moved from routine garrison duty and which sufficiently approximates actual war service to justify the extension of this benefit. Upon careful consideration we believe that the equities of providing war orphans educational assistance to the limited group here proposed warrant a departure from the basically sound principle that this special type of assistance should be afforded only for deaths occurring in actual war service. recommend favorable consideration of the bill by your committee. I therefore The House amendments limiting eligibility to combat and extrahazardous deaths have the effect of reducing the estimate of direct benefit costs furnished to your committee in connection with S. 1050 by approximately 90 percent. Assuming that authority for involuntary induction under the Universal Military Training and Service Act is not extended beyond the terminal date now in the law (June 30, 1963), we expect that the number of potential eligibles would not exceed 2,000. On this basis the cost for direct benefits for the first 5 years should not exceed $10,000 for the first year, $29,000 for the second year, $56,000 the third year, $94,000 the fourth year, and $128,000 the fifth year. In view of your urgent request for a report on this bill, we have not had sufficient time in which to ascertain from the Bureau of the Budget its relationship to the program of the President. Sincerely yours, Hon. LISTER HILL, BRADFORD MORSE, EXECUTIVE OFFICE OF THE PRESIDENT, BUREAU OF THE BUDGET, Washington, D.C., September 14, 1959. Chairman, Committee on Labor and Public Welfare, MY DEAR MR. CHAIRMAN: This will acknowledge your letter of August 24, 1959, inviting the Bureau of the Budget to comment on H.R. 4306, to provide education and training for the children of veterans dying of a service-connected disability incurred after January 31, 1955, and before the end of compulsory. military service. The Bureau of the Budget believes the bill departs from sound benefit principles in several respects. Most importantly, it is inconsistent with the basic principle of the Servicemen's and Veterans' Survivors Benefits Act of 1956. After long study the Congress decided that the obligation of the Government to dependents of servicemen whose deaths are connected with peacetime service could best be met by an improved system of survivor benefits. That act provided for the continuance of payments of death compensation to children between the ages of 18 and 21 when they are attending approved schools. Thus, in addition to providing a comprehensive program of survivor benefits for dependents of peacetime servicemen, the act gave specific assistance to children in obtaining an education. We do not believe a special added benefits program is now needed for children of deceased peacetime ex-servicemen. If H.R. 4306 were enacted into law, it could well lead to further extensions of the proposed benefits to other categories of peacetime ex-servicemen beyond that contemplated in the bill as it stands. The end result could well be to make such benefits a regular reward for any kind of military service, whether during wartime, peacetime draft, or peacetime per se, especially when service-connected disabilities are involved. The cost of such extensions, of course, would be great. Thus H.R. 4306 could well be a forerunner of a large educational benefits program for a special group. The 85th Congress enacted the National Defense Education Act which provides a general program of assistance and encouragement to the youth of our country in the field of higher education, including the children of veterans. Finally, H.R. 4306 would constitute still another departure from the readjustment concept of educational benefits and, in addition, it would grant these benefits to dependents when it has not been the policy to provide readjustment benefits for peacetime service. The War Orphans' Educational Assistance Act was a revision of the concept that education should be provided by the Government as an aid to readjustment from wartime military service to civilian pursuits but in enacting this unusual supplementary form of assistance to dependents the Congress closely limited it to the child of a veteran whose death resulted from a disability incurred during the war period itself. We do not believe this program should be extended to the peacetime group. For these reasons this Office strongly recommends that this measure not be enacted. Sincerely yours, PHILLIP S. HUGHES, Assistant Director for Legislative Reference. Senator YARBOROUGH. We will first hear from the Veterans' Administration. Mr. Bland, will you be the first witness for the Veterans' Administration? STATEMENT OF R. P. BLAND, DIRECTOR OF LEGISLATIVE SERVICE NO. II, OFFICE OF THE GENERAL COUNSEL OF THE VETERANS' ADMINISTRATION, ACCOMPANIED BY W. B. GUNDLACH, ASSISTANT DIRECTOR OF VOCATIONAL REHABILITATION AND EDUCATION SERVICE OF THE DEPARTMENT OF VETERANS BENEFITS; FRED BRANAN, PROGRAM ANALYST; AND H. F. MOORE, ASSISTANT DIRECTOR OF THE POLICY AND PLANNING, COMPENSATION AND PENSION SERVICE, DEPARTMENT OF VETERANS BENEFITS; AND A. T. BRONAUGH, ASSISTANT DIRECTOR OF LEGISLATIVE SERVICE NO. II Mr. BLAND. Yes, Mr. Chairman. Senator YARBOROUGH. You may proceed. Mr. BLAND. Mr. Chairman and Senator Prouty, I should like first to identify myself and those who accompany me from the Veterans' Administration. My name is