of the 20-percent increase in social security last September, many people long past the age of retirement lost their veterans' disability pensions or had them sharply reduced. These terminations or reductions, which took effect on January 1, actually made some elderly citizens worse off than they were before the social security increase.

The letters I received did not represent an organized letterwriting campaign. On the contrary, they were spontaneous, individual expressions of concern about the dilemma of senior citizens trying to live out their lives with dignity and respect.

I would like to share excerpts from several of these letters with the subcommittee:

One veteran from the western part of my district wrote:

I, like many others, am the victim of the 20% social security raise. I am a veteran of World War I and was getting $78.75 a month pension. I got a little over $25.00 raise with the social security increase. This increase put me over the allowed amount that veterans have as a standard-which is unlivable in these days. So I lost about $50.00 per month since January 1, 1973. I am 75 years old and can't do much work anymore. Is there a way I could refuse the social security raise, then I could get on the Vets program again.

Another veteran from a northern county declared:

After they gave me a 20 percent increase in my social security pension they cut my veterans' pension by $30.00 a month. I am getting $1.12 less now a month and my medical expense has gone from $750.00 to over $1300.00.

A Waupaca County veteran wrote:

I would just like to point out that with the last social security raise I got from $75.00 to $91.00. I was lowered from $130.00 to $109.00 on my VA disability pension. A loss of $5.00 per month. I can afford no more of these kind of raises. And a veteran from Brown County complained:

My pension has been completely cut off. Social Security was raised about $36.00 and pension was cut $78.75. I had a stroke a year ago and had two setbacks. I served on three fronts and am going onto 79 years. Any help you may give me will be very much appreciated.

After reading these letters and many others, I joined with the gentleman from Indiana (Mr. Hillis) in sponsoring H.R. 2992. This meritorious legislation would raise by $600 the limit on income a veteran can earn without losing his pension. It would also increase the benefit formula for computing veterans' pensions.

There is an unquestionable need for legislation to provide an upward adjustment in the present earnings limitations. In a statement prepared by the committee last fall entitled "Effect of Social Security Increase on Non-Service-Connected Pension Program," the committee said:

The Veterans Administration has stated that the VA pensioner who receives social security benefits received an average increase of approximately $26.50 a month in his social security benefits as a result of the recent 20 percent social security increase. The Veterans' Administration further advises that, as a result of the social security increase, the average loss in non-service-connected pension payments will be approximately $7.00 per month. Therefore, the VA pensioner will have an average net gain in his total income of approximately $19.00 a month.

This statement, prepared last fall on the basis of information provided by the Veterans' Administration, should be compared with an April 26 report on H.R. 2686, to Chairman Dorn from Donald Johnson, VA Administrator. In that report, Mr. Johnson wrote:

At the end of 1972, approximately 1,750,000 persons on our pension rolls were also receiving social security benefits. Of these, nearly 99% not only remained on the pension rolls in the face of the 20% increase in social security benefits... but also received an average increase in income of $158.00 per year, about $13.00 monthly.

Unless I am mistaken, the plain implication of the latter paragraph is that the average gain that accrued to a VA pension recipient as a result of the social security increase has mysteriously dropped by $6 per month from the figure projected last fall. This is a very serious discrepancy that ought to be fully and promptly explained.

In any event, in the face of serious inflation, the elderly people receiving VA disability pensions and social security moved ahead, on the average, only $13.00 per month, after the 20 percent social security increase.

Of course, some veterans and some widows actually lost money. In terms of income, they were pushed backward.

I suppose, Mr. Chairman, that it would be possible to concoct a pension program for veterans so lavish and generous in its benefits that it would be unfair to other segments of the population. But that is hardly the case with this bill. H.R. 2992 is simply an attempt to help aged veterans and the widows of veterans to maintain their position. For us to fail to raise the income limitations in the pension system after the social security increase would be a callous, hardhearted failure to come to grips with a problem that the Congress itself created.

In his letter of April 26, the Administrator criticized the price tag on the Hillis-Froehlich bill, as drafted. There is no question that increasing the income limitations and increasing the benefit formulas will cost money. Perhaps some compromise is in order. But the Administrator failed to seek out any middle ground, any compromise. He failed to tell us the price of increasing the income limitation by $600, or $400, or any figure. He even failed to advise the committee how much it would cost to assure that no veteran or widow actually lost money as the result of the social security increase. Is this too much to ask of an agency that is concerned about the twilight years of men and women who fought for their country?

Certainly, nothing is proposed in H.R. 2992, with respect to income limitations, that does not have ample precedent in recent years. For example, the income limitations for veterans and widows receiving pensions under the law in effect prior to June 30, 1960, used to be $1,400 and $2,700, depending on the particular circumstances. These limitations were increased to $1,600 and $2,900 by Public Law 90-275 in 1968.

They were increased to $1,900 and $3,200 by Public Law 91-588 in 1970.

They were increased again to $2,200 and $3.500 by Public Law 92

198 in 1971.

These same limitations would be increased to $2,800 and $4,100 under my bill, while the limitations for persons receiving benefits under the law in effect after June 30, 1960, would be increased to $3,200 and $4.400, depending upon the circumstances.

