INVESTIGATION OF DISABILITY RETIREMENT SYSTEMS IN THE ARMED SERVICES THURSDAY, MARCH 4, 1948 HOUSE OF REPRESENTATIVES, COMMITTEE ON ARMED SERVICES, The subcommittee met at 10 a. m., pursuant to recess, Hon. Charles H. Elston (chairman) presiding. Mr. ELSTON. The committee will come to order. We will hear first from Mr. Tracy S. Voorhees. Mr. Voorhees, will you state your full name, your address, and present occupation for the record. STATEMENT OF TRACY S. VOORHEES, FOOD ADMINISTRATOR FOR OCCUPIED AREAS Mr. VOORHEES. Name, Tracy S. Voorhees; home, 184 Columbia Heights, Brooklyn. At the present time I am serving as Food Administrator for the Occupied Areas-that is, serving in the Department of the Army. Mr. ELSTON. During the war what position did you occupy in the War Department? Mr. VOORHEES. I first came down, at the request of Judge Patterson, to serve as counsel for the Surgeon General in connection with the medical procurement program. Then later I went into uniform and served as adviser on organization for the Surgeon General, particularly in connection with the medical supply program, although in other matters also, affecting hospitalization. Then I went overseas, I think I was in every theater except the Mediterranean theater, to survey the medical supply organization, and to make recommendations for improvements, beginning with medical supply for the Normandy invasion. Sometime following V-J day, when Judge Patterson became Secretary, I went over into his office as an assistant of his to advise on matters in which he had to act relative to the Medical Department of the Army-demobilization of doctors, problems incident to the very large number of cases of wounded and ill men to be brought back from overseas, questions of disability retirement, and many other things. I served in that capacity until, roughly, a year ago, when I became Food Administrator for the Occupied Areas. Mr. ELSTON. Mr. Voorhees, we are interested particularly in your observations with respect to disability retirement. Did you at any time make any study of that subject for Secretary Patterson? Mr. VOORHEES. Yes, sir. In early 1946 just after I had gotten out of uniform. There were criticisms in the newspapers and by columnists, and also certain congressional criticisms of disability retirements, Secretary Patterson directed me to make some study of that to see whether he should take action, and if so, to recommend what action he could take. I did make such a study and I reported to him on February 15, 1946. I should perhaps have said that prior to Pearl Harbor I either was or attempted to be a lawyer in New York. Mr. ELSTON. Have you a prepared statement this morning? Mr. VOORHEES. I am sorry, I do not have. I have been testifying before the House Appropriations Committee for the last several days and I did not have the opportunity to prepare a formal statement for this committee. Mr. ELSTON. Can you give us the substance of your report to Secretary Patterson? Mr. VOORHEES. If it will meet your approval I should like to summarize, informally, what I found and then perhaps put the whole report into the record. ́ Mr. ELSTON. Do you have the report? Mr. VOORHEES. I have a copy of it here. It is not too long. Mr. VOORHEES. That is a document which was prepared over 2 years ago, and was not prepared for a congressional hearing but for Judge Patterson. The criticisms at that time were twofold. First, that there were high officers who were, it was charged, getting out with relatively small disabilities, and it was said that was in the nature of a racket. And then there was the charge that civilian component officers were not getting as fair a deal, the same consideration as Regular officers. I looked into both of those questions. Some of that work was continued after this report. The substance of my conclusions was about this [quoting from the report]: As to disability retirements, there are two questions: First the fairness of the Army's administration of the statutory provisions; second, whether the existing provisions are themselves equitable. I became satisfied, after looking into the matter, that the second was the real trouble, rather than the first. There were several reasons for this. I would like to discuss the second subject first, if I may, and will come back to the other, because it was in the second subject that I thought I found the conditions which had given rise to the complaints. As to that I said in the report: As to the second question (the provisions of law themselves) I believe that these embody essential inequalities which are the cause of the existing criticisms, which entail serious danger of further criticism of the War Department, and which tend to cause a strong motivation toward abuses. This trouble lies in the cumulative effect of the following: * * * I am not going to quote from the report now but to summarize it. The retirement of officers at their high temporary ranks. That was a situation which was entirely proper, I felt, in itself, but taken cumulatively with other matters it was not good. At that time, when it was known that as the Army shrank, officers would inevitably, in many cases, have to step downward in rank, a man with a disability which entitled him to retirement was naturally under a strong motivation to get out while he could get his retirement pay based on his highest rank. It seemed to me it was a bad thing for the Army, to lose good men for this reason when it did not need to lose them. The second thing was-and I think this is by far the most important of all-the fact that retired pay for disability is tax exempt. I reported to Judge Patterson that standing alone this provision would not furnish cause for criticism, if that part of it which is truly for disability were adjusted on a scale proportioned to the extent of the impairment, and if the balance of the pay, which is in the nature of a pension based on length of service, to which the officer would be equitably entitled quite apart from any disability, were separately computed and were not tax-exempt. The third factor was that diasbility retirement pay for officers and for enlisted men of over 20 years' service is computed in all cases at 75 percent of the base pay, although this is not so for other enlisted men. Of course, as the committee knows, other enlisted men receive disability compensation from the Veterans' Administration scaled in accordance with the extent of disability based upon impairment of capacity for earning a livelihood in civilian life. So that under the law we had two classes, a favored class and a class which was not favored. Mr. KILDAY. At that point: Did your investigation go into what proportion of those enlisted men profited by the Veterans' Administration compensation over those who were retired? In other words, at 75 percent of his pay he would be better off in the Veterans' Administration, unless he was a very high ranking enlisted man, with very considerable longevity; is that correct? Mr. VOORHEES. Yes. I recall there were certain such cases-and that applied to officers in lower ranks, too. In some cases they could get more from the Veterans' Administration than they could get under the other provisions, I believe. But I did not go into that extensively. Mr. KILDAY. My thought was-I wondered whether they balanced each other. Mr. VOORHEES. No, sir. I think there might be a few cases in which a man might make an election