1. SPECIAL MESSAGE TO THE CONGRESS TRANSMITTING PROPOSED CHANGES IN THE SOCIAL SECURITY PROGRAM--AUGUST 1, 1953

To the Congress of the United States:

In my message to the Congress on the State of the Union, I pointed out that there is urgent need for making our social security programs more effective.

I stated that the provisions of the Old Age and Survivor's Insurance law should cover millions of our citizens who thus far have been excluded from participation in the social security program.

Retirement systems, by which individuals contribute to their own security according to their own respective abilities, have become an essential part of our economic and social life. These systems are but a reflection of the American heritage of sturdy self-reliance which has made our country strong and kept it free; the self-reliance without which we would have had no Pilgrim Fathers, no hardship-defying pioneers, and no eagerness today to push to ever widening horizons in every aspect of our national life.

The Social Security program furnishes, on a national scale, the opportunity for our citizens, through that same self-reliance, to build the foundation for their security. We are resolved to extend that opportunity to millions of our citizens who heretofore have been unable to avail themselves of it.

The Department of Health, Education, and Welfare, with the counsel and assistance of twelve outstanding consultants, has been carefully studying the difficult technical and administrative aspects of this effort.

The Secretary of that Department has now recommended the specific additional groups which, in the judgment of the Department and its consultants, should be covered under this program. The Secretary has also recommended the means by which these additional groups can be brought into the system most equitably, with full consideration for the new groups as well as those who have heretofore contributed to the insurance system. The Secretary's recommendations would effectively carry out the objectives that I expressed in my Message to the Congress on the State of the Union and I am pleased to transmit them to Congress for its consideration.

Under the attached plan, approximately 10 1/2 million individuals would be offered social security protection for the first time. About 6 1/2 million of these would be brought into the system; the remaining 4 million would be eligible for coverage under voluntary group arrangements. New groups to be covered would include self-employed farmers; many more farm workers and domestic workers than are now covered; doctors, dentists, lawyers, architects, accounts and other professional people; members of many state and local retirement systems on a voluntary group basis; clergymen on a voluntary group basis and several other smaller groups.

As the Committee on Ways and Means of the House of Representatives proceeds with its studies to improve the Social Security Act, I strongly commend to this plan for the extension of coverage to most of the major groups now covered by any social insurance or public retirement system. This is a specific plan for a specific purpose--the extension of coverage. Other important improvements in the Social Security Act are now under study and will be subject of further recommendation.

There are two points about these proposals which I cannot stress too strongly. One is my belief that they would add immeasurably to the peace of mind and security of the individual citizens who would be covered for the first time under this plan; the second is my belief that they would add greatly to the national sense of domestic security. The systematic practice of setting aside funds during the productive years are over--or to one's survivors in the event of death--is important to the strength of our traditions and our economy. We must not only preserve this systematic practice, but extend it at every desirable opportunity. We now have both such an opportunity and a definite plan. I commend it to the Congress for its consideration.

Dwight D. Eisenhower

For a long time I have thought that there must be a clarification of the responsibilities of the State and Federal governments in many fields of public activity. The Federal Government has assumed an increasing variety of functions, many of which originated or are duplicated in State Government.

Another phase of this problem relates to taxation. The existing systems of taxation, both at the Federal and State level, contain many gross inequalities insofar as the tax burden between citizens of different states is concerned. There is often a pyramiding of taxation, State taxes being superimposed upon Federal taxes in the same field.

The development of the Federal Social Security system warrants study. This analysis should encompass not only the distribution of costs between the State and Federal government but also the operation and coverage of the system itself. It is a proper function of government to help build a sturdy floor over the pit of personal disaster, and to this objective we are all committed. However, we are equally committed to carrying out that great program efficiently and with greatest benefit to those whom it is designed to help.

The purpose of the meeting to which you are invited is to discuss with me proposed legislation providing for the creation of the Commission, the manner of its procedure, financial support and other related matters, and the selection of a working staff in order to accomplish the purposes of the study.

