1976, removed the restriction to undergraduate work imposed on the 9-month extension granted by Public Law 93-508, fulfilling another of our priority goals.

As you are aware, the VFW fought this restriction for Vietnam veterans when H.R. 12628 was being considered by Congress and. again, when the Congress resoundingly spoke in behalf of veterans and overrode the presidential veto of the Vietnam Era Veterans Readjustment Assistance Act of 1974.

Likewise, we have repeatedly opposed the administrations attempt to reduce from 10 years to 8 years the time allowed for completion of education for Vietnam era veterans.

While on the subject of education, we also recommend a cost of living increase for those pursuing educational programs under the GI bill of at least 6 percent.

One of our continuing priority goals calls for the establishment of a national cemetery in every State so that our honored veterans may be interred near their survivors. Our veterans were called to the colors by the Federal Government, and the Federal Government should assume this responsibility and should not shunt it off on the various States.

The quality and availability of medical care for our veterans has historically been of prime concern to the Veterans of Foreign Wars. The Veterans' Administration has over the years in general acquitted itself well in carrying out its responsibilities in this area. However, there presently exists on the one hand impediments in existing law, and on the other, the need of new legislative initiatives if care provided in Veterans' Administration hospitals and medical facilities is to be, in fact, second to none.

One provision of Public Law 94-581 has caused extreme hardship to veterans with non-service-connected disabilities entitled to aid and attendance and housebound benefits, and has subjected the Veterans' Administration to considerable criticism.

This is the interpretation of out-patient care by the general counsel and the medical administrative service of the Veterans' Administration requiring such disabled veterans to utilize Veterans' Administration health care facilities and to surrender their contract fee cards previously honored by private physicians and facilities. Additionally, many permitted their health insurance policies to expire as they felt secure with their government issued contract fee card to obtain local medical attention. We do not believe such was the intent of the law, but if the Veterans' Administration interpretation is permitted to stand, we surely need timely remedial legislation. The Veterans' Affairs Committee of the other body will soon consider H.R. 3696, deleting the restrictive words from section 612(g), title 38 United States Code. I trust this committee will act upon this measure quickly when it is referred, so that the contract fee cards will soon be returned to these needy disabled veterans.

Legislation which will expire this fiscal year, the Veterans' Administration Physician and Dentist Pay Comparability Act of 1975, Public Law 94-123, as amended, by Public Law 94-581, although supported by the Veterans of Foreign Wars, is at best stop-gap legislation which due to continuing inequities falls short of its intended goal.

Another of our priority goals is to seek enactment of permanent legislation to establish salary levels more attractive to VA health care personnel.

There is no doubt the "Bonus Bill," as it is commonly known, has had a desirable effect upon the recruiting and, in particular, the retention of VA physicians and dentists. However, not everyone is in agreement with respect to the extent of success of the program. While according to Senate Report 94-1206, VA fulltime physician strength reached an all time high of 5,815 Senate Committee Print No. 66 states the largest employment increase, 37 percent, has been in parttime physicians. Of great concern to the VFW is the fact that 31 percent of all physicians within the Veterans' Administration are foreign medical graduates. This growing trend toward dependence upon foreign medical graduates is disturbing. Their formal qualifications are definitely less than those of American-educated physicians and too often a language barrier exists which must be a detriment to the treatment and well being of the patient.

In view of the foregoing, steps must be taken to authorize pay scale to motivate graduates of American medical schools to eagerly seek permanent full-time employment within the Veterans' Administration. Recent Federal pay increases raising top salaries for VA physicians to $47,500 per annum should nearly eradicate retention problems. However, some form of permanent additional incentive plan must be forthcoming for recruiting purposes and retention within critical specialties. Perhaps waiver of the Dual Compensation Act for retired Armed Forces physicians permitted within the Department of Defense might be the answer. As a comparison, permit me to quote from an article in the October 18, 1976 edition of Medical Economics by its senior editor, Arthur Owens, namely,

a majority of office based M.D.'s now pull down at least $58,000 annually, after professional expenses. ..

Mr. SMITH. Mr. Owens obviously refers to general practitioners, not specialists, or surgeons, whose special skills rightly cost more.

Notwithstanding the high quality professional care rendered by the vast majority of dedicated Veterans' Administration health care personnel, serious nagging problems continue to exist throughout the hospital and medical care system. For example, the concerted effort to phase out of the VA system care for our non-service-connected disabled veterans, understaffed and underfunded ambulatory care programs, undue affiliated medical school influence in VA hospitals and the continuing untenable bed occupancy rate of 83 percent throughout the 172 VA hospital system. With 17 percent of the beds constantly unoccupied it is the same as having closed down 29 hospitals each and every month while veterans in need of care are turned away by admitting physicians, even dropping dead shortly thereafter. Compounding this dilemma, seven new and one replacement hospital are scheduled to be constructed. For whom? The veterans now denied care, or are we to have instead of 29 empty hospitals, 36 empty hospitals to care for welfare recipients under a national health insurance program? We believe many veterans in need of hospitalization are turned. away by admitting physicians. If not, why the following acceptance. rates? Albany, N.Y., 55.2 percent; Cleveland, Ohio, 58.6 percent;

Huntington, W. Va., 59.7 percent; Jackson, Miss., 44.9 percent; Kansas City, Mo., 58.7 percent; New York, N.Y., 58.9 percent; West Haven, Conn., 41.5 percent-seven hospitals below 60 percent. Obviously, one reason is that the revision of bed designations, that is, general medical, surgical and psychiatric is long overdue. We have no positions regarding the various national health insurance programs before Congress other than they shall not invade the VA hospital and medical care facilities. If all empty beds within the system are not filled by veterans who need and apply for hospitalization, then those beds should be allocated to the dependents of 100 percent permanently and totally disabled veterans-those with the most need and most deserving.

