grams to assist citizens against the economic problems they faced because of disability, death, old-age, unemployment, and similar risks. Since 1940 there has been a relatively rapid expansion in these programs. Expenditures rose in 1950 to slightly over $6 billion, and in 1955 they exceeded $11 billion. One of the most important welfare programs is the old-age and survivors' insurance program, under which benefit expenditures rose from $35 million in calendar 1940, to over $4.3 billion in the last fiscal year. Public assistance and unemployment insurance programs are also major programs in the welfare category. Over the next 30 years, a continuing increase in expenditures is in prospect under the general public-income-maintenance programs. The total of expenditures is expected to rise to $18.5 billion in 1965, to over $24 billion in 1975, and to nearly $30 billion in 1985. The bulk of this expansion is expected to occur in the OASI program. In the 3 years 1965, 1975, and 1985, OASI is expected to account for $10.5 billion, $15 billion, and nearly $19 billion, respectively, of the total general expenditures. These projections are on the basis of present price levels and existing laws, and with one exception make no provision for liberalization of the programs in coverage and benefit levels. The one exception is that cash disability benefits at age 50 are assumed under the OASI program-although of the total amounts shown they will account for less than $1 billion by 1985. The increase in the general income-maintenance expenditures under public programs in the next 3 decades will, of course, occur at the same time the veterans' pension outlays are expanding as indicated above in table 4. Chart VIII shows the combined total of expenditures under the general programs and under the Veterans' Administration compensation and pension programs. In 1940 the combined expenditures under the two sets of programs were only about $2.6 billion. By 1950 the grand total had increased to $8.3 billion and included $1.9 billion of Veterans' Administration pension and compensation payments. The corresponding total in 1955 was $13.7 billion and included $2.7 billion of Veterans' Administration payments. Projected into the next 3 decades, the expenditures under the general programs are estimated in 1965 at $18.5 billion, plus $6.6 billion under the Veterans' Administration programs. This will make a total of over $25 billion in income-maintenance expenditures in 1965. The Veterans' Administration pension and compensation figures used in this chart are similar to those in table 4, and are based on the assumption that a service pension at the rate of $100 a month for veterans and at increased rates for dependents is in force. By 1975, the general income-maintenance programs will spend an estimated $24 billion and the Veterans' Administration programs $7.6. billion, or a total of nearly $32 billion. Finally by 1985, under the same assumptions, the general programs would spend $29.6 billion and the veterans' programs would have risen to $11 billion, making a total of nearly $41 billion in income-maintenance outlays. A concomitant point stands out in chart VIII. It clearly shows that in 1940 there existed only meager public-income-maintenance arrangements to protect people against the hazards of disability, death, old-age, or unemployment. In the last 15 years the general programs have embraced insurance against such risks, largely through the development of the old-age and survivors' insurance program, which is spending more and more each year. At the same time, since 1940 there has been a substantial expansion in the Veterans' Administration compensation and pension programs. Much of this is due to the disability and compensation load arising from the World War II and Korean conflict. Looking ahead, however, a further substantial expansion in veterans' expenditures will occur in the next 3 decades, and afterward, under existing laws, chiefly for non-service-connected pensions for World War I and World War II veterans. A far greater expansion in Veterans' Administration expenditures would occur if general pensions were adopted. As can be seen in chart VIII, this expansion in expenditures would occur at the same time that the tremendous increases in income maintenance would occur under the general programs. This will be significant from two standpoints. Fiscally, it will mean that veterans' outlays would be increased at the same time * FIGURES FOR NON-VA PROGRAMS ARE ON CALENDAR YEAR BASIS. Source: Department of Health, Education and Welfare, Department of Labor, and Veterans Administration. that expenditures for beneral income-maintenance programs would be rising steeply. On the revenue side this would require more taxes for veterans' programs in future years when the contribution rates to support the OASI program-which is operated with only a limited reserve—are scheduled to rise under existing laws to raise revenues to finance the increasing benefit disburse ments. Socially, as is pointed out in a later part of this report, the great bulk of the Veterans' Administration pension expenditures would go to the same people who would be receiving benefits in increasing numbers and amounts under the OASI and other general income-maintenance programs. The Cost of Public-Income-Maintenance Programs Per Person in the United States The multi-billion-dollar sums discussed in the preceding section may perhaps be better visualized if they are viewed in terms of what they mean to every man, woman, and child in the United States. Chart IX shows the cost of the general public-incomemaintenance programs and the Veterans' Administration compensation and pension benefits (which were shown in chart VIII) on the basis of the average cost or expenditure per person in the United States. This illustrates even more clearly the rising trend of expenditures under the two sets of programs. In 1940, the per capita cost of Veterans' Administration and general programs was only $19, of which only $3 was for the Veterans' Administration compensation and pension benefits. By 1955, this cost had risen to $83 for every man, woman, and child in the United States, and this sum included $16 for the Veterans' Administration programs. In considering these per capita expenditures, it should be borne in mind that the typical family has approximately 32 people, so that the cost of the combined programs per family is in the neighborhood of $300 at the present time. Projected to 1965 and beyond, the per capita costs increase further, in spite of a growing population. According to estimates, the general income-maintenance programs will be costing about $97 per capita by 1965. In addition, if service pensions are enacted for veterans, the cost of veterans' programs will increase to $35 per capita-bringing the per capita total of all outlays to $132. This rising trend will continue in the general programs and by 1985 the combined per capita costs will be $156, of which $114 will go for general benefits and $42 for special veterans' pensions and compensation payments. This means that in 1985 the per family cost for our enlarged population of all the income-maintenance benefits will approximate $550 or about 8 times what the per family expenditures CHART IX PER CAPITA COST OF PUBLIC Annual Expenditures Per Person In The United States Dollars per Person 175 Legend: Dollars per Person FIGURES FOR NON-VA PROGRAMS ARE ON CALENDAR YEAR BASIS. for corresponding programs were in 1940. These figures are computed without adjustment for liberalizations in benefits and in the scope of programs, which are almost inevitable in a growing economy. Thus our future workers and taxpayers will be paying for an increasing amount of protection under the general programs while they are taxed for veterans' pension and compensation benefits at double the present rate per person, if service pensions are adopted. |