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Compensation Amendments of 1976 (1)" of the White House Records Office: Legislation
Case Files at the Gerald R. Ford Presidential Library.
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APPROVED
8/10/20/76
statement
THE WHITE
ACTION
WASHINGTON
Last Day: October 20
October 18, 1976
MEMORANDUM FOR
THE PRESIDENT
Rostoch
FROM:
JIM CANNON
SUBJECT:
H.R. 10210 - Unemployment Compensation
110/21/26
Amendments of 1976
Attached for your consideration is H.R. 10210, sponsored by
Representative Corman and six others.
arching 01/0/21/76
The enrolled bill would:
-- extend unemployment compensation coverage to certain
agricultural workers, domestic service workers, and
State and local government workers;
-- improve the financing of the system by increasing the
taxable wage base and the tax rate;
-- permit the Virgin Islands to join the unemployment
compensation system;
-- extend for one year, until December 31, 1977, and
amend the Special Unemployment Assistance program;
-- establish a National Commission on Unemployment
Compensation;
-- make other changes in the unemployment compensation program;
-- amend the Supplemental Security Income program (SSI)
A detailed discussion of the provisions of the enrolled bill
is provided in OMB's enrolled bill report at Tab A.
2
Staff Recommendations
Steve McConahey, your Special Assistant for Intergovernmental
Affairs, notes that some public interest groups (National
Association of Counties and National League of Cities-U.S.
Conference of Mayors) strongly oppose this bill because of
its adverse financial impact. Los Angeles County estimates
annual costs of $21 million. The National Governors' Conference
supports the bill.
OMB, Max Friedersdorf, Counsel's Office (Lazarus), Bill
Seidman, Alan Greenspan and I recommend approval of the
enrolled bill and the signing statement which has been
cleared by the White House Editorial Office (Smith).
RECOMMENDATION
That you sign H.R. 10210 at Tab B.
That you approve the signing statement at Tab C.
APPROVE
DISAPPROVE
RESIDENT
OFFICE
OF THE
EXECUTIVE OFFICE OF THE PRESIDENT
UNITED
OFFICE OF MANAGEMENT AND BUDGET
BENIVE
STATE
WASHINGTON, D.C. 20503
OCT 15 1976
MEMORANDUM FOR THE PRESIDENT
Subject: Enrolled Bill H.R. 10210 - Unemployment Compensation
Amendments of 1976
Sponsor - Rep. Corman (D) California and 6 others
Last Day for Action
October 20, 1976 - Wednesday
Purpose
Extends unemployment compensation coverage to certain agricultural
workers, domestic service workers, and State and local government
workers; improves the financing of the system by increasing the
taxable wage base and the tax rate; permits the Virgin Islands
to join the unemployment compensation system; extends for 1 year,
until December 31, 1977, and amends the Special Unemployment As-
sistance program (SUA) ; establishes a National Commission on
Unemployment Compensation; makes other changes in the unemployment
compensation program; and amends the Supplemental Security Income
program (SSI).
Agency Recommendations
Office of Management and Budget
Approval (Signing state-
ment attached)
Department of Labor
Approval (Signing state-
ment attached)
Department of the Treasury
Approval
Council of Economic Advisers
Approval
Department of Health, Education,
and Welfare
No objection
Department of Commerce
No objection
Department of Agriculture
No objection(Informally)
Department of Justice
Defers to HEW and Treasury
Department of the Interior
Defers to other agenciesorrally)
Civil Service Commission
Defers to Labor and Treasury
Advisory Commission on Intergovern-
mental Relations
No recommendation
2
Discussion
H.R. 10210 amends in a significant way the unemployment compensa-
tion program and makes changes in the Supplemental Security
Income program (SSI). Many of the unemployment compensation
provisions in the enrolled bill reflect recommendations made in
an Administration legislative proposal, the Unemployment Compensa-
tion Amendments of 1975, which was transmitted to the Congress
by the Department of Labor in July 1975.
The House passed its version of H.R. 10210 on July 20, 1976, by
a vote of 237-157. The Senate passed its version of the bill
on September 29, 1976, by a vote of 71-6. The Conference Report
was agreed to in the House by a vote of 272-97 and in the Senate
by voice vote.
Unemployment Provisions of H.R. 10210
Extension of coverage
H.R. 10210 extends coverage under the Federal-State unemployment
insurance system to certain agricultural workers, domestic
service workers, and State and local government employees.
Agricultural workers: agricultural workers on any farm
employing 10 or more persons in each of 20 weeks during a calendar
year and workers on any farm paying $20,000 or more in wages
during any calendar quarter are covered. Non-resident aliens
admitted to perform agricultural work are excluded from coverage
until January 1, 1980. The Administration recommended covering
laborers on farms with four or more workers in each of 20 weeks
and workers on farms with payrolls of $5,000 or more in any
quarter but excluded non-resident aliens.
Domestic service workers: domestics working for an employer
who paid $1,000 or more for such services in any calendar quarter
are covered. The Administration recommended coverage of domestics
working for an employer who paid $500 or more in any calendar
quarter.
State and local government workers: all State and local
government employees are covered except major nontenured policy-
makers and advisers, elected officials, judges, legislators,
National Guardsmen, and emergency disaster relief workers. The
Administration recommended coverage of State and local government
workers in elementary and secondary schools and hospitals.
3
Financing the program
In July 1975 the Secretary of Labor testified that the unemploy-
ment insurance program was "seriously threatened by the un-
precedented costs caused by heavy unemployment." As of
September 1976, $10.0 billion of general funds had been advanced
to the Unemployment Trust Fund and 21 States had outstanding
loans of $3.1 billion from the Fund.
To remedy the financing problems of the system, the Administra-
tion recommended permanently increasing the wage base on which
employers pay the Federal unemployment insurance tax from $4,200
to $6,000 and increasing the net Federal tax rate from 0.5% to
0.65%. After all obligations to general revenues were repaid,
the net Federal tax rate was to drop to 0.45%
H.R. 10210 permanently increases the wage base to $6,000 a year
beginning with wages paid in calendar year 1978 and increases
the net Federal tax rate to 0.7% until all advances from general
revenues have been repaid, when it would be reduced to 0.5%.
The increased tax rate applies in calendar year 1977.
Special Unemployment Assistance Program (SUA)
SUA was established in December 1974 as a temporary Federal pro-
gram of unemployment compensation for workers who were not
eligible for unemployment benefits under any other law. It is
financed from the general funds of the Treasury. Under present
law the program is scheduled to expire on December 31, 1976,
with benefits payable until March 31, 1977.
H.R. 10210 extends the SUA program for 1 year, to December 31,
1977, with benefits payable until June 30, 1978. The Administra-
tion supported a 1-year extension of SUA as a transitional step
to permanent coverage for workers under the regular system.
Like the Administration proposal, H.R. 10210 also amends the base
period for computing SUA benefits to correspond to the period
used under the regular State unemployment compensation program.
It denies SUA to non-professional service employees of schools
between academic terms if there is a reasonable assurance that
the individual will be employed in the upcoming term. The
Administration supported this change.
National Commission on Unemployment Compensation
The enrolled bill establishes a 13-member commission to study
the long-range needs of the unemployment insurance system. It
4
will study alternatives and improvements and recommend changes
by January 1, 1979, with an interim report due by March 31, 1978.
Seven members will be appointed by the President, and he will
designate the Chairman. The President pro tempore of the Senate
and the Speaker of the House will each appoint three members.
The Commission must include at least one representative of in-
dustry, labor, small business, the Federal Government, State
government, and local government. The Administration made a
similar proposal.
Coverage of the Virgin Islands
H.R. 10210 will bring the Virgin Islands within the Federal-
State unemployment insurance system, as the Administration
proposed.
Other major unemployment provisions in H.R. 10210:
--amend the trigger provisions for Federal-State extended
benefits to provide that the 120% requirement (i.e., the insured
unemployment rate (IUR) not seasonally adjusted for a State
must be at least 120% above that of the corresponding periods
in the preceding 2 years in order for the State to trigger on)
can be waived by the State when the IUR reaches 5%.
--require States to assume the full cost of extended
benefits for State and local workers, but the Federal Government
will continue to pay the administrative costs involved in cover-
ing these workers.
--deny unemployment benefits to illegal aliens, profes-
sional athletes between sports seasons, and teachers and other
professional school employees between academic terms.
--repeal the "finality" clause which provided that findings
of fact by a Federal agency in unemployment compensation cases
respecting employees leaving the Federal service were final,
thereby subjecting the compensation claims of Federal employees
to the same administrative procedures that apply to other workers.
--require, effective October 1, 1979, a reduction in an
individual's unemployment compensation benefits by the amount
of any public or private retirement pension, including social
security. This provision could cause equity problems; it will
not take effect until after the Study Commission reports, and
could be amended or repealed before it takes effect.
--amend the Social Security Act to require (subject to
denial of benefits) that an applicant under the Aid to Families
5
with Dependent Children--Unemployed Fathers (AFDC-UF) program
apply for and accept any unemployment compensation benefits to
which he is entitled. The applicant could then claim any AFDC-
UF benefits to which he would be entitled, but those benefits
would be reduced by the amount of the unemployment benefits
which he receives. This is similar to an Administration proposal
and HEW supports it. It will reduce AFDC-UF expenditures by
approximately $47 million, which will be absorbed by the Unemploy-
ment Insurance Trust Fund, and thus financed by an employer tax
rather than general revenues.
--require State employment offices, at the request of a
State or local AFDC or child support agency, to furnish certain
information including whether an individual is receiving, has
received, or has applied for unemployment compensation, whether
the individual has refused an offer of employment, and his home
address.
Benefit Amount Standard
According to the Labor Department, over 40% of covered workers
currently receive a weekly benefit amount that is less than half
their average weekly wage. The Administration proposed that each
State provide each individual claimant with a weekly benefit
amount equal to at least 50% of his average weekly wage up to
a State maximum equal to at least two-thirds of the statewide
average weekly wage for that State's covered workers. The en-
rolled bill does not include the proposed benefit standard,
which will be studied by the National Commission on Unemployment
Compensation.
Supplemental Security Income (SSI)
Provisions of H.R. 10210
These provisions are described in detail in the attachment to
HEW's letter on the enrolled bill. Briefly they amend Title XVI
(Supplemental Security Income) of the Social Security Act to:
--amend SSI eligibility criteria to permit full SSI benefits
to be paid to individuals in public non-Medicaid institutions
which serve no more than 16 residents and amend the standards
for certain institutions.
This provision also repeals section 1616 (e) of the Social Secu-
rity Act which provides that Federal SSI payments to beneficiaries
be reduced in the case of payments made by States or localities
for medical or other remedial care provided by an institution if
the care is, or could be, provided in a Medicaid institution.
6
This requirement originally sought to prevent the use of SSI
benefits as a means of evading Federal Medicaid requirements and
thus funding care in substandard facilities. Because of its
complexity, HEW has not been able to enforce this requirement.
The enrolled bill, effective October 1, 1977, adds a new section
1616 (e), which requires each State to establish or designate
State or local authorities to establish, maintain and ensure the
enforcement of standards for any category of institutions, foster
homes, or group living arrangements in which (as determined by
the State) a significant number of SSI recipients is residing.
The standards have to be appropriate to the needs of the recip-
ients and the character of the facilities involved. They would
govern admission policies, safety, sanitation, and protection
of civil rights.
The revised section 1616 (e) also requires each State to make
available for public review, as a part of its social services
program planning procedures under Title XX of the Social Secu-
rity Act, a summary of the standards, and to make available to
any interested individual a copy of the standards and the pro-
cedures available in the State to ensure their enforcement.
Each State is required to certify annually to the Secretary of
Health, Education, and Welfare that it is in compliance with
the requirements for State standards. The bill also provides
for the reduction of Federal payments in the case of any person
who is in an institution not approved under State standards as
determined by the appropriate State or local authorities.
The objective of these provisions is to eliminate disincentives
for the establishment and subsidization by States and localities
of residential facilities for the aged, blind or disabled and to
allow States and localities to supplement Federal SSI benefits
by either direct or indirect assistance to persons in public
institutions. HEW shares this objective and does not object to
enactment of the provisions. HEW estimates that the costs of
these provisions, depending upon State action, could range between
$400 million and $800 million for the period 1977 through 1981.
--provide that for any full month during which a spouse
is in an institution, the couple involved would be treated as
individuals for purposes of computing their eligibility and SSI
benefit amount. Currently, any income of either spouse is ap-
plied to reduce the couple's combined SSI benefit. HEW has no
objection to this provision and estimates its cost at $5 million
per year.
7
--provide that no recipient of Federal SSI benefits or
State SSI supplementary payments will lose "categorical eligi-
bility" for Medicaid solely as the result of a cost-of-living
increase under Title II of the Social Security Act (Federal
Old-Age, Survivors, and Disability Insurance Benefits).
Currently, an SSI beneficiary may lose his SSI eligibility and
therefore his linked Medicaid eligibility, because a cost-of-
living benefit increase under Title II provides added income
making him no longer eligible for SSI. HEW objects to this
provision because it is inequitable to "grandfather" some
individuals while leaving unprotected other similarly situated
individuals. Currently, the expansion of Medicaid eligibility
beyond AFDC and SSI beneficiaries is within the discretion of
each State. While HEW would recommend veto of this provision
if it were in a separate bill, its objection does not warrant
a veto of H.R. 10210. The estimated cost of the provision is
$10 million a year.
--require that the Federal Government pay twice, in effect,
for cost-of-living increases in the Federal SSI benefit in the
three remaining "hold harmless" States (Massachusetts, Wisconsin,
and Hawaii). First, general revenues fund the increased SSI
benefits for individuals. Second, this provision requires con-
tinued Federal liability for "hold harmless" payments to those
States by barring the current reduction in Federal liability
associated with such cost-of-living increases. The cost of
this provision will be about $12 million over the first 2 years,
and a total of about $50 million over the next 6 years.
--provide new procedures and funding for State services
to disabled children under the age of 16 who are receiving SSI
benefits through a new formula grant program. HEW objects to
these provisions because they establish a new grant program to
States under State plans meeting conditions prescribed by the
Secretary which entail complex administrative controls. HEW
does not believe its reservations about this provision justify
a veto of the enrolled bill. These provisions will cost about
$30 million in each of fiscal years 1977 through 1979.
Budget Impact
The budget impact of the unemployment compensation provisions
of H.R. 10210 is shown in the following table for two forecasts,
one pessimistic and one optimistic, of unemployment rates.
8
($ in Billions; fiscal years)
Pessimistic
1977
1978
1979
1980
1981
1982
(Forecast unemployment rate)
(7.0%)
(6.6%)
(6.4%)
(5.8%)
(5.2%)
(4.9%)
Additional revenues received
.3
1.4
3.9
4.1
4.1
4.2
Additional benefits paid
--
.5
.7
.5
.5
.5
Net additional revenue
.3
.9
3.2
3.6
3.6
3.7
Net additional revenue in
1.8
1.2
2.5
2.8
3.2
your 1977 Budget
N/A
Optimistic
1977
1978
1979
1980
1981
1982
(Forecast unemployment rate)
(6.8%) (6.1%) (5.4%) (4.8%) (4.6%) (4.5%)
Additional revenues received
.3
1.4
3.9
4.0
4.0
4.1
Additional benefits paid
--
.4
.5
.4
.4
.4
Net additional revenue
.3
1.0
3.4
3.6
3.6
3.7
Agency Recommendations
Labor most strongly urges that the bill be approved. The
Department states that many of the provisions in H.R. 10210 are
similar to the Administration's proposal and that the enrolled
bill makes important improvements in the Federal-State unemploy-
ment insurance system.
HEW has no objection to approval. Although the Department has
considerable problems with certain of the SSI provisions, as
indicated above, these are not sufficient to recommend disapproval.
The Department notes, as a general matter, "the continued lack
of realism on the part of the Congress as evidenced by effective
dates of such immediacy that there is obviously insufficient time
to implement the provisions as contemplated by the bill." The
Department's comments on the estimated cost of the SSI provisions
are indicated above, and it calls special attention to the pro-
vision which could cost $800 million over the next 5 years.
Justice defers to HEW and Treasury. The Department notes,
however, that H.R. 10210's requirement that States extend
9
coverage to State employees "may run afoul of the same consti-
tutional limits which invalidated a similar effort to bring
State employees within the overtime provisions of the Fair
Labor Standards Act in the case of National League of Cities V.
Usery,
U.S.
, in June of this year. The Court there
held a federal statute requiring that States compensate their
employees under prescribed terms and conditions to be an
impermissible invasion of basic sovereign attributes of the
several States. There is a substantial likelihood that the
same analysis would apply in this instance."
* * * *
H.R. 10210's unemployment compensation provisions are similar
in major respects to the Administration's proposal. The
financing provisions are especially important because they
should help to restore fiscal soundness to a system which has
been severely drained by high unemployment. The establishment
of a minimum Federal benefit standard, as proposed by the
Administration, is not included in the enrolled bill but will
be studied by the National Commission on Unemployment Compensa-
tion.
We share HEW's concerns, as indicated above, about certain of
the SSI amendments. We will explore with HEW the possibility
of developing corrective legislative proposals.
On balance, we believe that the advantages of H.R. 10210's
unemployment provisions significantly outweigh the disadvantages
of its SSI provisions and, accordingly, recommend approval.
Jane T. Lynn by
Director
Enclosures
STATES DEPARTMENTOS CERTIFICATE
DEPARTMENT OF AGRICULTURE
OFFICE OF THE SECRETARY
WASHINGTON, D. C. 20250
October 1 8, 1976
Honorable James T. Lynn
Director, Office of Management
and Budget
Washington, D.C. 20503
Dear Mr. Lynn:
In reply to the request of your office, the following report is submitted
on the enrolled enactment H.R. 10210, "Unemployment Compensation
Amendments of 1976."
This Department has no objection to approval of this bill by the President.
We are commenting only on those sections of the bill pertaining to the
extension of unemployment compensation coverage to agricultural workers.
This bill would extend unemployment compensation protection to workers
hired by agricultural employers who employ 10 or more workers in each of
20 or more weeks during the year, or pay $20,000 or more in farm wages in
any calendar quarter.
This Department feels that this important social benefit, which has been
enjoyed by most other American workers for many years, should be made
available to farmworkers employed on all but the very small farms which
cannot afford the cost of the program. However, this bill would provide
coverage only to workers working on the very large farms. This Department
supported an earlier position of the Department of Labor which would have
extended coverage to more farmworkers than the current bill. Farmworkers,
as an occupational group, have relatively low income levels and relatively
high seasonal unemployment.
We would urge the Department of Labor to establish a procedure and
schedule for reviewing the impact of the provisions of this bill on farm
operators and farmworkers in order to determine the feasibility of extend-
ing coverage to the smaller farms.
Honorable James T. Lynn
2
Since this Department is not directly involved with the administration
of the Unemployment Insurance Program, we defer to the Department of
Labor for an estimation of administrative cost.
Sincerely,
got 9. Youly
John A. Knebel
Acting Secretary
STATEMENT
OF
THE
United States Department of the Interior
OFFICE OF THE SECRETARY
March
3,
1849
WASHINGTON, D.C. 20240
OCT 1 5 1976
Dear Mr. Lynn:
This will respond to your request for the views of this Department
on enrolled bill H.R. 10210, "To require States to extend unemploy-
ment compensation coverage to certain previously uncovered workers;
to increase the amount of the wage subject to the Federal unemploy-
ment tax; to increase the rate of such tax; and for other purposes.'
We support those provisions of the enrolled bill which would extend
the Federal unemployment compensation laws to the Virgin Islands; but,
defer on other provisions to those Federal agencies with a more
significant interest.
Enrolled bill H.R. 10210 would require States to extend unemployment
compensation protection to certain categories of individuals including
certain employees of State and local governments and nonprofit school
employees, farm and household workers, and the Virgin Islands, now
covered only at State option and increase the Federal unemployment
tax rate and increase the annual amount of wages subject to Federal
and State unemployment taxes from $4,200 to $6,000 per employee.
The bill would also modify the requirements for triggering the
Federal-State extended benefit program into and out of operation in
the States, establish a national study commission on unemployment
compensation, and make a number of other changes. The enrolled bill
would also add several provisions which would affect the Supplemental
Security Income (SSI) program for needy aged, blind, and disabled
people.
Of particular interest to this Department enrolled bill H.R. 10210
would extend the Federal unemployment compensation laws to the Virgin
Islands as soon as various requirements of membership in the Federal-
State system could be met.
Under the existing provisions of Federal law, the territory of the
Virgin Islands is precluded from participating in the Federal-State
employment security systems of unemployment insurance and employ-
ment services.
REVOLUTION
AMERICAN
BICENTENNIAL
1776-1976
®
By letter to Director James T. Lynn, dated June 27, 1975, the
Department expressed its support for enrolled bill H.R. 6900, now
Public Law 94-45, which in effect, permitted the Virgin Islands to
participate in the Federal-State unemployment insurance program
until June 30, 1976. Enrolled bill H.R. 10210 would continue the
Virgin Islands participation on a permanent membership basis. We
note that this provision is very similar to legislation proposed
by the Administration.
The advantages to the United States of inclusion of the Virgin Islands
in the system are the increased scope and coverage of the Federal-State
system, the increased effectiveness of its interstate and multi-State
operations, the elimination of a tax advantage for Virgin Islands
employers (with a corresponding disadvantage for their competitors in
other States) and additional Federal Unemployment Tax Act revenue to
the Federal Unemployment Trust Fund (offset, however, by the additional
expenditures for administration from the employment security administration
account of the Unemployment Trust Fund). Costs of administering the
Virgin Islands Employment Service are now borne by general funds of the
U.S. Treasury but, upon inclusion of the Virgin Islands in the Federal-
State system, most of these costs would be financed by grants from the
employment security administration account in the Federal Unemployment
Trust Fund. Inclusion of the Virgin Islands would also benefit the
United States as a demonstration that Virgin Islanders are entitled to
share in national social legislation on the same basis as the citizens
of any State. Additionally, we would note that the magnitude of
present unemployment in the Virgin Islands is without precedent and
the resources of the existing Fund have been exhausted.
With respect to the other provisions of H.R. 10210, we defer in our
views to those Federal agencies with a more significant interest.
Sincerely yours,
Assistant Secretary of the Interior
Honorable James T. Lynn
Director, Office of
Management and Budget
Washington, D.C.
2
THE WHITE HOUSE
WASHINGTON
Jim -
No decision indicated on the
statement.
Trudy
STATEMENT BY THE PRESIDENT
I am pleased to sign the Unemployment Compensation
Amendments of 1976, H.R. 10210. This bill incorporates
many of the recommendations proposed by my Administration
in July 1975. It significantly improves our unemployment
compensation system.
