Mr. Hall?

Mr. HALL. Thank you, Mr. Chairman. Mr. Thompson, I notice on the first page of your written statement you say, "Fortunately, the number of living veterans with service-connected with blindness is small, relatively speaking." Could you tell the committee how many blinded veterans we have in the United States today and the number of those blinded veterans who are married, if you have that information.

Mr. THOMPSON. Mr. Hall, let me refer that question to the director of our field service program, Mr. Monroe. I will say that I don't believe he is going to be able to give you the answer to that second part right now, but I think we can probably come up with an estimate shortly and let you know. Charles, do you want to take that?

Mr. MONROE. The number would be in the neighborhood of 4,500 as service connected. The estimates of the total number of blinded veterans runs as high as 65,000. As for the number of blinded veterans who are married, I have no figures on that at all.

Mr. HALL. You say there are 4,500 service-connected blind veterans? Mr. MONROE. Yes; that is the estimate we have from the Veterans' Administration.

Mr. HALL. Now what was the 65,000 figure?

Mr. MONROE. That is one figure that is being thrown around as an estimated number of blinded veterans, service connected and nonservice connected.

Mr. HALL. Oh, I see, both.

Mr. MONROE. Right.

Mr. HALL. All right.

With reference to the ability or I should say the nonability to leave any sort of estate for your family. I recall, when we had testimony here last year, that the representative at that time said that it was clearly impossible for a blinded veteran to obtain life insurance, and I notice on page 4 today that you still indicate that your disability tends to preclude certain things, one of which is, I presume, procuring life insurance.

Has there been any change in that situation since last year?
Mr. THOMPSON. I would like Mr. Vale to answer that.

Mr. VALE. We went out with a survey at the time of our convention to try to get specific instances where blinded veterans had been refused insurance. The return from that particular questionnaire was not conclusive.

Last week a more comprehensive questionnaire went out to 18,500 blinded veterans in the United States. We are asking them to fill out a questionnaire in which that question on life insurance is highlighted, and we are trying to get more specific information.

However, I can say this: In the study which we mentioned here today, in which the 11 applications for DIC were turned down, of the widows or survivors who answered the income questionnaire sent out by the VA in that study, only 3 of those 11 had any life insurance at all. The others who reported income had no income from any life insurance proceeds.

Mr. HALL. Would it be a fair question for me to ask: Of the three blinded veterans who are at the table today, have they been turned down on applications for life insurance?

Mr. VALE. John, have you ever been turned down?

Mr. FALES. I have not been turned down, but I have had some difficulty getting life insurance, and it cost me additional premiums and I did not get the same quality life insurance that any other individual gets.

Mr. HALL. What company do you have your insurance with, if you know?

Mr. FALES. Well, sir, Metropolitan Life; also with Prudential Life. Mr. HALL. Well, now, do they-you say they do not give you-you said something about the quality of the coverage.

Mr. FALES. That is correct, sir. In most insurance policies, you receive a waiver clause similar to the clause you have in time of war, so that if you lose your vision, if you get into an accident, there is a waiver of premium clause that you would be entitled to in your insurance policy. As a blind individual, you don't receive this waiver and other additional insurance.

Mr. HALL. In other words, if you become totally and permanently disabled in some other way having nothing to do with blindness, you do not have a waiver clause in your policy?

Mr. FALES. That is correct, sir.

Mr. HALL. Well, is there a limit, and I ask this of all the gentlemen or any who may wish to answer, is there a limit on the amount of insurance that a company will write for a blinded veteran?

Mr. FALES. It depends, sir. It depends on many factors. What I have done is go to the American Legion, go through other associations to get term insurance. But, term insurance is not the same quality of insurance that other individuals are able to receive.

Mr. HALL. Well, do they put a maximum of $5,000 or $10,000? Mr. FALES. That is correct, and if you live long enough and the insurance premiums go up, then they will give you an additional $2,000, an additional $3,000.

Mr. THOMPSON. Mr. Hall?

Mr. HALL. Yes?

Mr. THOMPSON. I would like to go back to the earlier part of your question and give you some personal observations, going back to last summer when our testimony did include very heavy concentration on the insurance. My personal view is that it has been and was a serious problem, and remains one today, but not to that same extent. I know that this is very easily documented, that back shortly after the end of World War II, at that time blind persons-not just blinded veterans but blind persons-very often found it almost impossible to get insurance coverage. The American Foundation for the Blind, I am sure, used to have articles and pamphlets on this that they would disseminate and distribute because they fought that very hard.

So when the veterans in my era, let us say, first were separated from the service and began to get involved in this kind of thing, it was not at all uncommon to be turned down or, if you were accepted, to be rated to pay more for your insurance. I remember very well that when I first started looking for insurance, rather than to say, this, this, and this company will not cover you, it was-there was a small list of companies that would, for a rated policy, and most of the others simply would not.

