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Income insurance of various sorts has now penetrated our economy in many ways, from the basic "social security" provisions to the new and yet untried attempts to supplement unemployment insurance with "guaranteed" annual wages. As a generalization it appears likely that the importance of income insurance will continue to increase, covering more citizens more fully, with consequent individual and public economic benefits -- provided that the plans are financially sound.

As a first approach to the problem, there appears no need for fundamental changes in our existing social insurance programs. In particular cases however revampings and modernizations are in order.

Unemployment insurance now covers approximately 80% of wage and salary workers. About 12 million workers are still excluded, nearly forty per cent of them being employees of state and local governments. Here is an area for indicated action, although it may have to wait on an improvement in the administrative aspects of the program. In addition, state employment services also require substantial overhauling and coordination and considerable educational effort will be required to bring the business community to rely upon and cooperate more actively with them.

Workman's compensation has been almost immobile with respect to coverage in recent years, and is often out-of-date in its awards schedules and administration. Our best estimates of its coverage range from two-thirds to four-fifths of employees, and some of the omissions are serious. Agricultural workers, for example, have higher-than-average injury rates as well

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as higher-than-average unemployment rates. In short, there has been con-
spicuous indifference to workman's compensation, and there is a need for
renewed interest in the matter.

In the social security field, our Federal Old-age, Survivors and
Disability Insurance system is maturing and expanding rapidly. The law as
presently enacted will call for increases in benefit payments of ____% by 1965,
from $ ____ billion to $ ____ billion. Any changes which would increase
these vast expenditures must be considered with the utmost care. Nevertheless,
continuing attention is needed to keep benefit payments adjusted to changes
in price levels and to reflect in some degree increased levels of real wages.

Two further matters in regard to OASDI bear consideration. One is
the eligibility age for totally disabled persons. We have only begun to have
experience in regard to this type of claim, since the law was amended to
cover disabilities only recently. However the present age of eligibility,
fifty, tends to exclude from benefits precisely those younger workers with
dependent children who most badly need assistance. It is recommended that
as our cost experience allows us to do so, we reduce the age of disability
eligibility by successive steps and that we combine with this an intensified
effort at vocational rehabilitation programs aimed at self-support.

The other important social insurance question is that of the retirement
age itself. Particularly in view of the demand for employees in a growing
economy -- but not less importantly in view of the psychological and economic
injuries of premature retirement -- we urge that every encouragement be given

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to the continuation in employment of those workers who can and wish to
work past age 65. In the circumstances, a firm policy should be maintained
against general reduction of the present OASDI retirement age, and study
should be devoted to means of adjusting it to encourage postponement of re-
tirement.

Once again we recapitulate the recommendations of this section:

1. Additional coverage by unemployment insurance of as many as possible of our 12,000,000 presently uninsured workers.

2. Updating of our workman's compensation program in terms of benefits and coverage.

3. Simultaneous or prior thorough overhauling of state administrative machinery for these and related programs.

4. Review of the eligibility age for disability benefits under OASDI, with the aim of lowering the age limit as costs permit. Coupled with this is the need for increased efforts to retrain the disabled for self-support.

5. The encouragement, if need be by legislation, of higher retirement ages, and a firm policy against lowering the retirement age for OASDI.

We estimate the total cost of government welfare plans to rise from $15.5 billions today to $29 billions in 1965, most of which is due to present legislative requirements, and to rising eligible age groups.

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With the conclusion of this examination of some of our problems of social and economic distress, we have brought our analysis of growth to its next but last step. Starting with an outline of our objectives and philosophy, we have traced through the main currents of and obstacles to economic and social development. It remains now only to examine the compatibility of the claims advanced not only by this, but by other sub-panels with the Gross National Product which we hope to achieve for 1965.

It must be clear from the brevity of the preceding pages that our object has not been to enumerate every problem which complicates our objective of growth, not to mention every recommendation which might facilitate it. That would require not only far greater length of exposition, but a degree of omniscience which we hastily disavow. Rather, our purpose has been to clarify the main areas of the problems of growth, to illustrate the nature of these problems with one or two specific examples of each, and to suggest such courses of action as seem to us best suited to further our basic purposes.

Let us take a quick review of what our general recommendations have been:

1. We found the problem of *resources* a permissive, rather than an active factor in growth, and our summary conclusion was that it did not present a major obstacle to growth. Within this overall and hopeful finding, however, we pointed to the important impending problems of two raw materials, petroleum and water; and in connection with our human resources, we indicated three

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areas for action: better opportunities for older workers, wiser utilization of bypassed ethnic groups, and a general need for better educational training.

2. The problem of *motivation* we found to be a crucial one for growth. Although recognizing the importance of the social, economic, and political "climate" on motivation, we found two opportunities for constructive action. One of these was the need to upgrade the creative aspect of work; the other was to encourage the assumption of executive responsibility. Both seem to us to require the attention of our business community.

3. The problem of government supervision of our expanding economy naturally bulked large in our analysis of the determinants of growth. We found reason for satisfaction in the evolution of a climate of agreement on the general relation between government and business, and believe that this in itself augurs well for the continuance of growth. Within the agreement, however, lies a wide variety of desirable government actions to encourage growth.

In this connection we discussed the need for the direct provision of public assets, indicating their extensive magnitude, and emphasizing the importance for government economy in order to accommodate them. Turning to the vital question of private investment, our conclusions pointed to a number of possible changes in tax incentives and to the exploration of additional price-stabilizing economic devices. It was our strong conviction that an impartial commission should review the entire field of local, state, and government financial activity with a view to adapting our present basic

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structure to the needs of a growth economy.

4. Finally, we have reviewed some of the areas of economic and social distress. We recommended a revised agricultural policy aimed at the encouragement of successful farmers and at the economic and social relocation of the submarginal farmer. Similarly we strongly endorsed effective federal, state, and local action to move rapidly ahead with large-scale, well planned slum clearance and city redevelopment plans, with particular reference to improving race relations.

Turning to the field of health, we stressed the need for improved health insurance, suggesting family-prepayment group medical centers and the need for increased support of medical research and experimentation.

In the field of social insurance programs proper, we noted the important role of private expenditure, and urged better Federal-State cooperation for the administration of public expenditure. We then directed our notice to a number of necessary extensions and changes in the fields of unemployment benefits, and retirement provisions.

* * * * *

With these conclusions and recommendations in mind, we now turn to our final problem -- the ability of our growth economy to contain the totality of the claims made upon it, and the priorities which those claims seem to merit.