In particular, this bill makes vital changes in the
unemployment compensation system's financing. It restores
the fiscal soundness of the system so that unemployed
workers can be sure assistance will be available when
needed. Moreover, the bill clarifies some aspects of the
law to ensure that benefits are paid only to those indi-
viduals the program is intended to cover.
H.R. 10210 extends unemployment compensation coverage
to over nine million workers. This is the largest addition
to this program since its beginning.
H.R. 10210 also establishes a National Commission on
Unemployment Compensation to study and make recommendations
by January 1, 1979, on unresolved problems in the system.
The unemployment compensation provisions of this bill
represent the kind of cooperation and compromise between
the Congress and the Administration to enact legislation
which is in the interest of every American. As a result,
the unemployment compensation system will be able to better
serve our nation.
THE WHITE HOUSE
ACTION MEMORANDUM
WASHINGTON
LOG NO.:
Date: October 15
Time: 500pm
FOR ACTION: Bavid Lissy
cc (for information):
Jack Marsh
Max Friedersdorf
Ed Schmults
Steve McConahey
Spencer Johnson
Mike Duval
Bobbie #ilbergm Bill Seidman ah
Robert Hattmann
Paul Leach
defer
FROM THE STAFF SECRETARY
DUE: Date: October 18
Time: 200pm
SUBJECT:
H.R.10210-Unemployment Compensation Amendments 6f 1976
ACTION REQUESTED:
For Necessary Action
For Your Recommendations
Prepare Agenda and Brief
Draft Reply
X
For Your Comments
Draft Remarks
REMARKS:
please return to judy johnston, ground floor west wing
PLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.
If you have any questions or if you anticipate a
delay in submitting the required material, please
K. R. COLE, JR.
telephone the Staff Secretary immediately.
For the President
DAVID Lissy-
of
10/19/16
I am pleased to sign the Unemployment Compensation
Amendments of 1976, H.R. 10210. This bill incorporates
many of the recommendations proposed by my Administration in
July 1975. It significantly improves our unemployment
compensation system.
In particular, this bill makes vital changes in the
unemployment compensation system's financing. It restores
the fiscal soundness of the system so that unemployed workers
can be sure assistance will be available when needed.
Moreover, the bill clarifies some aspects of the law to ensure
that benefits are paid only to those individuals the program
is intended to cover. For снатрӏе, it now makes 10 clear that
professional athletes between sports seasons would not be
skigible.
H.R. 10210 extends unemployment compensation coverage to
This
over 9 million workers, the largest addition to this program
since its beginning. Newly covered groups include many
one
agricultural and domestic workers and most State and local
government employeers.
H.R. 10210 also establishes a National Commission on Unemploy-
ment Compensation to study and make recommendations by January 1,
1979, on unresolved problems in the system.
In addition to its unemployment compensation provisions,
H.R. 10210 contains amendments to the Supplemental Security
Income program. I find some of these provisions ill-conceived
and they may requir corrective action. Furthermore, they are
objectionable because of the unrealistic effective dates which
Congress has imposed.
The unemployment compensation provisions of this bill
represent the kind of cooperation and compromise between the
Congress and the Administration to enact legislation which
is in the interest of every American. As a result, the unemploy-
our nation
ment compensation system will be able to better sérve the needs
10/15/76 - 4:45
THE WHITE HOUSE
n
ACTION MEMORANDUM
WASHINGTON
LOG NO.:
13
Date: October 15
Time: 400pm
FOR ACTION: David Lissy-
CC (for information): Jack Marsh-
Max Friedersdorf
Ed Schmults,
Steve McConahey- Spencer Johnson
Mike Duval
Bobbie Kilberg
Bill Seidman
Robert Hartmann Paul Leach
FROM THE STAFF SECRETARY
DUE: Date: October 18
Time: 200pm
SUBJECT:
H.R.10210-Unemployment Compensation Amendments of 1976
ACTION REQUESTED:
For Necessary Action
For Your Recommendations
Prepare Agenda and Brief
Draft Reply
X
For Your Comments
Draft Remarks
REMARKS:
please return to judy johnston, ground floor west wing
10/15/76- - Copy sent for recearching. mm
10/18/76 - Researched copy returned. nm
ORAP
Returned toguy nim
PLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.
If you have any questions or if you anticipate a
delay in submitting the required material, please
James N. Cannon
telephone the Staff Secretary immediately
For the President
THE WHITE HOUSE
ACTION MEMORANDUM
WASHINGTON
LOG NO.:
13
Date: October 15
Time: 400pm
MB
FOR ACTION: David Lissy-
CC (for information): Jack Marsh-
Max Friedersdorf
Ed Schmults,
Steve McConahey-
Spencer Johnson
Mike Duval
Bobbie Kilberg
Bill Seidman
Robert Hartmann
Paul Leach
FROM THE STAFF SECRETARY
to
40! 10/16/19 RES
DUE: Date: October 18
Time: 200pm
GAM
tools
SUBJECT:
10/16/2:05. 10/16 12:05
H.R.10210-Unemployment Compensation Amendments of 1976
ACTION REQUESTED:
For Necessary Action
For Your Recommendations
Prepare Agenda and Brief
Draft Reply
x
For Your Comments
Draft Remarks
REMARKS:
please return to judy johnston, ground floor west wing
OK/MWB
PLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.
If you have any questions or if you anticipate a
delay in submitting the required material, please
James N. Cannon
telephone the Staff Secretary immediately.
For the President
STATEMENT BY THE PRESIDENT
on
I am pleased to sign the Unemployment Compensation
Amendments of 1976, H.R. 10210. This bill which significantly
improves our unemployment compensation system incorporated
many of the recommendations proposed by my Administration in
July 1975.
H.R. 10210 extends unemployment compensation coverage to
of
over 9 million workers, the largest addition to this program
since its beginning. Newly covered groups include many
agricultural and domestic workers and most State and local
government employees.
The bill makes vital changes in the system's financing in
order to restore its fiscal soundness so that unemployed
workers can continue to be assured that assistance will be
available when needed. Moreover, it removes loopholes in the
law which permitted some individuals to take advantage of the
system.
can
H.R. 10210 also establishes a National Commission on
Unemployment Compensation to study and make recommendations
a
by January 1, 1979, on unresolved problems in the system.
I am disappointed that the Congress did not adopt my
proposal for a Federal standard for the minimum unemployment
benefit amount. If unemployment compensation is to provide
meaningful support for those who have lost jobs while they look
for new ones, we should be sure that an adequate proportion of
lost wages is replaced. The Commission should give this pro-
posal prompt consideration.
In addition to its unemployment compensation provisions,
an
H.R. 10210 contains amendments to the Supplemental Security
on
Income program. I find some of these provisions ill-conceived
and they may require corrective action. Furthermore, they are
objectionable because of the unrealistic effective dates which
Congress has imposed.
STATEMENT BY THE PRESIDENT
I am pleased to sign the Unemployment Compensation
Amendments of 1976, H.R. 10210. This bill which significantly
improves our unemployment compensation system incorporated
many of the recommendations proposed by my Administration in
July 1975.
H.R. 10210 extends unemployment compensation coverage to
over 9 million workers, the largest addition to this program
since its beginning. Newly covered groups include many
agricultural and domestic workers and most State and local
government employees.
The bill makes vital changes in the system's financing in
order to restore its fiscal soundness so that unemployed
workers can continue to be assured that assistance will be
available when needed. Moreover, it removes loopholes in the
law which permitted some individuals to take advantage of the
system.
H.R. 10210 also establishes a National Commission on
Unemployment Compensation to study and make recommendations
by January 1, 1979, on unresolved problems in the system.
I am disappointed that the Congress did not adopt my
proposal for a Federal standard for the minimum unemployment
benefit amount. If unemployment compensation is to provide
meaningful support for those who have lost jobs while they look
for new ones, we should be sure that an adequate proportion of
lost wages is replaced. The Commission should give this pro-
posal prompt consideration.
In addition to its unemployment compensation provisions,
H.R. 10210 contains amendments to the Supplemental Security
Income program. I find some of these provisions ill-conceived
and they may require corrective action. Furthermore, they are
objectionable because of the unrealistic effective dates which
Congress has imposed.
2
The unemployment compensation provisions of this bill
represent the kind of cooperation and compromise between the
Congress and the Administration to enact legislation which
is in the interest of every American. As a result, the unemploy-
ment compensation system will be able to better serve the needs
of unemployed workers.
U.S. DEPARTMENT OF LABOR
OFFICE OF THE SECRETARY
WASHINGTON
OCT 13 1976
Honorable James T. Lynn
Director
Office of Management and Budget
Washington, D. C. 20503
Dear Mr. Lynn:
This is in response to your request for the Department of
Labor's views on the enrolled bill, H.R. 10210, the "Unem-
ployment Compensation Amendments of 1976. " We most strongly
urge that the bill be approved.
This bill would make several needed improvements in the
coverage and financing provisions of the laws relating to
the Federal-State unemployment insurance system. It would
also establish a National Commission on Unemployment Compen-
sation to study the major issues affecting the future of the
system.
H.R. 10210 would bring the Virgin Islands within the
Federal-State unemployment insurance system. It would
require the States, in order to participate in the Federal-
State system, to extend coverage under the regular program
to all State and local government workers. In adding new
employer categories under the Federal Employment Tax Act, it
would similarly assure State coverage for the agricultural
employees of an employer if that employer paid total remunera-
tion of $20,000 or more to individuals employed in agri-
cultural labor in any calendar quarter in the calendar year
or the preceding calendar year, or who employed 10 or more
employees for each of 20 days (each in a different calendar
week) during the calendar year or the preceding calendar
year; and for the domestic employees in private homes, local
college clubs, or local college fraternities or sororities
if such employer paid remuneration of $1,000 or more to
individuals employed in such capacity during any calendar
quarter in the calendar year or preceding calendar year.
- 2 -
The bill would extend the expiration date of the Special
Unemployment Assistance (SUA) program through June 30, 1978,
with a cut-off date for new claims of December 31, 1977.
The base period used for the SUA benefit year would be
changed to the base period used for other employees under
each State law.
The trigger provisions for Federal-State extended benefits
would be altered to provide that the 120 percent require-
ment (i.e., the insured unemployment rate (IUR) for a State
must be at least 120 percent above that of the corresponding
periods in the preceding two years in order for the State to
trigger on) could be waived by the State when the IUR
reached 5 percent. The States will be required to assume
the full cost of extended benefits for State and local
workers, but the Federal Government will pay the administra-
tive costs involved in covering these workers.
H.R. 10210 makes major improvements in the financing of the
system. The Federal tax wage base would be raised from
$4,200 to $6,000 and the Federal tax rate would be increased
from 0.5 percent to 0.7 percent until all advances to the
extended unemployment compensation account are repaid.
A Commission would be established to study the long-range
needs of the unemployment insurance system. It would study
possible alternatives and improvements and recommend changes
by January 1, 1979, with an interim report due by March 31,
1978. The Commission has seven members appointed by the
President, three members appointed by the President pro
tempore of the Senate, and three appointed by the Speaker of
the House. Of these thirteen, there will be least one
representative from each of several groups - business,
labor, small business, the Federal Government, State govern-
ment, and local government.
Among other changes that the bill would make are (1) the
allowance of a State to apply for advances on a three-month
basis rather than each month, although the payments will
continue to be advanced monthly; (2) a ban on benefits to
illegal aliens; (3) revised limitations on professional and
non-professional school employees receiving benefits between
school years; (4) repeal of the so-called "finality" clause
which limited the right of an unemployed Federal employee to
challenge the statement of the Government as to why the
- 3 -
individual was no longer employed; (5) a partial ban on
paying unemployment benefits to retirees effective on
October 1, 1979; and (6) changes in the criteria for han-
dling individuals eligible for both unemployment insurance
and aid for families with dependent children (AFDC). In
addition, amendments were made in the Supplemental Security
Income program; on these Supplemental Security Income
amendments we defer to HEW.
Many of the provisions in this bill are similar to the bill
originally submitted by the Administration, H.R. 8614. We
believe that H.R. 10210 makes important improvements in the
Federal-State unemployment system and should be signed. The
increased number of employees that will be covered under the
regular system will make emergency programs like SUA unneces-
sary in the future.
The increase in the Federal wage base to $6,000, and of the
Federal tax from 0.5 percent to 0.7 percent, will help the
financial soundness of the system. Advances from general
revenues to the extended unemployment compensation account
and to the Federal unemployment account, and loans to the
States' accounts have put a serious strain on the fiscal
integrity of the system. The changes made in this bill will
provide some of the necessary assistance to the system.
The extension of the SUA program will ease the transition
into full coverage. If SUA had not been extended many
workers would have found themselves without coverage until
their State had time to enact coverage.
Finally, establishment of the Commission will provide a
needed vehicle to generate a full discussion of the many
issues that must be answered about the future of the unem-
ployment system. The bill lists unemployment statistics
among the items that the Commission is to study. However,
we would point out that H.R. 12987, the "Emergency Jobs
Programs Extension Act of 1976," established a separate
Commission to study unemployment statistics. We would hope
that the Commission in H.R. 10210 does not spend its time on
a duplicative study.
We would, of course, have preferred a bill that adopted a
minimum Federal benefit standard as we proposed. Neverthe-
less, we urge Presidential approval of H.R. 10210.
Sincerely,
W Juany Jr.
Draft Signing Statement - H.R. 10210
It gives me great satisfaction today to sign H.R. 10210, the "Unem-
ployment Compensation Amendments of 1976." This bill is close in
its essential characteristics to my proposals introduced back in
July of 1975. When I again urged its speedy consideration this past
July, I pointed out that it was absolutely essential that we take
these steps to restore financial integrity to the unemployment compen-
sation system. The bill also makes several much needed improvements
in the coverage provisions and establishes a National Commission on
Unemployment Compensation to make recommendations by January 1, 1979,
on some major problems yet unresolved.
A serious weak spot in the system has been the lack of adequate
financing. Although the unemployment insurance system was intended
to be self-sustaining, over the past two years almost $10 billion has
had to be advanced from general revenues to the unemployment trust
funds. H.R. 10210 is designed to place this system on a sound finan-
cial footing.
The bill also brings within the system over 9 million workers including
State and local government employees, some domestics and farmworkers,
the largest addition to this program at one time since its beginning.
Until now, temporary measures such as Special Unemployment Assistance
were needed to protect these workers. However, now there is practically
universal coverage of this Nation's wage and salary workers under the
regular insurance system.
-2-
The National Commission on Unemployment Compensation will have
three members appointed by the President pro tempore of the Senate,
three appointed by the Speaker of the House of Representatives, and
seven appointed by the President. I plan to work with the Congress
so that the Commission can begin its important work at the earliest
possible date.
Finally, this bill provides for a tightening up in some qualifying
provisions of the system and ensures that benefits are paid only to
those individuals that the unemployment insurance program is intended
to cover.
Over the past two years the unemployment insurance system has been
severely tested as our first line of defense against the economic
downturn. It has functioned well in this time of stress. The men
and women responsible for administering this program at both the State
and Federal levels can look back with satisfaction on a job well done.
I hope this country and the unemployment insurance system will never
again experience a test of the magnitude which it has undergone.
However, it gives me great confidence to know that the system with-
stood the test. With the economy on its way back to good health it
is with great satisfaction that I am able to sign this bill. The bill is
the result of the combined efforts of the Administration and Congress
to repair the weaknesses of the unemployment insurance system so that
it will perform even more effectively in the future.
DEPARTMENT
OF
THE
TREASURY
DEPARTMENT OF THE TREASURY
THE
WASHINGTON, D.C. 20220
1789
ASSISTANT SECRETARY
OCT 14 1976
Dear Sir:
This is in response to your request for the views
of the Treasury Department on the enrolled bill,
H.R. 10210. Titles I and II of the enrolled bill con-
tain the most significant provisions relating to the
Internal Revenue Code, and our specific comments will
be limited to those provisions.
In general, Title I of the enrolled bill would
extend coverage under the Federal Unemployment Tax
Act ("Act") to certain State and local government
employees and to certain domestic and farm workers,
effective with respect to services performed after
December 31, 1977. The coverage of the Act would also
be extended to "employment" in the Virgin Islands.
Title II of the enrolled bill would increase the Act's
taxable wage based from $4,200 to $6,000 per year effec-
tive with respect to remuneration paid after December 31,
1977, and would increase the Federal unemployment tax
rate from 3.2 to 3.4 percent, effective with respect to
remuneration paid after December 31, 1976. The tax
rate increase would be temporary, and would expire
when all of the repayable advances to the extended
unemployment compensation account in the Federal
unemployment trust fund had been repaid.
The Treasury Department understands that the Labor
Department supports the extensions of the Act's cover-
age, the increases in the Act's wage base and rates,
and the other changes in the unemployment insurance
system provided for in the enrolled bill. The Treasury
Department generally defers to the views of the Labor
Department on policy questions regarding such matters.
- 2 -
Therefore, the Treasury Department has no objection
to the amendments to the Internal Revenue Code contained
in the enrolled bill, and recommends that the President
approve H.R. 10210.
Sincerely yours,
W illiam m. roldstern
William M. Goldstein
Deputy Assistant Secretary
Director, Office of Management and Budget
Attention: Assistant Director for Legislative
Reference, Legislative Reference Division
Washington, D.C. 20503
THE CHAIRMAN OF THE
COUNCIL OF ECONOMIC ADVISERS
WASHINGTON
October 13, 1976
Dear Mr. Frey:
This is in response to your request for my comments
on enrolled bill H. R. 10210, Unemployment Compensation
Amendments Act of 1976. I recommend that the President
sign the enrolled bill.
Much of what is in the enrolled bill is in accordance
with the President's requests -- the extension of
coverage, the increase in the Federal unemployment
compensation tax rate and tax base, and the establishment
of an unemployment compensation study commission. Some
other provisions not specifically requested are desirable.
These include the denial of benefits to persons receiving
retirement pay based on past employment, illegal aliens,
and professional athletes during the off-season. Hence,
a Presidential signature is appropriate.
Sincerely,
Alan Greenspan
Mr. James Frey
Assistant Director for
Legislative Reference
Office of Management and Budget
Washington, D. C. 20503
REVOLUTION
AMERICAN
BICENTENNIAL
1776-1976
HEALTH.
EDUCATION PREMIUM
DEPARTMENT OF HEALTH, EDUCATION. AND WELFARE
U.S.A.
OCT 14 1976
The Honorable James T. Lynn
Director, Office of Management
and Budget
Washington, D. C. 20503
Dear Mr. Lynn:
This is in response to your request for a report on
H.R. 10210, an enrolled bill "To require States to
extend unemployment compensation coverage to certain
previously uncovered workers; to increase the amount
of the wages subject to the Federal Unemployment Tax;
to increase the rate of such tax; and for other
purposes." The only provisions of concern to this Department
are those contained in title V.
In short, while we support or do not object to most of the
provisions of title V of the enrolled bill, we oppose two of
them. We also wish to note, as a general matter, the continued
lack of realism on the part of the Congress as evidenced by
effective dates of such immediacy that there is obviously
insufficient time to implement the provisions as contemplated
by the bill. Finally, we wish to bring to your attention the
high cost (perhaps $800 million over the first five fiscal
years) that would result from enactment of section 505.
Had the enrolled bill consisted solely of the provisions
contained in title V, we may well have considered recommending
a veto. However, there are several other titles contained in
the enrolled bill which are of significant interest to the
Department of Labor. Although we are not in a position to
assess the desirability of the enrolled bill as a whole, we
would not, on the basis of our problems with title V, object
to its enactment.
We have enclosed, for your information, a detailed
description of each section contained in title V of the
enrolled bill, and we will provide in this report, only a
brief summary of the individual sections.
Section 501 of the enrolled bill would amend section 1615
of the Social Security Act, pertaining to rehabilitation
services for blind or disabled individuals under the age
of 65 who are receiving supplemental security income
The Honorable James T. Lynn
2
(SSI) benefits. Currently, that section requires the
referral of all such individuals to the appropriate State
agency administering the State vocational rehabilitation
program. The section requires any individual so referred
to accept (except for good cause) any rehabilitation services
offered, and the Secretary is authorized to pay the State
agency the cost incurred in providing such services.
Section 501 of the enrolled bill would not change the
effect of section 1615 insofar as that section relates to
individuals who are sixteen or older. However, section 1615,
as it would be amended by the enrolled bill, would provide
new procedures for the referral of disabled children under
the age of sixteen and would establish a new formula for
allocating Federal funds to cover the cost of such referrals
and the provision of appropriate services. The increase in
budget authority and outlays resulting from enactment of
this section would be $30 million for each of the fiscal
years 1977 through 1979.
The Department has previously acknowledged to the Congress
that the current law does not adequately provide for the referral
of, and the provision of services to, disabled children who
are eligible for SSI benefits but who are too young to be
served by State vocational rehabilitation programs. In our
bill report on H.R. 8911, which we submitted to the Ways and
Means Committee on November 13, 1975, we supported section 5
of that bill, which provided for the referral of disabled
children to an appropriate State agency and for Federal
sharing in the cost of services. We supported this section
on the theory that it was comparable to provisions already
in effect with respect to vocational rehabilitation services
for older SSI recipients. Section 501 of the enrolled bill,
however, would in effect establish a new program of grants
to States for services provided to disabled children under
approved State plans meeting conditions to be prescribed by
the Secretary. Furthermore, section 501 includes several
constraints on cost reimbursement that will entail complex
administrative controls and will limit the effectiveness of
the service programs.
We view the establishment of a service program under title XVI
to be inappropriate. However, our reservations regarding the
enactment of this provision within the context of an income
maintenance program do not justify a veto of the enrolled
bill.
The Honorable James T. Lynn
3
Section 502 of the enrolled bill would amend section 1611
of the Social Security Act to provide that for any month
during all of which a spouse is in an institution, the couple
involved would be treated as individuals rather than as a
couple for purposes of applying their separate incomes in
computing any reduction of the SSI benefit amount. Currently,
any income of either spouse is applied to reduce the combined
SSI benefit of the couple.
We recognize that there are additional costs involved when
an individual is institutionalized, and that it is inequitable
to effectively reduce the benefits of the uninstitutionalized
spouse, who must continue to meet the usual costs of living,
by income that accrues to the institutionalized spouse and
that may be necessary to defray the costs of institutionalization.
We therefore have no objection to enactment of section 502.
We estimate that the cost of this amendment would be $5 million
per fiscal year.
