Legislative History

February 17, 1993

TO Symposium Participants
SUBJECT: Report of the Savannah Disability Symposium -INFORMATION!

It was a special pleasure to host the Savannah Disability Symposium. As Noel Wall indicated in his opening remarks, it was a unique opportunity -- "indeed, an historic occasion" -- to hear pioneers from the early days of the disability program talk about the issues and concerns of Social Security and Congress during those times. From there we can follow the developments over the history of the program to understand today's problems, discover some solutions and chart a course for tomorrow.

Enclosed, as promised, is a report of the meeting. Included are edited transcripts of the presentations of Art Hess, Alvin David, Gil Fisher and Ilene Zeitzer and a summary of the discussions resulting from the additional agenda items.

As you read these transcripts and recall the many highpoints of the symposium, may the spirit, excitement and vision of these pioneers inspire our efforts, imagination and courage in today's disability struggles.

Gordon M. Sherman
Regional Commissioner

U. S. DEPARTMENT OF HEALTH and HUMAN SERVICES
SOCIAL SECURITY ADMINISTRATION

DISABILITY SYMPOSIUM

The Disability Program

Its Origins - Our Heritage
Its Future - Our Challenge

Thursday, January 21, 1993, 8:30 a.m.

Sheraton Savannah Inn

Savannah, Georgia

C O N T E N T S

Opening Remarks by Mr. Sherman, et. al

Presentation by Mr. Hess and Mr. David

Presentation by Mr. Fisher

Presentation by Ms. Zeitzer

MR. SHERMAN: Good morning, ladies and gentlemen, on the first day of the Clinton administration. We are glad to have you here. Are you glad to be here? (NOTE: Applause.)

MR. SHERMAN: Okay. That sounds good! We are getting a little leisurely start, we wanted you to socialize and get to know each other as we begin this historic meeting. And it really is historic. But to welcome us to Savannah we have our Savannah District Manager, Russ Waller. Russ!

MR. WALLER: Well, I would like to welcome everybody this morning. Those of you who have not been to Savannah I think you will find it a great town. Those of you who have been here already know that. I see some of the faces I saw back in the springtime. You brought the rain with you again just like you did back in March. But I do want to welcome you. Savannah is a great place. We did pass out a few tourist information type things, a few coupons for some local restaurants if you want to get out. I don't know if any of you are spending the weekend, but Savannah has a lot of historic places, Fort Pulaski, the beach. We've have a lot of places to spend some time and money of course. I'm glad you are here in Savannah.

I know some of you may be a little bit worried coming into the Atlanta Region knowing how competitive we are here. I want to make sure that you are all relaxed in that aspect. We did time how long it took you to make breakfast and make it to the meeting this morning. But Gordon says we won't publish those rankings until after you leave.

I would like to introduce a few people this morning, that are involved with Savannah. The prior District Manager is here, Mr. Wade Allen. He's down on this end. A lot of you probably know Wade more than you know me. Wade was here for what, 20 years, Wade, 22?

MR. ALLEN: Twenty-two.

MR. WALLER: Twenty-two years. He decided he would retire and enjoy Savannah, and I don't think he is going anywhere for the rest of his life. I may be here just as long, Gordon. So get used to that fact!

I would like to introduce my staff here in Savannah. Ms. Eve Cappo, the Assistant Manager and we have three supervisors here, Gloria Williams, Charles Hildebrand and Alan Polite.

And if we can do or my staff can do anything for you here in the next couple of days, let us know. Whether it's connections back to the airport or something from the local office, we would be glad to help.

That's about all I've got to say this morning, so I'm going to turn it back over to Gordon. I'm sure you are going to have a great meeting.

MR. SHERMAN: Thank you very much, Russ. Both Noel Wall and I also welcome all of you from the Atlanta and Dallas Regions to this historic session.

But before we get into that we would like to go around the table and ask each of you to introduce yourselves and tell us your role in this great Social Security institution. We will begin to my right and go around the table.

I think we can hear well enough. The acoustics are pretty good here. If not, we will try to some public address support.

Let's begin with Gil here -- but before that, three people who were going to be with us are unable to make it. Robert Bynum, a former Deputy Commissioner of Social Security was going to be with us today, but his wife had a fall and he has to remain with her in Alabama. We will miss him of course but we understand his situation.

Also our Acting Commissioner, Lou Enoff will not be able to make it. Lou is standing by in case Secretary Shalala calls. And she most likely will call wouldn't you say, Gil?

MR. FISHER: Yes, sir.

MR. SHERMAN: And we are glad that he is there standing by and on duty while we are here.

Susan Parker who was our Associate Commissioner for Disability, I guess you might say played out her options at noontime yesterday, Gil?

MR. FISHER: Yes.

MR. SHERMAN: She wanted to be with us. But we regret that she is no longer with the organization. She contributed so much. We do have a couple of people here from her operation in Baltimore. They will introduce themselves as we go around the table.

And Mr. Alvin David who was a former Assistant Commissioner for Program Evaluation and Planning will join us in a few minutes. We have sent a car for him to Hilton Head. He will be here before we start our session on the historic part of the disability program.

With that we will go around the table and we will begin with Gil.

MR. FISHER: Gil Fisher, from the Office of Programs in Baltimore. And I am delighted to be here. I had to acknowledge to Noel this morning that I seldom travel. As I think back where I've been across the agency in my years in government, somehow I have always come to either Atlanta or Dallas. Here I an, again, and I'm happy to be here!

MR. WALL: I'm Noel Wall from Dallas. And I will say to Gil I know why he is coming to Atlanta and

Dallas, because I always identify Gil with the best. (NOTE: Laughter.)

MS. BLACKBURN: I'm Kerry Blackburn. I'm here from the Australian Department of Social Security spending 12 months with the SSA in the Atlanta Region.

MR. PENCE: I'm Gordon Pence, DPA from the Dallas Regional office, DPA for Texas, New Mexico and Arkansas.

MR. CISSELL: I'm Carl Cissell, DPA in the Atlanta Regional Office. And unlike Gordon, I only work with one state, Tennessee.

MR. DOBBINS: I'm Cleve Dobbins, Operations Manager for Kentucky. I did a lot of lobbying to get here. And as you see, I was successful. Thank you, Gordon!

MR. ALLEN: I'm Wade Allen, former District Manager here in savannah, now retired. come join me, it's great.

MR. SHERMAN: Not so fast, now, we need these folks, Wade.

MR. HINRICHS: Bob Hinrichs, Assistant Regional Commissioner for Programs in the Atlanta Region and also the flower boy, temporarily. (NOTE: Laughter.)

MS. ROBINSON: I'm Janet Robinson, Acting Director for the Florida DDS.

MR. BERLING: I'm Tom Berling from the Atlanta Region. I'm DPA for Louisiana and Oklahoma.

MR. SEXTON: I'm Glenn Sexton, the DDS Administrator for North Carolina.

MR. THOMAS: Jerry Thomas, the DDS Administrator for Georgia, and welcome!

MS. RENO: I'm Virginia Reno. I worked for years in the office of Research and Statistics in the Social security Administration. I an currently on loan to the National Academy of Social Insurance which is a nonprofit research and educational organization in Washington, D.C. The Academy has been asked by the Ways and Means Committee of the House to undertake a comprehensive review of the Social security disability program. For example; Are structural reforms needed? Do we need to rethink the way in which we determine eligibility for benefits, and so on? So I am here, and I'm delighted to be here to learn what concerns you all in the disability program and any receive any advice you nay share with me on for how to make it work better.

MR. BUNKER: I'm Doug Bunker, the DPA from the great "Tarheel" State of North Carolina.

MR. WARNER: I'm Charlie Warner. I'm the DP Director from Dallas and I see that one of my DPA's has already switched sides.(NOTE: Laughter.)

MR. SHERMAN: We really aren't proselyting. We take good people where ever we find them.

MR. WILKERSON: I'm Irving Wilkerson and I'm Mississippi DDS Director.

MR. LIGHTSEY: I'm Charles Lightsey. I'm located in field operations. I'm presently on detail with the Mississippi DDS.

