Mr. ALLEN. Mr. Birdsall, you have stated the approximate cost of this bill would be 100 million dollars the first year. Have you been able to project that for future years? Mr. BIRDSALL. No, sir, just for the fiscal year 1952. Mr. ALLEN. It would be difficult to project it in the future, would it? Mr. BIRDSALL. Mr. Dyess is here. Dr. Dyess. Mr. ALLEN. Doctor, could you give us a projection for the future years? If we report out a bill, I am sure the House would like to know what the amount might run to. STATEMENT OF WILLIAM B. DYESS, DIRECTOR, CLAIMS Mr. DYESS. Mr. Chairman, that would be not only difficult but it would be more tenuous. The application of income data, as we have had to use it here to project it for 1 year, has a fairly high margin of error inherent in it anyway. To project it further than that, when we get into unknown income levels, would make it so much more tenuous that I would be hesitant to do so. Mr. ALLEN. You would have to take into consideration the social conditions, and nobody but the good Lord knows what will happen 5 years from now? Mr. DYESS. That is right. Mr. ROGERS. Are you able to give any estimate as to the cost of the parental provisions in the bill? Mr. DYESS. We do not have any data on which to base any reasonable estimate of that at all. Mr. ROGERS. That is all. Mr. ALLEN. General Devereux. Mr. DEVEREUX. No questions. Mr. ALLEN. Thank you very much, Mr. Birdsall. We appreciate your statement. The committee may call on you later for further enlightenment on the matter before we finally act on it. Mr. Olson of the American Legion. STATEMENT OF CLARENCE H. OLSON, ASSISTANT DIRECTOR, NATIONAL LEGISLATIVE COMMISSION, THE AMERICAN LEGION Mr. OLSON. Mr. Chairman, Mrs. Rogers, Mr. Rogers, General Devereux, the American Legion appreciates the opportunity to come before you this morning to discuss this question which we think is very important to a great many widows and veterans throughout this country. As Mr. Stevens will point out later, we do not have a mandate covering the subject of dependency computation for the parents of veterans who died as a result of service. But we have been before your committee in the past on that very same subject. Mr. Stevens will have more to say on that later. Mrs. ROGERS. A number of years ago? Mr. OLSON. Yes. We have two bills which are related to H. R. 310 in respect to annual income limitations which preclude the payment of pensions to widows and to disabled veterans from nonservice connected causes. I want to reiterate again we consider this to be among the most important legislative factors we will deal with throughout this year or this Congress. With your permission, Mr. Chairman, Mr. Stevens will take on from here. Mr. ALLEN. Proceed, Mr. Stevens. We are glad to have both of you with us. STATEMENT OF CHARLES W. STEVENS, ASSISTANT DIRECTOR, NATIONAL REHABILITATION COMMISSION, THE AMERICAN LEGION Mr. STEVENS. Mr. Chairman and members of the committee, the American Legion appreciates the opportunity to testify in support of legislation proposing elevation of annual income limitations, and exclusion of certain income in annual income computations, in determining entitlement of war veterans to disability pension and of widows and children of deceased war veterans to death pension. H. R. 1078 and H. R. 1079 are bills introduced in this Congress January 8, 1951, by Mr. Rankin at the request of the American Legion. Sections 4 and 5 of H. R. 1078 deal with annual income limitations and annual income determinations in disability pension cases. Section 3 of H. R. 1079 has to do with this subject as pertains to death pension cases. We have been informed that the purpose of the hearing today is to consider only the question of income limitations in determining the entitlement of veterans and dependents to benefits. For that reason, I will confine my remarks to this important issue as contained in these sections. There are, however, several meritorious proposals in the other sections of these bills which we sincerely hope can receive the consideration of this committee and the Congress at an early date. These are the proposals of the American Legion for amendatory legislation relating to disability and death pension annual income limitations: 1. Amend paragraph II (a), part III, Veterans Regulation No. 1 (a), as amended, to read as follows: (a) Payment of pension provided by part III, except as provided in subparagraphs I (g) and (h), shall not be made to any person without dependents whose annual income exceeds $1,800, or to any married person or any person with minor child or children, or dependent parent or parents, whose annual income exceeds $3,800. 2. Provided that, notwithstanding any other provision of law or veterans' regulation, in determining annual income under the provisions of paragraph II (a), part III, Veterans Regulation No. 1 (a), as amended, any payments of retirement annuities, based upon age or disability and of social-security benefits based upon age, shall not be considered. 