Section 503 of the enrolled bill would provide that no
recipient of Federal benefits or State supplementary payments
under the SSI program would lose his "categorical eligibility"
for Medicaid as the result solely of a cost-of-living increase
under title II of the Social Security Act. Currently, as
explained in the enclosed summary of the bill, it is possible
for an SSI beneficiary to lose his SSI eligibility, and
therefore his Medicaid eligibility, solely by reason of a
cost-of-living increase under title II of the Social Security
Act. We agree that the loss of "categorical eligibility" for
Medicaid as a result of a cost-of-living increase under
Social Security could be of significant consequence to an
individual. However, on the basis of equity, we are
generally opposed to "grandfather clauses", which serve to
protect the interests of some individuals while leaving
without such protection other individuals in a similar
situation. Although we would, therefore, recommend the
veto of this provision were it the sole proposal contained
in a separate bill, our objection to section 503 is not of
sufficient significance to cause us to recommend that the
enrolled bill be vetoed. The cost of this provision would be
approximately $10 million per fiscal year.
The Honorable James T. Lynn
4
Section 504 of the enrolled bill would require that cost-of-
living increases, or any other general increase, in Federal
SSI benefits becoming effective after June 30, 1977, and
before July 1, 1979, be disregarded for purposes of determining
the amount which the Federal government must contribute to
each of the three remaining "hold-harmless" States for purposes
of title XVI of the Social Security Act. The effect of this
amendment would be to permit these three States to pass along
to SSI recipients Federal benefit increases at no additional
cost to each such State. Currently, all other States (which
receive no Federal contributions toward their State supplements)
may pass along such increases at no additional cost, but a
hold-harmless State loses a portion of its Federal hold-harmless
contribution with each such increase, and is therefore required
to increase State expenditures if it desires to pass along
any such increase. The cost of this section would be
approximately $12 million over the first two years, and a
total cost of about $50 million over the next six fiscal
years.
The fiscal liability of certain States under title XVI of the
Social Security Act is limited by section 401 of Public Law
92-603. That section, commonly referred to as the "hold-harmless"
provision, was to be a temporary provision designed to protect
States against a sudden and large increase in its aged, blind,
and disabled case load. The number of hold-harmless States
has been decreasing, and is now limited to Hawaii, Massachusetts,
and Wisconsin. We have opposed any proposal which would have
the effect of perpetuating in any form the temporary protection
afforded by section 401 of the P.L. 92-603. As is the case
with section 503 of the enrolled bill, if this section were
the sole provision of an enrolled bill, we would recommend
its veto. However, we do not believe that our opposition to
this section justifies a veto of the enrolled bill.
Section 505 of the enrolled bill would make several amendments
to title XVI of the Social Security Act pertaining to the
eligibility for SSI benefits of individuals in certain
institutions and the establishment of standards for certain
institutions. A detailed description of these amendments
is provided in the enclosed summary. The Department has
been supportive of the objectives of section 505--to eliminate
The Honorable James T. Lynn
5
disincentives for the establishment and subsidization by States
and localities of residential facilities for the aged, blind,
or disabled and to allow States and localities to supplement
Federal SSI benefits by either direct or indirect assistance
to persons in public institutions. Furthermore, we have
supported the repeal of section 1616(e) of the Social Security
Act. Although we are concerned by the potential cost of this
section (approximate cost estimates are provided in the
enclosed summary) and although we would have preferred the
repeal of section 1616 (e) to the modifications which would be
made to it by the enrolled bill, we do not object to the
enactment of section 505.
Section 506 of the enrolled bill would amend the Internal
Revenue Code of 1954, pertaining to employment taxes, and
we defer to the Department of the Treasury.
Section 507 of the enrolled bill would amend section 407
of the Social Security Act to modify the law applicable to
men who are eligible both for benefits under the Aid to
Families with Dependent Children-Unemployed Fathers (AFDC-UF)
program and for unemployment compensation. This section
is similar to a provision contained in an Administration draft
bill submitted by this Department to the Congress earlier
this year, and we support its enactment. The provision
would reduce AFDC-UF expenditures by approximately $47 million,
which would be absorbed by the unemployment insurance trust
funds.
Section 508 of the enrolled bill would require State employment
offices to furnish, at the request of the State or a local
AFDC or child support agency, certain information in their
files regarding any individual. The amendment specifies the
information which would be required to be provided.
Section 508 would likely contribute to the improved
coordination of welfare and employment programs, and we
therefore have no objection to its enactment.
The Honorable James T. Lynn
6
Thus, although we have considerable problems with title V of
the enrolled bill, we defer to the Department of Labor on
all the other titles, and we would not object to the enactment
of the enrolled bill.
Sincerely,
Maryore dyrch
Under Secretary
Enclosures
Section-by-Section Summary of Title V
of H.R. 10210
Section 501 of the enrolled bill would amend section 1615
of the Social Security Act, pertaining to rehabilitation
services for blind or disabled individuals under the age of
65 who are receiving supplemental security income (SSI)
benefits. Currently, that section requires the referral
of all such individuals to the appropriate State agency
administering the State vocational rehabilitation program.
The section requires any individual so referred to accept
(except for good cause) any rehabilitation services offered,
and the Secretary is authorized to pay the State agency
the costs incurred in providing such services.
Section 501 of the enrolled bill would not change the effect
of section 1615 insofar as that section relates to individuals
who are 16 or older. However, section 1615, as it would be
amended by the enrolled bill, would provide new procedures
for the referral for services of disabled children under the
age of 16. Under the amended section 1615, the Secretary would
be required to prescribe regulations for the approval of State
plans which would govern the referral of, and provision of
services to, SSI recipients who are under 16 and either blind
or disabled. Among other things, the plans would have to:
(1) assure appropriate counseling for disabled children,
including the establishment of individual service plans and
the prompt referral for medical, educational, and social
services; (2) provide for monitoring to assure adherence
to such service plans; and (3) provide for medical, social,
developmental, and rehabilitative services to disabled children
under age 7 and to disabled children who have never attended
public school and require preparation to take advantage of
public school, whenever such services can be expected to
enhance any such child's ability to benefit from education
or training or to improve his chances for self-support as
an adult. Children under the age of 16 would not lose their
SSI eligibility on account of failure to accept services to
which they are referred. The State plan would be administered
by the agency administering the crippled children's program
under title V of the Social Security Act or by any other
agency, designated by the Governor, which provides services
to disabled children.
2
Section 1615, as amended, would also specify a new funding
procedure for providing services to disabled children.
Whereas services provided pursuant to the current section 1615
are fully reimbursed by the Federal government, and such
services provided to adults under the revised section 1615
would continue to be fully covered without limitation,
Federal financial participation with respect to services
provided to disabled children under the revised section 1615
would be limited (except when such services are provided by
the State vocational rehabilitation agency) by an allotment
formula. The maximum Federal outlay for reimbursing States
for rehabilitation services provided under the new referral
procedures to disabled children receiving SSI benefits
would be $30 million for each of the fiscal years 1977 through
1979. The funds would be allotted to States on the basis
of each State's population of children under age 7. The
revised section 1615 would impose certain other conditions
on the use of the funds, including earmarking 90 percent
of each State's allotment for children under age 7, preventing
the use of the new funds as a replacement for State or local
funds, and limiting the new funds to costs related to meeting
the special needs of disabled children. It should be noted
that the Conference Report (H. Rept. No. 94-1745) makes clear
that the new referral procedures for children under 16 do not
preclude the referral of such children to the State vocational
rehabilitation agency. In any such instance, Federal financing
of the cost would not be limited by the allotment formula.
Lastly, this section would require the Department of Health,
Education, and Welfare to publish, within 120 days of enactment,
criteria for determining the disability of individuals
under the age of 18.
Section 502 of the enrolled bill would amend section 1611
of the Social Security Act to provide that for any month
during all of which a spouse is in an institution, the
couple involved would be treated as individuals rather than
as a couple for purposes of applying their separate incomes
in computing any reduction of the SSI benefit amount.
Currently, any income of either spouse is applied to reduce
the total SSI benefit of the couple.
Section 503 of the enrolled bill would provide that no
recipient of Federal benefits or State supplementary payments
under the SSI program would lose his "categorical eligibility"
3
for Medicaid as the result solely of a cost-of-living increase
under title II of the Social Security Act. Currently,
because cost-of-living increases under both titles II and XVI
of the Social Security Act are based upon an identical
percentage of the benefit amount, and because, in determining
the SSI benefit amount payable to an individual, there is
disregarded $20 of other income per month, the title II
benefit for an individual can exceed the SSI benefit and
therefore his title II benefit increase can be greater than
his SSI benefit increase. This circumstance can eventually
have the effect of making the individual ineligible for SSI,
and thus for Medicaid. Section 503 of the enrolled bill
would preserve the Medicaid eligibility of such individuals.
Section 504 of the enrolled bill would require that cost-of-
living increases, or any other general increase, in Federal
SSI benefits becoming effective after June 30, 1977, and
before July 1, 1979, be disregarded for purposes of determining
the amount which the Federal government must contribute to
each of the three remaining "hold-harmless" States. The effect
of this amendment would be to permit these three States to
pass along to SSI recipients Federal benefit increases at
no cost to each such State. Currently, any other State may
pass along such increases at no additional cost, but a hold-
harmless State loses a portion of its Federal hold-harmless
contribution with each such increase, and is therefore required
to increase State expenditures if it desires to pass along any
such increase.
Section 505 of the enrolled bill would make several amendments
to title XVI of the Social Security Act pertaining to the
eligibility for SSI benefits of individuals in certain
institutions and the establishment of standards for certain
institutions. First, the enrolled bill would provide that
the prohibition against SSI payments to persons in public
institutions not apply in the case of publicly operated
community residences which serve no more than 16 residents.
The enrolled bill would also provide that Federal SSI
payments would not be reduced in the case of assistance
provided by States and localities which is based upon need.
Currently, this exclusion is limited to cash payments
made on a regular basis in supplementation of the SSI
benefit amounts.
4
Thirdly, section 505 of the enrolled bill would repeal the
current section 1616 (e) of the Social Security Act. That
section currently provides that Federal SSI payments be
reduced in the case of payments made by States or localities
for medical or any other type of remedial care provided by
an institution if the care is or could be provided in a
medicaid institution. This requirement was originally
incorporated into the SSI statute to prevent the use of SSI
benefits as a means of evading Federal Medicaid requirements
and thus of funding care in substandard facilities. However,
because of its complexity, the Department has not been
able to enforce this requirement. Instead of the current
section 1616 (e), the enrolled bill would, effective October 1,
1977, add a new section 1616(e), which would require each
State to establish or designate State or local authorities
to establish, maintain and insure the enforcement of standards
for any category of institutions, foster homes, or group
living arrangements in which (as determined by the State)
a significant number of SSI recipients is residing. The
standards would have to be appropriate to the needs of the
recipients and the character of the facilities involved.
They would govern admission policies, safety, sanitation,
and protection of civil rights.
The revised section 1616 (e) would also require each State
to make available for public review, as a part of its social
services program planning procedures under title XX of the
Social Security Act, a summary of the standards, and to make
available to any interested individual a copy of the standards
and the procedures available in the State to insure their
enforcement. There would have to be made available a list
of any waivers of standards which have been made and any
violations of standards which have come to the attention of
the enforcement authority. Each State would be required to
certify annually to the Secretary of Health, Education, and
Welfare that it is in compliance with the requirements for
State standards. The bill would also provide for the reduction
of Federal payments in the case of any person who is in an
institution not approved under State standards as determined
by the appropriate State or local authorities.
5
The eventual cost of section 505 of the enrolled bill depends
upon how States will react to its enactment. However, for
purposes of guidance in estimating the potential cost, the
following chart shows the approximate range within which costs
are likely to fall (in millions) :
1977
1978
1979
1980
1981
8-16
39-81
78-161
116-242
155-323
Section 507 of the enrolled bill would amend section 407 of
the Social Security Act to modify the law applicable to men
who are eligible both for benefits under the Aid to Families
with Dependent Children--Unemployed Fathers (AFDC-UF) program
and for unemployment compensation. Currently, as the result
of the Supreme Court decision in Philbrook V. Glodgett,
95 S. Ct. 1893 (1975) an unemployed father who is eligible
for unemployment compensation benefits has the option of
applying for either unemployment compensation benefits or
AFDC-UF benefits, but cannot, with respect to any week receive
benefits under both programs. The amendment to section 407
would require that an applicant for AFDC-UF benefits apply
for and accept any unemployment compensation benefits to
which he is entitled. The applicant may then claim any
AFDC-UF benefits to which he would be entitled, but those
benefits would be reduced by the amount of the unemployment
benefits which he receives.
Section 407 of the Social Security Act, as that section would
be amended by section 507 of the enrolled bill, would also
require the Secretary of Health, Education, and Welfare and
the Secretary of Labor to jointly enter into an agreement
with any State for the purpose of reducing the number of
registration requirements imposed upon AFDC-UF recipients.
It is expected that in those States where the Work Incentive
Program (WIN) is operating, recipients of AFDC-UF benefits
would be required to register only with WIN and not, as is
now required, with both the WIN program and the State
Employment Service. Where WIN is not available, these
recipients would register with the Employment Service.
6
Section 508 of the enrolled bill would require State
employment offices, at the request of a State or local
AFDC or child support agency, to furnish information in
their files regarding any individual. The information to
be provided would include: (1) whether such individual is
receiving, has received, or has made application for,
unemployment compensation, (2) the current home address, and
(3) whether such individual has refused an offer of employment.
The State employment offices would be reimbursed for the
cost of supplying the information by the welfare or child
support agency which requested the information, and the costs
would be considered as expenditures incurred in the administration
of the applicable State plan approved under title IV of the
Social Security Act.
FACT SHEET
TITLE V OF H.R. 10210
Section 501 of the bill provides new procedures for
the referral for rehabilitation services of blind or
disabled children who are receiving supplemental security
income (SSI) benefits. Currently, such children are
referred, as is the case with disabled adults, to the
State vocational rehabilitation agency. However, because
of their age, the children usually are not provided
services by the agency. The section also provides
an additional $30 million in Federal funding for the
provision of services to such disabled children.
Section 502 of the bill provides that married couples
be treated as individuals for purposes of determining
SSI benefits when one of the spouses is in an institution.
Section 503 of the bill preserves the categorical
eligibility for Medicaid of individuals who become
ineligible for SSI benefits solely by reason of
social security cost-of-living increases.
Section 504 of the bill has the effect of allowing
the three remaining "hold-harmless" States--Massachusetts,
Wisconsin, and Hawaii--to pass along to SSI beneficiaries
Federal cost-of-living increases at no additional cost to
the States.
Section 505 of the bill makes several amendments to title XVI
of the Social Security Act pertaining to the eligibility
for SSI benefits of individuals in certain institutions
and the establishment of standards for certain institutions.
Section 507 of the bill modifies the law applicable to
men who are eligible both for benefits under the Aid
to Families with Dependent Children-Unemployed Fathers
program and for unemployment compensation.
Section 508 of the bill requires State employment
offices to furnish certain information to the State
or local AFDC or child support agency.
DEPARTMENT OF COMMERCE
GENERAL COUNSEL OF THE
UNITED STATES DEPARTMENT OF COMMERCE
UNITED STATES OF AMERICA
Washington, D.C. 20230
OCT 13 1976
Honorable James T. Lynn
Director, Office of Management
and Budget
Washington, D. C. 20503
Attention: Assistant Director for Legislative Reference
Dear Mr. Lynn:
This is in reply to your request for the views of this Department
concerning H.R. 10210, an enrolled enactment
"To require States to extend unemployment compensation
coverage to certain previously uncovered workers; to
increase the amount of the wages subject to the Federal
unemployment tax; to increase the rate of such tax; and
for other purposes. "
This legislation makes a number of amendments to the unemployment
compensation program, among which are the extension of coverage to
additional workers, an increase in the rate base and the tax levied on
that base, the establishment of a National Commission on Unemployment
Compensation and revision of the trigger provision of the extended
benefit program.
The Department of Commerce would interpose no objection to
approval by the President of H.R. 10210.
Enactment of this legislation would involve no additional expenditure
of funds by this Department.
REVOLUTION
AMERICAN
BICENTENNIAL
1776-1976
@
,SSISTANT ATTORNEY GENERAL
LEGISLATIVE AFFAIRS
Department of Justice
Washington, D.C. 20530
October 14, 1976
Honorable James T. Lynn
Director
Office of Management and Budget
Washington, D.C. 20503
Dear Mr. Lynn:
In compliance with your request, I have examined a
facsimile of the enrolled bill H.R. 10210, the "Unemployment
Compensation Amendments of 1976". The bill's purposes are
"To require States to extend unemployment compensation
coverage to certain previously uncovered workers; to increase
the amount of the wages subject to the Federal unemployment
tax; to increase the rate of such tax; and for other purposes."
The Department of Justice has no expertise in the
area of unemployment compensation systems. Therefore we
defer to the judgment of the Department of Health, Education,
and Welfare and to that of the Department of the Treasury on
the question whether the bill merits Executive approval.
However, we note that to the extent H.R. 10210 succeeds in
its expressed purpose to "require States to extend unemploy-
ment compensation coverage to certain previously uncovered"
State employees (see sections 114 and 115 of the bill), it
may run afoul of the same constitutional limits which in-
validated a similar effort to bring State employees within
the overtime provisions of the Fair Labor Standards Act in
the case of National League of Cities V. Usery,
U.S.
, in
June of this year. The Court there held a federal statute
requiring that States compensate their employees under prescribed
terms and conditions to be an impermissible invasion of
basic sovereign attributes of the several States. There
is a substantial likelihood that the same analysis would
apply in this instance.
Sincerely,
Wichael W. William
Michael M. Uhlmann
Assistant Attorney General
Office of Legislative Affairs
- 2 -
UNITED
STATE
CIVIL SERVICE COMMUNITY
UNITED STATES CIVIL SERVICE COMMISSION
WASHINGTON, D.C. 20415
CHAIRMAN
October 13, 1976
Honorable James T. Lynn
Director
Office of Management and Budget
Attention: Assistant Director for
Legislative Reference
Dear Mr. Lynn:
This is in reply to your request for the views of the Civil Service
Commission on enrolled H.R. 10210, a bill "To require States to extend
unemployment compensation coverage to certain previously uncovered
workers; to increase the amount of the wages subject to the Federal
unemployment tax; to increase the rate of such tax; and for other
purposes. We are limiting our comments to sections 313 and 411
of H.R. 10210.
Section 313 of title 3 of H.R. 10210 contains language repealing the
"finality" provision of section 8506(a) of title 5, United States Code.
As we noted earlier in our proposed report to the Chairman, Committee
on Finance, United States Senate, this amendment would permit a State
agency in its administration of the Unemployment Insurance Program to
review and make determinations on the validity of the findings of
Federal agencies. It would also afford to former Federal employees the
right of a hearing and a determination under State law with respect to
the cause of separation from employment as is now provided for all other
workers in a State. The effect of the repeal would be to have the
judgment of State Unemployment Insurance officials supersede that of
Federal employing agency officials on questions of fact. We object in
general to this principle.
Although determinations or conclusions made by a State agency in con-
nection with claims for unemployment compensation would not affect the
status of employment of a former Federal employee, we see potential
problems, particularly when a former Federal employee uses a determina-
tion made by a State agency that contradicts the findings of a Federal
employing agency or the Civil Service Commission as a basis for challeng-
ing the validity of a separation in a Federal district court. The
Commission is particularly opposed to this amendment as it is presently
worded. The addition of a specific statement that a determination made
under the Unemployment Insurance Program shall have no other application
or effect except that of the determination of entitlement of a former
Federal employee to unemployment compensation would make this amendment
more acceptable.
-2-
To accomplish this, we previously recommended that the fifth sentence of
section 8506(a) of title 5, United States Code be deleted and the fol-
lowing language substituted:
"A procedure established to make determinations pursuant to
sections 8502(d) and 8503(c) of this title shall be solely
for the purpose of determining the entitlement of a Federal
employee to compensation under this chapter, and a decision
issued following that procedure shall have no other applica-
tion or effect."
Since our recommended amendment is no longer possible for this enrolled
bill, it seems important that the legislative history show the Commis-
sion's position and clear intent that any review by a State agency can
have no effect on a Federal action taken against an employee.
Section 411 would establish a Commission on Unemployment Compensation.
Since this Commission would go out of existence by early 1979, the
Civil Service Commission does not object to the provisions of this
section which exclude staff members from provisions of title 5, United
States Code, governing appointments in the competitive service and
classification and pay under the General Schedule.
Although the Commission still finds the provisions of section 313 to be
objectionable, we do not believe that this objection merits our recom-
mending that the President not sign the enrolled bill. Since the Civil
Service Commission has no substantive concerns in the Unemployment
Compensation program, we defer to the recommendations of the Department
of Labor and the Department of Treasury.
By direction of the Commission:
Sincerely yours,
ACTING
Chairman
DISCRIPT COMM
ADVISORY
ACIR
COMMISSION ON INTERGOVERNMENTAL RELATIONS
INTERNATED RNMENTAL
WASHINGTON, D.C. 20575
October 14, 1976
Mr. James M. Frey
Assistant Director for
Legislative Reference
Office of Management and Budget
New Executive Office Building
Washington, D.C. 20503
Dear Mr. Frey:
The Unemployment Compensation Amendments of 1976
(H.R. 10210), among other things, require States to
extend unemployment compensation coverage to all State
and local employees except, in effect, those who are
elected or on political appointments, or those employed
temporarily. The legislation thus mandates an additional
cost on State and local governments as employers of
workers covered by the unemployment compensation program.
The Advisory Commission on Intergovernmental Relations
in its study, Labor-Management Policies for State and
Local Government recommended that:
Congress desist from any further mandating
of requirements affecting the working condi-
tions of employees of State and local govern-
ments or the authority of such jurisdictions
to deal freely or to refrain from dealing with
their respective personnel.
This recommendation was prompted by the 1966 amendments
to the Fair Labor Standards Act which extended coverage
to include government employees working in hospitals,
schools, higher education institutions and special training
and rehabilitative institutions. The supporting text for
this recommendation stated in part:
-2-
The Administration and Congress should
abstain from any further mandating of require-
ments affecting the working conditions of State
and local personnel, either by additional amend-
ments of the Fair Labor Standards Act or by
other statutory routes.
any additional man-
dating of salaries, wages and working conditions
can only be interpreted as an unconscionable
Federal reordering of the fiscal priorities of
State and local governments. If such an action
were to be taken, then Congress in all fairness
should simultaneously enact legislation providing
the funds required for adherence to the standards
stipulated.
H.R. 10210 provides Federal financial help to States
in the administration of the program. The Federal Govern-
ment will share more generously during a transition period
the cost of claims by persons who moved from uncovered to
covered status. The bill will not, however, provide
Federal help to States and localities in meeting the
burden of having their employees covered by the unemploy-
ment compensation program.
The extension of coverage of the Unemployment Compensa-
tion Amendments of 1976 (H.R. 10210) to all State and local
government employees who are not elected or on political
appointments is contrary to the position taken by this
Commission in September 1969.
In light of the Commission's recommendation, it would
be opposed to those portions of H.R. 10210 which relate
to State and local government employees. At the same time,
the Commission has not examined the other issues covered
in this bill and takes no position on them.
