enactment we did not concomitantly move to exempt veterans' pensions from suffering a corresponding decrease. Hence, our VA pensioners are no better off now than they were before the social security increase. In fact, in view of the skyrocketing cost of living, our veterans have been severely penalized.

The letters I have received on this issue are heart-rending and evidence a sense of confusion and loss of faith in a governmental system that gives with one hand and takes back with the other. As one of my constituents bitterly put it, "It would be better to keep your raises because it's no big bargain."

Our veterans served our country faithfully and it's a travesty that they should suffer such an injustice. It is estimated that over 1.3 million veterans and widows of veterans have had a reduction in their veterans' pensions because of the social security increase. Another 20,000-plus veterans are losing their veterans' pensions altogether. The three previous times there were increases in social security benefits, Congress adjusted the law so that our veterans would not be penalized in having their pensions decreased. It's long past time that we amend the law to insure that recipients of veterans' pension and compensation will not have the amount of such pension or compensation reduced because of social security increases. And this provision should not just apply to the latest social security increase but to all future increases so that this situation will not again occur and our veterans be shortchanged until such time as Congress acts to restore the benefits due them.

I urge swift and favorable consideration of H.R. 1754, to demonstrate to our vets our continued appreciation for their service.

STATEMENT OF HON. VERNON W. THOMSON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF WISCONSIN

Mr. THOMSON. Mr. Chairman, I would urge that the Subcommittee on Compensation and Pension of the House Veterans' Affairs Committee favorably consider H.R. 3740, or similar legislation.

I am greatly interested in that portion of legislation which raises by $600 the maximum annual income limitation governing payment of veterans' pensions. Last year the Congress enacted a 20-percent social security benefit increase. Differing from previous social security increases, however, there was no accompanying legislation designed to permit those receiving veterans' pensions to benefit from the social security hike. The result of this congressional inaction was to leave the income of many veteran pensions virtually static and actually to reduce it in a limited number of instances.

I see no justification for decreasing the total income of an elderly person due to a raise in social security benefits. For that matter I have seen no substantive justification, only that the income reduction affects 1 percent of veteran pensioners. But the number of persons affected is not the issue; rather it is that persons in this situation should not have their income cut when it was the clear intention of Congress last autumn to raise senior purchasing power.

VA statistics indicate the 20-percent social security increase resulted in a $13 average monthly boost in veteran pensioners' income. But this average does not indicate that those veteran pensioners approaching the limits of outside income failed to receive the full benefit of the

social security raise. If these outside earning limitations were high ($2,600 veterans and widows without dependents; $3,800 veterans and widows with dependents). I could perhaps understand why the full benefits resulting from the 20 percent hike might be denied. However, $2,600 or $3,800 whatever the applicable amount, is not a great deal, all factors being considered. Further, it should be noted that deductions for outside income begin after the first $300. Thank you for your consideration.

STATEMENT OF HON. BILL NICHOLS, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ALABAMA

Mr. NICHOLS. Mr. Chairman, I certainly appreciate this opportunity to submit a statement in support of H.R. 876, which provides a minimum pension of $100 per month for veterans of World War I. I have introduced this legislation in practically every Congress since my first term in the House of Representatives. I have not done this because of a large number of World War I veterans among my constituents, but because I believe it is just and equitable. It is something our Nation should do for those who served their country during this year.

The number of living World War I veterans is presently estimated at about 1,190,000 men, but their numbers are rapidly declining with a monthly mortality rate of between 8,000 and 17,000. Notwithstanding the senior age of these Americans, they always display much enthusiasm and love of country on our national hoidays.

Many of these veterans are living on very small social security payments and others with assistance from members of their immediate family.

We talk about equity and about treating the veteran of all of our wars the same, but the veterans of World War I received only a fraction of what their counterparts received following World War II, Korea, and now Vietnam. The original "doughboy" received no educational benefits, and had to take whatever he could get in the way of a job. Our medical facilities of that era were somewhat primitive when compared to the quality of today's VA medical facilities. The laws of the 1920's provided minimal veteran's pensions, and benefits such as specially equipped automobiles for amputees did not exist.

