Benefits Increase Urged for Elderly Poor : Aid: Panel finds SSI program, which also covers the blind and disabled, keeps its recipients below the poverty guideline.

A blue-ribbon citizens panel called Thursday for increased benefits and other reforms in a federal program assisting 1.5 million elderly poor and 3.9 million blind and disabled persons.

The panel, headed by Arthur S. Flemming, former health secretary in the Dwight D. Eisenhower Administration, said that the Supplemental Security Income program, which is administered by the Social Security Administration, guarantees recipients an annual income of only $5,064--a figure far below the federal poverty guideline of about $7,000 for a person living alone.

In a report to Social Security Administrator Gwendolyn S. King, who appointed Flemming and 20 other experts to evaluate the SSI program, a majority of panel members proposed raising benefits gradually over five years to 120% of the poverty level.

“SSI rules, rather than lifting the elderly and disabled out of poverty, now keep them deep below the poverty guideline,” Flemming said during a news briefing.

To pay for the proposed increase, Flemming suggested a tax on the wealthiest 1% of Americans--those making more than $250,000. Generally, that group’s after-tax income rose 102% between 1977 and 1989. He said King is appointing a new study group to explore alternative means of financing.

“This is the wealthiest nation in the world. We have the money,” Flemming said. “It is only fair to ask the upper 1% to share a portion of their wealth with the poorest of the poor.”

The evaluation of the SSI program is the first in its 18-year existence, Flemming said. Although administered by the Social Security Administration, the program is financed by general revenue funds and any reforms must be approved by Congress.

Panel members said they believe such a proposal is unlikely to be made in Congress this year but that it could come up in the new Congress that will be seated in January.

Of 5.4 million people covered by the program, by far the largest number--956,000--reside in California. New York is second with 471,000.

The panel also called for an end to the policy of cutting benefits when a recipient moves in with a family member or friend to help reduce living expenses.

“Under current rules, SSI benefits are cut one-third if a beneficiary moves in with a family member or friend to help reduce food and housing costs,” Flemming said. “We feel this is an intolerable and demeaning situation.”

The report also urged reducing the backlog of nearly 800,000 unprocessed applications by allowing the Social Security Administration to hire more employees.

Flemming complained that the Bush Administration’s budget for the fiscal year beginning Oct. 1 forecasts that reductions in staffing will increase its backlog of disability cases to 1.4 million.

“That is an indefensible situation,” he said. “It means that some disabled persons will have to wait eight months for their applications to be processed.”