1. SPECIAL MESSAGE TO THE CONGRESS ON SOCIAL SECURITY -- SEPTEMBER 25, 1969

To the Congress of the United States:

This nation must not break faith with those Americans who have a right to expect that Social Security payments will protect them and their families.

The impact of an inflation now in its fourth year has undermined the value of every Social Security check and requires that we once again increase the benefits to help those among the most severely victimized by the rising cost of living.

I request that the Congress remedy the real losses to those who now receive Social Security benefits by increasing payments by 10 per cent.

Beyond that step to set right today's inequity, I propose that the Congress make certain once and for all that the retired, the disabled and the dependent never again bear the brunt of inflation. The way to prevent future unfairness is to attach the benefit schedule to the cost of living.

This will instill new security in Social Security. This will provide peace of mind to those concerned with their retirement years, and to their dependents.

By acting to raise benefits now to meet the rise in the cost of living, we keep faith with today's recipients. By acting to make future benefit raises automatic with rises in the cost of living, we remove questions about future years; we do much to remove this system from biennial politics; and we make fair treatment of beneficiaries a matter of certainty rather than a matter of hope.

In the 34 years since the Social Security program was first established, it has become a central part of life for a growing number of Americans. Today approximately 25 million people are receiving cash payments from this source. Three-quarters of these are older Americans; the Social Security check generally represents the greater part of total income. Millions of younger people receive benefits under the disability or survivor provisions of Social Security.

Almost all Americans have a stake in the soundness of the Social Security system. Some 92 million workers are contributing to Social Security this year. About 80 per cent of Americans of working age are protected by disability insurance and 95 per cent of children and mothers have survivorship insurance protection. Because the Social Security program is an essential part of life for so many Americans, we must continually re-examine the program and be prepared to make improvements.

Aiding in this Administration's review and evaluation is the Advisory Council on Social Security which the Secretary of Health, Education and Welfare appointed in May. For example, I will look to this Council for recommendations in regard to working women; changing work patterns and the increased contributions of working women to the system may make present law unfair to them. The recommendations of this Council and of other advisers, both within the Government and outside of it, will be important to our planning. As I indicated in my message to the Congress on April 14, improvement in the Social Security program is a major objective of this Administration.

There are certain changes in the Social Security program, however, for which the need is so clear that they should be made without awaiting the findings of the Advisory Council. The purpose of this message is to recommend such changes.

I propose an across-the-board increase of 10% in Social Security benefits, effective with checks mailed in April 1970, to make up for increases in the cost of living.

I propose that future benefits in the Social Security system be automatically adjusted to account for increases in the cost of living.

I propose an increase from $1680 to $1800 in the amount beneficiaries can earn annually without reduction of their benefits, effective January 1, 1971.

I propose to eliminate the one-dollar-for-one-dollar reduction in benefits for income earned in excess of $2880 a year and replace it by a one dollar reduction in benefits for every two dollars earned, which now applies at earnings levels between $1680 and $2880, also effective January 1, 1971.

I propose to increase the contribution and benefit base from $7800 to $9000, beginning in 1972, to strengthen the system, to help keep future benefits to the individual related to the growth of his wages, and to meet part of the cost of the improved program. From then on, the base will automatically be adjusted to reflect wage increases.

I propose a series of additional reforms, to ensure more equitable treatment for widows, recipients above age 72, veterans, for persons disabled in childhood and for the dependent parents of disabled and retired workers.

I emphasize that the suggested changes are only first steps, and that further recommendations will come from our review process.

The Social Security system needs adjustment now so it will better serve people receiving benefits today, and those corrections are recommended in this message. The system is also in need of long-range reform, to make it better serve those who contribute now for benefits in future years, and that will be the subject of later recommendations.

THE BENEFIT INCREASE

With the increase of 10%, the average family benefit for an aged couple, both receiving benefits, would rise from $170 to $188 a month. Further indication of the impact of a 10 per cent increase monthly benefits can be seen in the following table:

The proposed benefit increases will raise the income of more than 25 million persons who will be on the Social Security rolls in April, 1970. Total budget outlays for the first full calendar year in which the increase is effective will be approximately $3 billion.

AUTOMATIC ADJUSTMENTS

Benefits will be adjusted automatically to reflect increases in the cost of living. The uncertainty of adjustment under present laws and the delay often encountered when the needs are already apparent is unnecessarily harsh to those who must depend on Social Security benefits to live.

Benefits that automatically increase with rising living costs can be funded without increasing Social Security tax rates so long as the amount of earnings subject to tax reflects the rising level of wages. Therefore, I propose that the wage base be automatically adjusted so that it corresponds to increases in earnings levels.

These automatic adjustments are interrelated and should be enacted as a package. Taken together they will depoliticize, to a certain extent, the Social Security system and give a greater stability to what has become a cornerstone of our society's social insurance system.

REFORMING THE SYSTEM

I propose a series of reforms in present Social Security law to achieve new standards of fairness. These would provide:

1. An increase in benefits to a widow who begins receiving her benefit at age 65 or later. The benefit would increase the current 82 1/2% of her husband's benefit to a full 100%. This increased benefit to widows would fulfill a pledge I made a year ago. It would provide an average increase of $17 a month to almost three million widows.

2. Non-contributory earnings credits of about $100 a month for military service from January, 1957 to December, 1967. During that period, individuals in military service were covered under Social Security but credit was not then given for "wages in kind"--room and board, etc. A law passed in 1967 corrected this for the future, but the men who served from 1957 (when coverage began for servicemen) to 1967 should not be overlooked.

3. Benefits for the aged parents of retired and disabled workers. Under present law, benefits are payable only to the dependent parents of a worker who has died; we would extend this to parents of workers who are disabled or who retire.

4. Child's insurance benefits for life if a child becomes permanently disabled before age 22. Under present law, a person must have become disabled before age 18 to qualify for these benefits. The proposal would be consistent with the payment of child's benefit to age 22 so long as the child is in school.

5. Benefits in full paid to persons over 72, regardless of the amount of his earnings in the year he attains that age. Under present law, he is bound by often confusing tests which may limit his exemption.

6. A fairer means of determining benefits payable on a man's earnings record. At present, men who retire at age 62 must compute their average earnings through three years of no earnings up to age 65, thus lowering the retirement benefit excessively. Under this proposal, only the years up to age 62 would be counted, just as is now done for women, and three higher-earning years could be substituted for low-earning years.

