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The CHAIRMAN. Are you proposing that we enact overlapping legislation Senator BUTLER. If it costs more money that way. [Laughter.]

Secretary FLEMMING. They only overlap, Mr. Chairman, in the sense that some people would come under one program and if they came under one program they wouldn't come under the other. That is all, and they would be dealing with different people.

The CHAIRMAN. Here we have an administration bill that no Senator or no Congressman has ever introduced. I don't know that I have ever known that to have happened before in my experience.

Senator BUTLER. Mr. Chairman, may I make an observation? The last time I sat in this chair at a public hearing I think it was the Secretary of the Treasury who sat where the Secretary, Mr. Flemming, is now sitting.

He explained to us the precarious position of the dollar.

He told us how necessary it was that we retrench and be saving and that we display complete fiscal responsibility. Now you come up and you want to spend $1,225 million per annum as a starter for a program that is local in nature and should be taken care of by the people in their local communities.

Secretary FLEMMING. Senator Butler, if I may correct the record on that, our proposal is not that the Federal Government spend $1,200 million. Our proposal is that the Federal Government spend $600 million and that the States and local communities spend $600 million.

We agree with you there is a responsibility that should be shared by the State and local governments, but we also feel that it is a matter in which the Federal Government should be a partner.

Senator BUTLER. I say to you, Mr. Secretary, this is not a matter that should be shared by the Federal Government. This is a matter that can be taken care of by self-reliant people in their local communities, if given a chance to do so.

Secretary FLEMMING. Well

Senator BUTLER. I say there is lack of coordination here. The Secretary of the Treasury- I can't believe he would endorse this bill. How could he endorse this bill after coming here and telling us that the balance of payments are going against us, the dollar is becoming more precarious every day of the week? The CHAIRMAN. It is $876 million. [Laughter.]

Senator BUTLER. It doesn't seem to make any difference what it is, just so it is money. I have never seen such fiscal irresponsibility.

Secretary FLEMMING. Senator Butler, I would like to comment on your comment.

Senator BUTLER. You certainly may do it.

Secretary FLEMMING. Well, I would like to say this: That I see no conflict between fiscal responsibility and the Federal Government accepting some responsibility for taking care of what is a very serious problem in this country at the present time. There is no reason at all why, if a program of this kind were put into operation, it would still not be possible to operate under a balanced budget.

It will require hard choices, but where the welfare of human beings is involved to the extent that it is in this particular instance, it seems to me that the country can well afford to decide to do something about

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taking care of this problem, and taking care of this need may mean giving up something else or even increasing taxes in order to do it.

Senator BUTLER. Is the Secretary now telling this committee that this problem has not existed as long as we have been a Nation.

What makes it so pressing now when the dollar is in such a precarious position?

We need to save all the money we can. We need all the thrift we can muster. We need all the self-reliance that the people of this great country can put forth or you are going to have a situation where you are not going to be able to pay anybody anything:

Secretary FLEMMING. Senator Butler, I don't know whether you had the opportunity of examining the facts that I presented to the committee, dealing with the situation as far as the aged are concerned or not, but I do not think that anybody can examine those facts and arrive at the conclusion that fiscal considerations should be placed above human considerations but in my judgment

Senator BUTLER. Does that mean the Government of the United States should spend unheedingly?

Secretary FLEMMING. No.

Senator BUTLER. What does it mean! Your statements don't hang together. If you don't pay any attention to finances, what then is the ultimate result?

Secretary FLEMMING. Senator Butler, as I indicated earlier, this Government could become involved in this kind of a program and still have a balanced budget.

Senator BUTLER. Does the Secretary honestly believe and now wants to tell this committee that this is the end rather than just the beginning of this program?

Secretary FLEMMING. No, I wouldn't say that.
Senator BUTLER. It is just the beginning:
Secretary FLEMMING. I wouldn't allege it is the end.
Senator BUTLER. Now tell us, it is but a modest beginning?

Secretary FLEMMING. No, I don't regard it as a modest beginning. I regard it as a very substantial contribution to the problem of dealing with long-term illness.

