creases. A study of the history, and current results, of this program shows conclusively that Government compensation is intended, in the vast majority of cases, to assist veterans by supplementing the income they are able to earn. To illustrate, 95 percent of the veterans currently on the disability compensation rolls are only partially disabled.

The vast majority of veterans (who do not have severe disabilities) need the Government benefits less in times of high prices and full employment, and more in times of low prices and considerable unemployment when it is hard to find jobs and to be self-sustaining. It would, therefore, appear to be more in the interest of the veteran to maintain stable benefits even though economic conditions fluctuate. In this connection, it should also be pointed out that increases in rates when the cost of living is rising add to the inflationary pressure in the general economy, and decreases when prices are declining are deflationary. Here again it appears that stable rates are preferable. Of course, this discussion does not mean to imply that changes in pension rates should not be made to adjust to longrun changes in price levels. Such long-run changes have followed both world wars and might, of course, occur on an upward or downward basis in the future. With respect to the long-run change in price level which followed World War II, it is believed that increases in compensation rates since 1939 have adequately reflected these fundamental changes. Generally speaking, the test of whether changes in price level are long-run or short-run can only be determined by rather general agreement among economists and among the members of the legislative and executive branches of the Government.

There remain for consideration two groups worthy of the Government's concern. There are those veterans with the most severe disabilities, and the dependents of those deceased from service-connected causes. Your attention is directed to Public Law 868, Eightieth Congress (increasing compensation benefits to dependents substantially) and Public Law 877, Eightieth Congress (providing increases of compensation to veterans rated not less than 60 percent disabled and who have dependents). These recent increases would appear to have raised the benefit levels for these groups to an equitable level.

In view of the above, and because of the cost involved, you are advised that the enactment of H. R. 908 and H. R. 937 could not be considered to be in accord with the President's program.

Sincerely yours,

(No. 121)

FRANK PACE, Jr., Director.

Hon. JOHN E. RANKIN,

VETERANS' ADMINISTRATION, Washington 25, D. C., July 12, 1949.

Chairman, Committee on Veterans' Affairs,

House of Representatives, Washington 25, D. C.

DEAR MR. RANKIN: Reference is made to your request of this date for a report by the Veterans' Administration on a confidential committee print of H. R. 5598, a bill to increase compensation for World War I presumptive service-connected cases, provide minimum ratings for service-connected arrested tuberculosis, increase certain disability and death compensation rates, liberalize requirement for dependency allowances, and redefine the terms "line of duty" and "willful misconduct," with the amendments approved in executive session of the committee today.

H. R. 5598 is in the form of an omnibus bill and as indicated by the title covers five separate subjects in the field of veterans' laws. These subjects are considered in five sections, which this report will discuss seriatim

SECTION

The purpose of section 1 of the bill is to provide for payment of compensation to World War I veterans for disabilities service-connected by statutory presumption at the same rates as are payable for directly service-connected disabilities. Under the present law, rates of compensation to World War I veterans for disabilities service-connected by statutory presumption are 75 percent of the rates payable World War I veterans for directly service-connected disabilities.

This section of the bill is identical with H. R. 896, Eighty-first Congress, a bill to restore full compensation awards in World War I presumptively service-connected cases, with respect to which the Veterans' Administration submitted a

report to the committee under date of April 19, 1949 (Committee Print No. 50), a copy of which is enclosed. The views expressed in the mentioned report on H. R. 896 are equally applicable to section 1 of the subject bill. The estimated cost of this section, if enacted, is $4,691,000, for the first year.

It will be noted in the mentioned report on H. R. 896 that the Bureau of the Budget has advised that the enactment of such legislation would not be in accord with the President's program.

SECTION 2

The purpose of section 2 of the bill is to amend Veterans Regulation No. 3 (a), as amended, by adding thereto a new paragraph II to provide that any ex-service person shown to have active tuberculosis which is compensable under Public, No. 2 and the Veterans Regulations promulgated pursuant thereto, who, in the judgment of the Administrator of Veterans' Affairs, has reached a condition of complete arrest, shall be rated as totally disabled for a period of 2 years following the date of such arrest; as 50 percent disabled for an additional period of 4 years; and 30 percent for a further 5 years. Following far-advanced active lesions the permanent rating shall be 30 percent, and following moderately advanced lesions the permanent rating, after 11 years, shall be 20 percent, provided there is continued disability, dyspnea on exertion, impairment of health. etc.; otherwise the rating shall be zero percent. It is provided by the section that its enactment shall not be construed as requiring the reduction of compensation authorized under any other law or regulation and that no compensation shall be payable for any period prior to its enactment It is also provided that the total disability rating for 2 years following complete arrest may be reduced to 50 percent for failure to follow prescribed treatment or to submit to examination when requested.

