Richard S. Schweiker, the man chosen by President-elect Ronald Reagan to head the giant Department of Health and Human Services, pledged yesterday to save the Social Security system from bankruptcy, but he warned that this may mean cutting benefit growth or making people work longer.
"We're going to maintain the integrity of the Social Security system," Schweiker told the Senate Finance Committee at a one-day hearing on his impending nomination. "It's my top priority."
Schweiker, a former senator who was greeted with warm praise by committee members, indicating his nomination will be approved easily, didn't spell out exact plans for saving Social Security from the short-term and long-term financial shortfalls it now faces.
But he hinted that the financial solution might well include cutting the future growth of benefits or raising the normal retirement age from 65 to 68. The basis structure of the problem, he indicated, is really rather simple, leaving only three options for dealing with it: "Raise taxes; reduce [the growth of] benefits; lengthen the age" of retirement gradually. He ruled out the use of general Treasury revenues to supplement the payroll tax financing of the basic Social Security old-age, disability and survivor programs.
The committee met with a Republican chairman, Sen. Bob Dole of Kansas, for the first time in a generation, but long-time Democratic chairman Russell B. Long of Louisiana said he's confident that Dole will welcome suggestions from even the lowest-ranking Democratics, on the theory, which Long himself followed in respect to Republicans when he was chairman, that "even a blind hog finds an acorn now and then."
Schweiker gave these views on key subjects:
He favors a form of "block grants" for the Aid to Families with Dependent Children welfare program, and so does Reagan. It would give each state a fixed federal grant to help pay its welfare costs, instead of allowing the states to get higher federal payments if they kept boosting their welfare rolls. He favors letting the states require welfare clients to work off payments if the state choose. Schweiker said that Reagan's efforts as California governor had demonstrated that if states tighten welfare eligibility and administration, they can use the savings to aid the truly needy.
He doesn't favor turning Medicaid or Social Security over to the States.
If he recommends any large-scale health-care program, it would be catastrophic health insurance, protecting individuals against ruinous cost from severe or long-term illness.This program would be combined "with something I would call 'fill-in-the-gaps,' because, as you know, 10 percent of the people aren't covered" by any form of health insurance. "Anything beyond that just wouldn't fit" the current economic situation or Reagan's views.
He likes the so-called competitive approach to medical and hospital cost controls, under which workers within a business are offered a range of different health insurance plans and can save on premium costs if they decide to choose a cheaper (but still adequate) plan offering a less rich mix of benefits. In theory, the competitive system encourages workers to be more cost-conscious in using health facilities (since their cheaper plan may not cover certain types of care) and also fosters cost-cutting competition among the different insurance carriers as they compete for business. Schweiker said that he opposes "jumping pell-mell into a broad-scale program" and would prefer starting with a number of "model demonstration projects" and tax changes designed to encourage private firms to try out the competitive system.
He favors repealing the Delaney amendment, which forbids use of any food additive shown to cause cancer in either animals or man. The flat prohibition against such additives should be replaced by "some kind of risk-benefit ratio" so that even cancer-inducing substances can be used in risk-benefit ratio" so that even cancer-inducing substances can be used in small amounts if the health risk is very small.
He would favor studying whether to abolish the existing medical practices review system, the Professional Standards Review Organizations, if it is shown that government costs for the system exceed money saved through elimination of needless treatment in government medical programs.
"HHS spends mor money [$222 billion a year] than any country in the world except the Soviet Union and the United States" and in that huge sum there must be some place to cut to save money, entitlement programs included. He will sit down with the U.S. comptroller general to get recommendations on where to cut waste and fraud, and he hopes to work out some joint approach to Medicaid fraud between the HHS inspector general and the Justice Department.