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"Hospital Services Under Workmen's Compensation

"(f) The provisions of subsection (a) shall not be applicable to any services which an individual required by reason of any injury, disease, or disability on account of which such services are being received or the cost thereof paid for, or upon application therefor would be received or paid for, under a workmen's compensation law or plan of the United States or of any State, unless equitable reimbursement to the Federal Old-Age and Survivors Insurance Fund for the payments hereunder with respect to such services have been made or assured pursuant to agreements or working arrangements negotiated between the Secretary and the appropriate public agency. Notwithstanding the above sentence, if (1) the individual's entitlement to receive such services (or to have the cost thereof paid for) under such a workmen's compensation law or plan is in doubt when such services are required, (2) the cost of such services is otherwise payable from the Federal Old-Age and Survivors Insurance Trust Fund pursuant to this section, and (3) the individual makes an appropriate application under such workmen's compensation law or plan and agrees, in the event that he is subsequently determined to be entitled to receive such services (or to have the cost thereof paid for) under such law, to reimburse the Federal Old-Age and Survivors Insurance Trust Fund in the amount of any loss it might suffer through its payment for such services, then the cost of such services may be paid from such Trust Fund in accordance with this section. In any case in which the cost of services is paid from the Federal Old-Age and Survivors Insurance Trust Fund pursuant to the immediately preceding sentence, or is paid from such Trust Fund with respect to any such injury, disease, or disability for which no reimbursement to such Trust Fund has been made or assured pursuant to the first sentence of this subsection, the United States shall, unless not permitted under the law of the applicable State (other than the District of Columbia) be subrogated to all rights of such individual, or of the provider of services to which payments under this section with respect to such services are made, to be paid or reimbursed pursuant to such workmen's compensation law or plan for such payments. All amounts recovered pursuant to this subsection shall be deposited in the Treasury of the United States to the credit of the Federal Old-Age and Survivors Insurance Trust Fund.

"Regulations and Functions of Advisory Council

"(g) All regulations specifically authorized by this section shall be prescribed by the Secretary. In administering this section, the Secretary shall consult with a National Advisory Health Council consisting of the Commissioner of Social Security, who shall serve as Chairman ex officio, and eight members appointed by the Secretary. Four of the eight appointed members shall be persons who are outstanding in fields pertaining to hospitals and health activities, and the other four members shall be appointed to represent the consumers of hospital and nursing home services, and shall be persons familiar with the need for such services by eligible groups. Each appointed member shall hold office for a term of four years, except that any member appointed to fill a vacancy occurring prior to the expiration of the term for which his predecessor was appointed shall be appointed for the remainder of such term, and the terms of office of the members first taking office shall expire, as described by the Secretary at the time of appointment, two at the end of the first year, two at the end of the second year, two at the end of the third year, and two at the end of the fourth year after the date of appointment. An appointed member shall not be eligible to serve continuously for more than two terms but shall be eligible for reappointment if he has not served immediately preceding his reappointment. The Council is authorized to appoint such special advisory and technical committees as may be useful in carrying out its functions. Appointed Council members and members of advisory or technical committees, while serving on business of the Council, shall receive compensation at rates fixed by the Secretary, but not exceeding $50 per day, and shall also be entitled to receive an allowance for actual and necessary travel, and subsistence expenses while so serving away from their places of residence. The Council shall meet as frequently as the Secretary deems necessary, but not less than once each year. Upon request by three or more members it shall be the duty of the Secretary to call a meeting of the Council.

"Utilization of Private Nonprofit Organizations

"(h) (1) The Secretary may utilize, to the extent provided herein, the services of private nonprofit organizations exempt from Federal income taxation under section 501 of the Internal Revenue Code which (A) represent qualified providers of hospital or nursing home services, or (B) operate voluntary insurance plans under which agreements, similar to those provided for under subsection (d), are made with hospitals and nursing homes for defraying the cost of services. Such organizations shall be utilized by the Secretary to the extent that he can make satisfactory agreements with them and to the extent he determines that such utilization will contribute to the effective and economical administration of this section. Such agreements shall not delegate (A) his functions relating to determinations as to whether the costs of hospital and nursing home services furnished an individual may be paid for out of the Federal Old-Age and Survivors Insurance Trust Fund under this section and the amount of such payment, and (B) his functions relating to the making of regulations.

