Social Security Amendments of 1956: A Summary and Legislative History

by CHARLES I. SCHOTTLAND*

N August 1, 1956, President monthly child's benefits (based on the from general revenue for the costs of Eisenhower signed H.R. 7225, earnings records of either retired or the gratuitous $160 monthly military O which thus became Public deceased insured workers) beginning wage credits granted to veterans who Law No. 880 (Eighty-fourth Con• January 1957. Benefit payments will served in the Armed Forces during gress), the Social Security Amend• also be made to a mother having such the period from September 16, 1940, ments of 1956. This new law amends a child in her care. to December 31, 1956, and for the the old-age and survivors insurance 3. The age at which women become costs of the special provision enacted provisions of the Social Security Act, eligible for benefits is lowered to 62. in 1946 that granted insured status to certain parallel provisions of the In• Full benefits are paid at age 62 to certain World War II veterans who ternal Revenue Code, the public as• women eligible for benefits as widows died within 3 years of leaving service. sistance and child welfare titles of the or dependent parents. Working wo• 8. Benefits are suspended for cer• Social Security Act, and the Railroad men and wives without child bene• tain aliens if they are outside the Retirement Act. ficiaries in their care who elect to United States for more than 6 As President Eisenhower stated receive a retired worker's or wife's months. when he signed the bill, "The new benefit while they are between the 9. A Judge may terminate the bene• law embraces a wide range of changes ages of 62 and 65 receive an actuari• fit rights of persons convicted of es• in old-age and survivors insurance, ally reduced benefit. As under the pionage, sabotage, treason, sedition, the public assistance programs, and old law, the wife of a retired worker or subversive activities as an added child welfare services." These changes will receive full benefits regardless of penalty for their crime. have major implications for the econ• age if she has a child beneficiary in 10. Employment for organizations omic security of the American people her care. registered or required to register by and for the field of public welfare. 4. About 900,000 persons in civilian final order of the Subversive Activi• The old-age and survivors insur• jobs are newly covered; the principal ties Control Board is excluded from ance system was also affected by groups consist of the previously coverage. Public Law No. 881 (Eighty-fourth excluded self-employed professional 11. The interest rate on certain in• Congress)—the Servicemen's and persons (other than doctors of medi• vestments held by the old-age and Veterans' Survivor Benefits Act— cine), additional farm owners and survivors insurance trust fund and which was signed by the President on operators, certain Federal civilian the disability insurance trust fund is August 1, 1956. This law substantially employees, and certain additional changed to reflect the essentially revamps the survivor benefit pro• State and local employees in specified long-term character of the invest• grams for the members of the uni• States. Coverage on a contributory ments. formed services. Included among its basis is extended, effective January 1, The following major changes in the provisions is the extension of old-age 1957, to nearly 3 million members of public assistance program are made and survivors insurance coverage to the uniformed services. by the Social Security Amendments this group (on a contributory basis 5. A separate trust fund is estab• of 1956: and. with certain special features). lished from which disability benefits 1. The Federal matching formula The major changes in the old-age will be paid. Contributions to the dis• is revised to increase the Federal and survivors insurance program as ability insurance trust fund from share in State assistance payments to a result of the 1956 legislation are as covered employees-and employers are needy persons who are aged, blind, follows: at the rate of 1/4 of 1 percent each, and or disabled and to dependent chil• 1. Permanently and totally disabled from covered self-employed persons dren. workers who are between the ages at the rate of 3/8 of 1 percent, effec• 2. A new basis is established for of 50 and 65, who meet certain re• tive January 1, 1957. Federal sharing in State expenditures quirements concerning the length and 6. Before each scheduled increase for medical care on behalf of recip• recency of covered work, and who in the tax rate, an Advisory Council ients, separately from money pay• serve a 6-month waiting period will on Social Security Financing is to be ments to them; the Federal Govern• be paid monthly benefits beginning established to review the status of ment will match dollar for dollar, July 1957. the Federal old-age and survivors in• within specified average maximums 2. Dependent disabled children aged surance trust fund and the Federal per person, the amounts spent by the 18 and over who were totally disabled disability insurance trust fund in re• States for this purpose. before attaining age 18 will receive lation to the long-term commitments. 3. The constructive aspects of pub• 7. The old-age and survivors in• lic assistance are emphasized through * Commissioner of Social Security. surance trust fund is to be reimbursed amendments relating to services in the public assistance programs, and these children may receive benefits as sons receiving old-age and survivors provision is made for grants for the long as they have child beneficiaries insurance benefits) under which ben• training of public welfare personnel. in their care. efits are suspended because earnings exceed a specified amount; the defini• Provision is made for grants for co• Disability Insurance Benefits tion of disability in itself precludes operative research or demonstration Disability insurance benefits are payment of benefits to anyone able projects. payable to totally disabled workers to engage in substantial gainful em• between the ages of 50 and 65 who ployment. Only one change was made in the qualify both as to work requirements When a beneficiary also receives child health and welfare programs. and disability standards after a wait• another Federal benefit based on dis• The amount authorized to be appro• ing period of 6 months. July 1957 is ability or a workmen's compensation priated for child welfare services was the first month for which disability benefit, the disability benefit under increased from $10 million to $12 benefits will be payable. No benefits old-age and survivors insurance is million for the fiscal year 1957-58 will be paid to dependents of quali• reduced by the amount of such bene• fied disabled workers. The procedures and subsequent years. fit. and practices for determining and de• Vocational rehabilitation will con• fining disability that were set forth in tinue as an important adjunct to the Old-Age and Survivors the previous law with respect to the administration of the disability freeze Insurance disability freeze are continued for and disability cash benefits. Appli• the new cash-payment program ex• cants for either the freeze or disa• cept that blindness does not consti• New Benefit Provisions bility insurance benefits will be re• tute presumed disability. For pur• ferred to the State agency for reha• poses of disability benefits, persons The disability "freeze" provisions bilitation, and monthly benefits will with visual impairments must be dis• in the old law permitted any extended be suspended if a beneficiary refuses abled to the same extent as those with period in which an insured worker to accept rehabilitation services other physical impairments—that is, was totally disabled to be disregarded without good cause. A beneficiary they must be unable to engage in any in determining his eligibility for and who is a member or adherent of any substantial gainful activity. the amount of his benefits. The 1956 recognized church or religious sect amendments provide for a system of The disabled person, to qualify for that relies on spiritual healing and disability insurance benefits, payable the disability insurance benefits, must who refuses to accept rehabilitation to insured workers between the ages be both fully and currently insured services is deemed to have done so of 50 and 65. that is separate from and must have had 20 quarters of em• with good cause. A beneficiary who the old-age and survivors insurance ployment covered by old-age and engages in substantial gainful activity system as far as financing is con• survivors insurance during the 40- under an approved State plan for vo• cerned. It is estimated that disability quarter period that ends with the cational rehabilitation purposes will insurance benefits could be payable quarter in which the disability begins. nevertheless be considered disabled for a year after he first engages in for July 1957 to 400,000 individuals An insured individual who is unable such activity. The provision that and that by 1975 a possible 900,000 to engage in any substantial gainful makes applicable the payment of persons could receive such benefits. activity is not necessarily entitled to benefits and the freeze only for im• Under the previous law, a child's disability insurance benefits even pairments that can be expected to be benefits stopped when he attained 18. though he is, in fact, severely dis• of long-continued and indefinite du• Under the new law, child's benefits abled. The disability must be ex• ration is not inconsistent with efforts are payable to the dependent adult pected to result in death or to be of toward rehabilitation, since it refers children of retired or deceased in- long and indefinite duration. A wait• only to the duration of the impair• sured workers if the children became ing period of 6 consecutive months of ment and does not require a predic• totally disabled before they reached disability must elapse before pay• tion of continued inability to work. age 