CHANGES IN THE RETIREMENT TEST

A feature of the present Social Security law that has drawn much criticism is the so-called "retirement test," a provision which limits the amount that a beneficiary can earn and still receive full benefits. I have been much concerned about this provision, particularly about its effects on incentives to work. The present retirement test actually penalizes Social Security beneficiaries for doing additional work or taking a job at higher pay. This is wrong.

In my view, many older people should be encouraged to work. Not only are they provided with added income, but the country retains the benefit of their skills and wisdom; they, in turn, have the feeling of usefulness and participation which employment can provide.

This is why I am recommending changes in the retirement test. Raising the amount of money a person can earn in a year without affecting his Social Security payments--from the present $1680 to $1800--is an important first step. But under the approach used in the present retirement test, people who earned more than the exempt amount of $1680, plus $1200, would continue to have $1 in Social Security benefits withheld for every $1 they received in earnings. A necessary second step is to eliminate from present law the requirement that when earnings reach $1200 above the exempt amount, Social Security benefits will be reduced by a full dollar for every dollar of added earnings until all his benefits are withheld; in effect, we impose a tax of more than 100% on these earnings.

To avoid this, I would eliminate this $1 reduction for each $1 earned and replace it with the same $1 reduction for each $2 earned above $3000. This change will reduce a disincentive to increased employment that arises under the retirement test in its present form.

The amount a retired person can earn and still receive his benefits should also increase automatically with the earnings level. It is sound policy to keep the exempt amount related to changes in the general level of earnings.

These alterations in the retirement test would result in added benefit payments of some $300 million in the first full calendar year. Approximately one million people would receive this money--some who are now receiving no benefits at all and some who now receive benefits but who would get more under this new arrangement. These suggestions are not by any means the solution to all the problems of the retirement test, however, and I am asking the Advisory Council on Social Security to give particular attention to this matter.

CONTRIBUTION AND BENEFIT BASE

The contribution and benefit base--the annual earnings on which Social Security contributions are paid and that can be counted toward Social Security benefits-- has been increased several times since the Social Security program began. The further increase I am recommending-- from its present level of $7800 to $9000 beginning January 1, 1970--will produce approximately the same relationship between the base and general earnings levels as that of the early 1950s. This is important since the goal of Social Security is the replacement, in part, of lost earnings; if the base on which contributions and benefits are figured does not rise with earnings increases, then the benefits deteriorate. The future benefit increases that will result from the higher base I am recommending today would help to prevent such deterioration. These increases would, of course, be in addition to those which result from the 10% across-the-board increase in benefits that is intended to bring them into line with the cost of living.

FINANCING

I recommend an acceleration of the tax rate scheduled for hospital insurance to bring the hospital insurance trust fund into actuarial balance. I also propose to decelerate the rate schedule of the old-age, survivors and disability insurance trust funds in current law. These funds taken together have a long-range surplus of income over outgo, which will meet much of the cost. The combined rate, known as the "social security contribution," already scheduled by statute, will be decreased from 1971 through 1976. Thus, in 1971 the currently scheduled rate of 5.2% to be paid by employees would become 5.1%, and in 1973 the currently scheduled rate of 5.65% would become 5.5%. The actuarial integrity of the two funds will be maintained, and the ultimate tax rates will not be changed in the rate schedules which will be proposed.

The voluntary supplementary medical insurance (SMI) of title XVIII of the Social Security Act, often referred to as part B Medicare coverage is not adequately financed with the current $4 premium. Our preliminary studies indicate that there will have to be a substantial increase in the premium. The Secretary of Health, Education and Welfare will set the premium rate in December for the fiscal year beginning July 1970, as he is required to do by statute.

To meet the rising costs of health care in the United States, this Administration will soon forward a Health Cost Control proposal to the Congress. Other administrative measures are already being taken to hold down spiraling medical expenses.

In the coming months, this Administration will give careful study to ways in which we can further improve the Social Security program. The program is an established and important American institution, a foundation on which millions are able to build a more comfortable life than would otherwise be possible--after their retirement or in the event of disability or death of the family earner.

The recommendations I propose today, which I urge the Congress to adopt, will move the cause of Social Security forward on a broad front. We will bring benefit payments up to date. We will make sure that benefit payments stay up to date, automatically tied to the cost of living. We will begin making basic reforms in the system to remove inequities and bring a new standard of fairness in the treatment of all Americans in the system. And we will lay the groundwork for further study and improvement of a system that has served the country well and must serve future generations more fairly and more responsively.

Richard Nixon
The White House
September 25, 1969

2. Statement on Signing the Federal Coal Mine Health and Safety Act of 1969--December 30, 1969

THE HEALTH and safety of American workers is a primary concern of this administration. With this concern in mind, one of my very early legislative recommendations was in the area of coal mine health and safety. This has culminated today in my signing of the Federal Coal Mine Health and Safety Act of 1969. The health and safety provisions of this act represent an historic advance in industrial practices.

However, I do have reservations about certain serious issues raised by the act. In signing it I wish to bring to the attention of the Congress and the Nation three points I consider to be of major importance:

First, workmen's compensation has been and should be a State responsibility. Title IV of this act gives the Federal Government responsibility in this area. I want to emphasize very strongly that Title IV is temporary, limited, and unique and in no way should it be considered a precedent for future Federal administration of workmen's compensation programs. With the exception of continuing benefit payments to claimants establishing eligibility during the period prior to December 31, 1972, all Federal responsibility in this area will expire within 7 years.

Next, this act creates confusion about the consistency of standards in federally administered disability programs. I have therefore instructed the Secretary of Health, Education, and Welfare in administering this program to apply wherever possible standards consistent with those under the existing Social Security Act disability program.

Finally, the act may present problems of administration that require legislative changes. If such problems arise, I will propose corrective legislation.

While I have these concerns about the problems presented by the act, I have great pride in this historic legislation. It represents a crucially needed step forward in the protection of America's coal miners.

YESTERDAY the House of Representatives passed a bill that is a major milestone on the road to reform of the social security system. This is the bill that would tie social security payments to the cost of living and thus protect them from the uncertainties of politics and shifts of the economy once and for all. I want to thank the Members of the House who voted to approve this proposal, which I have been urging since my campaign of 1968.

