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physical condition the degree of service-connected disability is reevaluated, any resulting reduction in the award of compensation shall be limited to not more than 50 percent of the amount payable under the former award until expiration of a period of 6 full calendar months following the effective date of such reduction."

6. Review all cases in which benefits were forfeited for fraud prior to September 1, 1959, in order to restore VA benefits.

RESOLUTION 91. INCREASE COMPENSATION

(Adopted at the 65th National Convention of the Veterans of Foreign Wars of

the United States, held at Cleveland, Ohio, August 21 through August 28, 1964)

Whereas, the compensation payments for veterans has not been increased since 1962, and the cost of living has increased by about 8 percent during the 2 years since the increase: Now, therefore, be it

Resolved by the 65th National Convention of the Veterans of Foreign Wars of the United States, That we request the Congress and President of the United States to grant an increase in com sation and that all combat veterans be gi an additional 16-percent increase if their wounds and disabilities are considered to be incurred in combat.

RESOLUTION 219. MINIMUM RATING OF 10 PERCENT COMBAT SERVICE (Adopted at the 65th National Convention of the Veterans of Foreign Wars of

the United States, held at Cleveland, Ohio, August 21 through August 28, 1964)

Whereas it is believed that veterans who incurred disabilities in combat with the enemy should be entitled to receive a minimum rating for such disabilities: Now, therefore, be it

Resolved by the 65th National Convention of the Veterans of Foreign Wars of the United States, That we respectfully request the Congress of the United States to enact a law which shall grant to veterans wounded in combat with the enemy a minimum rating of 10 percent irrespective of the requirements of rating schedules.

RESOLUTION 250. INCREASE IN COMPENSATION FOR ESTABLISHED SERVICE-CON

NECTED DISABILITIES OF VETERANS, WIDOWS, AND ORPHANS OF DECEASED VETERANS KILLED IN SERVICE OR WHO DIED AFTER DISCHARGE FROM SERVICE FROM THEIR ESTABLISHED SERVICE-CONNECTED DISABILITIES

(Adopted at the 65th National Convention of the Veterans of Foreign Wars of

the United States, held at Cleveland, Ohio, August 21 through August 28, 1964)

Whereas there are many veterans of World War I, World War II, and the Korean conflict who are drawing compensation for established service-connected disabilities incurred while serving in various branches of military service in defense of their country in time of war; and

Whereas there are also widows and children of deceased veterans, who died in service or after discharge from service from their established service-connected disabilities; and

Whereas said service-connected disabilities of the disabled veterans are increasing in physical disability to said veterans as they get older, causing their disabilities to be more disabling in their advanced age, thus decreasing their earning power; and

Whereas the index cost of living in these United States is increasing monthly, thus inflating the dollar, making its purchasing power less and less : Now, therefore, be it

Resolved by the 65th National Convention of the Veterans of Foreign Wars of the United States, That there be introduced at the present session of Congress a bill providing for the increase in the compensation rates of veterans for their established service-connected disabilities in order that they may be properly com

pensated for their established service-connected disabilities in accordance with the increased cost of living, as indicated by the admitted cost-of-living index nationwide, showing a continued upward trend in cost of living to each and every individual in these United States; and, be it further

Resolved, That said bill should further provide that once a year the compensation of these veterans and the widows of deceased veterans who have died from their service-established disabilities, be automatically adjusted in accordance with the increased cost of living as indicated by said cost-of-living index available to Members of Congress by its several agencies available to them.

Mr. STOVER. Subsequent to our convention, our commander in chief, John A. Jenkins, summoned our national legislative committee to meet here in Washington, D.C., for the purpose of reviewing the many resolutions adopted at our Cleveland national convention. This committee recommended and our commander in chief has approved a top priority legislative program for this year.

No. i on the list relates to the compensation program and reads as follows:

1. FOR THE SERVICE-CONNECTED DISABLED

(a) Fifteen-percent increase in the compensation payments with due consideration to the continuing increase in the cost of living, that a 100 percent totally disabled veteran is entitled to only $250 a month or $3,000 a year which has been defined as poverty status, that the income of the average American family is $6,000 a year and that a GS-1, the starting classification for a Federal employee is $3,360 per year, and all other factors having a bearing on the lagging compensation rates would have fallen behind by approximately 15 percent during the last three decades.

