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foreign policy, particularly on that part relating to our relations with the Soviet Union and Eastern Europe. He was in the Foreign Service for 25 or 30 years. He was acknowledged as one of the leading experts on Russia. He spoke the language well. He was sent there as a very young man specifically to learn Russian. He was our Ambassador to Russia. He had the distinction, if one wishes to call it that, of having his recall requested by the Soviet Government for remarks he made that were considered by the Kremlin as being critical of the situation in Berlin, I believe. This was about 10 years ago.

I believe everyone acknowledges that he has wide experience and knowledge of conditions in that part of the world and of our relations there.

I regret that anyone should criticize his efforts to enlighten the American people and Members of this body about our relations with Yugoslavia specifically, or Eastern Europe generally, or with the Kremlin.

His views are deserving of great weight. I would certainly not say they were infallible, but there is no more thoughtful man or student of our relations with Eastern Europe and Russia in or out of government.

He has resigned. He has a private capacity now. He is entitled to speak as any other citizen is. The only difference is that he speaks about his special field of study from knowledge and experience that are virtually unique among all the citizens of this country.

I believe the statements he made in this article are on the whole correct. I predict that history will prove that many of the suggestions that have been made regarding our policy with respect to the Soviet Union will prove to have been wise

ones.

Kennan, has quit as President Kennedy's Ambassador to Yugoslavia. Now free to speak out boldly, he warns that "overmilitarization" of our cold war thinking and fear of the "powerful influence of the right wing" are destroying our strength abroad.

(By J. Robert Moskin)

"Congress and the American people are so divided that American leadership is inde

cisive. It is high time we clarified our ideas, as a nation and a government, as to what we want in our contest with the Soviet Union and the rest of the Communist world: Whether we want these countries to change, to capitulate to our desires, or whether we want war. People who hold all these three points of view have influence in Washington."

This warning comes from George F. Kennan, long time expert on communism, former U.S. Ambassador to the Soviet Union and to Yugoslavia, and a prime architect of the Marshall plan. It is a rare event when a toprank diplomat like Kennan, who has served 29 years in the Foreign Service, breaks loose from the establishment and speaks out on America's foreign policy failings.

Kennan, 59, has fought for his convictions against Democrats and Republicans alike. He opposed Democratic Secretary of State Dean Acheson's German policy and was once fired by Republican Secretary of State John Foster Dulles for disagreeing with his talk of the "liberation" of Eastern Europe. Now, Kennan has resigned as President Kennedy's Ambassador to Communist Yugoslavia because, he feels, the Congress and Washington bureaucracy had him hogtied and have crippled American foreign policy.

After a lifetime in diplomacy (he was sent to the Soviet Union as soon as we recognized its existence in 1933), this tall, lean, imposing man sits now in his still book-bare office at the Institute for Advanced Study in Princeton, N.J., clasps and unclasps his hands, jumps up and paces the small room, peers out the window-as he struggles to say precisely what the American people should

know about the state of their Nation abroad.

In essence, he holds: We are fumbling because we have not made up our minds what kind of world we want, or what our role in

The PRESIDING OFFICER. The time the world should be. The administration is of the Senator has expired.

Mr. FULBRIGHT. I ask unanimous consent that I may have 1 more minute. The PRESIDING OFFICER. Without objection, it is so ordered.

Mr. FULBRIGHT. Several years ago Mr. Kennan became well known for an article in Foreign Affairs, written by "Mr. X"-I believe that was the pseudonym. It was considered as the origin of the policy of containment. Subsequent to that, a new policy of liberation theoretically was developed, which has not proved as effective. I think the actual state of affairs is much closer, and has been, to that of containment rather than liberation.

He also has given noted lectures on Western Europe regarding our policies in that area, which, while they have not been followed, and were roundly condemned by former Secretary Acheson, may prove in the future to have had considerable wisdom.

In any case, I for one wish to commend Mr. Kennan for taking the trouble to give the public his views. I regard him as one of the outstanding public servants of our time.

EXHIBIT 1

OUR FOREIGN POLICY IS PARALYZED (NOTE.-Respected diplomat, Russian expert, and Pulitzer Prize historian, George F.

zeroed in on political victory at home, enmeshed in bureaucratic redtape and buffeted by political cyclones that roar in from many directions. It sacrifices thought-out policies to pressures often inspired by "the powerful influence of the American rightwing." Kennan fears that unless we nail down what we want our foreign policy to be, we will plummet to the ground in wingclipped futility, or plunge into the flames

of war.