People receiving social security benefits have been among those hardest hit by a 5-year inflation of their cost of living. This reform would give them the peace of mind that comes from the certainty that the purchasing power of their benefit checks will not be eroded.

The bill passed by the House would provide a 5 percent rise in social security payments beginning the first of next year, financed by the social security system itself. I urge the Senate to approve this legislation, which is both fiscally sound and urgently needed to help the elderly and the disabled and their dependents make ends meet.

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 92nd 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 low-income 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.

NOTE: The White House released the transcripts of two news briefings on H.R. 1 : the first, on May 12, 1971, by Elliot L. Richardson, Secretary of Health, Education, and Welfare; and the second, on May 18, by John G. Veneman, Under Secretary of Health, Education, and Welfare.

TODAY marks a major legislative milestone in the history of welfare reform. Not only has the House of Representatives affirmed the principles of reform put forward by the Administration almost 2 years ago; in its constructive deliberations on this subject, it has strengthened and extended these principles. The Members of the House who supported H.R. 1, and in particular those on the Ways and Means Committee, have my personal and sincere thanks for their careful and responsible action.

H.R. 1 offers the Nation, at last, a way out of the present welfare morass. It establishes strong work requirements and work incentives. It provides coverage for the first time for workers whose earnings are inadequate to support their families, thus ending an unconscionable discrimination against millions of hard-working citizens throughout the Nation. Strong linkages are forged at every point under the new system between benefits and jobs for all employable recipients.

By establishing a national income standard for families with children, H.R. 1 represents a heartening step forward in building up levels of opportunity for our most valued asset--our children.

H.R. 1 also heralds a new day for older Americans. Reforming both social security and welfare programs, it strikes a blow against poverty for the elderly. Social security benefits will rise automatically in the future to protect against inflation, and recipients will be entitled to make and keep greater earnings without loss of benefits. Income assistance to the needy aged will be increased to $150 per month over a 3-year period and will be administered by the Social Security Administration on an efficient and equitable basis throughout the Nation.

It is my deeply felt hope that the Senate will move with dispatch now that welfare reform has passed the House. We cannot afford to delay any longer in our efforts to remedy the failures of the Nation's welfare programs and establish in their place an equitable and uniform system designed to build people up, rather than pull them down.

I AM today signing into law H.R. 10604 which covers four unrelated subjects and makes desirable changes in portions of the Social Security Act.

Two provisions of the measure are technical in nature.

The first would provide more favorable treatment for certain social security beneficiaries, particularly parents who lost their sons in Vietnam, by paying lump-sum death benefits when the body is not recovered for burial.

Under a second amendment being signed into law, Medicaid benefits would be extended to cover services provided by Intermediate Care Facilities, the so-called ICF'S. The purpose of this amendment: to provide a less costly alternative for the medically indigent, who do not need the institutional or intensive care provided in hospitals and skilled nursing homes.

A third worthwhile provision of H.R. 10604 will guarantee that some 600,000 Americans, needy, aged, blind, and disabled, now on public assistance, will continue to enjoy some benefits from the social security increases enacted in 1969. Were it not for this provision, these 600,000 would no longer be protected against a reduction of up to $4 monthly in their welfare checks.

The fourth provision represents a significant step in the direction of welfare reform.

Although they present some technical difficulties, the amendments the Congress voted to the Work Incentive program (WIN) would, in effect, essentially enact the workfare provisions I have proposed as a part of a complete reform of the welfare system.

Under these amendments, all able-bodied welfare recipients--rightly excepting the aged, children under 16 or attending school, those who are caring for ill or incapacitated persons, and mothers of small children-- will be required to register for jobs or job training. The Federal Government will also assume 90 percent of the cost of child care and supportive services. The Federal matching rate for manpower services will rise from 80 percent to 90 percent. A new public service program will be established to replace some ineffective existing special work projects. Separate units of the Federal Work Incentive program will be established at all State agencies. Also added is a requirement that at least one-third of total WIN expenditures be used for on-the-job training and public service employment--reflecting a clear preference for real jobs, as opposed to long-term classroom training.

These amendments parallel my work-fare recommendations embodied in H.R. 1. In my judgment, they reflect the national interest.

The United States today faces a changed world from the postwar world to which we had become accustomed. In the place of exhausted and dependent allies and defeated enemies, we today find ourselves with strong and independent friends and powerful adversaries competing for a new place in the sun.

No nation enjoys the unique advantages America possesses in that competition. But if we are to remain the most competitive, most productive society on earth, we must not forget how we got there. It is the sweat and labor of generations past and present that have brought us where we are today, that have piled high the wealth that enables us to be among the most generous nations in history with our own people, and with the world. The affluent society did not come into being by accident.

To those who deride the "work ethic," Americans must respond that any job for an able-bodied man is preferable to life on the public dole. No task, no labor, no work, is without dignity or meaning that enables an individual to feed and clothe and shelter himself, and provide for his family. We are a nation that pays tribute to the workingman and rightly scorns the freeloader who voluntarily opts to be a ward of the state. For over the last four decades, we have learned, at inestimable social cost, the truth of Franklin Roosevelt's words:

"Continued dependence upon relief induces a spiritual and moral disintegration fundamentally destructive to the national fibre. To dole out relief in this way is to administer a narcotic, a subtle destroyer of the human spirit."

With passage of these amendments, a number of the workfare ideas outlined in my welfare reform recommendations of 1969 and beyond have now become law. The principle of work requirements is in place. The Federal Government is committed to 90 percent of the cost of day care and supplemental services. Tax deductions have been provided for working mothers, for day care costs, in the tax law I recently signed.

But the welfare system is yet in need of reform. Further economic incentives must be provided to keep families together, rather than break them apart--to encourage welfare recipients to take jobs, rather than to discourage them from working. With its return in January, this Congress should then complete the work of welfare reform.

I HAVE today signed H.R. 15390, which extends the temporary ceiling on the national debt, and which, among other measures, provides for an across-the-board increase of 20 percent in social security benefits.

One important feature of this legislation which I greet with special favor is the automatic increase provision which will allow social security benefits to keep pace with the cost of living. This provision is one which I have long urged, and I am pleased that the Congress has at last fulfilled a request which I have been making since the first months of my Administration. This action constitutes a major break-through for older Americans, for it says at last that inflation-proof social security benefits are theirs as a matter of right, and not as something which must be temporarily won over and over again from each succeeding Congress.