(b) A review of dependency and indemnity compensation program for the surviving widows, children, and dependent parents of veterans with special emphasis on all factors having any relationship upon all hardships imposed upon these survivors of veterans who died from service-connected causes.

Mr. Chairman and members of the subcommittee, compensation payments have, for reasons not easily discernible, fallen or lagged behind, as other Federal payments have increased sharply. In the 1930's a 100-percent disabled veteran received $100 a month. At the present time a 100 percent disabled veteran receives only $250 a month. Something has happened to this program during the intervening years.

In recent times there has appeared in the American vocabulary the term “poverty? level or “poverty” class. Generally, a family living in poverty or in a poverty status is described as being one whose income is $3,000 a year or less.

The 100-percent disabled veteran receiving $250 a month is receiving $3,000 a year. By this standard such a veteran is in a poverty status. It would be a fair conclusion that Congress never intended this result. The Veterans of Foreign Wars is not advocating that our veterans should be in the top economic level of our society, but we are stating that our disabled war veterans should not be in the lowest economic group.

To reflect our views, there has been introduced in this Congress by the chairman of this committee, Olin E. Teague, a bill identified as H.R. 3225. This bill carries out our mandate and official views by proposing a 15-percent increase in the existing compensation rates. Such an increase will be a giant step in the right direction toward bringing the compensation payments up to a parity with their

purchasing power of several decades ago.

The aim of this Nation has always been that the disabled veteran should receive an amount which would assure him of maintaining a reasonably adequate living standard as a civilian. There are over 2 million veterans who are receiving compensation payments. The majority are veterans of World War II whose average age is now 46. These veterans have been carrying this burden of disability received during their wartime service for approximately 20 years.

For World War I veterans it has been about 45 years. It would seem only fair and equitable that the amount of payments they are receiving should be sufficient to assure these veterans of maintaining an adequate living standard. H.R. 3225 will help accomplish this purpose.

The Veterans of Foreign Wars is extremely hopeful that this subcommittee, the full committee, the House, and the Congress will favorably consider and approve our bill, H.R. 3225. With compensation being one of the cornerstones and foundation of the whole veterans benefit program structure, it is more desirable than ever to keep this program in its proper perspective. If this Nation neglects its service disabled, then it will follow as the night follows the day that other programs will likewise suffer. .

The Veterans of Foreign Wars is not just asking for a normal cost of living increase, since the last compensation rates were increased in 1962, but we are asking that this subcommittee take note of these facts presented here today and approve and recommend legislation for bringing the compensation rates up to date and at least in line with the purchasing power of the dollar as reflected at 1965 rates compared to 1935 rates.

Your favorable consideration of this and all other Veterans of Foreign Wars mandates with recommendations concerning our compensation program will be deeply appreciated.

Thank you for this opportunity to appear here this date.
Mr. DORN. Thank you, Mr. Stover, for an excellent statement.
Mr. Roberts.
Mr. ROBERTS. No questions.
Mr. DORN. Mr. Teague.
Mr. TEAGUE of California. No questions.

STATEMENT OF COL. FLOYD OLES, RESERVE OFFICER'S ASSOCIA

TION AND RESERVE EQUALIZATION COMMITTEE

Mr. DORN. Is Colonel Oles here?
Colonel OLES. Yes.

Mr. DORN. Mr. Floyd Oles, Reserve Officer's Association of the
United States.
Colonel, we are glad to have

you. Colonel OLES. Thank you, Mr. Chairman. Mr. DORN. You can read your statement or do whatever you like.

Colonel OLES. Mr. Chairman and members of the committee, I am Lt. Col. Floyd Oles of the Reserve Officer's Association representing that group as well as the Reserve Equalization Committee which is a of two World War veterans, those that served in World War

.

I certainly appreciate this opportunity to talk about H.R. 5319, a bill which would provide that persons who have a compensable disability amounting to 30 percent or more, and who are retired persons from the military should be accorded the right to have both their military retirement and their compensation provided, of course, that there should be no payment for the same disability twice.

I happen to be representing here the only people of whom I have any knowledge who would not benefit by any increase in disability compensation which I understand you are now considering:

Perhaps the best thing I could do to explain our position on it would be to call attention to a resolution and mandate of our association of which I believe you have a copy.

I would like to emphasize a portion of it.
That portion would read as follows upon one of the whereases here.