18; these benefits will be paid ments may begin. This requirement from the old-age and survivors in• was established to provide a simple Present disability rules, require• surance trust fund, beginning Janu• device for screening out cases of tem• ments, and standards for the freeze ary 1957. During the first year, it is porary disability, since in 6 months procedure are still in effect. If an in• estimated, approximately 20,000 chil• most temporary disablements will be dividual is determined to be totally dren will be added to the benefit rolls corrected or definite signs of recovery and permanently disabled before he under these provisions. Annually will appear. reaches age 50, the freeze can be es• thereafter, some disabled children The amount of the monthly disa• tablished. If, at age 50, he still meets currently attaining age 18 will be bility insurance benefit is to be the the disability test, he can become continued on the benefit rolls and same as the primary insurance eligible for disability insurance bene• others will be added to the rolls at amount, computed as though the fits, provided he files an application age 18 or over when the insured per• worker became entitled to old-age in• and meets the work requirements for son dies or becomes entitled to old- surance benefits in the first month of these benefits. October 1, 1956, is the age insurance benefits—some 2,500 his waiting period. There is no earn• earliest date an application for disa• children each year. The mothers of ings test (like that applied for per• bility benefits can be accepted. All the present framework to carry receiving at least half his support number now covered. The majority out the disability freeze provisions of from the insured worker at the time of those newly covered are farmers, the 1954 amendments will be used for his application for benefits was filed but coverage is also extended to all the payment of monthly disability or the worker died. Mother's (or previously excluded self-employed benefits. The determination of disa• wife's) benefits are also to be paid to professional groups (except doctors bility is to be made by State agencies a mother who has in her care any of medicine) and to several small under the same arrangements now child entitled to child's benefits. Such groups of employees. While a num• used for freeze determinations. In benefits will be payable for the first ber of changes were made in the the Conference report,1 Congress in• time for January 1957. Applications farm-worker coverage provisions, ap• cluded a statement that the Secretary may be filed beginning October 1956. proximately the same number of of Health, Education, and Welfare is The disabled child's benefit is re• farm workers are covered under the expected to use fully his authority to duced by the amount-of any Federal new amendments as were covered review and revise favorable deter• benefit or workmen's compensation after the 1954 amendments. minations of State agencies in order benefit payable to the child on ac• The Servicemen's and Veterans', to assure uniform administration of count of disability; any excess that Survivor Benefits Act (Public Law the disability benefits and to protect cannot be adjusted against the child's No. 881) extends coverage to almost the disability insurance trust fund benefits is adjusted against the moth• 3 million members of the uniformed from unwarranted costs. er's or wife's insurance benefits pay• services on a contributory basis, thus Beginning in 1957, an additional able solely because she has the closing one of the major gaps in old- tax (combined employer-employee) disabled child in her care. No adjust• age and survivors insurance cover• of 1/2 of 1 percent on wages and of 3/8 ment will be made in a wife's bene• age. Major groups that continue to of 1 percent on self-employment in• fit, however, if the wife has attained be excluded are most Federal civilian come will be imposed to finance the age 62. employees under retirement systems; disability insurance program. The The 1956 amendments state that in general, policemen and firemen amount of these taxes will be de• it is the policy of Congress that dis• covered by a State or local retirement posited in the disability insurance abled adult children be promptly re• system; low-income self-employed trust fund, from which the disability ferred to State vocational rehabilita• persons; and farm and domestic insurance benefits and administrative tion agencies so that as many of them workers not regularly employed. costs will be payable. as possible may be prepared for gain• Self-employed professional groups. ful work. Benefits for both the dis• —The 1956 amendments extend cov• Dependent Disabled Child's abled child and his mother will be erage to more than 200,000 persons Benefits suspended for his refusal to accept who are self-employed in the practice Under the new law a dependent rehabilitation services without good of specified professions. They bring disabled child aged 18 or over of a cause. If, however, a child beneficiary under coverage the self-employment deceased or retired insured worker who refuses rehabilitation services is earnings of lawyers, dentists, osteo• qualifies for child's benefits, regard• a member or adherent of any recog• paths, chiropractors, veterinarians, less of age, if he became totally dis• nized church or religious sect that naturopaths, and optometrists, effec• abled before reaching age 18 and the relies on spiritual healing, he is tive with taxable years ending after disability has continued uninter• deemed to have refused with good 1955. ruptedly since that time. The defini• cause. Work for 1 year begun under Farm owners and operators.—Under tion of disability is the same as that a State vocational rehabilitation plan the 1954 amendments, farm owners covering disabled workers (inability will not be regarded as substantial and operators were permitted to re• to engage in any substantial gainful gainful activity and therefore will not port their agricultural self-employ• activity by reason of any medically require suspension or termination of ment (1) on the basis of actual net determinable physical or mental im• the disabled child's benefits. earnings, or (2) if net earnings were pairment that can be expected to re• under $1,800, on the basis of 50 per• sult in death or to be of long-con• Extension of Coverage cent of gross income, with up to $900 tinued and indefinite duration). Blind At the end of 1955, 9 out of 10 of being creditable. The 1956 amend• persons, however, will not be pre• the Nation's gainfully employed work• ments extend coverage to an esti• sumed to be disabled for the purposes ers were covered under old-age and mated 220,000 additional farmers, ef• of the cash disability benefits, al• survivors insurance, and about 86 fective with taxable years ending on though they may be determined to be out of 100 jobs were under contribu• or after December 31, 1956, by liber• disabled. Determinations of disability tory coverage. Beginning with 1957, alizing the optional computation pro• are to be made by State agencies. contributory coverage will be extended vision. Under the amendments, a To qualify for these benefits the to nearly 4 million persons who are in farmer whose gross farm income in a disabled child must have been enti• jobs not now covered; thus, about 92 year is at least $600 and not more tled to child's benefits before he out of 100 jobs will be covered under than $1,800 is permitted to deem his reached age 18 or prove that he was old-age and survivors insurance on a net earnings to be two-thirds of gross contributory basis. income. If his gross income exceeds $1,800 and net earnings are less than 1 House Report 2936 (84th Cong., 2d sess.), The Social Security Amendments $1,200, his net earnings may be July 26, 1956. of 1956 add almost 900,000 to the deemed to be $1,200. Members of farm of employees, they may be treated as ployer, have a congregation that is partnerships and farmers who report having a separate retirement system. composed predominantly of American for income-tax purposes on an ac• Coverage is made available to about citizens. Coverage is also made avail• crual basis may now use the option. 20,000 employees under this provision. able to American citizens who are Another 400,000 farmers have cov• Farm workers,—The amendments employees of a foreign company in erage made available under the so- make several changes in previous which an American corporation holds called "material participation" clause. farm-worker coverage provisions that 20 percent or more of the voting stock Income formerly classified as rentals roughly offset one another as far as (rather than "more than 50 percent" will be covered if derived under an the number of persons who are cov• of the voting stock as provided in the arrangement whereby the recipient ered under the program is concerned. old law). participates materially (with the Under the 1954 amendments, a farm Three changes are made in the pro• tenant, share farmer, etc.) in the worker was covered with respect to visions relating to employees of non• production of agricultural or horti• his work for an employer if he was profit organization. They permit the cultural commodities. This provision paid at least $100 in cash wages by temporary reopening of the option to is effective with respect to taxable that employer in a calendar year. elect coverage, permit waiver cer• years ending after 1955. The 1956 amendments change the tificates filed after 1956 to be effective Confirmation is given to the inter• coverage test for farm workers, effec• in the quarter of filing if the organi• pretation of the old law, under which tive with respect to remuneration zation desires, and validate certain a person who undertakes to produce paid after 1956. Cash remuneration waivers previously filed. paid a worker by an employer in a agricultural or horticultural com• The amendments exclude from calendar year is covered if (1) the modities on the land of another, coverage service performed in the amount of cash wages is $150, or (2) under an arrangement providing employ of any organization regis• the worker performs agricultural that the product shall be divided be• tered under the Internal Security Act labor for the employer on 20 or more tween such person and the owner or of 1950 as a Communist-action, Com• days during the year for cash wages tenant of the land, is self-employed munist-front, or Communist-infil• computed on a time basis—that is, if if his share depends on the amount trated organization. The exclusion the worker is paid by the hour, day, of commodities produced. This pro• is applicable to service beginning in or week rather than on a piece-rate vision is effective for taxable years any quarter after June 30, 1956, dur• basis. As in the old law, a quarter of ending after 1954. ing any part of which the organiza• coverage is credited for $100-$199 of Federal civilian employees.