person who seeks a job and, in so doing, jeopardizes the necessary health and financial benefits he or she receives under the various public and private programs. Widely recognized and most important is the fact that Social Security programs, which provide monthly payments and medical protection, include highly restrictive provisions that discourage and often prevent people from attempting gainful work. Examples of these inhibitive provisions are:

The low earning level constituting substantial gainful activity;

Two consecutive years of receiving Social Security disability benefits required for medicare eligibility;

One trial work period lasting nine months, and applicable once in a person's lifetime; and

Re-entitlement to financial and medical benefits necessitates a second waiting period, similar to the initial entitlement to benefits.

We can and must do more for people who are disabled. We must change the restrictive provisions and promote improvements in the law to encourage employers to provide employment alternatives to severly disabled persons. These programs can be successful ventures for both the employer and employee, as one example demonstrates.

In January, 1978, Control Data Corporation, headquartered in Minneapolis, developed Project "HOMEWORK." HOMEWORK is a homebound employment program made possible through Control Data's computer-based education system called PLATO. Through "HOMEWORK," a select group of Control Data's permanently and totally disabled employees have re-entered the world of work.

Due to the encouraging results of the HOMEWORK experiment within Control Data, other major corporations within the United States have expressed an interest in having Control Data help them establish a HOMEWORK program for their company's disabled employees.

The most significant obstacle HOMEWORK has encountered since its inception is the disincentives currently contained in the Social Security regulations and law. Even though each HOMEWORK has been declared permanently and totally disabled by Social Security, the mere fact that each person attempts to work potentially leads to a discontinuation of all financial and medicare benefits.

Passage of S. 1643 would remove legal obstacles to the disabled returning to productive employment. Today we will hear from Gary Lohn, vice president of Control Data, who will review how their program assists the disabled. I appreciate the chairman providing us with an opportunity to present this important testimony. Senator MOYNIHAN. I see, Mr. Lohn is from Minnesota.

Senator DURENBERGER. I want to be sure that you value as I do both his perceptions of the problem we are dealing with here today. We used to be in the corporate social responsibility business together.

I particularly want to accent for members of the committee who may not be as familiar as you are, Mr. Chairman, the work that Control Data Corp. has done for a variety of persons, whom we would think would have nothing to do with the use of computer systems.

One of these is a computer system, which Gary will talk about today, and you have a little orange brochure that you can glance at while he is giving his 5-minute presentation.

I am very proud of Control Data and the witness that you are about to hear.

Senator MOYNIHAN. We are very happy to have you, Mr. Lohn. Please go right ahead.

STATEMENT OF GARY LOHN, VICE PRESIDENT OF PUBLIC AFFAIRS, CONTROL DATA, INC.

Mr. LOHN. Thank you very much. It is a pleasure to be here. In the interest of time, I will cover the highlights of the lengthier written presentation.

Senator MOYNIHAN. Take your time.

Mr. LOHN. I believe that Senator Long asked that we keep it down to 5 minutes, and I think we can do that.

Also, as Senator Durenberger indicated, there is a brief brochure available.

One of Control Data's primary business strategies is to identify societal problems and address them as business opportunities. Control Data adopted this strategy some 12 years ago, and it has been pursued vigorously and has proven sound.

Although we undertake some social programs because they are the right thing to do, we view the major, unmet needs of society as opportunities for business, generating profits, and providing jobs. Most recently, Control Data has become involved in developing special programs for persons who are severely disabled. It is Control Data's extensive involvement with these programs that has permitted us to become aware of the disincentives facing persons who are severely disabled, but who want to and who are qualified to work.

The central program is Homework, and is based on Plato computer-based education. It is important to note that Plato is a computer-based interactive educational network system that allows students to learn at their own pace. Students interact with the system through a special terminal with a keyboard and a TV-like screen. The objective of Homework is to provide training and employment alternatives to the severely disabled homebound population. Currently, there are more than 2 million Americans classified as being homebound because of a severe mental and/or physical disability.