"(2) An agreement under paragraph (1) shall provide for payment from the Federal Old-Age and Survivors Insurance Trust Fund to the organization of the amounts paid out by such organization to hospitals and nursing homes under this section and of the cost of administration determined by the Secretary to be necessary and proper for carrying out such organization's functions under its agreement pursuant to this subsection. Such payments to any organization shall be made either in advance on the basis of estimates by the Secretary or as reimbursement, as may be agreed upon by the organization and the Secretary, and adjustments may be made in subsequent payments on account of overpayments or underpayments previously made to the organization under this subsection. Such payments shall be made by the Managing Trustee of the Trust Fund on certification by the Secretary and at such time or times as the Secretary may specify and shall be made prior to audit or settlement by the General Accounting Office.

"(3) An agreement under paragraph (1) with any organization may require any of its officers or employees certifying payments or disbursing funds pursuant to the agreement, or otherwise participating in its performance, to give surety bond to the United States in such amount as the Secretary may deem necessary, and may provide for the payment of the cost of such bond from the Federal OldAge and Survivors Insurance Trust Fund.

"Certifying and Disbursing Officers

"(i) (1) No individual designated by the Secretary pursuant to an agreement under this section, as a certifying officer shall, in the absence of gross negligence or intent to defraud the United States, be liable with respect to any payments certified by him under this section.

"(2) No disbursing officer shall, in the absence of gross negligence or intent to defraud the United States, be liable with respect to any payment by him under this section if it was based upon a voucher signed by a certifying officer designated as provided in paragraph (1).

"Adjustments in Cash Benefits

"(j) For purposes of section 204, any payment under this section to any hospital or nursing home, with respect to hospital or nursing home services furnished an individual shall be regarded as a payment to such individual.”

(b) The amendments made by subsection (a) shall be effective on the first day of the twelfth calendar month after the month in which this Act is enacted. (c) Notwithstanding the provisions of section 226 (a) (2) of the Social Security Act, as amended by this Act, and subsection (b) of this section, application filed under such section 226 which would otherwise be valid shall, subject to regulations of the Secretary, be considered valid even though filed more than three months prior to the effective date of this Act, but not if filed prior to the first day of the fourth calendar month after the month in which this Act is enacted.

PART 2-AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1954

CHANGES IN TAX SCHEDULES

SELF-EMPLOYMENT INCOME TAX

SEC. 610. (a) Section 1401 of the Internal Revenue Code of 1954 (relating to rate of tax on self-employment income) is amended to read as follows: "SEC. 1401. RATE OF TAX.

"In addition to other taxes, there shall be imposed for each taxable year, on the self-employment income of every individual, a tax as follows:

"(1) in the case of any taxable year beginning after December 31, 1958, and before January 1, 1960, the tax shall be equal to 34 percent of the amount of the self-employment income for such taxable year;

"(2) in the case of any taxable year beginning after December 31, 1959, and before January 1, 1963, the tax shall be equal to 4% percent of the amount of the self-employment income for such taxable year;

"(3) in the case of any taxable year beginning after December 31, 1962, and before January 1, 1966, the tax shall be equal to 5% percent of the amount of the self-employment income for such taxable year;

"(4) in the case of any taxable year beginning after December 31, 1965, and before January 1, 1969, the tax shall be equal to 6% percent of the amount of the self-employment income for such taxable year; and

"(5) in the case of any taxable year beginning after December 31, 1968, the tax shall be equal to 7% percent of the amount of the self-employment income for such taxable year."

