PROPOSED CUTOFF OF WELFARE FUNDS TO THE STATE OF ALABAMA WEDNESDAY, JANUARY 25, 1967 U.S. SENATE, Washington, D.C. The committee met, pursuant to notice, at 10 a.m., in room 2221, New Senate Office Building, Senator Russell B. Long (chairman) presiding. Present: Senators Long, Gore, Talmadge, Hartke, Metcalf, Williams, Carlson, Morton, and Dirksen. The CHAIRMAN. The hearing will come to order. This hearing was requested to give representatives of the State of Alabama an opportunity to present the views of the State on the proposed cutoff of Federal welfare funds to that State. The Secretary of Health, Education, and Welfare, pursuant to title VI of the Civil Rights Act of 1964, advised this committee of his present intention to terminate Federal payments to Alabama under the welfare programs, effective midnight, February 28. The amendment requiring notification of committees having jurisdiction over programs involved in a civil rights order was sponsored in the House by the Congressman from the Third District of Louisiana, the Honorable Edwin E. Willis. At the time he offered the amendment on the House floor, he explained, and the Congress agreed with him, that a fund cutoff was too serious a matter to leave to the discretion of a single man. By requiring the head of the agency to report his proposed action to the appropriate committees of Congress, Congressman Willis said, "at least there would be some responsible minds over and beyond the agency head." This is the first instance in which a Federal program is proposed to be terminated in a State by virtue of the civil rights legislation. For Congress, it is a case of first impression. We all feel compassion for the many welfare recipients whose sole support comes from the welfare program and whose future well-being depends on the uninterrupted operation of this program. A program of this sort should not lightly be set aside. We have the 43-page finding of the Secretary of HEW before us, and, without objection, this finding, together with a copy of the Secretary's letter of transmittal, will be made a part of the record at this point. 1 (The material referred to, along with pertinent sections of the Civil Rights Act of 1964, follow): CIVIL RIGHTS ACT OF 1964 (Pertinent Sections) TITLE VI-NONDISCRIMINATION IN FEDERALLY ASSISTED PROGRAMS SEC. 601. No person in the United States shall, on the ground of race, color, or national origin, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance. SEC. 602. Each Federal department and agency which is empowered to extend Federal financial assistance to any program or activity, by way of grant, loan, or contract other than a contract of insurance or guaranty, is authorized and directed to effectuate the provisions of section 601 with respect to such program or activity by issuing rules, regulations, or orders of general applicability which shall be consistent with achievement of the objectives of the statute authorizing the financial assistance in connection with which the action is taken. No such rule, regulation, or order shall become effective unless and until approved by the President. Compliance with any requirement adopted pursuant to this section may be effected by (1) by the termination of or refusal to grant or to continue assistance under such program or activity to any recipient as to whom there has been an express finding on the record, after opportunity for hearing, of a failure to comply with such requirement, but such termination or refusal shall be limited to the particular political entity, or part thereof, or other recipient as to whom such a finding has been made and, shall be limited in its effect to the particular program, or part thereof, in which such noncompliance has been so found, or (2) by any other means authorized by law: Provided, however, That no such action shall be taken until the department or agency concerned has advised the appropriate person or persons of the failure to comply with the requirement and has determined that compliance cannot be secured by voluntary means. In the case of any action terminating, or refusing to grant or continue, assistance because of failure to comply with a requirement imposed pursuant to this section, the head of the Federal department or agency shall file with the committees of the House and Senate having legislative jurisdiction over the program or activity involved a full written report of the circumstances and the grounds for such action. No such action shall become effective until thirty days have elapsed after the filing of such report. THE SECRETARY OF HEALTH, EDUCATION, AND WELFARE, Washington, January 12, 1967. Hon. WILBUR D. MILLS, DEAR MR. CHAIRMAN: Pursuant to Section 602 of the Civil Rights Act of 1964, I am transmitting herewith for filing with your committee a decision, CR-1, terminating, and refusing to grant or continue Federal financial assistance to the State of Alabama under Sections I, IV, V (Part 3), X and XIV of the Social Security Act. The prefix "CR" above, refers to the docket of this proceeding maintained and available for public inspection in the Office of the Department Hearing Clerk, Room 5440, HEW North Building. This decision is based upon findings that the Alabama welfare agency has failed to file with the Commissioner of Welfare an assurance that it will administer its Federally-assisted welfare programs in a manner consistent with the mandate of the Civil Rights Act of 1964 and this Department's Regulation issued pursuant thereto. It is also based upon findings that, in fact, the Alabama welfare agency has not made an adequate effort to determine the extent to which racial discrimination is practiced under its programs, nor has it undertaken to adopt methods of administration to correct such practices. Only the Alabama agency, among the welfare agencies of all the States has failed to file an adequate statement of compliance. After a determination by the Commissioner of Welfare on August 17, 1965 hat she was unable to secure voluntary compliance by the Alabama agency, the General Counsel of this Department on that same day notified the Alabama agency of those matters of fact and law which he considered to constitute noncompliance and stated that Federal assistance would be discontinued if the Agency were found to be in non-compliance. The hearing procedures called for in Section 602 of the Civil Rights Act and in sections 80.8 (c), 80.9, 80.10 and 81 of