Another important section of H.R. 15390 provides for accelerated tax refunds for disaster losses. This provision, the passage of which this Administration also urged on the Congress, extends from 3 months to 6 months the period after the end of the tax year in which a person can claim a deduction for disaster losses. This means, for example, that a person suffering disaster losses between April 15 and June 30. of this year can recompute his or her 1971 taxes and receive a refund check now, while the money is needed most, rather than waiting until next April to claim the same amount. This is particularly timely in the wake of the extensive damage caused by the recent floods.

As I have indicated on other occasions, however, H.R. 15390 includes some serious shortcomings.

It fails the test of fiscal responsibility by failing fully to finance its increase in social security benefits. As a result of this failure, it would add an additional $3.7 billion to the more than $3 billion by which earlier actions and inactions by the Congress have already thrown the full employment budget for fiscal year 1973 into deficit--thus threatening dangerously to escalate the rate of inflation at a time when this Administration's economic policies are succeeding in turning it back.

I am determined that we shall win the battle against inflation--and that fiscally irresponsible policies shall not again penalize all Americans, and especially the older citizens whom these benefit increases are designed to help, by taking away in higher prices what they have gained in higher wages and higher benefits.

Therefore, it will be necessary for the Congress and the Administration to offset the additional $3.7 billion deficit created by this measure through cuts in other Federal programs.

An additional fault with H.R. 15390 is that it jeopardizes the integrity of the Social Security Trust Fund by substantially reducing the necessary coverage of trust fund reserves to ensure annual benefit payments. I shall request the next Congress to restore this full 100-percent protection.

My belief that offsetting cuts in other programs can be made--although they may be painful--together with my belief that older Americans need and deserve increased benefits, permits me to sign this measure. However, I note that the Congress has extended the debt ceiling only until October 31, thus setting the stage for what could become a frantic, election eve scramble to attach a whole collection of seemingly attractive, politically popular, but fiscally irresponsible, riders to the debt ceiling bill at that time. Debt ceiling bills are a tempting target for such maneuvers, because the Government quickly becomes unable to function if the ceiling falls back below the actual level of Government debt. I place the Congress on notice now that if this occurs--if fiscally irresponsible riders are then attached to that debt ceiling bill, for which it is not possible to find offsetting cuts in other programs--then I will not hesitate to exercise my right and responsibility to veto.

Beyond the shortcomings I have noted in this measure, it should be noted that the added benefits will not come without cost. Even though it is not fully funded, the measure still imposes considerable additional tax burdens on all wage earners. However, the overriding and finally determining factor in my decision to give my approval to this act is my deep concern for the well-being of our older Americans. They both need and deserve a significant increase in social security benefits.

With the signing of H.R. 15390, social security benefits since this Administration took office will have increased by a compound total of 51 percent. It is now our responsibility to see that these needed increases in income for our senior citizens are not eaten up by increases in the cost of living. The Congress has a solemn responsibility to join me in fighting inflation, adopting an unbreakable rule--that there shall be no future increases in spending above my budget without providing for tax increases to pay for such spending increases. Our older Americans deserve full and fair consideration at the hands of their Government, and I have made every effort to see that they receive it. It is in consideration of their just requirements, and in spite of the fiscal irresponsibility that the Congress has demonstrated in its deficit funding of this legislation. that I have signed H.R. 15390.

IT GIVES me very great pleasure to sign H.R. 1, landmark legislation that will end many old inequities and will provide a new uniform system of well-earned benefits for older Americans, the blind, and the disabled. This bill contains many improvements and expansions of the social security, Medicare, and Medicaid programs which this Administration recommended and is proud to bring into reality today.

But this legislation aims at goals which are larger than the sum of all of its various program improvements:

--It represents another step in my effort to end the gap that separates far too many older Americans from the mainstream of American life.

--It furthers my concept that, rather than being viewed as a problem, older Americans should be recognized and utilized as a priceless American resource whose energy, ideals, and commitment the Nation needs. But first they have to be protected against both the realities and the fears of income and health problems--and this bill will do much to advance such protections.

--It reaffirms and reinforces America's traditional efforts to assist those of our citizens who, through no fault of their own, are unable to help themselves. America has always cared for its aged poor, the blind, and the disabled--and this bill will move that concern to higher ground by providing better and more equitable benefits.

--Finally, it supports my conviction that the best way to help people in need is not with a vast array of bureaucratic services, but by providing them money and insurance so that they can secure needed services themselves.

H.R. 1's cost has always been a part of my budget estimates for fiscal year 1973. Due to its late enactment, the bill will actually provide a $900 million surplus over the additional outlays in fiscal year 1973.

Therefore, I am able to sign this bill without violating my promise to hold down Federal spending in order to avoid a general tax increase.

The social security taxes imposed by this bill, to pay for these benefits, also were included in my fiscal year 1973 budget estimates.

H.R. 1, as enacted, does not contain my proposals for reforming the welfare system for families with dependent children. This is a deep disappointment to all--including the taxpayers--who are the victims of the existing welfare mess.

In the next Congress, I will renew my efforts to achieve a work-oriented welfare program that will help all deserving people on a fair and equitable basis--but which will contain firm work requirements, and will not encourage idleness by making it more profitable to go on welfare than to work.

Despite this major omission, H.R. 1 does give life to many of my recommendations to improve the quality of life for older Americans, the blind, and the disabled.

Social Security--provides increased benefits for 3.8 million widows and widowers; it liberalizes the retirement earnings test by increasing from $1,680 to $2,100 the amount a beneficiary can earn without having benefits reduced, a provision that will aid 1.6 million persons; it establishes a special minimum benefit of $170 per month for 150,000 persons who have worked for long years at low wages; and it improves benefits for men retiring at age 62 and for those who work beyond 65.

Medicare/Medicaid--It extends Medicare to cover 1.5 million social security disability beneficiaries; it limits the monthly premium under Part B of Medicare, an expense I had urged be eliminated; it permits optional Medicare cover through health maintenance organizations; and it extends Medicare coverage for kidney transplants and renal dialysis--the cost of which is beyond most individuals--to workers under social security, and their dependents.

I am especially pleased that this legislation embodies my recommendation that the Federal Government bear the full cost of skilled nursing home inspectors to ensure that all such institutions meet the standards that a dignified and humane existence--and the law--require.