In my judgment, establishing new ceilings on outside income of $2.800 and $3.200 for aged single veterans or aged widows without children, before cutting off assistance from the Veterans' Adminis

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tration, does not strike me as any great extravagance on the part of the U.S. Government.

Mr. Chairman, the men and women who receive social security earned that social security through payments over many years to the Government.

The people who receive VA pensions have also earned their benefits— not by payments to the Government but by service to the Government in time of crisis. These men and women served their Nation faithfully; and now, when their needs are greatest, it is only fitting that their Nation should serve them.

I respectfully urge the subcommittee to take favorable action on H.R. 2686 and H.R. 2992.

STATEMENT OF HON. J. KENNETH ROBINSON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF VIRGINIA

Mr. ROBINSON. Mr. Chairman, as the sponsor of one of the bills under consideration by this distinguished subcommittee, I appreciate the privilege of offering this brief statement in behalf of H.R. 6361, which has as its purpose to amend title 38 of the United States Code to liberalize the provisions relating to payment of disability and death pension.

As the subcommittee is aware, the language of H.R. 6361 is identical with that of bills in which a number of colleagues have joined in sponsorship. The basic purpose of all such proposals is to insure equitable treatment for those veterans who have not received the full benefit of recent increases in authorized payments from the social security trust funds.

I am fully aware, Mr. Chairman, that, historically, we have provided, in the disability and death pension system, for an offset of other income, including social security, against the entitlement to these pensions. I do not quarrel with this concept, per se.

I respectfully suggest, however, that there is an essential unfairness in telling the veteran, in effect, that, while his Government has recognized that the impact of inflation requires an adjustment in benefits payable to social security beneficiaries, the veteran is not entitled to the full effect of such adjustment because, in consideration of his services in the Armed Forces of the United States in time of national emergency, and in view of his disability, he has been awarded a modest pension benefit.

I do not insist on the formula for correcting this injustice set forth in my bill, H.R. 6361, Mr. Chairman, but I do most respect fully urge that the injustice which has been perpetrated be corrected promptly in such manner as the subcommittee might find appropriate.

STATEMENT OF HON. DONALD M. FRASER, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MINNESOTA

Mr. FRASER. Mr. Chairman and members of the subcommittee, I genuinely appreciate the opportunity to appear before you today to testify on what I consider to be vitally needed legislation. I would like to discuss briefly legislation which I have introduced to remedy certain inequities relating to veterans' pensions.

H.R. 100 amends title 38 to make certain that recipients of veterans' pensions and widows' dependency and indemnity compensation will not have the amount of such pension or compensation reduced because of increases in monthly social security benefits.

As you know, to receive a pension, a veteran must either have attained the age of 65 or older or be totally and permanently disabled from nonservice-connected causes. Pensions for those veterans with service in World War I and after are subject to definite income limitations which are almost at the poverty level. A single, disabled or aged veteran cannot receive a pension if his incomes exceeds $2,600 annually. And no eligible veteran can receive a pension if his income exceeds $3,800, regardless of the number of dependents he may have.

The United States is experiencing an inflation which saw prices rise at an annual rate of roughly 612 percent over the past 6 months, and over 9 percent over the past 3 months. The purchasing power of those on fixed incomes, such as those veterans and their dependents who depend on Veterans Administration pension and compensation payments, suffers significantly. They pay just as much for a loaf of bread at the grocery store as everybody else. These men and women are usually too old or disabled to work. This group of low-income, aged, and disabled citizens must depend on congressional action to match rising prices and maintain the value of their incomes.

In the past, Congress has responded generously and fairly to maintain the real value of veterans' pensions and compensation. Congress recognized the need to offset the spiraling cost of living, as the recent increase in social security denotes. But now, many veterans will not be able to receive the increase intended by Congress, for they are in a higher income bracket due to the very social security increase-thus reducing their veterans' pensions.

Mr. Glenn R. Nielson, department commander of the American Legion in St. Paul, Minn., wrote me, "In my travels throughout the State of Minnesota, I have repeatedly heard complaints of hardship by veterans whose pensions have been reduced because of increases in social security benefits. This is an unnecessary hardship and we are confident that it was not the intent of Congress that veterans should be penalized because of the increase in social security benefits. We hope this can be corrected once and for all."

As the law now stands, over 1.2 million veterans receiving pensions will face a reduction in their VA pension because of this social security increase. 20,000 of our veterans will be dropped from the VA pension rolls entirely. 15,000 pensions will, in fact, suffer a loss in their aggregate incomes ranging from $38 to $168 annually. This means an aver age loss of approximately $108 annually to a veteran drawing a pension who is dropped from the rolls.

The reduction in veterans' pensions is hardly equitable. It creates an undue hardship on a segment of society which can least afford it. The increase in social security does not reflect nor result in an increase in purchasing power that exceeds needs. In fact, everyone who draws social security and is not poor will receive a substantial increase except the veteran receiving pension. Certainly Congress intended that our veterans and their survivors have the full measure of the social security increase provided for in Public Law 92-336 without a significant reduction in their veteran's pension.

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 comepusate (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.