—Cover• tion is registered under that Act or in annual wages, 2 quarters for $200- age is extended by the amendments which there is in effect a final order $299, 3 quarters for $300-$399, and 4 to employees who are covered by the of the Subversive Activities Control quarters for $400 or more. Tennessee Valley Authority retire• Board requiring such registration. ment system and to members of Fed• The amendments provide that cer• The amendments also contain three eral Home Loan Banks (all of whom tain "crew leaders" are deemed to be provisions that make exceptions in are presently covered by a staff re• the employers of the crew they fur• specified States to the general re• tirement system). The coverage is nish to perform agricultural labor quirement that all members of a contingent in each instance upon the for other persons, effective with re• State or local retirement system are approval by the Secretary of Health, spect to service performed after 1956. covered if any are covered. These Education, and Welfare before July For this purpose, a crew leader is provisions merely make coverage more 1, 1957, of a plan for the coordina• anyone who pays (on behalf of him• readily obtainable for certain employ• tion, on an equitable basis, of the self or of the person for whom the ees on the States or local level. benefits of the agency's retirement work is done) the members of his Members of the uniformed services. system with old-age and survivors crew and who has not been desig• —The Servicemen's and Veterans' insurance benefits. At the option of nated, by written agreement with the Survivor Benefits Act amends the the agency, such coverage may be person for whom the work is done, Social Security Act to extend regular effective with the beginning of any as an employee of that person. contributory coverage under old-age calendar quarter between January 1, The former exclusion from cover• and survivors Insurance, beginning 1956, and July 1, 1957, inclusive. age of the services of contract work• January 1, 1957, to nearly 3 million Some 13,000 employees of these agen• ers from Mexico and the British West members of the uniformed services cies could be covered. Indies is broadened to apply to agri• on active duty (including active duty Waiver of policemen and firemen cultural workers temporarily admit• for training), with contributions and exclusion.—The amendments make ted to this country from any foreign benefits computed on their basic serv• an exception to the specific exclusion country. Turpentine workers con• ice pay. The provision applies to of policemen and firemen who are tinue to be excluded. members of the regular components under a State or local retirement sys• Other groups.—Under the amend• of the uniformed services, including tem to allow these employees to be ments, coverage is made available for commissioned officers of the Public covered under the referendum provi• additional ministers who are Ameri• Health Service and of the Coast and sions in five States. Where the police• can citizens and who are employed Geodetic Survey, reserve officers and men and firemen (or both) are in a abroad—namely, those who, although enlistees when on full-time duty or retirement system with other classes not employed by an American em• active duty for training, midshipmen and cadets of the service academies, $600 million is expected to be paid under old-age and survivors insur• and members of the Reserve Officers out in the future. Reimbursement is ance. Training Corps when ordered to an• to be made annually over a 10-year nual training for a period of 14 days period for aggregate past expendi• Eligibility Conditions or more. tures through June 30, 1956. Reim• The 1956 amendments lower to 62 Public Law No. 881 also extends the bursement for future expenditures is the age at which women may qualify period for providing gratuitous mili• to be made annually for benefits paid for benefits. Women eligible for bene• tary wage credits of $160 a month by during the year. fits as widows or dependent parents including service in the active mili• Public Law No. 881 includes the fol• may receive full benefits at age 62. As tary or naval service after March 1956 lowing provisions that affect the before, wives with child beneficiaries and before January 1957. Gratuitous Bureau of Old-Age and Survivors In• in their care may receive full benefits credits therefore apply to service in surance and the Veterans Adminis• regardless of their age. Women who the Armed Forces after September 15, tration, or the Bureau of Old-Age and elect to receive a retired worker's or 1940, and before January 1, 1957. The Survivors Insurance and another wife's benefit when they are between law also provides for granting gratu• Federal agency: age 62 and age 65 will receive actuari• itous wage credits retroactively for 1. An application filed after De• ally reduced benefits. Once such elec• active service performed (1) as a cember 1956 for compensation on the tion has been made, benefits will con• commissioned officer of the Public death of a veteran constitutes an ap• tinue to be paid in an actuarially Health Service after July 3, 1952, and plication for survivor benefits under reduced amount after age 65. before January 1, 1957, and (2) as a the old-age and survivors insurance The reduction is 5/9 of 1 percent for commissioned officer of the Coast and program, and vice versa. each month before age 65 that a re• Geodetic Survey after July 29, 1945, 2. Survivors of servicemen who die tired woman worker draws an old-age and before January 1, 1957. Service• after 1956 while in service or from insurance benefit and of 1 percent men on active duty after December service-connected causes incurred for each month before age 65 that a 1956 receive the wage credits of $160 after September 15, 1940, and who wife's benefit is drawn. Thus a woman for military service performed after are not entitled to old-age and sur• who elects to receive an old-age in• 1950 and before 1957 even though vivors insurance benefits because the surance benefit for the month in benefits based on such service (in serviceman did not die insured are to which she attains 62 has her benefit whole or in part) are payable by one receive monthly payments from the amount reduced by 20 percent, and a of the service staff retirement sys• Veterans Administration under the woman who elects to receive a wife's tems, the Coast and Geodetic Survey same conditions as. and in amounts benefit beginning at age 62 has her system, or the Public Health Service equal to, those that would have been benefit amount reduced by 25 per• system. payable under old-age and survivors cent. If a wife or a retired woman The new law makes permanent the insurance if the serviceman had died worker who has elected to receive an previous temporary provisions relat• fully and currently insured. actuarially reduced benefit later has ing to old-age and survivors insur• 3. Supplementary compensation her benefit suspended under the re• ance lump-sum death payments when payments are to be made by the Vet• tirement test for at least 3 months, or servicemen dying overseas are re- erans Administration if the service• a wife later receives a full benefit be• buried in this country. Application man is survived by a widow and two cause she has had a child beneficiary for a lump-sum death payment or more children under age 18 and if in her care for 3 months or more, an (based on reimbursement for burial the old-age and survivors insurance automatic adjustment will be made in expenses) may be filed within 2 years benefits are relatively low. her benefit amount when she reaches of the interment or reinterment in 4. The gratuitous monthly wage age 65. This higher amount will be this country of the body of a service• credits of $160 for military service the benefit she receives after age 65. man who dies overseas after June 24, provided under the Railroad Retire• The amendments suspend benefit 1950. ment Act are continued. payments to certain aliens who are Public Law No. 881 also provides 5. Coordination of military service outside the United States for more that the old-age and survivors insur• credits under the Civil Service Retire• than 6 consecutive months. Payments ance trust fund is to be reimbursed ment Act and under old-age and sur• are suspended unless the alien is a from general revenues for past and vivors insurance permits survivor an• citizen of a country that has a social future expenditures resulting from nuitants under the Civil Service Re• insurance or pension system of gen• the various provisions for the grant• tirement Act to waive all rights to a eral application, under which monthly ing of $160 monthly military wage civil service survivor annuity and to benefits (or their actuarial equiva• credits and from the special provi• use military service after September lent) would be paid to otherwise eli• sions enacted in 1946 that granted 15, 1940, and before January 1, 1957, gible American citizens if they re• insured status to certain World War for survivor benefits under old-age turned to this country. Benefits are II veterans who died within 3 years and survivors