ing, those who heretofore supported it, is that they have found out State and local communities are in better financial shape than the Federal Government.

Mr. PHILLIPS. There has been considerable confusion which has arisen in the wake of the April 11 court decision. Our general position is that if Congress were to approve the GSA budget proposal in the fiscal year 1974 budget it would be pretty solid evidence of intent and it would, in addition, enable us to consider ways to protect the Federal interest and prepare for the possibility that the President meant what he said in terms of the fiscal year 1974 budget proposal.

FEDERAL BENEFITS TO POOR

Mr. MICHEL. A few moments ago you said there were roughly $30 billion identified as going to the poor.

Mr. PHILLIPS. Yes, sir.

Mr. MICHEL. Why don't you for the sake of the record at this particular point enumerate what we are talking about by specific items do it in dollar amounts.

[The information requested follows:]

FEDERAL BENEFITS TO THE POOR-SUMMARY TABLES

Insort + 7726

-May 3, 1973
Office of Economic Opportunity
authority.
thresholds) by the Federal government through expenditures and direct loan programs.
The figures in the attached summary tables are estimates of direct benefits provided to the poor (persons below the Census-Bureau-def nod povert
The figures shown are outlays--not obligations or budget
directly benefiting the poor, rather than the total funds for the program.
(For direct loan programs-which amount to about $0.05 billion of the estimated $30.3 billion requested for Fiscal Year 1974-ross loan
For each program,
disbursements were used as an appropriate measure of program level.) In all cases, the figures shown are the estimated portion of program funds
Details may not add exactly to totals due to independent rounding.
those fiscal years.
estimated outlays benefiting the poor were calculated by taking a total program outlays figure and multiplying it by the appro-
priate poverty percentage factor. For Fiscal Years 1964 through 1972, the total program outlays figures used were the actual outlays figures for
For Fiscal Year 1973, the total program outlays figures used were the outlays estimates prepared for the Fiscal Year 1974 Budget
Appendix (issued in January 1973) for outlays during Fiscal Year 1973 (ending on June 30, 1973); these estimates include the effects of proposed
rescissions and budget amendments. For Fiscal Year 1974, the total program outlays figures used were those projected to occur if the exact mounts
directly benefiting the poor.
in the President's Fiscal Year 1974 Budget request were appropriated; these projected estimates also include the outlays effects of proposed
Security Programs were used.
rescissions and budget amendments and proposed legislation. In general, calendar year 1971 poverty thresholds--the most recent thresholds available
when the Fiscal Year 1974 Budget was issued--were the latest poverty thresholds used in arriving at estimates of the proportions of program outlays
In a few cases, though, the estimated 1972-1974 poverty thresholds prepared for the Special Analysis of Federal Income

administering agency.
The basic units used in assembling the estimates shown in these tables were generally the appropriation accounts and activity lines within appro-
priation accounts as shown in the Fiscal Year 1974 Budget Appendix. Program administration funds were excluded from these estimates except for minor
cases where the amounts involved were small and the outlays in question could not easily be broken out from the appropriation structure used by the

the poor.
which had previously not been used.
The estimates in these tables are the result of over two years of intensive work to upgrade the quality of estimates of Federal benefits to
This work has increased the internal consistency of the estimates, adopted improved estimating techniques, and incorporated data sources
estimates are in those for Social Security and railroad retirement benefits.
In addition to the new data sources (on such programs as vocational rehabilitation, "black lung" benefits to
disabled coal miners, and vocational education) incorporated into the estimates issued last year, the most significent improvements in this year's
For the first time, sufficient information became available to make
possible a bridging between Census Bureau figures on the aged poor in 1970 and 1971, and Social Security Administration projections concerning the
aged poor in 1972 and 1973. (Besides the estimates for Social Security benefits, the new information also affects the estimates for Medicare.) In
addition, certain detailed tabulations on railroad retirement benefits became available for the first time. Because of these and other improvements
in the quality of the data base, the figures in the attached tables differ from previously released estimates of Federal benefits to the poor.

