To attempt to equate the disabilities of this group with loss of earning ability or capacity to follow a substantially gainful occupation is to do them a gross injustice-they have lost something more than their ability to earn a living.

Additional compensation under 314(k) was increased from $42 to $47 monthly under Public Law 82-427, approved June 30, 1952. Although Congress has approved increases in those statutory awards payable under 314 (1), (m), (n), (o), (p), (r), and (s) each time increases were made in rates of disability compensation for the 10 percent through 100 percent ratings, the rate under 314(k) continues to be $47. We recommend that this rate be increased to $75.

Provide special compensation for those veterans whose serviceconnected chronic kidney disease requires constant renal dialysis: For those individuals with chronic bilateral kidney failure, the only known treatment is a kidney transplant or periodic and constant renal dialysis.

Because of the many problems associated with kidney transplant, individuals must wait months before a suitable donor kidney becomes available-perhaps never. In the meantime, those with total kidney failure are kept alive through the use of renal dialysis.

Patients with end-stage kidney disease must have their dialysis two and three times each week. Not only are their lives dependent on dialysis, but also on other persons to assist them in the use of the equipment and also to be present during dialysis because of imminent equipment failure or other emergency.

In individual appellate cases involving the question of additional benefits based on the constant need for an aid or attendant, the Veterans' Administration Board of Veterans' Appeals has allowed the benefit, citing the veteran's dependency on another person during renal dialysis.

We urge, Mr. Chairman, an amendment of 38 U.S.C. 314(1) so as to provide that veterans with service-connected chronic kidney failure requiring constant renal dialysis be entitled to the increased compensation because of a need for the regular aid or attendance of another person.

Provide a statutory persumption of service-connected death of any veteran whose service-connected disability was rated permanent and total and who dies of another natural cause: Above, our statement had referred to the fact that disability ratings for compensation are based, as far as practicable, upon the average impairment of earning capacity.

We know that the loss of physical vitality from injuries or disease is a significant factor which can be measured actuarially by study of the mortality rates. Notwithstanding the availability of this study data, no provision is made for paying additional compensation because of shortened life expectancy.

As a consequence of reduced vitality and overriding effect of long term severe disabling conditions, some veterans are particularly susceptible to death from other causes. Veterans regulations do provide that service connection may be granted for cause of death where, although it is established that a non-service-connected condition was the principal cause of death, it is shown that the service-connected disease or disability substantially and materially contributed to the cause of death.

As a rule, these cases are difficult to adjudicate because of inability to establish that the service-connected condition substantially and materially contributed to the cause of death. We recommend that title 38, United States Code, be amended so as to provide that service connection for the purpose of dependency and indemnity compensation will be presumed in the case of a veteran with a 100-percent permanent total disability who dies of other natural causes.

There is ample precedence for this presumption under 38 U.S.C. 35, wherein a child or widow is eligible for educational assistance where a veteran at time of death had a total service-connected disability permanent in nature but who died of other causes not related to active military, naval, or air service.

Only in this way, we believe, will the dependents of these veterans receive the economic support they had the right to anticipate but which was denied them by reason of reduced earning capacity and economic security.

Remove restrictions against receipt of Armed Forces retirement pay due to length of service concurrently with VA disability compensation: Section 3104 (a) of title 38, United States Code, provides that except to the extent retirement pay is waived, not more than one award of compensation, regular or reserve retirement pay shall be made concurrently to any person based on his own service.

Regular or reserve retirement pay based on length of service is a recognition for service performed. It is one of the Armed Forces career incentives, while disability compensation is a payment for impairment of earning capacity resulting from service-incurred disease or injury.

Enlisted and reserve commissioned and, with some restrictions, regular warrant and commissioned component members of the Armed Forces, retired for length of service, may enter Federal or private employment and in fact become eligible for another retirement without dual payment restrictions.

Yet, some individuals, retired for length of service, also have service-connected disabilities which impair their pursuit of an occupation after retirement. Hence, the legal bars imposed by section 3104(a) to this group, compared to those not so disabled, are inequitable.

In view of this, we recommend an amendment to section 3104 (a) to provide that longevity retirement payment may be received concurrently with payments of disability compensation.

