Initial Effect of 1952 Amendments on Average OASI Monthly Benefits

administer and finance, A State that spends a comparatively large amount per inhabitant for public assistance ordinarily uses a relatively large percent of its income payments to support the program. There is a fairly high correlation between the ranking of States in amount spent per inhabitant for public assistance from State and local funds and percent of income used (chart 1). There is little correlation, however, between the fiscal ability of the States-as measured by per capita income-and the fiscal effort they expend for assistance programs. The 24 States with fiscal effort above ’ the median were divided almost evenly between those with aboveaverage and those with below-average fiscal capacity. Of the 12 States with highest fiscal effort, only four were among the 12 States with highest per capita income; seven of the other eight with highest fiscal effort were below the median State in per capita income, and two were among the 12 States with least economic resources. On the other hand, among the 12 States lowest in fiscal effort, four were in the lowest 12 with respect to per capita income and two were below the median State; the remaining six had above-average incomes, and three of them were among the top 12. In many of the more wealthy industrial States, the generally high level of economic activity plus the ever-increasing expansion of old-age and survivors insurance coverage has greatly reduced the need for public assistance. In these States, because the percent of population in need is comparatively small, high assistance standards can be maintained with expenditure of a relatively small percent of income payments. In contrast, States with the lowest per capita income, where need is widespread, must use an unusually large percent of their income for public assistance if they wish to maintain relatively high assistance standards. As evidence of this fact, the two low-income States that rank among the highest States in public assistance expenditures finance their programs only with extraordinary fiscal effort. The proportion of income payments used for public as-