The elderly veteran is a fast growing quandary, now spoken of as the "graying of America." The average age of all American veterans is 47 years. Almost half of our 29.7 million veterans, 13.3 million, are between 50 and 60, 2.3 million are over 65, and 123,000 are 85 and over. Many are widowers with no close kin or, most unfortunately, children who do not want the responsibility of caring for those who reared them and cannot afford placing them even in substandard nursing homes.

Needless to say, the 18.5 thousand VA, community, and State nursing home beds and the 18.4 thousand VA, and State home domiciliary accommodations will not meet the growing need. The House Veterans' Affairs Committee has advanced legislation to increase combined grants to State nursing homes and domiciliaries from $10 million to $15 million per annum, but this is only a small step in the right direction. Unfortunately, we have entered an "enlightened" age wherein people abandon their senile parents in the emergency rooms of community hospitals. No law can make these people properly care for their aged parents even if the "children" can be identified. In such an atmosphere, alien to most of us, we cannot let our honored veterans be cast aside. We must now make provisions for them. It is, indeed, a sad commentary that the Government must now make provisions for our heretofore honored and aged heroes who are too much burden for their children whom they reared and nurtured, but such is the case. While on this subject, I must congratulate this committee for having shepherded through the Senate legislation which became Public Law 94 417, increasing payments to State veterans homes. The per diem rate increases, from $4.50 to $5.50 for domiciliary care, $6 to $10.50 for nursing home care, and from $10 to $11.50 for hospital care retroactive to January 1, 1976, was both welcome and needed.

The third concurrent budget resolution reduced to $18.1 billion the $19.5 billion authorized for the Veterans' Administration in the second concurrent resolution for the fiscal year 1977 ending September 30, 1977. Most of this reduction is attributable to the over estimate in GI bill participation. However, President Carter's proposed VA budget for the fiscal year 1978, commencing October 1, 1977, is $19.1 billion. We believe this proposed budget understates the need by at least $1.5 billion and should be approximately $20.6 billion. The President's recommended compensation increase of 4.9 percent effective October 1, 1977, and pension increase of 5.3 percent effective January 1,

1978, both fall short of a realistic 6 percent. No provision has been made for a cost-of-living increase for our Vietnam veterans availing themselves of the GI bill and it is needed. These shortages represent another $229 million to be added to the budget. The budget also contains a false savings of $266 million in proposed negative legislation to take away benefits which this committee has repeatedly refused to do. In addition, the budget contains no funds for either new legislative initiatives or a meaningful restructuring of the pension program. We will include these items in our testimony before the Appropriations Committee.

Another area of deep concern to the VFW is the President's request for an extension of the Reorganization Act of 1949, which lapsed for the fourth time in 1973. Under the authority requested the President could transfer all or any part of an agency or its functions to another agency; abolish all or part of the functions of an agency; consolidate all or part of an agency; or change the name of an agency or the title of its head, among other measures, unless either House of Congress adopts a resolution opposing the plan before Congress has been in continuous session for 60 calendar days. Inasmuch as the Veterans' Administration is an agency, we would much prefer that the President be required to submit legislation to Congress to be voted up or down following appropriate hearings. Our fears in this area are not unfounded since when the President was Governor of Georgia his reorganization bill to the State legislature called for combining the Georgia State Department of Veterans' Services with Human Resources. Only an outpouring of protest from the veterans' organizations in Georgia prevented this from happening. To be forewarned is to be forearmed and we must be vigilant and prepared to act quickly, if such dehumanizing of our veterans is proposed.

I commend this committee for having held oversight hearings during the 94th Congress with respect to the failures of the Department of Labor to carry out the mandates of Congress with respect to vetcrans' employment. I would hope that more such hearings will be held particularly in view of the added new Help Through Industrial Retraining and Employment Program (HIRE).

I trust that each of you will be with us tonight at our Annual Congressional Banquet at the Sheraton-Park Hotel. We will be honoring the Honorable Herman E. Talmadge of Georgia, Chairman of the Agriculture and Forestry Committee of the U.S. Senate, and also an outstanding member of this committee.

The reception will begin at 6 p.m. with dinner promptly at 7 p.m. I want to assure you our program will conclude around 9:15 p.m.

And Mr. Chairman, I might add that we have the largest delegation of members that we have ever had come to our Washington conference. Our delegation numbers more than 3,000 members of our organizations throughout the United States.

And tonight again we think we will have the largest banquet that our organization has ever had, and also in conclusion I want to wish Senator Randolph a happy birthday. Thank you. [Applause.]

[The pamphlet, "VFW Priority Goals Legislative and Security for 1977", submitted by Commander Smith follows.]