my keeping this material for many weeks, and perhaps months, longer. I am aware that your staff is capable of a much more efficient and proficient analysis. If there is anything else I can do, please let me know. Sincerely, HARRY A. SCHWEIKERT, Jr., Mr. DORN. And now we will hear from the American Legion, John J. Corcoran, and he will be accompanied by Harold E. Stringer. STATEMENT OF JOHN J. CORCORAN, DIRECTOR, NATIONAL REHABILITATION COMMISSION, THE AMERICAN LEGION; ACCOMPANIED BY HAROLD E. STRINGER, DIRECTOR, LEGISLATIVE COMMISSION; AND EDWARD G. GOLEMBIESKI, ASSOCIATE DIRECTOR Mr. STRINGER. Mr. Chairman, members of the subcommittee. For the record, my name is Harold E. Stringer. I am national director of the American Legion Legislative Commission. With me this morning is John Corcoran, the director of the American Legion National Rehabilitation Commission and Edward G. Golembieski, assistant director of the commission. They will be our witnesses, Mr. Chairman. Mr. Corcoran is prepared to make his statement at this time. Mr. DORN. Mr. Corcoran, you may read your statement or summarize it. But just proceed in any manner that you care to; we are always glad to have you over here. Mr. CORCORAN. If it is agreeable, I would like to submit the written statement and mainly summarize what we have said in the written statement. (The statement referred to follows:) STATEMENT BY JOHN J. CORCORAN, DIRECTOR, NATIONAL REHABILITATION COMMISSION, THE AMERICAN LEGION Mr. Chairman and members of the subcommittee, we always look forward and welcome the opportunity to appear before this committee to present the views of the American Legion on legislation that pertains to the Veterans' Administration compensation program for veterans and their survivors. Of the many bills before the committee that are related to service-connected benefits, seven are of specific interest to the American Legion because they fulfill legislative objectives established by mandates of the 1964 Annual National Convention and the October 1964 meeting of the national executive committee. Those bills supported by this organization would provide for→ Increases in death and disability compensation; Additional compensation for those veterans rated less than 50 percent who have dependents; Equalization of the compensation payment structure; Improvements in the dependency and indemnity compensation program for dependent parents; and Three relatively minor adjustments in the disability compensation provision of law to provide additional benefits for some disabled veterans. With your permission, Mr. Chairman, we will proceed with a specific discussion of the purpose of each of our legislative objectives. INCREASES IN COMPENSATION PAYMENTS Compensation, as defined by title 38, United States Code, is a monthly payment made by the Administrator of Veterans' Affairs to a veteran because of a serviceconnected disability, or to a widow, child, or parents because of the serviceconnected death of a veteran occurring before January 1, 1957. Compensation for service-connected disability Compensation payments for service-connected disabilities were last increased October 1, 1962, the effective date of Public Law 87-645. Aside from the statutory rates established by Congress for the more seriously disabled, payments of compensation are based on a schedule for rating disabilities. Under law, the Administrator of Veterans' Affairs adopts and applies a schedule of ratings of reductions in earning capacity from specific injuries or combination of injuries. These ratings-as far as practicable are based upon the average impairments of earning capacity resulting from such earnings in civil occupations. The schedule adopted by the Administrator provides 10 grades of disability in increments of 10 percent from 10 to 100 percent. The 1945 schedule for rating disabilities, as amended and republished in looseleaf form in 1957, is the current document for evaluating the degree of disability for compensation payments. Whatever its shortcomings may be, this flat rate schedule, supported by the statutory ratings provided by Congress for the more seriously disabled, seems to meet with general approval because of its relative simplicity, definiteness, and application. Assuming there is agreement among us that the VA schedule for rating disabilities is an adequate standard with which to measure the degree of effect of physical or mental impairment of a veteran's economic adjustment, we must next examine whether these payments of compensation restore the economic loss that has resulted from the service-incurred disability. To enable veterans to cope with the ever increasing cost of living and advancing standard of living, Congress made the following increases in the monthly rates of compensation payable for total (100 percent) disability: 1 This maximum does not include the additional amounts later authorized for dependents of those rated above 49 percent or the aid and attendance rate while not hospitalized, as provided under 38 U.S. C. 314(r). Comparative data compiled by the President's Commission on Pensions