MR. STOJCICH: Charles Stojcich, District Manager, Mobile. Charlie, when Gordon gets out of his job I think I want it.

MR. SHERMAN: I want y'all to know those are the three Bubbas from Mississippi. (NOTE: Laughter.)

MR. FAIRBANKS: I'm Rick Fairbanks. I'm the DDS Director for New Mexico. And, yes, New Mexico is in the

Dallas Region.

MR. TAYLOR: I'm Rodney Taylor, Acting DDS Administrator, Alabama.

MR. DEMER: I'm Jim Demer, DPA for Georgia. And, Rick, what are you doing here?

MR. LEAHY: I'm Tom Leahy, the DPA for Florida.

MR. EVERETT: I'm James Everett, the Assistant Regional Commissioner for Programs in Dallas.

MS. HOFFPAUIR: I'm Kay Hoffpauir and I'm the Program Director for Louisiana DDS.

MS. BOZEMAN: I'm Gloria Bozeman, Acting Director for Regional Program and Internal Review in Atlanta.

MS. VIERA: I'm Grela Viera and I'm the Director of the Disability Quality Branch in Atlanta.

MR. KUNZLER: I'm Bob Kunzler. I'm the DPA for Kentucky and South Carolina.

MS. TROUT: I'm Peggy Trout currently Susan Parker's deputy, or until yesterday, Susan Parker's deputy in the Office of Disability. It's an assignment that I'm on for six months as part of the management development program. Prior to that, I served three years as Director of the Office Research and Statistics. And I'll be moving on from this position in another three months. But I'm enjoying it very much, and I'm very happy to be here.

MR. NANCE: I'm Raymond Nance. I'm the Disability Director from Oklahoma.

MR. VOGEL: Kenneth Vogel, Administrator, the Texas DDS.

MS. TELFORD: Betty Telford. And I'm the Charlie Warner of the Atlanta Region.

MR. VANDIVER: I'm Rick Vandiver, DDS Administrator in South Carolina and Voluntary DPA for Louisiana and New Mexico. (NOTE: Laughter.)

MR. DAVID: I'm Alvin David who in ancient times was the Assistant Commissioner of Social Security.

MR. CAMPBELL: I'm Keller Campbell, DDS Administrator from Kentucky.

MS. ZEITZER: I'm Ilene Zeitzer. I'm the Special Assistant to the Associate Commissioner for Disability in Central Office in Baltimore.

MS. CRATER: I'm Fran Crater and I'm the DDS Administrator for Tennessee.

MR. SHERMAN: And I'll introduce the other individual here when we get into our program.

At this point in tine we want to do a little something different. We have a little variety here. So, Bob Hinrichs, our Assistant Regional Commissioner for Program Operations and Systems, wants to hold a drawing for prizes.

MR. HINRICHS: Yes, we want to keep things light, and we want to extend further the hospitality of the Savannah Field Office. They have very graciously rounded up some gifts. So, we want to have a little drawing. Now, the process here is simple. We are going to draw for two prizes. You can tell the flowers are one. By the way if you win the flowers and aren't in a position to take them home, we can draw another number.
In my other hand I have something for those people who are interested in eating low cal meals. It says a coupon that is good for a nap meal. You know, maps, paper maps are very good to eat. Actually, that stands for a free dinner here at the hotel. I've got two of these.

So, Noel, if you would think of a number and just blurt it out, some number between one and 43.

MR. WALL: Thirty-nine.

MR. HINRICHS: Who has number 39?

MR. SHERMAN: Now, that's his age. Should we pick another one.

MR. HINRICHS: Thirty-nine, do you have the number? Carl Cissell, goodness sakes. Carl Cissell wins two free tickets! dinner. Agnes gets to eat tonight. (NOTE: Laughter.)

MR. HINRICHS: Okay. The flowers. Gordon, would you think of a number, one to 43.

MR. SHERMAN: Twenty-three, my age, 23.

MR. HINRICHS: Twenty-three, hey-

MR. SHERMAN: We've got Tom Berling coming to Atlanta, and we are working on you now, Kay. We couldn't buy you off with a pot of flowers though could we. (NOTE: Laughter.)

MR. STOJCICH: Carl, you know since you got a free dinner, you know that isn't going to cut you a deal. (NOTE: Laughter.)

MR. SHERMAN: That's right. We've got to economize.

Well, the topic today is the disability program and all of us are heavily involved in that in serving the American citizens with protection against disability. Our theme is: The Disability Program, Its Origins, Our Heritage! Its Future, Our Challenge!

I want to read three lines to you from Maya Angelou's inaugural poem, yesterday, which I think is quite appropriate. If you haven't read her poem it's in USA Today. It's really a fine poem, and I quote these lines which apply to our session.

"History, despite it's retching pain, Can not be unlived. And if faced with courage, Need not be lived again."

If we look at that as our theme for our session today as we move into it, I think it would be very apropos.

Noel Wall and I had talked about a session like this with Arthur Hess earlier this -- well, last year really. And we are much pleased that it came to fruition.

But before we move into that, I would like to ask Noel to join me to talk some more about the objectives of our session here today. Noel, if you would join me here at the podium, the first thing I would like to do is recognize my colleague for his leadership in the Dallas Region in serving the American people. And it's also the home of the Dallas Cowboys. (NOTE: Laughter.)

MR. SHERMAN: I can't give you a Dallas Cowboys tee shirt, Noel, but before you make your comments, I want to give you an Olympic tee shirt because we are very proud of the Olympics in Atlanta. And of course one of these days our Braves are going to win the World Series. But I would like for you to take this tee shirt. It symbolizes the Olympic flame for 1996. Wear it with pride throughout the Dallas Region. (NOTE: Laughter.)

MR. WALL: Thank you, Gordon. I will wear it with pride. And we would like to enter our Cowboys.

MR. SHERMAN: But I want you to also take this commemorative Coke bottle because Coke is it. And Atlanta is the international headquarters of Coca-Cola.

MR. WALL: You really are showing your age, Gordon. (NOTE: Laughter.)

MR. WALL: This is the old-time Coke bottle. Thank you!

Well, thank you, Gordon. I am humbled standing before this group this morning because in my career with Social Security, the names that I have always respected so highly and admired so much are here today.

I first met Gordon Sherman in about 1967, and I was so impressed with his character and leadership that I decided to make him one of my roll models. And over the years, he has almost become the role model. And I thought when I got to be a Regional Commissioner that I wanted to be a Regional commissioner like Gordon, realizing that I would never really achieve that. But I do respect Gordon so highly.

I think though, Gordon, I need another lesson because I was talking with Fran last night, and she asked me what job I had. I told her, and she said, "Well, you don't act like a Regional Commissioner." (NOTE: Laughter.)

MR. WALL: So, Gordon, would you tell me how I'm supposed to act as a Regional Commissioner?

MR. SHERMAN: I think I had better talk to Fran first. (NOTE: Laughter.)

MR. WALL: Last night I was talking with Art Hess and it was such a fine, fine occasion for me because it brought back some good memories. Not just some times that I found educational to me as a young and aspiring SSA manager, but good memories of what SSA has done for the people we serve through the years. And it does seem to me that one of the things we have really lost is accepting the role in SSA of being the monitoring agency for the economic well being of people in this county.

And I had the good fortune early on in my career to be pretty closely associated with the Regional Commissioner's office or the predecessor position. And so in many meetings and in a lot of correspondence and other communications, I knew what was going on in the Central office and who was doing it. And so the names of Art Hess and Alvin David and Bob Bynum were very prominent in those years. Not just in ter-.ri,.s of managing the process that we had at the time, but in terms of formulating a program that would eventually mean so much to people. And it had to be.

You know, I'm originally from Pottsboro, Texas. The nearest big city to where I grew up was Denison, Texas. And y*all have all heard of Denison of course. I got most of my education reading the Denison Herald and I still read it. And this is from the Denison newspaper, May 1st, 1874. it gave some numbers. Virginia, I have always liked numbers. You may want to write these down. In 1874 the average duration of life was 33 and a half years. one fourth of those born died before they are seven years old and one-half before the age of 17. Out of 100 persons only one reached the age of 60. Well, we can be so proud that numbers like that have changed through the years.

