union member with whom I have come in contact in recent months.

I can report to you that the repeated attacks on the social security system which have taken place in Washington have left young and middle-aged workers feeling equally as outraged and betrayed as their elderly colleagues.

Last September nearly half a million Americans participated in the union-sponsored Solidarity Day March on Washington. More than 500 Vermonters made the bus trip to and from the Capitol. Major among the issues at that demonstration was the issue of social security. The position taken by labor and its allies on Solidarity Day was a position of no cuts-whether those cuts are straight rollbacks in benefits or disguised as so-called reforms. The position we take today is the same. There should be no cuts in social security.

On the issue of where we are going with the social security system in this country, let me share with you a recent experience.

I was at a newsstand in Rutland where I live, the same newsstand where I go every day to buy the newspaper, when I noticed the cover of a magazine devoted entirely to the following headline "America's Elderly, Can We Afford Them?"

"Can We Afford Them?”

I was both angered and frightened to see that a major national magazine was raising the issue of social security in such a way. My concern over this was heightened when after watching events in Washington, the actions of the present Congressman excluded, I began to think perhaps Congress was looking at the issue from the same distorted perspective. To put it mildly, such a perspective is dreadfully wrongheaded.

Our society should and must be one in which our elderly citizens receive back from society the guaranteed security and respect to which their years of labor entitle them. For 42 years at least this country has been moving toward that goal. We must not now reverse that direction.

I reject the often used explanation that the social security system faces a financial crisis because the population of our country is growing older and because fewer people are paying into the system and more and more are collecting from it. That I do not believe is the main problem. The main problem facing the social security system is the same problem we are all facing right now. That is the troubled state of our economy and the record high unemployment, which is a blight on our State and the Nation. The problem is, of course, being compounded at a large rate by Reaganomics.

For every 1 million Americans out of work, the social security fund loses more than $1 billion a year-more than $1 billion a year. Putting as few as 8 million of the 10 million jobless in our country back to work would itself add nearly $10 billion to the social security fund, more than enough money to take care of the system's so-called immediate financial problem.

Obviously, further measures to employ the officially unemployed as well as steps toward putting back to work the millions of hidden unemployed and discouraged workers would make the social security fund still more healthy.

The problem facing social security is not that Americans are getting older and older. The problem is that jobs are getting fewer and fewer.

Now is not the time for retrenchment on social security. Now should be a time when we move ahead. I would like to suggest that the following steps be considered.

All future proposals to increase funding for social security through the payroll tax should be abandoned in favor of financing social security through general revenues. The payroll tax is regressive and it hits hardest those who can least afford it.

Second, proposals to cut social security costs by raising the retirement age at which you can collect benefits should be scrapped. I don't know a single man or woman toiling in a factory in Vermont who thinks raising the age at which they can begin collecting benefits is a good idea.

Third, we should recognize that in many cases social security does not now, even before any proposed cuts, provide enough to make possible a decent standard of living in retirement for many of our older citizens. Ultimately, benefit levels must be raised. One good way to start in that direction to at least insure the current benefits keep pace with inflation would be to grant cost-of-living raises to social security recipients on a quarterly rather than on an annual basis.

Fourth, and finally, we must also recognize very clearly that the growing unemployment in this country and the ever-growing military budget are directly related to the social security pinch. Steps must be taken to put America back to work, and to reduce spending on the military so as to free up funds for people-oriented programs like social security.

While I don't agree with some of the general reforms that you have proposed, Jim, I would like to state my agreement with certain aspects of your pension system suggestions. I do agree any future social insurance program should eliminate tests for continuity of work so as to end discrimination against women. And I further agree with the thrust of the suggestion that pension vesting requirements be reduced.

In closing, I would ask that you take back to Washington a couple of messages for us. First, a message from Vermont workers that if you will get us back to work, put us back on the job, we will help solve some of the social security funding problems. And. second, a message from 2,000 or so Vermonters going to New York City tomorrow, to protest in favor of disarmament and against increases in the military budget-the message is, any slack in the fund the workers cannot pick up once you put them back to work, we have an idea on how to fund the rest of it.

Thank you very much.

Mr. JEFFORDS. Thank you, Bob. You did not disappoint me at all. That was a very fine, articulate statement.

Next, Valerie Mullen.

STATEMENT OF VALERIE MULLEN, CHAIRPERSON, CENTRAL VERMONT BRANCH OF THE WOMEN'S INTERNATIONAL

LEAGUE FOR PEACE AND FREEDOM, VERSHIRE, VT.

Ms. MULLEN. My name is Valerie Mullen. I live in Vershire. I am the chairperson for the Central Vermont Branch of the Women's International League for Peace and Freedom, an international organization in 25 countries funded in 1915 by Jane Adams. The purpose of our organization is to work for the achievement by peaceful means of those political, economic, social, and psychological conditions throughout the world which can assure peace, freedom, justice for all.

From 1973 until 1975 I worked as a VISTA volunteer with the elderly in the Lebanon-Hanover area and was made all too aware of the devastation done to those living on social security by inflation. I would also mention when my husband died in 1963, leaving me with two children, ages 14 and 11, social security payments helped me go back to school to get an M.S. in library science and thus be able to support them until they completed their education. I understand this is no longer possible for women with minor children.

I asked to testify today because I feel very strongly that social security, has an important role to play in our society, and it must be strengthened as well as maintained. I am going to reiterate a little that Mr. Cole said and the last speaker said.

I am not an expert and do not know how this can best be achieved. However, I do feel that any planning for the future must take into account the impact of the $1.5 trillion committed to the military budget for the next 5 years. Such spending is not only the major cause of the largest Federal deficit in history; it is also one of the major causes of inflation which at present is only being controlled by ever-increasing unemployment.