Provide that psychosis developing to a compensable degree within 2 years of a period of war service shall be considered to have been incurred in or aggravated by such service: For the purpose of compensation for service-connected disability or death, chapter 11 of title 38, United States Code, provides that a chronic psychosis becoming manifest to a degree of 10 percent or more within 1 year from separation from war service of 90 days or more shall be considered to have been incurred in or aggravated by such service.

And, for the purpose of medical and hospital care, section 602 of title 38, United States Code, provides that an active psychosis developing within 2 years of World War II, Korean conflict, or Vietnam era service, shall be deemed to have been incurred in or aggravated by such active military, naval, or air service.

The American Legion, while advocating service connection for a chronic functional psychosis on a manifestation within 2 years, wants this done on the basis of sound medical reasoning. If it is shown that

an individual develops a psychosis due to a specific cause, such as brain injury, infection, or aging, or organic brain disease arising subsequent to discharge and otherwise not related to service, then it would not be proper to include that type within the 2-year presumption.

Excluding the known causes of psychosis, such as in the organic psychoses, we are advised that no one today can tell with certainty the cause or date of onset of most psychoses. Strong emotional factors, or long-continued emotional and mental stresses, can bring about a functional psychosis.

In most cases, however, the development of such a psychosis is so slow and insidious that it can be present to a disabling degree for months or years before it is recognized. When a psychotic individual presents himself to the physician, either public or private, he is usually brought in by relatives or friends.

At that time, he generally shows an advanced mental state. In attempting to trace the onset of the mental illness, the physician has to obtain history from the patient's family or friends.

Mr. Chairman, because of the insidious nature of chronic functional psychoisis, we urge the amendment of section 312 of title 38, United States Code, to provide, for the purpose of chapter 11, that a compensable degree of chronic psychosis manifested within 2 years of a period of war service shall be deemed to have been incurred in or aggravated by such service.

Provide that progressive muscular atrophy developing to a compensable degree within 7 years of separation from wartime service shall be considered to have been incurred in or aggravated by such service: Under sections 301 and 312 of title 38, United States Code, a progressive muscular atrophy developing to a 10-percent degree within 1 year from the date of separation from war service shall be considered to have been incurred in or aggravated by such service.

Also, these sections provide that a multiple sclerosis developing to a degree of 10 percent within 7 years of separation from a period of wartime service shall be considered to have been incurred in or aggravated by such service.

According to medical opinion, the symptoms of progressive muscular atrophy in the early stages, like those of multiple sclerosis, are vague and fleeting, making the initial diagnosis difficult to determine. Because of the fact that this disease process may be present for many years after service before a diagnosis is given and a compensable degree of disability established, it is recommended that section 312 of title 38, United States Code, be amended so as to provide a 7-year presumption of service connection for progressive muscular atrophy. Provide for the review of certain veterans benefits cases forfeited for fraud on or before September 1, 1959, and for remission of such forfeitures: Prior to September 2, 1959, sections 3503 and 3504 provided as follows:

3503. FORFEITURE FOR FRAUD

(a) Whoever knowingly makes or causes to be made or conspires, combines, aids, or assists in, agrees to, arranges for, or in any way procures the making or presentation of a false or fraudulent affidavit, declaration, certificate, statement, voucher, or paper, concerning any claim for benefits under any of the laws administered by the Veterans' Administration (except laws pertaining to insurance benefits) shall

forfeit all rights, claims, and benefits under all laws administered by the Veterans' Administration-except laws pertaining to insurance benefits.

(a) Any person shown by evidence satisfactory to the Administrator to be guilty of mutiny, treason, sabotage, or rendering assistance to an enemy of the United States or of its allies shall forfeit all accured or future gratuitous benefits under laws administered by the Veterans' Administration.

Public Law 86–222, approved September 1, 1959, amended section 3504 by adding a new subsection (d) which provided that after the date of its enactment, no forfeiture of benefits may be imposed under section 3503 or 3504 on any individual who was a resident of, or domiciled in, a State at the time the act or acts occurred on account of which benefits would, but for this section, be forfeited unless such individual ceases to be a resident of, or domiciled in, a State before the expiration of the period during which criminal prosecution could be instituted.

