Accordingly, we have submitted to the Speaker of the House and your committee a draft bill which would accomplish the above-mentioned recommendations of the President regarding disability compensation.

We believe that the enactment of the draft bill would, in the long run, be more beneficial for the service-connected disabled veterans than would H.R. 11469 or H.R. 12263. We, therefore, urge your committee to favorably consider the President's proposals, as set forth in the draft bill, in lieu of those measures.

H.R. 12300 would (a) increase the rates of dependency and indemnity compensation by approximately 15 percent for widows and children of veterans whose deaths were service connected; (b) increase the monthly rate of death compensation by approximately 15 percent for widows, children, and dependent parents of veterans who died before January 1, 1957, and whose deaths were service connected; and (c) equalize as to peacetime and wartime the monthly rates of serviceconnected death compensation payable for widows, children, and dependent parents of veterans who died of service-connected causes before January 1, 1957.

The Veterans' Administration does not favor sections 4 and 5 of H.R. 12300 which would increase the monthly rates of death compensation, or equalize peacetime with wartime rates of death compensation.

Survivors of veterans who died of service connected causes before January 1, 1957, and were entitled to death compensation may elect to receive dependency and indemnity compensation. The authority to continue on the death compensation rolls was undoubtedly provided to preclude a reduction of monetary benefits which could have resulted, in some instances, if dependency and indemnity compensation had been made the exclusive program.

We see no justification for enhancing this advantage of the protected group through increasing or equalizing rates as proposed by H.R.

12300.

As indicated, H.R. 12300 proposes to increase the rates of dependency and indemnity compensation for widows and children by approximately 15 percent. The President, in his letter of March 4, 1974, to your committee, to which I previously referred, also proposed a 14percent increase in such rates.

Since dependency and indemnity compensation was last increased on January 1, 1972, the Consumer Price Index has increased 13.5 percent. With respect to dependency and indemnity compensation, the President has proposed the same automatic cost-of-living increases as he did in our compensation program.

The draft measure we have submitted to the Speaker of the House and your committee, which would accomplish the President's recommendations regarding disability compensation, also encompasses his recommendations with respect to dependency and indemnity compensation.

We believe the enactment of this draft measure would, in the long run, be more beneficial to the survivors of veterans whose deaths are service connected than would the applicable provisions of sections 1, 2, and 3 of H.R. 12300. We urge your committee to act favorably on this draft bill.

H.R. 3017 would authorize, in certain cases, payment of service-connected dependency and indemnity compensation to the widows, children, and parents of a veteran who died of a non-service-connected cause, but was, at the time of his death, in receipt of, or entitled to receive, compensation for a service-connected disability which had been permanently and totally disabling for 20 or more years.

The proposal would not apply where death occurred as a result of accidental causes having no relationship to the service-connected disability.

This proposal would thus place the survivors of certain veterans who died of non-service-connected causes on a parity with the survivors of veterans who died of an actually service-connected cause.

By presuming, contrary to the evidence, service connection as to cause of death in cases covered by H.R. 3017, enactment of the bill would constitute a major departure from the policy of the Congress in maintaining separate systems of monetary benefits for deaths due to service and those not due to service.

Its enactment would be tantamount to superimposing on the present pension program new non-service-connected death benefits equivalent to the present service-connected benefits and would result in new and highly discriminatory benefits for surviving dependents of certain disabled veterans.

The Veterans' Administration finds no justification for presuming a death to be service-connected when the evidence does not support such a finding. Accordingly, we opposed enactment of H.R. 3017.

Mr. Chairman, before concluding, I believe it appropriate at this time to mention a related matter. Studies have shown that certain disabled veterans are under-compensated under our rating schedule for their disabilities.

In accordance with the President's recently stated wishes, we are now working toward adjustments in these cases.

This completes my formal statement. My associates and I will be pleased to answer any questions you may have.

Mr. TEAGUE of Texas. I don't intend to ask you any questions, now, even though I have a number, but I will expect you or your representative time to come up here after the veterans' groups have testified, when we have a mark up, and ask you about some things.

I would also like to mention that each Member of the House is supposed to be in five places at one time, and it is hard to do. That is why there aren't more Members here. This is my third meeting this morning and I am sure the others have about the same situation.

When I go to the floor today there will be more said to me about compensation and pension than any other subject. So the fact that the Members aren't here doesn't mean there isn't an interest in this legislation. There is.

Mr. Hammerschmidt, do you have any questions?

Mr. HAMMERSCHMIDT. Mr. Chairman, as you mentioned, there are too many committee meetings going this morning. I would also like to defer questions until after we have heard from the veterans' groups. Mr. TEAGUE of Texas. I assume you will have someone here listening to the testimony when the veterans' groups appear.

Mr. VAUGHN. Yes; we will. Thank you.

Mr. TEAGUE of Texas. Thank you.

Our next witness will be Mr. Charles L. Huber, National Director of Legislation of the Disabled American Veterans. Chet, would you like to introduce those gentlemen with you?