The fact remains, Senator, that at the present time the aged do not have the opportunity of obtaining protection against the heavy costs of long-term illnesses, and everybody knows that many of the aged are called upon to suffer as a result of that and, in many instances, their families are called upon to suffer as a result of that.

Now, it seems to me that this country has the resources to identify a situation of this kind and move in and do something about it, and at the same time adhere to a policy of fiscal responsibility.

I can assure you that the President would not have approved the submission of this program if he thought that it was in conflict with a policy of fiscal responsibility. He feels that it can be handled and handled within the framework of fiscal responsibility.

Senator BUTLER. I don't want to cross over the lines of authority. I don't want to ask any question of you that you feel you should not answer under executive privilege. But does the Secretary of the "Treasury approve this program?

Secretary FLEMMING. I am not going to talk for other people in the executive branch other than the President who cleared it.

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Senator BUTLER. Does the Budget Director-has the Budget Direc-tor cleared it!

Secretary FLEMMING. You were not here when I had a discussion with Senator Byrd on that. I told Senator Byrd and I will repeat it again, that it is my understanding, although I was not here—it was. in a closed session and I have not read the transcript—it is my understanding that the Budget Director appeared before the Ways and. Means Committee, and supported this proposal.

Senator BUTLER. He is going to have a lot of explaining on some other things to do to me because I can't believe it.

The CHAIRMAN. He didn't hear him say it. Have you seen the record of his testimony?

Secretary FLEMMING. I have not.

The CHAIRMAN. You have not seen the record and Senator Butler, he had numerous conferences with the Budget Director and was unwilling to say whether the Budget Director approved it or did not approve it in these conferences.

I want to make a statement and if it is incorrect I want you to show where it is incorrect.

This legislation, if passed, as you recommend, will cost the Federal Government $876'million. It will cost the States $840 million in 1 year, that means $1,716 million. It makes no difference to a taxpayer whether it comes out of the Federal taxes or State taxes. It all comes out of the taxpayer's pocket so this bill is a $1,716 million bill if it is. made operative by the States matching it. Is that correct, or do you question that?

Secretary FLEMMING. No, if all of the States do come into the picture, I would be perfectly willing to accept that figure except for theallowance of overlap but I won't make any point on that because that wouldn't affect the bill materially.

Senator BUTLER. Mr. Secretary, do the local communities, the city governments make any contributions!

Secretary FLEMMING. There would be a State contribution.
Senator BUTLER. State only!
Secretary FLEMMING. That is correct, Senator Butler.
The CHAIRMAN. I would like you to put in the record a breakdown

a of this overlapping.

Secretary FLEMMING. I would be very happy to.

(NOTE. See table supplied in response to earlier request of the chairman.)

The CHAIRMAN. As I understand it you are recommending both bills and now you state they overlap.

Senator SMATHERS. Mr. Secretary, first may I say that I wish to commend you on your statement with respect to the interest that you have in the medical needs of elderly people. Do you expect this bill to be passed at this session of the Congress?

Secretary FLEMMING. Well, Senator Smathers, I think the people on the other side of the table are in a better position to make that evaluation than I am.

Senator SMATHERS. I understand that completely but I am asking you. I think I understand the job we have to do here.

Secretary FLEMMING. I am a little bit confused.

Senator SMATHERS. I am asking you, Do you want this bill passed at this session!

Secretary FLEMMING. Well, certainly. I mean we recommended it to the Ways and Means Committee and we are recommending it to the Finance Committee just what we recommended to the Ways and Means Committee.

I personally would be delighted to see it passed at this session but as to what is going to happen, I am frank to say I am just a little bit confused at the present time as to what may emerge from the Congress.

Senator SMATHERS. You are not alone in being confused as to what is going to happen here in the Congress. I am just trying to get at the facts of the sincerity that you have for this program. Why was it that we didn't get this program here until so late?

Secretary FLEMMING. Well, let's see, I presented the program to the Ways and Means Committee in May. I spent off and on about 10 weeks in the Ways and Means Committee as they discussed this problem. There isn't any doubt at all that we had various points of view within the executive branch as to the best way of dealing with this matter, and it was not until May that those points of view were resolved, and I was put in the position to come up and present an administration proposal on it.

