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(b) In the case of any individual who first becomes entitled to a pension or dependency and indemnity compensation under such title in or after the month in which an increase becomes effective under subsection (a), the amount of the monthly rate payable to or with respect to him on the basis of such entitlement shall be determined by applying such increase (or, if more than one increase has become effective under subsection (a), by applying all such increases successively) to the amount of the monthly rate which would be payable under the provisions of such title without regard to this section.

(c) Any increase under subsection (a) shall apply with respect to all monthly rates payable under such title or such Act of 1959 during the period in which such increase is effective regardless of the provisions under which such monthly rates are payable or the manner in which such amounts are determined, but shall be applied with respect to monthly rates payable to or with respect to any particular individual only after all of the other provisions of such title or Act of 1959 which relate to eligibility for and the amount of such rates, and all prior increases made in such rates under this section, have been applied.

(d) If the amount of the increase in any monthly rate under subsection (a) is not a multiple of $0.10, it shall be raised to the next higher multiple of $0.10 in the case of a multiple, of $0.05 or adjusted to the nearest multiple of $0.10 in any other case. (e) For the purposes of this section

(1) the term "price index” means the Consumer Price Index (all itemsUnited States city average) published monthly by the Bureau of Labor Statistics; and the average level of the price index for the three months in any calendar quarter shall be deemed to be the level of the price index in such quarter; and (2) The term "base period” means

(A) the calendar quarter commencing July 1, 1965, with respect to the first increase under subsection (a), and

(B) the calendar quarter immediately preceding the quarter in which the determination constituting the basis of the most recent increase under subsection (a) was made, with respect to any increase under sub

section (a) after the first such increase. SEC. 10. The Administrator of Veterans Affairs (hereafter referred to as the “Administrator") shall undertake a study and investigation of sites in each of the fifty States for use as Veterans' Administration cemeteries. Upon completion of such study and investigation, the Administrator shall submit to the House Committee on Veterans Affairs and the Senate Finance Committee a report on the results of such study and investigation together with his recommendation. The Administrator shall thereafter establish, operate, and maintain Veterans' Administration cemeteries at such places within such States as may be designated by the committees on the basis of the report submitted by him.

SEC. 11. (a) Except as provided in subsections (b) and (c), this Act shall take effect on the date of the enactment of this Act.

(b) The first section of this Act shall apply with respect to disability compensation payable for months after June 1967.

(c) Section 9 of this Act shall apply with respect to increases in monthly rates of pension or dependency and indemnity compensation payable under title 38, United States Code, or the first sentence of section 9(b) of the Veterans' Pension Act of 1959 for months in and after the second calendar quarter beginning after the date of the enactment of this Act.

[H.R. 16311, 90th Cong., second sess.) A BILL To amend title 38, United States Code, to provide increases in rates for com

pensation for disabled veterans Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That (a) section 314 of title 38, United States Code, is amended

(1) by striking out “$21” in subsection (a) and inserting in lieu thereof "$23" ;

(2) by striking out “$40” in subsection (b) and inserting in lieu thereof “$44";

(3) by striking out “$60” in subsection (c) and inserting in lieu thereof “$66'';

(4) by striking out "$82” in subsection (d) and inserting in lieu thereof "90";

(5) by striking out “$113” in subsection (e) and inserting in lieu thereof “$124" ;

(6) by striking out "$136” in subsection (f) and inserting in lieu thereof "$150"';

(7) by striking out “$161" in subsection (g) and inserting in lieu thereof “$177”;

(8) by striking out “$186” in subsection (h) and inserting in lieu thereof "$205";

(9) by striking out "$209” in subsection (i) and inserting in lieu thereof "$230";

(10) by striking out “$300” in subsection (j) and inserting in lieu thereof "$330" ;

(11) by striking out "$47" and "$600" in subsection (k) and inserting in lieu thereof “$52” and “$660" ;

(12) by striking out “$400” in subsection (1) and inserting in lieu thereof $440";

(13) by striking out “$450” in subsection (m) and inserting in lieu thereof "$495";

(14) by striking out “$525" in subsection (n) and inserting in lieu thereof "$578"';

(15) by striking out “$600” in subsection (0) and (p) and inserting in lieu thereof “$660";

(16) by striking out “$250" in subsection (r) and inserting in lieu thereof "$275"; and

(17) by striking out “$350” in subsection (s) and inserting in lieu thereof "$385". (b) The Administrator of Veterans Affairs may adjust administratively, consistent with the increases authorized by this section, the rates of disability compensation payable to persons within the purview of section 10 of Public Law 85–857 who are not in receipt of compensation pursuant to chapter 11 of title 38, United States Code.

