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STATEMENT OF THE CHAMBER OF COMMERCE OF THE UNITED STATES ON,
AMENDMENTS TO THE SOCIAL SECURITY ACT OF 1935, JULY 5, 1960 The Chamber of Commerce of the United States supports some social security proposals being considered by your committee, but is opposed to all the health care proposals for reasons outlined in this statement.
MEDICAL CARE FOR THE AGED
H.R. 12580 would create a new program (title XVI), involving Federal grantsin-aid to those State which provide medical assistance to aged persons who cannot readily afford costly illness. According to the report of the House Ways and Means Committee, this program would initially cost about $325 million annually, with the National Government supplying $165 million and States, $160 million.
This report estimated that the number of aged who might qualify for such medical assistance number from 500,000 to 1 million in a year. We have examined the committee report in detail and we believe that data now available are inadequate on which to make a reasonable, reliable estimate of the additional cost to the National Government and to the State governments. Also, we find no data indicating all States need to establish such programs.
F lly, the Ways and Means Committee held no public hearings on this proposal, and the Senate Finance Committee held only 2 days of hearings. We feel that there has not been sufficient opportunity to study this proposal. For these reasons, the national chamber is opposed to this proposal in H.R. 12580.
Several other proposals for providing medical care for aged persons within the OASDI program, including S. 881, S. 1151, S. 2915, and S. 3503, are also before this committee. The first three embody what is sometimes referred to as the Forand principle which would pay for limited hospital and other specified medical care from the OASI trust fund. This care would be provided to those drawing social security benefits, as well as to those eligible to receive benefits but who are not receiving them because they are earning a self-supporting living. In other words, there is no work test. These health care service benefits would be provided to almost 2 million people who have not retired, as well as to the 10 million who have.
The national chamber is opposed to these bills embodying the Forand approach, because, first, they would establish a “service” benefit in social security in lieu of the cash benefit; second this benefit would be provided to older persons (women 62 and over, men 65 and over) who are earning self-supporting incomes and hence may have experienced no wage loss.
We believe that the National Government should not initiate any kind of benefit in social security which denies to each individual the freedom of choicethe freedom to decide how he wishes to spend his benefit money. In the case of these proposals, additional benefit money would be raised by increasing social security taxes. However, none of this money would be paid to the beneficiaries so that each could decide how he chooses to spend it. Instead, it would be used to pay for certain health care benefits for which Congress feels he should be compelled to use that income,
The national chamber is also opposed to the Forand approach because it abolishes the work test. Age (62 for women and 65 for men) would then be the main factor determining who would receive this health care protection, and who would not. We see no more justification for mere age alone as the deciding condition of eligibility for health care benefits than we do age 50 for disability benefits.
We believe that within a relatively few years this age requirement would be eliminated and we would then have a universal compulsory health care program for all-regardless of age. Incidentally, a universal compulsory program is the admitted long-range goal of leaders of organized labor (see testimony of Mr. Nelson Cruikshank and Mr. Walter Reuther, “Hospital, Nursing Home, and Surgical Benefits for OASI Beneficiaries," hearings, House Committee on Ways and Means, 86th Cong., 1st sess. pp. 101, 403).
Adoption of any Forand-type proposal (as well as S. 3503) is the certain way to achieve this goal—piecemeal. In consequence, the national chamber is opposed to all Forand-type proposals since we believe the National Government should not intervene in any area in which it has been demonstrated that private effort, depending upon individual freedom of choice, can meet human needs and wants.
The tax costs of such a universal program would certainly equal the amount people voluntarily spend for such health care, which in 1958 totaled more than $16 billion. Experience in other countries where health care benefits are sup posedly “free,” strongly suggests that the tax costs would exceed this $16 billion amount-and would involve many billions of dollars additional social security taxes annually on workers and on business. This additional tax burden could threaten public acceptance of the present social security program on which so many millions now depend as a "floor of protection.” In considering any changes in social security, it must always be borne in mind that the present schedule of benefits will require a 50-percent increase in taxes on workers and on employers by 1969. Assurance of benefits in the future depends wholly on workers' willingness to pay these much larger taxes.
In slight contrast to these first three bills (S. 881, S. 1151, and S. 2915) S. 3503 contains a kind of a work test but it differs radically from the one now in social security. The present work test is one which must be met each and every year until age 72. However, the work test in S. 3503 is one which must be met only once in any calendar year after a woman's 61st birthday or a man's 64th birthday. Having met this test once, a person could receive health care benefits regardless of whether he was truly retired, or working full-time.
Here again, age would be the decisive factor separating those who would get benefits from those who would not. The inequities are obvious. For example, in the case of two men—one, aged 63 and the other 65, and both working fulltime and receiving the same pay—the first one would receive no health care benefits while the second one would get such benefits. We do not believe such inequities could long persist-Congress would soon remove “age" as a condition of eligibility.