But with that in this century brought a whole new set of problems that had to be dealt with by government. And so in the mid-part of the century government was really moving out to deal with those problems.

And I wonder, I wonder, if we would have been as successful had it not been for those gentlemen that we will hear today. And so I tell you I stand in awe of them and I'm spending some time on this because I think it's important that everyone who did not have the privilege that Gordon and I enjoyed in those early years, and Wade Allen I'm sure. You didn't have the privilege. But I think you still benefit from the kind of input that these gentlemen had.

But today we are America's team. Right? Everybody identifies with the Dallas Cowboys. You do support them don't you? (NOTE: Laughter.)

MR. WALL: We are America's team. Do you think it would help the Dallas Cowboys going to San Francisco to be able to think back consciously or subconsciously and say, "We have a heritage." The Dallas Cowboys have been here before. They have been victorious before. They have been to five Super Bowls in the past. Didn't it really help them to know, "Yeah, we can do it again. we owe it to our heritage."

And that's the way it is in disability. We have a heritage. Last year we went to a Super Bowl I think in all of the DDS's. I really think the job the DDS's did last year was a superhuman job. And while there are not too many people still working in the DDS's who reach back as far as some of those great years of the past that I'm talking about, it would be an intangible but important factor I think to know, yes, we in the DDS's and, yes, we in Social Security always rise to the occasion. Someway, somehow we do the job. And I think that heritage was important to the achievement that we had last year.

You know, if we had been meeting -- I can't speak for the Atlanta Region, but Gordon can give you equally overwhelming numbers. We had risen to about 113,000 claims pending, two plus times our normal pending in the region.

Charlie, if I remember correctly we had gone up in our pending every month for about six months. It just looked like the job is overwhelming.

I never thought I would stand before a group of people and boast about having 92,000 claims pending in our DDS's, but I'm doing that today because that's down from 113,000 at its high. And we have dropped the pending in 13 of the last 16 weeks. And I know the Atlanta Region looks even better. I'm satisfied being number two to Atlanta, always satisfied.

But I think that what we hope to gain from the important segment of this meeting today is a more direct tie-in with what that heritage meant to the achievement last year and what the heritage will mean to what we have to do in the coming year. I really believe we are on downhill run in the DDS's.

Now, you look at this operation we have. If you said, "We are going to create a process, draw an organization chart for how to administer a disability program, and you drew it with just the blocks we have today and then you connected the work flow and the way it has to move from federal to state jurisdiction and back to federal and then over some other places and back, a learned person would have looked at that and said it will never work. And I personally don't think it's the most ideal way to make it work.

But it's worked because of the excellence of so many people, because of the heritage we have to excel. And I just don't believe it would work, I don't believe it would work at all if we hadn't had a partnership that was built so carefully and nurtured so wisely through the years.

And so I hope that this meeting today -- it really was Gordon's idea, but I claim one talent and that's to be able to recognize good ideas when I see them. And, Gordon, as soon as you suggested that I really thought it would mean a lot to our people to know that where we are today is not accidental, but it's part of a foundation that was laid sturdily 40 years ago. And one that we have used and used well. And so I hope that as we listen to how it all happened, that it will better establish the legend, better establish the responsibility and will make all of us who are here feel better and feel more able to deal with the challenges that we are going to face in the next year or so.

So, I'm very proud to be here. And Gordon, I really do want to thank all of the, all of you for the hospitality you have shown. It's the traditional southern hospitality, for the Savannah District Office, Eve and Laurie who helped us get here, and all that you have done to make this such a wonderful setting for a meeting. On behalf of the Dallas Region we thank you.

MR. SHERMAN: Thank you very much, Noel! After that comment that you got from Fran, Noel, I want to share with you some remarks made by President Lincoln. This is the first day of the new Clinton administration. I understand back during the Civil War one of President Lincoln's staff people came in and said to him, "President Lincoln, President Lincoln, the Secretary of War said you are a fool." Lincoln reportedly thought pensively for a few minutes, then responded, "You know, I'm going to have to talk with him because he is usually right." (NOTE: Laughter.)

MR. SHERMAN: I I m going to have to talk with you, Fran, because you are usually right. Look at that record

in Tennessee! And Noel, I certainly agree with you. We are getting closer together. I think the Dallas Cowboys are America's football team, but the Atlanta Braves are America's baseball team. Right?

Well, Noel was telling you a little about performance and also talked about the great accomplishments of the Dallas Region. And I shall just share a couple of records with you for the Atlanta Region. That's for this fiscal year since the 1st of October, our state agencies have 222,616 receipts of disability claims. And that's 14 percent more than they received during the same period last year. And this is through January 15, they have cleared 227,418 claims thus far. And that's 33 percent more than we did during that same period last year and that's over 90,000 citizens in the eight southeastern states that are getting disability benefits as having been allowed during that period of time.

You see what a tremendous situation and help to individuals that is and to the whole economy. In effect we undergird the whole economy. And if you talk about the situation, Noel told you about 1874, 1 just recalled some figures that Gil had put out a few years ago about the cohorts of the men and women born in 1966. And I gather these facts are still pretty much true today. That of the men born in 1966 who will be 27 this year, about 40 percent of them would either die or become disabled before they reach retirement age, one-third of the women born. So, you see we are living much longer and things are much better. But you see what the facts really are. And I'm sure that Alvin and Art both will sharing more information with us about that as we move into the session on the history of this institution.

Before we do that though, Charles or Bob, do you have any administrative instructions that we need to tell the group about? Lunch of course will be at -- what is that, the pro shop restaurant?

MR. HINRICHS: Yes, there is a restaurant right around the corner. If it's still raining, you can go out through these doors over here in a protected area. I think we are going to have more coffee.

MR. SHERMAN: What time is the break time? We do have coffee if you want it during the -

MR. HINRICHS: We have some coffee here.

MR. SHERMAN: If you would get up and get your coffee. The restrooms are right out this door in the hallway. Do we have a time? What time, Charles, would they bring the coffee?

MR. HINRICHS: It was originally scheduled for 9:45. But I'm going to move it back a little since our schedule changed a little bit. We will let you know.

MR. SHERMAN: Okay.

MR. HINRICHS: Is everybody's accommodations all right? Everybody has got a room I know. But if you have any problems let us know.

MR. SHERMAN: Why don't we set the formal break time at 10:30.

MR. HINRICHS: Okay, 10:30.

MR. SHERMAN: Does anybody want to stretch now before we move into the heat of the session?

Well, it's our great pleasure to have our former Deputy Commissioner and Acting Commissioner, Arthur Hess, to be with us to share his experiences over the years in the disability program with us. Art was our first Director of the Bureau of Disability Insurance, which was established in the 501s, which doesn't seem to be too long ago, Art. The disability program was already under way when I came with the Social Security Administration in November of 1958.

And I have thoroughly enjoyed all my years in the program and especially working with leadership like Arthur Hess and Alvin David. And having had the experience to get to know those people early in my career and having the opportunity and freedom to do things in this organization to serve people.

And as I mentioned, Alvin, before you came in, I told the individuals that you were our former Assistant Commissioner for the Office of Program Evaluation and Planning who had worked so closely with the legislative bodies in Washington in developing the Social Security programs over the years and so close with Arthur Hess and Robert Ball and others who have led this organization over the years.

But at this time, Art, we would like to turn the session over to you and Alvin and since Bob Bynum is unable to be with us, to tell us about the past. If we don't understand the past we will probably relive a lot of it in the future. And to share with all of us here the growth and development of the Social Security disability program in America.

I present to you Arthur Hess, our former Acting Commissioner of the Social Security Administration. (NOTE: Applause.)

MR. HESS: Thank you very much. since this is going to be a long morning for me and I hope it won't be as uncomfortable for us and for you if I remain seated rather than stand for the balance of the morning program. I'm not permanently and totally disabled, but the old legs begin to ache after a little while.