Insurance. Military not suspended, however, if the indi• after leaving the service. These pro• service performed after 1956 is not vidual upon whose earnings record visions have already resulted in pay• creditable under the Civil Service Re• the alien is receiving benefits has had ments from the trust fund of approxi• tirement Act if any retirement or sur• at least 40 quarters of coverage or mately $200 million, and more than vivor benefit is currently payable has lived in the United States for at least 10 years, or if suspension would become entitled under this amend• 1956. After 1956, service in the Armed violate a treaty existing on August 1, ment are first payable for November Forces is covered employment under 1956, between his country and the 1956 or the month of the second hus• the program, and the annual money United States. Time spent outside the band's death, if that is later. test will automatically apply but only country in the active military or The 1956 amendments extend for to military basic pay. naval service of the United States an additional 2 years the period for does not cause suspension. If an alien filing proof of support in claims for Computation of Benefits whose old-age benefit is suspended dependent husband's, widower's, and Under the new law, up to 5 years dies while he is still outside the parent's benefits and for filing ap• of low earnings may be "dropped out" United States, no lump-sum death plication for a lump-sum death pay• in computing the average monthly payment will be made. The amend• ment based on the earnings record of wage of an insured individual regard• ment does not apply to aliens who an insured worker who died after less of the number of quarters of cov• are (or who upon application would 1946. The claimant must, however, erage he may have. The old law re• be) entitled to receive benefits for show "good cause" for his failure to quired that he have at least 20 quar• December 1956. Beneficiaries who are file within the first 2 years after the ters of coverage before 5 years of low living outside the United States in death or entitlement of the insured earnings could be dropped in comput• that month will, therefore, not have individual. If the original 2-year ing his benefits; otherwise only 4 their benefits suspended. period has already expired, and "good years could be dropped. The amend• Under the new law the courts may, cause" can be shown for failure to ment applies to the benefit computa• at their discretion, as an additional file the necessary proofs within that tion for persons who become entitled penalty, terminate an individual's period, they can be filed at any time in the future and, under specified benefit rights based on his earnings up to September 1, 1958. Monthly circumstances, to a recomputation of before his conviction for crimes such, benefits will be paid for months after benefits on the basis of applications as espionage, sabotage, treason, sedi• August 1956 on the basis of applica• filed on or after August 1, 1956. Per• tion, or other subversive activities. tions filed after August. sons newly covered in 1956 will thus be able to drop out all years of non- The amendment applies to convic• The amendments contain an al• coverage after 1950 and before 1956. tions for crimes committed after ternative insured-status provision August 1, 1956. The benefit rights of that will permit individuals first cov• The amendments also provide spe• members of the convicted individual's ered in 1956 to become insured on the cial starting and closing dates for family are not affected by the court's same basis that the old law provided determining the period over which decision. Thus, for example, the wife for persons first covered in 1955. An the average monthly earnings are to of a convicted individual continues to individual who earns a quarter of be figured. They apply to an indi• have benefit rights based on his en• coverage in all but 4 of the quarters vidual who becomes entitled in 1957 tire earnings record, even though his after 1954 and before July 1957 or, if and who had at least 6 quarters of own rights could be based only on later, the quarter in which he attains coverage after 1955 and before the any earnings he might have after retirement age or dies, is fully in• quarter following the quarter of his conviction. sured. The amendment eases the death or entitlement, whichever oc• Under the law in effect before the insured-status requirement in many curred first. A starting date of De• 1956 amendments, a widow who re• death cases before October 1960 and cember 31, 1955, and a closing date married lost all her rights to bene• for many individuals who attain re• of July 1, 1957, may be used if a fits based on the earnings record of tirement age before that date. There• higher primary insurance amount her deceased husband. She gained after, the normal requirements for in• would result. Total wages and self- rights on the earnings record of her sured status are no more difficult (or employment income that can be second husband only after she had are less difficult) to meet than the counted in the 6-month period be• been married to him for at least 1 year special requirements in the amend• tween December 31, 1956, and July 1, ment. or if the couple had a child, natural 1957, cannot exceed $2,100, since $350 or adopted. If the second husband Benefits are not payable to persons is the maximum average monthly died before the year had elapsed and under age 72 otherwise eligible for wage that can be used in computing there were no children, she was left benefits if they have earnings above the benefit. Provision is made, under with no protection under the pro• the annual and monthly amounts set circumstances similar to those stated gram. The 1956 amendments provide out in the retirement test in the act. in the previous law, for recomputa• that a remarried widow's benefit For beneficiaries engaged in noncov- tion of benefits using the July 1, 1957, rights based on the earnings record ered work outside the United States, closing date if a higher primary in• of her first husband will be restored benefits are withheld for any month surance amount would result. if her second husband dies within a in which a beneficiary under age 72 The amendments place the compu• year of the marriage. The first hus• works in noncovered employment on tation of benefits in disability cases band would, of course, have to have 7 or more different calendar days. on an annual basis that confirms been insured under the program be• The amendments of 1956 apply the with the method of computing bene• fore his death, and their marriage money test, instead of the 7-day test, fits in other cases. For any part of a must have lasted for at least 1 year. to members of the Armed Forces year that is included in a period of Benefits for remarried widows who serving outside the United States in disability, the months and earnings of that year are eliminated from the each instance, the recommendations conform with the deadline for in• computation of the average monthly will be published in the next Trustees' come-tax reporting contained in the earnings. Months and earnings in Report. Internal Revenue Code of 1954. The the year in which the disability be• amendments also conform the old- gan may be included in the computa• Investments of Trust Fund age and survivors insurance statute tion, however, if their inclusion results The 1956 amendments change the of limitations governing the period in a higher benefit amount. interest rate on investments held by in which earnings records are open to correction to the time limit on filing Under the new law, an individual's the old-age and survivors insurance claim for credit or refund of taxes earnings record may be corrected, trust fund to reflect the essentially under the 1954 Internal Revenue even in periods normally barred to long-term character of the invest• Code. correction because of the statute of ments. The interest rate is to be limitations, to include self-employ• based on the average rate of interest The amendments clarify the intent ment income not previously included borne by all marketable, interest- of the law that the Secretary may by for a year for which wages were de• bearing obligations of the United regulation limit the time within leted from the record as having been States not due or callable until after which an individual may request a erroneously reported. Such self- the expiration of 5 years from the hearing after a decision has been employment income can be included, date of original issue. Previously, the made in his case. The regulations however, only if the amount was rate of interest for trust fund invest• cannot prescribe a period less than shown in a tax return or statement ments was equal to the average rate 6 months after notice of a decision is filed before the end of the time lim• borne by all interest-bearing obliga• mailed to the individual. Any indi• itation, running from the taxable tions of the United States without re• vidual who has not previously had a year in which the wage deletion was gard to maturities or marketability. hearing on a notice of decision mailed made. The average rate of interest, if it is before August 1, 1956, can request a not already a multiple of 1/8 of 1 per• hearing within 6 months after that Advisory Council on Social cent, will be rounded to the nearest date. Security Financing multiple of 1/8 of 1 percent rather The amendments provide for the than to the next lower multiple as Financing Basis and Policy establishment of an Advisory Council under the previous law. These At the time of the 1950 amend• on Social Security Financing to re• changes were recommended by the ments, as well as since then, Con• view the status of the old-age and Board of Trustees of the Trust Fund. gress has expressed its belief that the survivors insurance trust fund and The same procedure is to be followed insurance program should be com• the disability insurance trust fund in for the new disability insurance trust pletely self-supporting from