shown in the recent pension and compensation hearings for the needs and interests of this country's catastrophically disabled veterans. Thank you again for your continuing interest and concern. We hope the enclosed information will be helpful to you. Sincerely,

Enclosures.

PVA PRIORITIES

LYNN PHILLIPS, Assistant Legislative Director.

COMPENSATION AND DIC BILLS

In order of priority, PVA supports the following bills:

1. H.R. 10337, which would provide for a 6.5 percent increase in compensation and DIC benefits. PVA considers this bill of top priority. We do recommend, however, that the Committee consider revising the proposed increase upward if economic conditions change unexpectedly prior to October 1, 1978.

2. H.R. 10338, which would establish a two-tier system for aid and attendance. We wholeheartedly endorse this concept, although we recommend minor changes in the legislative language concerning eligibility for the higher level of aid and attendance.

3. H.R. 9994, which would provide for the payment of DIC benefits to certain survivors of veterans who die with a permanently and totally disabling service connected disability. We support the concept of presumption of service connected death as outlined in H.R. 9994, but we suggest that the eligibility period be reduced from 10 years to 1 year, and that causes of death other than natural causes be acceptable for establishing eligibility for DIC benefits.

4. H.R. 11530, which would provide additional compensation for veterans who have lost 3 extremities from service connected causes. PVA supports this bill. 5. H.R. 11531, which would provide for a 6 percent cost-of-living increase in DIC for parents.

PVA has no position on H.R. 10336, which would provide additional compensation for dependents of certain veterans with service connected disabilities.

PVA opposes H.R. 11543, which would provide for a 10 percent increase in compensation rates for veterans rated 30 percent to 90 percent at age 65. Our opposition to this bill is due to the fact that compensation is determined by degree of disability, not by age. Advanced age in and of itself does not necessarily increase the disability of the veteran. Consequently, we do not support this bill.

Mr. MONTGOMERY. I might say that in our pension reform legislation, we took the recommendation of your association where we raised from $500 to $1,000 income limits to be included in medicines and in treatments for those severely handicapped under the pension program, and we will consider these suggestions that you have made this morning.

Would you like to introduce the lady with you?

Mr. ROFFEE. Yes; this is my legislative assistant, Lynne Phillips, and she has been primarily responsible for pension and compensation, and she is the one that has the facts, the figures, and the ideas for all this stuff.

Mr. MONTGOMERY. We are very glad to have you here this morning. Ms. PHILLIPS. Thank you very much.

Mr. MONTGOMERY. OK. Mr. Edgar?

Mr. EDGAR. Thank you, Mr. Chairman.

I would like to commend you for your statement this morning. It is very helpful. I was particularly interested in the comments of H.R. 10338. I wonder if you could just clarify for me the change in language that you suggest. As I understand it, you are suggesting that the language read something like, "in the case of a veteran in need of constant aid and attendance because of severe helplessness." Was that correct? Is that the basic language change?

Mr. ROFFEE. That is correct, sir. If you would turn to page-I didn't number them-1, 2, 3, 4 of our written statements, in italics there is our suggested change for 10338 written out completely. As 10338 is written, although it does the job, it simply puts in "or" and then the aid and attendance allowance shall be at the rate of $828. It just, by a substitution of a short phrase, increases and creates a two-tiered system.

The bill that we are talking about, and it has been introduced as 9768, would divide subparagraph "R" in section 314, title 38, into two sections. Section 1 would be the normal aid and attendance which is paid now and which is raised under 10337 to $600 a month.

Section 2 would be your higher step of aid and attendance which is proposed in 10338, would be $828-if you consider your 6.5-percent cost-of-living increase, it would be approximately $900 a month. It is written out in the legislation there, "is in need of constant aid and attendance because of severe helplessness."

Mr. EDGAR. This language that you provide on page 4 has not been introduced in this particular form, has it?

Mr. ROFFEE. Yes, sir, it has. I believe the number is-introduced by request from Congressman Montgomery, 9768.

Mr. EDGAR. I see. I have it probably somewhere in the stack here. Let me just focus in on a question of "because of severe helplessness," and I realize the problem with the word "medical." Do you foresee any problems in the VA defining that term "helplessness"?

Mr. ROFFEE. No, sir. It is-I don't have the definition here now, but it is defined in—do you have the regulation? The reason we pick it, sir, is it already is in the regulations, and we have it here some place. I will provide them to you if you would like to see them, but it is a well-defined term. It is used in another section in title 38. It is another-the housebound aid and attendance, I believe, uses the word "helplessness."

Mr. EDGAR. So as I understand it, essentially what you are suggesting is that $600 for those in general need and $900 for those whom you would classify as severely helpless

Mr. ROFFEE. That is correct. That, incidentially, would includehow we changed that or how I think 3,000 came to well, quadriplegics, but that is high-level quadriplegics, and again this would be a medical determination. The quadriplegic would not automatically qualify for it. A great many quadriplegics are perfectly able to take complete and total care of themselves. Quadriplegia, quadriamputation, cases of severe strokes, terminal brain tumors, uncontrollable epilepsy and late-stage multiple sclerosis are some of the examples of diseases, disabilities that would be included in that category.