It's a real pleasure to be here. I seen to gravitate toward the South, too, when important things are happening. As we came across from South Carolina into Georgia, the Georgia Welcome Center, the memories came back. At the beginning of the 50's when the disability program was being constructed and put into place one of the first of the first regional manager's meetings that I attended was the meeting that the Atlanta Region had at Jekyll Island near here.

These names won't mean much to you, but I feel obliged to mention them in case any of you go back to South Carolina. Tell Ben Merritt of South Carolina that I remember him. We had Cord Andrews and Craig Mills of Florida and Joe Hiese (phonetic) of Georgia. And they were the state people with whom we sat down and worked out the first agreements as to how this dual program was going to be administered.

Now, one of the things that I might mention to you as a preliminary since I've gotten into this enactment and implementation of the disability program prematurely. I intend to take you back a little bit father into New Deal history and even pre-New Deal history of the subject of disability

But one of the things I might mention was that when we finally did in 1954 get the first operative disability program which involved the monumental compromise of bringing the state agencies into the picture, this was an absolutely unprecedented piece of legislation from the standpoint of federal/state relations.

There had been grants in aid. There were all kinds of federal and state involvements where federal money was either matched with state money or otherwise, but this was the first program that was 100 percent federal money including the salaries and operating expenses of the state agencies which were supposed to and did get into the picture as you well know. And it is still that way today.

And I don't know for sure that I would want to say today that there are no other programs of this kind, but that was 100 percent federal money, a federal statute and a few lines of legislation that said, "The Secretary shall--all Social Security legislation is always in terms of the Secretary shall, because that's where the fundamental legal authority rests, but the Secretary pushes it down to the commissioner of Social Security and in those days the commissioner of Social Security pushed it down to me and the fledgling disability organization--"The Secretary shall enter into agreements with the states to have determinations of disability made." That's about as much as was in the law.

Now, there was a lot of legislation that had to do with contracts and contract determinations and terminations and all kinds of other things for federal contracting authorities with private agencies, all the things that came out of World War II in the way of fiscal goals. But we didn't come under standard contracting authority and we didn't even have to negotiate those agreements with the governors. In a few places the governors got into the picture. But here we sat, a group of Social Security employees and a group of state's council administrators with the law and we had to work out this arrangement.

As Noel has said you all who have to work with this and even more so the people from outside who look at it today, and Virginia Reno's group of the National Academy which is going to be looking at this from the standpoint of the directive from the Ways and Means Committee as she told us a minute ago in her introduction are going to say, "Well, we don't know for sure how it got this way, but this sure doesn't look like the way you would set it up if you were starting over again."

And that question has come up from time-to-time and will come up again in the future of this symbiotic relationship that has been established and that both Gordon and Noel have said is working so well despite the unusual structure that was created.

But I would like to pick up on the theme of history and heritage because I think it's important to find out or at least to appreciate -- you don't have to remember all of the details and I hope I don't get too detailed in my description of how we got here. But it's important to find out how did we come to a permanent and total disability program under Social Security and how has it evolved in the years past.

I'll carry you through or carry us through maybe -I can't see that there is any need to come right up to the present time -- but certainly through the CDI fiasco which all of you know more about than I do because I had already left Social Security then. But I would have some views to give or some information to give if there were nobody else here who could talk to the subject on the questions of the appeals process, how it started, we got into it very early, and what it is today and what its problems and significance are, and the actuarial status of the trust fund and the future. But that's not appropriate really for my assignment nor for the fact that I was no longer around Social Security. Haven't been for quite a while. And I'm glad that Gil will take that on.

So, we will carry through with a break until noon and carry through essentially on history. And then we will leave to Gil and the people who will be with him this afternoon talking about the 1980's and 1990's and maybe the year 2000.

The subject of disability just -- I hope I don't get to sound too professorial -- but just to get it in perspective actually disability in social and economic terms and in terms of governmental activity, as many of you know, goes back to Bismarck and the Bismarck times in Germany when the first European social insurance system, comprehensive social insurance system was put into effect. And the moral of that was to couple disability as an adjunct or a sequel to cash sickness -- not cash sickness -- to health insurance, to medical care.

The German programs started with Weekly benefits for health payments and for people who were out of work, some temporary cash sickness payments and for people who stayed out of work for a long, long time some permanent medical or rehabilitative and other benefits including some cash benefits.

And that was the European model which spread all over as the model except in Great Britain where they later established national health insurance quite separate and apart from the concept of payments for retirement and invalidity. I say that only because it is going to be instructive as to what happened here during the New Deal days. And why disability became associated with the retirement programs rather than with the repeated aborted efforts to set up national health insurance in the 130's and 140's in this county.

However, disability as a concept, especially permanent and total disability, developed during the pre-World War I days and subsequently in lots and lots of fragmented and pinpointed ways. You had worker's compensation agencies developing or worker's compensation programs developing in the states that had both permanent and total and permanent partial and temporary disability payments.

You had during the war, war risk insurance which at the end of the war the government made it possible to convert to U.S. government life insurance which had a waiver of premium provision connected with it. Now, waiver of premium was already something which the insurance companies, private insurance companies, had been selling in the pre-World War I and post World War I days. And what is waiver of premium? Well, for a little bit of additional cost on your life insurance policy you would have a provision that said that if you became permanently and totally unable to engage in work, your life insurance premium would be waived. In other words you wouldn't lose the benefits of your life insurance. You would be excused from paying insurance because of permanent and total disability.

Some of these cases started getting court challenges and court interpretation, so the U.S. courts had an early introduction to the question of what is permanent and total disability.

Also, the insurance companies got more ambitious and they actually started to write some professional insurance. In other words, they started to write insurance in case, that is actually not life insurance waiver, but actually cash benefits in case you became professionally unable to work or unable to do any work.

And those two concepts which are the occupational concept of disability for your usual job and the permanent and total concept for inability to do any gainful work were already embedded in life insurance policies before the Great Depression. The were embedded in a whole series of federal programs that came along like the programs in the 120's for longshoremen and seamen and the program for federal civil service workers. And then the state agencies -- not state agencies -- the states picked up state pensions and the federal government picked up civil service pensions. And you had policemen's and firemen's pensions. And above all after World War I you've got veteran's benefits, compensation and veteran's non-service connected disability. Compensation was service connected and the other veteran's benefits were non-service connected.

Compensation which was service connected was total or partial. And there was no problem there of an occupational capacity because it was compensation for the fact that an injured veteran or a veteran injured in service or sick in service got a benefit, total or partial.

But they picked up veteran's benefits for those who did not have service connected injuries or illness. And that was total and it was not just occupational.. It was for all work.

So, when the New Deal started when FDR came in and the Council on Economic Advisors had the assignment in the depths of this terrible, terrible depression of seeing what were the needs for the millions and millions of people who had lost their jobs, were unemployed, et cetera, et cetera, bank failures and whatnot.

Some of this sounds a little familiar, but it's not as bad today as it was then by any means just because we have had all the social programs, the safety net programs, if I may borrow that term.

The Council on Economic Advisors looked at the whole scope of social insurance including national health insurance and invalidity and old age pensions and gave President Roosevelt options as to where to start. Obviously the options that were chosen were first of all immediate welfare benefits and the establishment of grant-in-aid programs for those already old or already unemployed and work fare programs like WPA and CCC and so on, and social security, old age pension benefit insurance for workers in commerce and industry.

And for the whole first 20 or so years, all during World War II and on up until the late 194 0 Is the self-employed weren't covered, professional self-employed or farm self-employed, domestic workers weren't covered. It was a program of old age insurance to pay people at 65. That was first enacted in 1935 to become effective 137. And in 139 it was extended to cover benefits for survivors, wives, children and survivors of the insured worker.

It was built on a pension insurance framework which was predicated on people working and paying in and working steadily for quite a while and becoming entitled to benefits when they became 65 or their survivors if the person died before that time.

But remember it was work related and it was work related in terms of first a minimum of six quarters of coverage. But gradually growing to a substantial number of quarters of coverage. A substantial attachment to the labor market lay behind the concept.