To the Congress of the United States:

I transmit herewith Reorganization Plan No. I of 1953, prepared in accordance with the provisions of the Reorganization Act of 1949, as amended.

In my message of February 2, 1953, I stated that I would send to the Congress a reorganization plan defining a new administrative status for Federal activities in health, education, and social security. This plan carries out that intention by creating a Department of Health, Education, and Welfare as one of the executive departments of the Government and by transferring to it the various units of the Federal Security Agency. The Department will be headed by a Secretary of Health, Education, and Welfare, who will be assisted by an Under Secretary and two Assistant Secretaries.

The purpose of this plan is to improve the administration of the vital health, education, and social security functions now being carried on in the Federal Security Agency by giving them departmental rank. Such action is demanded by the importance and magnitude of these functions, which affect the well-being of millions of our citizens. The programs carried on by the Public Health Service include, for example, the conduct and promotion of research into the prevention and cure of such dangerous ailments as cancer and heart disease. The Public Health Service also administers payments to the States for the support of their health services and for urgently needed hospital construction. The Office of Education collects, analyzes and distributes to school administrators throughout the country information relating to the organization and management of educational systems. Among, its other functions is the provision of financial help to school districts burdened by activities of the United States Government. State assistance to the aged, the blind, the totally disabled, and dependent children is heavily supported by grants-in-aid administered through the Social Security Administration. The old age and survivors insurance system and child development and welfare programs are additional responsibilities of that Administration. Other offices of the Federal Security Agency are responsible for the conduct of Federal vocational rehabilitation programs and for the enforcement of food and drug laws.

There should be an unremitting effort to improve those health, education, and social security programs which have proved their value. I have already recommended the expansion of the social security system to cover persons not now protected, the continuation of assistance to school districts whose population has been greatly increased by the expansion of defense activities, and the strengthening of our food and drug laws.

But good intent and high purpose are not enough; all such programs depend for their success upon efficient, responsible administration. I have recently taken action to assure that the Federal Security Administrator's views are given proper consideration in executive councils by inviting her to attend meetings of the Cabinet. Now the establishment of the new Department provided for in Reorganization Plan No. I of 1953 will give the needed additional assurance that these matters will receive the full consideration they deserve in the whole operation of the Government.

This need has long been recognized. In 1923, President Harding proposed a Department of Education and Welfare, which was also to include health functions. In 1924, the Joint Committee on Reorganization recommended a new department similar to that suggested by President Harding. In 1932, one of President Hoover's reorganization proposals called for the concentration of health, education and recreational activities in a single executive department. The President's Committee on Administrative Management in 1937 recommended the placing of health, education and social security functions in a Department of Social Welfare. This recommendation was partially implemented in 1939 by the creation of the Federal Security Agency--by which action the Congress indicated its approval of the grouping of these functions in a single agency. A new department could not be proposed at that time because the Reorganization Act of 1939 prohibited the creation of additional executive departments. In 1949, the Commission on Organization of the Executive Branch of the Government proposed the creation of a department for social security and education.

The present plan will make it possible to give the officials directing the Department titles indicative of their responsibilities and salaries comparable to those received by their counterparts in other executive departments. As the Under Secretary of an executive department, the Secretary's principal assistant will be better equipped to give leadership in the Department's organization and management activities, for which he will be primarily responsible. The plan opens the way to further administrative improvement by authorizing the Secretary to centralize services and activities common to the several agencies of the Department. It also establishes a uniform method of appointment for the heads of the three major constituent agencies. At present, the Surgeon General and the Commissioner of Education are appointed by the President and confirmed by the Senate, while the Commissioner for Social Security is appointed by the Federal Security Administrator. Hereafter, all three will be Presidential appointees subject to Senate confirmation.

I believe, and this plan reflects my conviction, that these several fields of Federal activity should continue within the framework of a single department. The plan at the same time assures that the Office of Education and the Public Health Service retain the professional and substantive responsibilities vested by law in those agencies or in their heads. The Surgeon General, the Commissioner of Education and the Commissioner of Social Security will all have direct access to the Secretary.

