THE CHAIRMAN OF THE COUNCIL Hon. OLIN E. TEAGUE, Chairman, Committee on Veterans' Affairs, DEAR MR. CHAIRMAN: This is in reference to your request of July 23, 1959, for the views of the Council of Economic Advisers on S. 1138, an act to provide readjustment assistance to veterans who serve in the Armed Forces between January 31, 1955, and July 1, 1963. Your courtesy in offering us an opportunity to communicate our views directly to your committee is appreciated, but the Council rarely transmits separate comments to congressional committees on legislative proposals. Our views are ordinarily sent to the Bureau of the Budget for consideration in the formulation of a general executive branch report to the committee cncerned, and we believe this would be the more appropriate course in the present case. Sincrely yours, RAYMOND J. SAULNIER. VETERANS' ADMINISTRATION, OFFICE OF THE ADMINISTRATOR OF VETERANS' AFFAIRS, Hon. OLIN E. TEAGUE, Chairman, Committee on Veterans' Affairs, DEAR MR. TEAGUE: The following comments are submitted in response to your request for our report on H.R. 1143, 86th Congress. This bill is intended to liberalize hospital admission requirements for veterans who engaged in enemy combat during active service in a war, campaign, or expedition. It would provide that if one applies for hospital treatment of a disease or injury which he claims was incurred or aggravated by combat service he shall be immediately hospitalized pending a determination on the question of combat incurrence or aggravation. Such hospitalization would be without charge, whether or not it was subsequently determined that the injury or disease was not service connected. Although the bill refers to Public Law 361, 77th Congress, this statute has been repealed and its provisions restated in section 354 of title 38, United States Code. We assume that if the bill is further considered it will be redrafted as an amendment to title 38. Veterans' Administration regulations provide an order of preference for furnishing necessary hospital treatment for persons discharged or released from active service. Top priority is given to veterans who are suffering from a warservice-connected injury or disease for which they are medically determined to need hospital treatment. Following in order of preference are veterans discharged for disability or in receipt of compensation who require hospital care for a service or non-service-connected disability. Then war veterans who require treatment for a non-service-connected disability, if beds are available and they state under oath their inability to defray the cost of hospital treatment. While H.R. 1143 requires the immediate hospitalization of combat veterans, it contains no corresponding provision that a need for hospital treatment be determined. This implies that the Veterans' Administration would be required to admit upon a priority basis a combat veteran making a claim even in the face of a medical determination of no immediate need. The bill provides that there be no charge for such hospitalization. Thus the doors of the Veterans' Administration would be open to a group of veterans for treatment of conditions for which service connection has not been established, and this new class of eligibles would be afforded priority for admission over emergency cases and veterans with proven service-connected conditions. We would be required to accept an applicant's unsupported allegation of service incurrence or aggravation of his disability, and there would be no recourse if the allegation proved erroneous. This would be so even in those cases where the disallowances of service connection would mean that the individual had no basic entitlement to hospitalization from the Veterans' Administration. We believe that our present regulations provide amply for veterans who seek hospital care while their claims for compensation are being acted upon. Admission in an emergency is provided upon a prima facie showing of eligibility. Reimbursement of expenses of, or payment for, medical services obtained in private hospitals without prior VA approval is authorized under certain criteria. Many cases involve reimbursement for such private services obtained during periods when claims for compensation are pending. It is impossible to submit a worthwhile estimate of the cost of the proposal if enacted. To comply with its terms we would need to set aside and hold open hospital beds to afford immediate hospitalization to veterans eligible under the bill. These would be additional ot those we must provide for veterans who require care for established service-connected disabilities. To the extent that it might be necessary to increase the use of contract beds, enactment of the bill would result in an increased cost of operating the Veterans' Administration hospital program. For the reasons mentioned in this report, I do not believe that enactment of the bill would be in the best interests of veterans as a whole. Accordingly, I recommend that H.R. 1143 not be favorably considered by your committee. Advice has been received from the Bureau of the Budget that there would be no objection