I appreciate very much this opportunity to express my views concerning improvements in the scope and coverage of our Social Security Laws. As a co-sponsor of S. 2260, introduced last year, I am delighted that the President's 1954 social security proposals as embodied in H.R. 7199 make similar important improvements in our old-age and survivors insurance program; but I am disappointed in the failure of the administration program to fully meet the retirement needs of our elder or disabled citizens.
As a result of improved mortality rates and a long-range decline in birth rates, this nation's number and proportion of persons 65 years and older have increased tremendously during the course of this century. In 1900, only one in twenty-five were in this bracket which we have arbitrarily labeled "aged". But today, more than one in twelve are over age 65. Since 1900, the total population of this nation has doubled; but our population of elder citizens has quadrupled.
Unfortunately, job opportunities for our older workers have not similarly increased. As a result, the proportion of men aged 65 and over in the labor force has dropped sharply. This is a problem with which I am well acquainted, inasmuch as in Massachusetts and New England our proportion of elder citizens is very high and their employment opportunities are increasingly difficult.
It is for these reasons that I recommend to your Committee consideration of at least some of the provisions of S. 2260 which I believe more fully meet the inadequacies in our present Social Security Laws.
1. The most glaring gap in American social insurance today is the absence of disability benefits. The worker whose career is prematurely ended by illness or injury is in too many cases a burden on his relatives, his community, and the nation. Regardless of his age, his diligence, or his earning capacity, permanent and total disability may bring impoverishment and disruption at the very time when the responsibility for support of the family is greatest. Disablement of the breadwinner not only removes a source of income from the family, but adds an extra dependent. The administration bill properly includes a provision freezing the benefit rights of those totally and permanently disabled, in order to protect the level of his benefits upon reaching age 65. But the 45 year old amputee, facing twenty lean years before he becomes eligible for so-called "retirement" benefits does not find his needs met by a reassurance that his benefit status has been frozen.
2. With respect to retirement benefits, the Eisenhower program contains some constructive and necessary improvements; but unfortunately, they are still not bold enough or big enough to meet today's needs. Increasing the minimum benefits from $25 to $30 is most desirable; but even the $35 proposed under our bill falls far short of providing an adequate supplement to the retirement income of the individual worker. Similarly, increases in the maximum benefits for individuals and families are not adequately provided by H.R. 7199. The new benefit formula contained in this bill is a desirable recognition for those in middle-income brackets; but an increase in the creditable and taxable wage base from $3600 to only $4200 is unrealistic under today's earning levels. In order to restore to the program its 1939 status, when the taxable wage base covered 96% of earnings, a base of $6,000 - as provided in S. 2260 - should be established. Finally, the provisions permitting the drop out of four or five years of lowest earnings are a commendable feature to bring a more equitable relationship between earnings and benefits; but this can be achieved more directly and with higher benefits for the wage earner if he were permitted to select his ten highest years of earnings in computing his retirement benefits.
3. I am delighted that the administration has seen fit to place the retirement test or so-called "work clause" on an annual basis, permitting $1,000 a year of outside earnings, with one month's benefits deducted for additional amounts earned over that sum. This is an important step in removing the harsh and restrictive features of the present law, although it seems to me that the figure of $1200 a year --or $100 a month--would be more in line with existing needs and wage levels.
4. Finally, I strongly urge that your Committee consider two features of S. 2260 which are in no way touched upon by H.R. 7199. Many persons find it difficult to understand the social security law and particularly do not understand the relationship between benefits and years of contributions. As you will recall, the original Social Security Act included an increment in the benefit amount for each year of work in covered employment. This was removed in 1950, thus permitting one who retires after a few years of contributions to receive the same benefit as a worker with the same average wage who has contributed for twenty years. I think that equity, and the importance of a better understanding of the law, requires a restoration of this benefit increment for additional years of paid in service. S. 2260 proposes an increment of 1/2% a year as recognition of these greater contributions. Similarly, our bill provided that an individual who postponed his retirement beyond the time that he could draw benefits would receive a delayed retirement credit for the period of his postponement at the rate of 2% a year. A flexible retirement age should be encouraged; and additional recognition should be given to those persons who forego their retirement benefits and make additional contributions to the fund instead of retiring as soon as they are eligible.
Except where rigid seniority rules apply, the older worker is among the first laid off - and the last to find another job. Increasing prevalence of compulsory retirement in industry, and the inability of our elder citizens today to qualify under the thousands of new pension plans gained through collective bargaining, accentuate the importance of maintaining the living standards and purchasing power of our older citizens regardless of the future course of our economy. It is my hope that this Committee and Congress will meet what has been called "the essential test of a civilized society" by making adequate provision for the decent and dignified retirement of our aged and disabled citizens.
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