There should be in the Department an Advisory Committee on Education, made up of persons chosen by the Secretary from outside the Federal Government, which would advise the Secretary with respect to the educational programs of the Department. I recommend the enactment of legislation authorizing the defrayal of the expenses of this Committee. The creation of such a Committee as an advisory body to the Secretary will help ensure the maintenance of responsibility for the public educational system in State and local governments while preserving the national interest in education through appropriate Federal action.

After investigation I have found and hereby declare that each reorganization included in Reorganization Plan No. I of 1953 is necessary to accomplish one or more of the purposes set forth in section 2 (a) of the Reorganization Act of 1949, as amended. I have also found and hereby declare that by reason of these reorganizations, it is necessary to include in the reorganization plan provisions for the appointment and compensation of the new officers specified in sections 1, 2, 3, and 4 of the reorganization plan. The rates of compensation fixed for these officers are, respectively, those which I have found to prevail in respect of comparable officers in the executive branch of the Government.

Although the effecting of the reorganizations provided for in the reorganization plan will not in itself result in immediate savings, the improvement achieved in administration will in the future allow the performance of necessary services at greater savings than present operations would permit. An itemization of these savings in advance of actual experience is not practicable.

Dwight D. Eisenhower

I am very happy to sign the Social Security Amendments of 1954.

By enabling some 10,000,000 more Americans to participate in the Old-Age and Survivors Insurance Program, it gives them an opportunity to establish a solid foundation of economic security for themselves and their families.

Beyond broadening the coverage of this program, this new law contains four other important provisions:

First, it raises payments to all retired workers by at least five dollars a month. It also raises--by $13.50 a month for retired workers and by $31.25 a month for families--the ceiling on payments to people now receiving monthly checks. People becoming eligible in the future will also receive higher payments, including increases that result from raising from $3,600 to $4,200 the maximum wage base from which the amount of their benefit checks is determined.

Second, the law eliminates the four or five lowest years of earnings from the computation of the OASI checks of workers who retire in the future. This provision is of great importance to many people whose years of unusually low earnings--for reasons of unemployment, illness, or otherwise--would sharply reduce their benefits.

Third, all retired workers under the program are permitted to earn more without forfeiting OASI checks. The amount of exempt earnings is increased to $1,200 a year, and this annual exemption is applied equally to wage earners and self-employed workers.

Fourth, the Act preserves the benefits rights, under Old-Age and Survivors Insurance, of those workers regularly covered under the program who become totally disabled for long and indefinite periods.

This new law is an important part of the broad program of the Administration and the 83d Congress to improve the well-being of our people. In the past month I have signed into law a number of other Acts directly affecting the human problems of each family in the land. These include:

1. More hospitals and nursing homes for persons who are chronically ill, special medical facilities for people not requiring hospitalization, and rehabilitation facilities for disabled people.

2. A start toward increasing from 60,000 to 200,000 by 1959, the number of disabled people rehabilitated each year.

3. Three Acts helping the States and local communities meet the nation's educational problems.

4. Help to provide and improved housing, to prevent and eliminate slums, and to conserve and develop urban communities.

5. Extension of the unemployment insurance program to almost 4,000,000 more workers.

These Acts and the Social Security amendments I have approved today will bolster the health and economic Security of the American people. They represent one of the cornerstones of our program to build a better and stronger America.

To the Congress of the United States:

I submit herewith for the consideration of the Congress a number of recommendations relating to the Old Age and Survivors Insurance System and the Federal grant-in-aid programs for public assistance.

The human problems of individual citizens are a proper and important concern of our government. One such problem that faces every individual is the provision of economic security for his old age and economic security for his family in the event of his death. To help individuals provide for that security--to reduce both the fear and the incidence of destitution to the minimum--to promote the confidence of every individual in the future--these are proper aims of all levels of government, including the Federal Government.

Private and group savings, insurance, and pension plans, fostered by a healthy, fully functioning economy, are a primary means of protection against the economic hazards of old age and death. These private savings and plans must be encouraged, and their value preserved, by sound tax and fiscal policies of the Government.