And it was then that a problem began to emerge that the insurance companies had recognized when they invented waiver of premium. The problem was that people were working under Social Security with the expectation that they were going to have benefits when they reached 65 or that their survivors would get benefits if they died in the meantime. And people were becoming unemployed because of inability to continue in work. And low and behold their insurance status was running out because their insurance status was always stated in terns of either a certain proportion of the elapsed time being in covered work or finally permanent insurance status if you worked as long as ten years.

And the priorities that were set in 1937 interestingly enough did not address and it was not recommended by the council on Economic Advisors that they address immediately either health insurance or disability insurance because all the studies were clear that this was going to be a difficult, very difficult type of coverage to enact on a national basis based on the experience of the insurance companies which had disastrous experience with their own private insurance policies during the Great Depression. That first signaled to actuaries and others that there was a strong relationship between the condition of the labor market and the claims that one would receive for benefits.

Also the worker's compensation and especially the U.S. government life insurance experience had signaled that it was going to be damn hard to say what is permanent and total disability. Even if you spelled it out and said for any substantial gainful activity, it was going to be pretty hard to say where you drew the line. And when you tried to make a distinction between permanent and total disability for any work which was the thing that people really wanted to insure and inability to do one's customary job which was what many of the pension plans for public employees and railroad employees and so on had, that those were going to be terribly difficult lines to draw and hold.

And so all during the 1930's and 1940's the emphasis in planning and in congressional attention to further developments in social insurance was really based on health insurance, putting national health insurance in place. There were a whole series of bills starting at the end of the Roosevelt administration and through the Truman administration and on up until about 1948 or 150 which focused on improvements in the social security coverage which was bad and benefits which were badly lagging. There had been no increase in benefits during the World War II period at all. And it became clear that this program was good enough that to be fair to the American people you had to give other people besides those working in commerce and industry a chance to be under it.

So, focus was on the things that Alvin can tell you more about which were the actual updating and improvement of the OASI program itself. And then the addition of health insurance. And when you said health insurance this set off an alarm as far as the medical profession and the insurance profession were concerned.

It was not until 1948 that a Senate Finance Committee Advisory Council, of which Bob Ball was the staff director, and I did some of the drafting of the disability provision, actually recommended disability benefits for permanent and total disability with very strict insured status requirements, with a very strict definition, with all kinds of things hedged about it, six months waiting period and medical. improvement, CDI's and so on. And the members of that advisory council which included some very prominent insurance people issued a dissent.

But the framework, not the administrative framework, but the programmatic framework for a very limited disability benefit program for presumably everybody who was covered by Social Security was first conceived and drafted in that kind of a climate.

The ball was thrown then to the congress because there had been a series of bills. And there was a bill in 1950 which passed the house including provision for disability benefits, but passed the Senate with disability out of the picture completely. And disability was dropped out in conference. The first big postwar legislative expansion of the Social Security program focused on improvements of coverage and benefits. Both health insurance and disability insurance fell by the wayside. That was toward the end of the Truman administration.

There was another session of congress and Chairman Doughton of North Carolina was then chairman. incidentally, it's very interesting that a lot of the leadership in the Ways and Means Committee came from these two regions. "Muley" Doughton was from North Carolina. That was his last session in 1952 that I'm going to tell you about. He was followed by Jerry Cooper from Tennessee, later Wilbur Mills from Arkansas. And God bless Wilbur Mills. I hope we can forgive him for his later transgressions which quite ironically arose out of one of the things that we are concerned with in disability. That is alcoholism and substance abuse. But for his working lifetime he was a power and he was strength. And he insisted on the financial solvency of any disability, I mean any Social security provisions which were ever introduced and considered.

There were no Ways and Means subcommittees and there weren't dozens and dozens of staff. Wilbur Mills was the main committee and there was a little bit of staff and they held the reins. Alvin and his people worked directly with the staff of the Ways and Means Committee.

This legislation originated in the Ways and Means Committee of course because that's the taxing committee and the committee that constitutionally received jurisdiction over the Social Security program.

Generally, the Senate came next and whatever came out of the Senate would go to conference. That would be where they would settle the final activity.

So, we are down to 1-951, 152 in the Truman administration and a bill came out from the House with the disability freeze in it. Maybe it had disability insurance and the disability --

MR. DAVID: The first one did in 1950. That was one that had disability benefits. And then after that ran into a big storm. The next one came with a freeze.

MR. HESS: I'm going to turn the ball over to you in a few moments, Alvin. And then you can give us some of the drama of the activity that took place in the next few years.

I do want to say, though, having mentioned the leadership coming from these two regions in the Ways and Means Committee, that the South was well represented in disability history in the Senate. Aside from Senator Albert Gore, Senior, who spoke up in support of the disability program the key person was Walter George of Georgia. He saved the day. And Alvin will give you that story.

I just want to tell you about the first abortive legislation in 1952. 1 want to tell you that because it brought us into the problem area of working with the states on how we were going to work out this program.

The disability freeze compromise that came out of the Senate/House conference was -- this was Muley Doughton's last term as Chairman of the Ways and Means Committee, he was dropping out. And he was determined he was going to have disability in the bill. The Senate Finance Committee was determined it wasn't going to be in the bill. And they had by that time focused on a freeze to at least address this increasingly growing anomaly of people losing their Social Security coverage because they couldn't continue their insurance status sufficiently long enough, their work sufficiently long enough to have permanently insured status for old age benefits or survivors benefits.

In conference there was a deadlock. I think it was July 3rd or July 4th and they were going to adjourn. At that point they began looking for compromises. And somebody said the principal problem is the fear of the doctors of Social Security. This is the entering wedge for health insurance and socialized medicine. Let's give the determination to the state agencies. After all the states have rehabilitation and they have worker's compensation and they have welfare.

Actually in 1950 an earlier bill, one of the congressional compromises had been to kill disability insurance, but to set up APTD, the first modern federal grant-in-aid program for the aged, blind and disabled came along with the other grant-in-aid programs in 1950.

If this sounds a little confused I will turn it over to be clarified immediately when I explain the now you see it, now you don't freeze. Because the conferees from the Senate side were still not satisfied that putting the states in the picture was going to take then off the hook either for their own intellectual hesitancy about this or because of the continued vehement testimony they had had from the insurance industry that this was disastrous road to go or the violent notices they had from their family doctors at home. 91 Don 9 t you go this way or else."

So get the bill out they put the freeze in with an effective date of July 1st, 1953. And then down at the end they said this program or this provision shall terminate June 30th, 1953. So, the freeze terminated the day before it was to go into effect. (NOTE: Laughter.)

MR. HESS: That was about 12 months off or 11 months off. And here was Bob Ball and Alvin and others and I had been involved in this drafting, and we said, "What's the point of all this?"

They said, "Well, you know we are getting a new congress next year. And if the new congress wants to put the freeze into effect all they have to do is delete that one sentence that says it's expired and then it will be in effect."

We said, "Well, what do we do?" So, we set up a shadow staff for the administration of this now you see it, now you don't freeze. And we began to consult with the states and we began to draft administrative provisions and see what we would do.

It became clear at that point or it became clear after the new congress came in and they had a lot of other things on their minds, that the freeze wasn't going to be resurrected. And so our planning staff which had consisted just of drawing people together on detail (we drew people together from the field and from other places on detail and had this shadow planning staff) which was the same way we had to set up the disability benefits programs a few years later. You never get the staff ahead of time when the legislation hasn't been passed. And even after the legislation has been passed, you don't get the appropriation and the staff until you are way into administering it.

The next couple of years involved some interesting jockeying, and I think rather than talking about the provisions, I would like for you to have a little bit of a feel for the political climate. This provision has always been very politicized. Alvin was much closer to that than I was because he had to sit with the Ways and Means Committee everyday for years and years and years representing across the board all of the things, not just disability but across the board all the things that they considered. I would get in there infrequently when disability was being discussed or when things got hot and we had to say, "Well, what are we going to do?" can you give us a little bit of a feel for the climate around in 1950 and 1952 and so on?