"If we can't devise solutions better than this, we should ask ourselves whether we

belong in the big leagues," Kennan warns. Indecisiveness at the top leads to a sterility of ideas and a failure to act. As a result, he argues, our foreign policy is paralyzed. A politician, whether in the White House or the Congress, who voices new ideas or acts with firmness in foreign affairs, must always protect his political life against extremists who talk loudly, but carry a very small stick of responsibility.

Kennan sees three forces paralyzing our foreign policy. The first is the Congress, in which a few powerful men-such as some leaders of the House Ways and Means Committee-tie up foreign policy. Some have strong notions about what the Government should be doing; others fear attacks from the extremists; some speak for special interests or jealously hug their prerogatives as holders of the Nation's purse strings. There is no reason to believe Kennan says, that their views represent American opinion more accurately than the President's.

The second force is the deadening hand of Government bureaucracy. As an Ambas

sador, Kennan found "the great difficulty was to get opinion and authority out of Washington, especially when it cost money."

The bureaucracy cannot react to changes fast enough. "Other countries find they are protected by our own financial procedures," he says. "The ponderousness of our Government institutions works against our best interest."

The third force Kennan sees crippling our foreign policy is the self-interest of our allies. "This coalition is incapable of agreeing on any negotiated solutions except unconditional capitulation and the satisfaction of the maximum demands of each of our allies. It is easier for a coalition to agree to ask for everything but the kitchen sink, rather than take a real negotiating position.

"This worries me because there is not going to be any capitulation. Our adversaries are not that weak. If we cannot find any negotiating position, the cold war will continue, and the dangers will not decrease."

The Russians may not accept our proposals, "but unless you dangle something before them, you put no pressure on their

decisionmaking."

Kennan sees no New Frontier in foreign affairs. "The Kennedy administration is not by any means a free agent in foreign policy. I can see important changes in military policy. But in foreign policy, the administration has had little latitude of action.

"Supposing these strictures did not exist and the Congress were more receptive? I believe we could usefully rethink our position on the problems of Germany and Central Europe. The same applies to the complex of problems surrounding Communist China, Taiwan, and the Japanese peace treaty. We ought to review carefully our attitude toward Gen. Charles de Gaulle and see whether, under his concepts, France could not assume more of the burden of leadership in Western Europe and protection of Western Europe against Communist pressures. There ought to be searching reexamination and clarification of our policy toward Eastern Europe. The same applies to the various neutralist countries in Asia, Africa, and Europe.

"Finally, there must be a real debate and clarification of our views on the problems of nuclear weapons. It seems dangerous to me that we should have to continue to stagger along with unresolved differences such as we have just witnessed in the debate on the test ban treaty."

To illustrate how such forces paralyze our foreign policy, Kennan explains why he resigned from the State Department: "I had no difficulty with the administration, but the actions which the Congress designed to tie the administration's hands in our economic relations with Yugoslavia—and in a way that would deny the Yugoslavs normal commercial treatment-largely paralyzed my effectiveness there. If I had greater support on the congressional side, and felt there were important possibilities for accomplishment, my decision might have been different."

Although the United States had millions of dollars in the bank in Yugoslavia, Kennan spent months getting congressional approval even to repair the Embassy fence. "The jealous and narrow ways in which these matters are handled have to be changed."

Last July 26, an earthquake destroyed the Yugoslav city of Skoplje, killing and injuring thousands. He has bitter memories: "The congressional strictures were so severe that we didnt know how we could help. The only thing I could do was give blood. No congressional committee could stop me from doing that."

Last year, the Congress directed the President to stop, as soon as practicable, normal most-favored-nation trade with any country dominated or controlled by communism. "The Yugoslavs aren't even asking aid," Kennan says. (They stopped taking military assistance from the United States in 1957.)

"They just want normal commercial treatment, and the Congress won't give it to them. That's very bad.

"I don't like to serve an administration that has been told by Congress it can't aid a country if it wishes to. I feel very strongly it is foolish to deny normal commercial intercourse to a country facing important choices between East and West. I don't favor any gifts to Yugoslavia, but I think it unfortunate that we should leave the longterm financing of Yugoslavia's industrial development entirely to Russia."

Kennan found some Congressmen sympathetic toward his views on trade with Yugoslavia. They told him, "What you say is true, but I don't want to go back to my district having helped a Communist regime." Kennan charges: "This resulted in a position that gave aid and comfort to an enemy. They were interested in keeping themselves out of trouble."

He believes that much of the pressure on such Congressmen comes from the right wing. "People are terribly sensitive to the charge that they are not sufficiently antiCommunist. The right wing has had an influence-it silences its opponents and makes everyone desirous of not being criticized from this quarter. A great part of the country stands silent on this. By far the greatest part of the American press is intimidated."