But in addition, a basic, nation-wide protection against these hazards can be provided through a government social insurance system. Building on this base, each individual has a better chance to achieve for himself the assurance of continued income after his earning days are over and for his family after his death. In response to the need for protection arising from the complexities of our modern society, the Old Age and Survivors Insurance system was developed. Under it nearly 70 million persons and their families are now covered, and some 6 million are already its beneficiaries. Despite shortcomings which can be corrected, this system is basically sound. It should remain, as it has been, the cornerstone of the government's programs to promote the economic security of the individual.

Under Old Age and Survivors Insurance (OASI), the worker during his productive years and his employer both contribute to the system in proportion to the worker's earnings. A self-employed person also contributes a percentage of his earnings. In return, when these breadwinners retire after reaching the age of 65, or if they die, they or their families become entitled to income related in amount to their previous earnings. The system is not intended as a substitute for private savings, pension plans and insurance protection. It is, rather, intended as the foundation upon which these other forms of protection can be soundly built. Thus the individual's own work, his planning, and his thrift will bring him a higher standard of living upon his retirement, or his family a higher standard of living in the event of his death, than would otherwise be the case. Hence the system both encourages thrift and self-reliance, and helps to prevent destitution in our national life.

In offering, as I here do, certain measures for the expansion and improvement of this system, I am determined to preserve its basic principles. The two most important are: (1) it is a contributory system, with both the worker and his employer making payments during the years of active work; (2) the benefits received are related in part to the individual's earnings. To these sound principles our system owes much of its wide national acceptance.

During the past year we have subjected the Federal social security system to an intensive study which has revealed certain limitations and inequities in the law as it now stands. These should be corrected.

1. OASI Coverage Should Be Broadened.

My message to the Congress on August 1, 1953, recommended legislation to bring more persons under the protection of the OASI system. The new groups that I recommended be covered--about ten million additional people--include self-employed farmers; many more farm workers and domestic workers; doctors, dentists, lawyers, architects, accountants, and other self-employed professional people; members of State and local retirement systems on a voluntary group basis; clergymen on a voluntary group basis; and several smaller groups. I urge the Congress to approve this extension of coverage.

Further broadening of the coverage is being considered by the Committee on Retirement Policy for Federal Personnel, created by the Congress. This Committee will soon report on a plan for expanding OASI to Federal employees not now protected, without impairing the independence of present Federal retirement plans. After the Committee has made its report, I shall make appropriate recommendations on that subject to the Congress.

Extension of coverage will be a highly important advance in our OASI system, but other improvements are also needed. People over 65 years of age who can work should be encouraged to do so and should be permitted to take occasional or part-time jobs without losing their benefits. The level of benefits should be increased. Certain defects in and injustices under the present law should be eliminated. I submit the following recommendations to further these purposes.

2. The Present "Retirement Test" Should Be Liberalized and Its Discrimination Against the Wage Earner Should Be Removed.

By depriving an OASI beneficiary of his benefit payment for any month in which he earns wages of more than $75, present law imposes an undue restraint on enterprise and initiative. Retired persons should be encouraged to continue their contributions to the productive needs of the nation. I am convinced that the great majority of our able-bodied older citizens are happier and better off when they continue in some productive work after reaching retirement age. Moreover, the nation's economy will derive large benefits from the wisdom and experience of older citizens who remain employed in jobs commensurate with their strength.

I recommend, therefore, that the first $ 1000 of a beneficiary's annual earnings be exempted under the retirement test, and that for amounts earned above $ 1000 only one month's benefit be deducted for each additional $80 earned.

To illustrate the effect of these changes: a beneficiary could take a $200 a month job for five months without losing any benefits, whereas under present law he would lose five months' benefits. He could work throughout the year at $90 a month and lose only one month's benefit, whereas under present law he would lose all twelve.