SEC. 2. The compensation payable pursuant to the amendments made by this Act shall be payable beginning with the first day of the second calendar month following the date of enactment of this Act.

Mr. ROBERTS. Is there any further business before the subcommittee?

Then, tomorrow at 10 a.m., we will hear the Veterans’ Administration, and without objection, the committee will stand recessed until 10 o'clock tomorrow.

(Whereupon, at 11:30 a.m., the committee recessed, to reconvene at 10 a.m., Wednesday, April 3, 1968.)

INCREASED COMPENSATION PAYMENTS FOR
SERVICE-CONNECTED DISABLED VETERANS

WEDNESDAY, APRIL 3, 1968

HOUSE OF REPRESENTATIVES,
SUBCOMMITTEE ON COMPENSATION AND PENSION
OF THE COMMITTEE ON VETERANS' AFFAIRS,

Washington, D.C. The subcommittee met at 10 a.m., pursuant to recess, in room 362, Cannon House Office Building, Hon. Horace R. Kornegay (acting chairman of the subcommittee) presiding.

Mr. KORNEGAY. The subcommittee will come to order.

We are meeting this morning to continue our hearings on the service-connected compensation increases for disabled veterans. We are very happy to have with us today the Chief Benefits Director for the Veterans Administration, Mr. A. W. Farmer. It is always good to see our old friend and able counsel Don Knapp.

STATEMENT OF A. W. FARMER, CHIEF BENEFITS DIRECTOR, ACCOM

PANIED BY J. T. TAAFFE, JR., DIRECTOR, COMPENSATION, PENSION, AND EDUCATION SERVICE, AND D. C. KNAPP, ASSISTANT GENERAL COUNSEL, VETERANS ADMINISTRATION

Mr. KORNEGAY. Mr. Farmer, will you identify your associates with you today for the record and then proceed in any fashion you choose.

Mr. FARMER. Yes, sir. I would like to make known to you Mr. Donald C. Knapp, Assistant General Counsel on my left who has worked with the committee for many years, and newly appointed James T. Taaffe, Director of Compensation, Pension and Education of the Department of Veterans' Benefits.

Mr. KORNEGAY. We welcome you. Mr. Fino. You say newly appointed. Whose place did he take? Mr. FARMER. Mr. J. C. Þeckarsky, and he in turn became Deputy Chief Benefits Director and he is over there.

Mr. FINO. I just want it for the record. Is that a promotion?

Mr. FARMER. That is what is known in Government as a lateral promotion.

Mr. Fino. Which means he didn't get more money?
Mr. FARMER. That is right. He has a wider range of interests now.

Mr. Fino. Then it is not a promotion. If it didn't carry more money, it is not a promotion, just a lateral change.

Mr. KORNEGAY. Just an end run. You may proceed.

Mr. FARMER. Mr. Chairman and members of the subcommittee, I am pleased to appear before you this morning to discuss an important

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phase of the veterans compensation program; namely, the various rates of compensation payable to our service-connected disabled veterans.

The basic rates of disability compensation payable in cases of wartime service, which now includes the Vietnam era, currently range from $21 for 10 percent disability to $300 per month for total disability.

An additional amount of $47 per month is payable for the loss or loss of use of a foot, hand, both buttocks, or one or more creative organs, blindness of one eye, complete organic aphonia, or deafness of both

A minimum rate for arrested tuberculosis of $67 per month is provided and conditions of helplessness, blindness, multiple amputations, et cetera, carry rates from $100 to $600 per month. An additional allowance of $250 per month is authorized for certain severely disabled veterans who are in need of regular aid and attendance for all periods during which they are not hospitalized at Government expense.