Homework evolved within Control Data Corp. because we have many severely disabled homebound employees. Tragically, this same group of people has a wide range of unused skills and capabilities. Therefore, a project was created to identify training and job opportunities for them using Plato technology.

The first Plato terminal was installed in August 1978 in the home of one of the first 12 homeworkers selected. The initial work identified for the homeworkers to perform was designing, developing and evaluating educational courseware. Depending on their interest, experience and skill, each participant was trained to perform one of these three functions via the Plato terminal. The end product of Homework is educational courseware to be marketed by Control Data and delivered via the Plato system.

Control Data has expanded homebound employment during 1979 making additions to the types of work performed that will include computer programing, remote student tutoring and other functions. It is important to emphasize that all of these people are totally and permanently disabled per social security definitions, and most are ineligible for State rehabilitation services due to the severity of their disabilities.

Homework brings the Plato terminal into the home, providing training and education as well as a means of communication for the disabled person. A counselor participates in the computer network along with the other employees. It is truly a network of disabled persons with varying disabilities learning different skills at different rates, but sharing the learning experience.

Homework is not intended to be restricted to Control Data employees. On the contrary, Homework will become an employment alternative for the disabled population throughout the Nation. In fact, other major employers have contacted us to assist them in developing a program like Homework for their disabled population, which we view as a business opportunity.

Control Data's experience with homework is most encouraging. Some of the benefits are as follows:

Health care costs for the Homework participants have decreased 50 to 75 percent.

Self-concept and confidence levels have increased substantially.
Improvement in family relations has occurred.
Higher level of self-care is realized.

Enhanced intellectual and cognitive functioning is apparent. These preliminary findings parallel results from a 7-year study on homebound rehabilitations sponsored by the Federation of the Handicapped and funded by the Department of Health, Education, and Welfare.

Our major problem with the Homework program relates not to the ability or enthusiasm for work, but to the impact this program has on individual insurance benefits, both public and private. As we initiated the Homework program, we sought and received cooperation from private insurance carriers to safeguard the Homework participants from losing their benefits. However, current social security legislation prohibits the same flexibility within the public

sector.

Because of the tremendous anxiety felt by each Homework participant over the thought of losing his or her social security benefits, Control Data has guaranteed to reimburse each participant his or her total social security disability insurance benefit should it be discontinued as a result of the individual's participation in Homework.

Obviously, this program cannot significantly impact the 2.8 million social security disability insurance recipients with these restrictions. The disincentives for both the disabled person and a private employer are too great.

Control Data is pleased to see the Congress address the many disincentives now inherent to social security law. We are convinced that changes must be bold and far reaching. Based on our experience, we would suggest that the following provisions be included in the legislation enacted by the Congress.

First, substantial gainful activity demonstration projects as identified in H.R. 3236, H.R. 3464, and S. 1643 should be broad enough to include a cooperative partnership between the public and private sectors in addressing substantial gainful activity levels and trial work periods. Participation of the private sector and disabled individuals must not only be encouraged, but should be driven with attractive incentives for all parties included.

Second, the amount of money people can earn without losing their social security benefits should be at least at the level currently proposed in H.R. 3464. H.R. 3236 should contain similar language.

Third, Control Data believes that the risks are too great for a severely disabled person to seek employment unless there is a

legislation enacted that permits both a reasonable level of earned income and social security disability insurance benefits. While the specifics of reasonable levels are beyond the scope of this discussion, some meaningful level is required of earned income.

Fourth, extraordinary work expenses due to a severe disability must be excluded from earnings when figuring substantial gainful activity. Examples of these work expenses include attendant care services, medical equipment, protheses and similar items and services which are essential in carrying out not only his or her employment responsibilities, but also his or her normal daily functions. Fifth, the waiting period for medicare eligibility, currently 2 consecutive years after financial eligibility is determined, should be nonconsecutive and made shorter than the 2 years now required and still being proposed. For those who have previously qualified for social security disability insurance and medicare, and have subsequently returned to work only to fail, the waiting period for reinstatement of both social security disability insurance and medicare should be reduced to zero. This would significantly reduce the risks facing a disabled person seeking to at least try meaningful employment once again.