It should be noted that the work test in S. 3503 for health care benefits is $2,000 of earnings in any calendar year, or $100 a month wages in each of 3 months in any calendar year after a woman's 61st birthday, or after a man's 64th birthday. This “test” differs very materially from the present work test for cash benefits. In consequence, many older people would receive the proposed health care benefits under social security but could not receive cash benefits. Obviously, the easier work test in S. 3503 would soon be made to prevail for the social security cash benefits as well.
As under the Forand-type proposals, social security would then no longer be a system of benefits partially to replace wage-loss on retirement, but one paying benefits automatically at age 65. Tax costs would increase very substantially. Since monthly income guaranteed at age 65 can be obtained through private enterprise, we do not believe the National Government should intervene in this field.
Should a sound work test be placed in any Forand-type proposal, or in S. 3503, the national chamber would still oppose the initiation of the service type benefit in social security. In a compulsory program, there is no substitute for paying benefits in cash that is acceptable to free Americans. Benefits in cash alone preserve the individual's freedom to decide how he wants to use that income to choose whether he wishes to save it, or to spend it—to spend it for medicine, drugs, health insurance, or for other things to meet his own needs.
OTHER SOCIAL SECURITY CHANGES
H.R. 12580 would extend social security coverage. The national chamber has long had the following policy—“The system of Federal old-age and survivors insurance benefits now covers more than 90 percent of the workers of the country. Extension should be made promptly to the few noncovered groups.”
Another provision in H.R. 12580 would reduce the quarters of coverage re quired for benefit eligibility. The national chamber is opposed to this proposal easing quarters of coverage from one out of two to the one out of four as a condition of benefit eligibility. We know of no conditions which would justify this change.
CHANGES IN THE FEDERAL UNEMPLOYMENT TAX ACT
H.R. 12580 would increase the Federal unemployment tax rate on employers' payrolls from 3 percent to 3.1 percent. The maximum credit against this would remain at 2.7 percent. The net effect is to increase the Federal unemployment compensation tax rate from 0.3 to 0.4 percent on the employers' payrolls covered by the act.
The present Federal unemployment compensation tax rate continues to yield revenues in excess of the amounts required for administrative purposes and for the Employment Service. Consequently, the national chamber is opposed to any increase in these taxes since additional moneys to operate an effective unemployment compensation program are not now needed.
ROCHESTER, N.Y., June 30, 1960. Senator HARRY F. BYRD, Committee Chairman, Senate Committee on Finance, U.S. Senate, Washington, D.C.:
As a doctor of medicine I should like to appear before your committee to testify in support of legislation to provide health benefits to the aged. However, I don't want to delay completion of your committee's work in these closing days of the congressional session and if my personal appearance would hold up the committee's deliberations I would prefer to be recorded favoring added health benefits to the OASDI system by having this telegram included in the committee's record.
WILLIAM A. SAWYER, M.D., Medical Consultant, International Association of Machinists.
PHILADELPHIA, PA., July 1, 1960. Senator HARRY F. BYRD, Chairman, Committee on Finance, U.S. Senate, Washington, D.O.:
As medical director of the Sidney Hillman Medical Center, I would like to go on record as requesting that your committee give favorable consideration to legislation providing health benefits to aged through social security system.
JOSEPH A. LANGBORD, M.D.
WASHINGTON, D.C., July 1, 1960. Hon. HARRY F. BYRD, Chairman, U.S. Senate Office Building, Washington, D.C.:
Textile Workers Union of America, AFL-CIO, representing over 220,000 workers in 38 States, request that it be recorded in current hearings of Senate Finance Committee as urging adoption at this session of legislation assuring health care for the aging along the lines of the McNamara and Forand bills. We insist upon the social insurance principle as absolutely essential to a sound and workable bill to aid the aging. We reject a means test as degrading, unfair, and cumbersome. Please record our opposition to title VI of H.R. 12580 and our support for a measure similar to S. 3503. Recent convention of our union, voted this position after full debate in which only rank and file delegates took floor.
WILLIAM POLLOCK, General President, Textile Workers Union of America, AFL-C10.
ELKINS, W. VA., June 30, 1960. Senator HARRY F. BYRD, Chairman, Senate Finance Committee, Washington, D.C.:
As a practicing surgeon and hospital medical director I feel the present proposed social security system for assisting the aged in the cost of their medical care is the best presented to date. I heartily urge its passage and shall be willing to testify on its behalf. Should time not permit I ask that this concurrent telegram be incorporated in the records.
BENJAMIN I. GOLDEN, M.D.
HAMDEN, CONN., June 30, 1960. Hon. HARRY F. BYRD, Chairman, Senate Finance Committee, New Senate Office Building, Washington, D.C.:
The Connecticut State Labor Council strongly urges your committee report favorably a bill of health care for senior citizens. Based on the well-established
social insurance principle of social security there is no adequate and equitable means of alleviating the financial burden of medical and hospital costs which retirees on reduced income face. The social security solution to this problem, based as it is on contribution of employer and employee, is the least costly of all solutions to Federal and State Governments.