contribu• relation to the long-term commit• fund. The exclusion of interest rates tions from covered individuals and ments of the old-age and survivors on short-term obligations in fixing employers. Accordingly, in the 1956 insurance program before each sched• the rate for public-debt obligations amendments, the contribution sched• uled tax increase. The Commissioner for issue to the trust fund and the ule contained in the 1954 act was re• of Social Security will, serve as chair• revised rounding procedure will in• vised in recognition of the increased man of each Advisory Council. crease the program's interest income, benefit costs involved. The rates for Twelve other members, appointed by on the average and over the long- the calendar years 1957-59, formerly the Secretary of Health, Education, range future, by about $160 million a 2 percent each for employer and em• and Welfare, will represent to the ex• year; the effect in the immediate ployee and 3 percent for the self- tent possible employees and employ• future will be materially less. To employed, are raised to 2 1/4 percent ers in equal numbers and self-em• make it clear that bonds purchased each for employee and employer and ployed persons and the public. The by the trust fund are as much a part 3 3/8 percent for the self-employed. first Council is to be appointed after of the public debt as any other ob• The schedule calls for further in• February 1957 and before January ligations of the Federal Government, creases for the years 1960-64, 1965- 1958 and will report its findings and they are designated as "public debt 69, 1970-74, and the rates will rise recommendations to the Secretary of obligations for purchase by the Trust ultimately, for the year 1975 and the Board of Trustees 0r the Trust Fund" in place of the designation thereafter, to 4 1/4 percent each for Fund not later than January 1, 1959, under the old law, "special obliga• employer and employee and 6 3/8 per• and for inclusion in the Trustees' Re• tions issued exclusively to the Trust cent for the self-employed. Fund." port to Congress by March 1 1959. The combined employer-employee A new Council, similarly constituted rate in the new schedule is a 0.5-per• and with the same functions and Minor Technical Amendments cent increase from that in the previ• duties, will be appointed not later Beneficiaries who earn more than ous schedule. This amount is allo• than 2 years before each scheduled the amount of earnings permitted by cated for the monthly disability increase in the tax rate and will re• the retirement test must report their benefits and goes into a separate dis• port its findings and recommenda• earnings at the close of each year. ability insurance trust fund. In es• tions not later than January 1 of the The new legislation extends the dead• sence, no increase in contributions year before the year in which the line for filing annual reports of earn• was made for the old-age and sur• scheduled increase is to occur. In ings from March 15 to April 15 to vivors insurance benefits, since their liberalization was offset by cost re• The States themselves decide if the fective in the four public assistance duction factors—extension of cover• additional Federal funds will be used programs beginning July 1, 1957. age, change in the interest basis of to give assistance to more persons, to the trust fund, and generally higher give more money to those already Training of Public Welfare earnings levels. The contribution al• getting aid, or to save State and local Personnel located for disability benefits is, ac• funds. A State may use the money An appropriation of Federal funds cording to the intermediate-cost esti• to do any one of these things or a is authorized for training grants to mate, slightly more than adequate to combination of them.3 (The bill as the States to assist in increasing the finance these benefits.2 amended by the Senate had con• number of adequately trained public tained a provision designed to re• welfare personnel available for work Public Assistance quire States to pass on to recipients in public assistance programs. The Matching Formulas the additional Federal funds to be Federal Government's share in total provided under the Senate bill. This State expenditures for this purpose Under the Social Security Amend• provision was not included in the bill will be 80 percent, and Federal funds ments of 1956, Federal funds to as enacted.) are authorized for a period of 5 years States are increased for public as• beginning July 1, 1957. The funds sistance to needy persons who are Medical Care are to be used by States to make aged, blind, or disabled and to de• grants to institutions of higher learn• pendent children. Under the formula Federal matching in public assist• ing for training personnel for the previously in effect the Federal share ance expenditures, including medical public assistance programs and for for payments to the aged, blind, and care, has been limited by the indi• establishing fellowships or trainee- disabled was four-fifths of the first vidual maximums on the amount of ships and special short-term courses $25 of the average monthly payment monthly payments that could be of study. The authorization is $5 mil• per recipient plus one-half the re• made to or on behalf of an individual lion for the fiscal year ending June mainder, up to a maximum of $55 a with Federal financial participation. 30, 1958, and for the next 4 years in month on any individual payment. The 1956 amendments provide for such amounts as Congress may deter• For dependent children, it was four- dollar-for-dollar Federal sharing in mine. fifths of the first $15 of the average expenditures for payments to suppli• monthly payment per recipient plus ers of medical care (including ex• Another amendment changes the one-half the balance, up to maxi• penditures for insurance premiums definition of "State" in title XI of the mums of $30 each for the first child for medical care), over and above Social Security Act to extend the pro• and the needy relative with whom the Federal matching in money payments visions for training grants to Puerto child lives and $21 for each additional to assistance recipients. In the pro• Rico and the Virgin Islands. child. Under the new law, the maxi• grams for the aged, the blind, and mum on payments to aged, blind, and the disabled the Federal Govern• Services in Assistance Programs disabled persons is increased to $60, ment will participate in such expendi• The amendments include provisions and the Federal share is raised to tures up to a maximum amount de• relating to services in the public as• four-fifths of $30 plus one-half the termined by multiplying $6 a month sistance programs, designed to en• balance up to the maximum. For aid by the number of recipients. In the courage the States to place greater to dependent children the maximums program of aid to dependent chil• emphasis on helping to strengthen are increased to $32 each for the first dren, the maximum is determined by family life and helping needy indi• child and the relative with whom the multiplying $3 a month by the num• viduals to attain the maximum eco• child lives and to $23 for each addi• ber of children receiving assistance nomic and personal independence of tional child; the Federal share is and $6 a month by the number of which they are capable. relatives who are recipients. The pro• made fourteen-seventeenths of $17 The statements of purpose for all visions that many States, particu• plus one-half the balance up to the four public assistance programs have larly those with limited fiscal capa• maximum. These amendments are been amended to make explicit that, effective October 1, 1956, and are city, make for the medical needs of in addition to enabling the States to scheduled to expire on June 30, 1959. public assistance recipients are inade• give financial aid to needy persons, quate. The purpose of the amend• the purpose is to encourage the States The amendments do not provide for ments is to assist the States in to provide services to help assistance an automatic increase in the amount broadening and improving their pro• of the assistance payment. Whether visions for meeting the costs of medi• recipients toward independent living. recipients will get larger assistance cal care for persons receiving as• The amended statement in aid to de• payments as a result of the amend• sistance. These amendments are ef• pendent children emphasizes that a ments depends on what the States goal of the program is to help main• do under their own laws and poli• tain and strengthen family life and to cies in administering the programs. help keep children in their own homes. In the program for the aged 3 For information on how Federal in• the amendment makes it clear that 2 For more complete details, see Robert J. creases under previous amendments were Myers, "Old-Age and Survivors Insurance: used see Ellen J. Perkins. "State and Local services should be directed toward the Financing Basis and Policy Under 1956 Financing of Public Assistance, 1935-55," achievement of self-care, while pro• Amendments," pages 16-20. Social Security Bulletin, July 1956, pages 7-8. gram objectives for the blind and the disabled are directed toward assisting to $5,312,500 for Puerto Rico and These amendments make changes In individuals to achieve self-support or from $160,000 to $200,000 for the Vir• the wording of the Railroad Retire• self-care. Other amendments add to gin Islands. The provisions will enable ment Act to take account of the old- the provisions for the approval of these two jurisdictions to meet more age and survivors insurance amend• State plans a requirement that State nearly adequately the needs of per• ment lowering to age 62 the retire• plans under the four public assistance sons qualifying for assistance. The ment age for widows and modify the titles include a description of any amendments are effective for the fis• cost adjustment provisions of that act services the State makes available in cal year ending June 30, 1957, and to take into account the