MR. DAVID: Yes, it was as you say politicized. It wasn't so hard for us during the Truman administration to work with the staff of the Ways and Means and Finance Committees because the administration was in favor of the program, it was their program. But when the Eisenhower administration came in, they were opposed to all the disability program, the disability freeze and the works.

And at that time the Finance Committee in the Senate and the Ways and Means Committee in the House did not have staff anything like they do today. As a matter of fact, there was the chief counsel of the Ways and Means Committee and one assistant. That was the staff. If it weren't for us from Social Security they would not have been able to operate at all.

And one of the things that made the whole thing work out and made it possible was a little known provision in the Social Security Act of 1935 which got in there because of the great interest at that time in health insurance. Health insurance had been recommended by the Committee on Economic Security in 1934. It was their report that was the basis for the Social Security Act of 135. And they wanted to go in with health insurance, but it was quickly recognized by the President, President Roosevelt, that there wasn't a chance in the world that the Social Security program, other than health insurance, getting enacted if health insurance was tied in the same bill. So, that was quickly dropped. Health insurance references in the original Social Security bill of 1934 were dropped.

And as a sop to those who wanted to see health insurance come in, a provision was put into the law which gave the Social Security Board authority to conduct research and do studies of various different ways of providing economic security in addition to those that were written into the Social Security bill. It was that provision that gave the Social Security Board authority to conduct studies and do research which enabled us to go charging ahead doing disability planning and writing a draft bill, draft provisions. And being able to go and work with the staff of the two committees, the Finance and the Ways and Means Committees.

Without that help the whole thing would have been in shambles. It could not have been done.

But now it was easy for them to go. It was easy to do all of this during the Truman administration. But when the Eisenhower administration came in and was opposed to all of this, it was a different story for us. We had to go still under the authority of this provision that I mentioned in the original act giving authority to do research and conduct studies. We were able to go ahead and work with the Committees, but under considerable difficulty because our bosses were not in favor of what was being done.

And the high point of that for me, personally, was in 1956 when the Committees had asked for a report from the department about the provisions for Social Security benefits. It came to writing a report for the department to the committees giving the department's views and advice, and that job of writing the report got delegated to me by the assistant secretary for legislation.

I did not really know what to do because my heart was in the enactment of the bill, but here I was working for an administration, working directly with the assistant secretary, who had done me the honor of asking me to write this report and I wrote it as best I could.

After it had gone the one person who was in charge of legislation for the department at that time was Wilbur Cohen who was then the Director of Research and Statistics. He saw this report that I had written after it had gone and in the presence of ladies he spoke language that I had never heard from his mouth before and never since. He was that much upset. But there was nothing that could be done. He just raised holy hell. But there was nothing that could be done and there was nothing that I could have done in the first place because I had to do as good a report as I could or else we would have broken relationships with the assistant secretary. And such good as we were able to do which was considerable would have been discontinued.

If I had offered a report that was not as good as they knew that I could do because they had seen other work that I had done and knew what I knew and didn't know. And so if I had come up with a report that pulled punches and was not as strong as it could have been it would not have been a good idea. And if I had to do it over again I would still have to do the same thing.

But the thing that I remember more vividly than anything else was Wilbur Cohen letting go with a string of quite surprisingly unpresentable language about this report.

Well, as I said the thing began with this provision for studies which grew out of the fact that there was great interest in health insurance which was being passed over.

Another thing that made a great difference and this relates to the political situation that Arthur mentioned, the thing that made the whole business of disability insurance, freeze and all, freeze and benefits and all, possible was something you won't read about in any books. You can read about what happened in 1950, about the enactment of disability benefits in the House and being thrown out in the Senate without even having hearings on it. You can read about a lot of the things that Arthur and I are talking about. But one thing you won't find in the books is a turning point, if it had gone the other way we would not be here.

That was in the beginning of 1953 after the Eisenhower administration had come in and there was a lot of talk all over the government about the holdovers, the people who had been there before during the Truman administration, civil service employees. And they were not trusted. Their hearts were not in the right place. All over the government, this was not only health and Social Security, but all over the government there was distrust and suspicion about these people who were holdovers.

Then in the spring of 1953 in the early days of the Eisenhower administration the heads of the different units in the Federal Security Agency were called in by the then to be Secretary, Mrs. Hobby, and asked about their programs. Mrs. Hobby and her assistant, Nelson Rockefeller met with Bob Ball, then the Deputy Director -- well, he was Acting Director of the Bureau of Old Age and Survivors Insurance -- went and made a presentation in which he explained to the administrator, Mrs. Hobby and Nelson Rockefeller, the deputy, he explained about what social insurance was. And it was something they didn't know anything about really. And he explained it in a way that nobody else in the world could have. He was and he still is the authority on Social Security. In addition he was one of the world's great authorities on how to explain something that is rather difficult on the face of it. He had a way of making things very, very simple.

And even the Secretary and the Administrator and the Deputy could easily see that this was a good program. This was something we ought to be for. This was a good conservative Republican program where people helped themselves. And they didn't get something in the way of a handout. And paid into the fund and from the fund benefits were paid to them when they reached 65 and so forth. And it was a good solid conservative program. And you all ought to be for it. And he said this is a way -- not like what I'm saying now -- but in his own inimitably convincing persuasive way. And they got it. And that enabled us to go ahead and continue to have a disabilities studies branch in our division or whatever we called it, the analysis division.

And to continue to do planning and research along the lines that Arthur was mentioning about what was done under other programs, other governments, worker's compensation and so forth. Without that we would not have been able to get what did come out.

The other turning point, the turning point you would have to say, was in 1956 when the -- I'm getting ahead of the game because I have to go back and fill in some of the details about the disability freeze and all -- but in 1956 the bill containing disability benefits passed the House and had gone to the Senate Finance Committee. Voted down 11 to four. It went to the floor of the Senate and there one great heroic figure, Walter F. George, took it upon himself to guide through an amendment that would add to the bill the disability provisions for disability benefits. Eleven to four were against it in the Finance Committee.

And the opposition was tremendous. It was not only the insurance industry that Arthur mentioned and strong case that they had made about their disastrous experience in trying to operate disability provisions before, but there was also the American Medical Association which poured it on. They had every ingenious idea including a lot of dumb ideas about why this was impossible, it couldn't be done, the costs were going to be astronomical, all out of control. It was not only going to lead to socialized medicine, but one of the Senators said, "This is socialized medicine. We have it right here. The federal government is going to be paying the doctors to do these examinations. The federal government is going to select the doctors to do these examinations. And we are right here in the middle of socialized medicine. Don't let anybody kid you."

So, Walter George stood up after doing a lot of homework and having a lot of help as he went, and he held off this powerful offensive by the lobbyists of the insurance industry and the AMA. And of the two I think that the AMA lobbyists were actually the more effective. They did not spare the horses. They did everything. They sent telegrams all the time. They were always sending telegrams to the members of the committee and the Senate telling them why this was terrible thing to do.

One of the things that I mentioned in passing about the costs being out of control, it has to be remembered which I don't think any of us are inclined to do unless they are reminded of it, that in those days the disability benefits program was skinned down, narrowed down, restricted so much in all kinds of ingenious ways. It was restricted. Most all of which is still in the law. But it was cut back so far that the cost of this program was one quarter of one percent of payroll for employees, one quarter of one percent for employers. That's what we were dealing with. That was this big deal about the costs going out of control. And there would just be ruin for everything because of these out-of-control costs.

That was one of the reasons that they put in the separate trust fund, the disability trust fund, because there was stirred up a lot of fear of these costs going out of control would jeopardize the benefits for the widows and the orphans and the retired people. So, one of the things we did was to put in the separate trust fund.

George, Senator George with his marvelous presentation -- I just wish, all of us wished that we had been able to stand up there and give out with all of these good arguments that we had offered and have it sound anything like as good as the way it came out of Senator George.

In the end after his presentation -- and nobody in the world could have done this except Senator George. He had the prestige and the ability and the drive and the interest to do it. Nobody else even if they had wanted to would have been able to match his prestige and the way that he could make these ideas come out and hit people, have an impact.

