To the Congress of the United States:
On the basis of his study of the world's great civilizations, the historian Toynbee concluded that a society's quality and durability can best be measured "by the respect and care given its elderly citizens". Never before in our history have we ever had so many "senior citizens". There are present today in our population 171/2 million people aged 65 years or over, nearly one-tenth of our population--and their number increases by 1,000 every day. By 1980, they will number nearly 25 million. Today there are already 25 million people aged 60 and over--nearly 6 million aged 75 and over--and more than 10 thousand over the age of 100.
These figures reflect a profound change in the composition of our population. In 1900, average life expectancy at birth was 49 years. Today more than 7 out of 10 new-born babies can expect to reach age 65. Life expectancy at birth now averages 70 years. Women 65 years old can now expect to live 16 more years, and men 65 years old can expect to live 13 additional years. While our population has increased 2 1/2 times since 1900, the number of those aged 65 and over has increased almost six-fold.
This increase in the life span and in the number of our senior citizens presents this Nation with increased opportunities: the opportunity to draw upon their skill and sagacity-and the opportunity to provide the respect and recognition they have earned. It is not enough for a great nation merely to have added new years to life--our objective must also be to add new life to those years.
In the last three decades, this Nation has made considerable progress in assuring our older citizens the security and dignity a lifetime of labor deserves. But "the last of life, for which the first was made ..." is still not a "golden age" for all our citizens. Too often, these years are filled with anxiety, illness, and even want. The basic statistics on income, housing and health are both revealing and disturbing:
The average annual income received by aged couples is half that of younger two-person families. Almost half of those over 65 living alone receive $1000 or less a year, and three-fourths receive less than $2000 a year. About half the spending units headed by persons over 65 have liquid assets of less than $1000. Two-fifths have a total net worth, including their home, of less than $5000. The main source of income for the great majority of those above 65 is one or more public benefit programs. Seven out of 10--12.5 million persons--now receive social security insurance payments, averaging about $76 a month for a retired worker, $66 for a widow, and $129 for an aged worker and wife. One out of 8--2 1/4 million people--are on public assistance, averaging about $60 per month per person, supplemented by medical care payments averaging about $15 a month.
A far greater proportion of senior citizens live in inferior housing than is true of the houses occupied by younger citizens. According to the 1960 census, one-fourth of those aged 60 and over did not have households of their own but lived in the houses of relatives, in lodging houses, or in institutions. Of the remainder, over 30 percent lived in substandard housing which lacked a private bath, toilet, or running hot water or was otherwise dilapidated or deficient, and many others lived in housing unsuitable or unsafe for elderly people.
For roughly four-fifths of those older citizens not living on the farm, housing is a major expense, taking more than one-third of their income. About two-thirds of all those 65 and over own their own homes-but, while such homes are generally free from mortgage, their value is generally less than $10,000.
Our senior citizens are sick more frequently and for more prolonged periods than the rest of the population. Of every 100 persons age 65 or over, 80 suffer some kind of chronic ailment; 28 have heart disease or high blood pressure; 27 have arthritis or rheumatism; 10 have impaired vision; and 17 have hearing impairments. Sixteen are hospitalized one or more times annually. They require three times as many days of hospital care every year as persons under the age of 65. Yet only half of those age 65 and over have any kind of health insurance; only one-third of those with incomes under $2000 a year have such insurance; only one-third of those age 75 and over have such insurance; and it has been estimated that 10% to 15% of the health costs of older people are reimbursed by insurance.
These and other sobering statistics make us realize that our remarkable scientific achievements prolonging the lifespan have not yet been translated into effective human achievements. Our urbanized and industrialized way of life has destroyed the useful and satisfying roles which the aged played in the rural and small-town family society of an earlier era. The skills and talents of our older people are now all too often discarded.
Place and participation, health and honor, cannot, of course, be legislated. But legislation and sensible, coordinated action can enhance the opportunities for the aged. Isolation and misery can be prevented or reduced. We can provide the opportunity and the means for proper food, clothing, and housing--for productive employment or voluntary service--for protection against the devastating financial blows of sudden and catastrophic illness. Society, in short, can and must catch up with science.
All levels of government have the responsibility, in cooperation with private organizations and individuals, to act vigorously to improve the lot of our aged. Public efforts will have to be undertaken primarily by the local communities and by the States. But because these problems are nationwide, they call for Federal action as well.
RECENT FEDERAL ACTION
In approaching this task, it is important to recognize that we are not starting anew but building on a foundation already well laid over the last 30 years. Indeed, in the last two years alone, major strides have been made in improving Federal benefits and services for the aged:
1. --The Social Security Amendments of 1961, which increased benefits by $900 million a year, substantially strengthened social insurance for retired and disabled workers and to widows, and enabled men to retire on Social Security at age 62. Legislation in 1961 also increased Federal support for old-age assistance, including medical vendor payments.