Certain seriously disabled veterans who are substantially confined to their house or immediate premises by their service-connected disabilities are eligible for the so-called house-bound rate of $350.

Additional amounts are also payable to veterans 50 percent or more disabled for a wife, child, or dependent parents. All rates of peacetime disability compensation are 80 percent of the wartime rates. There are currently over 2 million disabled veterans receiving compensation checks every month.

The basic purpose of the disability compensation program throughout its history has been to provide relief for the impaired earning capacity of veterans disabled as the result of their military service.

The amount payable generally varies according to the degree of disability which in turn is required by the law (38 U.S.C. 355) to represent, to the extent practicable, the average impairment in earning capacity resulting from such disability or combination of disabilities in civil occupations.

The degree of a given veterans loss of earning capacity is determined in accordance with the Veterans Administration schedule for rating disabilities.

As you know, for several years the Veterans Administration has been engaged in the preliminary steps of an extensive project designed to test whether the schedule for rating disabilities accurately represents the degree of average economic impairment resulting from disability.

Employing the facilities of the Bureau of Census, we have just this year begun the full-scale study. The assembly and evaluation of the data obtained in this study, and the reflection of that information in necessary changes, if any, of the rating schedule, will require an extended period of time.

In developing techniques for use in the study which is now under way, we conducted a pilot study. While much of the information obtained through this preliminary study could not be regarded as conclusive, it did show very clearly that the average totally disabled veteran on our compensation rolls has virtually no earnings and is dependent on his disability compensation.

One of the compensation rate increase bills pending before your committee, which was recently introduced by Chairman Teague, is

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H.R. 16027. This bill proposes a $100 monthly increase in the rate payable for total disability.

This increase would raise the basic compensation payable to a totally disabled veteran from $3,600 annually to $4,800 (plus the additional compensation payable for dependents under 38 U.S.C. 315.) The bill would provide the same $100 monthly increase for the higher statutory rates which existing law (38 U.S.C. 314 (1)-(p) and (s)). provides for certain very serious disabilities or combinations of disabilities.

In the light of the results obtained from the pilot study, it is clear that some substantial increase for the totally disabled veteran is warranted, and we feel that the rates proposed by the bill for this category can be justified.

As you know, the U.S. Veterans Advisory Commission, established early in 1967 at the direction of the President to conduct a comprehensive study of the veterans' benefit structure; has recently completed its task and has submitted a number of recommendations in its recent report. With respect to the disability compensation rate payable to the totally disabled veteran, the Commission's findings clearly bear out a need for an increase in this category of cases such as is proposed in H.R. 16027.

With respect to veterans on the compensation rolls who are less than totally disabled (i.e., from 10 percent through 90 percent), the bill proposes an across-the-board increase of 8 percent (rounded to the nearest dollar).

It is understood that this is intended to represent a cost of living increase. A comparison of the consumer price indexes between the time of the last compensation increase and the present time reflects an upward change of about 7 percent. An across-the-board increase as proposed by the bill presupposes the economic validity of the base compensation now being paid in these cases.

As I have pointed out, our extensive economic validation study is designed for the specific purpose of revealing whether the economic impairment of each of the several thousand specific disabilities is correctly reflected in our rating schedule. These findings will, of course, translate themselves into the adequacy or inadequacy of the amount of compensation payable in each case.

While the final, definitive findings in our validation study will not be available for some period of time, we are hopeful that in the next several months we will receive such further data as may form a basis for reaching some reasonable conclusions with respect to the need for increased compensation rates for those less than totally disabled.

This should enable us to furnish to the committee at a later date more intelligent advice as to the soundness of the various rates in this group, accompanied by recommendations for such increases as may be justified. The Veterans' Administration has always favored adjustment of compensation rates, when warranted by cost-of-living increases.

In this particular instance we would hope that the foregoing would be given serious consideration by the committee in connection with the establishment of an appropriate effective date for this legislation.

The committee will recall that the Veterans' Administration early last year submitted to the Congress, and recommended the enactment

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