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The bill would provide college, below-college-trade and vocational, on-the-job, and farm training. Avocational and recreational training would be prohibited. Subsistence, supplies, and equipment allowances in maximum amounts ranging from $70 to $125 a month would be paid to full-time trainees.

The amount of subsistence allowance would vary with the type of training and the number of persons dependent on the veteran trainee. Where the veteran has other income from productive labor available, his total income, including subsistence, could not exceed $215 if he has no dependents, $275 if he has one dependent, or $295 if he has more than one dependent. No subsistence would be paid for less than half-time training.

All income from the productive labor of the veteran would be considered in computing the amount of subsistence to be paid. Under the provisions of the bill the Government would pay one-half of the cost of tuition and fees up to a maximum payment of $300, except that where no subsistence is paid the Government would pay the full cost of tuition and fees up to $600.

The bill would also establish minimum standards for on-the-job training, for schools operating for profit, and for institutional onthe-farm training. It would give the Administrator of Veterans' Affairs the authority to approve or disapprove all course changes after the first and would prohibit him from authorizing benefits where training is substandard or where fraud has occurred.

Provision is also made for vocational advisement and guidance, including reimbursement of veterans for travel expense incurred when advisement and guidance is required; job counseling; and employment placement services comparable to those granted World War II veterans by title IV of the GI bill, Public Law 346, Seventy-eighth Congress.

Although S. 1940 is in general patterned after the GI bill, its provisions are substantially different from the education and training provisions of that law in certain important respects.

(a) Eligibility: Eligibility requirements would remain the same as under the GI bill except that for a full 4 years of eligibility the veteran's education or training must have been interrupted by reason of entrance into service. Veterans who had not passed their twentythird birthday on June 27, 1950, or on the date they entered military service would be deemed to have had their education or training interrupted. Veterans whose training was not interrupted would be eligible for a maximum of 1 year of training.

(6) Entitlement: Eligible veterans would receive 1 month of entitlement for each month of service, whereas the GI bill provided similar entitlement plus 12 months. Under the provisions of S. 1940, training received under the GI bill would be deductible from the 4year maximum to which a veteran would be entitled. Veterans whose training was not interrupted would be entitled to a maximum of 1 year of training for refresher purposes. Deadlines for entering and completing training would be reduced from 4 and 9 years respectively, as they were established by amendments to the GI bill, to 2 years after release from active service, and 7 years after the date to be established by Presidential proclamation or congressional resolution.

(c) Subsistence, supplies, and equipment: The allowances for subsistence would be at the same rates as under the GI bill. However, to the subsistence allowance would be added $5 per month to cover supplies and equipment. This would enable the veteran to purchase supplies and equipment himself and would relieve the Government of the administrative burden of purchasing these items.

Available information indicates that $5 per month is somewhat more than the average cost to the Government of these items under the GI bill. Income ceilings under the draft bill would be increased $5 to compensate for supplies and equipment expense. The subsistence would not be paid until after attendance certification rather than without such certification as is the practice under existing law.

Under S. 1940 no subsistence would be paid for less than one-halftime training; under the GI bill subsistence is paid for one-fourthtime training. Provisions pertaining to the payment of subsistence to institutional on-the-farm trainees would be modified to make them more consistent with on-the-job training subsistence provisions. For these two types of training the bill also provides for the automatic adjustment of subsistence payments as the course progresses in accordance with a preestablished formula, rather than for adjustment on the basis of the changing relationship between income and ceilings as was the case under the GI bill.

(d) Tuition: Whereas under the GI bill the full cost of tuition and fees up to a maximum of $500, less supplies and equipment, is borne by the Government, S. 1940 provides that, where subsistence is paid to the trainees, the Government would bear one-half the cost of tuition and fees up to a maximum Government payment of $300. Where no subsistence is paid the trainee, the Government would pay tuition and fees up to a maximum of $600 for an ordinary school year.

(e) Course changes: S. 1940 would require the approval by the Administrator of all course changes after the first. The GI bill as amended, on the other hand, requires only that changes from one general field to another be approved by the Administrator.