TAX ON EMPLOYEES

(b) Section 3101 of such Code (relating to rate of tax on employees under the Federal Insurance Contributions Act) is amended to read as follows: "SEC. 3101. RATE OF TAX.

"In addition to other taxes, there is hereby imposed on the income of every individual a tax equal to the following percentages of the wages (as defined in section 3121(a)) received by him with respect to employment (as defined in section 3121(b)) —

"(1) with respect to wages received during the calendar year 1959, the rate shall be 22 percent;

"(2) with respect to wages received during the calendar years 1960 to 1962, both inclusive, the rate shall be 34 percent;

"(3) with respect to wages received during the calendar years 1963 to 1965, both inclusive, the rate shall be 34 percent;

"(4) with respect to wages received during the calendar years 1966 to 1968, both inclusive, the rate shall be 44 percent; and

"(5) with respect to wages received after December 31, 1968, the rate shall be 44 percent."

TAX ON EMPLOYERS

(c) Section 3111 of such Code (relating to rate of tax on employers under the Federal Insurance Contributions Act) is amended to read as follows:

"SEC. 3111. RATE OF TAX.

"In addition to other taxes, there is hereby imposed on every employer an excise tax, with respect to having individuals in his employ, equal to the following percentages of the wages (as defined in section 3121(a)) paid by him with respect to employment (as defined in section 3121 (b)) —

"(1) with respect to wages paid during the calendar year 1959, the rate shall be 22 percent;

"(2) with respect to wages paid during the calendar years 1960 to 1962, both inclusive, the rate shall be 34 percent;

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"(3) with respect to wages paid during the calendar years 1963 to 1965, both inclusive, the rate shall be 34 percent;

"(4) with respect to wages paid during the calendar years 1966 to 1968, both inclusive, the rate shall be 44 percent; and

"(5) with respect to wages paid after December 31, 1968, the rate shall be 44 percent."

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21. AMENDMENT 6-29-60-AA-INTRODUCED BY SENATOR HARTKE

STAFF ANALYSIS

Increases the social security earnings limitation from $1,200 to $3,600 per

year.

Cost.-$2.56 billion per year, or 0.79 percent of payroll, on a level-premium Financing.-No tax increase provided in amendment for additional cost of the

basis.

program.

VIEWS OF DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE ON
AMENDMENT 6-29-60-AA

See joint report on page 480.

TEXT OF AMENDMENT 6-29-60-AA

Intended to be proposed by Mr. HARTKE to the bill (H.R. 12580), viz: On page 80, between lines 3 and 4, insert the following new section:

TO INCREASE THE EARNED INCOME LIMITATION

SEC. 211. (a) (1) Paragraphs (1) and (2) of subsection 203 of the Social Security Act are amended by striking out "$1,200" whenever it appears therein and inserting in lieu thereof "$3,600", and (2) such paragraphs and paragraph (1) of subsection (g) of such section are amended by striking out "$100 times" whenever it appears therein and inserting in lieu thereof "$300 times".

(b) The amendments made by subsection (a) shall be effective, in the case of any individual, with respect to taxable years of such individual ending after 1960.

22. AMENDMENT 6-29-60-BB-INTRODUCED BY SENATOR HARTKE (IDENTICAL TO NO. 9, 6-27-60-B, INTRODUCED BY SENATOR KEATING)

STAFF ANALYSIS

Eliminates the social security earnings limitation (now $1,200 per year).
Cost.-$3.24 billion per year or 1 percent of payroll, on a level-premium basis.
Financing.-No tax increase provided for additional cost of the program.

VIEWS OF DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE ON
AMENDMENT 6-29-60-BB

See joint report on page 480.

TEXT OF AMENDMENT 6-29-60-BB

Intended to be proposed by Mr. HARTKE to the bill (H.R. 12580), viz: On page 80, between lines 3 and 4, insert the following new section:

REMOVAL OF THE EARNED INCOME LIMITATION

SEC. 211. (a) Subsections (c), (e), (g), (j), and (k) of section 203 of the Social Security Act are repealed.