from an October 1955 survey by the Bureau of Census and the survey of individuals on the Veterans' Administration compensation rolls indicated that the total annual income of veterans with service-connected disabilities was about $365 less than that of nondisabled veterans and the median income, including disability compensation, of veterans with a 100 percent disability was about $1,300 below the median income of all veterans. Table 466 of the 1964 Statistical Abstract of the United States gives the following figures on median income of male employed civilians : Current reports say that the median income in 1964 for these employees is in excess of $5,400. From the foregoing, it seems to us that, from the standpoint of an average impairment or flat rate schedule for rating disability, compensation payments do not fully restore to a disabled veteran the loss of annual income. In addition, we believe these data establish rather clearly that the increases in compensation payments granted since 1933 have failed to keep pace with the increased standard of living as well as the rising cost of living as illustrated by the ever upward movement of the median annual income of the male employed civilian. A comparison of the median incomes given in the statistical abstract for 1947 and 1962 gives a ratio of 2.17 to 1. Application of this ratio to the rate of compensation for total disability payable in 1946 indicates that $300 in monthly compensation should have been payable in 1963 if the objective is to have these benefits keep pace with the rising economic income of fully employed male civilians. Much discussion has been associated with the 1963 definition of poverty. Under this definition, a family of two persons or more with an income of less than $3,000 was considered to be in poverty circumstances. The present analysis, according to the March 1965 Monthly Labor Review, pivots about a standard of $3,130 for a family of four persons. This standard is based on about 70 cents a day per person for food and an additional $1.40 for all other items-from housing and medical care to clothing and carfare. A somewhat less conservative but by no means generous standard requiring 90 cents a day for food per individual with a modest increase in the cost of the other necessities of life would raise the poverty delineation to $4,000. Patently, the $250 compensation plus additional compensation for dependents now payable to a veteran with a total disability who has a wife and two or more children is inadequate if he has no other sources of income. His plight is well illustrated by the 1955 comparative data compiled by the President's Commission on Veterans Pensions. Mr. Chairman, in view of the foregoing, the American Legion is supporting enactment of H.R. 7567, a bill to increase the rates of disability compensation, and H.R. 7569, a bill to increase the additional compensation for veterans with dependents. While these bills, if enacted, may not fully restore to veterans the economic loss flowing from their service-connected disabilities, they will, we believe, go far toward alleviating their financial need. Equalization of the system of additional compensation for dependents of veterans With the enactment of Public Law 877, 80th Congress, and its amendment by Public Law 339 of the 81st Congress, factors other than disability were introduced to determine the amounts of compensation payable to veterans with disability in excess of 49 percent who have a wife, child, or a dependent parent. We have no objection to this singular departure from the historic concept of disability compensation, but we fail to see any validity in the reasons advanced for denying the right to this additional compensation to veterans with a similar class of dependents whose service-connected disabilities are rated at less than 50 percent for compensation. In our opinion, the denial of this additional benefit to this group of veterans further compounds the inequity that exists because the rates of disability compensation and the percentages of disability no longer bear the same ratio to that payable for total disability. Our argument is well illustrated by the hardship imposed on a veteran with a wife and three children whose disability rating is reduced from 50 to 40 percenta reduction in compensation from $138 to $77. This loss of $61 in benefits is significant when you consider that $58 is payable for a disability of 30 percent. H.R. 7569, referred to in the earlier part of this statement under increased disability compensation, would equalize the system of additional compensation for dependents of service-disabled veterans. A balanced system of disability compensation Our discussion of the need for disability compensation increases ended with the statement that we favored the enactment of H.R. 7567, a bill to increase the rates of disability compensation to make them consistent with the economic impairment arising from the disability as well as the continuing increases in cost of living. A feature of that bill is that the rates proposed for disabilities rated less than total