At the end after all of his work and contribution that vote came up. And it was finally passed by one vote. Which is to say it passed by 47 to 45. That means that if one vote had changed it would have been 46 to 46 even. That meant that the Vice President, Mr. Nixon, would have cast the deciding vote and defeated the bill. So this one vote, this difference of 47 to 45 was the least, the closest it could be and have the bill get through. If one more vote had been lost the bill would have been lost.

Along in there came Senator McCarthy of Wisconsin who had a number of grudges against the Eisenhower administration including the Vice President, Mr. Nixon. McCarthy saw an opportunity to vote with the Democrats, vote for the bill and thereby make it a tie vote in which case the Vice President would have been embarrassed in this election year, 1956, having to cast the deciding vote to kill the disability benefits bill. But it turned out he did vote for the bill, McCarthy did vote for the bill but then as the record came before him and it became clear that the bill was going to pass by one vote without him he quickly turned around and changed his vote. So, it reads now in the record that he voted against the bill, but actually he voted for it the first time in order to embarrass the Vice President.

I wrote down a few things while Arthur was talking. Now, let me see what else I have.

MR. HESS: Tell them about Lyndon Johnson.

MR. DAVID: Oh, yes, well then I said the thing could not have happened without Walter George and that is absolutely true. But it also could have never happened without Lyndon Johnson. He was the majority leader. And he was the one who along with the majority whip was in charge of counting the votes. And supporters of the bill thought that they had enough votes to pass it. They thought they had six votes to spare. And Lyndon Johnson motioned to one of the people in the gallery, as a matter of fact it was Nelson Cruikshank who was the AFL-CIO liaison, head of their Social Security department and motioned for him to come down to the floor, which he did. And Johnson told him, "You don't have enough votes." And Cruikshank, "Sure, we have them. You've got six votes to spare." And Johnson said, "The hell you do."

And incidentally, when I say that, one little thing that you may or may not know, the language in private sessions, in committees and sessions in the congress that are not in public on the floor, the language will maybe surprise you. (NOTE: Laughter.)

MR. DAVID: The hell you do is minimum of gentle, refined language. Anyway, he said, "The hell you do. You need to round up six more votes." And so what Johnson did was to send word to Senator George to prolong his presentation of the arguments for the bill for one hour during which time the proponents of the bill were able to work to regain the votes of those six that they had somehow lost. Which they did up to the point where the bill passed by that one vote. But it was Lyndon Johnson who arranged for George to talk that extra hour.

And also -- Lyndon Johnson -- this is not new, this is the way things operated all of the time -- Lyndon Johnson took hold of the poor arm of the majority whip, senator Clements of Kentucky, who was running for reelection in 1956. And he said, "You have got to vote for this bill. This the leadership position and you can not vote against it." And Senator Clements said, "I gotta vote against. The AMA has come in and they have told everybody that they are going to put everything that they've got into defeating me in November. And I absolutely have to vote against this bill."

And Johnson, his poor arm twisted like a rag, you know, led him down the aisle holding him by the elbow. The story goes in giant six foot steps, led him down the aisle to change his vote to support the bill. And the end of that story is that in fact the AMA did go into Kentucky and put in everything they had and they_did defeat Senator Clements in 1956.

Arthur was mentioning the political atmosphere that all of this was in. That was one of them. One other thing that has mystified me from the beginning and still does is how grudging the congress has been and as a matter of fact the people about the disability insurance program. It was narrowed down and restricted in every ingenious way that you could think of, tightening the insurance status, the eligibility provisions to a ridiculous, I thought ridiculous extreme, fully insured, currently insured, 20 quarters out of the last 40. There was even one more than that which did get lost along the way. But all the different things, inability to engage in any substantial gainful work, long continued and indefinite duration, all sorts of little provisions to make it tighter and tighter. And those were not just done for the purpose of program, the purpose. But they were done to get the last few votes that were needed to get the bill passed like that vote in the Senate. Without some of these strange provisions that made it so tight there would not have been enough votes to pass it. So those were put in not just because some of us who had a hand in planning the program thought that they were a good idea. They were put in because that was the way you could hope to get the necessary votes.

Well, I think all the notes that I made while Arthur was talking I mentioned and I think I should leave it at that. Don't blame us for all of these screwy provisions. (NOTE: Laughter.)

MR. DAVID: Including that screwy one about the bill that became operative the day after it expired. It became operative the 1st of July and it expired the 30th of June. Anyway we didn't do all those things. We did what we could and to me it still seems remarkable that some of us were able to stay there and continue the work on disability legislation under an administration that was opposed to it.

I will leave you with one more story about that. This administration was opposed to it all the way along. They fought it every step of the way including after 1956 the legislation that took out the age 50 restriction which was in the original bill, benefits were paid only after age 50. They took that out in 1958 and they added disability benefits for the survivors and dependents of the disabled beneficiaries in 1958. All of this under the Eisenhower administration, all of this was done where we, the staff, were operating on a program that we were in favor of and our bosses were opposed to.

But in the end after the legislation was passed we got scads of mail. You seldom get much mail after the benefits were put in, but we got scads of mail from people who addressed the president, Mr. Eisenhower, and thanked him with just pathetic enthusiasm. They thanked him so profusely. They could believe what he had done. He had passed this legislation. He had opposed it all the way, but he had signed the bills which of course made the difference. He might not have signed them, but he did sign them to his credit. And he got all of the praise and accolades for his wonderful work in passing disability legislation.

Thank you. (NOTE: Applause.)

MR. SHERMAN: Well, Alvin, that goes to show if you don't mind who gets credit for what happens you can accomplish a lot, right? (NOTE: Laughter.)

MR. SHERMAN: I stole that from Mr. Woodruff of Coca-Cola fame. That's how he built the Coca-Cola Company.

Why don't we take a break. And then we can reconvene at 11:00. That will give you a chance to network a little bit and talk about some of the things that we have been discussing.

And I would like introduce Mrs. Hess. Jane, would you stand up. This is Art's wife, Jane. (NOTE: Applause.)

MR. SHERMAN: And we want to thank Tom Little for being so patient here and working so hard here on the closed microphone. And we will give you a break now too, Tom. So, why don't we take a break until 11:00.

MR. HINRICHS: Gordon.

MR. SHERMAN: Oh, okay, you've got something else you want to give away.

Mr. HINRICHS: May the rain cease and the outside gloom lift, but in case it doesn't I have an umbrella and your very own lighthouse, the Savannah lighthouse. Noel, I need a number.

MR. WALL: One.

MR. HINRICHS: Who has number one?

MR. SEXTON: I've got number one.

MR. HINRICHS: Aha. Gordon, I need a number.

MR. SHERMAN: Twenty-one.

MR. HINRICHS: Twenty-one, who has number 21?

MR. THOMAS: Thank you. (NOTE: Applause.) (NOTE: Recess.)

MR. SHERMAN: We will continue with the second half of our program on the history and the experiences through the years. So, we will turn it back to Art and Alvin. Art.

MR. HESS: We have amplification now. And I leave it up to you as to whether you would prefer to have me use it at this voice level or whether I should go ahead without it. (Static interference.) That's the problem. The problem is that if I look in a direction and don't speak into the amplification and any of you are having difficulty please let me know. Should I use it? Is it better?

SEVERAL PARTICIPANTS: Yes.

MR. HESS: All right. Don't hesitate to let me know.

I want to move now to a few of the specific program provisions that Alvin alluded to that made these programs be very tight but resulted in rapid and continuous amendments over the years, and give you a little bit of background on the reasons for the original provisions and the sense of what came up as changes and expansions and greater program coverage came in. And of course I'm going to begin telling you things that you know more about than I do, like what I call the CDI fiasco. And I guess you might not take offense if it was labeled a fiasco because I'm sure you felt that way when you were living through it.