He concludes: "There are tremendous issues that ought to be thoroughly debated and talked out and resolved in such a way as we can have a clear, vigorous, and consistent policy in all these fields. These issues should not be allowed to smolder and paralyze national action.”

Kennan sets forth four basic questions that Americans must answer for themselves:

Do we want to destroy, or negotiate with, Communist nations? At the heart of our international confusion is the question of "whether we are determined to destroy all these Communist regimes and inevitably have war, or are we determined to take advantage of such elements of moderation as may appear in the behavior of some of them, with a view of strengthening the chances of world peace?"

Kennan states bluntly where he stands: "People who expect the capitulation of Communist power are talking about something so unrealistic that they really want war." He calls their view highly irresponsible.

Some Americans, in Kennan's view, see totalitarianism as a straitjacket in which people get locked permanently. Others recognize it as one illness of the human spirit

from which societies recover.

He contrasts Khrushchev's regime with Stalin's: "I don't think it is more friendly toward us than Stalin's, but it is probably ready to go further in the direction of accommodation with us on questions of disarma

ment than was Stalin. The moderation of

the internal terror and the greater liberality internally make it easier for us to deal with them."

Looking beyond the Khrushchev era, Kennan says, "The demand of Russian youth for knowledge about the outside world and for freedom of expression has reached a dimension such that no Russian regime will be able to frustrate it entirely."

Do we want political or military solutions for the cold war? Kennan has long felt that our thinking about the cold war has been dominated by overmilitarization. often believe, if we have military superiority,

We too

the Communists must meet our demands.

To Kennan, Europe is a political problem. This judgment led to his break with Secretary of State Acheson. Kennan advocated a withdrawal of both Soviet and American

power from the center of Europe. Acheson, he recalls, took "violent exception" to this idea of "disengagement" and blasted it as "a timid and defeatist policy of retreat" and "the new isolationism." Kennan still disagrees with Acheson's claim that if the great

powers were to withdraw, all Europe would go down on its knees. He points to the Austrians: "They didn't go down on their knees. The Finns have done nothing of the sort."

As a result of this overmilitarized thinking, Kennan believes we have mishandled postwar Germany. "Ever since 1950, when Mr. Acheson proceeded to the rearming of West Germany, I've had misgivings about it. This has been a serious handicap on our policy in Eastern Europe. All of them fear Germany and don't want to see Germany rearmed. This is one fear that is shared by the people and the regimes of Eastern Europe. "It wouldn't have hurt the Germans to have had at least 20 years of demilitarization."

Kennan would like to see a unified but neutralized Germany possessing only weapons for defense. "None of this can be changed overnight. The West Germans are members of NATO, and we have to respect that status. I'm talking about a disposition to change some of these arrangements if, and only if, the Russians will make some compensation-only as part of a deal."

As Kennan sees it, two factors block the reunification of Germany: "We are inhibited by feeling the need of a strong U.S. military force in West Germany, even if the Russians withdraw in East Germany. They are inhibited by the disgraceful weakness of the Ulbricht regime." We should press the Russians to replace it. "They realize they are holding up a regime which has no popular support. I believe someday Russia will have to abandon East Germany and let it rejoin Germany."

Disengagement in Europe has not become the containment of Soviet power have greatly American policy, but Kennan's ideas about influenced our approach to the Soviet Union. They also triggered his being fired from the Foreign Service in 1953 by Secretary of State Dulles, or, as Emmet John Hughes has written, discourteously dismissed.

Kennan is convinced that Dulles talk of rescuing Eastern Europe damaged the United States. "Mr. Dulles liked to talk about liberation of Eastern Europe, but did nothing about it. I prefer not to talk about it. Mr. Dulles talked a line designed to appease the rightwing critics of our policy, and followed the same policy as in the past. I have intend to act." The effect of Dulles' words felt we should not talk in a way we did not was "to tighten the apron strings of the Kennan warns that we still have not made satellite governments to the Soviet Union." up our minds "whether we want Eastern we want to overthrow these governments." Europe to evolve in our direction, or whether

communism.

On what basis should we give aid to other nations? Kennan argues that economic and ing nations from dropping into the pit of military aid is no checkrein to keep teeter"I personally am skeptical about foreign aid, especially when it is given as a condition of not going Communist. We should help those who say, 'We are going to survive whether you help us or not'-like Finland. When a country says, 'If you don't help us, we will go under,' we should get off the trolley."

Jumping off the trolley can be a tricky maneuver, as the U.S. Government was reminded recently when it reexamined its

choices of action in South Vietnam. Kenlike Ngo Dinh Diem's. "We should appraise nan wants to take a tough look at regimes them-neither take too tragic a view of them nor underrate them. When you have regimes of this sort, they are awful fast to take advantage of your willingness to help them. You always have to be ready to get

out."

