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Mr. Jones. The Veterans Advisory Commission recommended $20 for each child for DIC rates, and that is a good recommendation. I think that amount is inadequate but at least it is a step in the right direction.

Mr. ROBERTS. I am sure you would say that certainly a widow of a man who has given his life for his country is entitled to better treatment than someone who has rendered no service to the country, has illegitimate children, and I think we ought to do something and we need the help of all of the veterans organizations. I don't think I can get it by but would be happy to put a provision in that they will never be paid less than the most that is paid to welfare recipients with the same number of children. Would you agree with my position on that?

Mr. STOVER. I certainly would. In fact, the VFW has taken a dim view of the $130 a month and hoped to get an increase for widows started a couple of years ago but couldn't get it off the ground at that time.

Mr. ROBERTS. I want to thank my colleague from Pennsylvania with reference to the statutory award on tuberculosis, because too many times those people die with emphysema, and they say it is not service-connected, has no connection with the other, but I think with the incidence of emphysema following that certainly shows there is some connection, and I agree with you, as I generally do.

Thank you very much, Mr. Stover and Mr. Jones, for appearing here this morning.



Mr. ROBERTS. Next is the American Legion: Mr. Charles E. Mattingly and Mr. Edward H. Golembieski.

Mr. MATTINGLY. Mr. Roberts, on behalf of the American Legion I want to thank you and the members of the subcommittee for this opportunity to appear before you today and make our views known on pending legislation pertaining to veterans compensation.

Before introducing our witness, I would like to introduce, in the audience, Mr. Peter S. Toloczkó, Mr. Golembieski's assistant for claims, and Bernard A. Nolan, Jr., assistant director for program management.

Mr. Chairman, our witness this morning is Mr. Edward H. Golembieski, director of the National Rehabilitation Commission of the American Legion.

Mr. ROBERTS. You may proceed.
Mr. GOLEMBIESKI. Thank you.

Mr. Chairman and members of this subcommittee, we of the American Legion welcome and appreciate this opportunity to participate in the presentation of testimony on the improvement of benefits for those most deserving increased compensation payments to veterans for their service disabilities.

As you know, the President's messages of January 31, 1967, and January 30, 1968, made no direct reference to increasing compensation benefits for those who suffered disability as a result of disease or injury from service in the Armed Forces. For this reason, we are particularly pleased with your decision to hold hearings on this matter so early in the second session of this Congress.

Our statement, Mr. Chairman, is directed to four specific areas: 1. Increased compensation for service-connected disability.

2. Equalization of compensation; that is, to provide that rates of disability compensation shall bear the same ratio to that payable for total disability as the percentage of disability for which compensation is payable bears to total disability.

Mr. ROBERTS. May I interrupt you right there? If this is not true, then what is the basis for the esstablishment of a percentage of disability? I just want to accent what you are saying.

Thank you, sir.

Mr. GOLEMBIESKI. 3. Additional compensation for veterans rated less than 50 percent for compensation who have dependents.

4. Increased rates of payments for certain anatomical losses or their loss of use, and for arrested tuberculosis.

With your permission, I shall discuss in more detail our reasons for seeking increases in these four benefit areas.

1. Increased compensation for service-connected disability: As the committee knows, compensation of $300 is payable to those veterans whose war-service disabilities are rated at 100 percent by the Veterans' Administration under the applicable schedule of rating disabilities. Disability compensation rates were last increased effective December 1, 1965, under Public Law 89–311.

According to the legislative history of this act, the increased rates were responsive to the rise in the cost of living which had occurred since 1933 as determined from the Consumer's Price Index published by the Bureau of Labor Statistics, Department of Labor.

We agree that cost-of-living increases in compensation and other benefit programs are needed at periodic or frequent intervals to assure that the benefit is sufficient to meet the costs of goods, services, housing, and other basic essentials.

It has been well established, however, that the Consumer's Price Index is not completely determinative of "how much does it cost to live.” An important factor not given consideration by applying the Consumer's Price Index formula is a family's standard of living.

