Page images

Senator HARTKE. That is all I want to know. If you would say “Yes” in the first place we would all save time.

Secretary FLEMMING. I know but I said it three times.

Senator HARTKE. Would you be in favor of reducing any specific program in the Federal budget today in favor of the proposal of yours for the care of the aged !

Secretary FLEMMING. I don't know that I can look at the total Federal budget and make decisions of that kind. My only point is that for a program that is as needed as this program is it is possible to work it in in an $80 billion budget. I would not want to be specific because I am not in position to be a competent witness.

Senator HARTKE. Would you care to compare it with the mutual security program?

Secretary FLEMMING. I am not going to compare it with anything. If you are building an $80 billion budget it should be possible to develop a balanced budget and work something like this into this balanced budget.

Senator HARTKE. I don't want to go into a long discussion on this if

you don't care, Mr. Secretary, but I just wanted to know whether you believe the $1,200 limitation which is placed on the present income of social security beneficiaries should be raised or removed ?

First, should it be raised?

Secretary FLEMMING. We submitted a report, a rather detailed report to the Ways and Means Committee dealing with that problem and I would want the opportunity of refreshing my memory on that report before commenting on it. I didn't know anybody wanted to discuss that today or I would have done it last night, if you want me to come back at another time and discuss that I will be happy to do it.

Senator HARTKE. I am just reading from a Life editorial in Life magazine concerning the age, health, and politics in which they stated that moreover many oldsters able and eager to work to better provide for their own security if the $1,200 limitation were raised on income they earned without forfeiting social security pensions. The only thing I asked you whether or not you would agree whether this would help.

Secretary FLEMMING. I just say this, Senator, in my judgment we have not solved that problem in a satisfactory manner as yet and I don't believe we should feel that the way the law stands at the present time should be the last word by any means.

I am not satisfied with the way it stands at the present time but I am not prepared to discuss proposals, specifically, for improving it at this point.

Senator HARTKE. Would you be willing to state whether or not you feel that this statement in the Life editorial was in fact desirable or undesirable ?

Secretary FLEMMING. I will rest with the statement that I have made. I don't think that the law as it stands at the present time represents a satisfactory solution to that problem and I will be glad to come back some other time and discuss possible solutions.

Senator HARTKE. Do you think that this is proper public business, this question of medical aid to the aged?

Secretary FLEMMING. That is the tenor of my testimony. It certainly is.

Senator HARTKE. I am asking a question.
Secretary FLEMMING. If I made anything clear, I hope I made that

I clear. The answer is “Yes.'

Senator HARTKE. All right. And you think it should be decided according to the Nation's sense of justice, urgency, and choice of priorities in the use of scarce resources ?

Secretary FLEMMING. OK, I will go along with that.

Senator HARTKE. Since you state the need is so great and that Federal action is necessary, if the Congress should accept the benefits which you propose, and if we accepted the deductible provisions which you have proposed and if we extended the coverage to help those who are not covered under the social security program, but either in one of two fashions put on an attachment that the payment be by social security or by payroll tax, would your oversensitivity to this particular approach be such that you would still oppose this legislation?

Secretary FLEMMING. I so indicated to Senator Douglas and I will indicate again.

Senator HARTKE. And in your opinion, Would you recommend to the President that if all of these conditions were accepted, would you recommend to the President that he veto such a bill?

Secretary FLEMMING. I normally don't discuss communications that I either send or might think in terms of sending to the President on a matter that is properly before the President. The President has stated time and again that he will not indicate what he will do with a piece of legislation until it is on his desk. Certainly it would be inappropriate for me as a member of his administration to comment on a hypothetcal situation as to whether or not I would recommend or not recommend.

Senator HARTKE. Let me change it then: Would you be very strongly opposed to it to such an extent that you would feel it would be unacceptable legislation from the viewpoint of the Secretary of Health, Education, and Welfare?

Secretary FLEMMING. I started to Senator Douglas and I have stated to you that I would be opposed to the legislation. I stand on that.

