1962 appropriation presently available $2, 401, 200, 000 1962 appropriation presently available plus supplement request. 2, 486, 200, 000 Net change in appropriation request Increases for mandatory items: For assistance payments: Medical assistance for the aged... Aid to dependent children Aid to the permanently and totally disabled. Total increases_ Decreases for mandatory items: For assistance payments: Aid to the blind.. +85, 000, 000 52, 800, 000 45, 400, 000 10, 700, 000 108, 900, 000 14, 800, 000 800, 000 15, 600, 000 4, 900, 000 1, 000, 000 200, 000 400, 000 1, 800, 000 8, 300, 000 Total decreases_ 23, 900, 000 Total 1962 supplemental request_ 85, 000, 000 PURPOSE AND NEED FOR SUPPLEMENTAL FUNDS For the fiscal year 1962, the Congress approved an appropriation of $2,401,200,000 for grants to States for old-age assistance, medical assistance for the aged. aid to dependent children, aid to the blind, and aid to the permanently and totally disabled under titles I, IV, X, and XIV, respectively, of the Social Security Act, as amended. The need for a supplemental request arises because a more rapid growth in the programs of medical assistance for the aged, aid to dependent children, and aid to the permanently and totally disabled has occurred than was anticipated when the estimates on which the appropriation was based were prepared. On the other hand, the estimates of the amounts needed for old-age assistance and aid to the blind have been revised downward to give effect to recent program trends. The net effect of these changes is to increase the amount required for Federal grants by $85 million over the amount appropriated by the Congress. The Social Security Act, as amended, requires Federal matching of a specified portion of State expenditures for public assistance in accordance with the various formulas prescribed in the act. These expenditures are directly related to the number of recipients on State rolls and to the average monthly payments made to or on behalf of these recipients. The Federal contributions to the States for public assistance are mandatory and admit of no administrative discretion. Under the provisions of the Social Security Act, all grants are certified to the Secretary of the Treasury prior to the beginning of a quarter unless there are instances of pending questions of conformity, unavailability of Federal funds, or failure of a State to submit necessary reports. Thus, the obligations of $1,773,930,197 through December 31, 1961, include obligations for grants to States for the quarters ended September 30, and December 31, 1961, as well as a major portion of the grants for the quarter ending March 31, 1962. Funds required for the quarter ending June 30, 1962, which include the supplemental request of $85 million, should be obligated for the entire quarter in March. April payments are due in the States between March 10 and March 20; May payments are due between April 10 and April 20; and June payments, between May 10 and May 20 The system of grants established under the public assistance titles of the Social Security Act provides for advances to States on the basis of quarterly estimates and for adjusting the amounts granted by adding to or deducting from subsequent grants on the basis of the States' actual expenditures. Thus, all grant operations are on a quarterly basis except that payments to States are scheduled in monthly installments. Any balance of funds not granted to States at the end of a fiscal year reverts to the U.S. Treasury. HOUSE ALLOWANCE Senator HILL. Miss Goodwin, do you wish to address yourself to the item of a supplemental request from the Bureau of the Budget in the amount of $85 million? The House allowed you $80 million. Would you address yourself to that item? REDUCTION OF ORIGINAL REQUEST Miss GOODWIN. You will recall that we told you that we reduced this request from the original $140 million shown in the President's budget. Senator HILL. You testified to that 2 or 3 weeks ago on your 1963 funds. Miss GOODWIN. Yes. Of course, the nearer we get to the end of the fiscal year, the more accurate we can be because all of the requests do not come in until the very last day. However, we are not questioning the House reduction from $85 million to $80 million. We believe it is unlikely that the $5 million will be needed for this fiscal year. Senator HILL. In other words, you think if the Senate concurs in the amount the House put into the bill you will have sufficient funds to meet your obligations to the several States for their public assistance programs? Miss GOODWIN. Yes, on the basis of the requests we have received to date. RECIPIENTS AFFECTED Senator HILL. Let me ask you this question, and if you do not have the answer, you can supply it for the record: How many recipients on public assistance do you estimate would be affected if you did not receive this $80 million, and how many different States would not have their share of Federal funds provided under the statute? Miss GOODWIN. This $80 million, you realize, is a deficit in the total for all States. Senator HILL. I understand that, for the whole 50 States. Miss GOODWIN. Yes. So it is a little difficult to relate it to particular States. We believe that the changes in the aid to dependent children program are such that this difference can be absorbed. If we did not have any of the $80 million, let us say, we would be unable to carry out the statutory authority to make advances to States on the basis of their estimates for the programs. We are required by law to make those advances before the beginning of the quarter on the basis of estimates of the State expenditures minus any overamounts received before. EFFECT OF FAILURE TO RECEIVE FUNDS So at this stage of the operation, we could not say how many persons would be affected. We would simply be unable to make the advances to the States in the last month of the year, for the last month of the year. Senator HILL. Unless you had this $80 million? Miss GOODWIN. That is correct. Senator HILL. You could not make this advance of funds which the basic act requires you to make to the several States? Miss GOODWIN. For the month of June, yes. Senator HILL. And you think the $80 million would permit you to make these advances as the statute requires; is that correct? Miss GOODWIN. Yes, sir. And if it should prove to be more than we need, of course, that money would simply be returned to the Treasury. Senator HOLLAND. I have no questions. Senator