Congress must continue to adhere to the principles set forth in the introduction and background of the U.S. Veterans Advisory Commission on the Veterans Benefits System Report:

As a return to veterans for their service, the Nation has accepted three basic principles as fundamental commitments to the veteran population:

(1) The commitment to comepnsate (a) disabled veterans for disability incurred in their Nation's service and (b) veterans' dependents for the loss of life or earning capacity of the veteran.

(2) The commitment to promote the rehabilitation and readjustment to civilian life of those veterans who have suffered physical or economic loss because of their service to the Nation.

(3) The commitment to care for needy veterans who cannot be completely rehabilitated.

The needy referred to in paragraph 3 of these commitments are in need because of service in and for their country. We have maintained a time-honored conviction that the war veteran who has served his country in time of peril should be provided a reasonable measure of financial relief when he is economically and physically disadvantaged. A social security increase is, in reality, a myth for those who need both social security and veterans' pension to survive. I find no indication that it was the intent of Congress that this interaction of programs should deny increases to the recipients. But, in the absence of further legislative action, a great many persons at the very bottom of the income scale will, in effect, be denied the social security increase that Congress intended they be granted.

Something must be done immediately. Our veterans have felt the loss of benefits since February. We cannot allow this to continue. If H.R. 100 is enacted, this unfair discrimination will be avoided.

STATEMENT OF HON. JAMES J. DELANEY, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW YORK

Mr. DELANEY. Mr. Chairman, under consideration today among pending pension bills, is my proposal, H.R. 3549, which would correct a most unfortunate situation that occurred when Congress recently passed legislation to increase social security benefits by 20 percent. I speak of the unintentional and substantial reduction in pension benefits for our veterans due to the social security increase.

In every case where I have received letters from my constituents, they have explained that the loss of pension benefits is far greater than the increase in social security. These reductions are causing extreme financial hardships for our veterans who, becasue of age and disability, are living on limited incomes.

My bill would simply disregard any increases in social security benefits in determining eligibility for veterans' pension benefits. Favorable action by the subcommittee is imperative if we are to provide adequate financial assistance for these heroic people and their families to help offset the spiraling cost of food, housing, and other essential needs. They have faithfully served and sacrificed for the betterment of America, and now it is our turn to help them. I ask for favorable consideration of II.R. 3549.

STATEMENT OF HON. JONATHAN BINGHAM, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW YORK

Mr. BINGHAM. Mr. Chairman, I appreciate this opportunity to present my views on legislation to improve veterans' pensions and compensation, the subject of your hearing today. The efforts which you and the distinguished members of the subcommittee have exerted to provide increased and improved benefits to our veterans who have served their country in its times of need are certainly deserving of public acclaim. On the first day of the 93d Congress, I introduced H.R. 321, a bill which would amend chapters 11, 13, and 15 of title 38 of the United States Code to provide for systematic cost-of-living increases in veterans' benefits, including compensation, indemnity compensation, dependency payments, and pension payments. These increases would apply in the cases of compensation to veterans for wartime and peacetime service-connected disabilities; wartime and peacetime serviceconnected death compensation, dependency compensation, and indemnity compensation paid to surviving spouses, children, and dependent parents; pensions paid for non-service-connected disabilities and service in specific wars; and pensions paid to widows of wartime veterans. The legislation which I have introduced provides that at the beginning of each calendar quarter, the Veterans' Administration would automatically increase the payments made under the programs I have described if the Consumer Price Index during the preceding quarter had risen by 3/4 of 1 percent (an annual rate of 3 percent) or more. The payments would be increased by a percentage equal to the rise in the Consumer Price Index.

Mr. Chairman, the need for this legislation is amply borne out by the figures on inflation and skyrocketing prices which are in the headlines constantly. These rapid jumps in the cost of living hit hardest those people who are living on pensions and fixed incomes, and the recipients of the title 38 programs covered by my bill are often to be found in this category. Figures supplied by the Congressional Research Service dramatize the scope of the spiraling rise in living costs. During recent months, the cost of living has increased staggeringly, jumping by an annual rate of 2.88 percent during October-November, 3.84 percent in November-December, 3.72 percent in December-January, 8.40 percent in January-February, a whopping 11.16 percent in February-March, and 8.28 percent in March-April.

