faith on the part of the person or persons having an interest in obtaining a waiver of such recovery, or the collection of such indebtedness.

In our experience in claims for waiver of recovery of payment and overpayment of benefits and of indebtedness to the VA, the application of the present provisions of title 38, United States Code, has resulted in undue hardship.

In submitting the proposed changes, the Administrator said that they would be brought in line with the statutory authority given the General Accounting Office under section 5584 of title 5, United States Code, in claims for overpayment of pay.

To be fully in accord with the statutory authority given the General Accounting Office, the Administrator's proposed measure should be enlarged to provide a person who has repaid to the Veterans' Administration all or part of the amount of the payment or overpayment with respect to which a waiver is granted under section 3102(a) is entitled to the extent of the waiver, to refund, by the VA, of the amount repaid if application for that refund is made within 2 years of the effective date of the waiver.

In conclusion, the American Legion expresses its gratitude to you and the members of this subcommittee for your consideration of our views. Thank you, Mr. Chairman.

Mr. DORN (chairman of the subcommittee, presiding). Mr. Hammerschmidt.

Mr. HAMMERSCHMIDT. Mr. Chairman, I have no questions. I would just like to thank Mr. Golembieski for a very fine comprehensive statement, and also thank Mr. Wertz for his appearance before the committee this morning.

Mr. DORN. Mr. Teague?

Mr. TEAGUE of California. Mr. Chairman, just this, I am sure that you gentlemen realize that while I think without exception, at least speaking for myself, we do favor a raise and perhaps several of the other recommendations that you have made, if I understand correctly, compensation paid for nonservice and for service-connected disability is not subject to the Federal income tax.

Mr. GOLEMBIESKI. No, sir; it is not.

Mr. TEAGUE of California. That is something that we have to consider in balancing the return when we get to comparing it with a factory worker.

Mr. GOLEMBIESKI. The figure cited was the bring-home pay, this was after taxes, spendable income which is available to them.

Mr. TEAGUE of California. Thank you.

Mr. DORN. Thank you, Mr. Teague. Mr. Golembieski, thank you very much.

Mr. GOLEMBIESKI. Thank you very much.

Mr. WERTZ. Thank you.

STATEMENT OF FRANCIS W. STOVER, DIRECTOR, NATIONAL LEGISLATIVE SERVICE, VETERANS OF FOREIGN WARS OF THE UNITED STATES, ACCOMPANIED BY NORMAN D. JONES, DIRECTOR, NATIONAL VETERANS SERVICE

Mr. DORN. The subcommittee will now hear from the Veterans of Foreign Wars, Francis W. Stover, director of the national legislative service.

Mr. Stover, we are very happy to have you and you may proceed in any way you wish.

Mr. STOVER. Thank you very much.

Mr. Chairman and members of the subcommittee, thank you for the privilege of appearing before this distinguished subcommittee to present the views of the Veterans of Foreign Wars with respect to bills which propose to increase rates of disability compensation for the service-connected disabled.

Disability compensation is paid to veterans whose average earning capacity is impaired because of the disabilities received as the result of their military service. Additional compensation is paid for dependents of veterans whose basic compensation is rated not less than 50 percent.

In addition to these rates, there are statutory awards paid to certain veterans who have suffered certain anatomical losses or losses of use, such as an extremity, eye, hearing, and so forth.

The Veterans of Foreign Wars has always given its highest consideration to those who have been wounded on the battlefield and suffered injuries and disabilities while on active duty in the Armed Forces. The Veterans of Foreign Wars has always held to the principle that disability compensation is the cornerstone of the structure of veterans rights and benefits from which all others flow.

For this reason, our organization has always strongly advocated that compensation rates be kept in balance with all other veterans programs. The Veterans of Foreign Wars, therefore, commends this subcommittee for holding these hearings to consider cost of living increases and other proposals regarding this most important aspect of veterans programs, namely, disability compensation.

The interest and concern of the membership of the Veterans of Foreign Wars is expressed at our annual national conventions for the approval of what we call national mandates. These are resolutions embodying the position of the Veterans of Foreign Wars on a wide range of programs, rights and benefits.

Last year at our most recent national convention, which was held in Dallas, Tex., a large number of resolutions which are pertinent to the bills before this subcommittee were approved by the more than 12,000 delegates representing more than 1.7 million members.