Approval of this recommendation will also retrieve the discriminatory treatment of wage earners under the retirement test. Self-employed persons already have the advantage of an exemption on an annual basis, with the right to average their earnings over the full year. The amendment I have proposed would afford this advantage, without discrimination, to all beneficiaries.

3. OASI Benefits Should Be Increased.

Today, thousands of OASI beneficiaries receive the minimum benefit of twenty-five dollars a month. The average individual benefit for retired workers approximates fifty dollars a month. The maximum benefit for an individual is $85 a month. For OASI to fulfill its purpose of helping to combat destitution, these benefits are too low.

I recommend, therefore, that benefits now being received by retired workers be increased on the basis of a new formula to be submitted to the appropriate Committees by the Secretary of Health, Education, and Welfare. This formula should also provide increases for workers retiring in the future, raising both the minimum and the maximum benefits. These increases will further the objectives of the program and will strengthen the foundation on which its participants may build their own security.

4. Additional Benefit Credits Should Be Provided.

The maintenance of a relationship between the individual's earnings and the benefits he receives is a cornerstone of the OASI system. However, only a part of many workers' annual earnings are taken into account for contribution and benefit purposes. Although in 1938 only the first $3000 of a worker's annual earnings were considered for contribution and benefit purposes, statistical studies reveal that in that year 94 % of full-time male workers protected by OASI had their earnings covered by the program. By 1950 less than half of such workers--44%--had their full earnings covered by the program, so the Congress increased the earnings base to $3600.

Today, the earnings base of $3600 covers the full earnings of only 40% of our regular male workers. It is clear, therefore, that another revision of this base is needed to maintain a reasonable relationship between a worker's benefits and his earning.

I recommend, therefore, that the earnings base for the calculation of OASI benefits and payroll taxes be raised to $4200, thus enabling 15,000,000 people to have more of their earnings taken into account by the program.

5. Benefits Should Be Computed on a Fairer Basis.

The level of OASI benefits is related to the average of a worker's past earnings. Under present law periods of abnormally low earnings, or no earnings at all, are averaged in with periods of normal earnings, thereby reducing the benefits received by the retired worker. In many instances, a worker may earn little or nothing for several months or several years because of illness or other personal adversity beyond his power of prevention or remedy. Thus the level of benefits is reduced below its true relation to the earning capabilities of the employee. Moreover, if the additional millions of persons recommended for inclusion under OASI are brought into the program in 1955 without modification of present law, their average earnings will be sharply lowered by including as a period of no earnings the period from 1951 to 1955 when they were not in the program. I recommend, therefore, that in the computation of a worker's average monthly wage, the four lowest years of earnings be eliminated.

6. The Benefit Rights of the Disabled Should Be Protected. One of the injustices in the present law is its failure to make secure the benefit rights of the worker who his a substantial work record in covered employment and who becomes totally disabled. If his disability lasts four years or less, my preceding recommendation will alleviate this hardship. But if a worker's earnings and contributions cease for a longer period, his retirement rights, and the survivor rights of his widow and children may be reduced or even lost altogether. Equity dictates that this defect be remedied. I recommend, therefore, that the benefits of a worker who has a substantial work record in covered employment and who becomes totally disabled for an extended period be maintained at the amount he would have received had he become 65 and retired on the date his disability began.

The injustice to the disabled should be corrected not simply by preserving these benefit rights but also by helping them to return to employment whenever possible. Many of them can be restored to lives of usefulness, independence and self-respect if, when they apply for the preservation of their benefit rights, they are promptly referred to the Vocational Rehabilitation agencies of the States. In the interest of these disabled persons, a close liaison between the OASI system and these agencies will be promptly established upon approval of these recommendations by the Congress. Moreover, in my message of January 18 to the Congress, I shall propose an expanded and improved program of Vocational Rehabilitation.

COSTS

I am informed by the Secretary of Health, Education and Welfare that the net additional cost of the recommendations herein presented would be, on a long-term basis, about one-half of one percent of the annual payrolls subject to OASI taxes. The benefit costs will be met for at least the next fifteen to twenty-five years under the step-rate increases in OASI taxes already provided in the law.