If we find people unable to help themselves but still consider their area vital, Kennan adds, "then we have to be ready to take over entirely, and be ready to face the

charges of colonialism-and we have to be very leery, very cautious of that.”

He thinks getting out of South Vietnam is a possibility to be considered: "Let's not overdramatize the results. Let's look at it realistically. It will be bad, but not as bad as we sometimes think. Politically, I regard the Chinese as much more deeply committed against us than the Russians." However, he adds, "the Chinese Communists are not yet a substantial naval or air power. It does not bear the same military implications as Russia taking over. On the contrary, there is such a thing as overextension."

How should we react to the Soviet-Chinese split? "The Soviet-Chinese conflict represents one of those turns of events in the face of which a great nation has no excuse not to think through its policies toward the Communist world."

Kennan sees little hope of establishing relations with the Chinese Communists now. He thinks they are "much too violent, wild, emotional." Yet, he contends, "the day will come when they settle down and we can have talks with them. We should be prepared to talk to the devil himself, if he controls enough of the world to make it worth our while."

He regards recognition of Communist China as "nothing more than the opening of a channel of communication-not a reward or approval." But, he says, "I am not sure they are even prepared to treat an American representative properly. I think we might have de facto recognition, keep a chargé there as the British do, if they will treat him properly."

Of Communist China entering the U.N., he says, "I don't think they would be a very constructive member of the U.N.-any more than the Russians have been. But if a majority of members wanted them in, we would put ourselves in a misleading position by holding out against it. This too is not some kind of reward."

How can the United States rid itself of the jellylike indecision that paralyzes our foreign policy? Kennan points to three alternatives:

First, if we are not going to act as a powerful and responsible leader of the free world, we had better get out of the arena. Kennan does not advocate isolationism, but he feels that the present chaos is worse than isolation. Americans are not used to compromises and dealing with a formidable adversary in peacetime. We need, he says, either to strengthen the Executive's freedom to act in foreign affairs or quit. "We lived for more than 100 years on principles of withdrawal from the mainstream, and maybe this should be done again."

His second alternative is to modify our political system. "Our form of Government is not well suited to making decisions." The reason for this, he says, is that "power is too much fragmented in Washington, including the Congress, the Armed Forces, the FBIall the people who decide our national actions."

Kennan suggests that we move closer to a parliamentary system. We could regard the off-year congressional elections between presidential elections as a vote of confidence on the administration's policies. If a President felt the vote showed that he was not supported in the country, he could be free to call a presidential election immediately. (To those who fear this idea, Kennan emphasizes that it would have to be made by amending the Constitution: "There's nothing treasonable about that.")

Kennan's third alternative is to mount a public debate over foreign policy so that the American people can understand the issues, make up their minds about them and reach a consensus. Out of such a debate, Kennan hopes, can come an American viewpoint-a body of instruction to the President and a body of support. "You must have

a crystallization of dominant public opin- 1949, to Paul Hoffman, then Adminision. Our international position calls for this trator of the Economic Cooperation Adtrator of the Economic Cooperation Adkind of clarification-calls urgently for it-ministration, in which I said that in such a way that perhaps it is the last call.

It can't come too soon."

Mr. ROBERTSON subsequently said: Mr. President, in my opinion, our former Ambassador, first, to Russia and then to Yugoslavia, Hon. George F. Kennan, is the ablest diplomat that we have developed, especially with respect to our relations with the Communists, in recent years. Before resigning from the diplomatic service to become a professor at Princeton, Mr. Kennan had spent most of his adult years with the State Department, having been sent to the Soviet Union as soon as we recognized it in 1933. In an interesting interview in the November 19 issue of Look magazine, Ambassador Kennan had this to say about foreign aid:

I personally am skeptical about foreign aid, especially when it is given as a condition of not going Communist. We should help those who say, "We are going to survive whether you help us or not"-like Finland. When a country says, "If you don't help us, we will go under," we should get off the trolley.

With that statement I am in full sympathy and accord, as I indicated in my speech to the Senate last Friday when I quoted my letter of December 4,

through our aid governments had been
established among all of our World War
Allies in Western Europe sufficiently
strong to resist the pressure of minority
Communist groups.

CIVIL RIGHTS LEGISLATION AND FOREIGN AID LEGISLATION Mr. MORSE. Mr. President, the press continues to print misstatements and misrepresentations in regard to the status of civil rights legislation on the floor of the Senate. The smear tactic of the press is that because the senior of the press is that because the senior Senator from Oregon refuses to give unanimous consent to limit debate in unanimous consent to limit debate in the Senate on the foreign aid bill, he is in some kind of collusive conspiracy with anticivil rights forces in this country, and that we would be able to proceed and that we would be able to proceed to consideration of a civil rights bill in the Senate if the senior Senator from Oregon would be more cooperative with the leadership of the Senate by surrendering his right to prevent unanimous consent agreements on the foreign aid bill.