It is apparent that the Congress, through the enactment of Public Law 86-222, intended to limit the punishment for fraud in connection with claims for gratuitous benefits to that imposed by the Federal criminal statutes in those instances where criminal prosecution could be instituted. In the earlier cases of fraud, the person concerned was subject to both criminal prosecution and forfeiture.

Mr. Chairman, down through the years, we have experienced cases in which it was patent that the forfeiture penalty was too severe but that the Veterans' Administration had no other recourse under law. To correct this inequity or injustice, we urge enactment of legislation that would authorize the Administrator to have the some 4,100 cases reviewed, and if forfeiture would not have been imposed under the provisions of Public Law 86-222 amendments after September 1, 1959, the forfeiture would be remitted and the person would have his eligibility to benefits restored effective on application therefor.

Provide more equitable standards for waiver of recovery of overpayments of Veterans' Administration benefits and for release or waiver of liability with respect to certain home loans under 38, U.S.C., chapter 37, after default and loss occurs: We support the purpose of H.R. 15105, the bill introduced at the request of the Administrator of Veterans' Affairs.

The proposed measure would amend section 3102 to provide:

(1) There shall be no recovery of payment or overpayment of any benefits whenever the VA determines that recovery would be against equity and good conscience.

(2) With respect to any loan guaranteed, insured or made under chapter 37 of title 38, United States Code, the VA may waive payment of an indebtedness to the Veterans' Administration by the veteran or his spouse, following default and loss of property where it determines that collection of such indebtedness would be against equity and good conscience.

(3) That the VA may not exercise this new authority to waive recovery of any payment or the collection of any indebtedness if it determines there exists, in connection with the claim for waiver, an indication of fraud, misrepresentation, material fault, or lack of good

faith on the part of the person or persons having an interest in obtaining a waiver of such recovery, or the collection of such indebtedness.

In our experience in claims for waiver of recovery of payment and overpayment of benefits and of indebtedness to the VA, the application of the present provisions of title 38, United States Code, has resulted in undue hardship.

In submitting the proposed changes, the Administrator said that they would be brought in line with the statutory authority given the General Accounting Office under section 5584 of title 5, United States Code, in claims for overpayment of pay.

To be fully in accord with the statutory authority given the General Accounting Office, the Administrator's proposed measure should be enlarged to provide a person who has repaid to the Veterans' Administration all or part of the amount of the payment or overpayment with respect to which a waiver is granted under section 3102(a) is entitled to the extent of the waiver, to refund, by the VA, of the amount repaid if application for that refund is made within 2 years of the effective date of the waiver.

In conclusion, the American Legion expresses its gratitude to you and the members of this subcommittee for your consideration of our views. Thank you, Mr. Chairman.

Mr. DORN (chairman of the subcommittee, presiding). Mr. Hammerschmidt.

Mr. HAMMERSCHMIDT. Mr. Chairman, I have no questions. I would just like to thank Mr. Golembieski for a very fine comprehensive statement, and also thank Mr. Wertz for his appearance before the committee this morning.

Mr. DORN. Mr. Teague?

Mr. TEAGUE of California. Mr. Chairman, just this, I am sure that you gentlemen realize that while I think without exception, at least speaking for myself, we do favor a raise and perhaps several of the other recommendations that you have made, if I understand correctly, compensation paid for nonservice and for service-connected disability is not subject to the Federal income tax.

Mr. GOLEMBIESKI. No, sir; it is not.

Mr. TEAGUE of California. That is something that we have to consider in balancing the return when we get to comparing it with a factory worker.

Mr. GOLEMBIESKI. The figure cited was the bring-home pay, this was after taxes, spendable income which is available to them.

Mr. TEAGUE of California. Thank you.

Mr. DORN. Thank you, Mr. Teague. Mr. Golembieski, thank you very much.

Mr. GOLEMBIESKI. Thank you very much.

Mr. WERTZ. Thank you.

STATEMENT OF FRANCIS W. STOVER, DIRECTOR, NATIONAL LEGISLATIVE SERVICE, VETERANS OF FOREIGN WARS OF THE UNITED STATES, ACCOMPANIED BY NORMAN D. JONES, DIRECTOR, NATIONAL VETERANS SERVICE

Mr. DORN. The subcommittee will now hear from the Veterans of Foreign Wars, Francis W. Stover, director of the national legislative service.