Many of our nursing homes are of good quality. But many others fall woefully short of standards, and many patients are forced to live their later years in institutions which are unsanitary and unsafe, overcrowded and understaffed. This intensified inspection program will help clean up such neglect and degradation.

H.R. 1 also contains an important provision, sponsored by Senator Wallace Bennett of Utah, for the mandatory establishment of Professional Standards Review Organizations which will review the medical necessity, appropriateness, and quality of services covered under Medicare and Medicaid. This will assure that

patients are getting exactly what they need--and nothing which they do not need--with the highest possible quality of care all along the line.

The Needy Aged, Blind, and Disabled--H.R. 1 will establish, beginning January 1, 1974, a nationally uniform system of benefits for people in these groups. As delegates to the White House Conference on Aging pointed out, these people now are subject to great inequities and considerable redtape inherent in the present system of varying State programs with different benefits, eligibility standards, and rules. The cost of this measure for calendar year 1974 is estimated to be $1.5 billion over what is being spent under the current law.

The new national plan--one I have long urged upon the Congress--will provide a minimum monthly benefit of $130 for an individual and $195 for a couple. States currently paying higher benefits would be encouraged to continue to do so by Federal assumption of any new costs involved.

This entire program will be fully financed by the Federal Government and efficiently executed with a minimum of paperwork by the Social Security Administration.

This legislation once again provides dramatic and heart-warming evidence that America is the country that cares-and translates that humanitarian care into a better life for those who need, and deserve, the support of their fellow citizens. The American way of life is the high achievement of our era and the envy of the world, and responsive and responsible legislation such as this is one major reason why.

I am highly gratified to be able, at long last, to put my signature on H.R. 1--thus lifting these long-sought benefits out of debate and placing them into the laws of our generous and compassionate land.

Good afternoon:

A President signs many bills, but one that I signed today gave me special satisfaction because of the enormous impact it can have on the lives of millions of individual Americans.

I refer to the legislation known as H.R. 1--and especially to its provisions for helping, older Americans. Many of these provisions grew out of recommendations which I have been urging the Congress to act on for several years.

Let's look at some of the things H.R. 1 will do:

First, nearly 4 million widows and widowers will get larger social security benefits--the full 100 percent of what was payable to the individual's late husband or wife. This will mean more than $1 billion in additional income for these deserving people in the next fiscal year.

Second, over a million and a half older Americans who are now working can earn more income without having their benefits reduced.

Until today, if you were receiving social security, every dollar you earned above $1,680 cost you 50 cents in benefits--and every dollar you earned above $2,880 cost you a full dollar. But under the new provision-which I have advocated for years--you can earn up to $2,100 without losing a cent of social security, and every dollar you earn above that $2,100--no matter how many--will cost you only 50 cents in benefits. This will encourage more older Americans to work--helping them and helping the country.

Third millions of older Americans who live in poverty, along with the blind and the disabled, will be helped by a new Federal floor under their income--a monthly minimum of $130 for an individual and $195 for a couple. Free of the inequities and redtape which plague the present system, this program will channel an estimated $1 billion in the next fiscal year to those whose needs are greatest. For millions of older people, it can mean a big step out of poverty and toward a life of dignity and independence.

In addition, H.R. 1 will pay a special minimum benefit of $170 per month to 150,000 older persons who worked for long years at low wages. Men who retire at 62 will also be helped. Medicare coverage will be extended to cover 100 percent and not just 80 percent of home health services, and to cover more of the cost of nursing home care, to pay for kidney transplants, chiropractors, and other services formerly not covered at all, and to cover disabled Americans of all ages. The patient's fees for Part B of Medicare will be limited. And steps will be taken to increase the quality and the appropriateness of services which are paid for by Medicare and Medicaid.

Altogether, H.R. 1 will improve the income position of millions of older Americans. That, in my judgment, is the best way to help older people--by providing them with more money so they can do more things for themselves.

H.R. 1 is only the latest in a series of steps we have taken to improve the incomes of older people. In the last 4 years, for example, social security benefits have gone up 51 percent. That is the largest and most rapid increase in history. But the important thing is not just that benefits have been brought up to date. The important thing is that they now can be kept up to date. That is a result of the automatic increase provisions which I have been pushing for many years and which finally became law this summer.

Social security, in short, is now "inflation proof." Payments that keep pace with the cost of living are no longer something the elderly have to battle for in the Congress year after year. They have at last become a guaranteed right for older Americans.

There have been other forward steps as well--proposals to make private pension programs more comprehensive and more reliable, for example, and to let older people receive more tax-free income.

Inflation is a special menace to the income of older Americans. Since 1969, we have cut the rate of inflation almost in half. In the area of medical care prices, we have cut inflation by nearly two-thirds--an achievement which is particularly important to older people because they spend more than three times as much per capita on health care as do younger people.

And we are also moving to relieve the property tax burden which falls so heavily on older citizens. Two-thirds of older Americans own their own homes. Yet, even when their income has gone down because of retirement, their property taxes have kept going up--by more than 100 percent in the last 10 years. The result: The home which was once a symbol of financial independence too often becomes a cause of financial hardship.

There are over 6 million American homeowners who are more than 65 years old. More than one million of these retired Americans live in their own homes on an income of less than $2,000 a year. In the Northeast, to take one example, these elderly citizens are paying an average of 30 percent of their income in property taxes.

This is wrong. We must stop it. One of my highest priority proposals to the new Congress will be property tax relief for older Americans.

Another problem which is of critical concern for older Americans--and for this Administration--is the quality of our nursing homes. Many of them are doing a good job, but too many have been below recent and decent standards. In 1971, I launched a new eight-point action plan to change this. Under that plan, we have already cut off Federal funding to hundreds of hopelessly inferior homes. H.R. 1 will permit the hiring and training of 2,000 inspectors to enforce strict regulations. And we have substantially expanded Federal efforts to make all nursing homes brighter and better places.

We also want to help more older Americans live decent, dignified lives in the familiar settings of their own homes. This is why we have increased budgeting under the Older Americans Act eightfold in the last 4 years, expanding a wide range of services in fields such as health, education, homemaking, counseling, and nutrition.

