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VETERANS' ADMINISTRATION,
OFFICE OF GENERAL COUNSEL,

Washington, D.C., April 5, 1972.
Hon. OLIN E. TEAGUE,
Chairman, Committee on Veterans' Affairs,
House of Representatives, Washington, D.C.

DEAR MR. CHAIRMAN: We are pleased to respond to your request for a report on H.R. 13799, 92d Congress, a bill to amend title 38, United States Code, to increase the rates of compensation for disabled veterans.

H.R. 13799 is identical with a draft bill transmitted to the Speaker of the House of Representatives by the Administrator's letter dated March 8, 1972; copy enclosed. The bill would provide increases in veterans' service-connected disability compensation rates commensurate with the rise in the cost of living since those rates were last increased effective July 1, 1970. For the reasons stated in the Administrator's letter, we recommend favorable consideration of H.R. 13799.

The Veterans' Administration was advised by the Office of Management and Budget that there was no objection to the presentation of the draft bill to the Congress, and that its enactment would be consistent with the objectives of the administration. Sincerely,

JOHN J. CORCORAN,

General Counsel.

78-995 0 - 72 (Face p. 2328)

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VETERANS ADMINISTRATION,
OFFICE OF THE ADMINISTRATOR OF VETERANS’ AFFAIRS,

Washington, D.C., March 8, 1972.:
Hon. CARL ALBERT,
Speaker of the House of Representatives,
Washington, D.C.

DEAR MR. SPEAKER: Transmitted herewith is a draft bill to amend title 38, United States Code, to increase the rates of compensation for disabled veterans. We request that it be introduced and considered for enactment.

The purpose of the proposal is to provide increases in veterans' service-connected disability compensation rates commensurate with the rise in the cost of living since those rates were last increased effective July 1, 1970.

The basic purpose of the disability compensation program, throughout its history, has been to provide relief for the impaired earning capacity of veterans disabled as the result of their military service. The amount payable varies according to the degree of disability which, in turn, is required by the law (38 U.S.C. 355) to represent, to the extent practicable, the average impairment in earning capacity resulting from such disability or combination of disabilities in civil occupations. Additional compensation for dependents is payable to any veteran entitled to basic compensation for disability rated at not less than 50 percent.

Since the disability compensation program was first established, the Congress has periodically reviewed the rates of compensation provided as to their adequacy and has made adjustments when such were deemed necessary. The rates of compensation were last increased by Public Law 91-376, effective July 1, 1970. From that date through January 1972, the cost of living, as reflected by the Consumer Price Index, has risen 5.9 percent. Subsection (a) of the first section and section 2 of the draft bill would increase the mentioned rates by approximately 6 percent.

Income maintenance programs, like service-connected disability compensation, have been exempted from coverage under the President's economic stabilization program. Accordingly, and recognizing our obligation to both the Nation's economic goals and to the veteran and his family in this critical time, the Veterans Administration feels justified in supporting an adjustment in these benefit payments to compensate for price increases since the time when benefits were last increased. We feel that price changes constitute a reasonable and appropriate benchmark to use in determining the magnitude of adjustment needed.

In our report of November 8, 1971, to the chairman, Senate Committee on Veterans Affairs, on S. 395, 92d Congress, we recommended cost-of-living increases in veterans' service-connected disability compensation as well as in service-connected death benefits for their survivors. This position was also asserted in the statement of our Chief Benefits Director on November 8, 1971, before the Subcommittee on Compenentiox and Pensions of that committee. At that time we also favored cost-of-living increases in non-service-connected disability and death pension benefits. ***

Rate increases for survivors of veterans who die of service-connected causes were subsequently enacted, as Public Law 92–197, effective January 1, 1972. Increases in the rates of non-service-connected disability and death pension were aocomplished by a companion measure, Public Law 92–198, also effective January 1, 1972. We believe it only reasonable that similar increases be provided in the rates of veterans? service-connected disability compensation including the additional compensation payable for dependents. Accordingly, we renew our recommendation for such increases.

Subsection (b) of the first section authorizes the Administrator to adjust administratively, consistent with the rate increases specified in subsection (a), the rates of disability compensation payable to persons within the purview of section 10 of Public Law 85–857, who are receiving disability compensation under laws other than chapter 11 of title 38, United States Code. A provision of this type, which has been included in prior enactments of this nature, is necessary to assure comparable; rate increases for the veterans whose disability compensation : pavments were, authorized by earlier laws as saved by the mentioned section 10.........

Section 3 of the proposal provides an effective date of the first day of the second calendar month which begins after the date of enactment.

It is estimated that the first-year additional cost of the proposal would be approximately $170 million, affecting about 2,177,000 veterans, increasing gradually to approximately $184 million in the fifth year, affecting an estimated 2,249,500 veterans.

For the reasons indicated, we recommend enactment of the proposal.

Advice has been received from the Office of Management and Budget that there is no objection to the presentation of this legislation to the Congress, and that its enactment would be consistent with the objectives of the administration. Sincerely,

DONALD E. JOHNSON,

Administrator.

"!!!!!

A. BILL. To amend title 38, ; United States Code, to increase the rates of

compensation for disabled veterans Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That (a) section 314 of title 38, United States Code, is amended

(1) by striking out "$25" in subsection (a) and inserting in lien thereof “$27”;

(2) by striking out "$46" in subsection (b) and inserting in lieu thereof $49";

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