STATEMENT OF QUINTUS E. CAMP, ASSISTANT NATIONAL DIRECTOR OF CLAIMS, DISABLED AMERICAN VETERANS

Mr. CAMP. The Disabled American Veterans, the American Legion-Mr. Kraabel can vouch for this-are in complete accord on H. R. 1352 as has been amended by inserts on the chairman's desk. Mr. VAIL. If there is no objection on the amendment, it will be inserted in the record.

(The bill as amended is as follows:)

[H. R. 1352, 80th Cong., 1st sess.]

A BILL To provide Government protection for widows and children of deceased veterans of World Wars I and II, and for other purposes

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That section 6, Public Law Numbered 483, Seventy-eighth Congress, is hereby amended to read as follows:

"SEC. 6. The surviving widow, child, or children of a veteran who served in World War II whose death is not due to service therein, but who was discharged or released from active service under conditions other than dishonorable after having served ninety days or more or for disability incurred in wartime service in line of duty, or who at time of death was receiving or entitled to receive compensation or retirement pay for wartime service-connected disability, shall be entitled to pension in the amounts and otherwise subject to the conditions of Public Law Numbered 484, Seventy-third Congress, as amended: Provided, That for the purposes of this section the definition of the terms 'veteran,' 'widow,' 'child or children' shall be those applicable to World War II as provided in Public Law Numbered 2, Seventy-third Congress, as now or hereafter amended."

SEC. 2. The surviving widow, child, or children of any person who has died, or dies, in active service after having served ninety days or more in World War I or World War II and whose death is held not due to service therein, shall be entitled to pension in the amounts and otherwise subject to the conditions of Public Law Numbered 484, Seventy-third Congress, as amended: Provided, That no pension shall be payable if the person who died in service was guilty of mutiny, treason, spying, or desertion, or because of conscientious objections, refused to perform service in the land or naval forces of the United States or to wear the uniform of such force, or if death was inflicted as a lawful punishment for crime or for military or naval offense, except when inflicted by an enemy of the United States: Provided further, That for the purpose of this section the definition of the term "World War I" or "World War II," "widow," "child or children" shall be those provided in Public Law Numbered 2, Seventy-third Congress, and Veterans Regulations promulgated thereunder as now or hereafter amended.

SEC. 3. Section 1 (c), Public Law Numbered 484, Seventy-third Congress, as amended, is hereby amended to read as follows:

"(c) Payment of pension under the provisions of this Act shall not be made to any widow without child, or a child, whose annual income exceeds $1.800, or to a widow with a child or children whose annual income exceeds $3,000. In determining annual income any payments made by widow, child, or children, for expense of last sickness and burial of the veteral shall be excluded and any payments by the United States Government because of disability or death under laws administered by the Veterans' Administration shall not be considered nor shall life insurance payments from any source be considered: Provided, That where payments to a widow are disallowed or discontinued hereunder, payment to a child or children of the deceased veteran may be made as though there is no widow."

SEC. 4. Notwithstanding any other provision of law or veterans' regulation, for the purpose of payment of compensation under laws administered by the Veterans' Administration, one parent whose annual income does not exceed $1,800 or two parents whose annual income does not exceed $3,000, shall be deemed to be dependent. In determining annual income any payments made by a parent for expense of last illness or burial of the veteran shall be excluded and any payments by the United States Government because of disability or death under laws administered by the Veterans' Administration shall not be considered nor shall life insurance payments from any source be considered.

SEC. 5. Paragraph II (a), part III, Veterans Regulation Numbered 1 (a), as amended, is hereby amended to read as follows:

"(a) Payment of pension provided by part III, except as provided in paragraph I (g), shall not be made to any unmarried person whose annual income exceeds $1,800, or to any married person or any person with minor child or children, or dependent parent or parents, whose annual income exceeds $3,000."

SEC.. Notwithstanding any other provision of law or veterans regulation, in determining "annual income" under the provisions of paragraph II (a), part III, Veterans Regulation Numbered 1 (a), as amended (U. S. C., 1934 ed., title 38, ch. 12, Appendix), any payments of retirement annuities based upon age or disability and of social-security benefits based upon age, shall not be considered. SEC. 6. This Act shall be effective from the date of its approval: Provided, That claims otherwise payable for a period prior to the effective date of this Act may be adjudicated and placed on the roll and the benefits of this Act shall be applicable to such claims and those claims now on the rolls.

SEC. 7. Except to the extent they may conflict with the provisions of this Act, the provisions of Public Law Numbered 2, Seventy-third Congress, the Veterans Regulations promulgated thereunder, and of Public Law Numbered 144, Seventyeighth Congress, as now or hereafter amended, shall be applicable to this Act: Provided, That no compensation or pension shall be reduced or discontinued by the enactment of this Act.

