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the handicapped and the blind, but this one is just too costly, and the need does not justify the expenditures required.

This committee has the responsibility to the American people to assure we are not foolishly giving away from the needs of our own families to pay for those who are not truly needy.

The suggestions the President has made are a fine start in this direction. The added direction outlined in this testimony would take the Nation a quantum step toward a responsible program to feed the poor while guaranteeing others would not abuse the generosity of our people.

I urge your consideration of these proposals, and the approval of the entire package the President has presented.

Thank you.

The CHAIRMAN. Thank you, Mr. Clinkscales.

STATEMENT OF JAMES HACKING, ASSISTANT LEGISLATIVE COUNSEL FOR FEDERAL LEGISLATION, AMERICAN ASSOCIATION OF RETIRED PERSONS

Mr. HACKING. Thank you. I am here representing the American Association of Retired Persons, as well as the National Retired Teachers Association. These two organizations are the largest organizations representing the elderly.

They have a collective membership now well in excess of 122 million people age 55 and older.

Accompanying me is my colleague, Mrs. Messer.

Since my prepared statement is to be made a part of the record, I shall simply summarize my remarks.1

The CHAIRMAN. Let me say to you, sir, ma'am, I know it has been a long afternoon for you, and I appreciate your patience. Mr. HACKING. We admire your fortitude and endurance.

I would like to begin by saying that, as indicated by every measure available to us, inflation is clearly the chief concern of the elderly. The high and sustained inflation rate that has been rising for well over a decade and now is at double-digit levels, is rapidly eroding the purchasing power of the income of the elderly.

It is also rapidly wiping away the value of the assets these people accumulated during their working years and put aside, to provide themselves with some kind of income supplementation during old age. Now, according to the last statistics available, the inflation rate has begun to drive up the incidence of poverty among the elderly.

This is a reversal of the prior trend under which the incidence of poverty had been declining since the sixties. In 1979 the figures show the incidence jumped considerably-a full 1.2 percent. This was the largest increase in poverty ever recorded for any population group since the Census Bureau started keeping statistics on poverty. We think it is clear that the effect of inflation on the elderly is quite serious. It is no wonder that it is their chief concern. At the same time, it is also important to note that the elderly's dependence on Government programs is increasing dramatically and in view of the demographic shift taking place in population, that is a very ominous trend.

'See p. 461 for the prepared statement of Mr. Hacking.

The high rate of inflation, in conjunction with other related economic trends, such as the high and rising rate of unemployment is driving up the cost of the Government programs, adding people to the rolls and curtailing the real rate of growth in the resources needed to fund those programs. This is all ominous.

The food stamp programs cost is a typical example. It is rising uncontrollably. A 1-percent increase in the unemployment rate adds millions of people to the rolls at a cost of $580 million a year. A 1-percent increase in food prices adds $148 million a year to program costs. These increases are quite dramatic, and are reflective of what is happening across the board in all of the programs including social security.

Clearly the rate of inflation has to be brought down, and it has to be kept down. Moreover, these other related economic trends have to be reversed if we are going to be able to make ends meet. The associations have for a number of years been supporting a comprehensive anti-inflation program that would bring the rate down and keep it down. One of the elements that must be included in such a program if it is going to be effective, is the bringing into balance of the Federal budget and maintaining that balance over the business cycle. .

This will not solve the inflation problem by itself, but it is certainly something that must be done if we are ever going to bring the inflation rate under control.

We are pleased with and very supportive of congressional scrutiny of all Government programs to bring program costs under control; however, we would urge all the committees with jurisdiction over the various programs to be sensitive to the varing sets of facts and circumstances of the different categories of beneficiaries of these Government programs. We ask you to try not to leave people without options.

With regard to the food stamp program, we would like to single out three items which will adversely affect elderly households. I think the most important is the proposed switch to the 130 percent gross income eligibility standard. The new standard is a very inflexible one. It would not allow those expenditures that the elderly have for medical expenses and fuel and utilities of shelter costs that occupy large shares of the typical elderly household budget to be taken into account in determining eligibility.