The estimates in these tables are from an OEO analysis based both on data supplied by the agencies administering the programs involved and data
figures for each program would be rechecked during this process.
attached tables.
from other sources (e.g., the Census Bureau). Some of those tables appeared in an OMB release dated February 6, 1973, and in an OEO release dated
February 20, 1973. It is hoped that it will be possible to prepare detailed backup sheets on the individual programs covered by those estimates;
If any typographical or other errors should be detected during the course of this
rechecking, they would be corrected, possibly causing any final revision of this series of estimates to differ slightly from the figures in the

FEDERAL BENEFITS TO THE POOR

The poverty population is defined by the Census Bureau in terms of family size and annual family income before taxes. In 1971, 25.6 million per-
sons-12% of all Americans--had incomes below the poverty line ($4,113 for a family of four). Of this total, almost half (48%) were children & you
21 or under, about a third (35%) were adults between 22 and 64, and about one sixth (17%) were aged 65 or over. Seventy percent were white and 30%
nonwhite. In terms of residency, 35% lived in central cities, 22% in metropolitan areas but outside central cities, and 43% in nonmetropolitan area.
below the poverty level.
The general trend in the poverty population has been downward since 1959, when there were 39.5 million persons (22% of the Nation's population)
(The lowest figure reached was 24.1 million, in 1969.) In net terms, all of the decrease during the period since 1959 has
been in male-headed families; as a result, the proportion of the poor who are in female-headed families (not including female unrelated individuals)
has risen from 18% in 1959 to 31% in 1971. Although the total number of poor persons was about the same in 1970 and 1971, the number of aged poor per-
March 1971.
sons decreased from 4.8 million in 1970 to 4.3 million in 1971, due in large part to increases in Social Security payments between December 1969 and
additional Social Security increases enacted in 1972.
A computerized population model projects that the number of aged poor persons will decrease further to 3.1 million in 1973, due to

Preliminary data on the dynamics of poverty suggest that the poverty population is not composed simply of a large group of families who are poor
year after year. Instead, as many as one third of the families who are poor during a given year are nonpoor the next year, and from one fifth to
one third of the families who are poor during a given year were nonpoor during the previous year. Among the subgroup which dean remain in poverty for
several years in succession, there is a heavy concentration of families headed by an aged person and of female-headed families.

Table I and Table II (on next page) show how Federal benefits to the poor have grown since Fiscal Year 1964, reaching an estimated $30.3 billion
in Fiscal Year 1974-11% of the total outlays in the President's Fiscal Year 1974 Budget request. Cash payment programs--Social Security, public
assistance, and so on--continue to be the largest single component of Federal benefits to the poor, making up an estimated 43% of the total in Fiscal
Year 1974. In addition to existing programs, one of the major items in this category in Fiscal Year 1974 will be the new Supplemental Security Incone
program (included in the "Public assistance payments" line), combining three of the four major existing public assistance programs (those for the aged,
the disabled, and the blind) under Federal administration. Because of the projected decline in the number of aged poor persons during the calendar
year 1971-1973 period, the proportion of Social Security benefits going to the smaller number of aged persons remaining in poverty is projected to
decrease also; this is the reason for the decrease in the "Social Security and railroad retirement" line from Fiscal Year 1973 to Fiscal Year 1974.
(See Table II, note 1.) The second largest component of Federal benefits to the poor is Health programs--e.g., Medicaid and Medicare. The component
showing the greatest percentage increase from Fiscal Year 1972 to Fiscal Year 1974 is the Income security/in-kind category (food and housing subsidy
programs), due in great part to increases in housing assistance payments (for existing units) and to a lesser extent to a Fiscal Year 1972-1973
increase in the food stamp program. For Fiscal Year 1974, both the Education and the Manpower categories contain proposed special revenue sharing
programs to be funded by merging together a number of existing programs. For each of the proposed special revenue sharing programs, estimates were
projected for this tabulation on the assumption that the proportion of funds benefiting the poor under the new program would remain about the same as
-the average proportion of funds benefiting the poor under the existing programs proposed to be merged into special revenue sharing.
TABLE I. FEDERAL OUTLAYS BENEFITING THE POOR BY FUNCTIONAL PROGRAM AREAS (in billions of dollars)
Functional Program Area FY 1964 FY 1965 FY 1966 FY 1967/ FY 1968 FY 1969 FY 1970 FY 1971 FY 1972
actual actual actual actual

FY 1973 FY 1974

actual

actual

actual

actual

actual

estimate request (est.)