Sincerely,
Wayne Executive Wayne F. f Anderson Anderson Director
THE WHITE HOUSE
ACTION MEMORANDUM
WASHINGTON
LOG NO.
13
Date:
October 15
Time: 400pm
FOR ACTION: David Lissy-
CC (for information):
Jack Marsh-
Max Friedersdorf
Ed Schmults,
Steve McConahey-
Spencer Johnson
Mike Duval
Bobbie Kilberg
Bill Seidman
Robert Hartmann-
Paul Leach
FROM THE STAFF SECRETARY
DUE: Date: October 18
Time: 200pm
SUBJECT:
H. R.10210-Unemployment Compensation Amendments of 1976
ACTION REQUESTED:
For Necessary Action
For Your Recommendations
Prepare Agenda and Brief
Draft Reply
X
For Your Comments
Draft Remarks
REMARKS:
please return to judy johnston, ground floor west wing
approl
MS
PLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.
If you have any questions or if you anticipate a
delay in submitting the required material, please
James N. Cannon
telephone the Staff Secretary immediately.
For the President
THE WHITE HOUSE
A
MEMORANDUM
WASHINGTON
LOG NO.:
13
Da.
October 15
Time: 400pm
FOR ACTION: David Lissy-
cc (for information):
Jack Marsh-
Max Friedersdorf
Ed Schmults,
Steve McConahey-
Spencer Johnson
Mike Duva
Bobbie Kilberg-
Bill Seidman
Robert Hartmann
Paul Leach
FROM THE STAFF SECRETARY
DUE: Date: October 18
Time: 200pm
SUBJECT:
H.R.10210-Unemployment Compensation Amendments of 1976
ACTION REQUESTED:
For Necessary Action
For Your Recommendations
Prepare Agenda and Brief
Draft Reply
X
For Your Comments
Draft Remarks
REMARKS:
please return to judy johnston, ground floor west wing
Sign Signature. statement MDmal
PLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.
If you have any questions or if you anticipate a
delay in submitting the required material, please
James N. Cannon
telephone the Staff Secretary immediately.
For the President
THE WHITE HOUSE
ACTI
RANDUM
WASHINGTON
LOG NO.
13
Date:
tober 15
Time: 400pm
FOR ACTION: David Lissy-
CC (for information): Jack Marsh-
Max Friedersdorf
Ed Schmults,
Steve McConahey-
Spencer Johnson
Mike Duval
Bobbie Kilberg-
Bill Seidman
Robert Hartmann-
Paul Leach
FROM THE STAFF SECRETARY
DUE: Date: October 18
Time: 200pm
SUBJECT:
H. .R.10210-Unemployment Compensation Amendments of 1976
ACTION REQUESTED:
For Necessary Action
For Your Recommendations
Prepare Agenda and Brief
Draft Reply
X
For Your Comments
Draft Remarks
REMARKS:
please return to judy johnston, ground floor west wing
Defer to Lissy & Johnson
Pch
10/15/76
PLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.
If you have any questions or if you anticipate a
delay in submitting the required material, please
James M. Cannon
telephone the Staff Secretary immediately.
For the President
THE WHITE HOUSE
ACTION IEMORANDUM
WASHINGTON
LOG NO.
13
Date:
tober 15
Time: 400pm
FOR ACTION: David Lissy-
CC (for information): Jack Marsh-
Max Friedersdor
Ed Schmults,
Steve McConahey-
Spencer Johnson
Mike Duval
Bobbie Kilberg-
Bill Seidman
Robert Hartmann
Paul Leach
FROM THE STAFF SECRETARY
DUE: Date: October 18
Time: 200pm
SUBJECT:
H. .R.10210-Unemployment Compensation Amendments of 1976
ACTION REQUESTED:
For Necessary Action
For Your Recommendations
Prepare Agenda and Brief
Draft Reply
X
For Your Comments
Draft Remarks
REMARKS:
please return to judy johnston, ground floor west wing
Recommend approval & signing
armony my
R.
PLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.
If you have any questions or if you anticipate a
delay in submitting the required material, please
James N. Cannon
telephone the Staff Secretary immediately.
For the President
10/20
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND BUDGET
WASHINGTON, D.C. 20503
OCT 15 1976
10-13-76pm.
MEMORANDUM FOR THE PRESIDENT
Subject: Enrolled Bill H.R. 10210 - Unemployment Compensation
Amendments of 1976
Sponsor - Rep. Corman (D) California and 6 others
Last Day for Action
October 20, 1976 - Wednesday
Purpose
Extends unemployment compensation coverage to certain agricultural
workers, domestic service workers, and State and local government
workers; improves the financing of the system by increasing the
taxable wage base and the tax rate; permits the Virgin Islands
to join the unemployment compensation system; extends for 1 year,
until December 31, 1977, and amends the Special Unemployment As-
sistance program (SUA) ; establishes a National Commission on
Unemployment Compensation; makes other changes in the unemployment
compensation program; and amends the Supplemental Security Income
program (SSI).
Agency Recommendations
Office of Management and Budget
Approval (Signing state-
ment attached)
Department of Labor
Approval (Signing state-
ment attached)
Department of the Treasury
Approval
Council of Economic Advisers
Approval
Department of Health, Education,
and Welfare
No objection
Department of Commerce
No objection
Department of Agriculture
No objection Informally)
Department of Justice
Defers to HEW and Treasury
Department of the Interior
Defers to other agencies
Civil Service Commission
Defers to Labor and Treasury
Advisory Commission on Intergovern-
mental Relations
No recommendation
THE WHITE HOUSE
ACTIO MEMORANDUM
WASHINGTON
LOG NO.
13
Date:
ctober 15
Time: 400pm
FOR ACTION: David Lissy-
CC (for information): Jack Marsh-
Max Friedersdorf
Ed Schmults
Steve McConahey
Spencer Johnson
Mike Duval
Bobbie Kilberg
Bill Seidman
Robert Hartmann
Paul Leach
FROM THE STAFF SECRETARY
DUE: Date: October 18
Time: 200pm
SUBJECT:
H. R.10210-Unemployment Compensation Amendments of 1976
ACTION REQUESTED:
For Necessary Action
For Your Recommendations
Prepare Agenda and Brief
Draft Reply
X
For Your Comments
Draft Remarks
REMARKS:
please return to judy johnston, ground floor west wing
No objection -- Ken Lazarus 10/18/76
PLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.
If you have any questions or if you anticipate a
delay in submitting the required material, please
James N. Cannon
telephone the Staff Secretary immediately.
For the President
Date:
October 15
Time: 400pm
FOR ACTION: David Lissy
CC (for information): Jack Marsh-
Max Friedersdorf
Ed Schmults
Steve McConahey-
Spencer Johnson
Mike Duval
Bobbie Kilberg-
Bill Seidman
Robert Hartmann
Paul Leach
FROM THE STAFF SECRETARY
DUE: Date: October 18
Time: 200pm
SUBJECT:
H. .R.10210-Unemployment Compensation Amendments of 1976
ACTION REQUESTED:
For Necessary Action
For Your Recommendations
Prepare Agenda and Brief
Draft Reply
X
For Your Comments
Draft Remarks
REMARKS:
please return to judy johnston, ground floor west wing
10-18
Sign for me. I'm waiting
In me Cometry on report on venes NACO etal before
femal decision The ceremony. statemen nelds a good deal
Munk.
my
PLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.
If you have any questions or if you anticipate a
delay in submitting the required material, please
James N. Cannon
telephone the Staff Secretary immediately.
For the President
STATEMENT BY THE PRESIDENT
I am pleased to sign the Unemployment Compensation
QA
Amendments of 1976, H.R. 10210. This bill which significantly
improves our unemployment compensation system incorporated
many of the recommendations proposed by my Administration in
July 1975.
H.R. 10210 extends unemployment compensation coverage to
over 9 million workers, the largest addition to this program
since its beginning. Newly covered groups include many
agricultural and domestic workers and most State and local
government employees.
The bill makes vital changes in the system's financing in
the
Then
order to restores fiscal soundness so that unemployed
besunt
workers can continue to be assured that assistance will be
available when needed. Moreover, it removes loopholes in the
law which permitted some individuals to take advantage of the
system.
H.R. 10210 also establishes a National Commission on
Unemployment Compensation to study and make recommendations
by January 1, 1979, on unresolved problems in the system.
I am disappointed that the Congress did not adopt my
a question
including
proposal for a Federal standard for the minimum unemployment
this.
benefit amount. If unemployment compensation is to provide
meaningful support for those who have lost jobs while they look
for new ones, we should be sure that an adequate proportion of
lost wages is replaced. The Commission should give this pro-
posal prompt consideration.
In addition to its unemployment compensation provisions,
H.R. 10210 contains amendments to the Supplemental Security
Income program. I find some of these provisions ill-conceived
and they may require corrective action. Furthermore, they are
objectionable because of the unrealistic effective dates which
ngress has imposed.
10/15/76 - 4 :45 form
THE WHITE HOUSE
ACTION MEMORANDUM
WASHINGTON
LOG NO.
13
Date: October 15
Time: 400pm
MB
FOR ACTION: David Lissy-
CC (for information): Jack Marsh-
Max Friedersdorf
Ed Schmults,
Steve McConahey-
Spencer Johnson
Mike Duval
Bobbie Kilberg-
Bill Seidman
Robert Hartmann Paul Leach
40
FROM THE STAFF SECRETARY
to
10/16/1:29
was
DUE: Date: October 18
Time: 200pm
SUBJECT:
10/16/2:05 tools
H.R.10210-Unemployment Compensation Amendments of 1976
ACTION REQUESTED:
For Necessary Action
For Your Recommendations
Prepare Agenda and Brief
Draft Reply
X
For Your Comments
Draft Remarks
REMARKS:
please return to judy johnston, ground floor west wing
OK/MWB
PLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.
If you have any questions or if you anticipate a
delay in submitting the required material, please
James N. Cannon
telephone the Staff Secretary immediately.
For the President
STATEMENT BY THE PRESIDENT
on
I am pleased to sign the Unemployment Compensation
Amendments of 1976, H.R. 10210. This bill which significantly
improves our unemployment compensation system incorporated
many of the recommendations proposed by my Administration in
July 1975.
H.R. 10210 extends unemployment compensation coverage to
of
over 9 million workers, the largest addition to this program
since its beginning. Newly covered groups include many
agricultural and domestic workers and most State and local
government employees.
The bill makes vital changes in the system's financing in
order to restore its fiscal soundness so that unemployed
workers can continue to be assured that assistance will be
available when needed. Moreover, it removes loopholes in the
law which permitted some individuals to take advantage of the
system.
as
H.R. 10210 also establishes a National Commission on
Unemployment Compensation to study and make recommendations
a
by January 1, 1979, on unresolved problems in the system.
I am disappointed that the Congress did not adopt my
proposal for a Federal standard for the minimum unemployment
benefit amount. If unemployment compensation is to provide
meaningful support for those who have lost jobs while they look
for new ones, we should be sure that an adequate proportion of
lost wages is replaced. The Commission should give this pro-
posal prompt consideration.
In addition to its unemployment compensation provisions,
H.R. 10210 contains amendments to the Supplemental an Security
on
Income program. I find some of these provisions ill-conceived
and they may require corrective action. Furthermore, they are
objectionable because of the unrealistic effective dates which
Congress has imposed.
2
The unemployment compensation provisions of this bill
represent the kind of cooperation and compromise between the
Congress and the Administration to enact legislation which
is in the interest of every American. As a result, the unemploy-
ment compensation system will be able to better serve the needs
of unemployed workers.
THE WHITE HOUSE
WASHINGTON
October 18, 1976
MEMORANDUM FOR:
JUDY JOHNSTON
sem
FROM:
STEVE McCONAHEY
SUBJECT:
H.R. 10210
Unemployment Compensation
Amendments of 1976
Although H.R. 10210 would provide for needed unemployment
compensation coverage, some public interest groups strongly
oppose this bill because of its financial effect on state
and local units of government; one group favors it.
Because of its divided constituency, the National Governors'
Conference is in favor of the bill. Many states already
have compensation programs and thus would not be severely
affected.
The National League of Cities-U.S. Conference of Mayors
and the National Association of Counties all do not question
the concept of unemployment compensation, but do raise
questions about the source of funding for these payments.
Estimates of costs vary from jurisdiction to jurisdiction,
but two examples were given by NACo: Los Angeles County
estimates that this bill would cost it over $21 million per
year, effective January, 1978. This county already provides
severance pay which it contends costs much less than the
proposed program.
Alameda County, California, also estimates a considerable
cost. Using SUA data for the past year, county officials
estimated that Alameda County alone would have paid out
$1,849,538 in unemployment compensation benefits in 1975.
(That figure does not include administrative costs.)
Other arguments presented by NACo against the bill
are:
1- To meet payment requirements, counties would have
to fire present employees and would thus create
more unemployment.
2- Counties would have to discourage part-time work
and shared employment in order to meet the cost.
3- Because county government is substantially different
from the private sector, it cannot be expected to
assume this burden as easily as private employers.
One factor here is that 85 per cent of the locally
guaranteed tax revenues are provided through in-
elastic property taxes which, in many areas, are
at the maximum level tolerable.
4- Local units which now voluntarily contribute to
state plans might lose the amount of credit they
have accrued with their states. States which
cover local units include Connecticut, Wisconsin,
Rhode Island, Minnesota and Hawaii.
NACo and the League of Cities-U.S. Conference of Mayors
all lobbied very actively in Congress against this bill
because of these factors.
The President has indicated that he approves this legisla-
tion and undoubtably will sign it. But, he should be aware
of the potential financial burden that it will place on
local and county governments.
THE WHITE HOUSE
ACTION MEMORANDUM
WASHINGTON
LOG NO.:
13
Date: October 15
Time: 400pm
FOR ACTION: David Lissy-
CC (for information): Jack Marsh-
Max Friedersdorf
Ed Schmults
Steve McConahey-
Spencer Johnson
Mike Duval are
Bobbie Kilberg
Bill Seidman
Robert Hartmann-
Paul Leach
FROM THE STAFF SECRETARY
DUE: Date: October 18
Time: 200pm
SUBJECT:
H.R.10210-Unemployment Compensation Amendments of 1976
ACTION REQUESTED:
For Necessary Action
For Your Recommendations
Prepare Agenda and Brief
Draft Reply
x
For Your Comments
Draft Remarks
REMARKS:
please return to judy johnston, ground floor west wing
Cincur w/ approval
89
PLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.
If you have any questions or if you anticipate a
delay in submitting the required material, please
James M. Cannon
telephone the Staff Secretary immediately.
For the President
THE CHAIRMAN OF THE
COUNCIL OF ECONOMIC ADVISERS
WASHINGTON
October 20, 1976
MEMORANDUM FOR JAMES M. CANNON
FROM: ALAN GIRENSPA GREENSPAN
This is in response to your request for the views
of the Council of Economic Advisers regarding a Justice
Department proposal to allocate a specific portion of
public works construction funds (provided under Title I
of the Public Works Employment Act of 1976) for the
renovation of State and local penal institutions.
I think the proposal is a good one. There seems
to be a clear need for rehabilitation of prison facilities
and it fits in well with the President's anticrime program.
However, I am worried that dedication of a set percentage
of the funds available for construction could limit the
ability of States and localities to make use of the
provisions of this legislation, thus delaying its anti-
recession impact. I would therefore recommend your
Option 2 which directs the Assistant Secretary of Commerce
for Economic Development to give prison projects "high
priority" in allocating funds under the Public Works
Employment Act -- as the best and most flexible course
of action.
REVOLUTION
AMERICAN
BICENTENNIAL
1776-1976
I am pleased to sign the Unemployment Compensation
Amendments of 1976, H.R. 10210. This bill incorporates
many of the recommendations proposed by my Administration in
July 1975. It significantly improves our unemployment
compensation system.
In particular, this bill makes vital changes in the
unemployment compensation system's financing. It restores
the fiscal soundness of the system so that unemployed workers
can be sure assistance will be available when needed.
Moreover, the bill clarifies some aspects of the law to ensure
that benefits are paid only to those individuals the program
is intended to cover. example, it now makes it clear that
mofessional
athletes
between
sports
be
eligible.
H.R. 10210 extends unemployment compensation coverage to
This
over 9 million workers. the largest addition to this program
since its beginning. Newly covered groups include many
agricultural and domestic workers and most State and local
government employeers.
H.R. 10210 also establishes a National Commission on Unemploy-
ment Compensation to study and make recommendations by January 1,
1979, on unresolved problems in the system.
In addition to its unemployment compensation provisions,
H.R. 10210 contains amendments to the Supplemental Security
Income program. I find some of these provisions ill-conceived
and they may requir corrective action. Furthermore, they are
objectionable because of the unrealistic effective dates which
Congress has imposed.
The unemployment compensation provisions of this bill
represent the kind of cooperation and compromise between the
Congress and the Administration to enact legislation which
is in the interest of every American. As a result, the unemploy-
our nation
ment compensation system will be able to better sèrve the needs
STATEMENT BY THE PRESIDENT
I am pleased to sign the Unemployment Compensation
Amendments of 1976, H.R. 10210. This bill incorporates
many of the recommendations proposed by my Administration
in July 1975. It significantly improves our unemployment
compensation system.
In particular, this bill makes vital changes in the
unemployment compensation system's financing. It restores
the fiscal soundness of the system so that unemployed
workers can be sure assistance will be available when
needed. Moreover, the bill clarifies some aspects of the
law to ensure that benefits are paid only to those indi-
viduals the program is intended to cover.
H.R. 10210 extends unexployment compensation coverage
to over nine million workers. This is the largest addition
to this program since its beginning.
H.R. 10210 also establishes a National Commission on
Unemployment Compensation to study and make recommendations
by January 1, 1979, on unresolved problems in the system.
The unemployment compensation provisions of this bill
represent the kind of cooperation and compromise between
the Congress and the Administration to enact legislation
which is in the interest of every American. As a result,
the unemployment compensation system will be able to better
serve our nation.