It is apparent that social security legislation being considered by this committee does contain many salient components that will provide the incentives for persons severely disabled to seek and retain meaningful employment. However, we recognize that the Congress may not be ready at this time to incorporate all the necessary changes into one major bill. As an interim measure, we are pleased to support legislation such as S. 1643 authorized by Senator Durenberger of Minnesota, which proposes cooperative research and demonstration projects.

We feel such legislation should explicitly state its legislative intent to not merely allow, but encourage private sector participation in these research and demonstration projects.

We are convinced that within a few years of experience with these cooperative research and demonstration projects, sufficient knowledge will be gained to provide the valuable data required to consider permanent legislative changes.

We thank you for the opportunity to present our views.

Senator MOYNIHAN. Mr. Lohn, witnesses like you make Senators like me wish we were from Minnesota. [Laughter.]

Mr. LOHN. Thank you, sir.

Senator MOYNIHAN. Senator Durenberger?

Senator DURENBERGER. I appreciate that.

Senator MOYNIHAN. I would like to thank Mr. Lohn so much for a touch of reality from the point of view of the employer.

Would you tell us just a little more about some of the number. Do I take it that Homework is a program whereby you first train, and then employ persons to use the training that they have acquired?

Mr. LOHN. That is true.

Senator MOYNIHAN. What kind of work do they do?

Mr. LOHN. We currently have the program operating in three different phases. We are in the training phase in all of them at this point, partly because instead of giving salaries, which contradicts

the social security rules, we give training stipends to the people involved.

The first group is involved with the Plato terminal I described in creating course material that we will be developing.

Senator MOYNIHAN. They are working with other people in Control Data just like students in laboratories learning how certain kind of instruction can best get done. Is that it?

Mr. LOHN. Yes; they are working each in their own home_all over the country-there are 12 of them involved in that first phase-with a couple of people in our headquarters in Minneapolis who, through the on-line communication capabilities of the terminal, can interact with them immediately. So it is virtually the same as being in the laboratory.

Senator MOYNIHAN. In training these people, are you also learning what is involved in training such persons?

Mr. LOHN. We are training these people to be developers of course material for our education business.

Senator MOYNIHAN. They, themselves, will be the developers? Mr. LOHN. Yes; they will be, and they have nearly completed. By the end of this month, we will have completed a 15-hour course on the Pascal computer programing language. It is not all computer people who are in the program, I should point that out. There is a second group of people who will be in jobs as computer programers when they complete their training.

Senator MOYNIHAN. I see, you have people who may have mobility disabilities, and things like that, but who are quite up to becoming instructors in teaching people how to use a computer program, and learn a computer language which they would, thereupon, use in some other work.

Mr. LOHN. Yes; or to do computer programing.

I should emphasize that each of these persons will be employed in their home, long term.

Senator MOYNIHAN. The Homework is, in that sense, handed out like women used to take sacks home and sew them as homework. Mr. LOHN. I guess that this is an analogy; yes.

Senator MOYNIHAN. People used to work in their home all the time. Women used to take work home from factories, sewing and the like.

Mr. LOHN. With modern technology, that is a very easy thing to do.

Senator MOYNIHAN. They are working at their console in their home like they might be working at it in downtown Minneapolis. Mr. LOHN. Yes; at their own pace, and at their own time. The jobs are structured so that they can be performed that way. Interestingly enough, we expected when we started that people might work about 20 hours per week, and most of them are working over 30 hours per week, and some of them much, much more. So we are very excited about the way they have responded to that opportunity.

Senator MOYNIHAN. I see that Senator Dole is here, and knowing that we have to be on the floor at 4 o'clock, let me turn to him right away.

Senator Dole has been one of the stalwarts of these endeavors in this committee. This year, as last year, we are going to get a bill,