(f) Award of benefits: S. 1940 provides that the Administrator may deny benefits for job, farm, or profit-school training if either he or the State approval agency finds that the course fails to meet the requirements of the law or if fraud exists. Under the GI bill the Administrator could deny benefits only if he found fraud to exist. He could not deny benefits for substandard training if the school was approved by the State approval agency

These differences between the provisions of S. 1940 and the education and training provisions of the World War II GI bill are distinct improvements, in our opinion. They represent the minimum modification which should be made if similar readjustment benefits are to be extended to veterans of service during the current emergency. The provisions of the GI bill represented a new and more positive approach to the veterans' readjustment problem than the pensions and bonuses previously provided.

There is ample evidence that the education and training received by millions of veterans has benefited the Nation as well as themselves. However, there were abuses which impaired the readjustment of some veterans and added to the cost of the program. The provisions of S. 1940 would eliminate the most serious abuses which occurred under the GI bill and make possible the achievement of the objectives of that bill at substantially smaller cost to the country.

It is important to your consideration of this matter to emphasize that S. 1940 is essentially a revision of the GI bill with certain important changes to make possible more complete achievement of the objectives of the bill. This is important because the World War II GI bill was itself in the nature of an experiment in that it represented a new type of effort to aid the veteran to readjust himself to civilian life. It was enacted in anticipation of serious unemployment resulting from mass demobilization at the close of an extended period of all-out war. Because of the experimental nature of the GI bill and because of the different situation now confronting the Nation, we are sure that your committee will want to give very fundamental consideration to this important matter.

The Armed Forces are in the process of expanding to a level of approximately 3.6 million men. Indications are that the Armed Forces will probably remain somewhere near this level for an extended period of years. A substantial proportion of the total personnel of the Armed Forces will have to be obtained through selective service or other involuntary channels in order to maintain this strength.

We are therefore entering upon a situation unlike any which has previously confronted the Nation-a long period of partial mobilization. The implications of such a situation from the standpoint of veterans' benefits are unprecedented. The situation also contains social, political, and economic implications which must be considered.

In the first place, since it is almost certain that a very large proportion of the maturing male population will become members of the Armed Forces, and hence by definition will become veterans, the proportion of the population eligible for veterans' benefits will increase steadily. As the number of veterans increases, the potential cost of veterans' benefits programs increases accordingly.

Second, previous distinctions, statutory and otherwise, between wartime and peacetime service can no longer be sharply drawn. Technically, no state of war exists in Korea, but it is a matter of national policy, as well as equity, to consider veterans of the Korean conflict persons with wartime service.

It can only be a matter of conjecture whether further response by the United States to provide troops for a United Nations effort to keep or restore peace will involve the combat conditions of the Korean campaign. It is not a matter of conjecture that maintenance of adequate armed strength will involve training far different from the kind of activity on the part of our Armed Forces once considered normal in times of peace.

Thus it appears to the Bureau of the Budget impossible to continue to make either a logical or an equitable distinction between a veteran who is drafted or called to active duty for fighting service in Korea or in preparation for such service and a veteran who may be drafted or called to active duty after the conclusion of the Korean campaign. It seems to us inevitable that extension of benefits of a new Servicemen's Readjustment Act to all members of the Armed Forces during , the period of the United Nations campaign in Korea will mean extension of similar benefits to all members of the Armed Forces during the entire future period of the use of the draft and involuntary call to active duty of the Reserves.

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If the reasoning of the foregoing paragraph is correct and if circumstances are as we believe they will be, it means that the United States must consider most carefully not only the justification for new or additional aids to veterans but also the scope of such programs, the purposes they are designed to fulfill, and the relationship between them and other programs which are now available or may be made available at public expense to all of the people, particularly to those in the younger age brackets and their dependents.

The concept of readjustment for the millions of veterans of World War II, whose lives and expected means of livelihood were interrupted by military service, was a great advance over the concept of bonus and adjusted compensation adopted after World War I. However, additional legislation in this field should take into account the further strides which we have made in the United States in providing greater opportunities for education and vocational training, and for freedom from want when early disability or death strike down the wage earner in the family. General programs in which veterans participate may well be of greater value than programs designed only for veterans.

