II. PRESIDENT'S BUDGET REQUESTS FOR NEW AND EXPANDED PROGRAMS WHICH WOULD REQUIRE AUTHORIZING LEGISLATION FOR FISCAL YEAR 1979

The Administration has not yet submitted its proposed legislation to the Congress.

The Administration has not yet submitted its proposed legislation to the Congress.

III. PRESIDENT'S BUDGET REQUESTS FOR REDUCTIONS IN EXISTING PROGRAMS WHICH WOULD REQUIRE AMEND. MENT OF AUTHORIZING LEGISLATION FOR FISCAL YEAR 1979

The Administration has submitted its proposed legislation to the Congress designed to terminate the authority for pursuit of correspondence training programs for veterans, spouses, and surviving spouses.

The Administration feels that neither of these two programs has fulfilled its intended purpose-helping the beneficiary adjust to his or her changed circumstances by providing the training needed for basic employment.

It is estimated that enactment of such a proposal would result in savings of $100 million in fiscal year 1979 and in savings of $356 million over the first five fiscal years. The proposed legislation would become effective October 1, 1978.

The Veterans Administration submitted the same proposal last year. In its transmittal letter dated January 19, 1977, the Administrator suggested that Federal assistance under the GI Bill program should be directed toward institutional training and job training.

Although the Committee has previously expressed doubts as to the equity in terminating these programs, the Subcommittee on Education and Training will re-evaluate the programs in light of the latest Administration recommendation and will determine whether these programs are not fulfilling their intended purposes,

Under existing law, a veteran of any war or of service after January 31, 1955, who is under age 65, is eligible for necessary hospital care for a non-service-connected disability if he is unable to defray the expenses of private hospital care. Veterans who are age 65 or older are entitled to such care without regard to their ability to bear the cost of private care.

The proposed legislation would require that certain veterans receiving hospital care from the Veterans Administration for nonservice-connected disabilities be charged for such care to the extent that they have health insurance or similar contracts with respect to such care, or are entitled to such care under worker's compensation. Similar proposals were submitted to the 91st Congress on February 26, 1970, as part of the Federal Economy Act of 1970; to the 92d Congress by letters of January 26, 1971, introduced as S. 2807; to the 93d Congress, by letter of March 14, 1973, introduced as H.R. 5936; and in the 94th Congress, it was introduced as H. R. 4009. The legislation was again submitted last year.

In its justification of the proposed legislation, the Veterans Administration feels that "the United States should not bear the cost of hospitalization or outpatient medical care of veterans for non-serviceconnected disabilities where to do so would provide a windfall in the nature of a Federal subsidy for third parties, such as insurance companies."

It should be noted that the Subcommittee on Medical Facilities and Benefits held hearings on the identical proposal submitted by thei Administration in 1976. In the testimony presented, no evidence was

24-936-78-3

submitted to show that hospitalization and medical care of veterans with non-service-connected disabilities carrying private insurance provided a windfall to insurance companies.

The Veterans Administration has made only minimal efforts to consult with private insurers, and then only at the insistence of the congressional authorizing committees, about the implications of the Administration proposal. At a meeting in the spring of 1976, attended by private insurers, officials of the Veterans Administration indicated they had probably grossly overstated the first-year savings of the proposed legislation.

Although additional hearings may be held this session, The Committee is not expected to favorably consider the proposed legislation until such time as the Veterans Administration can provide sufficient evidence that insurance companies, and/or other third parties, are receiving a windfall under current procedures.

The Administration has not submitted a proposed bill. The Committee would also point out that if enacted, the first-year cost savings would be no more than $20 to $25 million. In the opinion of the Committee, the projected cost-savings of $120 million is grossly overstated.

The current authority to provide hospital and medical care specifies that the beneficiary will be reimbursed for the necessary expenses of travel in connection with receiving medical care. Under present law, eligibility for reimbursement for non-service-connected conditions is based on a statement on the application form that the beneficiary is unable to defray the expenses of travel.

Section 101 of Public Law 94-581, the Veterans Omnibus Health Care Act of 1976, amended section 111 of title 38,to revise the VA reimbursement policy for beneficiary travel. Under the policy now in effect, veterans with non-service-connected disabilities are reimbursed only if they certify, subject to criminal sanction for false statements, that they are unable to defray the expenses of travel; and reimbursement for all veterans, service-connected as well as non-service-connected, is limited to the cost of travel by public transportation (except where public transportation is not reasonably accessible to the veteran's home or would be medically inadvisable, in which case the veteran may be reimbursed for the cost of travel by privately owned vehicle).

The Administration proposal would further restrict travel reimbursement for veterans with non-service-connected disabilities so that reimbursement would be authorized only when special vehicular modes

of transportation are required for medical reasons and conditioned upon prior authorization by the Veterans Administration. These modes of transportation would include ambulance service, air ambulance service, hired car, and transportation where it is necessary for the beneficiary to be accompanied by an attendant.

Although the Administration has not yet submitted its proposed legislation to the Congress, it is expected to be similar to that proposed during the first session of the 95th Congress, which was not favorably considered by the Committee.

This legislative proposal was submitted to the Congress during the first session of the 95th Congress. The bill, H.R. 4341, was reported by the Committee and passed the House on September 12, 1977. It is now pending in the Senate.

1. H.R. 6501-To provide increased compensation for veterans who have suffered the loss, or loss of use of, paired extremities.

Comment

On May 23, 1977, the House passed and sent to the Senate, H.R. 6501. The measure is pending before the Senate Committee on Veterans' Affairs.

2. To provide a 6 percent cost-of-living increase for DIC parents, effective October 1, 1978.

3. To decrease the minimum disability rating a service-connected veteran must have in order to receive additional compensation for dependents (the current minimum rate is 50 percent).

4. To provide for a two-step aid and attendance compensation payment system for certain severely disabled service-connected veterans. 5. To clarify the intent of Congress in providing for exemption from taxation of that amount of military disability retired pay to a veteran equal to the amount of tax-free veterans' compensation or pension benefit to which the veteran is determined to be retroactively entitled but for the receipt of such military retirement pay.

6. To increase the rate of compensation payable to veterans who have lost three extremities as the result of a service-connected disability.

7. Reinstate 6-month hospitalization, institutional or domiciliary care period prior to reducing stipend of a pensioner with no dependents. 8. To provide that the survivors of a veteran who was rated totally and permanently service-connected disabled for a period of at least ten years would be entitled to dependency and indemnity compensation as though the veteran had died from a service-connected disability.

9. To provide that the disability rating of a veteran with a serviceconnected disability rated 30 percent of more but less than total shall be increased by 10 percent when the veteran attains age 65.

10. To provide mortgage protection life insurance to certain veterans unable to acquire commercial life insurance because of permanent and total service-connected disabilities.

11. To provide increase from $500 to $1,000 the amount by which the annual income of certain disabled veterans may exceed the maximum annual income limitations for pensions without such veterans losing the rights to continue to receive drugs and medication from the VA.

1. To extend the period of eligibility for veterans readjustment appointments in the Federal Government for Vietnam era veterans. Comment

This is an Administration proposal.

2. To provide educational benefits on a prorated basis, to children and spouses of veterans having permanent service-connected disabilities rated at not less than 80 percent.

3. To improve the Chapter 31 Vocational Rehabilitation program to make more effective the placement of veterans in jobs following education and rehabilitation."

4. To expand and improve the VA On-The-Job training program designed to place more Vietnam veterans on jobs.

5. To transfer the functions of the Secretary of Labor under chapters 41, 42 and 43 (relating to job counseling, training, placement,