newly estab• order to achieve the purposes of the thereafter. lished Federal disability insurance legislation. Except in old-age assist• trust fund. ance, the plan must show the steps Cooperative Research or taken to assure maximum utilization Demonstration Projects Legislative History of other agencies providing similar or To learn more about the causes of On June 20, 1955, the Committee related services. This requirement is dependency and to find the most ef• on Ways and Means of the House of effective July 1, 1957. The amend• fective means of dealing with de• Representatives, under the chairman• ments also make it clear that the pendency, a program of cooperative ship of Representative Jere Cooper, costs of administration in which the research or demonstration projects is met in executive session. After that Federal Government shares include established. Grants to, contracts meeting, Chairman Cooper stated these services. with, or jointly financed cooperative that he planned to submit, for Com• arrangements with States and public mittee consideration, "proposals which Extension of Aid to Dependent and nonprofit organizations are au• would provide disability insurance Children thorized for sharing the cost of re• benefits to persons working in covered search or demonstration projects such Coverage under the program of occupations, lower from 65 to 62 years as those related to the prevention or aid to dependent children is broad• the age at which women beneficiaries reduction of dependency, the coordi• ened somewhat by two amendments may qualify for benefits, and the pay• nation of planning between private that make possible Federal sharing in ment of benefits to disabled children and public welfare agencies, or the 4 assistance to additional needy chil• age 18 and over." improvement of the administration dren. One provision adds "first During the next few weeks, the and effectiveness of programs under cousin," "nephew," and "niece" to the Ways and Means Committee met in the Social Security Act and related relatives previously specified in the executive session, and on July 11 Mr. programs. The authorization for this law with whom a dependent child Cooper introduced H.R. 7225, which purpose for the fiscal year ending may be living and receive aid under embodied the Committee's decisions. June 30, 1957 is $5 million and for the program. The other change elim• The bill was reported favorably by later years amounts to be determined inates the provision in the law that the Committee on July 14, with three by Congress. permitted Federal sharing in assist• minor technical amendments. It ance to children aged 16 and 17 only passed the House of Representatives if they attend school regularly. These Child Welfare Services on July 18 by a vote of 372 to 31 (with changes become effective July 1, 1957. Title V, part 3, of the Social Se• two members answering "present"). They will permit additional children curity Act authorizes appropriations The Senate Committee on Finance, to have the advantages of family life for establishing, extending, and to whom the bill was referred, did not with relatives and permit Federal strengthening, especially in predomi• take any final action on it in 1955 sharing in assistance to a group of nantly rural areas, public welfare because it was received so late in the children unable to attend school be• services for the protection and care of session. Early in 1956, however—from cause of illness or handicap or be• homeless, dependent, and neglected January 25 to March 22—the Com• cause school facilities are not avail• children, and children in danger of mittee held public hearings on the able. becoming delinquent. Appropriations bill and reported it favorably, with are made within the amount author• amendments, on June 5. Grants to Puerto Rico and the ized. This amount has been $10 mil• The bill passed the Senate, with a Virgin Islands lion in recent years. For the fiscal number of amendments from the Another amendment provides for year 1957-58 and subsequent years, floor, by a vote of 90 to 0 on July 17. Federal sharing in payments of aid the authorized amount is increased The conferees from the House and to dependent children in Puerto Rico to $12 million. the Senate completed their report on and- the Virgin Islands with respect the bill on July 26, and it was adopted to the needy adult relative with whom Amendments to the Railroad by the House of Representatives and the dependent child is living. The Retirement Act by the Senate on July 27. The bill provision, already in effect elsewhere, Public Law No. 880 makes the tech• was signed by the President on Aug• is thus extended to these two juris• nical amendments in the Railroad ust 1, 1956, and became Public Law dictions. Retirement Act necessary to main• No. 880. The dollar limitation on total an• tain the present relationship between

nual Federal payments for public as• the railroad retirement program and 4 Congressional Record, June 21, 1955, page sistance is increased from $4,250,000 old-age and survivors insurance. D590. House Action on H.R. 7225 grams, as well as make certain cor• 7. Revision of the optional report• rections and minor improvements in ing provisions for low-income farmers H. R. 7225, as introduced by Repre• the existing law—for example, pre• so that those in this category could sentative Cooper and as passed by scribing yearly, rather than quarterly, secure more protection under old-age the House in 1955, contained the fol• elimination of periods of disability in and survivors insurance. lowing major provisions: the benefit computations. 8. Inclusion of special provisions 1. Monthly benefits at or after age There were no public assistance or applicable to certain States so that 50 to insured workers who are totally child welfare provisions in H.R. 7225 additional groups of State and local and permanently disabled. as introduced in and passed by the government employees could be cov• 2. Lowering of the minimum retire• House in 1955. ered. ment age for women from 65 to 62 Identical bills carrying out the 9. Modification in the coverage test (applicable to women workers, wives President's recommendations for for farm workers to require (instead of insured workers, and widows and public assistance, made to the second of the existing requirement of $100 dependent mothers of deceased in• session of the Eighty-fourth Con• or more of cash wages paid by an sured workers). gress, were, however, introduced in employer during a calendar year) 3. Monthly benefits continued to the House by ranking members of either $200 or more of such wages or, children over age 18 who became to• the House Committee on Ways and regardless of earnings, employment tally and permanently disabled before Means. Representative Cooper intro• by a given employer for 30 or more that age and who had been receiving duced H.R. 9120 and Representative days during a calendar year on a child's benefits, either as the de• Reed, H.R. 9091. In the Senate an payment basis computed on some unit pendent of a retired worker or as the identical bill (S. 3139) was intro• of time. Under another provision the survivor of a deceased worker. (In duced by Senator Martin. crew leader, rather than the farm such a case the wife of a retired operator, would be considered as the In April 1956 the House Committee worker or widowed mother under age employer. on Ways and Means held public hear• 65 would continue to be eligible.) ings on H.R. 9120, H.R. 9091. H.R. 10. Extension of coverage, on a 4. Extension of coverage to all self- 10283, H.R. 10284, and other bills re• voluntary basis, to certain ministers employed professional groups ex• lating to public assistance and child residing abroad and to American em• cluded under existing law except health and welfare services. ployees of certain foreign corpora• doctors of medicine (that is, to oste• tions. opaths, lawyers, dentists, veterinari• 11. Exclusion from coverage of all ans, chiropractors, naturopaths, and Senate Committee Action on H.R. 7225 foreign temporary agricultural work• optometrists), to turpentine and gum ers (the existing law applied only to naval stores employees, and to certain Old-age and survivors insurance.— those from Mexico and the British employees of the Tennessee Valley The Senate Committee on Finance, West Indies). Authority and the Federal Home reporting on June 5, 1956, made the 12. Suspension of benefit payments Loan Banks. following changes in the bill as passed to aliens outside the United States for 5. Crediting, for old-age and sur• by the House: more than 3 months if such alien's vivors insurance purposes, of income 1. Elimination of the provision for country would not pay benefits to a derived by an individual from the monthly disability benefits. United States citizen under similar operation of a farm by another per• 2. Elimination of the provision low• conditions. son if such an individual materially ering the minimum retirement age 13. Additional minor improvements participated in the farm production. for women from 65 to 62, except for were made in the old-age and sur• 6. Increase in the contribution widows. vivors insurance program, including a schedule by 1 percent in the combined 3. Expansion of the provision for provision that would give a 2-year employer-employee rate, so that the monthly benefits for disabled children extension of the period within which rate would be 5 percent until 1960, aged 18 and over by eliminating the application for lump-sum payment 6 percent for 1960-64, 7 percent for requirement that such a child must must be filed or within which de• 1965-69, 8 percent for 1970-74, and have been receiving benefits before pendents may file proof of support 9 percent for 1975 and thereafter. The age 18. where there is good cause for failure rate for the self-employed would be 4. Elimination of extension of cov• to file within an initial 2-year period, increased by 3/4 of 1 percent. erage to self-employed osteopaths, and restoration of benefit rights to a 7. Creation of an Advisory Council turpentine and gum naval stores em• widow who remarries but is not eligi• on Social Security Financing to study ployees, and certain employees of the ble for benefits on her second hus• the financial status of the old-age Tennessee Valley Authority and the band's record because the new mar• and survivors insurance program be• Federal Home Loan Banks. riage was terminated by his death in fore each scheduled increase in the 5. Elimination of the proposed in• less than a year. contribution schedule. creases in the contribution schedule. Public assistance.