To meet the present situation, the extension of the principles underlying S. 1940 is sound. The experience gained under the GI bill should make it possible to write legislation which contains substantial improvements over the earlier act. It is the responsibility of the Bureau of the Budget, however, to urge that the Congress not overlook the fiscal implications of such legislation. The billions of dollars which will be involved by the enactment of legislation along the lines of S. 1940 must be taken into account in relationship to other national needs. In our judgment, the present and prospective requirements of continuing partial mobilization mean that great care must be exercised to avoid extending benefits which might impair our ability to sustain the defense effort or be out of proportion in terms of other national needs.

These changes in our national situation all point to the need for very careful consideration of the problem of veterans' readjustment benefits. In this connection, the study now being completed by a select committee of the House of Representatives, under the chairmanship of Representative Teague, of the GI bill education and training program is, to the best of our knowledge, the most comprehensive which has been made. We believe that any legislation considered by the Congress should take into account the findings of the Teague committee, and we recommend that your committee not complete its action on S. 1940 prior to the time that the report of the House committee becomes available.

The Bureau has not discussed the detailed provisions of S. 1940 with the President. Therefore, I am unable at this time to advise as to the relationship of its specific provisions to the program of the President. I am, however, authorized by the President to indicate his belief that the principles of readjustment underlying the bill are sound and that he supports the objectives of the measure. He agrees with the Bureau that any expression of Presidential views on the specific kind of educational and training opportunities to be authorized and the extent to which they should be financed by the Federal Government should be deferred until he has had an opportunity to study the forthcoming report of the House Select ('ommittee to In

vestigate Educational Training and Loan Guaranty Programs Under the GI Bill.

That is signed by Elmer B. Staats, Acting Director.
The CHAIRMAN. Are there any questions?

Senator Aiken. I think most of my questions are not expected to be answered by the Bureau of the Budget. Has the Bureau made any estimate of the probable cost over the next few years!

Mr. Hughes. We have worked with the Veterans' Administration in the preparation of their estimates. They have detailed figures, I believe, to present to the committee. Their figures indicate a probable cost in 1953, which we agree with, of approximately $250,000,000.

They estimate a 1954 cost of approximately $500,000,000, and a peak cost, leveling-off cost, of approximately $600,000,000 a year.

Senator AIKEN. When is it going to level off?

Mr. Hughes. About 1955 or 1956. The program will continue to grow, we believe, until 1955 or 1956.

Senator AIKEN. Are those estimates in addition to the present GI education program?

Mr. HUGHES. Yes, sir. Of course, the present costs will decline very sharply, particularly this year and next year, as eligibility under the World War II GI bill expires.

Senator AIKEN. About what is the present cost?

Mr. Hughes. The 1952 cost, as I recall offhand, is approximately $1.5 billion.

Senator AIKEN. Unless more men are taken into the service, continuation of the program would represent a decreasing cost but possibly a more permanent cost?

Mir. HUGHES. That is correct. I wanted to make sure I was clear about the World War II bill. Even if more men are taken into the service, eligibility for all practical purposes under the World War II bill will expire this year, that is, eligibility to initiate a course expired on July 25 of this year. Therefore, new entrances will not take place.

The remaining costs are costs attributable to men who entered on training previously.

Senator Aiken. Have you any estimate as to how many remaining veterans of World War II lost out on their benefits through the mistaken idea that enrollment in a school qualified them? Perhaps we should ask the Veterans' Administration in that regard.

Mr. HUGHES. May I comment to this extent, that the deadline date is a date which has been in the law for a rather long period.

Senator AIKEN. That is correct.

Mr. Hughes. A good deal of publicity was given to the interpretation which was made by the Veterans Administration. I think it is entirely posisble that there was some misunderstanding of what initiation of a course constituted. However, it has apeared to us that, in view of the time interval involved and the publicity which was given to the deadline date, the number of veterans who through misunderstanding were in need of readjustment and did not get it—the number would be very small.

Senator AIKEN. Well, there were some who felt that if they were enrolled in a course to start August 1 they qualified, whereas under the Veterans' Administration ruling and under the law they were not,

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