2. --The Community Health Services and Facilities Act of 1961 authorized new programs for out-of-hospital community services for the chronically ill and the aged, and increased Federal grants for nursing home construction, health research facilities, and experimental hospital and medical care facilities. Such programs are now underway in 48 States.
3. --The Public Welfare Amendments of 1962 authorized a substantial increase in Federal funds for old-age assistance, reemphasized restorative services to return individuals to self-support and self-care, and provided encouragement for employment by permitting States to allow old-age assistance recipients to keep up to $30 of his first $50 of monthly earnings without corresponding reductions in his public assistance payments.
4. --The Housing Act of 1961 included provisions for the rapid expansion of housing for our elderly through public housing, direct loans and FHA mortgage insurance. Commitments in 1961 and 1962 were made for more than 1 1/2 times the number of housing units for older citizens aided in the preceding 5 years.
5. --The Senior Citizens Housing Act of 1962 provided low-interest long-terms loans and loan insurance to enable rural residents over 62, on farms and in small towns, to obtain or rent new homes or modernize old ones.
6. --The new Institute of Child Health and Human Development, which was authorized last year, is expanding programs of research on health problems of the aging.
7. --Other new legislation added safeguards on the purchase of drugs which are so essential to older citizens--boosted railroad retirement and veterans benefits-helped protect private pension funds against abuse--and increased recreational opportunities for all.
8. --By administrative action we have (a) increased the quality and quantity of food available to those on welfare and other low income aged persons and (b) established new organizational entities to meet the needs and coordinate the services affecting older people:
--a new Gerontology Branch in the Chronic Disease Division of the Public Health Service, the first operating program geared exclusively to meeting health needs of the aging and giving particular emphasis to the application of medical rehabilitation to reduce or eliminate the disabling effects of chronic illnesses (such as stroke, arthritis, and many forms of cancer and heart disease) which cannot yet be prevented; and
--a new President's Council on Aging, whose members are the Secretaries and heads of eight cabinet departments and independent agencies administering in 1964 some $18 billion worth of benefits to people over 65. These and other actions have accelerated the flow of Federal assistance to the aged; and made a major start toward eliminating the gripping fear of economic insecurity. But their numbers are large and their needs are great and much more remains to be done.
1. Hospital Insurance. Medical science has done much to ease the pain and suffering of serious illness; and it has helped to add more than 20 years to the average length of life since 1900. The wonders worked in a modern American hospital hold out new hopes for our senior citizens. But, unfortunately, the cost of hospital care--now aver, aging more than $35 a day, nearly 4 times as high as in 1946--has risen much faster than the retired worker's ability to pay for that care.
Illness strikes most often and with its greatest severity at the time in life when incomes are most limited; and millions of our older citizens cannot afford $35 a day in hospital costs. Half of the retired have almost no income other than their Social Security payments--averaging $70 a month per person--and they have little in the way of savings. One-third of the aged family units have less than $100 in liquid assets. One short hospital stay may be manageable for many older persons with the help of family and savings; but the second--and the average person can expect two or three hospital stays after age 65--may well mean destitution, public or private charity, or the alternative of suffering in silence. For these citizens, the miracles of medical science mean little.
A proud and resourceful nation can no longer ask its older people to live in constant fear of a serious illness for which adequate funds are not available. We owe them the right of dignity in sickness as well as in health. We can achieve this by adding health insurance--primarily hospitalization insurance--to our successful social security system.
Hospital insurance for our older citizens on social security offers a reasonable and practical solution to a critical problem. It is the logical extension of a principle established 28 years ago in the Social Security system and confirmed many times since by both Congress and the American voters. It is based on the fundamental premise that contributions during the working years, matched by employers' contributions, should enable people to prepay and build earned rights and benefits to safeguard them in their old age.
There are some who say the problem can best be solved through private health insurance. But this is not the answer for most; for it overlooks the high cost of adequate health insurance and the low incomes of our aged. The average retired couple lives on $50 a week, and the average aged single person lives on $20 a week. These are far below the amounts needed for a modest but adequate standard of living, according to all measures. The cost of broad health insurance coverage for an aged couple, when such coverage is available, is more than $400 a year--about one-sixth of the total income of an average older couple.
As a result, of the total aged population discharged from hospitals, 49 percent have no hospital insurance at all and only 30 per, cent have as much as three-fourths of their bills paid by insurance plans. (Comparable data for those under 65 showed that only 30 percent lacked hospital insurance, and that 54 percent had three-fourths or more of their bills paid by insurance.) Prepayment of hospital costs for old-age by contributions during the working years is obviously necessary.