It has been and remains Department of Defense policy from which we quote:

Retired pay is earned income and constitutes deferred payment for services previously rendered.

In quoting that, I am quoting a man whom I admire very deeply indeed and that is Mr. Paul Kilday, whom I regard as the No. 1 authority on military pay.

A principle that has been repeatedly embodied in congressional enactment and court decisions; and

Whereas VA compensation is a wholly unrelated compensation dependent upon and measured by injuries received while in the service of his Nation, which injuries have been found to reduce to a compensable degree the earning power of the victim of such injuries; and

Whereas military retired pay is fully earned at the time of retirement, and its reduction, because of receipt of compensation from other sources is wrong, inequable, and destructive of the entire concept upon which military retirement is based; and

Whereas any reduction in military retired pay by reason of receipt of compensation from other sources as presently provided by VA law and regulation has the effect of reducing military retired pay from the status of earned income to that of a simple gratuity; and

Whereas the present VA law and regulation discriminates against those who suffered disability and reduced earning capacity by reason of service-connected disability, by unfairly reducing their earned retirement income; and

Whereas those who_suffered no disability are permitted to receive their retirement pay in full: Therefore

We resolve, and so forth.

Now, I observe in the comments from the VA on this as- as a matter of fact, it is on a previous bill because this has been before you on several occasions—they say and I quote:

It is believed that not too many of those retired for longevity would be likely to have had a serious connected disability 30 percent or more disabling.

I come before you because that estimate of the situation is extremely in error.

We have a great deal of correspondence and a great deal of personal knowledge of people who have been retired for longevity, having served their 20 to 30 years in the armed services, and who subsequently developed a disabling injury or illness that resulted definitely and clearly from their service.

46-011465

Now, the man who has been given his retired pay earned it according to Mr. Paul Kilday and the Armed Services Committees, and those incidentally are the people before whom I have been appearing for the last dozen years on military legislation, and having learned that he pays income tax on it just like any other income.

Therefore, to compare that or to equate it with VA compensation, which, of course, is tax free, is a complete error. Moreover, the number of people involved is very considerable and I know that because in one committee alone I have something like 3,500 retired officers and, permit me to add that retired enlisted men would be precisely in the same category, and we are equally concerned about them, who have disabilities for which they have been given a rating by the VA in excess of 30 percent or more, and that these are disabling disabilities and I would say that of the 3,500 who are particularly concerned in this one committee even, fully 50 percent of them are in that category.

Yet no matter what you do about VA compensation they gain no benefit because the VA compensation that is paid them is deducted from their retired pay. The only benefit as a matter of facts is the very minor one that the portion from the VA is nontaxable as to income tax.

I just looked through our file and hastily picked out a couple of letters here which refer to this matter and one of them is from a man in Kentucky here who says among other things:

I cannot draw both, meaning VA compensation and retired pay, but to my way of thinking this is an injustice to the person who has put in the required number of satisfactory years to obtain U.S. Army Reserve retirement, and also be unfortunate enough to incur a service-connected disability. And, in parenthesis, says, “As, for me, wounded in action, April 18, 1915, at Ansbach, Germany, and am drawing compensation from the Veterans' Administration.” If a person should be qualified individually under both systems, he should be able to collect from both systems.

I have a rather interesting letter which I have a copy of it before you also, from Mrs. Dunton, out in Spokane, Wash., and she, among other things, says:

I write you concerning another matter which I consider even more urgent and for which I hope to gain your efforts at the National Council Meeting, and so forth.

There is a very serious inequity existing in the law which governs a case such as the following: A retired Reserve officer, having served for 20 years in the Army and attaining the age of 60, is entitled to his retirement pay. He is rated 50-percent disabled service connected and should be given a VA disability compensation. Now, in order to receive one of these, he must relinquish the other even though they have been granted to him for entirely different

I feel your association should do something about it, and so on. Now, I was given the privilege last year of reading the letter from the Veterans' Administration which sought to justify their contention that this was in effect, according to them, dual compensation, or what they call a pyramiding of benefits.

Here is the basis of their argument reduced to a few words of the many which they used in several pages of argument.

A letter, incidentally, to Mr. Teague and, dated June 1964. Here is the attitude of the VÁ. There seems no doubt that military retirement pay based on disability, military retirement pay based on longevity and VA compensation are each designed generally to accomplish

reasons.

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