Studies of the Bureau of Labor Statistics on changes in consumer standards for over the period of 1951–66 reveal that the rise in a moderate standard of living-after adjustment for price changes averaged about 3.5 to 4 percent a year. Other related studies by the Bureau of Labor Statistics developed a typical city-worker family budget for a moderate standard of living.

According to this budget, the annual cost of living for a family of four (husband aged 38, wife not employed outside the home, a boy 13 and a girl 8) averaged $9,191 in the autumn of 1966 in urban areas. About 80 percent of the total cost of this budget was allocated to family consumption items: food, housing, transportation, clothing, personal care, medical care, and other items used in family living.

This budget, Bureau of Labor Statistics said, was an attempt to measure an adequate but modest standard of living.

Perhaps a good yardstick of income needed to live in today's economy is provided in the analysis of working veterans in the year 1965. This analysis showed that working war veterans, ages 25-64, had a median income of $7,000—24 percent above the median of working nonveterans.

The acceptance of this analysis indicates that the working war veteran is a responsible citizen, contributing his share of the cost of government in taxes, including those expenditures for the good of the less fortunate veteran through programs such as those administered by the Veterans' Administration.

A recognition of the need to periodically increase salaries and benefits to enable military and Federal employees to meet the cost-of-living increases as well as standards is illustrated by Public Law 90–207, which increased the basic pay for members of the uniformed services, and sectiton 201 of Public Law 90–206, the Federal Salary Act of 1967, which instituted salary reforms for the Federal Government.

Although directly these pay increases were based on a lag of comparability between Federal and private salary structures, indirectly they stem from a continued increase in the cost of living, and improved standards of living.

It is patent from the foregoing studies and comparisons that a veteran who, because of service-incurred disability, is disabled to the degree that precludes his gainful pursuit of employment, cannot, with the $300 compensation received monthly from the Veterans' Administration, meet the cost of maintaining himself and his family under prevailing standards of what is necessary for health, nutrition, and participation in community activities.

According to the welfare standards announced in 1965, this veteran and those dependent on him are required to subsist at or near a poverty level.

Because of these reasons, Mr. Chairman, the American Legion strongly urges that the compensation payable for 100-percent warservice disability be increased to $400 monthly. This increased amount, with the added compensation for those with dependents—wife, children, or parents--along with other benefits available to him from the Veterans Administration, would aid him materially, in meeting the cost of living within a standard which is not demeaning to his status as a veteran.

2. Equalization of disability compensation : Under authority of law, the Administrator of Veterans Affairs has adopted and is applying a schedule of ratings for reductions in earning capacity from specific injuries or combinations thereof.

As far as practicable, these ratings are to be based upon the average impairment of earning capacity resulting from such injuries in civil occupations. The schedule provides 10 grades of disability upon which payment of compensation shall be based; that is, 10 percent, 20 percent, at cetera, to 100 percent.

Before July 1, 1952, each rate for disability compensation bore the same ratio to that payable for total disability as the percentage of disability bore to 100 percent. This traditional relationship was destroyed by the enactment of Public Law 82-356, effective July 1, 1952.

This act provided increases of 5 percent for those with ratings of less than 50 percent, and 15 percent for those rated 50 percent and higher. Subsequent grants of compensation increases failed to restore

this balance between the percentage of disability and monthly rates of compensation.

It is the conviction of the American Legion that the departure from the earlier concept of balance and ratio between percentage of disability and compensation payable undermined the historical, logical, and legal basis of the 1945 Schedule for Rating Disabilities; that is, that the ratings be based upon the average impairment of earning capacity resulting from injuries and diseases in civil occupations.

One of the chief obstacles to restoration of equalization of the monthly compensation rates, we are told, is the first-year cost. We find it difficult to accept this as justification for not equalizing compensation rates. If we all agree that a mistake was made in 1952 when the rates were thrown out of balance; if we all agree that our service disabled have been treated unfairly and deprived of compensation to which they were entitled over the last 15 years, are we prepared to say that the cost of correcting the inequity is too high? We hope not.

