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OLD-AGE, SURVIVORS, AND DISABILITY INSURANCE-Continued IV. BENEFIT AMOUNTS-Continued
A. Computing average monthly wage-Con.
Individuals can "drop out" up to 5 years of lowest or no earnings in computing average monthly wage.
B. Child's survivor benefit.... Benefit payable to each child is 1⁄2 of workers'
benefit plus 4 of his benefit divided by the number of children he has (if he has 2 children, each child will get 1⁄2 plus % (%) of his benefit).
The earnings used in the computation would be earnings in the highest years. Earnings in years prior to attainment of age 22 or after attainment of retirement age could be used if they were higher than earnings in intervening years. The span of years could never be less than 2. Generally, the span of years to be used for the benefit computation in retirement cases could not be less than 5 the number of years that would have to be used under the present law by people who attain retirement age in 1960.
Effective, in general, on Jan. 1, 1961.
House report: pp. 28-29, 94-96.
Benefit payable to each child would be of workers' benefit.
Effective for 3d month after enactment.
A. Investment of the trust funds.
Provides that the managing trustee (Secretary of the Treasury) shall invest such portion of the trust funds as is not, in his judgment, needed to meet current withdrawals. Investments must be made in interest-bearing obligations of the United States or in obligations guaranteed as to both interest and principal by the United States. Such obligations issued for purchase by the trust funds shall have maturities fixed with due regard for the needs of the funds, and bear interest at a rate equal to the average rate of all marketable interest-bearing obligations not due or callable until after the expiration of 5 years from the date of original issue. This interest rate, if not a multiple of % of 1 percent, is rounded to the nearest multiple of % of 1 percent.
The special obligations shall be issued for purchase by the trust fund only if the managing trustee determines that the purchase in the market of other interest-bearing obligations of the United States, or of obligations guaranteed as to both principal and interest by the United States, on original issue or at the market price, is not in the public interest.
Changes interest provision so that obligations shall bear interest at a rate equal to the average market yield (computed by the managing trustee on the basis of market quotations as of the end of the calendar month next preceding the date of such issue) on all marketable interest-bearing obligations of the United States then forming a part of the public debt which are not due or callable until after the expiration of 4 years from the end of such calendar month. Reverses the provision so that the managing
trustee is authorized to make purchases in the open market when he deems it is within the public interest.
OLD-AGE, SURVIVORS, AND DISABILITY INSURANCE-Continued V. FINANCING-Continued
1. Board of Trustees. These funds are administered by a Board of Trustees consisting of the Secretary of the Treasury, as managing trustee, the Secretary of Labor, and the Secretary of Health, Education, and Welfare, all ex officio (with the Commissioner of Social Security as secretary).
It shall be the duty of the Board of Trustees to
(1) Hold the trust funds;
(2) Report to the Congress not later than the 1st day of March of each year on the operation and status of the trust funds during the preceding fiscal year and on their expected operation and status during the next ensuing 5 fiscal years;
(3) Report immediately to the Congress whenever it is their opinion that during the ensuing 5 fiscal years either of the trust funds will exceed 3 times the highest annual expenditures anticipated during the next 5 years, or whenever in their opinion either of the trust funds is unduly small.
(4) Recommend improvements in administrative procedures and policies designed to effectuate the proper coordination of the old-age and survivors insurance and Federal-State unemployment compensation
2. Advisory Council... An Advisory Council on Social Security
Financing will periodically review the status of the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund in relation to the long-term commitments of the programs.
Changes (1) so that bonds may be purchased on original issue at the issue price.
Effective date: 1st day of the month after the month of enactment.
Bill: Sec. 701(d).
House report: pp. 26-28, 137.
No change. No change.
(3) Changes requirement so that Board has to report immediately only if it believes that the amount of either trust fund is unduly small.
Adds requirements that the Board review the general policies followed in managing the trust funds, and recommend changes in such policies, including necessary changes in the provisions of the law which govern the way in which the trust funds are to be managed. The Board is also required to meet at least once each 6 months.