Let me say once again that if consideration of the foreign aid bill were stopped this minute, by passage of the General orders under rule VIII

bill, there would not be a start on civil rights legislation on the floor of the Senate, for there is no civil rights bill that any Senator has any intention of offering immediately on the floor of the Senate.

It is the understanding of the senior Senator from Oregon that the Senate is awaiting some action in the House on civil rights. The House is probably 2 and even 3 weeks away from completing action on a civil rights bill.

I grant that debate on civil rights could be started if that happened to be a part of the agenda, but it is not a part of the agenda.

Moreover, an examination of the Senate Calendar does not reveal any great list of important legislation that is awaiting action by the Senate. It is a short list. With the exception of the cold war GI bill and two or three other measures, much of it can be disposed of within a few days of debate. Seven of the bills on it have already been adopted this morning.

I ask unanimous consent to have printed at this point in the RECORD, the general orders of the Senate Calendar, which shows the bills awaiting Senate consideration.

There being no objection, the material ordered to be printed in the RECORD, is as follows:

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A bill to amend the Federal Aviation Act of 1958 to provide for the regu-
lation of rates and practices of air carriers and foreign air carriers in for-
eign air transportation, and for other purposes.

A bill to establish a uniform system of time standards and measurements
for the United States and require the observance of such time standards
for all purposes.

An act to amend the Merchant Marine Act, 1936, in order to provide for
the reimbursement of certain vessel construction expenses.

Concurrent resolution to create a joint committee to study the organization
and operation of the Congress and recommend improvements therein.
Resolution amending Rule XXV of the Standing Rules relative to meet-
ings of committees while the Senate is in session.

Reported by

June 27, 1963.-Mr. Eastland, Committee on the Judiciary, without amendment. (Rept. 331.) July 2, 1963.-Mr. Yarborough, Committee on Labor and Public Welfare, with amendments. (Rept. 345) (Minority views.)

Aug. 28, 1963.-Mr. Monroney, Committee on Commerce, without amendment. (Rept. 473).

Aug. 30, 1963.—Mr. Magnuson, Committee on Commerce, with amendments. (Rept. 475.)

Sept. 11, 1963.-Mr. Bartlett, Committee on Commerce, without amendment. (Rept. 486.) (Minority views filed.)

Sept. 19, 1963.-Mr. Hayden, Committee on Rules and Administration, with an amendment. (Rept. 504.) (Individual and supplemental views filed.)

Sept. 19, 1963.-Mr. Hayden, Committee on Rules and Administration, without amendment. (Rept. 506.) (Individual views filed.)

Resolution providing for germaneness of debate under certain circum- Sept. 19, 1963.-Mr. Hayden, Committee on Rules and

stances.

A bill to amend title 12 of the Merchant Marine Act, 1936, in order to re-
move certain limitations with respect to war risk insurance issued under
the provisions of such title.

A bill to continue certain authority of the Secretary of Commerce to sus-
pend the provisions of sec. 27 of the Merchant Marine Act, 1920 with re-
spect to the transportation of lumber.

An act to amend further the Foreign Assistance Act of 1961, as amended,
and for other purposes.

A bill to amend the Library Services Act in order to increase the amount
of assistance under such act and to extend such assistance to nonrural
areas.

A bill to consent to the institution of an original action in the Supreme
Court for the adjudication of the claim of the State of Hawaii to certain
land and property situated within that State.

A bill to change the requirements for the annual meeting date for national
banks.

A bill to amend sec. 375 of title 28 of the United States Code, relating to
the annuities of widows of Supreme Court Justices.

A bill for the relief of Lila Everts Weber---

An act to amend the Bretton Woods Agreements Act to authorize the U.S.
Governor of the International Bank for Reconstruction and Develop-
ment to vote for an increase in the Bank's authorized capital stock.
Concurrent resolution to provide for the printing of 3,000 additional copies
of civil rights hearings.

A bill to require annual reports instead of quarterly reports under the Re-
construction Finance Corporation Liquidation Act.

An act to revise the provision of law relating to the methods by which
amounts made available to the States pursuant to the Temporary Unem-
ployment Compensation Act of 1958 and title XII of the Social Security
Act are to be restored to the Treasury.

Administration, with amendments. (Rept. 507.) (Individual views filed.)

Sept. 24, 1963.-Mr. Bartlett, Committee on Commerce, with an amendment. (Rept. 523.) (Individual views filed.)