On the other hand, we recognize the practical problems faced in this matter. Accordingly, we offer, as a less desirable solution, one of the following alternatives :

(a) Accomplish the equalization gradually; that is, by increasing the dollar amounts each year over a period of years, until full equalization is attained;

(6) Accomplish the equalization by doing one percentage group each year, commencing with the more seriously disabled or higher percentages of disability;

(c). On validation of the Schedule for Rating Disabilities, make certain that the monthly rates of disability compensation bear the same ratio to that payable for 100-percent disability as the per

centages of disability bear to 100 percent. In any event, if equalization cannot be accomplished at this time, those receiving compensation for disabilities rated at less than 100 percent should be granted increases in their monthly rate which are consistent with the cost-of-living increase that has occurred since December 1, 1965, the effective date of Public Law 89–311.

Since December 1, 1965, and through February 1968, the Consumer Price Index (1957–59 equals 100) has advanced from 109.9 to 119, or an 8.3 percent increase in the cost of living. Unlike the Military Pay Act and certain private labor-management agreements, monthly compensation payments do not respond to advances in the Consumer Price Index.

Consequently, Congress must periodically enact legislation which not only meets the past advances in cost of living but which also meets anticipated advances. For these reasons, we advocate a 10-percent increase in the existing monthly compensation rates for those rated less than 100 percent if equalization cannot be attained.

3. Additional Compensation for Veterans Whose Disabilities Are Rated Less Than 50 Percent and Who Have Dependents: Effective July 2, 1948, Public Law 80–877, for the first time since the repeal of the World War Veterans Act of 1924, authorized payments of additional compensation to those veterans rated 60 percent and above who had a wife, children, or dependent parents. In the following year, Congress extended entitlement to this additional compensation to those veterans rated not less than 50 percent.

The American Legion can see no valid reason for denying this additional payment to those veterans rated less than 50 percent and who have a similar class of dependents. The denial of this additional benefit to these veterans further compounds the inequity covered earlier in this testimony under the subject of restoring balance to or equalization of disability compensation payments.

A good illustration of this situation is given by comparing the compensation paid a veteran rated 40 percent and the other rated 50 percent. Both have a wife and three children:

Veteran with 50 percent disability: Disability compensation

$113 Additional compensation of wife and 3 children.-




147 Veteran with 40 percent disability, $82.

Thus, for a disability difference of 10 percent, the Federal Government pays an additional $65.

4. Increase the amount of statutory award payable under 38 U.S.C. 314 (k) and (9): At present, 38 U.S.C. 314(k) provides that if a veteran, as the result of service-connected disability, suffers the anatomical loss or loss of use of one or more creative organs, or one foot, or one hand, or both buttocks, or blindness of one eye, or has suffered organic aphonia, or deafness of both ears, the rate of compensation is $47 for each such loss or loss of use in addition to any other compensation that is payable.

Also, 38 U.S.C. 314(q) provides that if a veteran is shown to have had a service-connected disability resulting from active tuberculosis disease, which disease in the judgment of the Veterans' Administration has reached a condition of complete arrest, the monthly rate of compensation shall be not less than $67.

Neither of the statutory awards of compensation has been increased since the enactment of Public Law 82-427, approved June 30, 1952.

For some veterans, the statutory award is all or a major portion of the compensation they receive for their service-connected disability. Since 1952, the Consumer Price Index has advanced from 92 to 119.0, or 29.3 percent. In view of this, the American Legion recommends that these statutory awards be increased to $60 under 38 U.S.C. 314 (k), and to $80 under 38 U.S.C. 314(g).

Mr. Chairman, there are some who will say that these recommendations, along with the other benefits already available to veterans and their dependents, are beyond the ability of this Nation to pay. As you know, the present cost of the veterans benefits program in relation to the total cost of our Federal Government is extremely low.

Putting it in comparison, only 4 cents of each Federal dollar is expended is used to care for the disabled and needy war veteran and his dependents and survivors.

As you know, the Veterans Advisory Commission report said: Military service in times of national stress constitutes the highest response to the obligations of citizenship and should continue to be on the basis of reciprocal obligation on the part of the Nation to provide reasonable assistance to veterans commensurate with the greater sacrifices experienced by them. With this in mind, the obligation to provide for the disabled and needy veteran as well as his dependents is a national commitment.

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