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Washington, D. C. The committee met at 10 a. m., pursuant to recess, in the Old Supreme Court Room, The Capitol, Hon. Lister Hill presiding.

Present: Senators Hill, Pastore, Aiken, and Ives.

Present also : Bill Coburn, chief clerk; Ray Rodgers, assistant committee clerk; William G. Reidy and Melvin W. Sneed, professional staff members.

Senator Hill. The committee will come to order.

We will be happy at this time to hear from our colleague, Representative Teague, chairman of the House Select Committee To Investigate Educational Training and Loan Guaranty Programs Under the GI Bill.

Congressman, you may proceed in your own way.




Representative TEAGUE. Thank you, Senator Hill.

Senator, as you know, we have been working on this for about a year. We have tried to cover practically every phase of it, and we have found mistakes and weaknesses in practically every phase of it. The General Accounting Office has been of much help to us and the Veterans' Administration has worked with us in every way.

Senator, I am speaking for myself not as chairman of the committee because we do not have a final report, and we do not have a report on which the committee has as yet agreed.

One of the first big conclusions that I have come to is that no one could have administered this bill without a lot of waste and a lot of abuse. My committee is in the process of preparing a final report, and I believe that we are at a point as this confiict continues and the number of veterans increase that certainly we should recognize the shortcomings of the program that we just finished.

I think there is an attitude in this country that appropriating money completes the process as far as benefits to veterans are concerned. I think there is another side to that story. The veterans, and a number of members of our committee are veterans of World Wars I and II, are paying the taxes to support the veterans' program, and we owe it to the public and to other veterans who draw no benefits to see that we get a dollar's worth of good out of the money spent.

It seems as this conflict continues we may soon have a new UMT bill and that it is time to give careful consideration in order that we may start out on a program that will be a sound basis for future educational benefit for veterans. I am convinced that it will be necessary that an entire new law be written if the desirable features of the veterans' program are to be retained and if the inefficiency and waste is to be removed.

My committee expects to approach the task from that standpoint and at the present time we are preparing a draft of an entirely new bill which will suggest some fundamental changes in the program. I believe it is a hopeless task to amend and patch the present act in an effort to correct certain weaknesses which exist in the program.

S. 1940 proposes to extend the benefits of the present program to Korean veterans with a number of modifications. Some of these modifications appear desirable; yet others promise to bring about further administrative complexities. I do not believe that the Congress can make a major improvement in the veterans' program by amendatory legislation to the present act; however, I shall be guided in my comments by the draft bill under consideration and would like to discuss specifically certain points in the bill, as well as certain of its omissions.

The draft bill proposes to amend Public Law No. 2, Seventy-third Congress, as amended, by adding at the end thereof a new subsection. Veterans Regulation No.1 (a), as amended, would be further amended by adding at the end thereof a new part, known as part X.

The method of this legislation creates necessity for consideration of the basic authority of the Administrator of Veterans Affairs. Constant controversy has resulted in the present program, since the unlimited authority of the Administrator established by Public Law No. 2, Seventy-third Congress, as follows:

All decisions rendered by the Administrator of Veterans Affairs under sections 701-703, 704, 705, 706, 707–715, 716-721, of this title and sections 30a, 485 of title 5 of the regulations issued pursuant thereto, shall be final and conclusive on all questions of law and fact and no other official or court of the United States shall have jurisdiction to review by mandamus or otherwise such decision

Senator Hill. That pretty much makes him the final authority?

Representative TEAGUE. It gives him complete and final authority. Senator, I am not a lawyer, but I feel that in this investigation I have had my belief strengthened in the soundness of judicial review. I do not mean to intimate that people are not honest, but all of us make mistakes and we do not always know what is right and wrong, and certainly our courts should review actions that would send a school into bankruptcy,

Presumably this all-inclusive authority was established by the Seventy-third Congress in order that the Administrator might be in a position to render a final decision on the hundreds of thousands of individual claims for disability compensation which originate under his jurisdiction, and certainly I think that is right. Since the Servicemen's Readjustment Act of 1944 amended Public Law No. 2, Seventythird Congress, the sweeping authority of the Administrator was extended to all functions and transactions under the Servicemen's Readjustment Act of 1944.

