[No. 97] COMMITTEE ON VETERANS' AFFAIRS, U.S. SENATE VETERANS' ADMINISTRATION, OFFICE OF THE ADMINISTRATOR OF VETERANS' AFFAIRS, Hon. VANCE HARTKE, Washington, D.C., March 12, 1974. Chairman, Committee on Veterans' Affairs, U.S. Senate, Washington, D.C. DEAR MR. CHAIRMAN: We are pleased to respond to your request for a report on S. 3067, 93d Congress, the proposed "Veterans' Disability Compensation Act of 1974". The purpose of the bill is to increase by approximately 15 percent the monthly service-connected disability compensation rates paid to veterans. The basic purpose of the disability compensation program is to provide relief for the impaired earning capacity of veterans disabled as the result of service-connected injury or disease. The monthly amount payable varies according to the degree of disability which, under the law (38 U.S.C. 355) is required to be based, as far as practicable, upon the average impairments of earning capacity resulting from such injuries in civil occupations. Additional compensation for dependents is payable to any veteran entitled to basic compensation for disability rated at not less than 50 percent. Since the disability compensation program was first established, the Congress has periodically made adjustments in the rates of compensation when such were deemed necessary. These rates were last increased by Public Law 92-328, effective August 1, 1972. From that date through January 1974, the cost of living, as reflected by the Consumer Price Index, has risen 11.3 percent. Subsection (a) of section 2 and section 3 of the bill would increase disability compensation rates payable to veterans by approximately 15 percent. Subsection (b) of section 2 would authorize administrative adjustment (consistent with the rate increases specified in subsection (a)) of the rates of disability compensation payable to persons within the purview of section 10 of Public Law 85-857, who are receiving disability compensation under laws other than chapter 11 of title 38, United States Code. Section 4 of the proposal provides that the effective date of these rate increases would be May 1, 1974. The estimated cost of enactment of S. 3067 approximates $416.4 million the first year, gradually declining to $406.9 million the fifth year. The President, in his letter of March 4, 1974, to your committee proposed, among other things, a 12-percent increase in disability compensation payable to veterans effective March 1, 1974, to conform with the changes in the cost of living since the last disability compensation rate increase, which was effective August 1, 1972. The President further stated that to protect compensation benefits in the future, an automatic adjustment in benefits is needed to recognize future increases in the cost of living, as measured by the Consumer Price Index. The enclosed draft bill, which has been transmitted to the President of the Senate, would accomplish the above-mentioned recommendations of the President regarding disability compensation as well as those regarding dependency and indemnity compensation contained in his letter of March 4, 1974. This measure would cost approximately $432 million the first year, decreasing to approximately $430 million the fifth year. We believe that enactment of the enclosed draft bill will in the long run be more beneficial for the service-connected disabled veterans and their survivors than would S. 3067. Accordingly, we oppose enactment of S. 3067 and urge, in lieu thereof, that the committee favorably consider the enclosed draft bill. This will also serve as a report on S. 2710, a substantially similar measure. Advice has been received from the Office of Management and Budget that there is no objection to the presentation of this report from the standpoint of the administration's program. Sincerely, DONALD E. JOHNSON, Administrator. Enclosure. A BILL To amend title 38, United States Code, to increase rates of disability compensation and dependency and indemnity compensation, and to provide for automatic adjustment thereof commensurate with future increases in the cost of living, and for other purposes Be it enacted by the Senate and House of Representatives of the United States in Congress assembled, That (a) section 314 of title 38, United States Code, is amended (1) by striking out "$28" in subsection (a) and inserting in lieu thereof "$31"; (2) by striking out "$51" in subsection (b) and inserting in lieu thereof "$57"; (3) by striking out "$77" in subsection (c) and inserting in lieu thereof "$86"; (4) by striking out "$106" in subsection (d) and inserting in lieu thereof "$119"; (5) by striking out "$149" in subsection (e) and inserting in lieu thereof "$167"; (6) by striking out "$179" in subsection (f) and inserting in lieu thereof "$200"; (7) by striking out "$212" in subsection (g) and inserting in lieu thereof "$237"; (8) by striking out "$245" in subsection (h) and inserting in lieu thereof "$274"; (9) by striking out "$275" in subsection (i) and inserting in lieu thereof "$308"; (10) by striking out “$495" in subsection (j) and inserting in lieu thereof "$554"; (11) by striking out "$616" and "$862" in subsection (k) and inserting in lieu thereof "$690 and "$965", respectively; (12), by striking out "$616" in subsection (1) and inserting in lieu thereof "$690"; (13) by striking out "$678" in subsection (m) and inserting in lieu thereof "$759"; (14) by striking out "$770" in subsection (n) and inserting in lieu thereof "$862"; (15) by striking out "$862" in subsections (o) and (p) and inserting in lieu thereof "$965"; (16) by striking out "$370" in subsection (r) and inserting in lieu thereof "$414"; and (17) by striking out "$554" in subsection (s) and inserting in lieu thereof "$620". (b) The Administrator of Veterans' Affairs may adjust administratively, consistent with the increases authorized by this section, the rates of disability compensation payable to persons within the purview of section 10 of Public Law 85-857 who are not in receipt of compensation payable pursuant to chapter 11 of title 38, United States Code. SEC. 2. Section 315(1) of title 38, United States Code, is amended (1) by striking out "$31" in subparagraph (A) and inserting in lieu thereof "$35"; (2) by striking out "$53" in subparagraph (B) and inserting in lieu thereof "$59"; (3) by striking out "$67" in subparagraph (C) and inserting in lieu thereof "$75"; (4) by striking out "$83" and "$15" in subparagraph (D) and inserting in lieu thereof "$93" and "$17", respectively; (5) by striking out "$21" in subparagraph (E) and inserting in lieu thereof "$24"; (6) by striking out "$36" in subparagraph (F) and inserting in lieu thereof "$40"; (7) by striking out "$53" and "$15" in subparagraph (G) and inserting in lieu thereof "$59" and "$17", respectively; (8) by striking out "$25" in subparagraph (H) and inserting in lieu thereof "$28"; and (9) by striking out "$48" in subparagraph (I) and inserting in lieu thereof "$54". SEC. 3. (a) Chapter 11 of title 38, United States Code, is amended by adding at the end therecf the following new section: "§ 363. Automatic cost-of-living increases for disability compensation (a) The rates payable under sections 314 (except the $47 rate in subsection (k)), and 315 of this title, shall be increased by such percentage as the Secretary of Health, Education, and Welfare shall certify in the Federal Register for social security recipients as a cost-of-living increase under section 215 of the Social Security Act, effective the same date as the latter increase. "(b) Where a rate so determined involves a fraction of a dollar, the amount payable shall be fixed at the nearest dollar, with fifty cents being increased to the next higher dollar. "(c) The Administrator shall adjust administratively, consistent with the increases authorized by this section, the rates of disability compensation payable to persons within the purview of section 10 of Public Law 85-857 who are not in receipt of compensation payable pursuant to chapter 11 of this title." (b) The analysis of such chapter 11 is amended by adding at the end thereof the following: "§ 363. Automatic cost-of living increase for disability compensation." SEC. 4. Section 411 of title 38, United States Code, is amended to read as follows: "(a) Dependency and indemnity compensation shall be paid to a widow, based on the pay grade of her deceased husband, at monthly rates set forth in the following table: "If the veteran served as sergeant major of the Army, senior enlisted adviser of the Navy, chief master sergeant of the Air Force, or sergeant major of the Marine Corps, at the applicable time designated by sec. 402 of this title, the widow's rate shall be $308. "2 If the veteran served as Chairman of the Joint Chiefs of Staff, Chief of Staff of the Army, Chief of Naval Operations, Chief of Staff of the Air Force, or Commandant of the Marine Corps, at the applicable time designated by sec. 402 of this title, the widow's rate shall be $573. (b) If there is a widow with one or more children below the age of eighteen of a deceased veteran, the dependency and indemnity compensation paid monthly to the widow shall be increased by $25 for each such child. “(c) The monthly rate of dependency and indemnity compensation payable to a widow shall be increased by $63 if she is (1) a patient in a nursing home or (2) helpless or blind, or so nearly helpless or blind as to need or require the regular aid and attendance of another person.' SEC. 5. Section 413 of title 38, United States Code, is amended to read as follows: "Whenever there is no widow of a deceased veteran, entitled to dependency and indemnity compensation, dependency and indemnity compensation shall be paid in equal shares to the children of the deceased veteran at the following monthly rates: "(1) One child, $105. “(2) Two children, $152. "(3) Three children, $196. (4) More than three children, $196, plus $39 for each child in excess of three.” SEC. 3. (a) Subsection (a) of section 414 of title 38, United States Code, is amended by striking out "$55" and inserting in lieu thereof "$63”. (b) Subsection (b) of section 414 of such title is amended by striking out “$92” and inserting in lieu thereof "$105". (c) Subsection (c) of section 414 of such title is amended by striking out “$47” and inserting in lieu thereof "$54". SEC. 6. (a) Chapter 13 of title 38, United States Code, is amended by adding at the end of subchapter II thereof the following new section: “§ 418. Automatic cost-of-living increases in dependency and indemnity compensation (a) The rates of dependency and indemnity compensation payable under sections 411, 413, 414, and 415 of this chapter shall be increased by such percentage as the Secretary of Health, Education, and Welfare shall certify in the Federal Register for social security recipients as a cost-of-living increase under section 215, of the Social Security Act, effective the same date as the latter increase. "(b) Where a rate so determined involves a fraction of a dollar, the amount payable shall be fixed at the nearest dollar, with fifty cents being increased to the next higher dollar." (b) The analysis of such chapter 13 is amended by adding at the end of subchapter II thereof the following: "§ 418. Automatic cost-of-living increases in dependency and indemnity compensation." SEC. 7. This Act shall take effect as of March 1, 1974. [No. 118] COMMITTEE ON VETERANS' AFFAIRS, U.S. SENATE EXECUTIVE OFFICE OF THE PRESIDENT, Hon. VANCE HARTKE, OFFICE OF MANAGEMENT AND BUDGET, Chairman, Committee on Veterans' Affairs, DEAR MR. CHAIRMAN: This is in response to your request of March 11, 1974 for the views of this Office on S. 3067, a bill to amend title 38, United States Code, to increase the rates of disability compensation for disabled veterans, and for other purposes. On March 12, 1974 draft legislation was submitted to the President of the Senate by the Administrator of Veterans' Affairs to provide for a 12-percent increase in veterans compensation benefits and a 14-percent increase for recipients of dependents and indemnity compensation (DIC) benefits. The draft bill would also provide for an automatic adjustment in these benefits to protect against future increases in the cost of living. In testimony before your Committee, also on March 12, 1974, the Veterans' Administration stated its reasons for recommending enactment of the Administration's proposal in lieu of S. 3067. We concur with the views expressed by the VA in its testimony and in its letter transmitting the Administration's draft bill to the Congress. Accordingly, we recommend enactment of the Administration's proposal in lieu of S. 3067. Enactment of the Administration's proposal would be in accord with the program of the President. Sincerely, WILFRED H. ROMMEL, Assistant Director for Legislative Reference. |