Since January, 1972, when the last general pension and indemnity compensation increase was voted by the Congress, the Consumer Price Index has grown from 123.2 to 130.7, an annual increase of about 6.1 percent. The automatic increase which my bill would provide is analogous to the automatic cost-of-living increase which was written into the social security law last year, and it would provide much-needed immediate relief to beneficiaries of veterans' pensions when prices go into an upward spiral. Congress would still be free to vote pension increases, but pension recipients would no longer have to depend on congressional action just to keep pace with the relentless pressures of inflation.

There are other highly worthwhile proposals before the subcommittee today for consideration, among which is an automatic passthrough of all social security benefit increases in computing veterans' pensions and compensation payments. A report entitled "Effect of Social Security Increase on Non-Service-Connected Pension Program" was published this year by the House Committee on Veterans' Affairs. It indicated that approximately 20,000 persons receiving non-serviceconnected pension benefits would find their pensions terminated as a result of the 1972 20 percent across-the-board increase in social security benefits. The Congressional Research Service at the Library of Congress estimates that 1.2 million pensioners have had their veterans' allotments reduced as a result of the social security benefit increase. It has further stated that of the 20,000 pensioners who have been dropped from the rolls because of the social security increase, 15,000 are suffering an overall income loss ranging from $38 to $168 annually.

Thus, the Government has taken back with one hand what it paid out with the other. In some instances these pensioners wound up with an overall reduction in Government benefits, a situation which was never intended by Congress. I urge the subcommittee to approve passthrough legislation which will remedy this appalling situation and restore all pensioners to their former total veterans' benefits levels.

I am certain that this distinguished subcommittee will bear in mind. the outstanding service which our veterans have rendered to this Nation both in wartime and in peacetime, and I urge the subcommittee to be as generous as possible toward veterans and their surviving dependents in the legislation which it recommends to the full Veterans' Affairs Committee. We can certainly afford to provide these members of our society with the improved standard of living which they deserve. STATEMENT OF HON. MARJORIE S. HOLT, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MARYLAND

Mrs. HOLT. Mr. Chairman, I would like to take this opportunity to urge your favorable consideration of a proposal which I introduced on March 20, 1973, "To amend title 38 of the United States Code to make certain that recipients of veterans' pension and compensation will not have the amount of such pension or compensation reduced because of certain increases in monthly social security or railroad retirement benefits."

This bill is designed to assure that no pensioner will receive a reduction in his VA pension as a result of general increases in benefits under the social security program of the 20 percent increase in railroad retirement pensions and annuities as provided by Public Law 92-460.

I am certain that all of us have received mail from constituents which describes the effects of the recent inflation on their earnings. Inflation has had its most disastrous effects on those who are forced to live on a fixed income. The daily erosion of their purchasing power has reduced formerly comfortable retirement incomes to the bare subsistance level.

These are especially difficult times for our veteran pensioners, those who served so valiantly to preserve our freedom, many of whom have begun to think of themselves as forgotten. Their years of service to their country have been followed by years of living on the fringe of

poverty. They have seen social security and railroad retirement benefits increased by Congress while their veteran pensions are simultaneously decreased. This to me is a classic case of the Government giving with one hand while taking away with the other.

Mr. Chairman, I strongly urge an end to this inequity and favorable consideration of II.R. 5864.

STATEMENT OF HON. TOM BEVILL, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ALABAMA

Mr. BEVILL. Mr. Chairman and distinguished members of this subcommittee, it is indeed a privilege to appear before you today in support of H.R. 1493, which I have cosponsored. This bill is of vital importance to our older veterans.

This bill amends title 38, United States Code, to make certain that recipients of veterans' pensions and compensation will not have the amount of pension or compensation reduced because of increases in their monthly social security benefits.