n
0
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"ocrText": "The original documents are located in Box 67, folder \"1976/10/20 HR10210 Unemployment\nCompensation Amendments of 1976 (1)\" of the White House Records Office: Legislation\nCase Files at the Gerald R. Ford Presidential Library.\nCopyright Notice\nThe copyright law of the United States (Title 17, United States Code) governs the making of\nphotocopies or other reproductions of copyrighted material. Gerald R. Ford donated to the United\nStates of America his copyrights in all of his unpublished writings in National Archives collections.\nWorks prepared by U.S. Government employees as part of their official duties are in the public\ndomain. The copyrights to materials written by other individuals or organizations are presumed to\nremain with them. If you think any of the information displayed in the PDF is subject to a valid\ncopyright claim, please contact the Gerald R. Ford Presidential Library.\nExact duplicates within this folder were not digitized.\nDigitized from Box 67 of the White House Records Office Legislation Case Files at the Gerald R. Ford Presidential Library\nAPPROVED\n8/10/20/76\nstatement\nTHE WHITE\nACTION\nWASHINGTON\nLast Day: October 20\nOctober 18, 1976\nMEMORANDUM FOR\nTHE PRESIDENT\nRostoch\nFROM:\nJIM CANNON\nSUBJECT:\nH.R. 10210 - Unemployment Compensation\n110/21/26\nAmendments of 1976\nAttached for your consideration is H.R. 10210, sponsored by\nRepresentative Corman and six others.\narching 01/0/21/76\nThe enrolled bill would:\n-- extend unemployment compensation coverage to certain\nagricultural workers, domestic service workers, and\nState and local government workers;\n-- improve the financing of the system by increasing the\ntaxable wage base and the tax rate;\n-- permit the Virgin Islands to join the unemployment\ncompensation system;\n-- extend for one year, until December 31, 1977, and\namend the Special Unemployment Assistance program;\n-- establish a National Commission on Unemployment\nCompensation;\n-- make other changes in the unemployment compensation program;\n-- amend the Supplemental Security Income program (SSI)\nA detailed discussion of the provisions of the enrolled bill\nis provided in OMB's enrolled bill report at Tab A.\n2\nStaff Recommendations\nSteve McConahey, your Special Assistant for Intergovernmental\nAffairs, notes that some public interest groups (National\nAssociation of Counties and National League of Cities-U.S.\nConference of Mayors) strongly oppose this bill because of\nits adverse financial impact. Los Angeles County estimates\nannual costs of $21 million. The National Governors' Conference\nsupports the bill.\nOMB, Max Friedersdorf, Counsel's Office (Lazarus), Bill\nSeidman, Alan Greenspan and I recommend approval of the\nenrolled bill and the signing statement which has been\ncleared by the White House Editorial Office (Smith).\nRECOMMENDATION\nThat you sign H.R. 10210 at Tab B.\nThat you approve the signing statement at Tab C.\nAPPROVE\nDISAPPROVE\nRESIDENT\nOFFICE\nOF THE\nEXECUTIVE OFFICE OF THE PRESIDENT\nUNITED\nOFFICE OF MANAGEMENT AND BUDGET\nBENIVE\nSTATE\nWASHINGTON, D.C. 20503\nOCT 15 1976\nMEMORANDUM FOR THE PRESIDENT\nSubject: Enrolled Bill H.R. 10210 - Unemployment Compensation\nAmendments of 1976\nSponsor - Rep. Corman (D) California and 6 others\nLast Day for Action\nOctober 20, 1976 - Wednesday\nPurpose\nExtends unemployment compensation coverage to certain agricultural\nworkers, domestic service workers, and State and local government\nworkers; improves the financing of the system by increasing the\ntaxable wage base and the tax rate; permits the Virgin Islands\nto join the unemployment compensation system; extends for 1 year,\nuntil December 31, 1977, and amends the Special Unemployment As-\nsistance program (SUA) ; establishes a National Commission on\nUnemployment Compensation; makes other changes in the unemployment\ncompensation program; and amends the Supplemental Security Income\nprogram (SSI).\nAgency Recommendations\nOffice of Management and Budget\nApproval (Signing state-\nment attached)\nDepartment of Labor\nApproval (Signing state-\nment attached)\nDepartment of the Treasury\nApproval\nCouncil of Economic Advisers\nApproval\nDepartment of Health, Education,\nand Welfare\nNo objection\nDepartment of Commerce\nNo objection\nDepartment of Agriculture\nNo objection(Informally)\nDepartment of Justice\nDefers to HEW and Treasury\nDepartment of the Interior\nDefers to other agenciesorrally)\nCivil Service Commission\nDefers to Labor and Treasury\nAdvisory Commission on Intergovern-\nmental Relations\nNo recommendation\n2\nDiscussion\nH.R. 10210 amends in a significant way the unemployment compensa-\ntion program and makes changes in the Supplemental Security\nIncome program (SSI). Many of the unemployment compensation\nprovisions in the enrolled bill reflect recommendations made in\nan Administration legislative proposal, the Unemployment Compensa-\ntion Amendments of 1975, which was transmitted to the Congress\nby the Department of Labor in July 1975.\nThe House passed its version of H.R. 10210 on July 20, 1976, by\na vote of 237-157. The Senate passed its version of the bill\non September 29, 1976, by a vote of 71-6. The Conference Report\nwas agreed to in the House by a vote of 272-97 and in the Senate\nby voice vote.\nUnemployment Provisions of H.R. 10210\nExtension of coverage\nH.R. 10210 extends coverage under the Federal-State unemployment\ninsurance system to certain agricultural workers, domestic\nservice workers, and State and local government employees.\nAgricultural workers: agricultural workers on any farm\nemploying 10 or more persons in each of 20 weeks during a calendar\nyear and workers on any farm paying $20,000 or more in wages\nduring any calendar quarter are covered. Non-resident aliens\nadmitted to perform agricultural work are excluded from coverage\nuntil January 1, 1980. The Administration recommended covering\nlaborers on farms with four or more workers in each of 20 weeks\nand workers on farms with payrolls of $5,000 or more in any\nquarter but excluded non-resident aliens.\nDomestic service workers: domestics working for an employer\nwho paid $1,000 or more for such services in any calendar quarter\nare covered. The Administration recommended coverage of domestics\nworking for an employer who paid $500 or more in any calendar\nquarter.\nState and local government workers: all State and local\ngovernment employees are covered except major nontenured policy-\nmakers and advisers, elected officials, judges, legislators,\nNational Guardsmen, and emergency disaster relief workers. The\nAdministration recommended coverage of State and local government\nworkers in elementary and secondary schools and hospitals.\n3\nFinancing the program\nIn July 1975 the Secretary of Labor testified that the unemploy-\nment insurance program was \"seriously threatened by the un-\nprecedented costs caused by heavy unemployment.\" As of\nSeptember 1976, $10.0 billion of general funds had been advanced\nto the Unemployment Trust Fund and 21 States had outstanding\nloans of $3.1 billion from the Fund.\nTo remedy the financing problems of the system, the Administra-\ntion recommended permanently increasing the wage base on which\nemployers pay the Federal unemployment insurance tax from $4,200\nto $6,000 and increasing the net Federal tax rate from 0.5% to\n0.65%. After all obligations to general revenues were repaid,\nthe net Federal tax rate was to drop to 0.45%\nH.R. 10210 permanently increases the wage base to $6,000 a year\nbeginning with wages paid in calendar year 1978 and increases\nthe net Federal tax rate to 0.7% until all advances from general\nrevenues have been repaid, when it would be reduced to 0.5%.\nThe increased tax rate applies in calendar year 1977.\nSpecial Unemployment Assistance Program (SUA)\nSUA was established in December 1974 as a temporary Federal pro-\ngram of unemployment compensation for workers who were not\neligible for unemployment benefits under any other law. It is\nfinanced from the general funds of the Treasury. Under present\nlaw the program is scheduled to expire on December 31, 1976,\nwith benefits payable until March 31, 1977.\nH.R. 10210 extends the SUA program for 1 year, to December 31,\n1977, with benefits payable until June 30, 1978. The Administra-\ntion supported a 1-year extension of SUA as a transitional step\nto permanent coverage for workers under the regular system.\nLike the Administration proposal, H.R. 10210 also amends the base\nperiod for computing SUA benefits to correspond to the period\nused under the regular State unemployment compensation program.\nIt denies SUA to non-professional service employees of schools\nbetween academic terms if there is a reasonable assurance that\nthe individual will be employed in the upcoming term. The\nAdministration supported this change.\nNational Commission on Unemployment Compensation\nThe enrolled bill establishes a 13-member commission to study\nthe long-range needs of the unemployment insurance system. It\n4\nwill study alternatives and improvements and recommend changes\nby January 1, 1979, with an interim report due by March 31, 1978.\nSeven members will be appointed by the President, and he will\ndesignate the Chairman. The President pro tempore of the Senate\nand the Speaker of the House will each appoint three members.\nThe Commission must include at least one representative of in-\ndustry, labor, small business, the Federal Government, State\ngovernment, and local government. The Administration made a\nsimilar proposal.\nCoverage of the Virgin Islands\nH.R. 10210 will bring the Virgin Islands within the Federal-\nState unemployment insurance system, as the Administration\nproposed.\nOther major unemployment provisions in H.R. 10210:\n--amend the trigger provisions for Federal-State extended\nbenefits to provide that the 120% requirement (i.e., the insured\nunemployment rate (IUR) not seasonally adjusted for a State\nmust be at least 120% above that of the corresponding periods\nin the preceding 2 years in order for the State to trigger on)\ncan be waived by the State when the IUR reaches 5%.\n--require States to assume the full cost of extended\nbenefits for State and local workers, but the Federal Government\nwill continue to pay the administrative costs involved in cover-\ning these workers.\n--deny unemployment benefits to illegal aliens, profes-\nsional athletes between sports seasons, and teachers and other\nprofessional school employees between academic terms.\n--repeal the \"finality\" clause which provided that findings\nof fact by a Federal agency in unemployment compensation cases\nrespecting employees leaving the Federal service were final,\nthereby subjecting the compensation claims of Federal employees\nto the same administrative procedures that apply to other workers.\n--require, effective October 1, 1979, a reduction in an\nindividual's unemployment compensation benefits by the amount\nof any public or private retirement pension, including social\nsecurity. This provision could cause equity problems; it will\nnot take effect until after the Study Commission reports, and\ncould be amended or repealed before it takes effect.\n--amend the Social Security Act to require (subject to\ndenial of benefits) that an applicant under the Aid to Families\n5\nwith Dependent Children--Unemployed Fathers (AFDC-UF) program\napply for and accept any unemployment compensation benefits to\nwhich he is entitled. The applicant could then claim any AFDC-\nUF benefits to which he would be entitled, but those benefits\nwould be reduced by the amount of the unemployment benefits\nwhich he receives. This is similar to an Administration proposal\nand HEW supports it. It will reduce AFDC-UF expenditures by\napproximately $47 million, which will be absorbed by the Unemploy-\nment Insurance Trust Fund, and thus financed by an employer tax\nrather than general revenues.\n--require State employment offices, at the request of a\nState or local AFDC or child support agency, to furnish certain\ninformation including whether an individual is receiving, has\nreceived, or has applied for unemployment compensation, whether\nthe individual has refused an offer of employment, and his home\naddress.\nBenefit Amount Standard\nAccording to the Labor Department, over 40% of covered workers\ncurrently receive a weekly benefit amount that is less than half\ntheir average weekly wage. The Administration proposed that each\nState provide each individual claimant with a weekly benefit\namount equal to at least 50% of his average weekly wage up to\na State maximum equal to at least two-thirds of the statewide\naverage weekly wage for that State's covered workers. The en-\nrolled bill does not include the proposed benefit standard,\nwhich will be studied by the National Commission on Unemployment\nCompensation.\nSupplemental Security Income (SSI)\nProvisions of H.R. 10210\nThese provisions are described in detail in the attachment to\nHEW's letter on the enrolled bill. Briefly they amend Title XVI\n(Supplemental Security Income) of the Social Security Act to:\n--amend SSI eligibility criteria to permit full SSI benefits\nto be paid to individuals in public non-Medicaid institutions\nwhich serve no more than 16 residents and amend the standards\nfor certain institutions.\nThis provision also repeals section 1616 (e) of the Social Secu-\nrity Act which provides that Federal SSI payments to beneficiaries\nbe reduced in the case of payments made by States or localities\nfor medical or other remedial care provided by an institution if\nthe care is, or could be, provided in a Medicaid institution.\n6\nThis requirement originally sought to prevent the use of SSI\nbenefits as a means of evading Federal Medicaid requirements and\nthus funding care in substandard facilities. Because of its\ncomplexity, HEW has not been able to enforce this requirement.\nThe enrolled bill, effective October 1, 1977, adds a new section\n1616 (e), which requires each State to establish or designate\nState or local authorities to establish, maintain and ensure the\nenforcement of standards for any category of institutions, foster\nhomes, or group living arrangements in which (as determined by\nthe State) a significant number of SSI recipients is residing.\nThe standards have to be appropriate to the needs of the recip-\nients and the character of the facilities involved. They would\ngovern admission policies, safety, sanitation, and protection\nof civil rights.\nThe revised section 1616 (e) also requires each State to make\navailable for public review, as a part of its social services\nprogram planning procedures under Title XX of the Social Secu-\nrity Act, a summary of the standards, and to make available to\nany interested individual a copy of the standards and the pro-\ncedures available in the State to ensure their enforcement.\nEach State is required to certify annually to the Secretary of\nHealth, Education, and Welfare that it is in compliance with\nthe requirements for State standards. The bill also provides\nfor the reduction of Federal payments in the case of any person\nwho is in an institution not approved under State standards as\ndetermined by the appropriate State or local authorities.\nThe objective of these provisions is to eliminate disincentives\nfor the establishment and subsidization by States and localities\nof residential facilities for the aged, blind or disabled and to\nallow States and localities to supplement Federal SSI benefits\nby either direct or indirect assistance to persons in public\ninstitutions. HEW shares this objective and does not object to\nenactment of the provisions. HEW estimates that the costs of\nthese provisions, depending upon State action, could range between\n$400 million and $800 million for the period 1977 through 1981.\n--provide that for any full month during which a spouse\nis in an institution, the couple involved would be treated as\nindividuals for purposes of computing their eligibility and SSI\nbenefit amount. Currently, any income of either spouse is ap-\nplied to reduce the couple's combined SSI benefit. HEW has no\nobjection to this provision and estimates its cost at $5 million\nper year.\n7\n--provide that no recipient of Federal SSI benefits or\nState SSI supplementary payments will lose \"categorical eligi-\nbility\" for Medicaid solely as the result of a cost-of-living\nincrease under Title II of the Social Security Act (Federal\nOld-Age, Survivors, and Disability Insurance Benefits).\nCurrently, an SSI beneficiary may lose his SSI eligibility and\ntherefore his linked Medicaid eligibility, because a cost-of-\nliving benefit increase under Title II provides added income\nmaking him no longer eligible for SSI. HEW objects to this\nprovision because it is inequitable to \"grandfather\" some\nindividuals while leaving unprotected other similarly situated\nindividuals. Currently, the expansion of Medicaid eligibility\nbeyond AFDC and SSI beneficiaries is within the discretion of\neach State. While HEW would recommend veto of this provision\nif it were in a separate bill, its objection does not warrant\na veto of H.R. 10210. The estimated cost of the provision is\n$10 million a year.\n--require that the Federal Government pay twice, in effect,\nfor cost-of-living increases in the Federal SSI benefit in the\nthree remaining \"hold harmless\" States (Massachusetts, Wisconsin,\nand Hawaii). First, general revenues fund the increased SSI\nbenefits for individuals. Second, this provision requires con-\ntinued Federal liability for \"hold harmless\" payments to those\nStates by barring the current reduction in Federal liability\nassociated with such cost-of-living increases. The cost of\nthis provision will be about $12 million over the first 2 years,\nand a total of about $50 million over the next 6 years.\n--provide new procedures and funding for State services\nto disabled children under the age of 16 who are receiving SSI\nbenefits through a new formula grant program. HEW objects to\nthese provisions because they establish a new grant program to\nStates under State plans meeting conditions prescribed by the\nSecretary which entail complex administrative controls. HEW\ndoes not believe its reservations about this provision justify\na veto of the enrolled bill. These provisions will cost about\n$30 million in each of fiscal years 1977 through 1979.\nBudget Impact\nThe budget impact of the unemployment compensation provisions\nof H.R. 10210 is shown in the following table for two forecasts,\none pessimistic and one optimistic, of unemployment rates.\n8\n($ in Billions; fiscal years)\nPessimistic\n1977\n1978\n1979\n1980\n1981\n1982\n(Forecast unemployment rate)\n(7.0%)\n(6.6%)\n(6.4%)\n(5.8%)\n(5.2%)\n(4.9%)\nAdditional revenues received\n.3\n1.4\n3.9\n4.1\n4.1\n4.2\nAdditional benefits paid\n--\n.5\n.7\n.5\n.5\n.5\nNet additional revenue\n.3\n.9\n3.2\n3.6\n3.6\n3.7\nNet additional revenue in\n1.8\n1.2\n2.5\n2.8\n3.2\nyour 1977 Budget\nN/A\nOptimistic\n1977\n1978\n1979\n1980\n1981\n1982\n(Forecast unemployment rate)\n(6.8%) (6.1%) (5.4%) (4.8%) (4.6%) (4.5%)\nAdditional revenues received\n.3\n1.4\n3.9\n4.0\n4.0\n4.1\nAdditional benefits paid\n--\n.4\n.5\n.4\n.4\n.4\nNet additional revenue\n.3\n1.0\n3.4\n3.6\n3.6\n3.7\nAgency Recommendations\nLabor most strongly urges that the bill be approved. The\nDepartment states that many of the provisions in H.R. 10210 are\nsimilar to the Administration's proposal and that the enrolled\nbill makes important improvements in the Federal-State unemploy-\nment insurance system.\nHEW has no objection to approval. Although the Department has\nconsiderable problems with certain of the SSI provisions, as\nindicated above, these are not sufficient to recommend disapproval.\nThe Department notes, as a general matter, \"the continued lack\nof realism on the part of the Congress as evidenced by effective\ndates of such immediacy that there is obviously insufficient time\nto implement the provisions as contemplated by the bill.\" The\nDepartment's comments on the estimated cost of the SSI provisions\nare indicated above, and it calls special attention to the pro-\nvision which could cost $800 million over the next 5 years.\nJustice defers to HEW and Treasury. The Department notes,\nhowever, that H.R. 10210's requirement that States extend\n9\ncoverage to State employees \"may run afoul of the same consti-\ntutional limits which invalidated a similar effort to bring\nState employees within the overtime provisions of the Fair\nLabor Standards Act in the case of National League of Cities V.\nUsery,\nU.S.\n, in June of this year. The Court there\nheld a federal statute requiring that States compensate their\nemployees under prescribed terms and conditions to be an\nimpermissible invasion of basic sovereign attributes of the\nseveral States. There is a substantial likelihood that the\nsame analysis would apply in this instance.\"\n* * * *\nH.R. 10210's unemployment compensation provisions are similar\nin major respects to the Administration's proposal. The\nfinancing provisions are especially important because they\nshould help to restore fiscal soundness to a system which has\nbeen severely drained by high unemployment. The establishment\nof a minimum Federal benefit standard, as proposed by the\nAdministration, is not included in the enrolled bill but will\nbe studied by the National Commission on Unemployment Compensa-\ntion.\nWe share HEW's concerns, as indicated above, about certain of\nthe SSI amendments. We will explore with HEW the possibility\nof developing corrective legislative proposals.\nOn balance, we believe that the advantages of H.R. 10210's\nunemployment provisions significantly outweigh the disadvantages\nof its SSI provisions and, accordingly, recommend approval.\nJane T. Lynn by\nDirector\nEnclosures\nSTATES DEPARTMENTOS CERTIFICATE\nDEPARTMENT OF AGRICULTURE\nOFFICE OF THE SECRETARY\nWASHINGTON, D. C. 20250\nOctober 1 8, 1976\nHonorable James T. Lynn\nDirector, Office of Management\nand Budget\nWashington, D.C. 20503\nDear Mr. Lynn:\nIn reply to the request of your office, the following report is submitted\non the enrolled enactment H.R. 10210, \"Unemployment Compensation\nAmendments of 1976.\"\nThis Department has no objection to approval of this bill by the President.\nWe are commenting only on those sections of the bill pertaining to the\nextension of unemployment compensation coverage to agricultural workers.\nThis bill would extend unemployment compensation protection to workers\nhired by agricultural employers who employ 10 or more workers in each of\n20 or more weeks during the year, or pay $20,000 or more in farm wages in\nany calendar quarter.\nThis Department feels that this important social benefit, which has been\nenjoyed by most other American workers for many years, should be made\navailable to farmworkers employed on all but the very small farms which\ncannot afford the cost of the program. However, this bill would provide\ncoverage only to workers working on the very large farms. This Department\nsupported an earlier position of the Department of Labor which would have\nextended coverage to more farmworkers than the current bill. Farmworkers,\nas an occupational group, have relatively low income levels and relatively\nhigh seasonal unemployment.\nWe would urge the Department of Labor to establish a procedure and\nschedule for reviewing the impact of the provisions of this bill on farm\noperators and farmworkers in order to determine the feasibility of extend-\ning coverage to the smaller farms.\nHonorable James T. Lynn\n2\nSince this Department is not directly involved with the administration\nof the Unemployment Insurance Program, we defer to the Department of\nLabor for an estimation of administrative cost.\nSincerely,\ngot 9. Youly\nJohn A. Knebel\nActing Secretary\nSTATEMENT\nOF\nTHE\nUnited States Department of the Interior\nOFFICE OF THE SECRETARY\nMarch\n3,\n1849\nWASHINGTON, D.C. 20240\nOCT 1 5 1976\nDear Mr. Lynn:\nThis will respond to your request for the views of this Department\non enrolled bill H.R. 10210, \"To require States to extend unemploy-\nment compensation coverage to certain previously uncovered workers;\nto increase the amount of the wage subject to the Federal unemploy-\nment tax; to increase the rate of such tax; and for other purposes.'\nWe support those provisions of the enrolled bill which would extend\nthe Federal unemployment compensation laws to the Virgin Islands; but,\ndefer on other provisions to those Federal agencies with a more\nsignificant interest.\nEnrolled bill H.R. 10210 would require States to extend unemployment\ncompensation protection to certain categories of individuals including\ncertain employees of State and local governments and nonprofit school\nemployees, farm and household workers, and the Virgin Islands, now\ncovered only at State option and increase the Federal unemployment\ntax rate and increase the annual amount of wages subject to Federal\nand State unemployment taxes from $4,200 to $6,000 per employee.\nThe bill would also modify the requirements for triggering the\nFederal-State extended benefit program into and out of operation in\nthe States, establish a national study commission on unemployment\ncompensation, and make a number of other changes. The enrolled bill\nwould also add several provisions which would affect the Supplemental\nSecurity Income (SSI) program for needy aged, blind, and disabled\npeople.\nOf particular interest to this Department enrolled bill H.R. 10210\nwould extend the Federal unemployment compensation laws to the Virgin\nIslands as soon as various requirements of membership in the Federal-\nState system could be met.\nUnder the existing provisions of Federal law, the territory of the\nVirgin Islands is precluded from participating in the Federal-State\nemployment security systems of unemployment insurance and employ-\nment services.\nREVOLUTION\nAMERICAN\nBICENTENNIAL\n1776-1976\n®\nBy letter to Director James T. Lynn, dated June 27, 1975, the\nDepartment expressed its support for enrolled bill H.R. 6900, now\nPublic Law 94-45, which in effect, permitted the Virgin Islands to\nparticipate in the Federal-State unemployment insurance program\nuntil June 30, 1976. Enrolled bill H.R. 10210 would continue the\nVirgin Islands participation on a permanent membership basis. We\nnote that this provision is very similar to legislation proposed\nby the Administration.