PUBLIC ASSISTANCE

An important by-product of the extension of the protection of the OASI system and the increase in its benefit scale is the impact on public assistance programs. Under these programs States and localities provide assistance to the needy aged, dependent children, blind persons and the permanently and totally disabled, with the Federal Government sharing in the cost.

As broadened OASI coverage goes into effect, the proportion of our aged population eligible for benefits will increase from forty-five percent to seventy-five percent in the next five or six years. Although the need for some measure of public assistance will continue, the OASI program will progressively reduce, year by year, the extent of the need for public assistance payments by the substitution of OASI benefits. I recommend that the formula for Federal sharing in the public assistance programs for these purposes reflect this changing relationship without prejudicing in any manner the receipt of public assistance payments by those whose need for these payments will continue.

Under the present public assistance formula some States receive a higher percentage share of Federal funds than others. In the program of old-age assistance, for example, States making low assistance payments receive up to eighty percent Federal funds in defraying the costs of their programs. States making high assistance payments receive up to sixty-five percent of Federal funds in that portion of the old-age assistance payments which is within the $55 maximum for Federal participation.

This variation in Federal participation is the result of a Congressional determination that the Federal sharing should be higher for States which, because of low resources, generally make low assistance payments. In order better to achieve this purpose, I recommend that a new formula be enacted. It should take into account the financial capacity of the several States to support their public assistance programs by adopting, as a measure of that capacity, their per capita income. Such a new formula will also facilitate the inclusion, in the old-age assistance program, of a factor reflecting the expansion of OASI.

The present formula for Federal sharing in public assistance programs requires adjustment from another standpoint. Under present law, the Federal Government does not share in any part of a monthly old-age assistance payment exceeding $55. Yet many of these payments must exceed this amount in order to meet the needs of the individual recipient, particularly, where the individual requires medical care. I consider it altogether appropriate for the Federal Government to share in such payments and recommend, therefore, that the present $55 maximum be placed on an average rather than on an individual basis. Corresponding changes in the other public assistance programs would be made. This change in the formula would enable States to balance high payments in cases of acute need against low payments where the need is relatively minor. In addition, great administrative simplification would be achieved.

A new public assistance formula should not become effective until the States have had an opportunity to plan for it. Until such time, the 1952 public assistance amendments should be extended.

The recommendations I have here submitted constitute a coordinated approach to several major aspects of the broad problem of achieving economic security for Americans. Many other phases of this national problem exist and will be reflected in legislative proposals from time to time to the Congress. The effort to prevent destitution among our people preserves a greater measure of their freedom and strengthens their initiative. These proposals are constructive and positive steps in that direction, and I urge their early and favorable consideration by the Congress.

Dwight D. Eisenhower

I have today signed H.R. 7225, the Social Security Amendments of 1956. The new law embraces a wide range of changes in old-age and survivors insurance, the public assistance programs, and child welfare services.

This Administration's strong support of the social security program was demonstrated by the broad expansion and improvements enacted in 1954 at my recommendation. The 1954 Amendments, which extended coverage of the program to millions of additional persons and included higher benefits for all who were then or who would become beneficiaries, have had a major impact in bringing greater security to our people.

The new law also contains certain major provisions which were recommended by the Administration. It extends social security coverage to about 600,000 additional farm owners or operators and about 225,000 self-employed lawyers, dentists, and others.

It provides for increased Federal funds to encourage better medical care for the needy aged, blind, disabled, and dependent children. This will help meet a critical problem for these groups.

Another Administration proposal placed increased emphasis, in public assistance programs, on services to help more needy people build toward independence. The law initiates new programs of grants to train more skilled social workers and to support research in ways of helping people overcome dependency. Another Administration proposal will increase funds for child welfare services.

The law also includes provisions about which the Administration had serious reservations in their initial form; these provisions were modified and improved before their final enactment and now meet, in part, some of the Administration's objections.