Oct. 17, 1963.-Mr. Magnuson, Committee on Commerce, with amendments. (Rept. 568.) (Minority views filed.)

Oct. 22, 1963.-Mr. Fulbright, Committee on Foreign Relations, with an amendment. (Rept. 588.)

Oct. 29, 1963.-Mr. Morse, Committee on Labor and Public Welfare, without amendment. (Rept. 592.) (Minority views filed.)

Oct. 29, 1963.-Mr. Fong, Committee on the Judiciary, without amendment. (Rept. 594.)

Calendar called Oct. 39, 1963

Nov. 1, 1963.-Mr. Robertson, Committee on Banking and Currency, without amendment. (Rept. 622.)

Nov. 1, 1963.-Mr. Dirksen, Committee on the Judiciary, with an amendment. (Rept. 623.)

Nov. 1, 1963.-Mr. Long of Missouri, Committee on the Judiciary, without amendment. (Rept. 624.)

Nov. 1, 1963.-Mr. Fulbright, Committee on Foreign Relations, without amendment. (Rept. 625.)

Nov. 1, 1963.-Mr. Jordan of North Carolina, Committee on Rules and Administration, without amendment. (Rept. 627.)

Nov. 1, 1963.-Mr. Robertson, Committee on Banking and
Currency, without amendment. (Rept. 628.)
Nov. 4, 1963.-Mr. Byrd, of Virginia. Committee on Fi-
nance, without amendment. (Rept. 629).

Mr. MORSE. Mr. President, therefore, once again let me say-although it never does any good to give facts to the press, because a very large segment of it is so Pravda inclined that it does not report the facts and will not print them that those of us who are interested in full debate on the foreign aid bill are, first, not in any collusion or conspiracy with the anti-civil-rights forces in the Senate, if there are any; and, second, there is no present intention to start, in the immediate future, Senate consideration of a civil rights bill. Our refusal to give a definite commitment to debate the foreign aid bill on a time limitation bears no relationship whatever to any immediate handling of civil rights legislation.

distinguished and knowledgeable array of talent which you have drawn together to present the program.

for granted. During the past 26 years, the Most of us take the social security system system has been broadened and liberalized so that today nearly everyone who draws wages or a salary, or is self-employed, is in the program. It has become an accepted way of life in the United States, and few practical politicians suggest its repeal anymore. But this does not mean that it is impractical to call attention to the state of insecurity of social security. It is a deadly practical situation which must be faced up to; and if the ill-considered and unfair King-Anderson bill has done nothing else than to focus public attention on the deplorable state of our social security system, it has served a useful

purpose.

During 1961 and 1962, while we were going almost $14 billion deeper into debt, we had

Mr. MANSFIELD. Mr. President, will inflation of over $14 billion throughout the the Senator yield?

Mr. MORSE. I yield.

Mr. MANSFIELD. I wish to reinforce what the distinguished senior Senator from Oregon has said. I point out that if it were his desire to delay any legislation, he could do so quite easily. However, every time that I have gone to him and other Senators to bring up bills on the calendar, he has been most cooperative and courteous.

I join in what he has said, and point

out to Senators that so far as the calendar is concerned, it is clear at the moment that we are waiting for a bill in the civil rights field from the House, that no bill has yet been reported to the House, and therefore, we do have time.

Mr. MORSE. I thank the majority leader very much for that statement. It is typical of the majority leader. I appreciate his statement very much.

INSECURITY OF SOCIAL SECURITY

Mr. MILLER. Mr. President, on October 31 it was my pleasure to address the 45th annual meeting of the Illinois State Chamber of Commerce on the subject "Insecurity of Social Security."

All of us from time to time receive letters from people inquiring why social security taxes are as high as they are, and expressing concern over the prospect that they will become higher. Along with my speech, I included an outline setting forth various tables showing important data relative to the social security system, not the least of which is the fact that the social security system is now $320 billion unfunded, and that, of course, the prospect of a hospitalization act financed through social security taxes looms in the offing as an additional burden on the backs of Americans.

I ask unanimous consent that the text of my address, with the tables and examples, be printed in the RECORD at this point.

There being no objection, the material was ordered to be printed in the RECORD, as follows:

INSECURITY OF SOCIAL SECURITY (By JACK MILLER, U.S. Senator, Iowa) Members of the Illinois State Chamber of Commerce, and guests, first let me express my appreciation for the gracious invitation to appear on the splendid program of your 45th annual meeting. It is an exceptionally well-balanced and timely program; and I am honored to appear in the company of such a

United States. This is at the rate of $7 billion a year-equal to a 10-percent income tax increase. Illinois' share of this $7 billion annual inflation was $459 million-equal to a 3.4 percent sales tax put on the backs of Illinois citizens to finance the billion-dollar deficit spending programs passed by Congress. The wholesale price index has remained stable for the past 5 years. However, the retail cost-of-living index, which is what affects 99.9 percent of our citizens, has gone up from 214.5 in January of 1961 to an alltime high of 221.3 in September. And the correla

tive is that the purchasing power of our dollar has fallen during this period from 46.6 cents (measured against a 1939 dollar worth 100 cents) to 45.2 cents.

