Statement About Approval of the Welfare Reform and Social Security Bill by the House Committee on Ways and Means

THE House Ways and Means Committee has taken a momentous step in approving H.R. 1. This bill, with its important symbolic designation as the first order of business of the 92d Congress, represents an important landmark in the history of both social security and public welfare reform. As reported by the committee, under the responsible leadership of Chairman Wilbur Mills and Congressman John Byrnes, this bill represents the finest kind of cooperation between this Administration and the Congress.

H.R. 1 embodies the essential principles advanced in my welfare reform proposals of August 1969. It provides:

---A requirement that assistance recipients who are employable must register for work or training as a condition to receiving benefits.

--A basic payment of $130 per month for the adult assistance programs which go to the needy aged, to the blind, and to the disabled, increasing to $150 per month after 2 years. These programs would be administered by the National Government through the Social Security Administration, but would be funded separately from the OASDI [Old-Age, Survivors, and Disability Insurance] social insurance program.

--A financing plan which eases the pressure of mounting welfare costs on State budgets and the pressure for higher local taxes.

--Coverage of the working poor to end the penalties for work in the present welfare system.

--A substantial program to provide increased child care and job training opportunities in a way which ensures that work and training opportunities are related to the recipients' needs.

--A basic floor of dignity for every lowincome family with children. It establishes a payment standard of $2,400 for a family of four, while eliminating the cumbersome and restrictive food stamp program, replacing it with cash payments.

--A new, unified administrative structure, under the Labor Department, for dealing more effectively with the problems of those family assistance recipients who are employable. Similarly the Department of Health, Education, and Welfare would administer programs for those not employable, in a manner best suited to their needs.

I believe very strongly that work--for those who are able to perform it is essential to a person's dignity and self-respect. H.R. 1 builds on this principle. In addition to the work and registration requirement for employable recipients, H.R. 1 provides strong encouragements for welfare recipients to become self-supporting in the following ways:

--200, 000 new public service jobs to provide valuable work experience to prepare recipients for regular jobs. This Administration urged the adoption of such a provision last February. It is the correct approach to public service employment.

--Child care for an additional 450,000 children to enable their mothers to take work and contribute to their support when appropriate.

--Expanded training programs for an additional 225,000 persons.

--A "disregard" provision which would allow the first $720 per year of earned income in the determination of welfare payments, thus defraying the initial cost of going to work. As earnings rise toward limits tailored to family size and income, the bill also allows recipients to retain some of their added income without a commensurate loss of assistance payments. It eliminates the old penalty for going back to work.

As I have said often during the past 2 years, our present welfare system is a hopeless failure. We can no longer tolerate a system that penalizes those who work, fails to control costs and coverage, and lacks the necessary incentives to encourage those who are able to work to go to work. Taxpayers and recipients alike demand a change. Welfare reform has been one of my highest priorities since the earliest days of my Presidency.

This Congress has the opportunity to enact the most fundamental reform of the welfare system since its inception in the dark days of the Great Depression of the thirties.

I earnestly hope that the House of Representatives and the Senate will follow the lead of the Committee on Ways and Means and move promptly to enact this bill into law.

Much of the discussion over H.R. 1 has concerned its welfare provisions. But this important bill also includes historic reforms in the social security system, the program which undergirds the income of millions of older Americans. H.R. 1 includes:

--Automatic adjustment provisions which will allow basic payments to keep pace with the cost of living, thus protecting our older citizens against the ravages of inflation. This has long been a goal which I have endorsed.

--Increased benefits for widows and widowers, eliminating an inequity which now creates a particular hardship on some of our poorer citizens.

--Liberalization of the retirement work income test, removing once and for all the present confiscatory reduction in benefits for any earnings above $2,800.

--Incentives for recipients of both Medicare and Medicaid to seek more comprehensive health care--particularly preventive care by encouraging the use of health maintenance organizations.

--Mechanisms to foster greater cost consciousness and more efficient utilization of medical services, by increasing the deductible amount in the supplementary medical insurance program and by providing for cost sharing and for reasonable limitations on Medicaid services.

The committee also added a 5 percent increase in social security effective in June of 1972. This increase means that social security benefits will have risen 33 percent over the past 3 years. This is an important recognition of the needs of the Nation's elderly. This new 5 percent increase helps to establish the point that I have long been urging that social security benefits be tied to the cost of living, and I believe it is appropriate.

Any bill can be improved; H.R. 1 is no exception. While hailing the concepts embodied in this legislation, I would hope that subsequent Congressional action could focus on several areas of possible improvement.

First, the cost of the social security and Medicare measures as provided in the bill should be determined in the light of present budget realities. The cost-saving approaches which were proposed for Medicare at an earlier time should now be enacted following similar actions on the Medicaid program. These actions should be accompanied by a shift in the way we would finance our supplementary medical insurance program. Payments for this program should be made while the beneficiary is working rather than by reducing his retirement income.

Finally, it should be made very clear that the fiscal relief this bill provides is only a partial response to the fiscal pressures now bearing down on States and cities throughout the country. There is a need for welfare reform, but there is also a pressing need for revenue sharing--distributed in a fashion more appropriate to the real financial burdens felt by all States and cities. I would urge speedy action on this front as well.

I view revenue sharing and welfare reform as interlocking components in our effort to reform Federal fiscal relief to the State and local institutions of government. Welfare reform in 1973 will relieve fiscal pressure, primarily on State governments, by helping them to meet the fastest growing element of their present expenditures. Revenue sharing would provide immediate help to our equally hard-pressed cities and to States as well. Revenue sharing would also help to promote a long-range reform of the present fragmented and inefficient system of delivering Federal aid to State and local governments, and it would do much to strengthen the overall capacities of State and local governments.

H.R. 1 is the single most significant piece of social legislation to be considered by the Congress in decades. It is my profound hope that the House of Representatives and the Senate of the United States will carry forward the momentum which has been generated, thus seizing an historic opportunity--and meeting an historic obligation.