The Administrator was placed in a position of contracting with educational institutions and ruling on the finality of those contracts



and was authorized to make final decisions concerning the legislative intent of the law, the meaning of regulations promulgated by him and any other questions which arose under the act. Educational institutions and individuals were precluded from judicial review and when the Administrator's authority was contested in court, the courts upheld his authority and ruled that they had no jurisdiction.

The unique authority enjoyed by the Administrator has been seriously questioned by a number of other congressional committees and Members of the Congress. The General Accounting Office has repeatedly called attention to the fact that decisions of the Administrator are not subject to their review and that the General Accounting Office is ineffective in dealing with the Veterans' Administration, since regardless of the merits of their case it can be resolved by an administrative decision by the Administrator which may or may not be based on legislative intent.

The House Committee on Expenditures in the Executive Departments has raised this question a number of times. The question was raised a number of times in the Senate, which I would like to remind you of. The House committee in its seventh interim report, published July 31, 1950, referred to the Administrator's authority with reference to the National Service Life Insurance Act as follows:

Section 608 of the National Service Life Insurance Act stands out, among similar grants of authority by the Congress, as being the most absolute and the most definite in its finality.

This subcommittee recommends that the Congress review the extent to which it has relinquished its control of public expenditures under the absolute authority granted the Administrator of Veterans Affairs through section 608 of the National Service Life Insurance Act.

In its ninth interim report, the House Committee on Expenditures in the Executive Departments reported on its administrative studies of the Veterans' Administration leave policy and overpayments of subsistence in the Veterans' Administration. That committee again called attention to the unrestricted authority of the Administrator.

The Comptroller General again has called attention to the unlimited authority which the Congress has bestowed upon the Administrator of Veterans' Affairs. These broad powers have prevented the Comptroller General from taking direct action with respect to expenditures resulting from the interpretations of the Veterans' Administration as herein reported.

This question has been repeatedly debated on the floor of the Senate and on October 12, 1949, Senator Humphrey commented on the attitude of the Veterans’ Administration in exercising its unlimited authority and ignoring the intent of Congress. Senator Humphrey's statements were as follows:

In other words, the bill, if enacted into law, will definitely prescribe certain regulations as to the amount of authority the Veterans' Administration has in promulgating regulations. Somebody might say “Why should we do this?" I will tell the Senate why. A conference report on an appropriations bill came to the floor of the Senate, and the Senate disagreed with certain language in the report. Thereafter the Senate Committee on Labor and Public Welfare held hearings in order to write the kind of language that would protect not only the veteran but the school and the Government. That language was carefully written. It was discussed with the Veterans' Administration. A proviso was placed in the appropriation bill which we thought, in view of the hearings, in view of the constant conversation and talk we had had on the subject, would clarify this situation once and for all. But, Mr. President, despite the language, despite the hearings, despite the time devoted to this matter, and despite the


complete understanding we had, the Veterans' Administration in instruction 1 (a) simply ignored what we had done and ignored the whole background and the legislative intent of the proviso which we incorporated.

During the same debate Senator Douglas made the following observations:

Is not one of the great difficulties with our whole system of administration the fact that the various Government departments, instead of going to the Attorney General to obtain a legal opinion, have set up their own legal departments, with solicitors and lawyers in them, named by the heads of the departments, and then they ask their subordinates as to what they can do, and in nearly every case they receive opinions in support of what they contend to be their powers.

On the same subject Senator Chavez made the following statement:

The law should be interpreted the way it was intended by Congress. As the Senator from Illinois (Mr. Douglas) has so well pointed out, the reason the Veterans' Administration acts in the way it does is that the interpretation of the law comes from within the Administration. The law is interpreted by those who are working for the Veterans' Administration, and not by those who are interested in interpreting the law for the benefit of the ones whom Congress intended to benefit.