—Although H.R. 8. Various technical provisions that 6. Revision of the basis for interest 7225 as passed by the House in 1955 would preserve the relationship be• rates of special obligations issued to contained no public assistance pro• tween the railroad retirement and the trust fund to take into account visions, during the public hearings on old-age and survivors Insurance pro• long-term interest rates. the bill before the Senate Finance Committee in 1956 testimony was affected the old-age and survivors in• defeated on the Senate floor were: presented on various public assistance surance program were: 1. The McCarthy amendment to proposals. Many proposed public as• 1. The Morse amendment to add lower the retirement age to 62 for sistance amendments to H.R. 7225 Oregon to those States whose police• men and 60 for women. were filed in the Senate. As H.R. 7225 men and firemen may elect to be 2. The McCarthy amendment to was reported by the Senate Finance covered, subject to the referendum change the annual exempt amount Committee, it contained the following provisions. under the earnings test from $1,200 public assistance provisions: 2. The George amendment to pro• to $1,800. 1. Separate Federal matching of vide for disability insurance to totally The amendments withdrawn were: expenditures for medical care on be• and permanently disabled workers at 1. The Morse-Neuberger amend• half of recipients of assistance on age 50 and to establish a separate ment to the Internal Revenue Code to a 50-50 basis, up to an average ex• Federal disability insurance trust provide that, in determining whether penditure of $3 per adult and $4 per fund. a child or stepchild who was drawing child receiving aid. 3. The Kerr amendment to lower survivor benefits under a public re• 2. Changes in the statement of pur• the minimum eligibility age for wom• tirement system was receiving more pose for the programs of aid to the en to 62 with actuarially reduced than half his support from the tax• blind and aid to the permanently and benefits for wives and working women payer, only the portion of such benefit totally disabled to make clear that as early as age 62. in excess of $600 in a calendar year welfare services to assist individuals 4. The Capehart amendment to would be considered. to self-support or self-care are pro• clarify coverage on the basis of "ma• 2. The Lehman amendment to gram objectives, and in aid to de• terial participation in production" by count tips as wages under old-age pendent children to emphasize that specifying that "material participa• and survivors insurance. services to strengthen family life are tion in the management of produc• Public assistance.—In addition to a major objective of that program. tion" shall also constitute covered the Senate Finance Committee 3. Grants to States to share in the self-employment, amendments, the following amend• cost of training public welfare per• 5. The Thye amendment to add ments affecting public assistance were sonnel, with Federal funds meeting Minnesota to the specified States that adopted by the Senate. 100 percent of the cost for 10 years may elect to cover certain employees 1. The Long-George amendment and 80 percent thereafter. Federal of State departments of unemploy• increasing Federal matching in old- funds for training made available to ment compensation who are under a age assistance, aid to the blind, and Puerto Rico and Virgin Islands by an retirement system. aid to the permanently and totally amendment to the definition of 6. The Curtis amendment to make disabled to five-sixths of $30 and "State" in the law. child's insurance benefits payable to one-half the remainder up to new 4. Grants to States and to public a child with respect to whom the in• maximums of $65, and extending the and nonprofit organizations to share sured individual had stood in loco present formula in aid to dependent in the cost of research or demon• parentis for at least 5 years before children to June 30, 1959. (To receive stration projects, such as the preven• the insured individual's death. the additional funds, the States would tion of dependency. 7. The Humphrey amendment to have to maintain average payments 5. Expansion of aid to dependent add Minnesota to the specified States per recipient at specified levels or children by adding "first cousin," that may elect to cover nonprofes• meet other qualifications.) "nephew," and "niece" to the rela• sional school employees who are 2. The Douglas amendment to the tives with whom a dependent child under a retirement system. Committee's amendment for separate may be living and be eligible to re• 8. The Williams amendment to financing of medical care, providing ceive assistance; elimination of the withhold insurance benefits from per• in addition that the Federal Govern• requirement of school attendance for sons convicted of espionage, sabotage, ment would share in the amount by Federal matching in assistance to treason, or subversive activities. which the maximum possible Federal children aged 16 and 17. 9. The Smathers amendment to add matching of cash payments exceeded 6. Extension of the temporary Fed• Florida to those specified States that the amount actually matched with eral matching formula then in effect may elect to cover certain State and Federal funds. to June 30, 1959. local government employees who are 3. The Douglas amendment pro• under State and local retirement sys• Senate Floor Action viding that States may disregard up tems. to $50 in net earned income in de• Old-age and survivors insurance.— 10. The Humphrey amendment to termining need for old-age assistance. On July 17 the Senate passed H.R. provide, in connection with the dis• 4. The Kefauver amendment re• 7225 as amended, by a unanimous ability provisions, that any refusal to quiring that a State plan shall vote. Eighteen additional amend• accept medical or surgical services provide that there will be no dis• ments were adopted, four were re• for rehabilitation would be considered crimination on the basis of sex in jected, and two were presented but to be for "good cause." determining the needs of individuals withdrawn. The amendments affecting old-age receiving assistance under the plan. The 10 amendments adopted that and survivors insurance that were 5. The Lehman amendments in- creasing the dollar limitation on total 2. Rejected the Senate amendment olate an existing treaty, or if the alien Federal payments to $300,000 for the to provide that any refusal to accept is a citizen of a country that has a Virgin Islands and to $5,312,500 for medical or surgical services for re• social insurance or pension system Puerto Rico, and providing Federal habilitation would be considered to and pays benefits to eligible United matching in payments of aid to de• be for "good cause." Retained the States citizens who leave that coun• pendent children with respect to a provision that such refusal would be try. needy relative caring for dependent for "good cause" for the adherents 9. Eliminated the Senate amend• children. of a church or sect relying solely on ment to make child's insurance bene• 6. The Humphrey amendment de• spiritual means for curing impair• fits payable to a child with respect leting the phrase "reduce dependency ments. to whom the insured individual has and" from the declaration of purpose 3. Extended coverage to employees stood in loco parentis for at least 5 of the public assistance amendments of the Federal Home Loan Banks and years before the insured individual's in clause (c) of section 300 of the bill. Tennessee Valley Authority, as in the death. Two other proposed public assist• House bill, but only if the Secretary 10. Modified the Senate amendment ance amendments that came to a vote of Health, Education, and Welfare to withhold insurance benefits from were rejected: approves, before July 1, 1957, plans persons convicted of certain subver• 1. The Kefauver proposal that, in for coordinating the staff retirement sive activities by providing that a determining need in old-age assist• system of these agencies with the Federal court, in passing sentence on ance, States shall disregard the own• old-age and survivors insurance pro• an individual convicted of an offense ership of a home having an assessed gram and reports to Congress before committed (after enactment) under value of less than $5,000 less encum• that date. specified statutes (relating to sedi• brances, except to the extent of rental 4. Agreed to the Senate provisions tious activities) may wipe out the income therefrom. (except with respect to Indiana) benefit rights of the convicted indi• vidual based on earnings up to and 2. The Magnuson proposal, which modifying the conditions under which including the quarter in which con• would have increased the Federal specified States may elect to coyer viction occurs. Also provided for re• matching formula in aid to dependent members of retirement systems. moval from coverage after June 30, children and included a provision, as 5. Extended coverage to self-em• 1956, of service for organizations in the Long-George amendment, that ployed osteopaths, as in the House while they are registered, or while States maintain a specified average bill. there is in effect a final order of the payment or meet other qualifications 6. Raised the amount of earnings Subversive Activities Control Board to receive the additional funds. required from a single farm employer requiring such organizations to regis• for coverage of farm workers, but to ter, as a Communist-front or similar In addition to the amendments re• $150 rather than $200 as in the Sen• organization. lating specifically either to old-age ate bill. Also provided an alternative and survivors insurance or to public time test for coverage—20 days rather Public assistance.