member companies we respectfully urge reenactment of the offset provision which would avoid such duplication. In view of the concern which has been expressed over the cost of broadening social security benefits in areas where protection is presently lacking, it seems particularly inappropriate to duplicate benefits already provided by State laws. You are respectfully urged to avoid this unnecessary tax burden. A somewhat more detailed memorandum on the subject is attached. J. DEWEY DORSETT, General Manager. MEMORANDUM CONCERNING H.R. 12580 BY MR. MILLS AND THE DUPLICATION OF WORKMEN'S COMPENSATION AND SOCIAL SECURITY DISABILITY BENEFITS This memorandum is being submitted on behalf of the Association of Casualty and Surety Companies, an organization with a membership of 133 stock insurance companies most of which write workmen's compensation insurance throughout the United States. The above captioned bill, by greatly liberalizing the eligibility requirements for social security disability benefits, would newly make compensable under that act a great many cases presently covered by State workmen's compensation laws. This would constitute an inequitable duplication of benefits for the same injuries. The new application of the Social Security Act to such cases would also be a long step toward the federalization of the State workmen's compensation system. For close to 50 years compensation for industrial injuries has been provided under State workmen's compensation laws. The interests of employees and employers would best be served by the retention of that system. Disability payments were first provided under the Social Security Act in 1956. However, at that time an offset provision was included (sec. 224) with respect to payments under workmen's compensation laws. Thus no duplication existed in this area. However, in 1958 this offset provision was repealed as part of extensive amendments to the Social Security Act. No hearings were held on the measure that was enacted. Moreover, no hearings have been held at any time, either by a Senate or House committee, where the serious impact of an elimination of the offset provision has been discussed from a workmen's compensation viewpoint. Up to the present, however, the impact of this duplication has been relatively limited. The eligibility requirements presently contained in the Social Security Act have been such as to restrict the area of duplication to comparatively few cases. No benefits are payable to persons under 50 years of age, a 6-month waiting period is required and the definition of disability limits payments to actual cases of permanent total disability. No attempt has, therefore, been made up to the present to restore the offset provision. H. R. 12580, presently before you for consideration, would eliminate the requirement that one must attain the age of 50 to be entitled to disability benefits. It would also make exceptions to the requirement of a 6-month waiting period and provide for a trial period after return to work during which benefits would have to be paid. This legislation, if enacted, would greatly enlarge the area of duplication. The added cost of social security benefits as a result of these changes has been estimated for the year 1961 at $200 million by the House Committee on Ways and Means (H.Rept. 1799, 86th Cong., 2d sess., p. 43). This makes restoration of the offset provision imperative. Social security benefits when pyramided on top of workmen's compensation benefits, which are large in a number of States, would impose a completely unnecessary cost on the public, including both individual taxpayers and industry. We also believe it is socially undesirable to provide systems of disability benefits producing such substantial sums of income that there is no incentive to return to work. In Arizona, for example, if social security benefits were added to workmen's compensation a tax free income of $904 a month could be produced, payable for life. In Hawaii, weekly compensation alone for partial disability can amount to $112, and for total disability $75. In Alaska $100 is payable for temporary total and partial disability and $52.65 for permanent total. In California, maximum weekly compensation is set at $65 for temporary total and $52.50 for permanent. Compensation is generally payable at the rate of twothirds of average weekly wage, subject to a weekly maximum which ranges from $150 in Arizona to $30 in only one State. These benefits are constantly being increased. Let us take a specific example: In Massachusetts, according to the U.S. Department of Labor (Monthly Labor Review, June 1959, p. 720) the average weekly earnings for production workers in manufacturing is $79. For an employee, who is totally disabled, with a wife and two children, his compensation would amount to $63 a week. If social security were added to his compensation, the total would exceed his average weekly wage, all tax free. He would lose considerable income by returning to work. Monthly social security disability benefits for an employee with a young wife and one or more children average $167.80 and with an old wife and one or more children $197 (Annual Statistical Supplement, 1958, Social Security