3. Amend section 1 (c), Public Law No. 484, Seventy-third Congress, as amended, to read as follows: (c) Payment of pension under the provisions of this Act shall not be made to any widow without child, or a child whose annual income exceeds $1,800, or to a widow with a child or children whose annual income exceeds $3,000. In determining annual income and payments made by widow, child, or children for settlement of debts incurred by the veteran or for expense of last sickness of the veteran and such expense of burial of the veteran as exceeds the amount of the allowance authorized by Veterans Regulation Numbered 9 (a), as amended, shall be excluded and any payments by the United States Government because of disability or death under laws administered by the Veterans' Administration shall not be considered nor shall life insurance payments from any other source be considered: Provided, That where payments to a widow are disallowed or discontinued hereunder, payment to a child or children of the deceased veteran may be made as though there is no widow. Regarding the first and second proposals, as this committee knows, the pension payable under part III is the award to war veterans permanently and totally disabled from disabilities in which service connection has not been conceded. Too many disabled veterans are being denied disability pension awards because of the present annual income limitations of $1,000 for an unmarried veteran and $2,500 for a veteran with dependents. These war veterans are disabled to the extent that they are certainly incapable of earning a decent livelihood. They endure a marginal existence because their incomes are insufficient to buy the necessities of life but exceed the limitations so that pension payment is denied. These income limitations were established in March 1933 and were then considered reasonable when this country was in the depths of a financial depression. In those days, $1,000 was a lot of money. It is obvious that the income limitations fixed in March 1933 are no longer reasonable. To the contrary, they are most unreasonable. Income in excess of the limitations barred pension awards but in the depression years the cost of living was such that single veterans and those with wives and children could get by with pensions added to their earnings. At the present time, the loss of a dollar's purchasing power makes it absolutely impossible for these disabled veterans to exist on their earnings without an added pension payment. The depreciation of the dollar has caused wages to be paid which exceed these present limitations by several hundreds of dollars for even such menial work as these unfortunate veterans are able to secure. But wages paid mean little. The dollar buys little. The consumer's price index, using the years 1935-39 at 100 percent. as a base, was 90 percent in March 1933; it was 184.5 percent in March 1951, 18 years later. The food price index was 226 percent in March 1951. We must ask the elevation of the limitations at least to the $1,800 and $3,000 which we have proposed. We know the people of the United States do not want badly disabled war veterans to live in hovels, wear hand-me-down clothes, and subsist on scraps. We have confidence that this committee and the Congress will rectify the deplorable situation created by these unrealistic limitations. This first proposal contains a technical revision of paragraph II (a) which I should mention. Subparagraphs I (g) and (h) relate to pension for Spanish-American War veterans. Paragraph II (a) now contains the exception of subparagraph I (g). Subparagraph (h) is added because the provisions of the subparagraph should be excepted also. Another phase of the first proposal must be mentioned. Many permanently and totally disabled war veterans are attempting to support their dependent parents with the little they earn. Under present law, the veteran's annual income may not exceed $1,000 if he has no wife or child. A parent may not be considered a dependent so the lower annual income limitation bars pension payment even though the veteran is contributing to the support of his parents. We urge acceptance or our recommendation that a parent be classed as a dependent to permit a veteran to have an income within the higher limitation when supporting a mother or father. We have asked Congress for several years to consider a parent dependent for this purpose. Government witnesses have testified in the past that this would be something new, that only the primary dependents, wives and children, have been considered heretofore. This does not make this proposal any less meritorious. Too often parents are given too little consideration. As concerns the second proposal, it is our experience that many veterans are being deprived of the disability pension award because of payments of annuities which are presently considered income in the annual computation. We recommend exclusion of social security benefits based upon age and the exclusion of any payments of retirement annuities, based upon either age or disability, in the annual income computation. We definitely believe that award of social security benefit payments to war veterans, aged 65 or over, should not in any way bar these disability pension payments. By retirement annuities, we