or 100 percent would restore balance to the disability compensation structure. Previously in this statement, we referred to the authority granted the Administrator of Veterans' Affairs to adopt and apply a schedule for rating disabilities and the philosophy underlying the degree of impairment. Prior to July 1, 1952, there was a correspondence in the ratio of percentage disability to 100 percent with that of the disability compensation assigned to the amount payable for total disability. Today, this is no longer true. As an illustration, compensation provided for 100-percent disability is $250, while that provided for 50 percent is $107 and not $125 as would have been the case under the structure in effect prior to July 1, 1952. We urge your favorable report on this part of the bill to restore the balanced system of disability compensation and to make meaningful the basic principle of the VA Schedule for Rating Disabilities; that is, that it be "a schedule of ratings of reductions in earning capacity from specific injuries or combination of injuries and these, as far as practicable, shall be based upon the average impairments of earning capacity resulting from such injuries in civil occupations." Death compensation In reviewing the history of wartime death compensation payable under 38 U.S.C. 322, it is seen that Congress last increased the monthly rates in 1954, notwithstanding the fact that there has since that date been a considerable increase in the cost of living. Statistics compiled by the Bureau of Labor Statistics, in terms of the 1957-59 index, disclose that the Consumer Price Index rose from 93.6 in 1951 to 108.9 at the present time, an increase of more than 16 percent. Most widows and children and some parents did receive higher awards effective January 1, 1957, by electing to receive dependency and indemnity compensation provided by Public Law 881, 84th Congress, the Servicemen's and Veterans' Survivors Benefits Act. A majority of those widows and children who initially chose to remain under the death compensation provisions of law have since elected to receive the DIC benefit. Quite recently, the Veterans' Administration sent about 9,000 form letters to those identified by the computer as being entitled to a greater benefit under Public Law 881. It is our understanding that about 5,000 of these have, on the basis of this letter, elected to receive dependency and indemnity compensation. There is, however, a group of widows and children and parents receiving death compensation who may never receive dependency and indemnity compensation because of the bar in 38 U.S.C. 417(a). If a veteran exercised the option to continue an inservice Government insurance premium waiver and the waiver was in force at the time of his death on or after May 1, 1957, his surviving widows and children as well as parents are prohibited from receiving dependency and indemnity compensation, the greater benefit. Admittedly, this group is not large; but, no matter how small, it is the belief of the American Legion that these survivors should receive benefits equivalent to those under the act providing dependency and indemnity compensation and should not be penalized because of a decision of the veteran. This provision of the law is clearly inequitable in view of the fact that those who initially chose to receive death compensation along with servicemen's indemnity, a free insurance coverage, and who, having exhausted the indemnity payments, have since elected to receive dependency and indemnity compensation. Another group of survivors, the parents, who continue to receive death compensation under the above provisions of title 38, United States Code, even though there is no bar to their electing to receive dependency and indemnity compensation, chose to do so because it is to their advantage to remain under the old provisions where the annual income limits and the death compensation rates are somewhat more liberal than those provided under the dependency and indemnity provisions of 38 U.S.C. 415. Although it is to the economic advantage of these dependent parents to remain under the old provisions of law, the death compensation provided thereunder, last increased by Congress in 1954, is insufficient to meet present costs of essential goods and services and drugs and medicines and to give them the means to live somewhat in consonance with others in their community under the current high standards of living. Under the provisions of 38 U.S.C. 322, if both parents are surviving, they receive $40 each, and if one is surviving, $75 is payable. Dependency of parents is determined under the criteria of 38 U.S.C. 102. In part, the law states that dependency of a parent shall not be denied where the monthly income for a mother or father, not living together, is not more than $105, or where the monthly income of a father and mother living together is not more than $175, plus, in either case, $45 for each additional member of the family whom the mother or father is under legal obligation to support, as determined by the Administrator. In considering this