R. P. Bland. I am Director of Legislative Service No. II in the Office of the General Counsel of the Veterans' Administration. With me are Mr. W. B. Gundlach, who is Assistant Director of the Vocational Rehabilitation and Education Service of our Department of Veterans Benefits in the VA. Accompanying him is Mr. Fred Branan, who is a program analyst in his office. And we have Mr. H. F. Moore, who is Assistant Director of the Policy and Planning, Compensation and Pension Service in our Department of Veterans Benefits. Also accompanying me is Mr. A. T. Bronaugh, who is Assistant Director of the Legislative Service No. II. Mr. Chairman, we welcome this opportunity to explain the position of the Veterans' Administration on the two bills which you are considering today. The Administrator has previously submitted formal reports to the committee, which we assume will be made a part of the record. Both of these bills-S. 1050 and H.R. 4306-pose a basic question as to whether the war orphans' educational program, heretofore limited to the children of veterans dying from war-service causes, should be expanded to render eligible for this special form of assistance the children of persons who have served during the period of the peacetime draft. Peacetime ex-servicemen and their survivors are already covered by a rather comprehensive system of benefits. Chief among these benefits are disability and death compensation, hospital and medical care for the veteran though not for his survivors, and national service life insurance for those veterans disabled from service. We have also recommended that this program be perfected by extending the vocational rehabilitation training benefit, which is now confined to service-disabled World War II and Korean conflict veterans, to those veterans who sustain service employment handicaps from disabilities incurred in peacetime service. At the threshold of any consideration of a proposal to extend the war orphans' program to the surviving children of peacetime servicemen, we believe it is necessary to look at the broader implications. In the first place, this special form of assistance was tailored to a wartime situation. The theory of the original 1956 law was that the loss of the parent due to war service worked a special hardship on the child in attempting to acquire extended education, which frequently would have been financed by the parent had he survived. This legislation was consistently a war-service measure-and that only. As originally enacted, it covered service in all of the major wars in which this country has engaged. A recent amendment even extended this coverage to include any surviving children of deceased Spanish-American War veterans who died from service causes where the children are still within the specified age limits. May I interpolate there, Mr. Chairman? That is a rather surprising thing. We estimated at the time you enacted that bill that there must be something like 30 potential eligibles within the tender year limits required by the law-surviving children of deceased Spanish-American War veterans. I do not know how many have actually qualified as of this time. Very few, I believe. The widespread hazards of war service, the greater number of family dislocations due to entrance into service, and the general desire to prefer war cases in providing this unique benefit were apparently at the bottom of this determination of policy by the Congress. We have felt that these are compelling factors. Any general departure from this policy to include the children of those serving during a limited peacetime period would lay the foundation for a later move to make of this a permanent peacetime program. It is difficult to draw any well-defined distinction between the typical service under present conditions and the typical military service in a period when the selective service system is not in operation. This consideration is especially applicable in view of the fact that a great many deaths related to peacetime service are not produced by special hazards peculiar to military service. As we pointed out in the previous hearing before this subcommittee on S. 1050, the problems of children of persons who die as the result of peacetime service have been recognized and dealt with by the Congress. Following the War Orphans' Act, the Congress determined that there were deficiencies in the death benefits provided for surviving dependents of persons dying in service and veterans dying from service causes. The result was enactment of the Servicemen's and Veterans' Survivor Benefits Act which became effective on January 1, 1957. It applies without distinction between wartime and peacetime cases. Under this new program, dependency and indemnity compensation at higher rates than had been provided under the old system of death compensation was established. The monthly payment for an only child under age 18 was set at $70 per month where there is no widow. Recognizing, however, that the child might continue to need special assistance after age 18 because of his educational problems, this law provides for continued payment of this $70 monthly benefit until age 21 if the child is attending an approved educational institution. If the mother is living and receiving compensation, this additional compensation to the child attending school is $35 per month. Notwithstanding these special provisions and our view