and do better under one than the other. But the essential thing, it seems to me, is that it is a basic inequality to take the men that fought the war as enlisted men and give them a different method of compensation for their disabilityfor the fellow who lost his arm, as an enlisted man, it is no less completely gone than it would be if he had lost it as an officer. I thought they should have the same treatment. Mr. KILDAY. If this man was a private who had come in during the war, he was much better off probably, with Veterans' Administration compensation than at 75 percent of the pay. Mr. VOORHEES. Depending on the nature of the disability and the enlisted grade. Some might do better under the Veterans' Administration, and some under the other provision of law if this had been open to them. It was not my thought to cut down what the enlisted men were already getting, but that there should not be two different systems. one for officers and enlisted men with over 20 years' standing and that means very few enlisted men--and the other for all of the remaining enlisted men. Mr. JOHNSON of California. Yes. Did your assignment include also recommendations for statutory changes? If it did, maybe you are coming to it later in your testimony. Mr. VOORHEES. Judge Patterson told me to look into it and recommend what I thought he should do. My instructions were not specific, but they led to recommendations for statutory changes. Mr. JOHNSON of California. And you will testify to them? Mr. VOORHEES. I will if you desire me to. Mr. JOHNSON of California. I would like to have that. Mr. VOORHEES. I reported to Judge Patterson: Because of the cumulative effect of the above-enumerated factors, an officer, who at the present time is found to have any incapacity merely sufficient to unfit him for field service in time of war, not only receive his retired pay based on his high rank which is probably temporary, but also for life his 75 percent of the base pay of that high rank is on a tax-exempt basis regardless of the degree to which his capacity to earn a civilian livelihood may have been impaired. On the other hand, most of the enlisted men who fought the war enjoy no comparable privileges. The above situation, therefore, inevitably tends (1) to invite retirements for disability of officers presently in high ranks whose physical condition is such that they probably can get jobs in civilian life; (2) to stimulate enlisted men's criticism because of this discrimination; and (3) to cause publie criticism because of both of these factors. I then emphasized the basic importance of this tax-exempt feature, because in the case of most of these officers, particularly the Regular Army officers, they were men for the most part, who were getting out with 25 or 30 years' service, and such men with 30 years' service were entitled to retirement pay, irrespective of disability equal to 75 percent of their base pay. The disability added nothing in their cases except tax exemption. If they had a very small disability, that represented a very high profit to them because they thereby had their whole retirement pay, which they had earned for length of service, also placed on a taxexempt basis. They might receive that although their capacity to earn a living in civilian life was not impaired at all. That was exactly what the statute provided. It was not due, it seemed to me, to any failure in administration of the statute, but it was due to the carrying-out of the specific provisions of the law. That is, as construed, the statute provided that a man is disabled if he is not fit for general field duty in time of war. Of course, those are my words. I do not have the statutory words in mind, but in substance it meant a very exacting standard for a man in middle age or a little past it. Most everybody in his fifties has some kind of a defect. If a man is a Regular it is pretty certain that he acquired that defect as an incident of service, because he had gone into West Point with the most careful physical examination at a time when he was probably under 20 years old, and he was physically a perfect specimen at that time. Therefore, any disability that he had was doubtless service-connected. Yet the disability might very well be very slight. Mr. JOHNSON of California. Did you ever go into that question of what is an incident of service? There are diseases like cancer, Hodgkin's disease, and high blood pressure. Do they arise out of the service, in your opinion? Mr. VOORHEES. There is a point in there which I never have. thoroughly understood. I believe as this statute is interpreted, if a disease originates, during service, it is treated as a service-connected disability. But if a disease originated before service and developed. during service, a further question is asked as to whether that aggravation is due to the service, or is due to the natural progress of the disease? I am not an expert on those questions. The point you raise does present a very difficult question, and I think it deserves further study as to whether the law should provide compensation wherever the disability originates during service, or only if it originates because of something which would not have occurred had the man not been in service. Mr. JOHNSON of California. One other question. When a man has served the necessary length of time to be retired on either age or length of service, do you think the boards have the right and the power, to discharge him, or retire him, rather on disability. Mr. VOORHEES. Well, sir- Mr. JOHNSON of California. My theory is that when a man has served a length of time before retirement, either by length of service or by age, then the only ground on which he should be retired is for that reason. They cannot say, we are retiring him on disability, because of his having arthritis or high blood pressure, or his vision or whatnot is bad. Mr. VOORHEES. With great respect, sir, I would like to express a different view from that. I believe that it is not a question of whether he is entitled to be retired for length of service, but that the true question is whether he has a disability under the law. If he has a disability under the law, then he is entitled to disability retirement whether the time of this disability retirement is the same time that he might otherwise retire or not. But I do think that the evil which I believe you are striking at is a thing which is inherent in the provisions of the law which I have just referred to and which should be corrected by a change in the law. Let me take a case to illustrate this point I tried to make a moment ago. Let us suppose a man has served his 30 years or is otherwise ready for retirement, and suppose he suffers from very serious accident, which clearly constitutes a disability. I do not see any reason why he should be deprived of the benefit of disability retirement merely because he had earned the right to retire even if he were not disabled. Mr. JOHNSON of California. I think that is a case where he should be retired, but I am thinking of cases, and I understand there are hundreds of them, and this is no personal criticism of any individual, where they had high blood pressure, and arthritis, all kinds of diseases of old age, and, I probably am wrong, but my theory was that when they had obtained the age limit, or the length of service limit, then they only have one method of retirement, and that is for length of |