We would hope that, at least the case of elderly headed households, you could preserve and maintain the "net income" standards used in determining eligibility under the current program.

There is another aspect to any switch to the new gross income standard for eligibility coupled with the retention of the existing deductions in determining program benefit allotments. We think very serious "notch" problems will occur and that we think will be unfortunate.

The other proposals which will have adverse impacts on the elderly will be the freezing of the standard deduction and the repeal of the rollback of the medical expense deduction threshold. We do not have accurate estimates on how many elderly households will be affected by these proposed changes, but we think the number will be significant.

I would like to point out to you, Senator, that these kinds of impacts, to the extent they cause some elderly households to suffer, will leave them without recourse. You must keep in mind that the elderly do not have access to wage income to compensate themselves, and because most elderly do not have any income tax liability, they will not benefit from any tax cuts enacted by the Congress. We therefor hope that in developing a package of program curtailments, you keep these points in mind and look very closely at what the impacts of proposed changes will be on various program benefi

ciaries.

The issue of providing cash in place of food stamps was raised earlier. I would indicate our associations have long supported cashing out food stamps. Three States are doing this now. We know the extent of participation in the food stamp program on the part of the elderly has been rather low, although it increased dramatically as a result of the 1977 amendments. Nevertheless, cashing out food stamps could be very costly unless it is done in the context of comprehensive welfare reform.

We hope this Congress will get around to taking a look at comprehensive welfare reform.

That concludes my remarks, Senator. I thank you for giving me the opportunity to present them.

The CHAIRMAN. Thank you, all three, for coming. You have been very helpful.

Now, it is entirely possible that one or more Senators who wanted to be here were not able to be here because of committee conflicts, so we may contact you in writing for any questions, and I would hope that you would be willing to respond to any questions they may have.

Thank you very much.

Now we have another patient lady, Sharleen Hemming of the Chicana Forum.

You have been here since when, 2 o'clock?

STATEMENT OF SHARLEEN MALDONADO HEMMING,
CHAIRLADY, BOARD OF DIRECTORS, CHICANA FORUM

MS. HEMMING. 10:30.

My name is Sharleen Maldonado Hemming, and I am the chairlady of the board of directors of the Chicana Forum.

The Chicana Forum is pleased to present our recommendations and observations concerning the effectiveness of food stamps in upgrading the quality of life for Mexican-American women and their families.

Our association is a closely knit group of women who have worked for the last 10 years ardently on behalf of the economic development and stabilization of Hispanic families.

We are primarily focused on the 2,000-mile strip referred to as the southwest border with Mexico, the motherland to the entire Southwest.

Our networks are extensive and our commitment to Hispanic consumers threads through these sometimes informal networks. As Americans proud of the cultural and historical contribution of Mexican heritage within the fabric of this country, we question the logic of a food stamp program for poverty communities. I am

continually told by members of radical nonprofit civil rights organizations that we are a poor group of people who suffer severe health and nutritional problems.

I listen to prominent black leaders umbrella us under the term minority-because that means a larger grant-and then dare to speak about our problems and issues. Many feminist organizations, such as the National Organization of Women or the National Council of Working Women or the National Council of Neighborhood Women, use the common denominator of women to speak for uscausing great friction for us with our male colleagues.

It was they who took the term "machismo" and made it ugly— never realizing what it meant to Hispanic women and Hispanic mothers. Their contracts with Federal agencies tell us we are oppressed and that we have little hope for economic gain. Well, perhaps it is good that they don't speak much Spanish. My 80-yearold grandmother would be very upset to learn she broke the rules.