While the Older Americans bill is being perfected in the months ahead, these programs will all move forward under a continuing resolution. We have also taken special steps to fight crime in areas where older people are living to provide more housing and transportation for older people, to fight job discrimination based on age, and to expand opportunities for older people to find self-fulfillment in useful voluntary action. We have doubled the budget for the Foster Grandparent Program. We have tripled the budget for the Retired Senior Volunteer Program.

This summer I launched a new program called Project FIND. Its purposes were expressed in its name--to "find" older people who are so isolated that they are not receiving the help which should be theirs.

The results have been remarkable. One and a half million names have already come in to us. And now, with the help of the American Red Cross, we are mobilizing an army of 20,000 volunteers to make personal contact with each one of these elderly persons.

Already over 300,000 contacts have been made. In Des Moines, for example, a group of high school students has been giving many hours a week to visiting older people. One girl, Carol Clayton, discovered a 79-year-old man a few weeks ago who spoke only Spanish. He lived on very little income, and he had never heard about food stamps. And now, as a result of Project FIND, Trinidad Medina has made contact with the Polk County Department of Social Services. Just as importantly, he has made a friend, Carol Clayton. He can't communicate with her in English, but with the help of his Spanish guitar, he has no trouble communicating friendship.

This, in the final analysis, is what our programs to help older people are all about: not lines on an organization chart, or numbers in a budget, but helping individual men and women live fuller, richer lives.

In less than 4 weeks, we will celebrate another Thanksgiving. Our family will think back to our first Thanksgiving in the White House 3 years ago. Our guests that day were over 200 older Americans. When I talked with them, I found that many were particularly excited about the Moon walks that they had recently watched on television. And it occurred to me on that day that most of our guests could also remember the first airplane flight by the Wright Brothers at Kitty Hawk, over a half century ago.

Our older generation has lived through the greatest period of change in human history. They have brought your Nation through all that change with colors flying. We owe them more than we can ever repay.

But when we think of older Americans, we must not think only about what they have already given. We must also think about what they still can give. They are our seasoned veterans, and America can never be at its best if we keep them on the bench.

We hear a lot about generation gaps these days. We cannot afford a generation gap which shuts out the young in this country. But neither can we afford a generation gap that shuts out the old.

And so we must develop a new attitude toward aging in America, one that stops regarding older Americans as a burden and starts regarding them as a resource.

Senior power can be a tremendous source of energy for our country. Churchill was a great leader at 81. Holmes was a great jurist at 91. Clara Barton led the Red Cross at 83, and Connie Mack led the Athletics at 88. Michelangelo was painting at 89; Toscanini was conducting at 87. And for every celebrated name like these, there are millions of ordinary citizens in their seventies and eighties who are making extraordinary contributions to their communities.

Senator Green of Rhode Island used to contend: "Most people say that as you get old you have to give up things. I think you get old because you give up things."

I believe that millions of older Americans can make great contributions to our Nation's progress if only they have the chance. This really is the point of our Government programs and policies--to help older Americans play a full, continuing role in the great adventures of America.

Thank you and good afternoon.

To the Congress of the United States:

A dynamic economic system in a democracy must not only provide plentiful jobs, good working conditions, and a decent living wage for the people it employs; it should also help working men and women to set aside enough of the earnings of their most productive years to assure them of a secure and comfortable income in their retirement years.

This fundamental concept of prudent savings for retirement came under direct public sponsorship in the United States more than a generation ago, with the establishment of the Social Security System. Today, Social Security is the largest system of its kind in the world, and one of the most effective and progressive. Numerous significant improvements have been made in it during the past four years by this Administration in cooperation with the Congress.

In addition, public policy has long given active encouragement to the growth of a second form of retirement income: private pensions which are tailored to the needs of particular groups of workers and help to supplement the Social Security floor. Private pension plans now cover over 30 million workers and pay benefits to another 6 million retired persons.

But there is still room for substantial improvement in Federal laws dealing with private retirement savings. Those workers who are covered by pension plans--about half the total private work force--presently lack certain important types of Government protection and support. The other half of the labor force, those who are not participants in private plans, are not receiving sufficient encouragement from the Government to save for retirement themselves. Self-reliance, prudence, and independence--basic strengths of our system which are reinforced by private retirement savings and which government should seek to foster--are in too many cases not supported, and sometimes actually discouraged, by present practices and regulations.

Sixteen months ago I asked the Congress to enact pension reform legislation to remedy these deficiencies. Since then committees of both the House and the Senate have held useful hearings on reform, and the issue has received wide public discussion. The Administration has also completed studies on some additional facets of the pension question, and we have refined our proposals.

I believe that the time is now ripe for action on those proposals. They will be resubmitted within several days, in the form of two bills, the Retirement Benefits Tax Act and the Employee Benefits Protection Act. This message outlines the specific reforms contained in the legislation.

THE RETIREMENT BENEFITS TAX ACT

If working men and women are to have a genuine incentive to set aside some of their earnings today for a more secure retirement tomorrow, they need solid assurances that such savings will not be erased late in their career by the loss of a job, wiped out by insufficient financing of promised benefits, nor penalized by the tax laws. To this end, the Retirement Benefits Tax Act would embody the following five major principles:

1. A minimum standard should be established in law for preserving the retirement rights of employees who leave their jobs before retirement.

Protection of retirement rights, which is essential to a growing, and healthy pension system, is ordinarily defined in terms of "vesting." A pension vests when an employee becomes legally entitled upon retirement to the benefits he has earned up to a certain date, regardless of whether he leaves or loses his job before retirement.

Despite some recent movement toward earlier vesting, many private plans still carry overly restrictive requirements for age or length of service or participation before vesting occurs. Thus, the pensions of more than two-thirds of all full-time workers participating in private pension plans are not now vested. All too frequently, the worker who resigns or is discharged late in his career finds that the retirement income on which he has been counting heavily has not vested and hence is not due him.

The legislation this Administration is proposing would meet this problem by requiring that pensions become vested at an appropriate specified point in a worker's career. That point should not be set too early: if a great many younger, short-term workers acquired vested rights, pension plans would be burdened with considerable extra costs and the level of benefits for retiring workers could be reduced. But neither should too long a wait be required before vesting begins, since many older workers would then receive little if any assistance. To strike the right balance, I urge the Congress to adopt a "Rule Of 50" vesting formula, which is moderate in cost and works to protect older workers.

