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The educational and vocational training benefits, though extended wholly on the basis of military service in peacetime, are generally similar to those provided in the Korean GI bill. The period of entitlement would be 11⁄2 times the duration of service and total entitlement would be limited to 36 months; training would have to be started within 3 years and completed within 8 years after discharge (or enactment of S. 1138). Monthly allowances would be identical with those in the Korean program. However, the active duty requirement for eligibility is increased from 90 to 180 days, and in the case of college students interest-free loans instead of grants would be made after the first year in school if the student does not place in the upper half of his class in any school year. Educational entitlement would expire June 30, 1973, but those who continue in military service on a career basis without substantial interruption would be permitted to obtain educational benefits after that date. The cost of these educational benefits through June 30, 1973, would be about $3 billion, of which roughly half would be noncollege instruction or job training.

The proposed new home loan guarantee and direct loan programs also would be generally comparable to the existing programs for World War II and Korean conflict veterans with the exception that ex-servicemen would be required to pay a fee not to exceed one-half of 1 percent of the loan, with the fees credited to a mortgage guaranty fund to offset loan program losses. To the extent that the fund could not meet such losses, appropriations would be authorized by the bill from the Veterans' Administration "readjustment benefits" appropriation. Administrative expenses would also be paid from regular appropriations. Section 3 of S. 1138 would extend vocational rehabilitation training benefits similar to those provided for World War II and Korean conflict veterans to the peacetime ex-servicemen. The program for peacetime ex-servicemen would be permanent, but coverage of benefits would be restricted somewhat by requiring that those with disabilities of less than 30 percent show a pronounced employment handicap.

The President has recommended that vocational rehabilitation be extended to all peacetime ex-servicemen having substantial service-connected disabilities. Such ex-servicemen now receive unemployment compensation benefits, employment service and reemployment rights, service-connected disability or death compensation, and other benefits. The addition of vocational rehabilitation to these benefits will enable the Federal Government to discharge adequately its responsibility as an employer to peacetime ex-servicemen. At full operation the new vocational rehabilitation benefits would add an estimated $19 million annually to the costs of present programs.

We note that paragraph (b) of section 3 of the bill would eliminate the presently established termination dates for the vocational rehabilitation training programs for veterans who served during the Korean conflict. The Bureau of the Budget believes that it is desirable to follow the established principle of providing definite terminal dates in all the readjustment benefit and related programs and therefore recommends against the indefinite continuation of the present vocational rehabilitation training program for the Korean conflict group. This group is afforded, under present law, up to 9 years to complete vocational rehabilitation training from the official termination date of the Korean conflict of January 31, 1955. In addition, the law provides that individuals who were unable to avail themselves of these benefits because of illness or certain other specified reasons are to be allowed to continue training for up to 4 years beyond the general terminal dates stipulated in the law. Korean conflict veterans who would not qualify under the present Korean conflict program should, however, be allowed to apply for and obtain training under the permanent program for ex-servicemen, provided that they met the requirements under the new program. While favoring the enactment of vocational rehabilitation benefits for peacetime ex-servicemen, the President has stated

**** I oppose the establishment of special educational and loan guarantee programs for peacetime ex-servicemen. Such benefits are not justified because they are not supported by the conditions of military service. Moreover, they would be directly contrary to the incentives which have been provided to encourage capable individuals to make military service a career."

The principal arguments for special educational and loan benefits for peacetime ex-servicemen are: (a) peacetime military service, when selective service is in effect, disrupts a selectee's civilian career plans (particularly for obtaining education) and warrants readjustment benefits like those which have been

granted for wartime service, and (b) such benefits would serve the national interest by encouraging ex-servicemen to obtain more education or training or by increasing home ownership.