Current law provides monthly pensions based on income and age or disability for certain veterans. Eligibility includes veterans discharged under other than dishonorable conditions after 90 or more days service (or separated earlier because of a service-connected disability) including at least one day of wartime service. In addition to this service criterion, they must also have attained age 65 or older or be totally and permanently disabled from non-service-connected causes. According to the law, a single eligible veteran cannot receive a pension if his income exceeds $2600 annually-an income near the poverty level. And no veteran, despite the number of his dependents, can receive a pension if his income exceeds $3,800.

Certainly we have all been experiencing the effects of inflation. From January to April the cost-of-living has increased 2.35 percent. If projected to an annual rate, it would be an increase of 9.4 percent. Those veterans and their dependents who depend on veterans' pension and compensation payments are suffering the most. These men and women on fixed incomes cannot work. They are too old or disabled and must depend on Congress to match rising prices with increasing benefits in order to survive.

Last Congress we recognized the need of these people and provided an increase in pension benefits. But then, with the increase in social security, the benefits for which we strived have been rendered useless. As the law now reads, over 1 million veterans receiving pensions will face a reduction in their VA pension due to the social security increase: 20.000 veterans will be dropped from the pension rolls entirely: 15,000 veterans will actually suffer a loss in their aggregate income.

Congress did not intend this inequitable situation to exist. The reduction in veterans' pensions places an undue hardship on the very people we must protect.

A social security increase must not be a myth for those veterans who need both social security and veterans' pensions to survive. An increase in social security which results in a decrease in veterans' pension and compensation cannot be the will of this Congress. We must act now. Our veterans have experienced the loss of benefits since February. We cannot allow this to continue.

Mr. Chairman, I hope your committee can report out this legislation at the earliest possible time.

STATEMENT OF HON. LEE H. HAMILTON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF INDIANA

Mr. HAMILTON. Mr. Chairman, I support H.R. 1492, a bill to amend title 38 of the United States Code to make certain that recipients of veterans' pensions and compensation will not have the amount of such pension or compensation reduced because of increases in monthly social security benefits. The bill applies to all social security increases after December 31, 1971.

The 20-percent increase in social security benefits effective in September 1972, has already had an adverse effect on many veterans. The Veterans' Administration has indicated that the VA pensioner who received this increase had an average loss in non-service-connected pension payments of $7 per month, or $84 per year. Furthermore, about 20,000 veterans had their pensions terminated because of the 20-percent increase. This is an intolerable situation that works a real hardship on the veteran who receives both VA and social security pensions.

I have been contacted by dozens of constituents on this matter, and I receive more mail from veterans on this issue than on any other. Veterans in my congressional district are most upset over this matter, and rightfully so.

This hearing occurs shortly after the celebration of Memorial Day, a time when the Nation honors the more than 1 million Americans who have fallen in the service of their country. They have made the supreme sacrifice.

There are 28 million living veterans of our Armed Forces who have also made a sacrifice and who also deserve to be honored, in this case by the enactment of veterans' legislation such as H.R. 1492 now pending before the Congress.

We must never permit the passing of time to obscure or minimize the extent of our gratitude to all of our veterans. Our country exists today proud, free, and unafraid because of their sacrifices. We have an obligation to them, an obligation recognized by Teddy Roosevelt when he said that:

No other citizen deserves so well of the Republic as the veteran. They did the one deed which, if left undone, would have meant all else in our history went for nothing. But for their steadfast promise, all of our annals would be meaningless, and our great experience in popular freedom and self-government would be a gloomy failure.

We should also be well aware that the contribution of our veterans to the national welfare is not limited only to wartime. The evidence of their leadership is all about us: in business, in public life, and in the professions. Our last five Presidents have been veterans. Many Congressmen, Governors, and judges are veterans. Today, veterans are contributing to a stronger and better America through their efforts in every form of human endeavor.

Let us live up to our obligation to our veterans by taking prompt and affirmative action to insure veterans an adequate income. Positive action on H.R. 1492 would be a welcome step in this direction.