Mr. Chairman, I plead with this great committee to favorably consider my bill and others of a similar nature which would attempt, in a small way, to compensate in their latter years those who served their country so honorably in World War I. I firmly believe that such legislation is justified and in the name of all that is just and equitable, I recommend that this bill be reported favorably.

STATEMENT OF HON. RICHARD W. MALLARY, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF VERMONT

Mr. MALLARY. Mr. Chairman and members of this subcommittee, I am most grateful for this opportunity to present my views on pending pension legislation.

I am most concerned about the situation of veterans and widows who have lost all or part of their nonservice-connected pensions because of the 20-percent increase in social security benefits in 1972.

As you well know, action is often taken, following an increase in social security benefits, to permit pensioners to retain a good share of the increase in social security benefits. Unfortunately, no legislation with this effect was enacted in 1972.

It has been estimated that 20,000 widows and veterans totally lost their VA pensions this year as a result of the social security benefit increase. Many more have lost part of their pensions.

I am convinced that relief to these veterans and widows is needed immediately. After the high expectations resulting from the social security benefit increase, many veterans and widows now find themselves in a position which is worse than the position they were in prior to the social security benefit increase. For example, I discovered that one of my constituents in Burlington. Vt., is a veteran of World War I and is the widow of a World War I veteran. Before the social security increase, she received $2,138 in social security benefits and $868 in veterans' pensions. With the 20-percent social security increase, her income rose to $2,782, and her VA pensions have been discontinued. Thus, the social securty increase has caused her loss of a net total of $404 per year.

I introduced a bill last year, H.R. 16371, which provided for a pass along to pensioners of at least one-half of the social security increase. Early this year, I cosponsored H.R. 1754, providing that there be no decrease in VA pensions as a result of the social security benefit in

crease.

I realize that this type of pass along it not the ultimate solution to discrepancies in the veterans' pension system. The system was vastly improved with Public Law 92-128. The provision that aggregate income of a pensioner will not be lowered with an increase in income from another source, as long as the pensioner's income does not exceed the maximum annual limitation, has been of great importance. However, I would urge that this principle be extended so that there be no decrease in aggregate income for any pensioner whose outside income increases as a result of other Federal programs.

In addition, it may be time to reconsider the levels of payments for nonservice-connected pensions. The increase in payments of approximately 6.5 percent provided for in Public Law 92-198 was included to compensate for previous increases in the cost of living. When the law became effective in January 1972, the Consumer Price Index was 123.2. In April of this year, the CPI was 130.7. This amounts to an increase in the cost of living of more than 6 percent since pensioners last received an increase in benefits. It may be time to consider adding an automatic cost of living increase mechanism to veterans' pensions similar to that which now applies to civil service annuities and will apply to social security benefits.

If agreement cannot be reached upon legislation to revise the truncation of the nonservice-connected pension scales, and to provide for cost of living increases in payments, then I would urge that immediate relief in the form of H.R. 1754 be acted upon favorably.

STATEMENT OF HON. JAMES H. QUILLEN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF TENNESSEE

Mr. QUILLEN. Mr. Chairman, I appreciate the opportunity to appear before this distinguished Subcommittee on Compensation and Pension

in support of my bill, H.R. 1610, which would amend title 38 of the United States Code so as to provide that monthly social security benefit payments and annuity and pension payments under the Railroad Retirement Act of 1937 shall not be included as income for the purpose of determining eligibility for a veteran's or his widow's pension.

Congress has always taken a genuine interest in the needs of our senior citizens. We realized that something must be done to help these individuals combat the high cost of living and thus action has been taken during the past 2 years to increase every social security and railroad retirement recipient's benefits. During the 92d Congress, three bills were enacted into law which affected these benefits.

In March 1971, Public Law 92-5 provided a 10 percent social security benefit increase. Again in October 1972, all social security recipients received a 20-percent increase in their benefits. Soon after Congress approved the 20-percent social security increase, a 20-percent increase was also provided to all railroad retirees.