Several of these resolutions call for a cost of living or substantial increases in disability compensation rates. Others call for an increase in the statutory awards with particular emphasis on the $47 a month award for a specific loss or loss of use. A resolution, identified as No. 604 entitled, "Compensation for Service Connected Veterans," adopted by our national convention delegates contains many of the concerns and goals of our organization with respect to our service-connected disabled veterans, which reads as follows:

Whereas, veterans who have suffered wounds and disabilities during war-time service in defense of our great nation deserve the highest consideration or, if deceased, their surviving widows, children and parents; and

Whereas, compensation payments reflect the average impairment in loss of earning power caused by specific disabilities or combination of disabilities; and Whereas, there has been a failure to keep compensation payments on a par with the increased cost of living, which has skyrocketed during the last decade, and continues to do so; and

Whereas, a shortened life span caused by a service connected disability is not a factor in his loss of earning capacity; and

Whereas, the 100% totally disabled veteran is now receiving only $5,400 a year which is substantially below the average family income of Americans; and Whereas, no increase in disability compensation has reflected a raise in the rates of those veterans receiving statutory awards for specific losses; Now, therefore, be it

Resolved, by the 72d National Convention of the Veterans of Foreign Wars of the United States, That the Congress improve the compensation program by increasing compensation rates and dependency allowances for the service disabled so that the average loss of earning power caused by the veterans disability will reflect the high American standard of living; and be it further

Resolved, That there be substantial increases not only in all basic compensation rates and dependency allowances, but that the statutory awards for specific losses, such as a foot or hand or eye, be also increased to reflect the increased cost of living since the statutory awards were last increased; and be it further Resolved, That the Veterans of Foreign Wars supports legislation which would accomplish much needed increases in service connected compensation rates and carry out the purpose and intent of this resolution.

The Veterans of Foreign Wars supports a cost of living increase in the compensation rates. On the other side of the Capitol in the Senate, the Veterans of Foreign Wars has already gone on record in support of a proposal which would provide a 10 percent across-the-board increase in all disability compensation and dependency allowance payments.

A 10 percent cost-of-living increase will include the increase in cost of living since the last compensation increase and anticipated increases in cost of living. This is necessary because so many veterans depend on their disability compensation payments in whole or in part for their everyday needs.

Inflation is a cruel tax on all veterans who depend on their disability compensation payments for their existence and especially for totally disabled veterans, whose income in these days of high prices is only a little over $5,000 a year.

Mr. Chairman, the Veterans of Foreign Wars has been deeply disturbed that there has been no increase in the statutory award of $47 a month, which is provided for certain anatomical losses or losses of use. There has been no increase in the $47 rate since 1952.

It has been two decades since the $47 rate has been increased. During these two decades the disability compensation payments have been increased on six occasions. Other statutory rates have been increased, but the Congress has chosen to keep the $47 rate without change.

The Veterans of Foreign Wars disagrees with this policy of Congress and submits that the continued failure to increase the $47 award is a gross injustice to a group of very small, but seriously disabled, veterans. These veterans, despite the great progress made by rehabilitation, will never be made whole again.

They have suffered a loss which will never be replaced. The $47 a month statutory award is a recognition by Congress for this extraordinary loss or loss of use and the payment for this loss, or loss of use, should by all means keep up with the skyrocketed cost of living increases experienced during the last 20 years. The Veterans of Foreign Wars strongly recommends that a substantial increase be provided for the $47 statutory award.

Mr. Chairman, it is noted that there is a new statutory award in some of the bills before you with respect to a proposed clothing allowance. This would be a once a year clothing award of $150, which would

be payable to certain veterans whose disability requires them to wear prosthetic appliances.

While the Veterans' Administration has existing authority to furnish special clothing made necessary by the wearing of a prosthetic appliance, the law does not authorize the replacement of ordinary, conventional clothing by reason of any excessive or extraordinary wear and tear caused by the wearing of a prosthetic appliance.

The Veterans of Foreign Wars has received numerous complaints from veterans who have stated that prosthetic appliances just tear up their clothing. Authority should be provided for the Veterans' Administration to replace conventional clothing damaged by the wearing of prosthetic appliances or, in the alternative, to authorize the $150 clothing allowance.

The Veterans of Foreign Wars supports the proposal for the extra allowance for clothing for the small group of veterans who would benefit by this new statutory allowance. Mr. Chairman, the bill introduced this week with respect to more equitable standards under which the Veterans' Administration may waive recovery of overpayments of veterans benefits and release or waive liability with respect to certain home loans is supported by the Veterans of Foreign Wars.