Senator HARTKE. Even if we accepted all of these other principles ? Secretary FLEMMING. I stand on that. Senator HARTKE. In your opinion, would the President veto such a bill?

Secretary FLEMMING. I am not going to speculate as to what the President would or would not do, but the President has made it very clear to the Nation through his press conferences and otherwise that he is completely opposed to the use of the social security mechanism for dealing with this problem.

Senator HARTKE. In other words, you would disagree with the conclusion of the Life editorial of April 25, 1960.

Secretary FLEMMING. I would. I read it.

Senator HARTKE. In which they say, in principle such a principle is proper public business. The issue, therefore, is inevitably a political one.

It should be decided according to the Nation's sense of urgency, justice, and choice of priorities and in use of scarce resources as determined by the Nation's elected Representatives in Congress.

Secretary FLEMMING. In my judgment if the plan we have presented to the Congress were accepted it would fit all of those qualifications very nicely.

Senator HARTKE. Except for the fact that you are in effect saying that you would deny to the Congress the right to make its own determination of how it is going to provide.

Secretary FLEMMING. When did I say that? This is the kind of thing that I object to. I mean the Congress has got a perfect right to do anything in matters of this kind. The President of the United States is a part of the legislative process, and he has got, too, the right to make up his mind as to what he would do. I haven't said anything about what the Congress should or should not do. I have got a point of view which I have been here presenting, and trying to justify. Of course, it is up to the Congress to determine what it would do. I haven't said anything about denying the Congress the right of doing anything.

Senator HARTKE. All right, then you haven't denied Congress the right to do anything and I want to thank you for the time you have given me.

Secretary FLEMMING. Thank you, sir.

Senator GORE. Mr. Secretary, I have not yet had an opportunity to review a copy of your bill. If you have a copy, I will be glad to see that it is introduced unless you have some other person whom you would prefer as an author of the bill.

Secretary FLEMMING. It is my understanding that it will be introduced and as you know I did make available a copy of the draft bill.

Senator GORE. I understand you made a copy available to the committee but I have not been able to see it.

Secretary FLEMMING. That's right.

Senator GORE. But I am glad it is going to be introduced. As you know it is customary for legislation of, shall we say, uncertain support to be introduced by Members by request.

Secretary FLEMMING. That's right.

Senator GORE. And I can understand why, if you have already contacted someone you would prefer that they introduce it, and I think it deserves to be introduced.

Secretary FLEMMING. I appreciate that.

Senator GORE. It is a serious proposal to deal with a very serious problem, and I wish to congratulate you upon the amount of study which you have given the problem, and upon your ability to bring the administration into agreement upon a proposal in this vexatious field.

Several proposals, of which you have indicated your awareness, are before the committee. There is one by Senator Humphrey, one by Senator Kennedy, and I think Senator Anderson is preparing one for introduction perhaps today or tomorrow. I will be unable to interrogate you in any detail on your proposal, not having had an opportunity to study it but I followed your statement and your description of it with care, and from that would like to submit a very few questions.

For what period of time would the initiation fee, you described it by another term, what did you call it?

Secretary FLEMMING. Enrollment fee.

Senator GORE. Enrollment fee, maybe one name is as good as another.

For how many years would it be necessary that this enrollment fee be paid before a person would be entitled to benefits which you recommend ?

Secretary FLEMMING. In our proposal there isn't any limit. It would be paid each year.

Senator Gore. You mean he could pay for 1 year and then be entitled to benefits?

Secretary FLEMMING. Well, he would be entitled to the benefits during that benefit year, but then the next year he would have to pay another fee of $24. And so on. It is an annual enrollment fee.

Senator GORE. I believe there are some more questions and I am sure after your bill is introduced and we all have had a chance to study it that you will have an opportunity to return because this is a question that can't be solved in 2 days, or should not be, in my opinion.

Suppose a person who has not been enrolled is advised by his private physician that he may need surgery?

Would there be any estoppel in your program so that he could not pay the enrollment fee and then be immediately eligible for the payment of his hospital bill?