STATEMENT OF CHARLES L. HUBER, NATIONAL DIRECTOR OF LEGISLATION, DISABLED AMERICAN VETERANS, ACCOMPANIED BY WILLIAM FLAHERTY AND WILLIAM GARDINER

Mr. HUBER. Mr. Chairman and members of the subcommittee, I appreciate the opportunity to present the views of the Disabled American Veterans on pending bills to improve the disability compensation and dependency and indemnity compensation programs.

We have prepared a detailed statement covering the bills in which the DAV has an interest as well as the position we take on each

measure.

With the chairman's permission, I would like to offer this statement for the record and then make a few general comments on some of the proposals.

Mr. TEAGUE of Texas. Without objection, your statement will be placed in the record.

[The document referred to follows:]

STATEMENT OF CHARLES L. HUBER, NATIONAL DIRECTOR OF LEGISLATION, DISABLED AMERICAN VETERANS

Mr. Chairman, members of the subcommittee, on behalf of the Disabled American Veterans, I wish to thank you for this opportunity to present our views on pending bills to improve the Disability Compensation and Dependency and Indemnity Compensation Programs.

I also want to express our appreciation for the timely scheduling of these hearings on two subjects of vast importance to those whom the DAV represents— America's disabled war veterans, their dependents and survivors.

Mr. Chairman, you may recall that our National Commander, John T. Soave, in his February 27th appearance before the full Committee, told of the many letters we are receiving regularly from seriously disabled veterans across the country. All of them make known their dire situations due to the higher costs of food, clothing, housing, fuel, and other basic necessities. Those veterans whose only income is their fixed monthly compensation payments are hit hardest by runaway inflation, and are desperately struggling to survive.

These facts and circumstances present an overwhelming case for increases in compensation rates to restore their purchasing value, and a specially urgent case for those who are totally disabled and unemployable. It is our feeling that any proposed increase in compensation rates should, in all fairness, take into account not only the loss in purchasing value since the August 1, 1972 compensation increase, but also an estimate of the additional loss which will occur between the present and the next review of the program by this Committee and the Congress. The pending bill, H.R. 11469, which was introduced at DAV request by Mr. Dorn, the distinguished Chairman of the full Committee, would provide an acrossthe-board increase of 15 percent in the basic disability compensation rates. Dependency allowances payable to veterans with service-connected disability rated 50 percent or more would also be increased by 15 percent. The third provision of the bill proposes to raise from $47 to $60 the special statutory award payable to veterans who have suffered certain anatomical losses, or loss of use of limbs or body organs.

Mr. Chairman, all of us are acutely aware of the fact that the cost of goods and services has increased dramatically since this Committee so thoughtfully improved and updated the compensation program in August 1972. Available statistical data show that overall living costs have gone up by approximately 12 percent, and that food prices are up a record-breaking 20-25 percent. Current trends clearly indicate that we can expect further substantial increases in retail prices in the month ahead. H.R. 11469, if enacted, would serve to bring com

pensation rates more closely into balance with rises in the cost of living. For purposes of the proposed increases, an effective date of May 1, 1974 would be most desirable.

As I mentioned earlier, Mr. Chairman, H. R. 11469 would raise from $47 to $60 the special statutory award payable to veterans who have suffered certain specific losses. These awards were last increased on July 1, 1952, a period of almost 22 years. The DAV, in this time frame, has on numerous occasions sponsored legislation to increase the existing $47 monthly payment. We feel impelled to cry out once more for action on this worthy proposal.

It has been pointed out at previous hearings that this special monthly compensation-authorized by Section 314 (k) of Title 38, U. S. Code-is in the nature of a supplemental award which recognizes factors other than the economic loss involved.

As you know, Mr. Chairman, the basic rate for an amputee is governed solely by the precise site of the amputation. In creating the award, the Congress recognized that there was no way to adequately compensate the veteran for his physical loss and the irreparable damage suffered in the service of his country. The awards take into account the special problems resulting from amputation— problems that cannot he medically assessed. The physical fact of amputation creates burdens beyond those reflected in the disability evaluation. Minor degrees of impairment in joint movements, which mean nothing to a normal individual, are very real handicaps to the amputee, not only to his comfort, but also to his safety, and he has to take increasing care in getting about. Minor disabilities in the opposite arm, leg and foot are common, but these can be major disabilities to the amputee who has to depend on the integrity of his remaining good limb. No adjustments in the fit or alignment of the limb overcomes these discomforts.

I may add that many of our World War II amputee DAV members, through the process of growing older are finding it increasingly more difficult to cope with their disabilities. The time of onset of this difficulty seems to vary in different individuals, and in different sites of amputations. Veterans who have gone on for years with few complaints and who have had adequate mobility begin to find that artificial limbs become heavier and more uncomfortable. They experience pain in their stumps often, are slowed down, and are less able to cope with daily actiivties.

Mr. Chairman, the strains and sacrifices an amputee must suffer every moment of the day and night have been overlooked since 1952. The loss of function prevents his taking part in many activities which people regard as a way of life. And, Mr. Chairman, none of these things appear in a Cost of Living Index.