to the submission of this report to the committee. Sincerely yours, BRADFORD MORSE, Deputy Administrator. VETERANS' ADMINISTRATION, Hon. OLIN E. TEAGUE, OFFICE OF THE ADMINISTRATOR OF VETERANS' AFFAIRS, Chairman, Committee on Veterans' Affairs, DEAR MR. TEAGUE: The Advisory Committee on Vocational Rehabilitation and Education, constituted under the authority in section 1662, chapter 33, title 38, United States Code, at its meeting on July 6, 1959, gave consideration to S. 1138. Further consideration was given this matter at its October 26, 1959, meeting. The Committee expressed the desire that its views be made known to your committee expressed the desire that its views be made known to your committee. mittee. The views expressed at the July 6 meeting is as follows: "S. 1138 proposes to establish a program of educational assistance for veterans who served in the Armed Forces of the United States after January 31, 1955. These benefits would be patterned after those provided for veterans of the Korean conflict by the Veterans' Readjustment Assistance Act of 1952. S. 1138 also proposes to extend vocational rehabilitation benefits as now provided for disabled veterans of World War II and the Korean conflict to veterans in need of such assistance to overcome the employment handicap of a disability arising from serfvice after January 31, 1955. Vocational rehabilitation would become a permanent program and not limited to those serving during the post-Korean induction period. "The Advisory Committee is cognizant that inequities may have resulted through the termination of entitlement for education and training benefits under chapter 33, title 38, United States Code, as of January 31, 1955. "The Advisory Committee favors the extension of some education and training benefits to veterans so circumstanced so long as individuals may be inducted into the Armed Forces under the Selective Training and Service Act. However, the Committee believes that the Congress will find it desirable to give further careful study to the equities and inequities that are inherent in any provision for the extension of education and training benefits to veterans. "It is further recommended that provision for vocational rehabilitation be made for persons who acquire a disability in active service in the Armed Forces of the United States during periods of war or peace, and that such benefits be not less than applicable to those veterans who are now eligible for vocational rehabilitation under chapter 31, title 38, United States Code." After considerable deliberation at its October 26, 1959, meeting, the committee reaffirmed the position taken at its July 6, 1959, meeting as expressed in the above quotation, but amplified it as follows: "The Committee wishes to amplify paragraph 2 of its July 6, 1959, statement by urging the Congress, in consideration of any extension of educational benefits for veterans, to initiate a much broader approach to this problem not limited only to veterans. Ample and proper educational opportunities for the youth of America is a fundamental problem involving the security and welfare of the Nation and should be considered as such. Action affecting basic issues, the Committee believes, should not be considered piece by piece to benefit special groups. Perhaps the problem should be studied with the Department of Health, Education, and Welfare as well as by the Veterans' Administration and appropriate committee of Congress." My view on legislation to provide major benefits such as education and training and loan assistance to those who sustained no disablement in their peacetime service have been presented to your committee in reports on various bills, particularly H.R. 2258. Briefly, I do not believe that present circumstances justify these special forms of assistance for this group of ex-servicemen. However, I want to reemphasize my feeling that legislation should be enacted to provide vocational rehabilitation for those peacetime ex-servicemen who have a definite need for training to overcome an employment handicap produced by a service-connected disability. Sincerely yours, BRADFORD MORSE, Deputy Administrator (For and in the absence of Sumner G. Whittier, Administrator).. Hon. OLIN E. TEAGUE, GENERAL COUNSEL OF THE DEPARTMENT OF DEFENSE, Chairman, Committee on Veterans' Affairs. DEAR MR. CHAIRMAN: I refer to your request for the views of the Department of Defense with respect to S. 1138, 86th Congress, a bill to provide readjustment assistance to veterans who serve in the Armed Forces between January 31, 1955, and July 1, 1963, as enacted by the Senate on July 21, 1959, The purpose of S. 1138 is stated generally in its title. Under provisions of the bill, as passed by the Senate, post-Korean veterans would be provided three major types of benefits which are patterned closely after the forms of assistance authorized under the GI bills for certain veterans of World War II and the Korean conflict. These are (a) educational and vocational training assistance (sec. 2 of the bill); (b) vocational rehabilitation training for veterans with service-connected disabilities (sec. 3 of