This is not the only impact that such an enormous military budget has on our economy. Numerous studies have shown money spent on military programs produces less jobs than money spent on other programs. A U.S. Department of Labor study entitled "The Structure of the U.S. Economy, 1980 to 1985," found that $1 billion spent on such needs as environmental control, alternative energy development, or mass transportation would yield an average 20,000 more jobs per million dollars than if spent on the military.

Without an increase in jobs, the future of social security is threatened as it is also threatened by increasing inflation.

Social security and high military budgets cannot go hand in hand. This is a maxim that anyone planning the future of the system should bear in mind. And I hope it will be stressed in any plans you will take.

Thank you for letting me testify, Mr. Jeffords.

Mr. JEFFORDS. Thank you very much. That certainly put a good reflection on what happens in defense spending. I happen to agree with you that we need to have a strong defense. But the rate we are spending now, 7 percent real growth per year, is going to create some serious problems for us. Thank you very much.

Barbara Corwin is next. Please proceed.

STATEMENT OF BARBARA CORWIN, VERMONT

Ms. CORWIN. I am concerned about social security too. We have heard we need to have some reforms and some changes in regulations. We as farmers have never paid very much social security, principally because I guess we have not made very much money to pay to it.

But we feel very strongly at our house that social security needs to be, as my husband would say, done away with. But we don't think that we should all be left without an alternative.

I have brought with me a program which would answer many of the problems that I have heard reiterated here over and over again this afternoon. But it would take much too long to try to do it. It could not be done in 5 minutes. It would take at least 30. And I have a copy which I will be happy to give to you.

Mr. JEFFORDS. I would appreciate it if you would do that. We will make it part of the record. I wish I had the 30 minutes. But we have still a large number of people who want to testify.

[Material submitted by Ms. Corwin retained in committee files.] Ms. CORWIN. My principal concern is not only for myself. I am still working. I expect I will be able to support myself for some time yet even though I guess I am a senior citizen. They say I am. But my concern is for this little fellow with me today, and having this world and this United States the kind of a place that he will find happy, secure, stable; where he can grow up to live the life that will give him and all his children after him not only happiness, but security.

I thank you for listening to me. I will bring this over to you.

Mr. JEFFORDS. Thank you, Barbara, very much. I know the problem we have in the agricultural sector, not just in the social security area, but the number of employees or people in the agricultural sector that are covered by any pension program is incredibly low, and it is going to create a serious problem for those people. I appreciate your comments.

Peggy Higgins.

STATEMENT OF PEGGY HIGGINS, QUECHEE, VT.

Ms. HIGGINS. I appear as a private citizen. One of my concerns is the social security insurance payments made by millions of wives who have worked outside the home for many years. Most of these women will only receive partial benefits as a wife of a retiree, or as a widow. And those benefits would be the same amount even if they had never made payments to the system. In all fairness, it's time to regard working wives as individuals entitled to a benefit proportionately higher than that of wives who have not worked and made social security payments.

Another inequity of the present law is in requiring a retiree to pay additional money into social security if he supplements his income. If he did not work, the system would be no richer, but by working he's contributing to the general economy.

However, he often earns a lower salary and with deductions for social security and Federal and State income taxes, together with the costs of working, such as transportation, there is little spend

able income from earnings, and almost nothing from the $1 remaining after the present earnings ceiling is reached.

Furthermore, these laws actually increase the amount of Government money which has to be spent for SSI, food stamps, welfare, housing and energy assistance, and medicaid. For those retirees who want to work, the present system is a powerful disincentive. At the very least, the earnings ceiling should be raised for retirees below age 72. This could enhance the quality of life for many retir

ees.

Before any cutback in social security benefits is considered by the Congress, I would suggest reduction of civil service supplemental payments, which far exceed those for social security, and I also urge that "double dipping" be absolutely eliminated.

To find additional funds for social security, I think it's time our priorities were reordered. Substantial funds could be found in other areas, such as eliminating most of the consumer printings of the GPO, the unnecessary stamp issues which primarily benefit the stamp lobbyists, the incredible waste in the GSA, and such extravagances as adding $13 million to the $82 million budget for military bands.

Last, but certainly not least, I think most Americans of all ages feel that it is time to use Government money-which is really our money to improve the quality of life for Americans rather than for foreign aid, which is largely unappreciated.

Mr. JEFFORDS. Thank you.

Next, Bill Heaslip.

STATEMENT OF WILLIAM HEASLIP, VICE PRESIDENT AND TRUST OFFICER, FIRST VERMONT BANK

Mr. HEASLIP. I appreciate the opportunity to have some time to make some comments. I will keep the comments brief and general. My background, I am a vice president and trust officer with First Vermont Bank. I worked for 10 years in the private pension industry, working for a large mutual fund company and then with the trust department of a bank.

I worked the last 5 years in personal trust work. I believe my background covers a wide spectrum that addresses itself directly to many of the concerns that are expressed here today.

I have dealt and I am dealing currently with people all the way from individual guardianships, people with very little money, all the way up to very wealthy people who use trusts for investment purposes.

I would like to first address the corporate retirement area, and also Keogh Plan area for self-employed people.

I have seen the private pension industry go from one that was very straightforward, fairly complicated, and I might add very unfair to many workers in this country, to one that has become fair, much more complicated, and also has lost many workers in this country. And the reason I say this is because of the advent of the Pension Reform Act passed in 1974.

I think overall, this law was good. However, it created many inequities, among which were complication, having to deal with new compliance with the Labor Department, and bringing in other