mean annuities purchased by the veterans from commercial insurance companies, retirement benefits paid those formerly employed under civil service by the United States Government or any of its political subdivisions, railroad retirement benefits, and such. Presently, Veterans' Administration regulations consider these benefit payments to annuitants as income only when the amounts paid exceed the cost of the benefit to the veteran. This matter is one which has engaged our attention for some time for it is found frequently that the sole income these veterans have is that paid as an annuity and small as it may oftentimes be, as concerns single veterans particularly, it is still in an amount which constitutes a bar to the disability pension payment. The retirement annuity plus the disability pension award would enable the veterans to live reasonably well; without the pension award, they barely exist. The third proposal is very important. Widows and orphans have a right to death pension awards if their incomes are within annual limitations prescribed by law. These are the same limitations used in determining whether pension may be paid a permanently and totally disabled war veteran, namely, $1,000 for a widow or child alone, $2,500 for a widow with children. I say a child alone because if a widow with children is excluded because of an income exceeding $2,500, each child may be awarded pension if its income does not exceed $1,000. The same need exists for elevating these limitations as exists in the disabled veterans' pension cases. We propose these limitations be increased from the present $1,000 and $2,500 to $1,800 and $3,000. The present limitations were established in the depression year of 1934. They were reasonable then but unrealistic today. I have said why the American Legion supports enactment of legislation to elevate the income limitations in disability pension cases; the same arguments must be advanced in behalf of the widows and orphans. Widows and children are frequently obliged to pay debts incurred by veterans before their deaths, from income which is considered in determining the limitation which may be established for pension purposes. They use money that they need for living expenses to pay these debts. The American Legion believes and recommends that payments made by widows and children for settlement of debts incurred by veterans should be excluded in calculating the amount of annual income of these survivors. Paragraphs II and III of Veterans Regulation No. 9 (a), as amended, specify the allowances which may be made by the Veterans' Administration for expenses incident to burials of veterans. The amount may vary. A sum not exceeding $150 is payable in the majority of cases, but when a veteran's death occurs in a Veterans' Administration facility there is authority for payment of costs of transportation of the body to the place of burial under certain circumstances. Funeral costs exceed $150 in many cases today even when the families are in moderate circumstances for at such a crucial time the bereaved widows and children, to whom the veteran has meant so much, want to pay their last respects to their loved ones. The American Legion does not believe that these excess costs should be considered in determining the annual income of a widow or child and recommends exclusion of such sums in the computation. Present law provides for exclusion of payments to widows and children of life indemnity or insurance benefits by the Veterans' Administration in computation of their annual income for death pension purposes. This may attain an aggregate amount of $10,000. Commercial insurance payments to widows and children are considered income. The American Legion believes and recommends that insurance payments from any source should be excluded in the income computation. Many veterans name their wives and children beneficiaries of commercial insurance policies which amount to but a few thousand dollars, frequently much less than the amount of Government insurance carried by other veterans. They insist that it is unfair to consider their insurance as income when the Government insurance is excluded. We believe that there is every justification for the existing provision which benefits widows and children who are beneficiaries of the Government insurance contracts but do urge that a similar provision be made as concerns commercial insurance. The announcement of this hearing informed us that its purpose was the consideration of H. R. 310 and related bills. H. R. 310 contains a proposal for establishing a statutory income limitation for the purpose of determining dependency of parents for compensation award pur poses. This would be applicable in determining the entitlement of parents to death compensation in service-connected deaths and the entitlement of veterans to additional disability compensation for dependents. The American Legion has no mandate at present to seek accomplishment of this objective so that I have not included this subject in my discussion. I might comment, however, that Mr. Allen and Mrs. Rogers will recall that they served as managers on the part of the House on the |