the bill); and (c) guaranteed and direct loan assistance for the purchase of (1) homes, including homes on farms, and (2) farmlands, livestock, machinery and other equipment to be used in farming operations conducted by veterans (sec. 4 of the bill). The question of providing benefits of the type contemplated by S. 1138 to peacetime veterans of the military service was one of the major topics of consideration of the President's Commission on Veterans' Pensions, established in 1955 with Gen. Omar N. Bradley as Chairman. That Commission in its final report to the President on April 23, 1956, concluded that, in view of the changed character of our national military responsibilities for the foreseeable future, peacetime veterans should not be provided benefits such as were provided to veterans of World War II and the Korean conflict. The primary reason for offering postservice assistance to the veterans of World War II and the Korean conflict was to assist them in making the transition from a period of military service in time of war or national emergency to civilian life. The Department of Defense believes that to apply this same reasoning to personnel now in service leads to the inference that service in the Armed Forces is something abnormal and undesirable for which a man deserves rehabilitation or extra privileges. The Department of Defense recognizes that S. 1138 involves questions of broad national policy beyond the scope of the Department of Defense. However, it must be pointed out that proposals of this nature have a very definite effect on the ability of the Armed Forces to retain qualified personnel. Programs of educational and vocational assistance encourage personnel to leave military service immediately after accruing the maximum benefits which can be gained. This results in a serious handicap to the Armed Forces in their efforts to attract and retain qualified personnel on a career basis. The Department of Defense has emphasized before that the maintenance of a force in being of sufficient strength to assure the peace and security of the Nation without unreasonable expenditures of funds requires that a large percentage of personnel who volunteer for service in the Armed Forces remain there on a longterm basis. Despite all of the best efforts of the Armed Forces themselves and despite the enactment by the Congress of legislation designed to increase the attractiveness of a career in the Armed Forces, retention of personnel remains one of our most crucial problems. Enactment of a bill reinstituting benefits available only to the person who separates from the service will compromise the effectiveness of the efforts now being directed toward personnel retention. Extensive studies have been made of the reasons why personnel choose to leave the Armed Forces. In the Department of the Air Force, for example, surveys have revealed that one of the primary reasons for the separation of first-term airmen has been the desire and intention to take advantage of veterans' educational benefits. Attitude surveys conducted in the Air Force during the past 4 years have conclusively established that 45 to 50 percent of all separating first-term airmen leave the service in order to pursue courses of formal education. The problem is further aggravated by the fact that separations to take advantage of educational benefits are significantly higher among technically qualified airmen who are most needed by the Air Force from the standpoint of skill and training, educational and mental levels, and career-field management than among airmen in nontechnical fields who can be more easily replaced. The Department of Defense provides educational opportunities for personnel serving on active duty. For example, the Air Force educational services program is designed to make an Air Force career more attractive, encourage airmen and officers serving on active duty to raise their educational levels, and to fulfill the Air Force goal of a high school diploma or its equivalent for each airman and a college degree for each officer. The Army and the Navy, as a part of similar programs, are conducting pilot programs for the college training of selected enlisted men to meet specific job requirements. For the reasons stated, the Department of Defense is opposed to section 2 of the bill which would provide educational and vocational training assistance. The Department of Defense defers to the Veterans' Administration on sections 3 and 4 of the bill which provide rehabilitation for certain disabled veterans and certain home and farm loan assistance. The Bureau of the Budget has advised that there is no objection to the submission of this report and that enactment of sections 2 and 4 of the bill would not be in accord with the program of the President. Sincerely yours, J. VINCENT BURKE, Jr., Office of Administrator of Veterans' Affairs. FEBRUARY 22, 1960. Hon. OLIN E. TEAGUE, Chairman, Committee on Veterans' Affairs, DEAR MR. TEAGUE: We are pleased to furnish the following comments in response to your request for a report by the Veterans' Administration on S. 1138, 86th Congress, as passed by the Senate on