Mr. KORNEGAY. Mr. Fino, have you any questions?

Mr. FINO. Well, if we wait until October it might be 10 percent by that time.

Mr. FARMER. It is about a little over seven now.

Mr. FINO. I have no further questions.

Mr. KORNEGAY. Mr. Hanley.

Mr. HANLEY. Thank you, Mr. Chairman.

I, too, want to commend Mr. Farmer for his very fine statement and am delighted with the affirmative position which the Veterans' Administration has evidenced in this matter. The figure which you have projected, the cost figure of slightly over $234 million-is that an accurate figure?

Mr. FARMER. Yes, sir; this is an area where we rarely make a mistake inasmuch as we know the number of people that are on the rolls today. We make projections as to the number that are going to be on the next 5 years. Our experience has demonstrated we rarely miss this. Then after you do that, all it is is just a question of multiplication by the number versus the amount of increase. The $234.7 million, I am sure, will be borne out, if this law becomes effective, for the first 12 months.

Mr. HANLEY. I see. The reason I question it is because it is a figure that is substantially lower than the figures projected here yesterday in testimony of other witnesses.

Mr. FARMER. On this same bill?

Mr. HANLEY. I believe so. Or a very similar bill. But I would accept your figure as the valid one.

Mr. FARMER. Thank you.

Mr. HANLEY. The only other point I make on the part of your statement that I am concerned about is the spread between the 90-percent rating and the 100-percent rating.

Mr. FARMER. You mean the fact that we have this situation.
Mr. HANLEY. Well, the actual pay differential.

Mr. FARMER. There is a reason for that, Mr. Hanley. There is a provision in our rating schedule that says that if any veteran, whether 60, 70, 80, or 90 percent disabled, is unemployable by reason of his service-connected disability, the rating schedule provides for 100-percent evaluation.

Now, there are only 9,000 of the 90-percent veterans on the rolls. The reason for that relatively low number is that they have been siphoned off into the 100-percent category by reason of this unemployability provision I referred to; that is, those who have not been able to overcome the impairment of their service-connected disability and are not able to work or draw 100 percent.

They are regarded as 100 percent in all of the tabulations that you see. So you have less of the 90-percent veterans, those who have overcome their economic handicap on an individual basis. Some of them may even have an arm disarticulated at the shoulder, but they are earning as much as or in some of our data in a preliminary basis, on the pilot study they come pretty close to the nondisabled in many cases because they are of the type of person who did on an individual basis overcome disability.

They are 90 percent and the 100-percent veteran is 100-percent disabled, but actually those truly disabled in this category are being paid 100 percent. The other factor is, under the rating schedule, muscle injuries are combined, so we do find a large number of 90-percent veterans are people who have sustained muscle injuries in various

parts of the body, either in automobile accidents or combat wounds, and under the Rating Schedule they combine to 90, yet they are able to overcome this handicap somewhat more easily than they would be, say, from disease such as diabetes or a heart attack, something of that nature.

So I really do not believe that this 90 percent is as severely disabled or economically impaired as would be indicated by his juxtaposition to the 100-percent category.

Mr. HANLEY. So it would be your contention that of these 9,000 beneficiaries that most of them are employed?

Mr. FARMER. I would say "Yes, sir" over 80 percent of them. Mr. HANLEY. And about how many fall into the 80-percent rating category?

Mr. FARMER. 28,000 of those, or rather 28,700, are in the 80-percent category. You actually have the situation, oddly enough, I think about 72 percent of those are employed. These would be equivalent to 80percent employed in the 90-percent disabled group. So you have what might be regarded as an anomaly but it does make I think the point I was trying to make before.

The 90-percent disabled are largely employed, about 80 percent of them. In the 80-percent category you don't get quite the same mix as you do in the 90-percent category but I would go back to the fact if they are 80 percent and unemployed by reason of that disability, we pay them 100.

Mr. HANLEY. I see.