Mr. CAMP. As to the first section of this bill, this simply puts the veterans of World War I and World War II on a parity for benefits to their survivors.

Section 2 of the bill provides for payment of rates under Public Law 484, Seventy-third Congress, as amended, to those survivors of veterans who died in service and death has been held as not the result of service.

Many instances could be cited as such cases. However, this does prohibit the payment of any benefits to those who have been convicted of mutiny, treason, spying, or desertion, conscientious objectors, or those who were executed for crime.

Section 3 (c) provides income limitation of $1,800 as to a widow, or $3,000, widow with a child or children. It must be remembered that the rates now prevailing were fixed in 1933 at the very bottom of the depression, when a dollar was worth a hundred cents and the cost of living has so increased that it is believed that the specified amounts here are within the realm of reason and equity.

The question of holding that insurance payments received from private sources should not be considered as income, is certainly in our opinion something that the law has long needed. You must remember that Government insurance is excepted in income computation. What difference does it make whether the contract is made with the United States Government or with the Prudential Life Insurance Co., we will say? The veteran has paid for it out of his own pocket. It is his by right of purchase. It doesn't make any difference with whom the contract was made.

Further, income from insurance sources, regardless of where they may be, is not taxable by act of Congress. So, why if it is not a taxable income for one purpose should it be income for another purpose?

The provision of section 4, parents, is likewise on a parity with the income limitations for widows and children. It is not believed a parent can live any cheaper than the widow. They should be on all fours rather than having different standards by which to measure dependence.

Section 5, that has been inserted, brings along the same income limitations as heretofore mentioned. It is also to be noted that an

nuities, social-security benefits, and other income that has been bought and paid for is not to be considered in the computation of income. Mr. DONOHUE. Mr. Chairman, may I ask the gentleman a question? What is your thought and idea as to just what a pension is granted for?

Mr. CAMP. A pension is to take care of the person who cannot take care of himself or herself.

Mr. DONOHUE. So that in case they can take care of themselves, do you think they should still receive a pension?

Mr. CAMP. If they can earn sufficient to meet the income limitations here, why no, they should not have a pension.

Mr. DONOHUE. Let us assume the situation of a veteran dying and leaving an estate of $500,000, then what?

Mr. CAMP. Why, certainly no pension would be payable, and should not be payable.

Mr. DONOHUE. If in pension cases these limitations are to be governed by earned income, and there was no earned income from that $500,000 estate, supposing it was in a checking account, if we can imagine that situation, or was placed in a vault, and there wasn't any actual earned income from that $500,000, then what should the situation be insofar as a widow is concerned?

Mr. CAMP. That would certainly be a most unusual case as far as veterans are concerned. Of course, capital assets must be considered in all cases of this kind where you are going to establish dependency. But it is inconceivable that one would leave an estate of $500,000 as you mentioned and not leave some income for his dependents.

Mr. DONOHUE. Let us assume the case of a widow that has an annuity, we will say, of $2,500 or say $5,000 a year; don't you think she is in a pretty good condition to sustain herself?

Mr. CAMP. That is something of which she was deprived during the lifetime of her husband because he was paying for that annuity at that time. He was also paying tax on the money he earned to pay that annuity.

Mr. DONOHUE. Whereas that is quite true, I have in mind the situation after he dies now, she has this income by way of an annuity of, we will say, $5,000 a year; is it any different than if he took that money that he had paid into an insurance fund that granted him that annuity, and had deposited it in a bank?

Mr. CAMP. Our position on that is, as I say

Mr. DONOHUE. Is there any difference, is my question.

Mr. CAMP. That if she had an annuity from a Government life insurance contract, that would not be considered in income computation. For the life of me, I can't see where it makes any difference where the contract is made.

Mr. DONOHUE. I will grant you that. But still you will agree that it is really defeating the very thought behind pensions, will you not? Mr. CAMP. You might find 1 case in 10,000 of that kind. But certainly we are looking for the majority of the people, the people up in the forks of the creek and on the mountainside that we can't see every day and handle that claim for them. There should be some rule of law by which their entitlement is determined rather than by some rule of thumb.

Mr. VAIL. Mr. Witness, if the legislation that is brought before this committee is based upon the depreciated purchasing value of the

dollar, on the principle that what goes up must eventually come down, have you given any thought to the establishment of a purchasing basis of the dollar in order that there might be a return to level compensation?