This matter came up in the Senate on August 27, 1951, in connection with Senate Resolution 124, which the Senate was considering as a result of a failure by the Veterans' Administration to interpret Public Law 610 in accordance with its legislative intent. With reference to Senate Resolution 124, Senator Humphrey made the following statement:

First of all we passed a specific bill on this subject, which was cosponsored, as I recall, by the senior Senator from Ohio (Mr. Taft), and in the House by Representative Teague, of Texas, I believe. The bill was passed unanimously and it was signed by the President. Despite that the Veterans' Administration counsel decided he knew more than the Congress, and continued to rule just as he had ruled previously. Then we had a conference report in connection with an appropriation bill, which spelled out the language we wanted, the legislative intent, and again the Veterans' Administration legal counsel said, “We are right and the Congress is wrong."

So what the resolution amounts to is a directive to the Veterans' Administration to administer the Servicemen's Readjustment Act, pertaining to its educational features as the law is written, as the legislative intent of the Congress is written in the report and as it is found in the debates on the House and Senate floors. The resolution provides that the law shall be administered, notwithstanding the legal counsel, as it was intended to be administered by the Congress.

Senator, about this time Senator Taft wrote General Gray asking for an interpretation. General Gray furnished me an answer to that letter and Senator Taft furnished me a copy, and I took the two letters and sent them over to the Legislative Reference Service and asked them for an interpretation as to who was right and who was wrong, and they summarized the situation as follows:

The requirements of the Federal Register Act are that the rules and regulations of the Veterans' Administration be published. Compulsion is absent, however, and lack of enforcement by judicial review may leave claimants in many cases without a remedy other than an appeal to Congress.

While no specific exemption was afforded the Veterans' Administration in the Administrative Procedure Act, the saving of existing provisions of law precluding judicial review in most cases contributes to the situation whereby claimants must take their cases to Congress.

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With reference to interpretations made by the Veterans' Administration of Public Law 610, Eighty-first Congress, the Legislative Reference Service made the following comments:

I believe that Congress created wording commensurate with that intent in the enactment of section 2, Public Law 610, and that the Administrator can avoid his responsibility in effectuating that intent only on the basis of a technicality.

Acknowledging his power, I believe the Administrator has acted arbitrarily in this situation and that he should have issued instructions commensurate with the intent as expressed in the report. Despite . his protestation that "If the Congress

does not want me to do what I am doing they certainly have the right to change it

When Congress indicates its disfavor of his administration of a program and enacts remedial legislation designed to effect a change the Administrator fails to effectuate this policy

This is indicative of the determination of the Administrator that he rather than the Congress shall establish policy and it further indicates a determination on his part to operate outside the purview of Public Law 610 if possible.

We have witnessed a situation of the Administrator of Veterans' Affairs interpreting the intent of Congress, entering into contracts with educational institutions and making all final decisions concerning questions which arise under these contracts.

Senator, recently we had a case where the Veterans Administration office in Texas told a man that he could start a course in upholstering. He had an auto-mechanic school, and it was approved in Texas. He rented a building, hired instructors, and the case came on to Washington, and, as I remember, I am not sure, but I think there were four reversals in the Department itself.

Finally the man had to discontinue his course, and he lost something like $10,000.

Senator Hill. He spent all that money getting ready?

Representative TEAGUE. Yes, sir. It seems to me that man should have been able to go to the courts and been able to enter a claim that he was done an injustice, because I think he was.

My committee has studied cases of repudiation of contracts, questionable interpretations made by the Veterans' Administration, and regardless of the merits of the case the decision of the Administrator is final. It is obvious that some person or agency must be empowered with authority to administer the act and I do not disagree that it was perhaps wise that the Administrator be given final administrative authority in deciding individual pension claims.

I do believe that we have a dangerous situation where an administrative officer of the Federal Government and in fact all employees under him enjoy the right to make a final administrative interpretation in their dealings with the educational institutions of this country and in many cases State agencies and State schools, under a law which precludes further judicial review. Before extending the educational benefits to additional groups of veterans I think that it is wise that the Congress thoroughly consider this question before continuing the Administrator's broad authority to make final determinations in connection with the veterans' educational program.

I firmly believe that the new act should not amend Public Law No. 2, Seventy-third Congress, and continue the Administrator's broad and final authority, but should be a new and separate act defining specifically those areas in which the Administrator should have final

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