\nThe advantages to the United States of inclusion of the Virgin Islands\nin the system are the increased scope and coverage of the Federal-State\nsystem, the increased effectiveness of its interstate and multi-State\noperations, the elimination of a tax advantage for Virgin Islands\nemployers (with a corresponding disadvantage for their competitors in\nother States) and additional Federal Unemployment Tax Act revenue to\nthe Federal Unemployment Trust Fund (offset, however, by the additional\nexpenditures for administration from the employment security administration\naccount of the Unemployment Trust Fund). Costs of administering the\nVirgin Islands Employment Service are now borne by general funds of the\nU.S. Treasury but, upon inclusion of the Virgin Islands in the Federal-\nState system, most of these costs would be financed by grants from the\nemployment security administration account in the Federal Unemployment\nTrust Fund. Inclusion of the Virgin Islands would also benefit the\nUnited States as a demonstration that Virgin Islanders are entitled to\nshare in national social legislation on the same basis as the citizens\nof any State. Additionally, we would note that the magnitude of\npresent unemployment in the Virgin Islands is without precedent and\nthe resources of the existing Fund have been exhausted.\nWith respect to the other provisions of H.R. 10210, we defer in our\nviews to those Federal agencies with a more significant interest.\nSincerely yours,\nAssistant Secretary of the Interior\nHonorable James T. Lynn\nDirector, Office of\nManagement and Budget\nWashington, D.C.\n2\nTHE WHITE HOUSE\nWASHINGTON\nJim -\nNo decision indicated on the\nstatement.\nTrudy\nSTATEMENT BY THE PRESIDENT\nI am pleased to sign the Unemployment Compensation\nAmendments of 1976, H.R. 10210. This bill incorporates\nmany of the recommendations proposed by my Administration\nin July 1975. It significantly improves our unemployment\ncompensation system.\nIn particular, this bill makes vital changes in the\nunemployment compensation system's financing. It restores\nthe fiscal soundness of the system so that unemployed\nworkers can be sure assistance will be available when\nneeded. Moreover, the bill clarifies some aspects of the\nlaw to ensure that benefits are paid only to those indi-\nviduals the program is intended to cover.\nH.R. 10210 extends unemployment compensation coverage\nto over nine million workers. This is the largest addition\nto this program since its beginning.\nH.R. 10210 also establishes a National Commission on\nUnemployment Compensation to study and make recommendations\nby January 1, 1979, on unresolved problems in the system.\nThe unemployment compensation provisions of this bill\nrepresent the kind of cooperation and compromise between\nthe Congress and the Administration to enact legislation\nwhich is in the interest of every American. As a result,\nthe unemployment compensation system will be able to better\nserve our nation.\nTHE WHITE HOUSE\nACTION MEMORANDUM\nWASHINGTON\nLOG NO.:\nDate: October 15\nTime: 500pm\nFOR ACTION: Bavid Lissy\ncc (for information):\nJack Marsh\nMax Friedersdorf\nEd Schmults\nSteve McConahey\nSpencer Johnson\nMike Duval\nBobbie #ilbergm Bill Seidman ah\nRobert Hattmann\nPaul Leach\ndefer\nFROM THE STAFF SECRETARY\nDUE: Date: October 18\nTime: 200pm\nSUBJECT:\nH.R.10210-Unemployment Compensation Amendments 6f 1976\nACTION REQUESTED:\nFor Necessary Action\nFor Your Recommendations\nPrepare Agenda and Brief\nDraft Reply\nX\nFor Your Comments\nDraft Remarks\nREMARKS:\nplease return to judy johnston, ground floor west wing\nPLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.\nIf you have any questions or if you anticipate a\ndelay in submitting the required material, please\nK. R. COLE, JR.\ntelephone the Staff Secretary immediately.\nFor the President\nDAVID Lissy-\nof\n10/19/16\nI am pleased to sign the Unemployment Compensation\nAmendments of 1976, H.R. 10210. This bill incorporates\nmany of the recommendations proposed by my Administration in\nJuly 1975. It significantly improves our unemployment\ncompensation system.\nIn particular, this bill makes vital changes in the\nunemployment compensation system's financing. It restores\nthe fiscal soundness of the system so that unemployed workers\ncan be sure assistance will be available when needed.\nMoreover, the bill clarifies some aspects of the law to ensure\nthat benefits are paid only to those individuals the program\nis intended to cover. For снатрӏе, it now makes 10 clear that\nprofessional athletes between sports seasons would not be\nskigible.\nH.R. 10210 extends unemployment compensation coverage to\nThis\nover 9 million workers, the largest addition to this program\nsince its beginning. Newly covered groups include many\none\nagricultural and domestic workers and most State and local\ngovernment employeers.\nH.R. 10210 also establishes a National Commission on Unemploy-\nment Compensation to study and make recommendations by January 1,\n1979, on unresolved problems in the system.\nIn addition to its unemployment compensation provisions,\nH.R. 10210 contains amendments to the Supplemental Security\nIncome program. I find some of these provisions ill-conceived\nand they may requir corrective action. Furthermore, they are\nobjectionable because of the unrealistic effective dates which\nCongress has imposed.\nThe unemployment compensation provisions of this bill\nrepresent the kind of cooperation and compromise between the\nCongress and the Administration to enact legislation which\nis in the interest of every American. As a result, the unemploy-\nour nation\nment compensation system will be able to better sérve the needs\n10/15/76 - 4:45\nTHE WHITE HOUSE\nn\nACTION MEMORANDUM\nWASHINGTON\nLOG NO.:\n13\nDate: October 15\nTime: 400pm\nFOR ACTION: David Lissy-\nCC (for information): Jack Marsh-\nMax Friedersdorf\nEd Schmults,\nSteve McConahey- Spencer Johnson\nMike Duval\nBobbie Kilberg\nBill Seidman\nRobert Hartmann Paul Leach\nFROM THE STAFF SECRETARY\nDUE: Date: October 18\nTime: 200pm\nSUBJECT:\nH.R.10210-Unemployment Compensation Amendments of 1976\nACTION REQUESTED:\nFor Necessary Action\nFor Your Recommendations\nPrepare Agenda and Brief\nDraft Reply\nX\nFor Your Comments\nDraft Remarks\nREMARKS:\nplease return to judy johnston, ground floor west wing\n10/15/76- - Copy sent for recearching. mm\n10/18/76 - Researched copy returned. nm\nORAP\nReturned toguy nim\nPLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.\nIf you have any questions or if you anticipate a\ndelay in submitting the required material, please\nJames N. Cannon\ntelephone the Staff Secretary immediately\nFor the President\nTHE WHITE HOUSE\nACTION MEMORANDUM\nWASHINGTON\nLOG NO.:\n13\nDate: October 15\nTime: 400pm\nMB\nFOR ACTION: David Lissy-\nCC (for information): Jack Marsh-\nMax Friedersdorf\nEd Schmults,\nSteve McConahey-\nSpencer Johnson\nMike Duval\nBobbie Kilberg\nBill Seidman\nRobert Hartmann\nPaul Leach\nFROM THE STAFF SECRETARY\nto\n40! 10/16/19 RES\nDUE: Date: October 18\nTime: 200pm\nGAM\ntools\nSUBJECT:\n10/16/2:05. 10/16 12:05\nH.R.10210-Unemployment Compensation Amendments of 1976\nACTION REQUESTED:\nFor Necessary Action\nFor Your Recommendations\nPrepare Agenda and Brief\nDraft Reply\nx\nFor Your Comments\nDraft Remarks\nREMARKS:\nplease return to judy johnston, ground floor west wing\nOK/MWB\nPLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.\nIf you have any questions or if you anticipate a\ndelay in submitting the required material, please\nJames N. Cannon\ntelephone the Staff Secretary immediately.\nFor the President\nSTATEMENT BY THE PRESIDENT\non\nI am pleased to sign the Unemployment Compensation\nAmendments of 1976, H.R. 10210. This bill which significantly\nimproves our unemployment compensation system incorporated\nmany of the recommendations proposed by my Administration in\nJuly 1975.\nH.R. 10210 extends unemployment compensation coverage to\nof\nover 9 million workers, the largest addition to this program\nsince its beginning. Newly covered groups include many\nagricultural and domestic workers and most State and local\ngovernment employees.\nThe bill makes vital changes in the system's financing in\norder to restore its fiscal soundness so that unemployed\nworkers can continue to be assured that assistance will be\navailable when needed. Moreover, it removes loopholes in the\nlaw which permitted some individuals to take advantage of the\nsystem.\ncan\nH.R. 10210 also establishes a National Commission on\nUnemployment Compensation to study and make recommendations\na\nby January 1, 1979, on unresolved problems in the system.\nI am disappointed that the Congress did not adopt my\nproposal for a Federal standard for the minimum unemployment\nbenefit amount. If unemployment compensation is to provide\nmeaningful support for those who have lost jobs while they look\nfor new ones, we should be sure that an adequate proportion of\nlost wages is replaced. The Commission should give this pro-\nposal prompt consideration.\nIn addition to its unemployment compensation provisions,\nan\nH.R. 10210 contains amendments to the Supplemental Security\non\nIncome program. I find some of these provisions ill-conceived\nand they may require corrective action. Furthermore, they are\nobjectionable because of the unrealistic effective dates which\nCongress has imposed.\nSTATEMENT BY THE PRESIDENT\nI am pleased to sign the Unemployment Compensation\nAmendments of 1976, H.R. 10210. This bill which significantly\nimproves our unemployment compensation system incorporated\nmany of the recommendations proposed by my Administration in\nJuly 1975.\nH.R. 10210 extends unemployment compensation coverage to\nover 9 million workers, the largest addition to this program\nsince its beginning. Newly covered groups include many\nagricultural and domestic workers and most State and local\ngovernment employees.\nThe bill makes vital changes in the system's financing in\norder to restore its fiscal soundness so that unemployed\nworkers can continue to be assured that assistance will be\navailable when needed. Moreover, it removes loopholes in the\nlaw which permitted some individuals to take advantage of the\nsystem.\nH.R. 10210 also establishes a National Commission on\nUnemployment Compensation to study and make recommendations\nby January 1, 1979, on unresolved problems in the system.\nI am disappointed that the Congress did not adopt my\nproposal for a Federal standard for the minimum unemployment\nbenefit amount. If unemployment compensation is to provide\nmeaningful support for those who have lost jobs while they look\nfor new ones, we should be sure that an adequate proportion of\nlost wages is replaced. The Commission should give this pro-\nposal prompt consideration.\nIn addition to its unemployment compensation provisions,\nH.R. 10210 contains amendments to the Supplemental Security\nIncome program. I find some of these provisions ill-conceived\nand they may require corrective action. Furthermore, they are\nobjectionable because of the unrealistic effective dates which\nCongress has imposed.\n2\nThe unemployment compensation provisions of this bill\nrepresent the kind of cooperation and compromise between the\nCongress and the Administration to enact legislation which\nis in the interest of every American. As a result, the unemploy-\nment compensation system will be able to better serve the needs\nof unemployed workers.\nU.S. DEPARTMENT OF LABOR\nOFFICE OF THE SECRETARY\nWASHINGTON\nOCT 13 1976\nHonorable James T. Lynn\nDirector\nOffice of Management and Budget\nWashington, D. C. 20503\nDear Mr. Lynn:\nThis is in response to your request for the Department of\nLabor's views on the enrolled bill, H.R. 10210, the \"Unem-\nployment Compensation Amendments of 1976. \" We most strongly\nurge that the bill be approved.\nThis bill would make several needed improvements in the\ncoverage and financing provisions of the laws relating to\nthe Federal-State unemployment insurance system. It would\nalso establish a National Commission on Unemployment Compen-\nsation to study the major issues affecting the future of the\nsystem.\nH.R. 10210 would bring the Virgin Islands within the\nFederal-State unemployment insurance system. It would\nrequire the States, in order to participate in the Federal-\nState system, to extend coverage under the regular program\nto all State and local government workers. In adding new\nemployer categories under the Federal Employment Tax Act, it\nwould similarly assure State coverage for the agricultural\nemployees of an employer if that employer paid total remunera-\ntion of $20,000 or more to individuals employed in agri-\ncultural labor in any calendar quarter in the calendar year\nor the preceding calendar year, or who employed 10 or more\nemployees for each of 20 days (each in a different calendar\nweek) during the calendar year or the preceding calendar\nyear; and for the domestic employees in private homes, local\ncollege clubs, or local college fraternities or sororities\nif such employer paid remuneration of $1,000 or more to\nindividuals employed in such capacity during any calendar\nquarter in the calendar year or preceding calendar year.\n- 2 -\nThe bill would extend the expiration date of the Special\nUnemployment Assistance (SUA) program through June 30, 1978,\nwith a cut-off date for new claims of December 31, 1977.\nThe base period used for the SUA benefit year would be\nchanged to the base period used for other employees under\neach State law.\nThe trigger provisions for Federal-State extended benefits\nwould be altered to provide that the 120 percent require-\nment (i.e., the insured unemployment rate (IUR) for a State\nmust be at least 120 percent above that of the corresponding\nperiods in the preceding two years in order for the State to\ntrigger on) could be waived by the State when the IUR\nreached 5 percent. The States will be required to assume\nthe full cost of extended benefits for State and local\nworkers, but the Federal Government will pay the administra-\ntive costs involved in covering these workers.\nH.R. 10210 makes major improvements in the financing of the\nsystem. The Federal tax wage base would be raised from\n$4,200 to $6,000 and the Federal tax rate would be increased\nfrom 0.5 percent to 0.7 percent until all advances to the\nextended unemployment compensation account are repaid.\nA Commission would be established to study the long-range\nneeds of the unemployment insurance system. It would study\npossible alternatives and improvements and recommend changes\nby January 1, 1979, with an interim report due by March 31,\n1978. The Commission has seven members appointed by the\nPresident, three members appointed by the President pro\ntempore of the Senate, and three appointed by the Speaker of\nthe House. Of these thirteen, there will be least one\nrepresentative from each of several groups - business,\nlabor, small business, the Federal Government, State govern-\nment, and local government.\nAmong other changes that the bill would make are (1) the\nallowance of a State to apply for advances on a three-month\nbasis rather than each month, although the payments will\ncontinue to be advanced monthly; (2) a ban on benefits to\nillegal aliens; (3) revised limitations on professional and\nnon-professional school employees receiving benefits between\nschool years; (4) repeal of the so-called \"finality\" clause\nwhich limited the right of an unemployed Federal employee to\nchallenge the statement of the Government as to why the\n- 3 -\nindividual was no longer employed; (5) a partial ban on\npaying unemployment benefits to retirees effective on\nOctober 1, 1979; and (6) changes in the criteria for han-\ndling individuals eligible for both unemployment insurance\nand aid for families with dependent children (AFDC). In\naddition, amendments were made in the Supplemental Security\nIncome program; on these Supplemental Security Income\namendments we defer to HEW.\nMany of the provisions in this bill are similar to the bill\noriginally submitted by the Administration, H.R. 8614. We\nbelieve that H.R. 10210 makes important improvements in the\nFederal-State unemployment system and should be signed. The\nincreased number of employees that will be covered under the\nregular system will make emergency programs like SUA unneces-\nsary in the future.\nThe increase in the Federal wage base to $6,000, and of the\nFederal tax from 0.5 percent to 0.7 percent, will help the\nfinancial soundness of the system. Advances from general\nrevenues to the extended unemployment compensation account\nand to the Federal unemployment account, and loans to the\nStates' accounts have put a serious strain on the fiscal\nintegrity of the system. The changes made in this bill will\nprovide some of the necessary assistance to the system.\nThe extension of the SUA program will ease the transition\ninto full coverage. If SUA had not been extended many\nworkers would have found themselves without coverage until\ntheir State had time to enact coverage.\nFinally, establishment of the Commission will provide a\nneeded vehicle to generate a full discussion of the many\nissues that must be answered about the future of the unem-\nployment system. The bill lists unemployment statistics\namong the items that the Commission is to study. However,\nwe would point out that H.R. 12987, the \"Emergency Jobs\nPrograms Extension Act of 1976,\" established a separate\nCommission to study unemployment statistics. We would hope\nthat the Commission in H.R. 10210 does not spend its time on\na duplicative study.\nWe would, of course, have preferred a bill that adopted a\nminimum Federal benefit standard as we proposed. Neverthe-\nless, we urge Presidential approval of H.R. 10210.\nSincerely,\nW Juany Jr.\nDraft Signing Statement - H.R. 10210\nIt gives me great satisfaction today to sign H.R. 10210, the \"Unem-\nployment Compensation Amendments of 1976.\" This bill is close in\nits essential characteristics to my proposals introduced back in\nJuly of 1975. When I again urged its speedy consideration this past\nJuly, I pointed out that it was absolutely essential that we take\nthese steps to restore financial integrity to the unemployment compen-\nsation system. The bill also makes several much needed improvements\nin the coverage provisions and establishes a National Commission on\nUnemployment Compensation to make recommendations by January 1, 1979,\non some major problems yet unresolved.\nA serious weak spot in the system has been the lack of adequate\nfinancing. Although the unemployment insurance system was intended\nto be self-sustaining, over the past two years almost $10 billion has\nhad to be advanced from general revenues to the unemployment trust\nfunds. H.R. 10210 is designed to place this system on a sound finan-\ncial footing.\nThe bill also brings within the system over 9 million workers including\nState and local government employees, some domestics and farmworkers,\nthe largest addition to this program at one time since its beginning.\nUntil now, temporary measures such as Special Unemployment Assistance\nwere needed to protect these workers. However, now there is practically\nuniversal coverage of this Nation's wage and salary workers under the\nregular insurance system.\n-2-\nThe National Commission on Unemployment Compensation will have\nthree members appointed by the President pro tempore of the Senate,\nthree appointed by the Speaker of the House of Representatives, and\nseven appointed by the President. I plan to work with the Congress\nso that the Commission can begin its important work at the earliest\npossible date.\nFinally, this bill provides for a tightening up in some qualifying\nprovisions of the system and ensures that benefits are paid only to\nthose individuals that the unemployment insurance program is intended\nto cover.\nOver the past two years the unemployment insurance system has been\nseverely tested as our first line of defense against the economic\ndownturn. It has functioned well in this time of stress. The men\nand women responsible for administering this program at both the State\nand Federal levels can look back with satisfaction on a job well done.\nI hope this country and the unemployment insurance system will never\nagain experience a test of the magnitude which it has undergone.\nHowever, it gives me great confidence to know that the system with-\nstood the test. With the economy on its way back to good health it\nis with great satisfaction that I am able to sign this bill. The bill is\nthe result of the combined efforts of the Administration and Congress\nto repair the weaknesses of the unemployment insurance system so that\nit will perform even more effectively in the future.\nDEPARTMENT\nOF\nTHE\nTREASURY\nDEPARTMENT OF THE TREASURY\nTHE\nWASHINGTON, D.C. 20220\n1789\nASSISTANT SECRETARY\nOCT 14 1976\nDear Sir:\nThis is in response to your request for the views\nof the Treasury Department on the enrolled bill,\nH.R. 10210. Titles I and II of the enrolled bill con-\ntain the most significant provisions relating to the\nInternal Revenue Code, and our specific comments will\nbe limited to those provisions.\nIn general, Title I of the enrolled bill would\nextend coverage under the Federal Unemployment Tax\nAct (\"Act\") to certain State and local government\nemployees and to certain domestic and farm workers,\neffective with respect to services performed after\nDecember 31, 1977. The coverage of the Act would also\nbe extended to \"employment\" in the Virgin Islands.\nTitle II of the enrolled bill would increase the Act's\ntaxable wage based from $4,200 to $6,000 per year effec-\ntive with respect to remuneration paid after December 31,\n1977, and would increase the Federal unemployment tax\nrate from 3.2 to 3.4 percent, effective with respect to\nremuneration paid after December 31, 1976. The tax\nrate increase would be temporary, and would expire\nwhen all of the repayable advances to the extended\nunemployment compensation account in the Federal\nunemployment trust fund had been repaid.\nThe Treasury Department understands that the Labor\nDepartment supports the extensions of the Act's cover-\nage, the increases in the Act's wage base and rates,\nand the other changes in the unemployment insurance\nsystem provided for in the enrolled bill. The Treasury\nDepartment generally defers to the views of the Labor\nDepartment on policy questions regarding such matters.\n- 2 -\nTherefore, the Treasury Department has no objection\nto the amendments to the Internal Revenue Code contained\nin the enrolled bill, and recommends that the President\napprove H.R. 10210.\nSincerely yours,\nW illiam m. roldstern\nWilliam M. Goldstein\nDeputy Assistant Secretary\nDirector, Office of Management and Budget\nAttention: Assistant Director for Legislative\nReference, Legislative Reference Division\nWashington, D.C. 20503\nTHE CHAIRMAN OF THE\nCOUNCIL OF ECONOMIC ADVISERS\nWASHINGTON\nOctober 13, 1976\nDear Mr. Frey:\nThis is in response to your request for my comments\non enrolled bill H. R. 10210, Unemployment Compensation\nAmendments Act of 1976. I recommend that the President\nsign the enrolled bill.\nMuch of what is in the enrolled bill is in accordance\nwith the President's requests -- the extension of\ncoverage, the increase in the Federal unemployment\ncompensation tax rate and tax base, and the establishment\nof an unemployment compensation study commission. Some\nother provisions not specifically requested are desirable.\nThese include the denial of benefits to persons receiving\nretirement pay based on past employment, illegal aliens,\nand professional athletes during the off-season. Hence,\na Presidential signature is appropriate.\nSincerely,\nAlan Greenspan\nMr. James Frey\nAssistant Director for\nLegislative Reference\nOffice of Management and Budget\nWashington, D. C. 20503\nREVOLUTION\nAMERICAN\nBICENTENNIAL\n1776-1976\nHEALTH.\nEDUCATION PREMIUM\nDEPARTMENT OF HEALTH, EDUCATION. AND WELFARE\nU.S.A.\nOCT 14 1976\nThe Honorable James T. Lynn\nDirector, Office of Management\nand Budget\nWashington, D. C. 20503\nDear Mr. Lynn:\nThis is in response to your request for a report on\nH.R. 10210, an enrolled bill \"To require States to\nextend unemployment compensation coverage to certain\npreviously uncovered workers; to increase the amount\nof the wages subject to the Federal Unemployment Tax;\nto increase the rate of such tax; and for other\npurposes.\" The only provisions of concern to this Department\nare those contained in title V.\nIn short, while we support or do not object to most of the\nprovisions of title V of the enrolled bill, we oppose two of\nthem. We also wish to note, as a general matter, the continued\nlack of realism on the part of the Congress as evidenced by\neffective dates of such immediacy that there is obviously\ninsufficient time to implement the provisions as contemplated\nby the bill. Finally, we wish to bring to your attention the\nhigh cost (perhaps $800 million over the first five fiscal\nyears) that would result from enactment of section 505.\nHad the enrolled bill consisted solely of the provisions\ncontained in title V, we may well have considered recommending\na veto. However, there are several other titles contained in\nthe enrolled bill which are of significant interest to the\nDepartment of Labor. Although we are not in a position to\nassess the desirability of the enrolled bill as a whole, we\nwould not, on the basis of our problems with title V, object\nto its enactment.\nWe have enclosed, for your information, a detailed\ndescription of each section contained in title V of the\nenrolled bill, and we will provide in this report, only a\nbrief summary of the individual sections.\nSection 501 of the enrolled bill would amend section 1615\nof the Social Security Act, pertaining to rehabilitation\nservices for blind or disabled individuals under the age\nof 65 who are receiving supplemental security income\nThe Honorable James T. Lynn\n2\n(SSI) benefits. Currently, that section requires the\nreferral of all such individuals to the appropriate State\nagency administering the State vocational rehabilitation\nprogram. The section requires any individual so referred\nto accept (except for good cause) any rehabilitation services\noffered, and the Secretary is authorized to pay the State\nagency the cost incurred in providing such services.