Mr. FARMER. That is the reason you find a rather substantial number of the 80-percent people fully employed, 75 percent. And in the 100 percent you find very few of them employed.

Mr. HANLEY. I appreciate your explanation.

No further questions. Thank you, and thank you, Mr. Chairman. Mr. KORNEGAY. Mr. Roberts.

Mr. ROBERTS. Thank you, Mr. Chairman. Just one question.

What is the position of the Veterans' Administration with reference to widows and children's compensation for death of the husband? Mr. FARMER. For the DIC, dependency and indemnity compensation?

Mr. ROBERTS. Yes.

Mr. FARMER. This was a matter spoken to by the Commission. We have not completed our review of that report. There have been a number of increases given to DIC recipients, particularly the widows associated with pay increases on the military in the past. It has been rather frequent. I would hesitate to respond to you today at this stage as to the official positions.

Mr. ROBERTS. One of our problems, and we need a position, I think, occurs from publicity given and I think bad management on the part of some "do gooders," where we have a woman-not a widow, but with 7 illegitimate children and we just had a suit filed recently-who was drawing $340 a month welfare and she said she couldn't live on that and another was drawing $358 a month, and the more children they have the more money they draw.

This is not so, we have not recognized this for a widow of a man killed in the service. Of course, I think it is ridiculous for a woman who lost a husband and who has children to support, to draw far less money than someone on welfare.

Mr. FARMER. It certainly presents an anomaly.

Mr. ROBERTS. I will attempt to correct it.

Thank you, Mr. Chairman.

Mr. KORNEGAY. Thank you, Mr. Roberts.

The chairman of the subcommittee has just come in and I extend to him the floor.

Mr. DORN. No, thank you, Mr. Chairman, I am here just a few minutes to lend my support to the committee.

Mr. KORNEGAY. We understood you were at a very important meeting and we appreciate the fact you did come by for a few minutes. Mr. DORN. Thank you.

Mr. KORNEGAY. Mr. Farmer, I have two or three questions I would like to ask you.

No. 1, how many, and I don't believe this was disclosed in your statement, how many of the 100-percent disabled veterans do we have on the compensation rolls at the present time?

Mr. FARMER. About 112,000 or just over 112,000 of the 100-percent veterans.

Mr. KORNEGAY. Does that include the 90 percenters who are unemployable?

Mr. FARMER. Yes, sir.

Mr. KORNEGAY. In other words, that is the total number who are drawing 100 percent?

Mr. FARMER. Yes, 100 percent. It also includes those that are more severely disabled than 100 percent; that is, that are in receipt of compensation under the statutory awards, (1) through (p).

Mr. KORNEGAY. Now, how long has it been since there was an increase in service-connected compensation.

Mr. FARMER. December 1965.

Mr. KORNEGAY. Now, since that time isn't it true that recipients of social security disability as well as annuity benefits, the military, civil service employees and non-service-connected pensioners have received two raises?

Mr. FARMER. I think the civil service have received two in that interval, and this is based on memory and certainly social security have received two.

Mr. KORNEGAY. And military?

Mr. FARMER. Military pay has received two.

Mr. KORNEGAY. And pensions?

Mr. FARMER. Pensioners received two rather quickly, October 1, 1967, and another one just enacted.

Mr. KORNEGAY. Now, I think this is a significant factor in this whole area; we ought to have some statement from you, representing the Veterans' Administration, on the record. That is, what impact is the Vietnam war having on the compensation rolls today?

Mr. FARMER. Well, sir, there are about 18,000 on the compensation rolls today that are drawing compensation who are veterans of the Vietnam era, or who sustained injuries.

Mr. KORNEGAY. As a result of injuries sustained in the Vietnam war?

Mr. FARMER. In the Vietnam era. I don't want it to be reflective of those injured in Vietnam. We do not make a distinction, statistically at least, that would permit us to differentiate between them. It is hav