the Regulation of this Department (54 CFR Parts 80 and 81) have been followed. The Hearing Examiner in this case recommended on April 6, 1966, that the Alabama welfare agency be found in non-compliance with Title VI and that Federal assistance to Alabama under Titles I, IV, V (Part 3), X and XIV of the Social Security Act be terminated. After a hearing and the consideration of briefs and exceptions, the Commissioner of welfare substantially adopted those recommendations in a decision dated November 16, 1966. On December 16, 1966, the Alabama agency submitted three motions plus exceptions to the Commissioner of Welfare's decision. The General Counsel replied to these on December 21, 1966. These motions and exceptions have been received by me and subsequently denied. I enclose my action approving the Commissioner's decision. It constitutes the final decision of the Department of Health, Education and Welfare, and will become effective at midnight, February 28. I have taken this action with regret and only after the failure of long efforts to achieve compliance by voluntary means. The requirements of the 1964 Civil Rights Act were spelled out in Department Regulation two years ago. The Regulation clearly requires State agencies administering Federally-assisted programs to submit satisfactory assurances of non-discriminatory operation of each program including those parts in which services are provided by third parties. More than 16 months have elasped since the Alabama welfare agency was warned by the Commissioner of Welfare that Federal assistance would have to be ended if specific steps were not taken to comply with the law of the land. In all this time the Alabama welfare agency has made no perceptible movement towards compliance for any part of its welfare programs. The Department has told the Alabama welfare agency it need commit itself to compliance only for those programs under which it wishes to qualify for continued Federal assistance. This distinction is important because in this compliance proceeding the Alabama agency has sought to distinguish between those parts of its programs which it administers directly and those parts in which it pays third parties (nursing homes, hospitals and the like) to provide services for the needy. In the case of third parties Alabama flatly refuses to accept any responsibility for assuring non-discrimination in the services which third parties provide and says it will seek judicial review of the requirement that it do so. The State can test this principle with greatly-reduced hardship to the poor and needy if it will comply on those parts of its welfare program that do not involve payments for services by third parties. More than 80 percent of Federal assistance provided does not involve third party services. I sincerely hope that in the period before this order becomes effective the Alabama welfare agency will move to comply fully with the Civil Rights Act of 1964. At the very least, however, I hope Alabama's authorities will commit themselves to non-discriminatory operation of its welfare programs so that we may continue the major share of the Federal contribution to the blind, the needy and the disabled in the State. Sincerely, JOHN W. GARDNER, Secretary. COMPLIANCE PROCEEDING PURSUANT TO SECTION 602 OF THE CIVIL RIGHTS ACT OF 1964 AND THE REGULATION OF THE DEPARTMENT OF HEALTH, EDUCATION AND WELFARE ISSUED PURSUANT THERETO (Docket No. CR-1) In the Matter of the Alabama State Board of Pensions and Security and the Alabama State Department of Pensions and Security ACTION OF THE SECRETARY OF HEALTH, EDUCATION AND WELFARE This case involves the refusal of the Alabama Board of Pensions and Security and the Alabama State Department of Pensions and Security (hereinafter referred to jointly as the Agency) to comply with the Regulation issued by this Department and approved by the President pursuant to Section 602 of the Civil Rights Act of 1964 (45 CFR 80). Under Section 80.4(b) of this Regulation each State agency administering "continuing" public assistance and welfare programs financed in part by Federal funds is to submit a statement of the extent to which those programs are and are not in compliance with Title VI of the Civil Rights Act and a description of methods of administering those programs which the Commisisoner of Welfare finds give reasonable assurance of securing compliance under Title VI. The Alabama agency administers such programs under Titles I, IV, V (Part 3), X and XIV of the Social Security Act. Their programs provide for Old Age Assistance and Medical Assistance for the Aged, Aid to Families with Dependent Children, Child Welfare Services, Aid to the Blind and Aid to the Permanently and Totally Disabled. Only the Alabama agency, among the welfare agencies of all the States, has refused to submit the required statement and description of its compliance program. Between December 1964 and August 1965, the Commissioner of Welfare, through printed materials, briefings, private conferences and direct correspondence, sought the compliance of the Alabama agency. On August 17, 1965, however, the Commissioner determined in writing that she was unable to bring the Agency into voluntary compliance with Title VI and scheduled a hearing on the matter. A notice was sent to the Alabama agency on that same day by the General Counsel of this Department specifying those matters of fact and law which were considered to constitute non-compliance and stating that Federal assistance to Alabama under the programs involved would be terminated if the Agency was found to be in non-compliance. The hearing procedures called for in Section 602 of the Civil Rights Act and in Sections 80.8(c), 80.9, 80.10 and 81 of the Regulation of this Department (45 CFR Parts 80 and 81) have been followed. The Hearing Examiner in this case recommended on April 6, 1966, that the Alabama welfare agency be found in non-compliance with Title VI and that Federal assistance to Alabama under Titles I, IV, V (Part 3), X and XIV of the Social Security Act be terminated. After a hearing and the consideration of briefs and exceptions, the Commissioner of Welfare substantially adopted those recommendations in a decision dated November 16, 1966. My function is to "approve such decision, any sanctions imposed" vacate it, or remit or mitigate (45 CFR Part 80, Section 80.10 (e)). If I approve any termination of Federal assistance as a result of a finding of noncompliance with Title VI, I am to make a full report of the matter to the Ways and Means Committee of the House of Representatives and to the Senate Finance Committee. Under the law the effective date of such termination is to be no less than thirty days after such reports are filed. I have reviewed the Commissioner's decision, the testimony, exhibits, briefs and recommendations on which it was based, the exceptions filed by the Alabama agency and the reply thereto of the General Counsel of this Department. Three requests or motions made by the Alabama agency call for an answer at this point: 1. Request for a hearing before the Secretary.