Under this standard, all pension benefits which have been earned would be considered half vested when an employee's age plus the number of years he has participated in the pension plan equals 50. From this half-vested starting point, an additional ten percent of all of the benefits carried would be vested each year, so that the pension would be fully vested five years later.

For example, someone joining a plan at age 30 would find that his pension would become 50 percent vested at age 40--when his years of participation (10) plus his age (40) would equal 50. Similarly, the pension of an employee joining a plan at age 40 would become 50 percent vested at age 45, and that of an employee joining a plan at age 50 would begin to vest immediately. And in each case, the degree of vesting would increase from 50 percent to 100 percent over the subsequent five-year period of the worker's continued employment.

So that this formula would not discourage employers from hiring older workers, who would have an advantage of more rapid vesting, the legislation would permit a waiting period of up to three years before a new employee must be allowed to join a pension plan, and it would also permit employees hired within five years of normal retirement age to be excluded from participation in a plan.

Under the "Rule Of 50," the proportion of full-time workers in private retirement plans with vested pension benefits would increase from 32 percent to 61 percent. Among participants age 40 and older the percentage with vested pension benefits would rise from 40 percent to about 90 percent.

To avoid excessive pension cost increases which might lead to reduction of benefits, this new law would apply only to benefits earned after the bill becomes effective, although the number of years a worker participated in a pension plan prior to enactment would count toward meeting the vesting standard. The average cost increase for plans which now have no vesting provision would be about 1.9 cents per hour for each covered employee; for plans that now provide some vesting it would be even less.

2. Employees expecting retirement benefits under employer-financed defined-benefit pension plans should have the security of knowing that their vested benefits are being adequately funded.

Perhaps the most fundamental aspect of any pension plan is the assurance that when retirement age arrives, pension benefits will be paid out according to the terms of the plan. To give this assurance, it is essential that when an employer makes pension promises he begin putting away the money that will eventually be needed to keep them. Yet Federal regulations at present are lenient on this point, requiring that only a small portion of pension liabilities be put aside or "funded" each year.

My retirement savings proposal would augment this minimal protection with an additional requirement calling for at least 5 percent of the unfunded, vested liabilities in a pension plan to be funded annually. Over time, this rate of funding would build up substantial assets for the payment of pension benefits. It would make the average employee or retiree less dependent for his pension upon the survival of a former employer's business.

By requiring employers to be more fore-handed and systematic in preparing to meet their pension obligations, this reform should help to reduce the frequency and magnitude of benefit losses when pension plans terminate. Even now the termination problem is not a major one: a study conducted at my direction last year by the Departments of Labor and the Treasury found that about 3100 retired, retirement-eligible, and vested workers lost pension benefits through terminations in the first 7 months of 1972, with losses totaling some $10 million. To put them in perspective, these losses should be compared with the more than $10 billion in benefits paid annually.

I also recognize, however, that these pension termination losses did work very real injustices and hardships on the individual workers affected, and on their families. Though the stricter funding requirements we are proposing will help to minimize these benefit losses, it has also been suggested that a Government sponsored termination insurance program should be established to see that no workers or retirees whatever suffer termination losses.

After giving this idea thorough consideration, I am not recommending it at this time. No insurance plan has yet been devised which is neither on the one hand so permissive is to make the Government liable for any agreement reached between employees and employers, nor on the other hand so intrusive as to entail Government regulation of business practices and collective bargaining on a scale out of keeping with our free enterprise system. With new support from the funding standard I am requesting, the private sector will be in a better position than the Federal Government to devise protection against the small remaining termination loss problem, and I encourage employers, unions, and private insurance companies to take up this challenge.

3. Employees who wish to save independently for their retirement or to supplement employer-financed pensions should be allowed to deduct on their income tax returns amounts set aside for these purposes.

Under present law, neither an employer's contribution to a qualified private retirement plan on behalf of his employees, nor the investment earnings on those contributions, are generally subject to taxes until benefits are paid to the retired worker or his family. When an employee contributes to a group plan, the tax liability on investment earnings is similarly deferred--though in this case the contribution itself is taxable when initially received as salary. By contrast, a worker investing in a retirement savings program of his own is actually subject year by year to a double tax blow. He is taxed both on the savings contributions themselves as part of his pay and on the investment income his savings earn.

Employees who want to establish their own retirement plan or to augment an employer-financed plan should be offered a tax incentive comparable to that now given those in group plans. Accordingly, I am proposing that an individual's contributions to a retirement savings program be made tax-deductible up to the level of $1,500 per year or 20 percent of earned income, whichever is less, and that the earnings from investments up to this limit also be tax-exempt until received as retirement income. Individuals could retain the power to control the investment of these funds, channeling them into qualified bank accounts, mutual funds, annuity or insurance programs, government bonds, or other investments as they desire.

The maximum deduction of $1,500 would direct benefits primarily to employees with low and moderate incomes, while preserving an incentive to establish employer-financed plans. The limit is nevertheless sufficiently high to permit older employees to finance a substantial retirement income--a consideration which is of special importance to the 9 million full-time workers in this country who are between 40 and 60 years old and are not participating in private pension plans.

The $1,500 ceiling should be more than adequate for most workers. Supposing for example that a worker in that situation was to start an independent plan at age 40, tax-free contributions of $1,500 a year from then on would be sufficient to provide him an annual pension of $7,500, over and above his basic Social Security benefits, beginning at age 65.

The tax deduction I am proposing would also be available to those already covered by employer-financed plans, but in this case the $1,500 maximum would be reduced to reflect pension plan contributions made by the employer.

4. Self-employed persons who invest in pension plans for themselves and their employees should be given a more generous tax deduction than they now receive.

At present, self-employed people who establish pension plans for themselves and their employees are subjected to certain tax limitations which are not imposed on corporations. Pension contributions by the self-employed are tax-deductible only up to the lesser of $2,500 or 10 percent of earned income. There are no such limits to contributions made by corporations on behalf of their employees.

This distinction in treatment is not based on any difference in reality, since unincorporated entities and corporations often engage in substantially the same economic activities. Its chief practical effect has been to deny to the employees of self-employed persons who do not wish to incorporate benefits which are comparable to those of corporate employees. It has also led to otherwise unnecessary incorporation by persons solely for the purpose of obtaining tax benefits.