Now I suspect, the pressure of our demands—I am not talking about the Blinded Veterans Association as much as the pressure of the fact that there were these young men looking for insurance, focused a lot of attention on it, and the insurance companies finally did have to agree that, on an actuarial basis, blindness was not so much of a risk. Over the years it has become progressively easier for blind people to obtain insurance, but there still are the kinds of obstacles which Mr. Fales mentioned with certain companies that will not give you certain kinds of exclusions because of the blindness, and it is still not an equal treatment sort of thing.

I know in my own case, I was not able to bet unrated insurance from the first three companies that I went to. This was about 1954, because I didn't really go out looking for insurance until almost 10 years after I had gotten out of the service. I finally did get an unrated policy from New York Life. The rest of my insurance I have gotten is term insurance from organized groups where there is no medical, examination; you just send in your premium and you get the insurance.

Mr. HALL. I see. Well, thank you. I yield back the balance of my time, Mr. Chairman.

Mr. MONTGOMERY. We do plan, because of your interest and, of course, other members of the subcommittee, to have an oversight hearing on the total insurance program of the Veterans' Administration, and of course this subject could be covered also, but they are preparing themselves where the VA insurance program is administered in Philadelphia, Pa. They will be here in the near future to testify before this Subcommittee, and we will follow up on this area.

Mr. Edgar, do you have any questions?

Mr. EDGAR. Thank you, Mr. Chairman. I don't have any specific questions. I apologize for not being able to listen to your total statement, but I will read it and reflect upon it, and thank you for coming this morning.

Mr. MONTGOMERY. Thank you very much, Mr. Thompson. We appreciate you and the other gentlemen being here, and we invite you back to come before this committee. Thank you, sir.

Mr. THOMPSON. Thank you very much, Mr. Chairman.

Mr. MONTGOMERY. We have two more witnesses, and we will finish this morning, but I remind the Subcommittee that we also go back into hearings tomorrow morning to complete the testimony on the bills that are before the subcommittee.

Our next witness is Mr. Don Schwab, who is the director of the National Legislative Service of the Veterans of Foreign Wars. Mr. Schwab, we are very glad to have you appear before our subcommittee again. Thank you for your testimony.

STATEMENT OF DONALD H. SCHWAB, DIRECTOR, NATIONAL LEGISLATIVE SERVICE, VETERANS OF FOREIGN WARS OF THE UNITED STATES

Mr. SCHWAB. Thank you, Mr. Chairman, and in the interest of time, if there is no objection, I will summarize my statement with the understanding it will be included in the record in full.

Mr. MONTGOMERY. Without objection, your full statement will be submitted for the record.

STATEMENT OF DONALD H. SCHWAB, DIRECTOR, NATIONAL LEGISLATIVE
SERVICE, VETERANS OF FOREIGN WARS OF THE UNITED STATES

Mr. Chairman and Members of the Subcommittee, thank you for the privilege of appearing before this most distinguished and important Subcommittee to present the views of the Veterans of Foreign Wars of the United States with respect to pending legislation.

My name is Donald H. Schwab, and my title is Director, National Legislative Service, Veterans of Foreign Wars of the United States.

Mr. Chairman, the Veterans Administration's compensation program, which remunerates in part, and only in part, our 2.3 million veterans for their service connected disabilities, and their 364 thousand widows and children for the loss of the head of the household and the breadwinner, is the very keystone of veterans benefits. The Veterans of Foreign Wars, now entering its 79th year, has historically pressed Congress for needed improvements in the compensation program and to keep those benefits abreast of the cost of living.

The primary bill under consideration today is H.R. 10337, introduced by the Chairman of this Subcommittee, the Honorable G. V. (Sonny) Montgomery, for himself, and the Chairman of the full Committee, the Honorable Ray Roberts, and the Ranking Minority Member of the full Committee, the Honorable John Paul Hammerschmidt. Briefly, the bill would increase by 6.5 percent basic rates for compensation, statutory and extra schedular awards, allowances for dependents, and dependency and indemnity compensation for surviving spouses and to children of the veteran where there is no surviving spouse. These increases would become effective October 1, 1978.

Mr. Chairman, and as you are aware, the President's recommended budget allowance is for only a 5.8 percent increase in compensation and DIC, which the Veterans of Foreign Wars considers wholly inadequate. You will recall when our National Commander-in-Chief, John Wasylik, testified before the full Committee earlier this month, he recommended at least a 6.5 percent increase in compensation and DIC, predicated upon an anticipated inflation rate of between 6 and 7 percent. We are cognizant of the fact that other bills are pending to grant larger increases, namely H.R. 6274, introduced by the Chairman of this Subcommittee, which would grant a 7 percent increase and, also H.R. 915, introduced by the Ranking Minority Member of the full Committee, which would grant a 10 percent increase. To reiterate, our position is that there be at least a 6.5 percent increase in compensation and DIC, and a larger increase if, by the time this legislation is passed, such is so indicated by economic conditions, thus fulfilling one of our current V.F.W. priority legislative goals.

H.R. 10336, introduced by the Chairman of this Subcommittee, would amend Section 315, Title 38 of the United States Code to grant additional benefits for dependents of those service connected disabled veterans rated less than 50 percent and 10 percent or more.