The original proposal to lower the retirement age for all women was changed to provide that employed women and wives may accept reduced benefits at an earlier age or obtain full benefits at age 65. I am hopeful that this provision will now have no adverse effect on employment opportunities for older women. The law allows full benefits at age 62 for widows because of their special needs.

Congress also modified somewhat the original proposal to provide disability benefits at age 50 or above. A separate trust fund was established for the disability program in an effort to minimize the effects of the special problems in this field on the other parts of the program--retirement and survivors' protection. We will, of course, endeavor to administer the disability provisions efficiently and effectively, in cooperation with the States. I also pledge increasing emphasis on efforts to help rehabilitate the disabled so that they may return to useful employment.

The original proposal would have imposed a 25 percent increase in social security taxes on everyone covered by the system. I am pleased that the tax increase has now been cut in half. Our actuaries report that while they cannot estimate costs of the disability program with certainly, the tax increase should be adequate to finance the benefits, assuming effective administration.

Although there were differences of opinion over separate provisions, the final legislation was approved overwhelmingly by Congress. In signing this legislation, I am hopeful that this new law, on the whole, will advance the economic security of the American people.

I have today approved H. R. 13549, "To increase benefits under the Federal Old-Age, Survivors, and Disability Insurance System, to improve the actuarial status of the Trust Funds of such System, and otherwise improve such System; to amend the public assistance and maternal and child health and welfare provisions of the Social Security Act; and for other purposes."

This act is a significant forward step in the old-age, survivors, and disability insurance program of the social security system. The increases in benefits and in the tax base are desirable in the light of changes in the economy since these provisions were last amended in 1954. The increase in social security contribution rates and the accelerated tax schedule in the bill will further strengthen the financial condition of this system in the years immediately ahead and over the long-term future. It is, of course, essential that the old-age, survivors, and disability insurance program, which is so vital to the economic security of the American people, remain financially sound and self-supporting.

The act also makes desirable changes which will permit Federal support for child welfare services where needed in urban areas and provides for State and local financial participation in the costs of this program on an improved basis.

In the public assistance programs the bill institutes the desirable principle of varying Federal matching of costs in accordance with the relative fiscal capacity of each State as measured by per capita income. However, the effect of this change is very limited because the formula used results only in increases in the Federal share. In addition, the introduction of averaging of benefits on an overall basis provides increases in the Federal share, regardless of the fiscal ability of the State.

For the fifth time in twelve years legislation has been enacted providing an increase in the Federal share of the costs of these programs and a decrease in the relative financial contribution of the States and communities. These successive increases have raised the Federal share from about 45 percent in 1946 to an estimated 58.5 percent under this bill.

Increases in the proportion of the public assistance programs which are financed by the Federal Government can lead only to a weakening of the responsibility of the States and communities. I believe deeply in the concept that the States and communities can best determine the actual needs of individuals and best administer programs of assistance to them-- and that State and local financial responsibility in these programs should be strengthened, not weakened.

I am, accordingly, asking the Secretary of Health, Education, and Welfare to deal specifically with this problem in the review of the public assistance programs which is now under way. It is my hope that the work of the Advisory Council on Public Assistance which is established by this bill will materially assist in the early development of constructive recommendations.

Dwight D. Eisenhower

(Released November 16,1959. Dated November 12, 1959)

Dear Arthur:

I want to thank you and the other members of the Federal Council on Aging for your informative report on Federal action in assisting the aging.

Federal programs for the aged, including Social Security programs, have increased fivefold in the last decade and will total $15 billion in the fiscal year 1960. This is a substantial contribution to our national effort in this field, but the task is not done. The report suggests important areas for exploration. For example, I am sure we can do more to employ productively and utilize the skills and experience of our 15 million aged.

The creation of increased economic and social opportunities for the aged must clearly be a many-sided approach. It is important to emphasize the Council's observations that this will require the efforts of the individual, his family, his community, and the local and State governments, as well as of the Federal government.

The report merits study by the many groups now preparing for the White House Conference on Aging to be held in January 1961. I will look forward to future reports of the Council.

Sincerely,

Dwight D. Eisenhower