(b) Subsection (b) of such section 203 is amended by (1) striking out "Work or" in the heading, and (2) striking out paragraphs (1) and (2) thereof.

(c) (1) The first sentence of subsection (d) of such section 203 is amended by striking out "subsections (b) and (c)" and inserting in lieu thereof "subsection (b)".

(2) The second sentence of such subsection (d) is repealed.

(d) Subsection (f) of such section 203 is amended by (1) striking out "or (c)" each time it appears therein, and (2) by striking out "(other than an event specified in subsection (b) (1) or (c) (1))".

(e) Paragraph (1) of subsection (h) of such section 203 is amended by striking out", (f), or (g)" and inserting in lieu thereof ", or (f)".

(f) Subsection (1) of such section 203 is amended by striking out "or (g) (1) (A)".

(g) Paragraph (1) of subsection (n) of section 202 of the Social Security Act is amended by striking out "Section 203 (b) and (c)" and inserting in lieu thereof "Section 203 (b)".

(h) Paragraph (7) of subsection (t) of section 202 of the Social Security Act is amended by striking out "Subsections (b) and (c)" and inserting in lieu thereof "Subsection (b)".

(i) Paragraph (3) of section 208 (a) of the Social Security Act is hereby repealed.

(j) The amendments made by subsections (a) through (h) of this section shall apply only with respect to benefits payable for months beginning after the month in which this Act is enacted, and the amendment made by subsection (i) of this section shall become effective on the first day of the month after the month in which this Act is enacted.

23. AMENDMENT 6-29-60-CC-INTRODUCED BY SENATOR HARTKE

STAFF ANALYSIS

Provides that a State agency, under the aid to the blind program, may disregard up to $1,000 per year of net earned income in determining need up to June 30, 1961. After this date the State agency must disregard this amount. Under present law the first $50 per month of earned income must be disregarded. Cost. Additional cost to Federal Government of $60,000 a year for individuals already on rolls. No estimate as to persons who would be made newly eligible. Financing. Federal share paid out of general revenue.

VIEWS OF DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE ON
AMENDMENT 6-28-60-CC

July 11, 1960.

Hon. HARRY F. BYRD,

Chairman, Committee on Finance,

U.S. Senate, Washington, D.C.

DEAR MR. CHAIRMAN: This is in response to your request for a report on an amendment to H.R. 12580 (designated as 6-29-60-CC) intended to be proposed by Senator Hartke.

The significant effect of the additional exemption of income as provided in the amendment would be to make eligible many of the employed blind persons who do not now qualify for payments under the State programs established under title X of the Social Security Act. Also, some persons now receiving assistance whose earned income in excess of $50 has been considered under the present law would be eligible for increased payments.

An

The implications of this amendment for public assistance are serious. essential characteristic of aid to the blind under title X, like the other public assistance programs, is that need be determined on an individual basis, taking income and resources into account. It is the contributory social insurance program that is designed to provide benefits based on previous earnings and without regard to the individual's need. This basic distinction between assistance and insurance is inherent to the Social Security Act. Special consideration has been given the needy blind by the Congress in requiring an exemption of $50 per month of earned income. The exemption of more income as proposed in the amendment is inconsistent with the nature of the public assistance program as supplementary to the individual's resources and income, could increase pressures for exemptions of income in the other public assistance titles, and would tend to give the program some of the qualities of a pension. The majority of blind persons have no earnings or hope of earnings. The enactment of the amendment may actually reduce the amount of assistance they are receiving. This could come about by States giving aid to additional people and increase aid to some people without increasing State funds appropriated.

We would therefore recommend that this amendment not be enacted by the Congress.

The Bureau of the Budget advises that it perceives no objection to the submission of this report to your committee.

Sincerely yours,

ROBERT A. FORSYTHE, Assistant Secretary.

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