Others say that the children of aged parents should be willing to pay their bills; and I have no doubt that most children are willing to sacrifice to aid their parents. But aged parents often choose to suffer from severe illness rather than see their children and grandchildren undergo financial hardship. Hospital insurance under Social Security would make it unnecessary for families to face such choices--just as old-age benefits under Social Security have relieved large numbers of families of the need to choose between the welfare of their parents and the best interests of their children.
Others may say that public assistance or welfare medical assistance for the aged will meet the problem. The welfare medical assistance program adopted in 1960 now operates in 25 States and will provide benefits in 1964 to about 525,000 persons. But this is only a small percentage of those aged individuals who need medical care. Of the 111,700 persons who received medical assistance for the aged in November, more than 70,000 were in only three States, California, Massachusetts, and New York.
Moreover, 25 States have not adopted such a program, which is dependent upon the availability each year of State appropriations, upon the financial condition of the States, and upon competition with many other calls on State resources. As a result, coverage and quality vary from State to State. Surely it would be far better and fairer to provide a universal approach, through social insurance, instead of a needs test program which does not prevent indigency, but operates only after indigency is created. In other words, welfare medical assistance helps older people get health care only if they first accept poverty and then accept charity.
Let me make clear my belief that public assistance grants for medical care would still be necessary to supplement the proposed basic hospitalization program under social security--just as old-age assistance has supplemented old-age and survivors insurance. But it should be regarded as a second line of defense. Our major reliance must be to provide funds for hospital care of our aged through social insurance, supplemented to the extent possible by private insurance.
The hospital insurance program achieves two basic objectives. First, it protects against the principal component of the cost of a serious illness. Second, it furnishes a foundation upon which supplementary, private programs can and will be built. Together with retirement, disability, and survivors insurance benefits, it will help eliminate privation and insecurity in this country.
For these reasons, I recommend a hospital insurance program for senior citizens under the Social Security System which would pay (1) all costs of in-patient hospital services for up to 90 days, with the patient paying $10 a day for the first 9 days and at least $20, or, for those individuals who so elect, all such costs for up to 180 days with the patient paying the first 2 1/2 days of average costs, or all such costs for up to 45 days; (2) all costs of care in skilled nursing home facilities affiliated with hospitals for up to at least 180 days after transfer of the patient from a hospital; (3) all costs above the first $20 for hospital out-patient diagnostic services; and (4) all costs of up to 240 home health-care visits in any one calendar year by Community visiting nurses and physical therapists. Under this plan, the individual will have the option of selecting the kind of insurance protection that will be most consistent with his economic resources and his prospective health needs--45 days with no deductible, 90 days with a maximum $90 deductible, or 180 days paying a "deductible" equal to 2 1/2 days of average hospital costs. This new element of freedom of choice is a major improvement over bills previously submitted.
These benefits would be available to all aged Social Security and railroad retirement beneficiaries, with the costs paid from new social insurance funds provided by adding one-quarter of one percent to the payroll contributions made by both employers and employees and by increasing the annual earnings base from $4,800 to $5,200.
Hospitals, skilled nursing facilities, and community health-service organizations would be paid for the reasonable costs of the services they furnished. There would be little difference between the procedures under the proposed program and those already set up and accepted by hospitals in connection with Blue Cross programs.
Procedures would be developed, utilizing professional organizations and State agencies, for accrediting hospitals and for assisting non-accredited hospitals and nursing facilities to become eligible to participate.
I also recommend a transition provision under which the benefits would be given to those over 65 today who have not had an opportunity to participate in the social security program. The cost of providing these benefits would be paid from general tax revenues. This provision would be transitional inasmuch as 9 out of 10 persons reaching the age of 65 today have social security coverage.
The program I propose would pay the costs of hospital and related services but it would not interfere with the way treatment is 'provided. It would not hinder in any way the freedom of choice of doctor, hospital, or nurse. It would not specify in any way the kind of medical or health care or treatment to be provided by the doctor.
Health insurance for our senior citizens is the most important health proposal pending before the Congress. We urgently need this legislation--and we need it now. This is our number one objective for our senior citizens.
2. Improvements in Medical Care Provisions under Public Assistance. The public assistance medical aid program should, as I have said, serve as a supplement to health insurance. I have asked the Department of Health, Education and Welfare to continue its efforts to encourage those States that have not already established programs for the medically-indigent aged to do so promptly. I also urge those States which now have incomplete programs to expand them to give the medically needy aged all the help they need.