All of this means that social security recipients are being steadily squeezed by a continued decline in the purchasing power of their pensions.

you can see how the increases in pensions From table 1 (see below) in our outline, enacted by Congress have been needed to preserve the purchasing power of pensioners because of the declining value of the dollar.

Since most of these pensioners do not have enough income to pay income tax, or pay very little income tax, they are naturally concerned over an even greater decline in the value of their pensions. They would receive no benefit from a tax cut; but they would severely feel a stepped up inflation if a tax cut were enacted without a cutback in spending to make room for it. Congress would sooner or later have to increase the pensions-and taxes.

These are two reasons for the insecure state of the Social Security System:

1. Millions of people have been blanketed into the program without paying more than a fraction in taxes of the cost of the benefits they are receiving. (See table II below, showing the total payments a pensioner would have made under the various actsas against just the first year of retirement benefits he or he and his wife would receive.)

2. Congress has been increasing social security benefits and expanding the coverage without at the same time increasing social

presently covered persons in the social security system was $486 billion-$269 billion

in excess of the value of the taxes these persons and their employers would pay, plus what was left in the trust fund.

Following the 1961 act, the shortage reached $321 billion. In just 4 years, the shortage legislated by Congress amounted to $52 billion.

As a class, present members of the social security system will pay an estimated 42 percent of the value of their benefits in taxes.

But, as shown in table 4 (below), new entrants, along with their employers, will pay an estimated average of 167 percent of the value of the benefits they can ever hope to receive. The discrepancy is worse for many, of course, depending upon whether they are married, how few children they have, and whether or not they are self-employed. This disproportion for new entrants into the social security system will continue indefinitely into the future and will grow worse if Congress votes some more benefits under social security without increasing taxes to pay for these added benefits currently.

It is in this setting, of course, which the administration's social security-financed Hospital Insurance Act of 1963-formerly misleadingly called medicare, is to be considered. No doctor bills are covered-only limited hospital and nursing home bills. Under the proposal, some 16 million persons over 65 would immediately become eligible for benefits even though they never paid any tax money to finance them; and millions of others in the middle-age group would pay only a fraction in taxes of the value of the benefits they would receive. And this would be so whether or not any of these people could afford to pay for these benefits out of their own resources.

In other words, there would be another deficit in the social security system to be made up by higher taxes on present and future entrants into the system-along with their employers. This deficit has been variously estimated at between $25 and $60 billion, and it would be on top of the $321 billion deficit now in the social security system. The only way the deficit could be avoided would be to modify the bill to exclude benefits for those who can afford to pay for them, or partially exclude benefits for those who can afford to pay part of them, and to increase taxes enough to put the new program on a pay-as-you-go basis. Otherwise, future generations of employees and their employers will pick up the tab.

From table 5 below, you can see that two more boosts in social security taxes for employers and employees are already in the law. However, be forewarned that there may be more increases. Congressman WILBUR MILLS, of Arkansas, the chairman of the House Ways and Means Committee, has introduced a bill which would raise the earnings base from $4,800 to $5,400. This bill appears to be in response to a trustee's report on social security trust funds a few months ago which indicated a long-range income deficiency of about 3 percent. The Mills bill would cut in half the 3-percent deficiency. If enacted, it would mean that the employer and em

security taxes enough to meet the increased ployee would each pay $21.75 a year more;

costs on a current basis. When measured against the benefits which are going to have to be paid out to all persons presently working or retired under social security, the fund is some $320 billion short. This represents a per capita deficit of $4,679 for each and every person in the social security program today.

Incidentally, the balance in the fund was about $19 billion last June 30-down $4 billion from its high point of $23 billion in 1957.

From table 3 (see below) in your outline, you can see how the deficit has increased just since 1956. Following the 1956 act, the value of benefits and expenses for all

and self-employed persons earning $5,400 would pay $32.40 a year more.

Table 6 below indicates how, even in recent years, tax payments are falling short of funding benefit payments. Just for the 6 years shown, the shortage comes to $4.3 billion. This will level off in future years, but the long-range deficiency will still be an estimated 3 percent unless either the tax rate or the earnings base, or both, are increased.