Bulletin, March 1960, p. 41). It is likely that in many States social security benefits if added to compensation would often approach or exceed average weekly wages or, at least, take-home pay. This would hardly encourage rehabilitation. Industry already has expressed serious concern about the burden being placed on the national economy by the social security system. The New York Journal of Commerce, March 7, 1960, page 10, quotes the National Association of Manufacturers as indicating that "the liabilities against the old age and disability insurance fund now stand at some $360 billion. Of this enormous sum, only about $21 billion is funded. The unfunded part-some $340 billion-exceeds the national debt by about $50 billion." It hardly seems appropriate to add to this burden by duplicating payments under State workmen's compensation laws. In this connection, it is worth noting that total workmen's compensation payments in the United States for the year 1958 amounted to $1,113,253,000 (Social Security Bulletin, December 1959, p. 15). Moreover, the report of the House Committee on Ways and Means on Social Security Amendments of 1960 (H. Rept. 1799, 86th Cong., 2d sess., p. 49) gives a low estimate of social security disability payments for 1965 (the most recent indicated) of $820 million and a high estimate of $1,231 million. The cost to the taxpayer cannot be ignored. Already 6 percent of taxable payrolls are funneled into the social security system. Even at present benefit levels it is scheduled to be raised to 9 percent after 1968. In considering the imposition of additional obligations upon the system the avoidance of undesirable duplication should deserve careful consideration. In the report of the Committee on Finance on Social Security Amendments of 1958 (S. Rept. 2388, 85th Cong., 2d sess.), it is stated that the national social security system should be looked upon as providing the basic protection against loss of income due to disabling illness and that it is incompatible with the purpose of this program to reduce these benefits on account of disability benefits that are payable under other programs. It is respectfully submitted that the State workmen's compensation system rather than the Social Security Act is the basic system of income protection with respect to industrial injuries. It provides for medical care, unlimited in amount in most States, compensation for permanent injuries, temporary injuries, total disablement, partial disablement, and death and funeral benefits. Not even the most ardent advocates of social security can reasonably contend that comparable benefits are likely to be provided under the social security system in the foreseeable future. It is the latter that is supplementary, not basic. It is completely impractical to undertake amendment of the laws of the 50 States and other jurisdictions having compensation acts to mold them around the variable benefits which are or may be provided under the Social Security Act. Yet, as indicated above, if social security benefits are to be added to compensation, adjustment of benefit levels will be essential. Little would be gained and possibly a great deal lost if adequate compensation levels were made excessive. Restoration of the offset provision with respect to workmen's compensation would avoid this possibility. If it is the purpose of this legislation to provide a floor for work injury benefits, an offset provision would most equitably accomplish this objective. A minimum would be established, but an undesirable accentuation of benefit differences between States would be avoided. It seems difficult to justify substantial additions to benefits which are already adequate. H.R. 12580 also contains provisions relating to medical care for the aged. Since eligibility for such care under the bill is based on need, duplication with the medical care provisions of workmen's compensation laws would seem to be avoided. However, an express offset provision in this area also would be helpful. It is to be noted that S. 2915, by Mr. Kennedy, which also relates to this subject does contain such an offset provision. Whether or not the above-captioned legislation is to be enacted at this session of the Congress, avoidance of duplication is necessary. It is most prob able that as time progresses the Social Security Act will be given broader application. Even now there are several other bills1 pending before the Congress which would greatly liberalize the definition of disability. It is important that duplication of social security disability benefits with workmen's compensation be avoided. We would like to emphasize also that our recommendation does not contemplate restoration of an offset provision as to veterans and other Federal periodic disability benefits. These are within the control of the Congress which can establish with respect thereto the overall level which it deems appropriate. In workmen's compensation, however, this combined level is beyond congressional control. Without an offset provision, it would likewise be beyond the control of the States. In such a situation serious inequities are bound to arise. It is, therefore, respectfully recommended that the offset provision with respect