Secretary FLEMMING. He could enroll at that point.

Senator GORE. In other words, if he knew that he was going to have to go to a hospital for an operation, he could then pay $24 and be eligible to have you pay or have the Government pay a hospital bill of $5,000?

Secretary FLEMMING. As we visualize it, something like the way your Blue Cross and Blue Shield operate at the present time, there would be an enrollment period during which persons would have the opportunity of enrolling. Senator GORE. That is the first question I asked you. Secretary FLEMMING. That is right.

Senator GORE. I thought of necessity there would be an enrollment period.

Secretary FLEMMING. That is right and given a situation such as you describe, he would not come under the plan that we have proposed. He would in all probability then come under the old-age assistance benefit schedule. As you will recall, we are recommending that the same schedule of benefits be set up for the old-age assistance people that are set up for people who would come under this plan, so that if he did not have resources to deal with that situation, he would come under the old-age assistance and be given all of the assistance provided for in our plan.

Senator GORE. What is the enrollment period ?

Secretary FLEMMING. Our thought there was the State would make the determination, or at least include in the plan that it submitted to the Federal Government for approval provision for an enrollment period, and if the provision that they put in appeared to be reasonable to the Federal Government, it would then be approved as a part of their State program.

We did not have in mind writing into either Federal law or regulation any uniform provision on that for all 50 States although that could be done.

Senator GORE. You say you did not have that in mind.

Secretary FLEMMING. We felt that, just thinking out loud, it would be better to let the State make proposals to us and the proposals were reasonable, if they were, approve them, rather than having any uniform provision for the entire country. But certainly you could think in terms of a uniform provision.

Senator GORE. Your answer is thus far

Secretary FLEMMING. When you get into something of that kind following this a little further, if you had a fixed enrollment period, then

you have got to make provision for the people who reach age 65 between enrollment periods and that certainly could and should be done. Senator GORE. Well,

your answers thus far lead me to the conclusion that perhaps the Department could give some further study to this problem with profit during the proposed recess of the Congress.

I think of necessity you would have a qualifying period, or else you would certainly have a rash of enrollment fees after visits to the doctor's office.

I agree with your point of view that it's more equitable to derive revenue from a progressive income tax than from a payroll tax or sales tax or manufacturing excise tax, and I congratulate you upon presenting that point of view. It has been a little cold around here Îately, but I think you are sound in that point of view.

However, when applied to this particular situation, I am constrained to the view that it is only through a program sufficiently widely based that we will have a truly national program.

If you proceed upon the enrollment fee of $24 per year that is equal to 1 percent of a $2,400 salary, which is more than would be deducted from an income, from wages, by either of the proposals pending before the committee with the social security approach.

For instance, a person with a $3,000 per annum wage would pay $15—let's take the example of a person with a $4,000 annual wage.

Under the bill I have introduced he would pay $10 per year, and the employer would pay $10 a year. Now under your plan before he would be eligible he would have to pay, the person himself would have to pay, $24 a year for a period of years on which we are now uncertain.

Secretary FLEMMING. Senator, just to back up a minute, does your bill provide for a one-half percent increase in payroll tax?

Senator GORE. Yes; one-quarter by each, employer and employee.

Secretary FLEMMING. I might say we have not had the opportunity of studying your bill in detail

, but taking the McNamara bill as an illustration, if I understand, if yours is fairly close to that although possibly a little more liberal in terms of some of the benefits.

Senator GORE. More liberal in some and less liberal, I think, in others.

Secretary FLEMMING. Yes.
Senator GORE. Pardon me just a moment.

Secretary FLEMMING. The McNamara bill, Senator Gore, would require in our judgment, from an actuarial point of view a 1-percent increase in payroll tax.

Senator GORE. Eventually.

Secretary FLEMMING. Well, when it is adopted, by the Congress our recommendation-if it is adopted by the Congress, our recommendation from the actuarial point of view would be that it includes a 1-percent tax. That is if we made the same kind of a recommenda

« PreviousContinue »