In addition, the basic welfare law authorizing medical care for those on old-age assistance should now be strengthened.
(a) First, in a few States--six at this time--the scope of medical care available to the neediest group of aged persons, those on old-age assistance, is more limited than that which is available to the new category established by the Kerr-Mills Act: the "medically indigent," those aged persons who only require assistance in meeting their medical care costs. This is unfair. Accordingly, I recommend that Federal law require the States to provide medical protection for their aged receiving old-age assistance at least equal to that provided to those who are only medically indigent.
(b) Secondly, under present law, Federal old-age assistance grants may be used by a State to provide medical care in a general hospital only up to 42 days for a person suffering from mental illness or tuberculosis. This forces transfer of individuals who need hospitalization for longer periods to State institutions, normally outside the community. In my recent message on mental illness and mental retardation, I proposed that mentally ill and mentally retarded persons should, insofar as possible, receive care in community hospitals and facilities--where their prospects for treatment and restoration to useful life are far better than in the often obsolete, custodial State institutions. Accordingly, in order to help improve the States' financial capacity to provide these aged with care in their own communities for longer periods, I recommend that the 42-day limitation be eliminated.
3. Nursing Homes. As a larger proportion of our growing aged population reaches advanced ages, the need for long-term care facilities is rapidly rising. The present backlog of need is staggering. Enactment of the Hospital Insurance Bill will increase that need still further. In my Message on Improving American Hea1th, I recommended-and again urge--amendment of the Hill-Burton Act to increase the appropriation authorization for high quality nursing homes from $20 million to $50 million.
4. Other important health legislation. We not only need a better way for the aged to pay for their health costs; we also need more physicians, dentists, and nurses, and more modern hospitals as well as nursing homes--so that our senior citizens, and all our people, can continue to have the best medical care in the world. Older people need and use more medical facilities and services than any other age group. For that reason, I again urge enactment of previously recommended legislation authorizing (1) Federal matching funds for the construction of new and the expansion or rehabilitation of existing teaching facilities for the medical, dental, and other health professions, (2) Federal financial assistance for students of medicine, dentistry, and osteopathy, (3) revision of the Hill-Burton hospital construction program to enable hospitals to modernize and rehabilitate their facilities, and (4) Federal legislation to help finance the cost of constructing and equipping group practice medical and dental facilities.
5. Food and Drug Protection for the Elderly. Measures which safeguard consumers against both actual danger and monetary loss resulting from frauds in sales of unnecessary or worthless dietary preparations, devices, and nostrums are especially important to the elderly. It has been estimated that consumers waste $500 million a year on medical quackery and another $500 million annually on some "health foods" which have no beneficial effect. The health of the aged is in jeopardy from harmful and useless products and they are unable to bear the financial loss from worthless products.
Unnecessary deaths, injuries and financial loss to our senior citizens can be expected to continue until the law requires adequate testing for safety and efficacy of products and devices before they are made available to consumers. I therefore again urge that the Congress extend the provisions of the Food, Drug, and Cosmetic Act of 1938 to include testing of the safety and effectiveness of therapeutic devices, to extend existing requirements for label warnings to include household articles which are subject to the Food, Drug, and Cosmetic Act, and to extend adequate factory inspection to foods, over-the-counter drugs, devices, and cosmetics.
Recent hearings conducted by Senator McNamara and his Special Committee on Aging have highlighted certain commercial practices of a small portion of industry which sold worthless and ineffective merchandise to all segments of our society, and particularly to the aged. This is an abuse of the public trust. Consequently, the Secretary of Health, Education, and Welfare will take necessary steps to expand measures to supply consumers, and particularly aged consumers, with information which will enable them to make more informed choices in purchasing foods and drugs.
II. TAX BENEFITS
The tax program I recently submitted to the Congress will, by calendar year 1965, reduce Federal income tax liabilities for an estimated 3.4 million persons aged 65 and over by $790 million. An estimated $470 million of this reduction will arise from the general rate reductions and certain other provisions affecting the aged. The other $320 million reduction results from the replacement of the present complicated retirement income credit and extra exemption with a flat $300 tax credit.
These changes simplify and equalize the tax provisions for the aged, increase incentives for employment, assist those who need help most, and give relief in meeting medical and drug costs. Under current law, many inequities exist in the manner in which different groups of our older citizens are treated. For example, because wage income is taxed more heavily than pensions or other retirement income, employment is discouraged. The retirement income credit for the aged is one of the most complicated sections of the entire Internal Revenue Code.
I have recommended the substitution of a $300 tax credit for each person over age 65 in place of the extra exemption and retirement income credit. In addition, the limits on medical expense deductions would be eliminated and the present provision which limits deductible drug costs to those in excess of 1 percent of income repealed.