These arguments are not supported by the facts:

(1) The present conditions of military service, even during a period of cold war, differ substantially from wartime conditions in a number of important respects. The draft has a lesser impact on disrupting of educational and career plans; service personnel are exposed to fewer rigors and hazards; and educational and vocational training opportunities while in service are excellent. This can be illustrated in the following ways

(a) Selective service procedures and military reserve programs under peacetime conditions can be and are operated to avoid interference with educational or vocational training programs. The period of required service is definitely known and is shorter than in wartime. Young men under age 22 are not now being drafted, which provides them ample time to complete educational and vocational programs prior to service. Deferment policies, liberally applied, also permit deferments for individuals in any field of study and continuing them up through the graduate level. Moreover, military reserve programs afford over 30 ways to fulfill the military obligation; most of these allow completion of educational programs prior to service. Far fewer individuals are affected by the draft. In 1959 only 96,000 individuals were drafted, as compared to over 3 million during 1943, the peak year of World War II, and 550,000 in 1951, the peak year of the Korean conflict.

(b) Peacetime service is clearly much less hazardous than that in wartime. Exposure to combatlike conditions is rare and affects relatively few individuals. The amount of service in isolated posts is minimized by rotation policies and is offset by provision of amenities not possible during wartime. The pace of peacetime service permits greater attention to safety and comfort even in circumstances of direct battle training. A high percentage of servicemen now serve in jobs comparable to civilian occupations and runs no more risks than their civilian counterparts. This can be strikingly summarized by service mortality statistics which show that 1.7 deaths per 1,000 were reported in 1959, as compared with 5.5 per 1,000 annually during the Korean conflict and 11.6 per 1,000 annually during World War II.

(c) Educational and vocational training opportunities provided by the armed services in peacetime exceed those in wartime. Since World War II, the types of jobs in the armed services have changed considerably, to the point where civilian-type jobs greatly outnumber the traditional military jobs. To meet these space-age changes the Armed Forces have established a much more extensive program of on-the-job training and on-duty formal schooling in skills related to civilian jobs. The services spend over onehalf of a billion dollars annually on service schools alone; in 1959 about 300,000 servicemen received such training, many in skills that will be useful to them when they return to civilian life. Off-duty educational activities are also encouraged by the services and substantial financial aid is provided. Hundreds of thousands of servicemen are studying by correspondence with the U.S. Armed Forces Institute or with 44 affiliated colleges, are studying Vocational or educational courses in classes given on base, or are attending high schools, technical schools, and colleges located near the base. The net effect of on- and off-duty opportunities is that a serviceman can obtain a high school diploma, progress significantly in vocational proficiency, or complete a substantial amount of college.

(d) Two further considerations illustrate additional differences between wartime and peacetime service: First, military pay as increased by the Military Pay Act of 1958 and the services' fringe benefits are presently at higher levels than ever before; second, peacetime ex-servicemen are being released in comparatively small and steady numbers and do not encounter problms of economic adjustment of the magnitude that resulted from the mass demobilization of millions of wartime veterans.

(2) Enactment of S. 1138 would tend to lessen the effectiveness of various steps which have been taken during the past few years in order to retain qualified personnel in the Armed Forces on a career basis. The Military Pay Act of 1958, enacted at a first-year cost of $500 million, is an example. Enactment of S. 1138, however, would lead to expenditures averaging $300 million

annually over the next decade for benefits which would be bound to make it attractive for servicemen to leave military service after a short term. This would be especially regrettable because the measures designed to retain qualified personnel have begun to show the intended effect, as witnessed, for example, by an increase in reenlistment rates among first-term enlistees from 15 percent in 1955 to 30 percent in 1959.

We believe S. 1138 would tend to halt or even reserve this upward trend of reenlistments.

That the proposed readjustment assistance would have an adverse effect on reenlistments is illustrated by experience with the Korean GI bill. Air Force surveys when the Korean GI bill was coming into full effect showed that 40 to 45 percent of the personnel leaving service said they were doing so to take advantage of veterans' educational benefits. On this same basis S. 1138 could be expected to cancel out the incentives already offered for career service by encouraging service for periods just long enough to qualify for readjustment assistance benefits. Moreover, it can be anticipated that the new educational benefits would be of greatest attractiveness to those capable servicemen whom the Armed Forces need most.