Mr. EDGAR. I appreciate your testimony. I think it is helpful for us to recognize that there is a variety of need as opposed to one set figure of need, and I think your testimony clearly outlines that.

Mr. ROFFEE. Thank you, Congressman.

Mr. EDGAR. Thank you, Mr. Chairman.

Mr. MONTGOMERY. Thank you. Mr. Guyer?

Mr. GUYER. Mr. Chairman, I have no questions. It was a very compelling and very complete testimony. There is one area, and I don't want to take time this morning, that I have some other thoughts about,

27-920-78- -3

and that has to do with the definition of natural causes of death. I think we ought to have some remedial action, but I do not want to introduce it this morning.

Mr. MONTGOMERY. Yes. Thank you for being here this morning. Mr. Hall?

Mr. HALL. I have no questions.

Mr. MONTGOMERY. Thank you very much, Mr. Roffee.

Mr. ROFFEE. Mr. Chairman, if I could make one correction for the record in our written statements, on the top of page 5, average cost for aid and attendance, we have $500 per month. That is a typographical error; it should be $1,500 per month. So if we could do that, with your permission.

Mr. MONTGOMERY. OK; without objection, the correction will be made. Thank you, sir.

Mr. ROFFEE. Thank you.

Mr. MONTGOMERY. Our next witness will be Mr. Edward Lord, assistant legislative director, and with him is Mr. John Sommer, chief of claims, American Legion, here in Washington. We are glad to have you gentlemen appearing before the committee.

Mr. LORD. Good morning, Mr. Chairman and members of the subcommittee. It is a real pleasure for me to introduce a colleague of mine. This is the first time that Mr. Sommer has testified before the House committee having to do with compensation.

For a quick background, John is a combat veteran of Vietnam, served as a medic. He has been with the Legion for a number of years now. He is presently our chief of claims.

Our prepared testimony runs about 15 pages. We have summarized down to about five pages, so it will only take us about 5 minutes, and we will answer any questions you may have.

Mr. MONTGOMERY. Thank you very much. Without objection, the full statement of Mr. Sommer will be put in the record, and we are very glad to have you testify before this committee. Welcome to Washington. Mr. SOMMER. Thank you, sir, it is a pleasure to be here.

STATEMENT OF THE AMERICAN LEGION BY EDWARD J. LORD, ASSISTANT DIRECTOR, NATIONAL LEGISLATIVE COMMISSION AND JOHN F. SOMMER, Jr., CHIEF OF CLAIMS SERVICE, NATIONAL VETERANS AFFAIRS AND REHABILITATION COMMISSION

Mr. Chairman and Members of the Subcommittee, the American Legion appreciates this opportunity to comment on legislation affecting service-connected veterans and their survivors.

Mr. John Sommer is our witness this morning and will be pleased to respond to any questions you or members of this Subcommittee may have.

STATEMENT OF JOHN F. SOMMER, Jr.

Mr. Chairman and Members of the Subcommittee, we appreciate the opportunity given The American Legion to appear before this Subcommittee to present its views on the several measures scheduled for your consideration.

With your permission, we shall now address ourselves to each of the bills, not necessarily in their numercial sequence. Our statement also covers other measures under your jurisdiction on which The American Legion has existing mandates.

H.R. 10337-to amend title 38, United States Code, to increase the rates of disability compensation for disabled veterans; to increase the rates of dependency and indemnity compensation for their survivors; and for other purposes.

Presently, section 314 of title 38, United States Code, provides for payment of compensation of $754 monthly to those veterans with service-connected dis

abilities rated 100 percent or totally disabling. Higher monthly stipends in the form of statutory awards are payable for certain multiple disabilities which warrant ratings in excess of total. For those veterans whose service-related impairments are rated from 10 percent to 90 percent, the monthly rates range from $41 to $419.

Section 315 provides for additional monthly compensation for the wives, children and dependent parents of those veterans entitled to compensation under section 314, and whose service-connected disabilities are rated not less than 50 per centum.

Section 101 (b) of this bill woud allow that the Administrator of Veterans Affairs may adjust administratively, consistent with the increases authorized by this section, the rates of disability compensation payable to persons within the purview of section 10 of Public Law 85-857 who are not in receipt of compensation payable pursuant to chapter 11 of title 38, United States Code.

Dependency and indemnity compensation is payable to the surviving spouse, based on the pay grade of the person upon whose service-connected death entitlement is predicated, and as set forth under section 411 of this title. These pay grades range from E-1 through O-10, and the present monthly DIC payments range from $277 to $708. Where there is an eligible child or children of the veteran, these rates are increased by $33 monthly for each child under present law.

Sections 413 and 414 of this title provide for specific payments for children of the veteran under certain circumstances.

Payments of monthly rates of disability compensation and dependency and indemnity compensation were last increased by Public Law 95-117, approved October 3, 1977 and effective October 1 of the same year. To maintain the purchasing power of the beneficiaries of, or those entitled to receive, these monthly benefits, the rates payable must respond to cost-of-living increases. As published by the Bureau of Labor Statistics, Department of Labor, the October 1, 1977 Consumer Price Index was 184.0.