These proposals would benefit older taxpayers who are employed by greatly reducing the unfairness in taxation of income from different sources. At present, for instance, a couple 65 or over with an income of $5,000 using the standard deduction would pay a tax of $420 if their income was in salaries or wages, but only $31 if the $5,000 was made up of $1,200 from earnings, $1,800 from social security and $2,000 from a private pension. Under my proposals, in neither case would the couple pay any tax whatsoever.
Furthermore, at present the maximum retirement income, on which the retirement income credit is based, must be reduced by the full amount of social security benefits. Under the new proposal, the $300 credit would also be reduced to take account of social security, but only half of the amount of such benefits would be used in calculating the reduction. Social security, railroad retirement and other tax-free pensions would remain tax-free.
These changes are of particular benefit to elderly persons in the low and middle income brackets. At present, an elderly person can be taxed if his income exceeds as little as $1,333. The new tax proposals raise this level so that no single person 65 or over would pay tax until his income exceeds $2,900. An elderly couple would pay taxes only on income over $5,788, as opposed to the current $2,667. These increases in exemption of income, combined with the lower rates now proposed, save as much as $284 in reduced taxes for a single person and as much as $560 for a couple.
Roughly half of the $320 million reduction in taxes paid by older persons which would be made possible by the new $300 credit would go to those with incomes below $5,000. Ninety-seven percent would go to those with incomes of less than $10,000. Of the total $790 million tax benefit which will accrue to the aged as a result of all tax recommendations, both reductions and reforms, approximately 90 percent will go to those 3 out of every 4 elderly taxpayers who receive income from employment or self-employment. I again urge that the Congress give favorable consideration to these tax provisions benefiting our aged citizens.
III. ECONOMIC SECURITY
I. Improvements in Social Security Insurance. The OASDI system is the basic income maintenance program for our older people. It serves a vital purpose. But it must be kept up-to-date.
My recommendation for financing hospital insurance under social security--by increasing the maximum taxable wage base, on which benefits are computed, from $4800 to $5200 a year--will automatically provide an improvement in future OASDI cash benefits for millions of workers, raising the ultimate maximum monthly benefits payable to a worker from $127 to $134, and for a family from $254 to $268.
For the average regularly employed man the Social Security wage base has become a smaller and smaller portion of his earnings, and his insurance against the loss of employment income upon retirement, death or disability is thus declining steadily. Today only 39 percent of all regularly employed men have all of their earnings counted under the $4,800 ceiling. It is generally agreed that the earnings base needs to be adjusted from time to time as earnings levels rise, and the Congress has done so in the past. Raising the wage base to $5,200 will still only cover the total wages of about 50 percent of regularly employed men. This increase in the Social Security wage base is sound, beneficial and necessary.
The entire relationship between benefits and wages, however, needs to be reexamined. As required by the Social Security Act, the Secretary of Health, Education, and Welfare will soon appoint an Advisory Council on Social Security Financing. I am directing him to charge this Council with the obligation to review the status of the social security trust funds in relation to the long-term commitments of the social security program, and to study and report on extensions of protection and coverage at all levels of earnings, the adequacy of benefits, the desirability of improving the present retirement test, and other related aspects of the social security system. The results of the Council's work should provide a sound basis for continued improvement of the program, keeping it abreast of changes in the economy.
2. Improvements in Old-Age Assistance. In the fiscal year 1964 the Federal Government will provide grants to the States of about $1.5 billion under the old-age assistance program. I recommend three improvements in the equity and effectiveness of this program, in addition to the two medical payments changes previously mentioned:
First, under existing Federal law, States are permitted to require up to 5 years residence for eligibility under the old-age assistance program. Currently, 20 States impose the maximum 5-year requirement, 3 States require fewer than 5 years but more than I, and the remaining States require 1 year or less.
Lengthy residence requirements are an unnecessary restriction on elderly people receiving public assistance who would like to move to another State to be near a child or other relative. Others in need, not previously receiving such assistance, find themselves in a "no-man's land", with no aid at all and no place to turn because they have not lived long enough in the State of their present residence. To ensure that our Federal-State public assistance program can help all of our needy aged, I recommend that the maximum period of residence which may be required for eligibility be gradually reduced to 1 year by 1970. This change does not represent an expansion of the program or a significant cost to the Federal Government or any individual State; and it will simplify administration by eliminating many detailed investigations of residence.