matter, the committee is asked to note the fact that this is, generally, a closed group of beneficiaries, that is, they are parents of veterans whose service-connected death occurred before January 1, 1957. As such, the number entitled each year will decline, not increase. Enactment of H.R. 7568 would be in keeping with our Nation's traditional liberal treatment of those dependent survivors of veterans whose death resulted from a service-connected condition. DEPENDENCY AND INDEMNITY COMPENSATION Dependency and indemnity compensation is a monthly benefit payable by the Administrator of Veterans' Affairs to a widow, child, or parent because of a service-connected death occurring on or after January 1, 1957, or pursuant to an election of a widow, child, or parent in the case of such a death occurring before January 1, 1957. Liberalization of the dependency and indemnity program for dependent parents Although the rates of dependency and indemnity compensation payable to dependent parents under 38 United States Code 415 were adjusted upward by 10 percent on enactment of Public Law 21, 88th Congress, the annual income limitations which control eligibility to this benefit have not been increased since they were set up by the enabling act, Public Law 881 of the 84th Congress. In the light of statistical data, it is our thought that the present rates and corresponding income limitations are unrealistically low. The 1963 report of the President's Council on Aging contains interesting information on the incomes and living costs of elder citizens. Since, in general, dependent parents are in this elderly category, the information appears to be particularly pertinent for measuring the needs of dependent parents and for formulating entitlement criteria for payment of dependency and indemnity compensation. According to this report, an average elderly couple living in an average city had a yearly income of $2,530 or slightly more than $210 a month. Living alone, the average elderly person had an income of only $1,055. In this average city, the modest but adequate budget established that an elderly couple renting a small house or an apartment would need $3,010 a year to provide them with goods and services necessary for a healthful self-respecting living and permit normal participation in community life. Unfortunately, this report did not give a measure of the needs of a single elderly preson or one living alone. Some measure of their need may be gleaned from the discussion of the poverty standard in the Monthly Labor Review of March 1965. Here, the economic separation point of an unrelated individual from poverty is an income of $1,540. The bill, H.R. 7570, supported by the American Legion, would liberalize the DIC program for dependent parents in two ways: By increasing the annual income limits and by increasing the monthly benefit by $5. MISCELLANEOUS Enactment of the following bills is supported by the American Legion: H.R. 3805 would provide that special consideration for the purpose of compensation shall be given those veterans who have suffered deafness in one ear, the result of a service-connected disability, and who suffer deafness in the other ear, not the result of service and not the result of his own willful misconduct. Section 360 of title 38, United States Code, now permits such special consideration by the Administrator of Veterans' Affairs in cases of blindness or where there is bilateral kidney involvement. Since deafness in both ears is a severe impairment-one that denies a veteran the full use of an essential sense and seriously limits his ability to communicate with his fellow man-it is our feeling that the purpose of this bill deserves favorable consideration by Congress. H.R. 5509 would amend 38 U.S.C. 3104 to authorize payments of pension under chapter 15 to a veteran, otherwise entitled, in addition to a statutory award of disability compensation under section 314 (k) of the title because of a serviceconnected loss or loss of use of one foot, or one hand, or both buttocks, or blindness or one eye having only light perception. At present, 38 U.S.C. 3104 (a) provides that not more than one award of pension or compensation shall be made concurrently to any person based on his own service. Thus, a veteran entitled to disability compensation and to the statutory award payable under 314(k) for any of the conditions set forth above cannot draw both compensation and pension. He must elect one or the other-usually the greater benefit. This bill is directed to those veterans who suffer a serviceconnected injury and who suffer loss of physical integrity as well. Because of this loss of physical integrity, Congress in its wisdom and generosity provided a statutory award-an award in addition to that payable based on a schedular evaluation of the disability. Since statutory awards were designed by Congress to compensate a veteran for embarrassment and discomfort and not impaired earning or economic readjustment, it is our thought that they should not be taken away from a veteran when he chooses to receive disability pension upon meeting |