(3) In addition to the foregoing factors affecting the military services and their manpower, S. 1138 has significant implications for education in America, and as such is open to a number of objections:

First, financial assistance would be based simply on an individual's military service and not on his need, aptitude, or ability, except to the limited extent that S. 1138 provides loans instead of grants for college students in certain cases of lower scholastic attainment.

Second, it will not direct Federal funds where they are most needed in the educational field. It will not significantly help with the problem of reaching many among the most qualified high school graduates who do enter higher education. For example, it is estimated that among able high school graduates, three times as many girls as boys fail to go to college, yet S. 1138 would assist boys almost exclusively. Furthermore, since assistance would be provided only on the criterion of military service, S. 1138 would not necessarily augment our resources of educational and vocational skills in fields critical to our national security and welfare. It would channel Federal funds into a new student assistance program, based on entirely different premises than, and competing for classroom space and Federal funds with, the highly desirable and successful programs authorized by the National Defense Education Act. We believe that first priority for additional Federal funds should be given to construction of college facilities, as has been proposed by the President, rather than to new student aid benefits.

Third, considering the many competing demands for Federal funds, the need for large-scale financial assistance to students such as would be authorized by S. 1138 is not evident. Financial assistance for qualified students is already available in substantial amounts through Federal, State, and private funds. Federal support has increased in recent years not only through the National Defense Education Act which will provide contributions for 100,000 loans in 1960, but also through support under governmental research project grants and special programs supported by the National Science Foundation, the Atomic Energy Commission, and the Public Health Service. State scholarship programs now exist in 44 States and private programs also provide substantial assistance. Hundreds of thousands of college students are thus aided in some measure through these various sources and they constitute a significant proportion of all students, particularly among those with ability and need.

Finally, it should be noted that the Federal Government already is providing substantial financial assistance for vocational training. The 1961 budget for the Department of Health, Education, and Welfare recommends $39 million in grants to the States for the promotion of training in agriculture, industrial trades, and similar skills. In addition, $9 million is proposed in appropriations under the National Defense Education Act for vocational training in skills vital to the national defense, and the Department of Labor also carries on a program for apprenticeship training. Federal-State-local government support for vocational training is now running well over $200 million annually, a significant part of which is spent for adult education in which ex-servicemen undoubtedly participate.

(4) The proposed home loan guarantee program for peacetime ex-servicemen which S. 1138 would create represents an unwarranted duplication of the general Federal Housing Administration loan guarantee program. The latter program

is available to ex-servicemen as well as to persons without prior military service and now has exceptionally low downpayment requirements of as little as 3 percent for purchase of houses in the lower price ranges. Nor do we believe it would be sound or equitable to provide direct Federal loans for peacetime ex-servicemen. Again, as in the case of the educational benefits provided by S. 1138, we do not believe this loan assistance is warranted as readjustment assistance because of the vast difference between peacetime and wartime service.

In summary, the Bureau of the Budget believes that the education and training and the loan benefits for peacetime ex-servicemen proposed in S. 1138 are not sound in principle. We do not think that military service in peacetime provides a sufficient or an equitable basis upon which to predicate eligbility for the extremely valuable benefits which this bill would confer. The proposed benefits are not needed for bona fide readjustment purposes, and they are not sound proposals for Federal action in their own right. The education and training benefits under the bill would in fact represent a vast program of Federal aid to education out of keeping with the principles which have hitherto guided the Federal Government in this important field. The proposed loan programs would duplicate unnecessarily the home loan assistance which is already available.

For these reasons, the Bureau of the Budget opposes extension of special educational and home loan benefits for peacetime ex-servicemen. While the President favors authorization of a program of vocational rehabilitation for peacetime ex-servicemen, sections 2 and 4 of S. 1138, providing the educational and home and farm loan benefits, would not be in accord with the program of the President.

Sincerely yours,

MAURICE H. STANS, Director.

Representative OLIN E. TEAGUE,

SYRACUSE, IND., February 21, 1960.

Chairman, House Veterans' Affairs Committee,
House Office Building, Washington, D.C.