Saltonstall? Senator SALTONSTALL. No questions. Senator HOLLAND. Senator Pastore? Senator PASTORE. No questions. Senator HOLLAND. Senator Young? Senator YOUNG. No questions. Senator HOLLAND. Senator Monroney. EFFECTS OF INADEQUATE SOCIAL SECURITY BENEFITS Senator MONRONEY. I would like to learn about the duplicating costs that we run into by our failure to realistically provide enough social security benefits. As I understand it, about 50 percent of the load now on the State old-age assistance is associated with those who are getting an inadequate amount from social security. It seems to me that we maintain two duplicating overheads which, from my sketchy figures, would indicate it would run about a billion dollars independently of the medical care and aid to dependent children. We should have some long-range way of providing realistically for moneys through social security so that we do not go through this excess overhead carrying to combine and supplement the social security funds with the State old-age assistance. Miss GOODWIN. We would agree with you, of course. I think it is not 50 percent of the total old-age assistance cases that also receive old age and survivors insurance, but 50 percent of the new cases. It is nearer 30 percent. Senator MONRONEY. Is that dollars or cases? MEDICAL CARE Miss GOODWIN. Cases. At the present time, the greatest reason for assistance in addition to old-age and survivors insurance is the need for medical care. This, of course, would be affected by whatever provision the Congress makes on medical care. It is true that in the program as a whole, many of the cases that get the minimum benefit are very likely to have need for assistance in addition. Senator MONRONEY. This demands caseworkers in every county in the State. Miss GOODWIN. Of course, but the assistance funds for all programs are all administered as a unit. PERMISSION FOR AGED TO EARN Senator MONRONEY. I always thought it would be fine, since we are talking about preventive dependency, to convert into old-age insurance a program that today is just a continual reinspection of the aged to see if they earn $5 or $10 more by selling chickens or eggs or mowing lawns. They are free from the slight earnings test and given quite wide latitude on social security. But when you move to the State assistance, they are carefully confined to that amount. It seems to me we are spinning our wheels by continual oversupervision of the aged when we could be devoting our qualified social service workers to rehabilitation activities of the young and the family and the people who today are unemployable, but who could, through proper guidance, be given employment. Miss GOODWIN. I think what you are saying is especially true for the future. Senator MONRONEY. I am not sure the aged would be affected, but I am talking about transferring the great capabilities of the social service worker to the younger people. Miss GOODWIN. Yes. Senator MONRONEY. I have been talking about this in the examination of witnesses for the past 2 or 3 years, and the caseload, the one we inherited because we did not have social security benefits for a large group of people, is getting smaller and smaller each year due to the attrition by death. Yet our costs of administering the program remain as high or higher. Miss GOODWIN. The old-age assistance caseload is getting smaller not only because of the attrition by death but also because old-age and survivors insurance is keeping many people from having to come. for assistance. NEED FOR STUDY OF PROGRAM Senator MONRONEY. That is what I mean. Wouldn't we be more realistic, since the money is coming out of, generally, I think, 65 or 70 percent, out of the Federal Treasury in your old-age assistance to the States, coming out 100 percent for the social security payments; and it seems to be probably with a billion dollars we are duplicating because we are running parallel services? Miss GOODWIN. That is true to some extent. Senator MONRONEY. An overall long-range study could be made to try to convert this fine talent we have to rehabilitation and put it under the social security system. It would seem to me it would be much better. Miss GOODWIN. There are studies of this kind being made all the time, Senator. I am sure you would find some people have a great sympathy in that undertaking. Senator MONRONEY. I hope when the Department comes up for its regular annual appropriation next time, it will be better prepared to give us documentation along this line than in the past. It has been rather sketchy on prior occasions in appropriations hearings. I realize this is not the place to raise it. However, I wanted to put it in the record for the committee's information. Senator HOLLAND. Thank you very much. (The statement of Miss Kathryn D. Goodwin follows:) STATEMENT BY DIRECTOR, BUREAU OF FAMILY SERVICES, ON 1962 SUPPLEMENTAL ESTIMATE For Grants TO STATES FOR PUBLIC ASSISTANCE The Department of Health, Education, and Welfare presented to the House a request for a supplemental appropriation of $85 million for 1962 for grants to States for public assistance, in addition to the regular appropriation of $2,401,200,000 approved by the Congress. These funds are used for grants to States for five programs: Old-age assistance, medical assistance for the aged, aid to dependent children, aid to the blind, and aid to the permanently and totally disabled. The President's budget message included a proposed supplemental request for $140 million. This amount was revised downward to $85 million at the time the request was presented to the House. This downward revision was based on program trends through November 1961 and States' request for funds through the third quarter, which indicated that estimated expenditures under the programs of medical assistance for the aged and aid to dependent children would be lower than was anticipated when the original supplemental amount of $140 million was included in the President's budget. EFFECT OF HOUSE ACTION The House approved a supplemental request of $80 million, or $5 million less than requested. On the basis of the States' requests for funds for the fourth quarter, which are now substantially complete, the Department believes that the House allowance probably will be adequate to provide for both regular quarterly grants and supplemental requests which may be received. Consequently, we are not appealing for restoration of the $5 million reduction made by the House. $2245-62-19 |