If the administration's proposed Hospitalization Insurance Act of 1963 (the KingAnderson bill) is enacted, the earnings base would be increased to $5,200, and the rate would be increased one-fourth of 1 percent

for the employer and one-fourth of 1 percent for the employee; the rate would be increased four-tenths of 1 percent for self-employed individuals. It would mean that the employer and employee would each pay $24.50 a year more; and self-employed persons earning $5,200 would pay $42.40 a year more. Even so, as I have earlier pointed out, this would produce a deficit of between $25 and $60 billion-still further aggravating the 3-percent deficit the Mills bill is designed to partially correct.

However, let us not be so naive as to think that if the administration bill is enacted, this is where social security tax increases will stop. The limited scope of the benefits only 90 days' hospitalization and 180 days' nursing home per benefit period, and no doctor bills-will hardly satisfy the needs of people who are met with catastrophic illness or disease, or who have large doctor bills, and who do not have the wherewithal to pay for them. As time goes on, these areas of need will be covered-for not only persons 65 and over, but for younger people as well. This will require a further boost in taxesunless benefits to those who do have the wherewithal to meet their medicare costs are dropped from coverage. Mr. Wilbur Cohen, Assistant Secretary of the Department of Health, Education, and Welfare, has testified that over the next 10 years, the earnings base for social security taxes might well go from $5,200, as proposed in the administration's bill, to $9,000.

Not to be overlooked is the fact that the social security tax is a flat rate applied against gross salaries and wages. Under the administration's bill, the first $5,200 of the wages of a low-income taxpayer would be taxed exactly the same amount as the first $5,200 of the income of a high-bracket income taxpayer. This is just as regressive as having a 1-percent Federal sales tax to finance the program. In view of this fact, it is incredible to find the AFL-CIO Washington officials championing the administration's bill. These are the same people who strongly oppose sales tax increases as being "regressive." Now they come along and support a bill which calls for financing by an increase in the regressive social security tax. They reply by saying that the average worker would like to put aside a small portion of his weekly paycheck to buy social insurance, so that when he retires there will be a fund to cover his hospital and nursing home expenses. There are two answers to this: (1) the worker is already, through income taxes, putting aside a portion of his weekly paycheck to finance the Kerr-Mills program which, if amended to cure a few defects and if given a fair chance to work, will meet the needs of those who cannot afford their doctor, hospital, and nursing home expenses; (2) workers had better not be too sure about having a fund from which to pay benefits when they retire, because of the horrible unfunded liabilities that plague the social security system.

When future generations come into the hundreds of billions of dollars in debt heritage we are leaving them and begin to elect people to Congress, they are not going to be very happy. They could well cut back the benefits, scrap the program, or enact a new program financed out of general taxationanything to get out of a program which forces them to pay far more in taxes than the value of the benefits they could ever hope to receive.

Other Federal Government trust funds are in bad shape besides the old-age and survivors insurance trust fund. Also in the social security system is the disability insurance trust fund. This is expected to go broke between 1969 and 1975 unless some changes, such as those provided in the Mills bill, are enacted. The civil service

retirement system has unfunded liabilities amounting to $34 billion, and Civil Service Commission officials have warned that the retirement fund will go bankrupt between 1980 and 1990 unless some changes are made. Things are so bad that more than $4 billion in unused sick leave has been accumulated by civil service employees, and Congress has no plans to reimburse these employees for this accumulation because the retirement fund is in such jeopardy. Some administration officials and some Members of Congress would postpone the day of reckoning by simply integrating the Civil Service Retirement Fund into the Social Security System, and adding the $34 billion of unfunded liabilities onto the $320 billion in unfunded liabilities of the social security system.

If what I have said leaves you with a insecure feeling over the fiscal policies of your Federal Government in general and the social security system in particular, then I would recommend that you make known your feelings to not only those Members of Congress who have been supporting these policies, but to the White House as well. The proposed tax cut without a cutback in spending to make room for it affords a good opportunity to do this. The American people are being teased with the idea that we can have a meaningful tax cut of billions of dollars and at the same time continue to go billions of dollars deeper in debt. They should know-and especially businessmenthat you can't get something for nothingeven on the New Frontier.

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1956 act..

1958 act.

1960 act.

1961 act

Value of Unfunded benefits liability

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NOTE.-Acts of 1956, 1960, and 1961 did not increase pensions, but liberalized coverage (e.g., brought in members of Armed Forces, professional self-employed, permitted optional retirement at age 62, etc.).

TABLE 4.-Showing relation between value of taxes to be paid by new workers coming into the Social Security system and their employers, and value of benefits to be paid to them upon retirement

Year

Annual pension

1939 dollar

worth 100

cents

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Cents

benefits

$499.20

99.2

$495.20

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