DEAR SIR: At the present time, public hearings are in progress on a bill to provide Treasury financed college scholadships for peacetime veterans. I am opposed to such a bill for several reasons, and respectfully request that your committee reject this bill. I am opposed to this bill, even though I am classified as a peacetime veteran serving in the U.S. Army, 1948-49, for the following rea

sons:

1. The cost of administrating such a program would be staggering. Present taxes are high enough, and the national debt increases constantly.

2. The original GI bill was given for service in wartime and subsequent readjustment to civilian life. Under the present terms of the bill under consideration, those persons who serve between January 31, 1955, and July 1, 1963, would receive almost identical educational benefits granted to veterans of World War II and the Korean war. The period of transition from wartime service to civilian life was much more difficult than the temporary transition of a peacetime serviceman. Supporters of this bill claim that the peacetime veteran is exposed to the dangers of war and therefore is entitled to these educational benefits. I recall that the threats of war and global tension were prevalent during the period I served in the Armed Forces. It's strange that no one considered the plight of these peacetime veterans and their readjustment to civilian life. Among the duties that go hand in hand of a good citizen is that of serving one's country in time of war without thought of monetary or personal gain. Evidently some people forget that some of our wartime servicemen died for their country-so that others may live free.

I can speak from personal experince that anything one has to work hard for is appreciated much more than something given free. If these peacetime veterans want a college education, let them work their way through college or save their money before going to college. Others, including myself, have done this without ill effects.

Sincerely yours,

EDWARD ADERKAS.

Mr. DORN. We are pleased to welcome before the committee at this time our colleague, Hon. Joseph Montoya, of New Mexico.

You may proceed, Mr. Montoya.

STATEMENT OF HON. JOSEPH M. MONTOYA, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW MEXICO

Mr. MONTOYA. Mr. Chairman and members of the committee, I appreciate the opportunity of appearing before your committee in connection with S. 1138, the so-called peacetime GI bill.

This bill provides needed legislation which appears long overdue. The thousands of young men whose career development is interrupted when they are drafted are deserving of assistance after active service with the Armed Forces. These men and women are a part of our defense effort and are entitled to reasonable education opportunities in order to compensate them in some measure for the opportunities which were missed because of service.

As you know, the legislation provides that three major types of readjustment assistance will be made available to post-Korean veterans. These are: First, educational and vocational training assistance; second, vocational rehabilitation training for veterans with service-connected disabilities; and third, guarantee and direct loan assistance for the purchase of (a) homes, including housing on farms, and (b) farmlands, livestock, and machinery to be used in farming operations conducted by veterans.

The bill is patterned closely after the forms of assistance provided under the GI bills for veterans of World War II and the Korean conflict. It would apply to veterans who first entered the Armed Forces after January 31, 1955, the date when the President ended the Korean program, and those who will be entering until July 1, 1963, when the compulsory draft is scheduled to expire.

The enactment of such a bill would have a salutary effect on veterans in New Mexico. I would like to point out that 37,000 World War II veterans and 12,000 Korean veterans from New Mexico received training of various types under the GI bills. It is estimated that some 20,000 New Mexicans will have served in the Armed Forces between January 31, 1955, and July 1, 1963, when the present draft law expires. Of these 20,000, an estimated 7,000 will take advantage of the training provisions contained in S. 1138, should it become law.

I believe it is the duty of the Government to deal fairly and honestly with those who served in a military capacity. I do not believe that in this respect there should be a marked distinction between those who serve during actual wartime and those serving during peacetime. In our era our Armed Forces are required to prepare for mobilization promptly and efficiently-whether peacetime or wartime, each trained veteran is an integral part of our defense effort.

We are all well aware of the benefits which the GI bill brought to the Nation as a whole in effect. This measure raised the average educational level of millions of veterans and this bill would accomplish no less. The need for scientists and engineers and others trained in the technical fields is unquestioned. This legislation would provide an education program for thousands of veterans who might otherwise never have an opportunity to continue their education. It would be a

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