Second, a problem of increasing proportions found among our needy citizens is the difficulty some have in properly handling the money which they receive from a public welfare agency. Of the more than 2 million recipients of old-age assistance, over half are 75 years or older, one in three is 80 or more, and one in eight is over 85. One-third are confined to their homes or require help from others because of physical or mental disability and almost 9 percent are in nursing homes and other institutions. Among this group some lose their assistance payments through forgetfulness; others are defrauded by unscrupulous persons. Obviously many of these aged beneficiaries who are not in need of legal guardians, should nevertheless have help in handling their money; yet current provisions of the Federal law tend to make it difficult for States to provide necessary protective services.
I therefore recommend that the old-age assistance program be modified to permit Federal participation in protective payments made to a third party in behalf of needy aged individuals. This would be comparable to provisions adopted last year for dependent children.
Third, many of our older people, with very limited income, live in rental housing which falls far short of any reasonable standard of health or safety. As mentioned earlier, among households headed by a person 65 years of age or over who live in rented housing, nearly 40 percent are in quarters classified as substandard. Yet they are frequently charged exorbitant rents for this housing.
It is estimated that old-age assistance payments presently going into payments of rent equal some half a billion dollars a year--a fourth of the $2 billion total that is expended in Federal, State, and local funds for all old age assistance. These funds should not subsidize substandard housing. The establishment of State rental housing standards is long overdue. I therefore recommend that, as a condition for receiving Federal grants for old-age assistance, a State's plan must establish and maintain standards of health and safety for housing rented to recipients of old age assistance. There is a precedent for such a plan-requirement in the 1950 legislation which required the establishment of similar standards for institutions.
IV. EMPLOYMENT OPPORTUNITIES
The Nation's economic development, coupled with the growth of its social insurance and private pension plans, has brought to our aged deserved opportunities for leisure and retirement. While the number of persons 65 and over has almost doubled since 1940, only 13 percent are now in the labor force--half the 1940 percentage.
Retirement, however, should be through choice, not through compulsion due to the lack of employment opportunities. For many of our aged, social security and retirement benefits are not a satisfactory substitute for a pay check. Many of those who are able to work need to work and want to work. But, often knowingly and sometimes unwittingly, industrialization and related social and economic trends have progressively limited the possibilities for gainful employment for many of our older citizens. The gradual decline in agricultural employment, for example, has reduced the traditional job opportunities which farming once provided for older persons. Employment in the expanding sectors of our economy is too often attended by compulsory retirement programs or by age discrimination practices. Older workers, if not protected by seniority, are among the first to be laid off--and men 65 and older are twice as likely to remain unemployed for 26 weeks or more as are other unemployed workers.
Denial of employment opportunity to older persons is a personal tragedy. It is also a national extravagance, wasteful of human resources. No economy can reach its maximum productivity while failing to use the skills, talents, and experience of willing workers.
Rules of employment that are based on the calendar rather than upon ability are not good rules, nor are they realistic. Studies of the Department of Labor show that large numbers of older workers can exceed the average performance of younger workers, and with added steadiness, loyalty and dependability.
In the Federal Government a number of steps are being taken to facilitate employment opportunities for older workers.
--I am directing each agency to honor fully both the spirit and the letter of official Federal policy to evaluate each older applicant or employee on the basis of ability, not age. I am asking all Federal agencies to review their current policies and practices in order to insure that full consideration is given to the skills and experience of older workers. I urge all employers, private and public, to adopt a similar policy.
--I have recommended that Congress increase the funds for the Federal-State Employment Service so that the strengthening and expansion of its counseling and placement services, started in the first year of this Administration, may be continued. The public employment offices will continue to give special attention to promoting employment and employment prospects for older workers.
--I have also recommended a substantial expansion in funds for the training programs under the Manpower Development and Training Act and the Area Redevelopment Act--both enacted within the past two years. The Secretary of Labor will launch this year a series of experimental and demonstration programs designed to assist older workers to make the best possible use of training opportunities in their communities and to test new classroom and counseling techniques.
These efforts are only a bare beginning. Our Nation must undertake an imaginative and far-reaching effort--in both the public and private sectors of our society--for the development of new approaches and new paths to the employment of older citizens. This will require a sharp new look at retirement and personnel patterns, part-time work opportunities, restrictive pension plans, possible incentives to employers and a host of other traditional or future practices. To give impetus to this nation-wide reappraisal, I propose two immediate actions.
First, I recommend legislation to establish a new 5-year program of grants for experimental and demonstration projects to stimulate needed employment opportunities for our aged. The Federal Government through the Department of Labor would provide up to $10 million per year on a matching basis to State and local governments or approved nonprofit institutions for experiments in the use of elderly persons in providing needed services. They would be employed in such activities as school lunch hour relief, child care in centers for working mothers, home care for invalids, and assistance in schools, vocational training, and programs to prevent juvenile delinquency. Precautions would be taken to insure that no project would result in any displacement of present employees and that wages would be reasonably consistent with those for comparable work in the locality.