Approximately 77 percent of all veterans receiving nonserviceconnected pensions and 75 percent of their survivors receiving VA pensions also receive social security benefits. According to the Veterans. Administration, 1.2 million pensioners will have a reduction in their VA pensions because of the 20-percent social security increase. An additional 20,000 pensioners will be dropped completely from the pension rolls because of this increase, and 15,000 of those dropped from the pension rolls, according to VA figures, will suffer losses in aggregated income ranging from $38 to $168 annually.

Since social security benefits and railroad retirement benefits are counted as income in determining a veteran's pension, every time he receives an increase in the above-mentioned benefits, his pension is decreased. Thus, after every social security or railroad retirement increase, Congress finds it necessary to take action to make certain that these increases will not have adverse effects on our veterans.

Fortunately, a step has been taken which provides some relief from this problem. Last year Congress passed a measure which created a new formula for determining veterans' pensions. As long as the pensioner's income is within the maximum income limitation, the decrease in VA pension will always be less than the increase in other income.

Although this act is a step in the right direction, it is not enough. There should be provisions made so that the pensions of our veterans and their survivors would not be reduced when they receive an increase in social security or railroad retirement benefits. H.R. 1610 would accomplish this.

This measure when enacted into law will result in an increase in the pension payable to veterans and their widows who are now getting a pension which is reduced because they are also receiving social security or railroad annuity and pension benefits. It would also make newly eligible for pension benefits many veterans and veterans' widows whose income from other Federal programs presently keeps them from qualifying for their well-deserved veteran's pension.

Mr. Chairman, as I am sure you and the other members of this subcommittee are well aware, our senior citizens and especially our veterans are, by their hard work, patriotism and selfless efforts, largely responsible for the freedom and privileges we as Americans enjoy daily. They are, therefore, entitled to a life of dignity and economic security. Yet the sad truth of the matter is that in many cases, they

do not have a life of economic security-due to the high cost of living, many find it extremely difficult to meet even their basic needs.

This is the reason Congress has granted increases in both social security benefits and railroad retirement annuities. Therefore, it is not fair to our veterans to increase their social security and railroad retirement benefits and then reduce their VA pensions, which many desperately need. This is a great injustice and it must be rectified as soon as possible. My bill will prove more permanent and will end this almost yearly problem, since these benefit increases would have no effect whatsoever in determining the total annual income of a veteran. I respectfully urge members of this subcommittee to take favorable action on this measure so that no veteran or his widow will find their pension decreased by the increases in other Federal programs. STATEMENT OF HON. ROBERT F. DRINAN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MASSACHUSETTS

Mr. DRINAN. Mr. Chairman, I welcome this opportunity to stand before this committee on behalf of the many veterans and their dependents within my congressional district who have suffered a reduction in pension as a result of the 20-percent increase in social security benefits enacted last year.

We are all aware of the fact that some 1.2 million pensions were affected by this action. Since by law an increase in income becomes effective on the last day of the calendar year during which the increase occurs, veterans' pensioners did not experience this reduction which averaged out to between $9 and $14 per month, until January of this year. Needless to say, most of these pensioners were relying on these few extra dollars. Though this amount may not seem critical, we must keep in mind that 76 percent of the persons receiving veterans' pensions are also receiving social security pensions and that these persons rely on these two sources of income to meet the ever escalating cost of living. The majority of them are elderly and fall within a low income bracket.

In addition to our concern for these persons, we must be mindful of the fact that 21,000 persons were dropped from the pension rolls as a result of this increase in social security benefits. We must also realize that these are the effects that can be indentified at this time and that there will be another category of individuals affected by this increase as of 1974-widows. Since the provision of H.R. 1, which allows a widow who files at age 65 or over to obtain 100 percent of her husband's benefits, did not become effective until May of this year, it will not be reflected in the reduction in veterans' pensions statistics until 1974. Many of these widows who have already sustained a reduction in their pensions by reason of the 20 percent increase in social security benefits will be subject to a further reduction in 1974, unless some action is taken to offset the increases. I am confident that it is not necessary to impress upon this committee the hardship that will be placed on this category of widows.

Foreseeing this repercussion of the social security increase, I joined last year in sponsoring legislation, H.R. 100, to amend the United States Code to make certain that recipients of veterans' pensions and compensation do not have such pension or compensation reduced be