The statutory ratings proposed by section 2 of the bill would be applicable to veterans who served either in peace or in war and who are eligible to benefits provided under Public, No. 2, Seventy-third Congress, and the Veterans Regulations promulgated pursuant thereto. Such veterans who have arrested tuberculosis incurred in wartime service would be entitled to the rates provided under part I of Veterans Regulation No. 1 (a), as amended, which presently provides for compensation at the rate of $138 per month for 100 percent or total disability, $69 per month for 50-percent disability, $41.40 per month for 30-percent disability, and $27.60 per month for 20-percent disability. Such veterans who have arrested tuberculosis incurred in peacetime service would be entitled to compensation under part II of Veterans Regulation No. 1 (a), as amended, which presently provides compensation at the rate of $110.40 per month for 100 percent or total disability, $55.20 per month for 50-percent disability, $33.12 per month for 30percent disability, and $22.08 per month for 20-percent disability.

In addition to the amounts specified in the preceding paragraph veterans who are rated as 100-percent disabled would receive pursuant to the provisions of Public Law 877, Eightieth Congress, additional allowances for certain dependents ranging in amounts in wartime cases from $14 to $91 monthly and in peacetime cases from $11.20 to $72.80 monthly.

Under the rating schedule now in effect, ratings of 100 percent are provided for service-connected active pulmonary tuberculosis unless the veteran is employed without apparent detriment to his health. Ratings of 100 percent are continued for 6 months after attainment of arrest or inactivity following hospitalization for active tuberculosis. At the end of the 6-month period, a 50-percent rating is provided for 41⁄2 years and a 30-percent rating is provided for 5 years thereafter. In the case of far-advanced lesions, the 30-percent rating is continued for life. and in the case of moderately advanced lesions after 10 years a 20-percent rating is continued for life, if reexamination discloses continued disability such as dyspnea on exertion or scattered rales, otherwise the rating is zero percent. The 100-percent rating following arrest may be continued for successive periods of 6 months, up to a maximum of 2 years, in any case in which a certificate from a tuberculosis specialist employed by the Veterans' Administration or from a tuberculosis specialist who is approved by the district section chief of tuberculosis and who may be salaried or fee basis, is received before the expiration of each 6-month period following arrest, establishing that the veteran is suffering from inactive pulmonary tuberculosis in a convalescent stage which precludes employment and requires continued special medical rehabilitation under a suitable program of limited activity, in a sheltered workshop or his home, under frequent medical supervision, and the specialist's personal examination confirms the necessity for continuing the program of certain limited activity. This increased rating would be in lieu of the 50-percent rating following 6 months after arrest.

From the foregoing, it will be seen that section 2 of the bill is substantially similar to the present regulations on the subject with the following exceptions: (1) The 100-percent rating for the first 2 years would be conclusive under the bill

(2) The 50-percent rating would be authorized for one additional year under the bill.

Under the Schedule for Rating Disabilities, 1945, ratings for disabilities from tuberculosis, like any other disease, are based upon the actual disability found to exist. Extensive advances have been made during the past 24 years as the result of studies in the field of tuberculosis. Administrative amendments in the rating schedules have followed such advances and the current rates have been fixed in proportion to the degrees of disablement resulting from the residuals of tuberculosis. It is believed that the current ratings authorized are liberal and medically sound and we are not aware of the justification for the changes proposed by section 2 of the bill.

In view of the indeterminate factors involved, the Veterans' Administration is unable to submit an accurate estimate of the cost of this section of the bill, if enacted. It appears that the added cost for the first 5 years would not be substantial, amounting to something approximating $700,000 for the first fiscal year. The major portion of the additional cost would arise out of the additional year for which the 50-percent rating would be authorized. Advice has not been received from the Bureau of the Budget with respect to this proposal.

SECTION 3

The purpose of section 3 of the bill is to increase certain disability and death compensation rates. Subsection (a) would increase the basic rates for serviceconnected disability based on degree of disability and subsection (b) would increase the rate of death compensation payable to a widow with children.

The wartime rate for total disability would be increased from $138 to $150 per month with proportionate increases for the nine degrees of partial disability. The new rates of disability compensation would represent an increase of approximately 8.7 percent and would be effected by amending subparagraphs (a) to (j), inclusive, of paragraph II, part I, Veterans Regulation No. 1 (a), as amended. The proposed increase would also result in an increase in the peacetime rates of serviceconnected disability based upon percent of disability in view of the provisions of Public Law 876, Eightieth Congress, which provides that the rates for disability incurred in or as a result of peacetime service shall be 80.percent of the rates authorized for wartime service.

The proposal would not increase the special rates for certain specific serviceincurred disabilities authorized under subparagraphs (k) to (0) of paragraph II, part I, Veterans Regulation No. 1 (a), as amended. These rates range from $240 to $360 per month; nor would it increase the presently authorized additional allowance of $42 per month in connection with the loss or loss of use of one limb or blindness of one eye. Enactment of section 3 (a), therefore, would discriminate against those veterans who, generally speaking, suffer from more serious disabilities.

Subsection (b) would increase the wartime rate of death compensation for a widow with one child from $100 to $105, and the rate for each additional child (with widow) from $15 to $25. The similar peacetime rates of death compensation would be increased to 80 percent of the stated new wartime rates. The increases would be effected by an amendment of paragraph IV, part I. Veterans Regulation No. 1 (a), as amended.