that this should generally remain in the category of a wartime benefit, we have concluded that a limited exception is probably in order. This is represented by H.R. 4306 as amended in the House of Representatives. The Administrator's report on that bill has been favorable. The extension of the program by that bill to cases in which the death resulted from extrahazardous conditions of service during the draft period is quite appealing and can be supported by forceful arguments. Extrahazardous service, involving conditions of exceptional danger and risks beyond those encountered in routine peacetime duties, presents a situation like that quite commonly encountered in wartime service. It is the type of situation with which the committees were no doubt concerned when the War Orphans' Act was passed as a war preference measure. Circumstances of exceptional military hazard occur more often and more widely in present service than they could be expected to occur under more normal conditions of peace. These circumstances plus the existence of compulsory military service make a rather forceful case for the limited extension of the benefit embodied in H.R. 4306. Because of these special aspects, we favor the enactment of H.R. 4306, as it was amended in the House of Representatives. We maintain the position, however, that the program should not be extended on a broader basis. We fully appreciate that forceful arguments can be made against even this limited extension. The Bureau of the Budget has submitted a report to the committee strongly recommending against enactment of H.R. 4306 and pointing up some adverse considerations of policy. This concludes our general statement, Mr. Chairman, and we shall be pleased to answer any questions which you may have or provide any additional information which is available. At this point, Mr. Chairman, I would like to present for the record a revised estimate of cost on each of the bills, which has been necessary due to two factors; first with respect to the broader bill, and to some extent the other bill, that is, with respect to S. 1050 and to some extent with respect to H.R. 4306, it is necessary to have a revision in order to make the cost estimates more current. The last cost estimates were submitted something like 6 months ago, and were predicated upon a first-year cost in 1960. These new estimates begin with fiscal 1961. The costs of H.R. 4306, the extrahazardous coverage, are estimated at being considerably more in this new submission, because of additional information which we have obtained in the meantime concerning the incidence of extrahazard deaths in the service. Now, I can read that to you, Mr. Chairman, or simply present that for the record. Senator YARBOROUGH. I would like for you to read that, please. You are now reading the figures on H.R. 4306? Mr. BLAND. I am now reading first the figures on S. 1050, Mr. Chairman. This is an estimate of direct benefit costs, not including administrative costs. For the first year, 1961, the cost of benefits would be an estimated $380,000. In 1962, $710,000. In 1963, $1,160,000. In 1964, $1,680,000. In 1965, $2,290,000. The total for the first 5 years, $6,220,000. The annual cost of direct benefits would reach a peak of approximately $3 million in fiscal year 1967, and decline each year thereafter. The proposal passed by the House, H.R. 4306, would limit benefits to children of persons who die from disease or injury attributable to extrahazardous duty or conditions simulating war. On the basis of information which became available after passage in the House, it now appears that the cost of direct benefits under H.R. 4306 would be about 15 percent as high as under S. 1050. Senator YARBOROUGH. Would you prepare a table showing what that 15 percent would be, calculated year after year? Mr. BLAND. I would be glad to do that, Mr. Chairman. Senator YARBOROUGH. Of course, we can compute that, but people might see only this one table. Mr. BLAND. Very well, We will prepare a separate table showing that in dollars for the 5 years. (The Veterans' Administration later submitted for the record the following table setting forth the estimated cost of H.R. 4306:) T Mr. BLAND. That is our principal statement, Mr. Chairman. had one other thought. The committee may wish to have briefly some information concerning the numbers that have participated in this program and the kind of training by numbers that they have used under this War Orphans' program to date. Would that be of interest at this time? Senator YARBOROUGH. I believe so; yes. Mr. BLAND. Mr. Gundlach? Mr. GUNDLACH. Up to date we have received applications for benefits under this law to the extent of 36,213. Senator YARBOROUGH. You mean the World War II and Korean conflict both combined? Mr. GUNDLACH. That is, the children of veterans of the SpanishAmerican War, World War I, World War II, or the Korean conflict who died of service-connected disability. Senator YARBOROUGH. The children. That is a little over 36,000 children of veterans who died in service during World War II and the Korean conflict? Mr. GUNDLACH. Also World War I and the Spanish-American War. Senator YARBOROUGH. The total is 36,000 children of veterans of those four wars? Mr. GUNDLACH. That have applied for benefits under this War Orphans' Act; yes. Senator YARBOROUGH. Go ahead. Mr. GUNDLACH. Of that number, 19,342 have entered training. |