JOSEPH M. ROURKE, Secretary-Treasurer, Connecticut State Labor Council.
ITHACA, N.Y., June 30, 1960. Hon. HARRY F. BYRD, U.S. Senate, Washington, D.C.:
Regarding your current hearings on proposed legislation for health care of the aged, may I request insertion of remarks into your committee record. As a physician engaged for 20 years in administrative medicine at the level of the local community, the State, and the Federal Government, I am convinced that health services of aged persons can be maintained at proper American standards only through insurance which is fully paid up before age 65. This is most feasible through our well-established social security system. Such coverage would halt the rise in voluntary hospitalization insurance premiums now carried by wage-earning citizens while also reinforcing the financing of our voluntary hospitals at their weakest points. I therefore urge amendment of the Social Security Act to provide hospital and medical services for aged beneficiaries. For identification purposes I am an associate professor of administrative medicine at Cornell University.
MILTON I. ROENER, M.D.
PORTLAND, OREG., July 1, 1960. Hon. HARRY F. BYRD, Chairman, Senate Finance Committee, Room 2227, New Senate Office Building, Washington, D.C.:
On behalf of the International Woodworkers of America, AFL-CIO, we urge you and your committee to adopt a program of medical care for the aged within the social security system. We urge you to oppose direct relief approach and means test requirements.
A. F. HARTUNG, International President, International Woodworkers of America, AFL-CIO.
DETROIT, Mich., June 30, 1960. Hon. HARRY F. BYRD, Chairman, Senate Committee on Finance, U.S. Senate, Washington, D.C.:
Urge that the Finance Committee give favorable consideration to amending House Ways and Means Committee social security bill to provide that broad health benefits for the aged be obtained through the social security system. This will afford the most sound and economical solution to a vast social and economic problem. Please include this telegram in the record of the committee.
FREDERICK D. Mott, M.D.
MEYERSDALE, PA., June 30, 1960. Senator HARRY F. BYRD, Chairman, Senate Finance Committee, Senate Office Building, Washington, D.C.:
I do not feel that the present bill for medical assistance to the senior citizens is nearly adequate. Any legislation must be coupled with social security bene fits in broader coverage to be satisfactory.
Ross RAMBAUGH, M.D.
SALISBURY, PA., June 30, 1960. Senator HARRY F. BYRD, Chairman, Finance Committee, Senate Office Building, Washington, D.C.:
In my opinion the present administration hospitalization bill for the aged is unfair to the majority of our senior citzens. I feel strongly that any adequate bill should be part of the social security program. I just returned from a month's survey of European hospitals and found that the aged in the seven countries I visited are adequately protected against the insecurities of expensive hospitalization by national insurance programs.
ALEXANDER SOLOSKO, M.D., Chief of Staff, Meyersdale Community Hospital, Meyersdale, Pa.
AUSTIN, TEX., June 30, 1960. HARRY BYRD, Chairman, Senate Finance Committee, U.S. Senate, Washington, D.C:
In behalf of the 675 members of the Texas Hospital Association who are dedicated to the better health of all Texans, we urge you to use your vote and influence to defeat the unnecessary legislation pending before the Senate regarding federally supported health care for the aged. This is a local and State responsibility and we are doing our utmost to provide the necessary care through voluntary means.
FRED R. HIGGINBOTHAM, President, Texas Hospital Association.
CINCINNATI, OHIO, June 30, 1960. Hon. HARRY F. BYRD, Room 227, New Senate Office Building, Washington, D.C.:
I urge your committee to adopt medical care benefits for aged as part of social security system and oppose any means test legislation.
GEORGE M. HARRISON, Brotherhood of Railway Clerks.
WINDOW CLEANERS UNION, LOCAL 16,
Pittsburgh, Pa., June 29, 1960.
DEAR SENATOR: On behalf of 250 members of our organization and for myself, I am writing this letter to urge you to do all in your power to support the Senate bill 3503. Your support of this bill will be greatly appreciated. Very truly yours,
LEO KAPRUS, Secretary-Treasurer.
July 1, 1960.
DEAR MR. CHAIRMAN: I have recently noted that he Nationwide Insurance Co. of Columbus, Ohio, has taken a strong position supporting the use of the social insurance principle to meet the health needs of older citizens.
This responsible company which has grown to list assets of $350 million, is the first such large insurance carrier to recognize the desirability of legislation to carry out this principle. At the same time, it understands that such a measure would leave a large area of opportunity for the private insurance industry.
For the information of the Members of the Senate and others who will be studying this issue, therefore, I would like to request that the policy statement of the Nationwide Insurance Co. on this issue together with a memorandum indicating the supporting reasons for their policy position, and a New York Times