July 21, 1959. S. 1138 has two related but distinct purposes. It would— (1) Place the existing vocational rehabilitation program for the service disabled on a permanent basis and extend eligibility for the benefit to those disabled during the period between the end of World War II and the beginning of the Korean conflict or after the end of the Korean conflict period; and (2) Provide education and training and home and farm loan benefits as readjustment aids for those serving after the end of the Korean conflict and before July 1, 1963 (the scheduled termination of authority to induct individuals into the Armed Forces under the Universal Military Training and Service Act). Vocational rehabilitation, as it would be extended to the peacetime group by section 3 of the bill, would afford eligibility to those with a compensable disability rated 30 percent or more on the same basis as it has been provided for veterans of World War II and the Korean conflict. However, peacetime exservicemen with lesser rated disabilities could receive the benefit if it is clearly shown that the disability causes a pronounced employment handicap. In either event, once need for vocational rehabilitation is determined, the peacetime ex-serviceman would receive the full range of vocational services as provided for the wartime group; that is, vocational counseling to determine the type and extent of training, and training at Government expense for as much as 4 years (longer if necessary). Vocational rehabilitation for the service disabled has proved to be extremely worthwhile, not only to the veterans themselves but to the Nation as a whole The amendments to chapter 31 of title 38, United States Code, which would be made by this bill represent a sound approach to providing this benefit and conform to recommendations which I have heretofore made to your committee, particularly in connection with my report of May 21, 1959, on H.R. 266. They are also consistent with the President's recommendation to the Congress in his budget message of January 18, 1960, in which he stated that a program of vocational rehabilitation for persons with substantial service-connected disabilities should be added to the range of benefits currently provided for peacetime ex-servicemen. I strongly recommend favorable consideration of this legislation by your committee. On the other hand, sections and 4 of the bill would provide major readjustBoth of the benefits ment benefits for persons serving during the draft period. which would be provided-education and training and home and farm loan assistance-are similar to the comparable benefits provided veterans of the Korean conflict by the Veterans' Readjustment Assistant Act of 1952. Each would be substantially modified, however, and would present some novel features. Education and training would be established as a program separate from that for the Korean conflict veterans. Most provisions would be identical with those of the earlier program. The major variation is the provision adopted on the floor of the Senate that the ex-serviceman pursuing a program of higher education will receive education and training allowances as loans, rather than as grants, after the first school year if he does not "attain a scholastic average sufficient to place him in the upper half of his class" during the preceding school year. Another new provision is designed to preserve the education and training entitlement of career personnel until after their final release from the Armed Forces. This would mean that in reality some education or training would be afforded long after June 30, 1973-the nominal general termination date for the program. Section 4 of the bill would provide home and farm loan guaranty benefits to persons who served during the post-Korean induction period which would be similar to the benefit now available to World War II and Korean veterans. They would also be eligible for direct loans under the same conditions as are applicable to the World War II and the Korean groups, subject however to the existing cutoff date of July 25, 1960. Veterans of World War II or Korean service who serve during the specified post-Korean period would be eligible for the new benefits, but only to the extent of their unused World War II or Korean service entitlement. The distinctive new feature of the extended program would be the requirement that the beneficiary pay a fee (not in excess of one-half of 1 percent of the loan amount) as a prerequisite for the guaranty of the loan or the making of a direct loan. The fees would be placed in a mortgage guaranty fund to be used for the payment of claims, expenses, and losses arising out of guaranty If the fund balance at any time is transactions under the proposed program. insufficient for these purposes, however, additional amounts could be transferred to the fund from moneys appropriated for readjustment benefits. I am unable to recommend these special readjustment benefits for peacetime ex-servicemen. As the President stated in his recent budget message, the need for this type of benefit is not supported by the conditions of current military service. |