\nSection 501 of the enrolled bill would not change the\neffect of section 1615 insofar as that section relates to\nindividuals who are sixteen or older. However, section 1615,\nas it would be amended by the enrolled bill, would provide\nnew procedures for the referral of disabled children under\nthe age of sixteen and would establish a new formula for\nallocating Federal funds to cover the cost of such referrals\nand the provision of appropriate services. The increase in\nbudget authority and outlays resulting from enactment of\nthis section would be $30 million for each of the fiscal\nyears 1977 through 1979.\nThe Department has previously acknowledged to the Congress\nthat the current law does not adequately provide for the referral\nof, and the provision of services to, disabled children who\nare eligible for SSI benefits but who are too young to be\nserved by State vocational rehabilitation programs. In our\nbill report on H.R. 8911, which we submitted to the Ways and\nMeans Committee on November 13, 1975, we supported section 5\nof that bill, which provided for the referral of disabled\nchildren to an appropriate State agency and for Federal\nsharing in the cost of services. We supported this section\non the theory that it was comparable to provisions already\nin effect with respect to vocational rehabilitation services\nfor older SSI recipients. Section 501 of the enrolled bill,\nhowever, would in effect establish a new program of grants\nto States for services provided to disabled children under\napproved State plans meeting conditions to be prescribed by\nthe Secretary. Furthermore, section 501 includes several\nconstraints on cost reimbursement that will entail complex\nadministrative controls and will limit the effectiveness of\nthe service programs.\nWe view the establishment of a service program under title XVI\nto be inappropriate. However, our reservations regarding the\nenactment of this provision within the context of an income\nmaintenance program do not justify a veto of the enrolled\nbill.\nThe Honorable James T. Lynn\n3\nSection 502 of the enrolled bill would amend section 1611\nof the Social Security Act to provide that for any month\nduring all of which a spouse is in an institution, the couple\ninvolved would be treated as individuals rather than as a\ncouple for purposes of applying their separate incomes in\ncomputing any reduction of the SSI benefit amount. Currently,\nany income of either spouse is applied to reduce the combined\nSSI benefit of the couple.\nWe recognize that there are additional costs involved when\nan individual is institutionalized, and that it is inequitable\nto effectively reduce the benefits of the uninstitutionalized\nspouse, who must continue to meet the usual costs of living,\nby income that accrues to the institutionalized spouse and\nthat may be necessary to defray the costs of institutionalization.\nWe therefore have no objection to enactment of section 502.\nWe estimate that the cost of this amendment would be $5 million\nper fiscal year.\nSection 503 of the enrolled bill would provide that no\nrecipient of Federal benefits or State supplementary payments\nunder the SSI program would lose his \"categorical eligibility\"\nfor Medicaid as the result solely of a cost-of-living increase\nunder title II of the Social Security Act. Currently, as\nexplained in the enclosed summary of the bill, it is possible\nfor an SSI beneficiary to lose his SSI eligibility, and\ntherefore his Medicaid eligibility, solely by reason of a\ncost-of-living increase under title II of the Social Security\nAct. We agree that the loss of \"categorical eligibility\" for\nMedicaid as a result of a cost-of-living increase under\nSocial Security could be of significant consequence to an\nindividual. However, on the basis of equity, we are\ngenerally opposed to \"grandfather clauses\", which serve to\nprotect the interests of some individuals while leaving\nwithout such protection other individuals in a similar\nsituation. Although we would, therefore, recommend the\nveto of this provision were it the sole proposal contained\nin a separate bill, our objection to section 503 is not of\nsufficient significance to cause us to recommend that the\nenrolled bill be vetoed. The cost of this provision would be\napproximately $10 million per fiscal year.\nThe Honorable James T. Lynn\n4\nSection 504 of the enrolled bill would require that cost-of-\nliving increases, or any other general increase, in Federal\nSSI benefits becoming effective after June 30, 1977, and\nbefore July 1, 1979, be disregarded for purposes of determining\nthe amount which the Federal government must contribute to\neach of the three remaining \"hold-harmless\" States for purposes\nof title XVI of the Social Security Act. The effect of this\namendment would be to permit these three States to pass along\nto SSI recipients Federal benefit increases at no additional\ncost to each such State. Currently, all other States (which\nreceive no Federal contributions toward their State supplements)\nmay pass along such increases at no additional cost, but a\nhold-harmless State loses a portion of its Federal hold-harmless\ncontribution with each such increase, and is therefore required\nto increase State expenditures if it desires to pass along\nany such increase. The cost of this section would be\napproximately $12 million over the first two years, and a\ntotal cost of about $50 million over the next six fiscal\nyears.\nThe fiscal liability of certain States under title XVI of the\nSocial Security Act is limited by section 401 of Public Law\n92-603. That section, commonly referred to as the \"hold-harmless\"\nprovision, was to be a temporary provision designed to protect\nStates against a sudden and large increase in its aged, blind,\nand disabled case load. The number of hold-harmless States\nhas been decreasing, and is now limited to Hawaii, Massachusetts,\nand Wisconsin. We have opposed any proposal which would have\nthe effect of perpetuating in any form the temporary protection\nafforded by section 401 of the P.L. 92-603. As is the case\nwith section 503 of the enrolled bill, if this section were\nthe sole provision of an enrolled bill, we would recommend\nits veto. However, we do not believe that our opposition to\nthis section justifies a veto of the enrolled bill.\nSection 505 of the enrolled bill would make several amendments\nto title XVI of the Social Security Act pertaining to the\neligibility for SSI benefits of individuals in certain\ninstitutions and the establishment of standards for certain\ninstitutions. A detailed description of these amendments\nis provided in the enclosed summary. The Department has\nbeen supportive of the objectives of section 505--to eliminate\nThe Honorable James T. Lynn\n5\ndisincentives for the establishment and subsidization by States\nand localities of residential facilities for the aged, blind,\nor disabled and to allow States and localities to supplement\nFederal SSI benefits by either direct or indirect assistance\nto persons in public institutions. Furthermore, we have\nsupported the repeal of section 1616(e) of the Social Security\nAct. Although we are concerned by the potential cost of this\nsection (approximate cost estimates are provided in the\nenclosed summary) and although we would have preferred the\nrepeal of section 1616 (e) to the modifications which would be\nmade to it by the enrolled bill, we do not object to the\nenactment of section 505.\nSection 506 of the enrolled bill would amend the Internal\nRevenue Code of 1954, pertaining to employment taxes, and\nwe defer to the Department of the Treasury.\nSection 507 of the enrolled bill would amend section 407\nof the Social Security Act to modify the law applicable to\nmen who are eligible both for benefits under the Aid to\nFamilies with Dependent Children-Unemployed Fathers (AFDC-UF)\nprogram and for unemployment compensation. This section\nis similar to a provision contained in an Administration draft\nbill submitted by this Department to the Congress earlier\nthis year, and we support its enactment. The provision\nwould reduce AFDC-UF expenditures by approximately $47 million,\nwhich would be absorbed by the unemployment insurance trust\nfunds.\nSection 508 of the enrolled bill would require State employment\noffices to furnish, at the request of the State or a local\nAFDC or child support agency, certain information in their\nfiles regarding any individual. The amendment specifies the\ninformation which would be required to be provided.\nSection 508 would likely contribute to the improved\ncoordination of welfare and employment programs, and we\ntherefore have no objection to its enactment.\nThe Honorable James T. Lynn\n6\nThus, although we have considerable problems with title V of\nthe enrolled bill, we defer to the Department of Labor on\nall the other titles, and we would not object to the enactment\nof the enrolled bill.\nSincerely,\nMaryore dyrch\nUnder Secretary\nEnclosures\nSection-by-Section Summary of Title V\nof H.R. 10210\nSection 501 of the enrolled bill would amend section 1615\nof the Social Security Act, pertaining to rehabilitation\nservices for blind or disabled individuals under the age of\n65 who are receiving supplemental security income (SSI)\nbenefits. Currently, that section requires the referral\nof all such individuals to the appropriate State agency\nadministering the State vocational rehabilitation program.\nThe section requires any individual so referred to accept\n(except for good cause) any rehabilitation services offered,\nand the Secretary is authorized to pay the State agency\nthe costs incurred in providing such services.\nSection 501 of the enrolled bill would not change the effect\nof section 1615 insofar as that section relates to individuals\nwho are 16 or older. However, section 1615, as it would be\namended by the enrolled bill, would provide new procedures\nfor the referral for services of disabled children under the\nage of 16. Under the amended section 1615, the Secretary would\nbe required to prescribe regulations for the approval of State\nplans which would govern the referral of, and provision of\nservices to, SSI recipients who are under 16 and either blind\nor disabled. Among other things, the plans would have to:\n(1) assure appropriate counseling for disabled children,\nincluding the establishment of individual service plans and\nthe prompt referral for medical, educational, and social\nservices; (2) provide for monitoring to assure adherence\nto such service plans; and (3) provide for medical, social,\ndevelopmental, and rehabilitative services to disabled children\nunder age 7 and to disabled children who have never attended\npublic school and require preparation to take advantage of\npublic school, whenever such services can be expected to\nenhance any such child's ability to benefit from education\nor training or to improve his chances for self-support as\nan adult. Children under the age of 16 would not lose their\nSSI eligibility on account of failure to accept services to\nwhich they are referred. The State plan would be administered\nby the agency administering the crippled children's program\nunder title V of the Social Security Act or by any other\nagency, designated by the Governor, which provides services\nto disabled children.\n2\nSection 1615, as amended, would also specify a new funding\nprocedure for providing services to disabled children.\nWhereas services provided pursuant to the current section 1615\nare fully reimbursed by the Federal government, and such\nservices provided to adults under the revised section 1615\nwould continue to be fully covered without limitation,\nFederal financial participation with respect to services\nprovided to disabled children under the revised section 1615\nwould be limited (except when such services are provided by\nthe State vocational rehabilitation agency) by an allotment\nformula. The maximum Federal outlay for reimbursing States\nfor rehabilitation services provided under the new referral\nprocedures to disabled children receiving SSI benefits\nwould be $30 million for each of the fiscal years 1977 through\n1979. The funds would be allotted to States on the basis\nof each State's population of children under age 7. The\nrevised section 1615 would impose certain other conditions\non the use of the funds, including earmarking 90 percent\nof each State's allotment for children under age 7, preventing\nthe use of the new funds as a replacement for State or local\nfunds, and limiting the new funds to costs related to meeting\nthe special needs of disabled children. It should be noted\nthat the Conference Report (H. Rept. No. 94-1745) makes clear\nthat the new referral procedures for children under 16 do not\npreclude the referral of such children to the State vocational\nrehabilitation agency. In any such instance, Federal financing\nof the cost would not be limited by the allotment formula.\nLastly, this section would require the Department of Health,\nEducation, and Welfare to publish, within 120 days of enactment,\ncriteria for determining the disability of individuals\nunder the age of 18.\nSection 502 of the enrolled bill would amend section 1611\nof the Social Security Act to provide that for any month\nduring all of which a spouse is in an institution, the\ncouple involved would be treated as individuals rather than\nas a couple for purposes of applying their separate incomes\nin computing any reduction of the SSI benefit amount.\nCurrently, any income of either spouse is applied to reduce\nthe total SSI benefit of the couple.\nSection 503 of the enrolled bill would provide that no\nrecipient of Federal benefits or State supplementary payments\nunder the SSI program would lose his \"categorical eligibility\"\n3\nfor Medicaid as the result solely of a cost-of-living increase\nunder title II of the Social Security Act. Currently,\nbecause cost-of-living increases under both titles II and XVI\nof the Social Security Act are based upon an identical\npercentage of the benefit amount, and because, in determining\nthe SSI benefit amount payable to an individual, there is\ndisregarded $20 of other income per month, the title II\nbenefit for an individual can exceed the SSI benefit and\ntherefore his title II benefit increase can be greater than\nhis SSI benefit increase. This circumstance can eventually\nhave the effect of making the individual ineligible for SSI,\nand thus for Medicaid. Section 503 of the enrolled bill\nwould preserve the Medicaid eligibility of such individuals.\nSection 504 of the enrolled bill would require that cost-of-\nliving increases, or any other general increase, in Federal\nSSI benefits becoming effective after June 30, 1977, and\nbefore July 1, 1979, be disregarded for purposes of determining\nthe amount which the Federal government must contribute to\neach of the three remaining \"hold-harmless\" States. The effect\nof this amendment would be to permit these three States to\npass along to SSI recipients Federal benefit increases at\nno cost to each such State. Currently, any other State may\npass along such increases at no additional cost, but a hold-\nharmless State loses a portion of its Federal hold-harmless\ncontribution with each such increase, and is therefore required\nto increase State expenditures if it desires to pass along any\nsuch increase.\nSection 505 of the enrolled bill would make several amendments\nto title XVI of the Social Security Act pertaining to the\neligibility for SSI benefits of individuals in certain\ninstitutions and the establishment of standards for certain\ninstitutions. First, the enrolled bill would provide that\nthe prohibition against SSI payments to persons in public\ninstitutions not apply in the case of publicly operated\ncommunity residences which serve no more than 16 residents.\nThe enrolled bill would also provide that Federal SSI\npayments would not be reduced in the case of assistance\nprovided by States and localities which is based upon need.\nCurrently, this exclusion is limited to cash payments\nmade on a regular basis in supplementation of the SSI\nbenefit amounts.\n4\nThirdly, section 505 of the enrolled bill would repeal the\ncurrent section 1616 (e) of the Social Security Act. That\nsection currently provides that Federal SSI payments be\nreduced in the case of payments made by States or localities\nfor medical or any other type of remedial care provided by\nan institution if the care is or could be provided in a\nmedicaid institution. This requirement was originally\nincorporated into the SSI statute to prevent the use of SSI\nbenefits as a means of evading Federal Medicaid requirements\nand thus of funding care in substandard facilities. However,\nbecause of its complexity, the Department has not been\nable to enforce this requirement. Instead of the current\nsection 1616 (e), the enrolled bill would, effective October 1,\n1977, add a new section 1616(e), which would require each\nState to establish or designate State or local authorities\nto establish, maintain and insure the enforcement of standards\nfor any category of institutions, foster homes, or group\nliving arrangements in which (as determined by the State)\na significant number of SSI recipients is residing. The\nstandards would have to be appropriate to the needs of the\nrecipients and the character of the facilities involved.\nThey would govern admission policies, safety, sanitation,\nand protection of civil rights.\nThe revised section 1616 (e) would also require each State\nto make available for public review, as a part of its social\nservices program planning procedures under title XX of the\nSocial Security Act, a summary of the standards, and to make\navailable to any interested individual a copy of the standards\nand the procedures available in the State to insure their\nenforcement. There would have to be made available a list\nof any waivers of standards which have been made and any\nviolations of standards which have come to the attention of\nthe enforcement authority. Each State would be required to\ncertify annually to the Secretary of Health, Education, and\nWelfare that it is in compliance with the requirements for\nState standards. The bill would also provide for the reduction\nof Federal payments in the case of any person who is in an\ninstitution not approved under State standards as determined\nby the appropriate State or local authorities.\n5\nThe eventual cost of section 505 of the enrolled bill depends\nupon how States will react to its enactment. However, for\npurposes of guidance in estimating the potential cost, the\nfollowing chart shows the approximate range within which costs\nare likely to fall (in millions) :\n1977\n1978\n1979\n1980\n1981\n8-16\n39-81\n78-161\n116-242\n155-323\nSection 507 of the enrolled bill would amend section 407 of\nthe Social Security Act to modify the law applicable to men\nwho are eligible both for benefits under the Aid to Families\nwith Dependent Children--Unemployed Fathers (AFDC-UF) program\nand for unemployment compensation. Currently, as the result\nof the Supreme Court decision in Philbrook V. Glodgett,\n95 S. Ct. 1893 (1975) an unemployed father who is eligible\nfor unemployment compensation benefits has the option of\napplying for either unemployment compensation benefits or\nAFDC-UF benefits, but cannot, with respect to any week receive\nbenefits under both programs. The amendment to section 407\nwould require that an applicant for AFDC-UF benefits apply\nfor and accept any unemployment compensation benefits to\nwhich he is entitled. The applicant may then claim any\nAFDC-UF benefits to which he would be entitled, but those\nbenefits would be reduced by the amount of the unemployment\nbenefits which he receives.\nSection 407 of the Social Security Act, as that section would\nbe amended by section 507 of the enrolled bill, would also\nrequire the Secretary of Health, Education, and Welfare and\nthe Secretary of Labor to jointly enter into an agreement\nwith any State for the purpose of reducing the number of\nregistration requirements imposed upon AFDC-UF recipients.\nIt is expected that in those States where the Work Incentive\nProgram (WIN) is operating, recipients of AFDC-UF benefits\nwould be required to register only with WIN and not, as is\nnow required, with both the WIN program and the State\nEmployment Service. Where WIN is not available, these\nrecipients would register with the Employment Service.\n6\nSection 508 of the enrolled bill would require State\nemployment offices, at the request of a State or local\nAFDC or child support agency, to furnish information in\ntheir files regarding any individual. The information to\nbe provided would include: (1) whether such individual is\nreceiving, has received, or has made application for,\nunemployment compensation, (2) the current home address, and\n(3) whether such individual has refused an offer of employment.\nThe State employment offices would be reimbursed for the\ncost of supplying the information by the welfare or child\nsupport agency which requested the information, and the costs\nwould be considered as expenditures incurred in the administration\nof the applicable State plan approved under title IV of the\nSocial Security Act.\nFACT SHEET\nTITLE V OF H.R. 10210\nSection 501 of the bill provides new procedures for\nthe referral for rehabilitation services of blind or\ndisabled children who are receiving supplemental security\nincome (SSI) benefits. Currently, such children are\nreferred, as is the case with disabled adults, to the\nState vocational rehabilitation agency. However, because\nof their age, the children usually are not provided\nservices by the agency. The section also provides\nan additional $30 million in Federal funding for the\nprovision of services to such disabled children.\nSection 502 of the bill provides that married couples\nbe treated as individuals for purposes of determining\nSSI benefits when one of the spouses is in an institution.\nSection 503 of the bill preserves the categorical\neligibility for Medicaid of individuals who become\nineligible for SSI benefits solely by reason of\nsocial security cost-of-living increases.\nSection 504 of the bill has the effect of allowing\nthe three remaining \"hold-harmless\" States--Massachusetts,\nWisconsin, and Hawaii--to pass along to SSI beneficiaries\nFederal cost-of-living increases at no additional cost to\nthe States.\nSection 505 of the bill makes several amendments to title XVI\nof the Social Security Act pertaining to the eligibility\nfor SSI benefits of individuals in certain institutions\nand the establishment of standards for certain institutions.\nSection 507 of the bill modifies the law applicable to\nmen who are eligible both for benefits under the Aid\nto Families with Dependent Children-Unemployed Fathers\nprogram and for unemployment compensation.\nSection 508 of the bill requires State employment\noffices to furnish certain information to the State\nor local AFDC or child support agency.\nDEPARTMENT OF COMMERCE\nGENERAL COUNSEL OF THE\nUNITED STATES DEPARTMENT OF COMMERCE\nUNITED STATES OF AMERICA\nWashington, D.C. 20230\nOCT 13 1976\nHonorable James T. Lynn\nDirector, Office of Management\nand Budget\nWashington, D. C. 20503\nAttention: Assistant Director for Legislative Reference\nDear Mr. Lynn:\nThis is in reply to your request for the views of this Department\nconcerning H.R. 10210, an enrolled enactment\n\"To require States to extend unemployment compensation\ncoverage to certain previously uncovered workers; to\nincrease the amount of the wages subject to the Federal\nunemployment tax; to increase the rate of such tax; and\nfor other purposes. \"\nThis legislation makes a number of amendments to the unemployment\ncompensation program, among which are the extension of coverage to\nadditional workers, an increase in the rate base and the tax levied on\nthat base, the establishment of a National Commission on Unemployment\nCompensation and revision of the trigger provision of the extended\nbenefit program.\nThe Department of Commerce would interpose no objection to\napproval by the President of H.R. 10210.\nEnactment of this legislation would involve no additional expenditure\nof funds by this Department.\nREVOLUTION\nAMERICAN\nBICENTENNIAL\n1776-1976\n@\n,SSISTANT ATTORNEY GENERAL\nLEGISLATIVE AFFAIRS\nDepartment of Justice\nWashington, D.C. 20530\nOctober 14, 1976\nHonorable James T. Lynn\nDirector\nOffice of Management and Budget\nWashington, D.C. 20503\nDear Mr. Lynn:\nIn compliance with your request, I have examined a\nfacsimile of the enrolled bill H.R. 10210, the \"Unemployment\nCompensation Amendments of 1976\". The bill's purposes are\n\"To require States to extend unemployment compensation\ncoverage to certain previously uncovered workers; to increase\nthe amount of the wages subject to the Federal unemployment\ntax; to increase the rate of such tax; and for other purposes.\"\nThe Department of Justice has no expertise in the\narea of unemployment compensation systems. Therefore we\ndefer to the judgment of the Department of Health, Education,\nand Welfare and to that of the Department of the Treasury on\nthe question whether the bill merits Executive approval.\nHowever, we note that to the extent H.R. 10210 succeeds in\nits expressed purpose to \"require States to extend unemploy-\nment compensation coverage to certain previously uncovered\"\nState employees (see sections 114 and 115 of the bill), it\nmay run afoul of the same constitutional limits which in-\nvalidated a similar effort to bring State employees within\nthe overtime provisions of the Fair Labor Standards Act in\nthe case of National League of Cities V. Usery,\nU.S.\n, in\nJune of this year. The Court there held a federal statute\nrequiring that States compensate their employees under prescribed\nterms and conditions to be an impermissible invasion of\nbasic sovereign attributes of the several States. There\nis a substantial likelihood that the same analysis would\napply in this instance.\nSincerely,\nWichael W. William\nMichael M. Uhlmann\nAssistant Attorney General\nOffice of Legislative Affairs\n- 2 -\nUNITED\nSTATE\nCIVIL SERVICE COMMUNITY\nUNITED STATES CIVIL SERVICE COMMISSION\nWASHINGTON, D.C. 20415\nCHAIRMAN\nOctober 13, 1976\nHonorable James T. Lynn\nDirector\nOffice of Management and Budget\nAttention: Assistant Director for\nLegislative Reference\nDear Mr. Lynn:\nThis is in reply to your request for the views of the Civil Service\nCommission on enrolled H.R. 10210, a bill \"To require States to extend\nunemployment compensation coverage to certain previously uncovered\nworkers; to increase the amount of the wages subject to the Federal\nunemployment tax; to increase the rate of such tax; and for other\npurposes. We are limiting our comments to sections 313 and 411\nof H.R. 10210.