Like you, I gather from your question, I am sorry that it has taken our Government as long, including the executive and legislative branches, to come to grips with what I consider to be a very real and a very pressing need.

But as you know, there are a lot of points of view on this, and it isn't easy to get them resolved and in support of one way of doing it.

Senator SMATHERS. So it was late in May that the administration, as I understand it, decided to make this kind of a proposal to the Congress.

Secretary FLEMMING. I think it was—it was May 4.
Senator SMATHERS. May 4?

Secretary FLEMMING. That is correct, and my testimony at that time was made public by the Ways and Means Committee.

Senator SMATHERS. Do you have anybody out at the Governors' conference presenting this type of program to the Governors so that you might get some indication from them of its merit? They would be interested since their respective States would have to participate in it.

Secretary FLEMMING. We were not, so far as I know, invited to present this program or this issue to the Governors' conference. The Under Secretary of the Department has been out there presenting our plans for the White House Conference on the Aging, but that is the only thing we were invited to present.

Senator SMATHERS. Do you believe that you could probably acquire some support for this type of a program inasmuch as it is a FederalState participation program if you got the Governors for it?

Secretary FLEMMING. Well, I am sure that any Governor would be reluctant to face the problems involved of taking on an additional fiscal responsibility at this time. I appreciate the problems that they are up against.

On the other hand, I do feel that this is something that should be shared by the Federal and State Governments. As you know, we have the responsibility for a good many Federal-State programs in our Department.

Senator SMATHERS. I understand that completely, Mr. Secretary, and I think you are absolutely right that there would be great reluctance. I am just curious as to how serious you people have been pushing this legislation toward the end of the session.

Did you go out there? Did you write somebody out there and ask them could you appear? Have you asked the Governors for their cooperation? It would obviously take their cooperation to make this type of a program work.

Secretary FLEMMING. The answer is that we did not request to go or to have this put on the agenda of the Governors' conference, possibly we missed a bet there but

Senator SMATHERS. I am curious as to whether or not this proposal which the administration has evolved has arisen subsequent to the great discussion about the Forand and McNamara bill and other bills on the subject.

Secretary FLEMMING. I will try to be perfectly fair and frank about it. Of course, the discussion that has taken place regarding this particular issue, I think, has helped all of us get attention focused on the problem, but I want to say that the program that we have presented does represent the conviction of the administration as to the best way in which to deal with the problem. There is a very deep-seated conviction that it should be a joint sharing of responsibility on the part of the Federal and State Governments just as we do in the public assistance areas at the present time.

I tried to say earlier, Senator Smathers

Senator SMATHERS. Do you recall prior to May 4 when you made a statement as to the need in this area that you or anyone else in the administration had made such a statement with respect to the fact the Federal Government should do something in the field of helping the medical indigent other than those who were under OAS?

Secretary FLEMMING. Yes, statements were made prior to that time to that effect. I also was before the Ways and Means Committee some time before that and indicated that we felt there was a very real need, and that we should endeavor to work out something.

I was before the Ways and Means Committee last July in which I also indicated a recognition of a very real need, and a feeling that something should be worked out in an effort to deal with this need more adequately than it is being dealt with at the present time.

Senator SMATHERS. But was that when you were called before the Ways and Means Committee to testify with respect to the Forand bill and the other bills of that nature?

Secretary FLEMMING. I testified—the Ways and Means Committee last July held hearings on the Forand bill.

Senator SMATHERS. That is when you made that statement?
Secretary FLEMMING. I certainly did, that is correct.

Senator SMATHERS. Now, Mr. Secretary, what has been the reaction of the American Medical Association to this proposal ?

Secretary FLEMMING. Well, by reading the newspapers, I gather they don't like it.

Senator SMATHERS. Do you have any other information other than that of reading the newspapers as to what their position is?

Secretary FLEMMING. They have not sent me an official communication to that effect but I don't have any reason to question the accuracy of the reports that I have read.

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