It is time for you, Mr. Chairman, and your colleagues in the Senate to understand that continuing programs based on a welfare concept will cripple the solidarity of the Mexican-American community. The Chicano, or Mexican heritaged, family is the most valuable resource we Hispanic women share. We are a deeply religious and hard-working community, with a strong land base in the Southwest economy. Mexican-American women have twice as many children but one-tenth the divorces that non-Hispanic women show statistically in this country.

We have the youngest median age and the least formal education, we do pull together, and we pool our family resources together in a way which many of you here today may have forgotten. Our businesses are small but according to the Small Business Administration, the most successful. The family-operated restaurants and grocery stores have maintained the personalized and culturally charming profile of our neighborhoods, for example.

Large families still work for us. We care for our elderly and for our less fortunate as part of the family concept.

Welfare programs, such as food stamps, work against this important factor in our cultural and economic stabilization.

The past administration conducted surveys as to why Hispanics do not take advantage of existing welfare programs-including food stamps and health care.

The results were well-publicized at many Chicano and Hispanic conferences. The audiences were told that there was ineffective outreach. The recommendations were to establish capacity-building programs for new and old grantees-to build a system of expertise in getting welfare-to train our people to be the best users in this highly technical and professional field, welfare.

Well, this poverty philosophy is formally rejected by this association. You are training our youngsters to have bleeding hearts and to think of themselves as helpless and condemned. Better that they are hungry, but brave; poor, but full of potential and promise. The Government has no right to interfere in our family structure this way. As it stands, the Government food stamp program will continue to fail in its objective to facilitate life for lower income families. It is totally the wrong approach.

Instead of giving us food stamps, give us credentialed consumer profiles and nutritional surveys which are culturally relevant-a simple data indexing achievement. This we can use at the bank to justify services and businesses which will employ Hispanics, build the economy, and keep our food products processed domestically instead of abroad.

Here in D.C. is a section off Columbia Road referred to as the Latino Quartre by Hispanics. Many of you know it as AdamsMorgan. The many small restaurants and markets are thriving-in a manner well-known along the Southwest border. The foods are prepared in restaurants from imported items, mostly, and the little markets-as well as the big-carry mostly foreign products catering to the Hispanic diet. This is ridiculous. Wouldn't it make more sense for this committee to counter the trade deficit experienced in food products from Latin America among Hispanic households? Why should food stamps subsidize these foreign-processed products? There is no proof that food stamps guarantee nutritional quality, timely meals, cost-effective planning, or better grades in school. Indeed, nutritional studies by the National Institute of Health research division show us to be overfed. How many of us are on diets today? While there has never been any specific data on Hispanic-U.S. nutrition, expertise from the Pan American Health Organization and the U.S./Mexico Border Health Association have viewed the most pressing border State issues for Hispanics.

They do not feel nutrition to be a major health factor along the border areas of the Southwest. Indeed, there is every sign that the poverty level of Hispanic households can claim surprising nutritional merit in their menus.

There is a lot to be said for beans and the high vitamin C content of chile.

There are options other than food stamp programs which offer superior benefits for the families, neighborhoods, and health of the mentally and physically disabled-for those who are unable to survive without assistance.

Many elderly and disabled live in areas where there are small cafes and neighborhood business corners. These individuals require meals at strange hours sometimes due to medication-and immediately. Often they just cannot plan a meal and cook it. Food stamps are a waste for these people. Much better is a credit system for small businesses feeding meals to these people.

Many families find that food stamps and other subsidies still do not relieve them of the expense of providing shelter, crisis counseling, and emergency meals for disabled and fiesty elderly. Where are their tax benefits for bailing out an unproductive program that they pay for? Perhaps, this option should be reviewed.

I have a 100-percent Vietnam veteran brother, and I have observed the problems in the Veterans Administration, of the abuses, the waste in the food stamp program, and I sure wish you I would have oversight hearings on the Veterans Administration. I will be there in all my glory.

The Veterans Administration and other similar agencies-including local and State level, often participate in the food stamp program with the mentally disabled-knowing full-well that the program will be abused and even useless. Surely, these profession

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