—The conferees assistance, the Senate adopted the than the 30 days in the Senate ver• agreed to the public assistance Payne-Potter amendment that would sion. amendments made by the Senate, have provided for the establishment 7. Changed the optional method of except that they: of a United States Commission on the computing net income by farmers as 1. Modified the Senate provision Aging and Aged. Senate action on in the Senate version but provided for separate financing of State ex• child welfare services is described that, if gross farm income is at least penditures for medical care on behalf later. $600 and not more than $1,800, the of recipients by reducing the maxi• farmer could deem net farm earnings mum to an average expenditure of Conference Action to be two-thirds of gross farm in• $6 per adult and $3 per child receiv• The House -Senate conferees reached come; if gross income exceeds $1,800 ing assistance and by deleting the agreement on July 26. They took the and net earnings are less than $1,200, provisions of the Douglas medical following actions on the substantive net earnings may be deemed to be care amendment that had been differences between the House and $1,200. Use of the option is extended adopted by the Senate. Senate versions of the bill. to members of farm partnerships and 2. Modified the Senate amendment Old-age and survivors insurance.— farmers who report on accrual basis. with respect to services by including In provisions affecting old-age and 8. Provided for suspension of bene• provisions to emphasize that, in old- survivors Insurance, the conferees fits of aliens who are outside the age assistance, services to assist in• agreed to the Senate provisions, ex• United States, but with more limited dividuals to attain self-care are pro• cept as follows: applicability than in the Senate ver• gram objectives, along with the ob• 1. Made available actuarially re• sion. Suspension would begin to apply jective of providing income to meet duced insurance benefits for wives after the sixth month of absence current needs. and women workers at age 62 as in from the United States, but there 3. Modified the Senate provision for the Senate bill, but with some modi• would be no suspension if the insured training grants by limiting the Fed• fication in the method of adjustment worker had 10 years of residence in eral grant to 80 percent of total State when a woman qualifies for two types the United States or 40 quarters of expenditures for this purpose and to of benefits. coverage, or if suspension would vi• a 5-year period. 4. Modified the matching formula hearings were held, and no action on the amendments proposed in S. adopted by the Senate to four-fifths was taken by Congress. 3297. The House Ways and Means of $30 plus one-half the remainder After Congress adjourned in 1955, Committee held hearings on H.R. up to a maximum of $60 for the pro• the Administration made a further 10283 and H.R. 10284 in April 1956. grams for the aged, the blind, and review of needs and developments in Many organizations, both public and the disabled; deleted the special the States with respect to the three voluntary, expressed support of these qualifications for the receipt of programs. In the light of this review, bills to the Committee. matching under the new formula; new legislative proposals for amend• None of these three bills was re• and, in Federal matching in aid to ing title V were submitted to Con• ported out. However, in the floor dependent children, provided for an gress in 1956. In his State of the debate on H.R. 7225, the Senate increase to fourteen-seventeenths of Union message in 1956, the President passed an amendment proposed by $17 plus one-half the remainder up stated that needs in the area of social Senator Lehman and Senator Bush, to new maximums of $32 each for welfare included increased child wel• raising the amount of the annual the first child and the needy relative fare services. S. 3297, H.R. 10283, and appropriation authorized for child with whom the child lives and $23 H.R. 10284, identical bills, were sub• welfare services from $10 million to for each additional child; and estab• sequently introduced in Congress. $12 million. H.R. 7225, as finally lished an expiration date of June 30, These bills incorporated the Presi• passed by both Houses and approved 1959, for these amendments. dent's recommendations with regard by the President, contained this 5. Modified the Senate increase in to increased child welfare services amendment, which becomes effective the dollar limitation on total public and the Administration's proposals July 1, 1957. assistance grants to the Virgin Islands for additional amendments to title V. by reducing the increased amount to The proposed amendments would Servicemen's and Veterans' $200,000. have accomplished the following pur• Survivor Benefits Act 6. Eliminated the Senate provision poses: (1) increase authorizations for President Eisenhower, in his State permitting the States to disregard annual grants to the States for child of the Union message of January 6, certain earned income in determining welfare services from $10 million to 1955, recommended that "full con• need in old-age assistance. $12 million for the fiscal year ending tributory coverage should be made 7. Eliminated the Senate provision June 30, 1958, and to $15 million for available to all Federal personnel, relating to the prohibition of dis• each year thereafter; (2) remove just as in private industry." With crimination on the basis of sex in present requirements that Federal respect to the Armed Forces, the determining an individual's need for child welfare funds for local child President stated: "For career military assistance. welfare services may be used only in personnel the protection of the old- predominantly rural areas and permit age and survivors insurance system The conferees also agreed to elimi• their use in any part of a State where would be an important and long- nate the Senate amendment provid• the money would be effective in es• needed addition, especially to their ing for the establishment of a United tablishing, extending, and strength• present unequal and inadequate sur• ening child welfare services, although States Commission on the Aging and vivorship protection." This recom• emphasis would still be placed on serv• Aged. mendation supported the proposals of ices in rural areas; (3) explicitly au• the President's Committee on Retire• thorize the use of Federal grants to Child Welfare Services ment Policy for Federal Personnel pay for the foster care of children; On January 31, 1955, H.R. 3292 was (the Kaplan Committee), which stud• (4) provide, for the first time, that a introduced by Representative Reed. ied the problem of retirement and portion of the annual appropriation This bill, which was recommended by survivor benefits for members of the for child welfare grants may be used the Administration, provided for uniformed services and similar prob• to pay for special projects of regional amending title V, parts 1, 2, and 3, lems for other Federal employees or national significance; (5) provide, of the Social Security Act to: (1) from December 1952 to June 1954. for all three programs under title V, earmark a portion of the appropri• that grants for special projects may The recommendations of the Com• ation for each of the three pro• go either to State agencies or, with mittee on Retirement Policy for grams—maternal and child health their concurrence, to any public or Federal Personnel in regard to the services, child welfare services, and nonprofit institution of higher edu• uniformed services were studied by services for crippled children—for ex• cation or research; and (6) require the House of Representatives Select tension and improvement grants; (2) that States, to be entitled to Federal Committee on Survivor Benefits, es• require variable matching on the child welfare grants, match these tablished pursuant to House Reso• same formula for all three programs; grants with State and local expendi• lution 549 (Eighty-third Congress, (3) authorize making a portion of tures, the amounts varying with the August 4, 1954). Time, however, did each appropriation available for spe• per capita incomes of the States. not permit a complete study of all cial project grants; and (4) broaden the complex problems involved, al• present provisions of the law for At the hearings held by the Senate though it was recommended that the using Federal child welfare funds for Finance Committee on H.R. 7225 in general principle of old-age and sur- the return of runaway children. No March 1956, some witnesses testified SOCIAL SECURITY AMENDMENTS sessions, reported H.R. 7089 favorably The Committee held public hearings on June 28, 1955. The bill passed the on the bill from June 4 to June 8, House of Representatives on July 13 1956, and reported the bill favorably, vivors insurance coverage on a by a voice vote, unchanged except for with relatively minor amendments, contributory basis be given "serious an amendment concerning the credit• on June 28. The bill passed the consideration." A similar Select Com• ing of military service under the rail• Senate by a voice vote on July 2. mittee was appointed pursuant to road retirement program rather than The conferees from the House and House Resolution 35 (Eighty-fourth under old-age and survivors insurance Senate completed their report, and Congress, January 31, 1955). This in certain cases. the bill was adopted by both bodies Committee, under the chairmanship The bill was referred to the Senate on July 17. The President signed it of Representative Hardy, after ex• Committee on Finance, too late in on August 1, 1956, and the amend• tensive public hearings and executive the session for action during 1955. ments became Public Law No. 831.