The Veterans of Foreign Wars has over the years favored wide discretionary authority in the part of the Veterans' Administration regarding the recovery of overpayments and the waiving of liability with respect to VA home loans.

The Veterans' Administration recommended bill introduced this week and now before this subcommittee for consideration will accomplish the Veterans of Foreign Wars goal in this regard. Under the terms of this bill the Veterans' Administration will determine each claim for waiver of recovery or waiver of liability on a case by case basis.

The Veterans' Administration will be sitting to hear these cases on the basis of equity and good conscience and will not be strapped with statutory restraints which may make it impossible in certain cases to provide the waiver which is otherwise justified.

This bill regarding waivers satisfies a longstanding Veterans of Foreign Wars position, and it is recommended that the bill be considered by the subcommittee and recomemnded to the full committee for approval by the House.

In summary, Mr. Chairman, the Veterans of Foreign Wars is hopeful that this committee will report a bill along the lines of H.R. 13799 and similar bills which will authorize at least a 10-percent cost-ofliving increase in all the disability compensation rates. By all means, the Veterans of Foreign Wars is hopeful that the $47 statutory award for certain anatomical losses or losses of use will not be bypassed.

Lastly, the Veterans of Foreign Wars supports the proposal for a special clothing allowance for veterans whose regular clothing is damaged or wears out quickly by prosthetic appliances necessitated by their service-connected disabilities.

These. Mr. Chairman, are the views of the Veterans of Foreign Wars. Thank you for the privilege of presenting them to this most distinguished subcommittee.

I neglected to officially introduce Mr. Norman D. Jones, the director of our national veterans service on my left who has been with me on

many previous occasions. I would be glad to respond to any questions you might have. Also, I would appreciate it if resolution No. 736, adopted at our last convention, might be made a part of the record.

Mr. DORN. That was a splendid statement. The resolution will be included at this point, without objection.

RESOLUTION No. 736

(Adopted at the 72nd National Convention of the Veterans of Foreign Wars of the United States held in Dallas, Texas, August 13 through 20, 1971)

REVIEW OF FORFEITED BENEFITS

Whereas, prior to 1959 the Veterans Administration revoked all benefits earned by military service in approximately 5000 cases, in most cases because of simple infractions of governing laws and regulations; and

Whereas, in 1959, at the instigation of the Veterans of Foreign Wars of the United States, the Congress enacted and the President approved legislation discontinuing forfeiture of authority of the Veterans Administration, except in cases: involving claimants not currently under the jurisdiction of the courts of this country; and

Whereas, forfeiture of all benefits in most of these cases is manifestly unjust and not commensurate with the degree of the alleged offense; Now, therefore, be it Resolved, by the 72d National Convention of the Veterans of Foreign Wars of the United States, That the Congress of the United States be urged to enact legislation authorizing review of all cases involving forfeiture of benefits and revocation of such forfeiture actions if warranted under regulations established pursuant to the legislation adopted in 1959.

Mr. DORN. Mr. Hammerschmidt?

Mr. HAMMERSCHMIDT. I, too, would like to thank Mr. Stover for a fine statement.

All the service organizations have testified in support of the 1-yearclothing award of $150 for certain veterans whose disability requires them to wear prosthetic appliances. Do you have any estimate of the cost of that, Mr. Stover?

Mr. STOVER. I have not, but I think Mr. Jones may have.

Mr. JONES. There may be approximately 35,000 veterans who might qualify. I presume that will be increased in the future. In this con-nection I might comment on the VA's position on this on the contention that the existing authority to repair clothing is an adequate. benefit.

Last year they reported some 200 cases having benefited. We called the proper official of the VA hospital who should be administering it and he had never heard of it. They said they think there is some such provision. Also, the geographical inconveniences makes it almost an impossibility.

You would not normally send a $7, half-worn-out shirt 300 miles to have a little tear sewn up in it. I think the present authority to repair clothing in effect is not an effective benefit at all.

Mr. HAMMERSCHMIDT. It might be helpful to the record if we made that inquiry of the Veterans' Administration on the projected costs on these recommendations.

Mr. DORN. Without objection, the Veterans' Administration will furnish us with that information, and it will be placed in the record. (The following cost estimates were provided by Veterans' Administration :)