to workmen's compensation be restored to the Social Security Act. Respectfully submitted. J. DEWEY DORSETT, U.S. SENATE, June 29, 1960. Hon. HARRY FLOOD BYRD, Chairman, Senate Finance Committee, Washington, D.C. DEAR SENATOR BYRD: I submit herewith a statement in support of S. 3503. I would appreciate it if you would make it a part of the record of your hearings on H.R. 12580 and call it to the attention of your colleagues for their consideration. Sincerely yours, JAMES E. MURRAY. STATEMENT BY SENATOR JAMES E. MURRAY BEFORE SENATE FINANCE COMMITTEE, JUNE 29, 1960 My statement for your committee, perhaps the last one before any Senate committee in this, my last term in the Senate, is obviously not motivated by any need to get votes in the next election. Nor can it be explained in terms of any eligibility for old-age social security benefits, since I am not covered by OASDI. Indeed, it might be said that I am in an enviable position, because my position cannot be compromised by pressures from any organized group. Nor am I a late arrival on any bandwagon for action in the area of legislation for the health needs of our great Nation. The Murray-Wagner-Dingell bill of more than a decade ago should remind you of that fact. Furthermore, only 8 years ago, I introduced the first bill to provide medical care benefits for beneficiaries under the social security system. I believe that I speak with authority on this subject. Today, because of our previous failures to meet the problems, the needs and the gravity of the health care of America's senior citizens have resulted in the unda voidable clamor for a solution. I must also pay tribute to the work of Congressman Forand on the House side in keeping the issue before us. And, of course, on the Senate side we have the pioneering efforts of the Subcommittee on Problems of the Aged and Aging, under the assertive leadership of Pat McNamara. Regardless of the final version of the legislation that must come out of your committee, these two men and their colleagues deserve the credit for making Congress come to a decision. Twenty-five years ago, in my first term as a Senator, we enacted the one great piece of legislation that still thrives, unexpurgated and undefiled, since the New Deal of Franklin D. Roosevelt. Historians make that legislation the outstanding feature of that period of our national life. What will they say about 1960 if we fail miserably and uncourageously to provide health care benefits for the retired Americans who were in their prime of life in 1935? Nations are not judged in terms of their productivity and novelty of their gadgets: they are judged in terms of the dignity and well-being that they make possible for the widest number of their citizens. 1 H.R. 9684, 9686, 9687, 9743, and 9915. In signing the Social Security Act in 1935, President Roosevelt described it as the "cornerstone in a structure which is being built but is by no means complete." The passage this year of legislation assuring basic health benefits for senior citizens through the most efficient and sensible mechanism at our disposal, the social security system, would epitomize the principle stated by President Roosevelt. Through such legislation, working people would contribute during their working years to a fund assuring them of medical benefits when they have retired. While private insurance programs-especially through the accomplishments of collective bargaining-have basically met the need to protect the younger population, they simply cannot afford to offer protection against the higher risks of the aged at premiums the aged and their families can afford. The insurance companies' fears are simply unfounded, just as were their fears of 25 years ago, when they prophesied the collapse of the private pension movement if a program of old-age benefits were established in the land. You have before you the retired persons medical insurance bill, S. 3503, introduced by Senator McNamara and 23 cosponsors, including myself. It should be approved as a substitute amendment for title XVI of H.R. 12580. The McNamara bill is not socialized medicine. It does not nationalize the country's hospitals. It does not put doctors on Government payrolls. Individuals would not be forced to accept a doctor or a hospital designated by some bureaucrat in Washington. The McNamara bill, in fact, omits any payments to doctors and surgeons. It will not result in the flooding of hospitals with hypochondriacs and unnecessary operations. The contributions by employees and employers will be no more compulsory than the public's support for schools, firemen, and policemen. Indeed, if we don't enact such legislation, we will only be forcing the local communities and States into assuming the impossible burden of relief-and real State medicine, with its less than adequate standards. In other words, just as will old-age benefits under social security, the McNamara bill would establish a basic foundation of medical protection for the retired aged of this growing Nation. I expect to be around 10 years from now, when all the vested interests now childishly fighting this and similar proposals will be accepting-indeed praising-old-age medical benefits as a normal part