But from the time the disability freeze which was passed in 1954, the actual freeze, not the abortive 1952 freeze, but the actual freeze in 154 was established up until the present there was a long, long period in which the administrative structure of federal/state relations, the role of the district office, how the claimant was handled, where the applications were taken and how much medical evidence was requested in the first instance and what the state law was and how much consultive examination and how the appeals came into the picture and so on, there was a long time when there were very few legislative changes in the causative area of administrative development until we got to I think it was the 184 legislation or the 181 legislation perhaps which redefined the agreement contractual relationship into something that from my point of view think is very much different from what we had before.

But which was a congressional effort to satisfy both the people in congress and others as to the formal relationship that should exist between these organizations. There was very little in the growth of the administrative relationships that didn't come through negotiation with the state directors and ad hoc cooperative working relationships between the statest the Regional offices and the Central office as to who was to do what in order to get a final product.

But there were 14 pieces of legislation in the period from the Eisenhower administration through Kennedy, Johnson, Nixon, Ford, Carter, Reagan and up until the beginning of the Bush administration. I don't know whether there have been -- my count doesn't cover the last couple of years.

And they were all significant in that they made some expansion, mostly expansion and certainly some modifications in the substantive provisions that had to do with the benefits themselves or the way in which the benefits were handled administratively.

And I can't touch on all of those, but I want to take a couple of areas and give you a little bit of background as to where we came from and how we got there because I think that they are going to be instructive to all of us and especially you folks who are still very actively going to be playing roles from here on out into the future as to what the disability benefits are going to look like next year and on through the rest of this century.

If I say the rest of this century because that isn't so far away. But the record of 14 major pieces of legislation over a period of 30 years or so and the fact that we are coming up against a stone wall on the healthy status of the disability trust fund probably by the end of this decade. It's certainly going to mean there is going to be significant legislation in the coming years dealing with the effort to contain or constrain or make sure that disability benefits are going to the right people in the right amounts, but not in amounts that are considered to be excessive in terms of resources unless there is going to be a reallocation of basic resources that go into the program. And that is a very likely possibility. And I won't get into that because that's going to be Gil Fisher's domain this afternoon.

One of the areas that deserves some discussion because again it's only going to begin to take on real significance as time goes on is the role and the reality of rehabilitation in the disability programs especially in the SSI DI program, but also in the SSA, the Social Security DI program.

An underlying theme that was in this original compromise in 1954 in the freeze and certainly in 1956 when cash benefits for age 50 came into the picture for the first time was the idea that there would be a realistic role for vocational rehabilitation of disabled individuals. Realistic in terms of both governmental support of programs and in terms of the possibilities of physical restoration and training and placement in the labor market of people who were or became seriously disabled. And that was one of the pieces of underlying rationale and compromise that made the program acceptable in the first instance.

We were to enter into contracts with state agencies. And they said state agencies because there were one or two very powerful state welfare directors who hoped to and did get the designation for the welfare department to administer the program. And there was worker's compensation in New York which was very strong and wanted to be in the picture. But by and large it was agreed that it was going to be the state vocational rehabilitation agencies with whom we would work and they would have two functions, assisting in the determination of disability. But at that time a lot of rhetoric and theory that their real function was to be to catch these cases before they went on the rolls and became well embedded into the cash benefit situation. And give every individual a chance to be considered for rehabilitation.

At that time the rehabilitation programs were embryonic but had been set in place. But there was a very, very strong motivation in the Eisenhower administration to foster federal/state rehabilitation services. And the director of the rehabilitation agency then was the legendary Mary Switzer who is the mother and I suppose now maybe the grandmother of rehabilitation. But was very powerful in the Eisenhower administration and powerful in her dealings with Social Security.

And Ms. Switzer's idea was that while the District office's might identify and take an initial application from the person who was applying for disability benefits, the very first thing that was to be done with that was it was to be turned over to the state rehabilitation agencies and a rehabilitation counselor would go to work and consider each case and determine whether or not the client was likely to profit from rehabilitation services.

Well, this was unrealistic in a number of ways. First of all the programs had hardly started except as I said for Georgia, Florida, South Carolina and a few other programs. Relative to the population there wasn't much in the way of services. And where there were services they were primarily for persons who were physically handicapped, needed prosthesis, needed some training to go into sheltered work or something like that. They certainly were never funded for or oriented towards considering rehabilitation of the benefit population which was age 50 and over. And it's true the disability freeze did apply to younger people.

But as far as benefits were concerned most of the people who were applying for benefits had by definition to have long work in the labor market. And they were worn out. They were elderly. They were coal miners to the extent that we actually finally got a separate black lung program because the disability program was not responsive enough in its benefits provisions for silicosis and pneumomycosis and the problems in West Virginia. And we got a separate black lung program which was dumped on us overnight. We thought the labor department was going to run the program and then the provisions were made retroactive to the very beginning and there was such a load that they turned it over to Social Security. We didn't know ahead of time that we were going to get it. And it was effective almost immediately.

Well, the same with the freeze. When they started to work on the f reeze we said, "Well, you know, there is no point in making this prospective. There are people who started working under Social Security in 1937 and by 1942 they would have met the insurance status requirements that we are now writing into the law. And they have lost their rights to retirement and survivor benefits. And if you don't go back and pick them up you've left a tremendous gap in the promise that was made to the American people when they were brought under the Social Security Act." So, the freeze was made retroactive.

And we found overnight that the estimates were that there were a half a million or a million people who were in that category who if you could establish a relationship between the time of their termination of employment and the onset of disability they would be entitled at least to the freeze. And then two years later when we got the age 50 benefits it became even more acute because then if they were over 50 they could establish the fact that they were now entitled to full scale disability benefits.

And I had a half a year's battle in the implementation period with Mary Switzer about who was going to get a hold of those applications and move them along and process them before they were considered for rehabilitation. I understood that we ought to get people focused on rehabilitation as soon as possible. But I didn't quite use the language with Mary that Alvin says we used in the closed door meetings of the Ways and Means Committee, but I did say in the nicest kind of terms, "Mary, there are a half a million people out there." And within six months we had a half a million applications of people, many, many of them who were over 50 and many of them who had been disabled and not working anymore, had been disabled for a long period of time. "And you've got rehabilitation programs that only had a half a dozen or a dozen counselors. And we have District offices out there all over the country with tens and hundreds and thousands of people who are immersed in doing nothing but talking to these people, taking their applications, asking them for their preliminary medical evidence. And a lot of these people, the cases are cut and dry."

Now, finally working with the state rehabilitation council directors we worked out despite the Washington point of view a realistic schedule of what kind of cases they thought they could look at and would want to look at. And we gave our District Offices the initial opportunity to designate by age, by physical condition, by various other characteristics almost state by state. The people who if they were referred for rehabilitation either by the District Offices or by the DDS wouldn't be wasting counselor time. And it turned out that this was minuscule.

And over a period of years until we got into recent times and until we got into the 1619 SSI motivated provisions we struggled with this idea of making it possible for the rehabilitation agencies to give services to the disabled. There was a whole series of provisions starting in about 1956 in which federal money, Social Security money was made available to the state agencies. First in advance and then when the actual rehabilitations were coming out of the pipeline were so little later on congress changed it to be only reimbursement for cases that were actually rehabilitated. And that even aggravated the problem for the rehabilitation agencies because the states then had to put their money out in advance and risk the possibility that there wouldn't be a termination.

But it was on again, off again on rehabilitation as such, per se. But it never was a very realistic idea because you were dealing with provisions that were essentially for people who had long established experience in the labor market and for whom even if they could be remotivated or retrained were frequently subject to the vagaries of the employment situation locally. And if they were hired were the last to be hired and the first to be off.

So, the rehabilitation thing still stands with us. With the coming of SSI and then the 1619 provisions there had been a lot more attention to SGA and the trial work period and the circumstances under which an individual's rights to disability payments can be preserved as he or she goes on or off the program or has to come back again later on. And we haven't heard the end of this.

You folks are going to be probably faced with, and the people who study the future of disability programs, are going to be faced with the question of realistic relationships between services and benefits in an administrative structure which probably is not in a program structure in terms of benefits which probably are not ideally suited as they would be if they had been planned in the first instance in a situation where funding for rehabilitation and prospects for rehabilitation had been realistically rel