-Under Section 81.106 of this Department's Regulation or independent thereof, the Agency requests an opportunity to make an oral presentation to me. This request is denied. In my opinion the issues in this case have been fully elaborated, clarified and emphasized in the testimony before the Hearing Examiner and the Commissioner and in the exhibits, briefs, recommendations and decision which have been submitted. 2. Motion to present current data concerning civil rights in Alabama as it relates to grants and services under the child welfare and public assistance programs involved in this proceeding.-The Alabama agency asserts that changes have taken place since the time of the hearing before the Examiner which "materially affect" Alabama's right to receive Federal assistance for child welfare and public assistance programs. They ask to be allowed to submit such evidence or affidavit or otherwise or that final decision be withheld until this evidence can be presented at a new hearing. This motion is denied. Evidence of decreased racial discrimination in the operation of the Federally assisted child welfare and public assistance programs in Alabama would be welcome. However, such evidence of decreased discrimination alone would not compensate for the failure of the Alabama agency to commit itself to achieve non-discriminatory care and services in Federally assisted programs as called for in Section 80.4(b) of this Department's Regulation. Were it willing to do so, however, this evidence would, of course, be relevant and needed to evaluate the adequacy of the methods of administration which it would propose to use to assure compliance with Title VI. 3. Motion to incorporate Title XIX into this proceeding.-Pursuant to Section 81.56 of this Department's Regulation, the Alabama agency moves to add to this proceeding, the question of the compliance of its proposed Medical Assistance program with Title VI. The Agency is trying in this way to have this new program approved and funded without providing the assurances of non-discrimination called for in our Regulation. The Agency promises only to comply with what the courts ultimately decide it must do. This motion is denied. I do not believe that granting it would be either timely or appropriate. This Department shares the expressed interest of the Alabama welfare agency in bringing the benefits of Title XIX to the people of Alabama as soon as possible. We stand ready to help it to resolve all of the issues-civil rights and otherwise which presently stand in the way of approval of its Title XIX plan. If the Commissioner of Welfare determines that voluntary compliance with Title VI requirements cannot be obtained for that plan, formal action on the matters in dispute will be expedited. APPROVAL OF DECISION The Alabama agency recognizes that the "legality" of this Department's Title VI Regulation is not a question to be considered in this proceeding. This issue may be raised before the courts. Within the area of Departmental discretion under the Regulation, however, I consider the actions of the Commissioner of Welfare in this matter to have been reasonable and appropriate and I approve her decision that the Alabama agency is not in compliance with Title VI. It is disappointing that we have had to seek compliance formally in an area where the voluntary cooperation of all parties is so important. It is particularly unfortunate that such action may necessitate the termination of badly needed Federal welfare funds in Alabama. The Alabama welfare agency in effect seeks to force this Department to choose between its mission to assist States in aiding the needy and its obligation to secure non-discriminatory treatment for those receiving assistance through Federally aided programs. As stated at page 26 of its brief to the Commissioner of Welfare, "Until public assistance recipients receive an adequate grant and receive needed services, Respondents submit that the requirements of the Civil Rights regulations are irrelevant, oppressive and illegal." This Department does not agree that the poor and the disabled are less entitled to non-discriminatory treatment than other Americans. We do not propose to ignore or postpone their fundamental human rights until we can adequately provide for their physical needs. We do not accept the proposition that seeking non-discriminatory care for the needy will reduce the amount of care available to them. It seems self-evident that the more scarce facilities are, the more important it is to try to assure full access to them by all those in need of assistance under Federally aided programs. The Alabama agency alone among the welfare agencies of all the States has refused to accept the procedures suggested by the Welfare Administration for compliance with Title VI. It has attacked the validity of the provisions in Section 80.3 of the Department regulation which prohibits discrimination in the provision of Federally-assisted services through third parties. It has been unwilling to commit itself to achieve non-discriminatory care and services in Federally-assisted programs as called for in Section 80.4 (b) of that regulation. It has not adopted or proposed methods of administering its programs which give "reasonable assurance" that compliance with Title VI can be obtained; nor has it made a clear commitment not to discriminate on the basis of race in those aspects of its program which are solely within its control as is also required in Section 80.4(b). It has said only that it will comply with the Civil Rights Act as that Act is interpreted in the courts. To await ultimate judicial review and approval of the Department's Regulation before enforcing its provisions would constitute an abdication of the responsibility of this Department. |