of American life as a basis for improving through private techniques the living conditions of Americans in their retirement years. I fervently hope that the members of the Finance Committee will also be around to witness the fruits of positive action on their part in the next few days ahead. Whether they will be in Washington or not may well depend, in large measure, on their decision about this particular issue. AMERICAN FARM BUREAU FEDERATION, Hon. HARRY FLOOD BYRD, Chairman, Senate Finance Committee, U.S. Senate, Washington, D.C. DEAR SENATOR BYRD: This is to express to you Farm Bureau's position with regard to certain provisions of H.R. 12580, a bill that amends the old age and survivors insurance program and adds certain new provisions. This legislation has some desirable features; however, we are deeply concerned about the implications of title VI of this legislation which would amend the Social Security Act by adding a new title under which medical services would be financed for certain individuals 65 years of age or over who are determined to be medically indigent. We recognize that the approach taken in this title is different from, and perhaps has less far-reaching implications than, the original proposal known as the Forand bill. However, we believe that the enactment of title VI will (1) be the opening wedge for Forand-type proposition, (2) be very costly to both Federal and State Treasuries, (3) slow down progress being made to provide medical care for aged through nongovernmental programs. Any such permanent new program costing billions of dollars, where there is so much disagreement as to a possible solution, should not be drafted and launched in haste and in an atmosphere supercharged with election-year politics. We believe this proposal deserves more adequate consideration. Since there have been no hearings in the House and since there is insufficient time for the Senate Finance Committee to give adequate consideration to the provisions of title VI of this bill, we recommend that the committee strike this title in order to give time for thorough study of the implications of this legislation. We respectfully request that this letter be made a part of the hearing record with regard to H.R. 12580. Sincerely yours, JOHN C. LYNN, Legislative Director. Hon. HARRY FLOOD BYRD, AMERICAN ASSOCIATION OF UNIVERSITY WOMEN, Chairman, Finance Committee, Washington, D.C. DEAR SENATOR BYRD: For many years the American Association of University Women, an organization of over 144,000 women organized into 1,464 branches in all of the States of the Union, Guam, and the District of Columbia, has followed social security legislation with keen interest. For this reason we feel that you would be interested in knowing that the proposed revision of the Social Security Act which has proven to be of greatest concern to our members is that to increase the present $1,200 ceiling on earning of OASDI beneficiaries. We find this present earning level works hardship upon numbers of our members who accept teaching positions which are frequently not located in the community of their permanent residence. The financial hardship of travel axl of maintaining temporary dual residence has in some instances led to resignation when earnings over the $1,200 ceiling meant loss of social security benefits. Other retired teachers are inhibited from ever taking post-retirement positions for which they are intellectually and physically qualified. In view of the alarming shortage of classroom teachers at the elementary, secondary, and college levels, it is our hope that this unnecessary financial hurdle to the augmentation of the supply of teachers will be removed. We have cited this illustration because of its applicability to our own membership. We could pick others which also demonstrate the needless limitation on the contributions which could be made by older citizens. In conclusion, we should like to point out that as the cost of living index continues to rise the present $1,200 ceiling, enacted some years ago, becomes increasingly unrealistic. Sincerely yours, KATHERINE BAIN, Chairman, Legislative Program Committec. YSABEL FORKER, Chairman, Status of Women Committee. FEDERATION OF JEWISH CHARITIES OF ATLANTIC CITY U.S. Senator HARRY FLOOD BYRD, DEAR SENATOR BYRD: The questions of medical services for the aged is one in which there is considerable interest in our Federation Family Welfare Serv This body has gone on record as approving the use of the social insurance pri ciple to meet the health needs of older citizens. We have come to support t1 conclusion on the basis of an actual case-by-case study of individuals and famili in the aged category whose lives are troubled, and whose present and future ou look is uncertain largely because of the failure to provide for their medical needs in their old age. We believe, too, that it is more dignified for the individual to provide for his needs during the earning years of his life than to be subjected to the indignities of a means test for medical care. We would very much appreciate that this statement be incorporated in e official record of hearings, if they are to be held. Sincerely yours, IRVING T. SPIVACK, Executive Director. |