Second, I have directed the President's Council on Aging, in consultation with private organizations and citizens, to undertake a searching reappraisal of problems of employment opportunities for the aged and to report to me by October 31, 1963, on what action is desirable and necessary.
In addition, voluntary service by older persons can both demonstrate their continued skill and provide useful activity for those retired from gainful employment but anxious to make use of their talents. Enactment of the National Service Corps recommended last week is urged again as a constructive opportunity for senior citizens to serve their local communities.
This program would provide an ideal outlet for those whose energy, idealism and ability did not suddenly end in retirement. In the labor force in 1960, there were more than 6 1/2 million men and women 60 years of age or older. They included: 126,000 public school teachers, 25,000 lawyers, 3,000 dietitians and nutritionists, 18,000 college faculty members, 12,000 social welfare and recreation workers, 11,000 librarians, 32,000 physicians and surgeons, and 43,000 professional nurses. Many of these people have now retired. Others are ready to retire or would retire if they saw further useful career activity ahead.
The Peace Corps, which has no upper age limit, has already drawn upon this reservoir of talent--and corpsmen in their 60's and 70's are today serving with distinction in Africa, Asia and South America. More are needed. The proposed National Service Corps can also use retired men and women to good advantage. Retired teachers, for example, have the freedom which would enable them to travel with migrant workers who are not in a community long enough to enter their children in school. The patience that comes with age will be an asset in work with the mentally retarded and the mentally ill. This program can be particularly helpful to, and helped by, our older citizens.
Adequate housing is essential to a full, satisfying life for all age groups in our population. The elderly have special needs for housing designed to sustain their independence even when disability occurs, and to promote dignity, self-respect and usefulness in later years. Yet millions of older people are forced to live in inferior homes because they cannot find or afford better. Nearly half of our people 65 and older, it has been estimated, live in substandard housing or in housing unsuited to their special needs.
In the past two years the Congress and the Executive Branch have taken major strides to assist in providing housing specially designed for the elderly. Under the three special programs administered by the Housing and Home Finance Agency--mortgage insurance, direct loans, and public housing-commitments have been issued for the construction of 49,000 units of specially-designed housing for the elderly. This almost tripled the total investment in special housing for the aged aided by the Federal Government, raising it from $336 million at the end of calendar 1960 to $950 million at the end of 1962.
The following steps are essential this year: (a) Direct Loan Assistance. The direct loan program for housing for senior citizens is rapidly using up all available funds under existing appropriations and authorizations. Moreover, no appropriation has yet been made to put into operation the new authority provided last fall to the Secretary of Agriculture to make loans for rental housing in rural areas for elderly persons and families of low and moderate incomes.
To expand the Federal contribution toward meeting the housing needs of senior citizens through direct loans I have included in the 1964 budget a supplemental appropriation for fiscal 1963 and requested a further increase of $125 million for 1964 in appropriations for the Housing and Home Finance Agency. I have also requested a supplemental appropriation of $5 million for 1963 to initiate the new rental housing program for elderly persons in rural areas and requested an additional $5 million for 1964. I urge favorable consideration of these requests.
(b) Group Residential Facilities. For the great majority of the Nation's older people the years of retirement should be years of activity and self-reliance. A substantial minority, however, while still relatively independent, require modest assistance in one or more major aspects of their daily living. Many have become frail physically and may need help in preparing meals, caring for living quarters, and sometimes limited nursing.
This group does not require care in restorative nursing homes or in terminal custodial facilities. They can generally walk without assistance, eat in a dining room and come and go in the community with considerable independence. They want to have privacy, but also community life and activity within the limits of their capacity. They do not wish to be shunted to an institution, but often they have used up their resources, and family and friends are not available for support. What they do need most is a facility with housekeeping assistance, central food service, and minor nursing from time to time. The provision of such facilities would defer for many years the much more expensive type of nursing home or hospital care which would otherwise be required.
To meet the special needs of this group, facilities have been constructed in many communities, and many more should be constructed. Such buildings can be small, with facilities for group dining, recreation and health services; and they should be integrated with the various community resources which can sustain and encourage independent living as long as possible. I am requesting (a) that the Housing and Home Finance Administrator give greater emphasis to the construction of group residences suitable for older families and individuals who need this partial personal care, and (b) that the Secretary of Health, Education, and Welfare, using the funds under the proposed Senior Citizen's Act and other resources already available to his Department, work with communities to assure that health and social services are provided efficiently for the residents of such facilities in accordance with comprehensive local plans.