To achieve greater equity, I propose that the annual limit for deductible contributions by the self-employed be raised to $7,500 or 15 percent of carried income, whichever is less. This provision would enable the self-employed to provide more adequate benefits for themselves and for their workers, without causing excessive revenue losses.

5. Workers who receive lump-sum payments from pension plans when they leave a job before retirement should be able to defer taxes on those payments until retirement.

In order to avoid the problems of administering funds for the benefit of a former employee, an employer will sometimes give a departing employee a lump-sum payment representing all his retirement benefits. Present law requires that the employee pay income tax on that payment even if he intends to put it aside for his retirement. A worker who remains with one employer pays no such tax. This discrimination should be corrected.

The legislation we are proposing would amend the tax law to permit the worker who receives a lump-sum payment of retirement benefits before he retires to put the money into another qualified retirement savings program--either in his own or an employer-sponsored plan--without having to pay a tax on it, or on the interest it earns, until he draws benefits upon retirement.

THE EMPLOYEE BENEFITS PROTECTION ACT

An important companion to the five-point reform contained in the Retirement Benefits Tax Act is our proposed legislation to make the Federal Government a tougher watchdog over the administration of the more than $160 billion in private pension and welfare funds benefiting American workers.

Submitted by this Administration more than 3 years ago, this needed reform languished in both the 91st and 92nd Congresses. Each month that it has sat un-enacted, the small minority of employee benefit fund officials who are careless or unscrupulous have been permitted to deny hard-working men and women part of their benefits. That is why we are today proposing to the 93rd Congress a strengthened and improved Employee Benefits Protection Act, with an urgent request for prompt action.

Control of pension and welfare funds is shared by employers, unions, banks, insurance companies, and many others. Most pension plans are carefully managed by responsible people, but too many workers have too much at stake for the Government simply to assume that all fund management will automatically meet a high fiduciary standard.

Accordingly, the bill we are proposing would establish for the first time an explicit Federal requirement that persons who control employee benefit funds must deal with those funds exclusively in the interest of the employee participants and their beneficiaries. Certain corrupt practices such as embezzlement and kickbacks in connection with welfare and pension funds are already Federal crimes, but many other types of activity which clearly breach principles of fiduciary conduct are overlooked by present statutes. My proposal would plug these holes in the law to give workers a more solid defense against mishandling of funds.

Present reporting and disclosure requirements would also be broadened to require of benefit plan administrators a detailed accounting of their stewardship similar to that rendered by mutual funds, banks, and insurance companies.

To back up these changes, the new law would give additional investigative and enforcement powers to the Secretary of Labor, and would permit pension fund participants and beneficiaries to seek remedies for breach of fiduciary duty through class action suits.

Finally, the Employee Benefits Protection Act would foster the development of uniform Federal laws in employee benefits protection, complementing but in no way interfering with State laws that regulate banking, insurance, and securities.

BRIGHTENING THE RETIREMENT PICTURE

By moving rapidly to enact the pension incentive and protection package I am recommending today, this Congress has the opportunity to make 1973 a year of historic progress in brightening the retirement picture for America's working men and women.

Under the reforms we seek, every participant in a private retirement savings plan could have a better opportunity to earn a pension and greater confidence in actually receiving that pension upon retirement. Those who are not members of an employer pension plan or who have only limited benefits in such a plan would be encouraged to obtain individual coverage on their own. The self-employed would have an incentive to arrange more adequate coverage for themselves and their employees. And all participants could have well-deserved peace of mind in the knowledge that their welfare and pension funds were being administered under the strictest fiduciary standards.

The achievements of our private welfare and retirement plans have contributed much to the economic security of the Nation's workers. They are a tribute to the cooperation and creativity of American labor and management. We can be proud of the system that provides them--but we must also be alert to the Government's responsibility for fostering conditions which will permit that system's further development.

I urged at the outset of my second term that in shaping public policy we should "measure what we will do for others by what they will do for themselves." By this standard, few groups in this country are more deserving than the millions of working men and women who are prudently saving today so that they can be proudly self-reliant tomorrow. I urge the Congress to help these citizens help themselves by going forward with pension reform.

RICHARD NIXON

The White House,

April 11, 1973.

11. Statement About Signing a Bill To Increase Social Security Benefits--January 3, 1974

I HAVE signed into law H.R. 11333, an extremely important, far-reaching measure. This new law will raise social security benefits for nearly 30 million Americans and will bring increased benefits to some 3.4 million aged, blind, and disabled persons who have started receiving new supplemental security income benefits this week.

Just 6 months ago, I signed legislation which would have increased social security benefits almost 6 percent by next July to meet the rising cost of living. The bill I sign today will replace that increase in order to reflect more closely the rise in the cost of living since the last social security increase took effect in September of 1972.

The 11 percent increase provided by the new law will be accomplished in two steps. The first increase of 7 percent will begin in April of 1974, and a second increase of 4 percent will begin this coming July.

With these increases, social security benefits will have risen by 68.5 percent since this Administration took office nearly 5 years ago.

Protection against inflation for the aged, blind, and disabled is another very major consequence of this new law. These especially deserving people were transferred from the previous Federal-State public assistance program to the new Federal supplemental security income program on January 1. The bill I sign today will move up the benefit increase already scheduled to take effect for these recipients from July to January of 1974.

I am greatly pleased that many millions of Americans will enjoy an improved financial situation because of this legislation. To be sure, such gains cannot be made without a price, and in this instance, the increases must be financed largely by an increase in the wage base on which social security payroll taxes are levied.

One provision included in this bill is most unfortunate. It would delay until December 31, 1974, the effective date of the social service regulations recently issued by the Secretary of Health, Education, and Welfare. We in this Administration have worked hard to see that services are concentrated on those who are truly needy, rather than permitting funds to be spent with little regard for genuine need. We have made considerable progress toward this goal, and the new regulations were an important step in this progress. The postponement included in the new law significantly impede this important thrust and could actually reduce the amount of day care, child care, and other services which can be provided for our poorest citizens.

In considering whether to sign this bill, I have weighed this reservation very carefully, even as I have considered carefully the impact of H.R. 11333 on payroll taxes for the average wage earner. In the end, however, I have been most deeply impressed by what this legislation can do to enhance the financial security of millions of Americans--especially our older citizens. Because I believe this advantage out-weighs the disadvantages I have mentioned, I have signed H.R. 11333 into law.