Mr. CAMP. I might say for the benefit of the committee that the Disabled American Veterans has long had the idea that compensations and pensions should be based on an escalator basis, that with the rise of the cost of living the compension and pensions should go up accordingly; when it comes down, the rate should accordingly be reduced. I think that is certainly a fair position to take with the people who pay the taxes.

Mr. VAIL. Are there any other questions?

Mr. SULLIVAN. Thank you, gentlemen.

Mr. CAMP. Thank you.

Mr. STANDISH. The Veterans' Administration representatives are present. Just a minute, Mr. Kraabel wants to discuss those amendments on the income limitations.

Mr. HAYDEN. I am Harry V. Hayden, national legislative representative of the Legion. Mr. Stevens, our assistant director of rehabilitation, testified on this bill at length. However, Mr. Kraabel, director of that division, would like to say a word about these proposed amendments.

Mr. VAIL. Very well.

Mr. KRAABEL. Mr. Chairman and members of the committee, we did testify extensively on H. R. 1352, 2 weeks ago introduced by the Madam Chairman of the entire committee at the behest of the American Legion. Since that time and as a result of the meeting 2 weeks ago, our representatives and the organization represented by Mr. Camp, who just testified, have agreed on two amendments which they have inserted in H. R. 1352, and as to which they have notified the chairman of the subcommittee. We join in submitting that for the record. I think the explanation has been fully made. That is the only comment I want to make now.

Mr. VAIL. That will be put in the record. Thank you. Are the Veterans' Administration representatives present?

Mr. HOWARD. My name is Willis Howard, Assistant Administrator for Claims. Mr. Edward Reinmuth, Chief of Field Operations Division, will be glad to review these bills and answer any questions. Mr. STANDISH. This is on income limitations.

STATEMENT OF EDWARD REINMUTH, CHIEF OF FIELD OPERATIONS DIVISION, DEPENDENTS AND BENEFICIARIES CLAIMS SERVICE, VETERANS' ADMINISTRATION

Mr. REINMUTH. Is this on income limitations or eliminating of service-connected limitations in World War II non-service-connected death cases? Are both of these features included in the same bill? Mr. STANDISH. Income limitations, group of seven bills there. Mr. REINMUTH. The purpose of this non-service-connected death pension, of course, is to assist those dependents in poor financial condition, in poor financial circumstances, or in need. Under that criterion the present delimiting amounts of income limitations seem reasonable.

Experience shows that in most cases widows and especially children rarely have income sufficient to exclude them from pension benefits. As to the small number of widows and children whose income exceeds the limitations it appears that the present limitations are sufficiently liberal in determining their need for supplemental support. Do you want to comment on section 3, H. R. 1352, concerning the deducting of burial and last illness expenses in connection with determining annual income?

Mr. STANDISH. That was not in this.

Mr. REINMUTH. That is about our views on the income limitations alone.

Mr. VAIL. Have you a statement to make on another feature?

Mr. REINMUTH. Yes, sir; I have another statement concerning section 1, H. R. 1352.

Mr. VAIL. You may proceed.

Mr. REINMUTH. This relates to the question of removing the serviceconnected disability requirement in World War II non-service-connected death cases. Pension predicated on service alone as indicated was not provided for dependents of veterans of other wars for periods varying from 16 to 26 years following the war. The present conditions under which dependents of veterans of World War II receive pensions where the death was not due to service did not become applicable as to World War I cases on July 19, 1939, 21 years after the armistice, and as to World War II cases these conditions become applicable on May 27, 1944, which was during the war period. This is the only situation in which a pension where death was not due to service was provided during the time of the particular war involved, and pension benefits in World War II cases are now years ahead of what they were in previous wars.

In connection with section 3 of H. R. 1352, on excluding expenses defrayed in connection with the last illness and burial of the veteran, it will affect only those cases in which the deduction of that expense would be required to bring the income of the widow within the limitation. Then only the income for the first calendar year would be affected.

It would in a measure be a duplication of benefits, since the statutory burial allowance of not to exceed $150 is allowed by existing law.

Inasmuch as it has been the policy to restrict pension benefits to those widows and children who are in limited financial circumstances, it is also felt that the proceeds of commercial insurance should be a factor in determining their entitlement to pension benefits, considering the fact that such insurance is something the widow or children may rely upon for support.

As to the income limitations for parents provided in section 4, H. R. 1352, do you want to cover that?

Mr. STANDISH. Yes; we want that.

Mr. REINMUTH. As to income limitations for parents, the theory of legislation providing death pension benefits for dependent parents of veterans has been consistent in the view that the payment of such benefits should be contingent upon circumstances which indicate a need for supplemental support. It has not been designed to provide complete maintenance.