In this connection, the question has often been asked, "How do you place a value on the loss of a leg, an arm?" We think anyone would be hard-pressed to come up with a precise response. It does occur to us, however, that since the Congress in 1933, placed a $25 value on the statutory payment, then successively raised it to $35 in 1945, to $42 in 1946, and to $47 in 1952, it logically follows that the value—if measured in a strictly monetary sense-has greatly increased in terms of 1974 economic standards. This feature of the bill, Mr. Chairman, would affect 86,094 veterans at a first year cost of $13.3 million-an extremely small figure in terms of today's total budget.

It is our hope that the Committee, after giving full and thoughtful consideration to the matter-will approve the very modest increase in the special monthly awards as proposed in H. R. 11469.

Mr. Chairman, I would like to comment for a moment on the Administration's proposal to establish a future system of automatic cost of living increases in compensation payments, as measured by the Consumer Price Index. A resolution calling for an automatic cost of living increase tied to the Consumer Price Index was considered by our most recent National Convention and was rejected.

This Committee traditionally has kept the compensation program under close and continuing study, and has steadfastly taken whatever steps were necessary to hopefully satisfy the changing needs of the veteran disabled in the service of his country. For example, since July 1, 1933, when the current compensation program began, until August 1, 1972, the date of the last compensation increase, the Congress, through its periodic reviews, has increased the monthly compensation payments for the totally disabled veteran by 450 percent. In this same time period, the Consumer Price Index had increased by 220 percent. If the compensation increases had been tied to the CPI, the veteran would have lost 230 percent in his compensation payments.

It is therefore apparent that our country's most severely disabled veterans have fared much better in the compassionate hands of this Committee than would have occurred had they been under any system of automatic adjustments based upon fluctuations in the Consumer Price Index. We feel strongly that the subject of compensation adjustments should remain under control of the Committee. Moreover, we hold firmly to the view that this Committee and the Congress should evaluate and give prior approval to any VA-contemplated "structural" changes in the Schedule for Rating Disabilities. The bill, H.R. 4763 (VA Accountability Act), although not the subject of today's hearings, would assure that any such changes would be carefully scrutinized by the Congress, and that the best interests of our disabled veterans would be preserved and protected.

DEPENDENCY AND INDEMNITY COMPENSATION

Mr. Chairman, the DAV strongly supports and recommends for your considera tion the pending bill, H.R. 12300. It provides for an increase in DIC payments and removes one of the remaining discriminations in service-connected death benefits by equalizing the wartime and peacetime rates under the old death compensation program.

Our reasons for urging the adoption of the DIC increases proposed in H.R. 12300 are essentially the same as those expressed earlier with respect to the need for increases in the rates for disability compensation.

Another DIC proposal in which the DAV has had a long-standing interest is H.R. 3017. It provides for the payment of Dependency and Indemnity Compensation to survivors of deceased veterans who were rated 100 percent disabled by reason of service-connected disabilities for 20 or more years.

In assessing the merits of this proposal, Mr. Chairman, we think it reasonable to say that a veteran who has suffered the distress and debilitating effects of a service-related total disability for 20 years should, thereafter, have statutory assurance that upon his death his widow will be provided for by payment of Dependency and Indemnity Compensation. This certainly would give the veteran such peace of mind in the knowledge that his wife-who ministered to him for many years and often at great personal sacrifice-will have a more favored and dignified place in our society.

There is evidence that many of these women, of necessity, had cut themselves off from society. Many underwent rigid privations. In many instances the veteran survived for a long period of time through his wife's efforts, despite his severe service-connected disability.

In an overwhelming majority of these cases, the totally disabled veteran is unable to pursue a gainful occupation. He very definitely had no opportunity to make adequate provisions for his survivors.

Mr. Chairman, at present we are conducting a survey to accumulate actual cases where service-connection for cause of death has been denied on the premise that there was no casual relationship between the veteran's death and his serviceconnected total disability. Attached to this statement is an addendum citing a number of cases which we believe support our position with respect to the 20year feature of H.R. 3017. It is requested that the addendum be made a part of the hearing record.

I would like to call attention to three cases that are more or less representative of all those which we have received thus far. Included in the addendum is the case of a World War II veteran rated totally disabled from February 1946 for serviceconnected bi-lateral amputation of both legs. He died in February 1967 from bronchial pneumonia with arteriosclerotic heart disease. The widow's claim for DIC was denied by the Veterans Administration.

The records in another case show a veteran rated totally disabled because of loss of use of right leg, with nerve and muscle damage incurred in combat during World War II. The veteran held the total rating from 1947 until his death on August 22, 1970. Cause of death is shown as cardio-respiratory arrest. The widow's claim for DIC was denied and she is currently receiving non-serviceconnected pension.

Another case is that of a World War II Veteran who was rated totally disabled by reason of schizophrenic reaction from date of discharge in 1945 to the date of his death in 1972. Cause of death is shown as coronary thrombosis due to coronary arteriosclerosis. The VA held that the service-connected disability did not substantially or materially contribute to the cause of death. The widow's claim for DIC was denied. The decision was appealed and the Board of Veterans Appeals on June 22, 1973 upheld the previous denial of the claim.

31-413-74--8