(c) Eligibility of Single Elderly Persons for Moderate Income Housing. One of the new programs authorized by the Housing Act of 1961 which is already achieving substantial success finances rental housing, at below-market rates of interest, for families whose incomes are not low enough to qualify for public housing, but not high enough to afford housing financed on private market terms. This program is providing good housing to many moderate income families of all ages caught in the income squeeze. However, under the law it is limited to families; single persons are not included. About half of America's senior citizens are in a single or widowed status and therefore cannot obtain the benefits of such housing. Modification of this program is needed if it is to serve them. I recommend that the Congress amend the law to make single elderly persons eligible, if they otherwise qualify, to live in housing financed under section 221(d) (3) of the National Housing Act.
(d) Home Financing. Many of the homes of our older citizens require modernization or rehabilitation. Other older citizens need or prefer to sell their homes and realize their investment in it. Unfortunately, such actions too often involve a substantial financial sacrifice. I am directing the Federal Council on Aging to study these problems and develop a program to assist older citizens with the modernization, rehabilitation or sale of their individually owned homes, such program to be submitted to me by October 31st of this year.
VI. COMMUNITY ACTION
The heart of our program for the elderly must be opportunity for and actual service to our older citizens in their home communities. The loneliness or apathy which exists among many of our aged is heightened by the wall of inertia which often exists between them and their community.
We must remove this wall by planned, comprehensive action to stimulate or provide not only opportunities for employment and community services by our older citizens but the full range of the various facilities and services which aged individuals need for comfortable and meaningful life. I believe that in each State Government specific responsibility should be clearly assigned for stimulating and coordinating programs on aging; and that every locality of 25,000 population or above should make similar provision, possibly in the form of a community health and welfare council with a strong section on aging.
The Federal Government can assume a significant leadership role in stimulating such action. To do this, I recommend a 5-year program of assistance to State and local agencies and voluntary organizations for planning and developing services; for research, demonstration, and training projects leading to new or improved programs to aid older people; and for construction, renovation and equipment of public and nonprofit multipurpose activity and recreational centers for the elderly.
The assistance to be provided under this legislation will not duplicate other grant programs; indeed, it will make possible the more effective use of grants for such purposes as health, housing and other services. Developing a comprehensive community plan will enable communities to discover where gaps exist, where unnecessary duplications lie, where health grants are most needed, and where sound social service or adult education or senior housing developments should be strengthened.
Among the demonstration projects which can be developed under this program would be the establishment of single, one-stop centralized information and referral offices, to avoid the need of an aged person seeking assistance from as many as a dozen agencies before finding the particular service or combination of services he needs--and the construction of multipurpose activity centers providing older people with educational experiences promoting health, literacy, and mental alertness, with information concerning available community services, and with an opportunity to volunteer for helping others in a variety of community programs.
This legislation is of real importance to our older citizens, and to the State and local agencies which can be strengthened by it. I strongly urge its enactment.
VII. OTHER LEGISLATION
Other measures previously recommended and not specifically designed for older citizens can be of immense benefit to them. For example:
--Too many senior citizens are wasting away in obsolete mental institutions without adequate treatment or care. The mental health program previously recommended can help restore many of them to their communities and homes.
--Too many elderly people with small comes skimp on food at a time when their health requires greater quantity, variety and balance in their diets. The pilot food stamp program recommended in my farm message could improve their nutrition and health.
--Of the more than 17 1/2 million persons aged 65 and over, about 14 million did not finish high school, some 6 million of these did not finish grade school and over 1 million received no education at all. The comprehensive education program previously recommended would encourage Federal-State programs of general university extension for those previously unable to take college courses, and adult basic education for those who are considered to be functionally illiterate. The largest percentage of illiteracy still existing in this country is found among men and women 65 and over. To gain the ability to read and write could bring them a new vision of the world in their later years. Increased library services provided under this program would also be of particular interest to older people.
--Finally, the District of Columbia should make every effort to take full advantage of Federal legislation aiding senior citizens. There is no reason why the District of Columbia should not be a leader and a model in its community senior citizen program.
Our aged have not been singled out in this special message to segregate them from other citizens. Rather, I have sought to emphasize the important values that can accrue to us as a nation if we would but recognize fully the facts concerning our older citizens--their numbers, their situation in the modern world, and their un-utilized potential.
Our national record in providing for our aged is a proud and hopeful one. But it can and must improve. We can continue to move forward--by building needed Federal programs--by developing means for comprehensive action in our communities--and by doing all we can, as a nation and as individuals, to enable our senior citizens to achieve both a better standard of life and a more active, useful and meaningful role in a society that owes them much and can still learn much from them.
JOHN F. KENNEDY