Current V.F.W. Resolution No. 664, entitled, "Additional Benefits for Dependents" was passed by the voting delegates to our last National Convention, representing our now more than 1,850,000 members and the more than 590,000 members of our Ladies Auxiliary, calling for additional benefits for dependents of those veterans rated less than 50 percent on the same proportionate basis as for those veterans rated 50 percent or more. A copy of the cited resolution is appended to my testimony.

H.R. 10338, again introduced by the Chairman of this Subcommittee, for himself and for the Chairman of the full Committee and the Ranking Minority Member of the full Committee, would establish for the first time a two-step aid and attendance compensation payment system. $828 per month would be awarded to those veterans with a service connected disability who are in need of constant medical aid and attendance, while those in need of aid and attendance less than constantly would continue to receive $528 per month as adjusted by law. Permit me, Mr. Chairman, to compliment you and the cosponsors of this bill for both recognizing that there is a vast difference in cost to the veteran who needs constant aid and attendance as opposed to those who require intermittent aid and attendance and, also, for your obvious and continuing deep concern for our most catastrophically disabled veterans. The V.F.W. supports this innovative

measure.

Mr. Chairman, the Chairman of the full Committee, the Honorable Ray Roberts, has introduced H.R. 10352, to amend Title 38, United States Code, to clarify the intent of Congress in providing for exemption from taxation of that

amount of military retirement pay paid 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 retired pay.

The New York Times, on November 7, 1977, carried the story of the experience of Col. Zebulon L. Strickland, Jr., which the instant legislation addresses. Col. Strickland, a retired Army officer, who ". . . won his personal battle with the Internal Revenue Service in 1976, but is still losing the war. . ." In January, 1967, the Veterans Administration granted him compensation at the rate of 100% for service connected disabilities, for which he had applied in March of 1966, and the Veterans Administration ruled his eligibility commenced at that time. In filing his 1966 income tax return, Col. Strickland excluded his compensation payment, since they are tax free. The Internal Revenue Service objected. Col. Strickland argued his own case in the tax court and lost his appeal.

However, in March, 1976, the United States Court of Appeals for the Fourth Circuit, ruled Col. Strickland was entitled to treat the compensation payments as disability income despite the fact it may have been technically paid by the Department of the Army. Subsequently, the Internal Revenue Service disagreed with the Court, stating, "The opinion of that court is erroneous and should not be followed." Although the IRS is still holding to its original decision, insisting that retroactive disability payments are taxable, a spokesman has stated that, "In view of the controversy and the interest on the Hill" the issue was again being studied. Mr. Chairman, the Veterans of Foreign Wars of the United States fully supports the passage of H.R. 10352.

Mr. Chairman, while speaking of those veterans who are retired from our Armed Forces, current V.F.W. Resolution No. 635 is entitled, "Eliminate Restrictions of Military Retirees to Receive VA Disability Compensation or Pension," a copy thereof is appended to my testimony. The requirement in Sections 3104 and 3105 of Title 38 of the United States Code, that Armed Forces retirees waive a like portion of retired pay to draw tax free compensation payable by the Veterans Administration is an inequity of longstanding. A number of bills are currently pending before this Subcommittee which would rectify this injustice, and the Veterans of Foreign Wars recommends early consideration and passage of this needed, remedial legislation.

H.R. 9994, again introduced by the Chairman of this Subcommittee, would grant dependency and indemnity compensation to the survivors of veterans who were rated totally and permanently disabled for at least ten years immediately preceding death, regardless of the cause of death. Another provision would deny such benefits to the surviving spouse married to the veteran less than five years. H.R. 9994 would fulfill our current Resolution No. 620, entitled "Veterans Administration Death Benefits" and, also, another of our priority goals which is to "Authorize Dependency and Indemnity Compensation to the widows and orphans of 100 percent service connected disabled veterans, regardless of the cause of death and insure that such DIC is not subjected to a 'needs basis' test." Notwithstanding our support of this bill, we find the five year marriage clause alien to the compensation program, and recommend that the criteria enunciated in Section 302 (a), Title 38 of the United States Code, herein quoted, be substituted therefore:

"(a) No compensation shall be paid to the surviving spouse of a veteran under this chapter unless such surviving spouse was married to such veteran

(1) before the expiration of fifteen years after the termination of the period of service in which the injury or disease causing the death of the veteran was incurred or aggravated; or

(2) for one year or more: or

(3) for any period of time if a child was born of the marriage, or was born to them before the marriage."

H.R. 11530, introduced by the Chairman of this Subcommittee. the Chairman of the full Committee and the Ranking Minority Member of the full Committee, would amend Section 314(p), Title 38 of the United States Code to include those veterans who have suffered anatomical loss or loss of use of three extremities. Although such severely disabled veterans are now covered under Section 314(k), we believe their inclusion in Subsection (p) to be more appropriate and. in addition, would increase the award from the present $937 per month to $1,312. The Veterans of Foreign Wars gladly supports the passage of this legislation.