In reporting on the Consumer Price Index for January 1978, the Bureau of Labor Statistics stated that the index had advanced to 187.2. According to the BLS report, the January index was 6.7 percent higher than that of January 1977. The report further stated that on a seasonally adjusted basis, the CPI for all urban consumers (CPI-U) rose 0.8 percent in January alone. About two-thirds of this rise was due to price increases of 1.2 percent for food and beverages and 0.8 percent for housing. It was also reported last week that there was a 1.1 percent increase in the February Wholesale Price Index, and there will certainly be some pass-through of that to higher consumer prices.

In an article contained in the March 14 edition of the Washington Post, it. was reported that the director of the Council on Wage and Price Stability, in an internal memorandum, stated, in part, that there will probably be substantial increases in the CPI over the next few months. Projecting the 0.8 percent growth in the January 1978 Consumer Price Index alone, it could well be that the index would increase by between 9 and 10 percent by January 1979.

H.R. 10337 proposes an average increase of 6.5 percent in the monthly rates of compensation and DIC. While we certainly support the intent of this measure, we also believe that a look at the trend of the Consumer Price Index will show an average annual increase much in excess of 6.5 percent.

An alternative to the need for periodic legislation to increase the purchasing power of disability compensation and dependency and indemnity compensation payments is to provide an automatic adjustment that will recognize future increases in the cost of living, as measured by the Consumer Price Index over a given base period. This could be accomplished by amending title 38, United States Code, so as to provide that the Administrator of Veterans Affairs shall increase monthly rates payable under the foregoing sections by such percentage as may be determined in a base period similar to that used for Civil Service annuitants, social security beneficiaries, and others. A recommendation of this nature is contained in Chapter Ten of the Evaluation of Benefits Under the Dependency and Indemnity Compenstaion Program; the VA study pursuant to Public Law 94-433, section 204, which was released on January 31, 1978.

H.R. 10336-to amend title 38, United States Code, to change the minimum disability rating a veteran must have in order to receive additional compensation for dependents from 50 per centum to 10 per centum.

As previously mentioned in our statement, section 315 of this title provides for additional monthly compensation for the wives, children and dependent

parents of those veterans entitled to compensation under section 314, and whose service-connected disabilities are rated between 50 per centum and 100 per centum, inclusively.

To the American Legion, there is no valid reason for denying this additional compensation to those veterans whose disability is rated less than 50 percent and who have the same classes of dependents. A good illustration of this situation is given by comparing the compensation paid a veteran rated 50 percent with that paid a veteran rated 40 percent-both have a spouse and three children:

Veteran with disability rated 50 percent :

Disability compensation___.

Additional compensation for wife and three children_

Total

Veteran with disability rated 40 percent_-

$216

60

276

155

This is a difference of $121 per month, and would be a significant loss of income to a veteran with spouse and three children whose rating is reduced from 50 percent to 40 percent. Under the provisions of this measure, the veteran with disability rated 40 percent would receive compensation in the amount of $203. H.R. 9994-to amend title 38 of the United States Code 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.

Under current law, as illustrated previously, dependency and indemnity compensation is provided to a veteran's dependents in cases where the veteran dies in service. Also, it is provided where the death of the former member of the military service is the result of a service-connected disability or where the service-connected condition materially contributed to the cause of death.

The American Legion feels that in these determinations consideration is rarely given to the fact that severe chronic disabilities materially shorten life expectancy. Nor is consideration given to the fact that a veteran rated permanently and totally disabled for many years places a severe economic strain on his dependents due to the reduced earning capacity.

The approval of H.R. 9994 would accomplish an amendment which The American Legion has sought for many years.

H.R. 10338-to amend title 38, United States Code, to provide for a two-step aid and attendance compensation payment system for certain severely disabled veterans.

The American Legion could not oppose the intent of this bill, as it is certainly beneficial to veterans with severe service-connected disabilities. However, we do not have a position on this issue, and would have to discuss it with the National Veterans Affairs and Rehabilitation Commission prior to making a statement of support.

We would suggest that an amendment be made to the measure, clearly defining the criteria to be used in making a determination of eligibility for the two-step aid and attendance under section 314 (r) of this title; or, at least, a definition to be included in the legislative history relating to the bill, in the event it is approved.

H.R. 11543-to amend title 38, United States Code, to provide that the disability compensation paid to a veteran with a service-connected disability rated 30 per centum or more but less than total shall be increased by 10 percent when the veteran attains age 65.

The American Legion is opposed to legislation of this nature, as it deters from the intent and purpose of disability compensation, as defined in section 355 of this title; i.e., that ratings shall be based, as far as practicable, upon the average impairments of earning capacity resulting from such injuries in civil Occupations.

Here again, we feel that the most practical solution to increasing monthly compensation payments, is to provide an automatic adjustment that will recognize increases in the Consumer Price Index.

H.R. 11530-to amend title 38, United States Code, to increase the rate of compensation payable to veterans who have lost three extremities as the result of a service-connected disability.