Effective date: 1st day of the month after the month of enactment.
Bill: Sec. 701 (a), (b), (c).
OLD-AGE, SURVIVORS, AND DISABILITY INSURANCE-Continued
B. Review of status of trust
2. Advisory CouncilContinued
The first such Council will be appointed by the Secretary after February 1957 and before January 1958 and will consist of the Commissioner of Social Security, as Chairman, and 12 other persons representing employers and employees, in equal numbers, self-employed persons and the public. The Council shall make its report, including recommendations for changes in the tax rate, to the Board of Trustees of the trust funds before Jan. 1, 1959. The Board shall submit the recommendations to Congress before Mar. 1, 1959, in its annual report. Other advisory councils with the same functions and constituted in the same manner will be appointed by the Secretary not earlier than 3 years nor later than 2 years prior to Jan. 1 of the years in which the tax rates are scheduled to be increased. These advisory councils will report to the Board on Jan. 1 of the year before the tax increase will occur and the Board will report to Congress not later than Mar. 1 of the same year.
Changes appointment and report dates of ad-
House report: pp. 31-32, 138.
II. Scope of benefits..
The new title XVI provides for Federal payments to States which institute programs to
Federal payments to States would reimburse the States for a portion of their expenditures
The Federal Government would share in the expense of providing the following kinds of
1. Skilled nursing home services;
2. Physicians' services;
3. Outpatient hospital services;
4. Organized home care services;
5. Private duty nursing services;
6. Therapeutic services; and
7. Major dental care.
The Federal Government would share in the expense of providing the following medical services up to the limits stated:
1. Inpatient hospital services-up to 120 days per year;
2. Laboratory and X-ray services (other than those included as inpatient hospital services)-up to $200 per year; and,
3. Prescribed drugs-up to $200 per year.
The Federal Government would not share in the expense of providing the following kinds of medical benefits:
1. Services not determined to be medically necessary by a physician;
2. Services rendered to patients in mental or tuberculosis hospitals;
3. Services rendered to persons in hospitals (other than mental or tuberculosis hospitals) on a diagnosis of tuberculosis or psychosis, after the first 42 days;
4. Services rendered to inmates of public institutions (other than medical institutions); and,
5. Any other type of medical service not mentioned above.
The State plan must designate or establish an agency which will be responsible for setting and maintaining standards for the providers of hospital, nursing home, and organized home care services. The plan must also include methods for determining rates of payment for institutional services, and methods for determining schedules of fecs or rates of payment for other medical services.
II. Scope of benefits-Continued The State plan must provide medical benefits to all persons who1. Have attained age 65;
III. Eligibility for benefits....
IV. Beginning date..
V. Planning grants.
2. Have income and resources, considering their other living requirements, as determined by the State, which are insufficient to meet the cost of their medical services;
3. Are citizens of the United States; and,
4. Are residents of the State (provision must also be made, in accordance with the Secretary's regulations, which will make benefits available to residents of the State who are absent therefrom).
The State plan must exclude from eligibility for medical benefits all persons who
1. Are receiving payments, or are having payments made in their behalf, under the programs for aid to the blind, aid to the totally and permanently disabled, aid to dependent children, or old-age assistance; or
2. Are under age 65.
The State plan must contain provisions, in accordance with the Secretary's regulations, which
Payments to State will first be made for calendar quarter beginning July 1, 1961.
House report: pp. 2-3, 6-9, 10-11, 129-135.
Authorizes appropriation of Federal funds to the States to make plans and initiate administrative arrangements for the new programs under title XVI. Such grants shall be made upon application of the State agency, and may not exceed 50 percent of the cost of planning with the further limitation that aggregate payments to a State may not exceed $50,000. Effective date: Date of enactment. Funds appropriated would be available for grants to and obligation by the States through June 30, 1962.
I. Old-age assistance medical program.
The following formula is applicable for a com-
A. Matching formula. Federal matching share is $24 of the 1st $30