\nSection 313 of title 3 of H.R. 10210 contains language repealing the\n\"finality\" provision of section 8506(a) of title 5, United States Code.\nAs we noted earlier in our proposed report to the Chairman, Committee\non Finance, United States Senate, this amendment would permit a State\nagency in its administration of the Unemployment Insurance Program to\nreview and make determinations on the validity of the findings of\nFederal agencies. It would also afford to former Federal employees the\nright of a hearing and a determination under State law with respect to\nthe cause of separation from employment as is now provided for all other\nworkers in a State. The effect of the repeal would be to have the\njudgment of State Unemployment Insurance officials supersede that of\nFederal employing agency officials on questions of fact. We object in\ngeneral to this principle.\nAlthough determinations or conclusions made by a State agency in con-\nnection with claims for unemployment compensation would not affect the\nstatus of employment of a former Federal employee, we see potential\nproblems, particularly when a former Federal employee uses a determina-\ntion made by a State agency that contradicts the findings of a Federal\nemploying agency or the Civil Service Commission as a basis for challeng-\ning the validity of a separation in a Federal district court. The\nCommission is particularly opposed to this amendment as it is presently\nworded. The addition of a specific statement that a determination made\nunder the Unemployment Insurance Program shall have no other application\nor effect except that of the determination of entitlement of a former\nFederal employee to unemployment compensation would make this amendment\nmore acceptable.\n-2-\nTo accomplish this, we previously recommended that the fifth sentence of\nsection 8506(a) of title 5, United States Code be deleted and the fol-\nlowing language substituted:\n\"A procedure established to make determinations pursuant to\nsections 8502(d) and 8503(c) of this title shall be solely\nfor the purpose of determining the entitlement of a Federal\nemployee to compensation under this chapter, and a decision\nissued following that procedure shall have no other applica-\ntion or effect.\"\nSince our recommended amendment is no longer possible for this enrolled\nbill, it seems important that the legislative history show the Commis-\nsion's position and clear intent that any review by a State agency can\nhave no effect on a Federal action taken against an employee.\nSection 411 would establish a Commission on Unemployment Compensation.\nSince this Commission would go out of existence by early 1979, the\nCivil Service Commission does not object to the provisions of this\nsection which exclude staff members from provisions of title 5, United\nStates Code, governing appointments in the competitive service and\nclassification and pay under the General Schedule.\nAlthough the Commission still finds the provisions of section 313 to be\nobjectionable, we do not believe that this objection merits our recom-\nmending that the President not sign the enrolled bill. Since the Civil\nService Commission has no substantive concerns in the Unemployment\nCompensation program, we defer to the recommendations of the Department\nof Labor and the Department of Treasury.\nBy direction of the Commission:\nSincerely yours,\nACTING\nChairman\nDISCRIPT COMM\nADVISORY\nACIR\nCOMMISSION ON INTERGOVERNMENTAL RELATIONS\nINTERNATED RNMENTAL\nWASHINGTON, D.C. 20575\nOctober 14, 1976\nMr. James M. Frey\nAssistant Director for\nLegislative Reference\nOffice of Management and Budget\nNew Executive Office Building\nWashington, D.C. 20503\nDear Mr. Frey:\nThe Unemployment Compensation Amendments of 1976\n(H.R. 10210), among other things, require States to\nextend unemployment compensation coverage to all State\nand local employees except, in effect, those who are\nelected or on political appointments, or those employed\ntemporarily. The legislation thus mandates an additional\ncost on State and local governments as employers of\nworkers covered by the unemployment compensation program.\nThe Advisory Commission on Intergovernmental Relations\nin its study, Labor-Management Policies for State and\nLocal Government recommended that:\nCongress desist from any further mandating\nof requirements affecting the working condi-\ntions of employees of State and local govern-\nments or the authority of such jurisdictions\nto deal freely or to refrain from dealing with\ntheir respective personnel.\nThis recommendation was prompted by the 1966 amendments\nto the Fair Labor Standards Act which extended coverage\nto include government employees working in hospitals,\nschools, higher education institutions and special training\nand rehabilitative institutions. The supporting text for\nthis recommendation stated in part:\n-2-\nThe Administration and Congress should\nabstain from any further mandating of require-\nments affecting the working conditions of State\nand local personnel, either by additional amend-\nments of the Fair Labor Standards Act or by\nother statutory routes.\nany additional man-\ndating of salaries, wages and working conditions\ncan only be interpreted as an unconscionable\nFederal reordering of the fiscal priorities of\nState and local governments. If such an action\nwere to be taken, then Congress in all fairness\nshould simultaneously enact legislation providing\nthe funds required for adherence to the standards\nstipulated.\nH.R. 10210 provides Federal financial help to States\nin the administration of the program. The Federal Govern-\nment will share more generously during a transition period\nthe cost of claims by persons who moved from uncovered to\ncovered status. The bill will not, however, provide\nFederal help to States and localities in meeting the\nburden of having their employees covered by the unemploy-\nment compensation program.\nThe extension of coverage of the Unemployment Compensa-\ntion Amendments of 1976 (H.R. 10210) to all State and local\ngovernment employees who are not elected or on political\nappointments is contrary to the position taken by this\nCommission in September 1969.\nIn light of the Commission's recommendation, it would\nbe opposed to those portions of H.R. 10210 which relate\nto State and local government employees. At the same time,\nthe Commission has not examined the other issues covered\nin this bill and takes no position on them.\nSincerely,\nWayne Executive Wayne F. f Anderson Anderson Director\nTHE WHITE HOUSE\nACTION MEMORANDUM\nWASHINGTON\nLOG NO.\n13\nDate:\nOctober 15\nTime: 400pm\nFOR ACTION: David Lissy-\nCC (for information):\nJack Marsh-\nMax Friedersdorf\nEd Schmults,\nSteve McConahey-\nSpencer Johnson\nMike Duval\nBobbie Kilberg\nBill Seidman\nRobert Hartmann-\nPaul Leach\nFROM THE STAFF SECRETARY\nDUE: Date: October 18\nTime: 200pm\nSUBJECT:\nH. R.10210-Unemployment Compensation Amendments of 1976\nACTION REQUESTED:\nFor Necessary Action\nFor Your Recommendations\nPrepare Agenda and Brief\nDraft Reply\nX\nFor Your Comments\nDraft Remarks\nREMARKS:\nplease return to judy johnston, ground floor west wing\napprol\nMS\nPLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.\nIf you have any questions or if you anticipate a\ndelay in submitting the required material, please\nJames N. Cannon\ntelephone the Staff Secretary immediately.\nFor the President\nTHE WHITE HOUSE\nA\nMEMORANDUM\nWASHINGTON\nLOG NO.:\n13\nDa.\nOctober 15\nTime: 400pm\nFOR ACTION: David Lissy-\ncc (for information):\nJack Marsh-\nMax Friedersdorf\nEd Schmults,\nSteve McConahey-\nSpencer Johnson\nMike Duva\nBobbie Kilberg-\nBill Seidman\nRobert Hartmann\nPaul Leach\nFROM THE STAFF SECRETARY\nDUE: Date: October 18\nTime: 200pm\nSUBJECT:\nH.R.10210-Unemployment Compensation Amendments of 1976\nACTION REQUESTED:\nFor Necessary Action\nFor Your Recommendations\nPrepare Agenda and Brief\nDraft Reply\nX\nFor Your Comments\nDraft Remarks\nREMARKS:\nplease return to judy johnston, ground floor west wing\nSign Signature. statement MDmal\nPLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.\nIf you have any questions or if you anticipate a\ndelay in submitting the required material, please\nJames N. Cannon\ntelephone the Staff Secretary immediately.\nFor the President\nTHE WHITE HOUSE\nACTI\nRANDUM\nWASHINGTON\nLOG NO.\n13\nDate:\ntober 15\nTime: 400pm\nFOR ACTION: David Lissy-\nCC (for information): Jack Marsh-\nMax Friedersdorf\nEd Schmults,\nSteve McConahey-\nSpencer Johnson\nMike Duval\nBobbie Kilberg-\nBill Seidman\nRobert Hartmann-\nPaul Leach\nFROM THE STAFF SECRETARY\nDUE: Date: October 18\nTime: 200pm\nSUBJECT:\nH. .R.10210-Unemployment Compensation Amendments of 1976\nACTION REQUESTED:\nFor Necessary Action\nFor Your Recommendations\nPrepare Agenda and Brief\nDraft Reply\nX\nFor Your Comments\nDraft Remarks\nREMARKS:\nplease return to judy johnston, ground floor west wing\nDefer to Lissy & Johnson\nPch\n10/15/76\nPLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.\nIf you have any questions or if you anticipate a\ndelay in submitting the required material, please\nJames M. Cannon\ntelephone the Staff Secretary immediately.\nFor the President\nTHE WHITE HOUSE\nACTION IEMORANDUM\nWASHINGTON\nLOG NO.\n13\nDate:\ntober 15\nTime: 400pm\nFOR ACTION: David Lissy-\nCC (for information): Jack Marsh-\nMax Friedersdor\nEd Schmults,\nSteve McConahey-\nSpencer Johnson\nMike Duval\nBobbie Kilberg-\nBill Seidman\nRobert Hartmann\nPaul Leach\nFROM THE STAFF SECRETARY\nDUE: Date: October 18\nTime: 200pm\nSUBJECT:\nH. .R.10210-Unemployment Compensation Amendments of 1976\nACTION REQUESTED:\nFor Necessary Action\nFor Your Recommendations\nPrepare Agenda and Brief\nDraft Reply\nX\nFor Your Comments\nDraft Remarks\nREMARKS:\nplease return to judy johnston, ground floor west wing\nRecommend approval & signing\narmony my\nR.\nPLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.\nIf you have any questions or if you anticipate a\ndelay in submitting the required material, please\nJames N. Cannon\ntelephone the Staff Secretary immediately.\nFor the President\n10/20\nEXECUTIVE OFFICE OF THE PRESIDENT\nOFFICE OF MANAGEMENT AND BUDGET\nWASHINGTON, D.C. 20503\nOCT 15 1976\n10-13-76pm.\nMEMORANDUM FOR THE PRESIDENT\nSubject: Enrolled Bill H.R. 10210 - Unemployment Compensation\nAmendments of 1976\nSponsor - Rep. Corman (D) California and 6 others\nLast Day for Action\nOctober 20, 1976 - Wednesday\nPurpose\nExtends unemployment compensation coverage to certain agricultural\nworkers, domestic service workers, and State and local government\nworkers; improves the financing of the system by increasing the\ntaxable wage base and the tax rate; permits the Virgin Islands\nto join the unemployment compensation system; extends for 1 year,\nuntil December 31, 1977, and amends the Special Unemployment As-\nsistance program (SUA) ; establishes a National Commission on\nUnemployment Compensation; makes other changes in the unemployment\ncompensation program; and amends the Supplemental Security Income\nprogram (SSI).\nAgency Recommendations\nOffice of Management and Budget\nApproval (Signing state-\nment attached)\nDepartment of Labor\nApproval (Signing state-\nment attached)\nDepartment of the Treasury\nApproval\nCouncil of Economic Advisers\nApproval\nDepartment of Health, Education,\nand Welfare\nNo objection\nDepartment of Commerce\nNo objection\nDepartment of Agriculture\nNo objection Informally)\nDepartment of Justice\nDefers to HEW and Treasury\nDepartment of the Interior\nDefers to other agencies\nCivil Service Commission\nDefers to Labor and Treasury\nAdvisory Commission on Intergovern-\nmental Relations\nNo recommendation\nTHE WHITE HOUSE\nACTIO MEMORANDUM\nWASHINGTON\nLOG NO.\n13\nDate:\nctober 15\nTime: 400pm\nFOR ACTION: David Lissy-\nCC (for information): Jack Marsh-\nMax Friedersdorf\nEd Schmults\nSteve McConahey\nSpencer Johnson\nMike Duval\nBobbie Kilberg\nBill Seidman\nRobert Hartmann\nPaul Leach\nFROM THE STAFF SECRETARY\nDUE: Date: October 18\nTime: 200pm\nSUBJECT:\nH. R.10210-Unemployment Compensation Amendments of 1976\nACTION REQUESTED:\nFor Necessary Action\nFor Your Recommendations\nPrepare Agenda and Brief\nDraft Reply\nX\nFor Your Comments\nDraft Remarks\nREMARKS:\nplease return to judy johnston, ground floor west wing\nNo objection -- Ken Lazarus 10/18/76\nPLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.\nIf you have any questions or if you anticipate a\ndelay in submitting the required material, please\nJames N. Cannon\ntelephone the Staff Secretary immediately.\nFor the President\nDate:\nOctober 15\nTime: 400pm\nFOR ACTION: David Lissy\nCC (for information): Jack Marsh-\nMax Friedersdorf\nEd Schmults\nSteve McConahey-\nSpencer Johnson\nMike Duval\nBobbie Kilberg-\nBill Seidman\nRobert Hartmann\nPaul Leach\nFROM THE STAFF SECRETARY\nDUE: Date: October 18\nTime: 200pm\nSUBJECT:\nH. .R.10210-Unemployment Compensation Amendments of 1976\nACTION REQUESTED:\nFor Necessary Action\nFor Your Recommendations\nPrepare Agenda and Brief\nDraft Reply\nX\nFor Your Comments\nDraft Remarks\nREMARKS:\nplease return to judy johnston, ground floor west wing\n10-18\nSign for me. I'm waiting\nIn me Cometry on report on venes NACO etal before\nfemal decision The ceremony. statemen nelds a good deal\nMunk.\nmy\nPLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.\nIf you have any questions or if you anticipate a\ndelay in submitting the required material, please\nJames N. Cannon\ntelephone the Staff Secretary immediately.\nFor the President\nSTATEMENT BY THE PRESIDENT\nI am pleased to sign the Unemployment Compensation\nQA\nAmendments of 1976, H.R. 10210. This bill which significantly\nimproves our unemployment compensation system incorporated\nmany of the recommendations proposed by my Administration in\nJuly 1975.\nH.R. 10210 extends unemployment compensation coverage to\nover 9 million workers, the largest addition to this program\nsince its beginning. Newly covered groups include many\nagricultural and domestic workers and most State and local\ngovernment employees.\nThe bill makes vital changes in the system's financing in\nthe\nThen\norder to restores fiscal soundness so that unemployed\nbesunt\nworkers can continue to be assured that assistance will be\navailable when needed. Moreover, it removes loopholes in the\nlaw which permitted some individuals to take advantage of the\nsystem.\nH.R. 10210 also establishes a National Commission on\nUnemployment Compensation to study and make recommendations\nby January 1, 1979, on unresolved problems in the system.\nI am disappointed that the Congress did not adopt my\na question\nincluding\nproposal for a Federal standard for the minimum unemployment\nthis.\nbenefit amount. If unemployment compensation is to provide\nmeaningful support for those who have lost jobs while they look\nfor new ones, we should be sure that an adequate proportion of\nlost wages is replaced. The Commission should give this pro-\nposal prompt consideration.\nIn addition to its unemployment compensation provisions,\nH.R. 10210 contains amendments to the Supplemental Security\nIncome program. I find some of these provisions ill-conceived\nand they may require corrective action. Furthermore, they are\nobjectionable because of the unrealistic effective dates which\nngress has imposed.\n10/15/76 - 4 :45 form\nTHE WHITE HOUSE\nACTION MEMORANDUM\nWASHINGTON\nLOG NO.\n13\nDate: October 15\nTime: 400pm\nMB\nFOR ACTION: David Lissy-\nCC (for information): Jack Marsh-\nMax Friedersdorf\nEd Schmults,\nSteve McConahey-\nSpencer Johnson\nMike Duval\nBobbie Kilberg-\nBill Seidman\nRobert Hartmann Paul Leach\n40\nFROM THE STAFF SECRETARY\nto\n10/16/1:29\nwas\nDUE: Date: October 18\nTime: 200pm\nSUBJECT:\n10/16/2:05 tools\nH.R.10210-Unemployment Compensation Amendments of 1976\nACTION REQUESTED:\nFor Necessary Action\nFor Your Recommendations\nPrepare Agenda and Brief\nDraft Reply\nX\nFor Your Comments\nDraft Remarks\nREMARKS:\nplease return to judy johnston, ground floor west wing\nOK/MWB\nPLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.\nIf you have any questions or if you anticipate a\ndelay in submitting the required material, please\nJames N. Cannon\ntelephone the Staff Secretary immediately.\nFor the President\nSTATEMENT BY THE PRESIDENT\non\nI am pleased to sign the Unemployment Compensation\nAmendments of 1976, H.R. 10210. This bill which significantly\nimproves our unemployment compensation system incorporated\nmany of the recommendations proposed by my Administration in\nJuly 1975.\nH.R. 10210 extends unemployment compensation coverage to\nof\nover 9 million workers, the largest addition to this program\nsince its beginning. Newly covered groups include many\nagricultural and domestic workers and most State and local\ngovernment employees.\nThe bill makes vital changes in the system's financing in\norder to restore its fiscal soundness so that unemployed\nworkers can continue to be assured that assistance will be\navailable when needed. Moreover, it removes loopholes in the\nlaw which permitted some individuals to take advantage of the\nsystem.\nas\nH.R. 10210 also establishes a National Commission on\nUnemployment Compensation to study and make recommendations\na\nby January 1, 1979, on unresolved problems in the system.\nI am disappointed that the Congress did not adopt my\nproposal for a Federal standard for the minimum unemployment\nbenefit amount. If unemployment compensation is to provide\nmeaningful support for those who have lost jobs while they look\nfor new ones, we should be sure that an adequate proportion of\nlost wages is replaced. The Commission should give this pro-\nposal prompt consideration.\nIn addition to its unemployment compensation provisions,\nH.R. 10210 contains amendments to the Supplemental an Security\non\nIncome program. I find some of these provisions ill-conceived\nand they may require corrective action. Furthermore, they are\nobjectionable because of the unrealistic effective dates which\nCongress has imposed.\n2\nThe unemployment compensation provisions of this bill\nrepresent the kind of cooperation and compromise between the\nCongress and the Administration to enact legislation which\nis in the interest of every American. As a result, the unemploy-\nment compensation system will be able to better serve the needs\nof unemployed workers.\nTHE WHITE HOUSE\nWASHINGTON\nOctober 18, 1976\nMEMORANDUM FOR:\nJUDY JOHNSTON\nsem\nFROM:\nSTEVE McCONAHEY\nSUBJECT:\nH.R. 10210\nUnemployment Compensation\nAmendments of 1976\nAlthough H.R. 10210 would provide for needed unemployment\ncompensation coverage, some public interest groups strongly\noppose this bill because of its financial effect on state\nand local units of government; one group favors it.\nBecause of its divided constituency, the National Governors'\nConference is in favor of the bill. Many states already\nhave compensation programs and thus would not be severely\naffected.\nThe National League of Cities-U.S. Conference of Mayors\nand the National Association of Counties all do not question\nthe concept of unemployment compensation, but do raise\nquestions about the source of funding for these payments.\nEstimates of costs vary from jurisdiction to jurisdiction,\nbut two examples were given by NACo: Los Angeles County\nestimates that this bill would cost it over $21 million per\nyear, effective January, 1978. This county already provides\nseverance pay which it contends costs much less than the\nproposed program.\nAlameda County, California, also estimates a considerable\ncost. Using SUA data for the past year, county officials\nestimated that Alameda County alone would have paid out\n$1,849,538 in unemployment compensation benefits in 1975.\n(That figure does not include administrative costs.)\nOther arguments presented by NACo against the bill\nare:\n1- To meet payment requirements, counties would have\nto fire present employees and would thus create\nmore unemployment.\n2- Counties would have to discourage part-time work\nand shared employment in order to meet the cost.\n3- Because county government is substantially different\nfrom the private sector, it cannot be expected to\nassume this burden as easily as private employers.\nOne factor here is that 85 per cent of the locally\nguaranteed tax revenues are provided through in-\nelastic property taxes which, in many areas, are\nat the maximum level tolerable.\n4- Local units which now voluntarily contribute to\nstate plans might lose the amount of credit they\nhave accrued with their states. States which\ncover local units include Connecticut, Wisconsin,\nRhode Island, Minnesota and Hawaii.\nNACo and the League of Cities-U.S. Conference of Mayors\nall lobbied very actively in Congress against this bill\nbecause of these factors.\nThe President has indicated that he approves this legisla-\ntion and undoubtably will sign it. But, he should be aware\nof the potential financial burden that it will place on\nlocal and county governments.\nTHE WHITE HOUSE\nACTION MEMORANDUM\nWASHINGTON\nLOG NO.:\n13\nDate: October 15\nTime: 400pm\nFOR ACTION: David Lissy-\nCC (for information): Jack Marsh-\nMax Friedersdorf\nEd Schmults\nSteve McConahey-\nSpencer Johnson\nMike Duval are\nBobbie Kilberg\nBill Seidman\nRobert Hartmann-\nPaul Leach\nFROM THE STAFF SECRETARY\nDUE: Date: October 18\nTime: 200pm\nSUBJECT:\nH.R.10210-Unemployment Compensation Amendments of 1976\nACTION REQUESTED:\nFor Necessary Action\nFor Your Recommendations\nPrepare Agenda and Brief\nDraft Reply\nx\nFor Your Comments\nDraft Remarks\nREMARKS:\nplease return to judy johnston, ground floor west wing\nCincur w/ approval\n89\nPLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.\nIf you have any questions or if you anticipate a\ndelay in submitting the required material, please\nJames M. Cannon\ntelephone the Staff Secretary immediately.\nFor the President\nTHE CHAIRMAN OF THE\nCOUNCIL OF ECONOMIC ADVISERS\nWASHINGTON\nOctober 20, 1976\nMEMORANDUM FOR JAMES M. CANNON\nFROM: ALAN GIRENSPA GREENSPAN\nThis is in response to your request for the views\nof the Council of Economic Advisers regarding a Justice\nDepartment proposal to allocate a specific portion of\npublic works construction funds (provided under Title I\nof the Public Works Employment Act of 1976) for the\nrenovation of State and local penal institutions.\nI think the proposal is a good one. There seems\nto be a clear need for rehabilitation of prison facilities\nand it fits in well with the President's anticrime program.\nHowever, I am worried that dedication of a set percentage\nof the funds available for construction could limit the\nability of States and localities to make use of the\nprovisions of this legislation, thus delaying its anti-\nrecession impact. I would therefore recommend your\nOption 2 which directs the Assistant Secretary of Commerce\nfor Economic Development to give prison projects \"high\npriority\" in allocating funds under the Public Works\nEmployment Act -- as the best and most flexible course\nof action.\nREVOLUTION\nAMERICAN\nBICENTENNIAL\n1776-1976\nI am pleased to sign the Unemployment Compensation\nAmendments of 1976, H.R. 10210. This bill incorporates\nmany of the recommendations proposed by my Administration in\nJuly 1975. It significantly improves our unemployment\ncompensation system.\nIn particular, this bill makes vital changes in the\nunemployment compensation system's financing. It restores\nthe fiscal soundness of the system so that unemployed workers\ncan be sure assistance will be available when needed.\nMoreover, the bill clarifies some aspects of the law to ensure\nthat benefits are paid only to those individuals the program\nis intended to cover. example, it now makes it clear that\nmofessional\nathletes\nbetween\nsports\nbe\neligible.\nH.R. 10210 extends unemployment compensation coverage to\nThis\nover 9 million workers. the largest addition to this program\nsince its beginning. Newly covered groups include many\nagricultural and domestic workers and most State and local\ngovernment employeers.\nH.R. 10210 also establishes a National Commission on Unemploy-\nment Compensation to study and make recommendations by January 1,\n1979, on unresolved problems in the system.\nIn addition to its unemployment compensation provisions,\nH.R. 10210 contains amendments to the Supplemental Security\nIncome program. I find some of these provisions ill-conceived\nand they may requir corrective action. Furthermore, they are\nobjectionable because of the unrealistic effective dates which\nCongress has imposed.\nThe unemployment compensation provisions of this bill\nrepresent the kind of cooperation and compromise between the\nCongress and the Administration to enact legislation which\nis in the interest of every American. As a result, the unemploy-\nour nation\nment compensation system will be able to better sèrve the needs\nSTATEMENT BY THE PRESIDENT\nI am pleased to sign the Unemployment Compensation\nAmendments of 1976, H.R. 10210. This bill incorporates\nmany of the recommendations proposed by my Administration\nin July 1975. It significantly improves our unemployment\ncompensation system.\nIn particular, this bill makes vital changes in the\nunemployment compensation system's financing. It restores\nthe fiscal soundness of the system so that unemployed\nworkers can be sure assistance will be available when\nneeded. Moreover, the bill clarifies some aspects of the\nlaw to ensure that benefits are paid only to those indi-\nviduals the program is intended to cover.\nH.R. 10210 extends unexployment compensation coverage\nto over nine million workers. This is the largest addition\nto this program since its beginning.\nH.R. 10210 also establishes a National Commission on\nUnemployment Compensation to study and make recommendations\nby January 1, 1979, on unresolved problems in the system.\nThe unemployment compensation provisions of this bill\nrepresent the kind of cooperation and compromise between\nthe Congress and the Administration to enact legislation\nwhich is in the interest of every American. As a result,\nthe unemployment compensation system will be able to better\nserve our nation.\nn\n0"
}