(Notes follow Table II.)

Program Group and Subgroup

TABLE II

(in billions of dollars)

FEDERAL OUTLAYS BENEFITING THE POOR BY FUNCTIONAL, PROGRAM GROUPS AND SUBGROUTS

FY 1964 FY 1965 FY 1966 FY 1967 FY 1968 FY 1969 FY 1970 FY 1971 FY 1972 FY 1973 FY 1974
actual actual

actual

actual actual

actual

actual

actual

actual estimate request

(estimate)

FOOTNOTES TO TABLES I AND II

*Less than $0.5 billion.

**These figures have been adjusted to be comparable to those for earlier and later years by including public assistance payments for intermediate care facilities in the Medicaid" subtotal (under "Health") rather than in the Public assistance payments" subtotal (under "Cash payments"). (The unadjusted figures were 8.2, 8.9, and 11.1 for "Cash payments"; 2.3, 2.6, and 3.8 for "Public assistance payments"; 3.6, 4.1, and 4.8 for "Health"; and 1.4, 1.7, and 2.3 for "Medicaid.") #In these years, the "Public assistance payments" line includes some payments for medical assistance under pre-Medicaid programs. (The amounts for these years on the "Medicaid" line are for the pre-Medicaid Medical Assistance for the Aged program.) For Fiscal Year 1966 and all subsequent years, all public-assistance-related medical assistance payments are included in the "Medicaid" line.

In pre

##These aggregations differ from those used in previous versions of this tabulation.
vious versions, veterans pensions have been grouped together as a separate aggregate, while
veterans compensation programs have been included in the "Other cash payments" aggregate.

@Some programs included in these lines in Fiscal Year 1973 and prior years are proposed to be replaced by Education revenue shoring in Fiscal Year 1974. The amounts for these lines in Fiscal Year 1974 include outlays for these programs from obligations made in Fiscal Year 1973 and prior years (no funds being requested for these programs in Fiscal Year 1974).

@CA number of programs included in the "Skill training" and "Work support"
lines in Fiscal Year 1973 and prior years are proposed to be replaced by
Manpower revenue sharing in Fiscal Year 1974. (These programs are all
included in the Manpower Training Services appropriation account--the pro-
posed Manpower Revenue Sharing account.) Proposed activities under the
"State and local programs" activity line of the Manpower Training Services/tian-
power Revenue Sharing account in Fiscal Year 1974 are included in the "Manpower
revenue sharing" line of Table II. Existing programs and subprograms under
that account which are not proposed to be replaced by Manpower revenue sharing
in Fiscal Year 1974 (the activities under the "National programs" activity
line of the Manpower Training Services/anpower Revenue Shering account) are
included in the "Skill training" and "or.: support" lines (as appropriate)
of Table II for Fiscal Year 1974.

eccost of the amounts in these lines in Fiscal Year 1974 are outlays for obligations made in Fiscal Year 1973 and prior years (no funds being requested for most of the programs in these lines in Fiscal Year 1974).

NOTES ON TABLES I AND II

1. This tabulation is based on the Census Bureau definition of poverty, for which the starting point is a family's total money income including government transfer payments. Accordingly, if a family (or individual) receives a Federal income transfer payment but remains in poverty even after receipt of that payment, the dollers in question would be included in this tabuletion. However, if a family (or individual) receives a Federal income transfer payment which raises its total incone (after the payment) above the poverty threshold, the dollars in question would not be included in this tabulation, since the family is no longer in poverty by the Census Bureau definition (even though it would have been in poverty without the transfer payment). This consequence of the definition used here is what is behind the slight Fiscal Year 1973-1974 decrease (noted in the text) in the "Cash payments/Social security and railroad retirement" line. Overall Social Security benefits (i.e., going to both the poor and the non-poor) are expected to rise. However, the number of Social Security recipients remaining in poverty is projected to dccrcase after the recently enacted benefit increases; accordingly, Social Security benefits going to those remaining in poverty are expected to decrease also.