Wartime and peacetime rates of death compensation for widows, children, and dependent parents were last increased substantially by Public Law 868, Eightieth Congress, July 1, 1948. A further increase in rates for only a portion of such group of dependents might be considered discriminatory with respect to the remaining classes, which include the widow alone, children alone, and dependent mothers and fathers.

It is estimated that the enactment of section 3 (a) of the bill would increase the rates payable to 2,024,100 veterans of World Wars I and II, Spanish-American War, and the Regular Establishment at a cost for the first year of $84,432,000. Enactment of section 3 (b) would provide increases in death compensation for approximately 58,000 cases at an estimated cost the first year of $7,368,000.

The Veterans' Administration is not advised as to the relationship of the specific proposals to the program of the President. However, advice has been received with respect to bills proposing percentage increases generally in compensation rates that the enactment thereof would not be in accord with the

President's program. (See report on H. R. 908, C1st Cong., May 11, 1949, Committee Print No. 74.)

SECTION 4

The purpose of section 4 of the bill is to authorize additional compensation because of dependents under Public Law 877, Eightieth Congress, to veterans whose service-connected disability is rated 50 percent.

Attention is invited to H. R. 910, Eighty-first Congress, a bill to amend the act of July 2, 1948 (Public Law 877, 80th Cong.), to include persons whose serviceconnected disability is rated not less than 10 percent, with respect to which the Veterans' Administration submitted a report to your committee under date of May 4, 1949 (Committee Print No. 65), a copy of which is enclosed. Although the provisions of H. R. 910 are more liberal than the proposal contained in section 4 of the bill, the mentioned report contains a detailed statement of the existing law on this subject and indicates the amount which would be payable on account of dependents to those veterans whose disability is rated at 50 percent.

It is estimated that enactment of section 4 of the bill would result in additional cost the first year of approximately $15,406,300.

The Bureau of the Budget advised the Veterans' Administration that the enactment of H. R. 910, supra, could not be considered to be in accord with the program of the President. We have not been apprised of the relationship to such program of the more limited proposal on this subject contained in section 4 of the bill.

SECTION

The purpose of section 5 of the bill is to liberalize the line of duty requirements of paragraph VIII, Veterans Regulation No. 10, as amended, with respect to a service person whose disease, injury, or death was incurred without willful misconduct on his part while in confinement under sentence of court martial or civil court. In such cases the disease, injury, or death would be deemed to have been incurred in line of duty if the sentence of the court martial did not involve an unremitted dishonorable discharge or if the offense for which convicted by civil court did not involve a felony, as defined under the laws of the jurisdiction where the service person was convicted by such civil court.

Except as to certain matters of form, section 5 of the bill is identical with H. R. 6557, Eightieth Congress, a bill to amend the act approved May 17, 1926, as amended by Public Law 439, Seventy-eighth Congress, approved September 27, 1944, which defines line of duty and misconduct for pension and compensation purposes, with respect to which the Veterans' Administration submitted a report to your Committee under date of November 9, 1948 (Committee Print No. 403), a copy of which is enclosed. The views expressed in the mentioned report regarding the substantive provisions of H. R. 6557 are equally applicable to section 5 of this bill.

There is no available information upon which to base an estimate of cost of section 5, if enacted.

The Veterans' Administration has been advised by the Bureau of the Budget that the enactment of legislation such as proposed by section 5 of the bill would not be in accord with the program of the President.

SUMMARY OF COST

With respect to those portions of the bill which are susceptible of a cost estimate (secs. 1 to 4, inclusive), it is estimated that the cost of H. R. 5598, if enacted, would be approximately $112,597,300 for the first year.

Sincerely yours,

O. W. CLARK (For Carl R. Gray, Jr., Administrator).

(No. 403)

Hon. EDITH NOURSE ROGERS,

VETERANS' ADMINISTRATION, Washington 25, D. C., November 9, 1948.

Chairman, Committee on Veterans' Affairs,

House of Representatives, Washington 25, D. C.

DEAR MRS. ROGERS: This is in further reply to your request for a report on H. R. 6557, Eightieth Congress, a bill to amend the act approved May 17, 1926,

as amended by Public Law 439, Seventy-eighth Congress, approved September 27, 1944, which defines line of duty and misconduct for pension and compensation purposes

The purpose of the bill is to liberalize the line of duty requirements of paragraph VIII, Veterans Regulation No. 10, as amended, with respect to a service person whose disease, injury, or death was incurred without willful misconduct on his part while in confinement under sentence of court martial or civil court. In such cases the disease, injury, or death would be deemed to have been incurred in line of duty if the sentence of the court martial did not involve an unremitted dishonorable discharge or if the offense for which convicted by civil court did not involve a felony, as defined under the laws of the jurisdiction where the service person was convicted by such civil court.

At the outset it may be noted that the act of May 17, 1926, was inadvertently referred to in the title of the bill. Neither the 1926 act nor its amendments by section 1 of Public Law 439, Seventy-eighth Congress, is concerned with the definition of line of duty and misconduct for pension and compensation purposes. This subject is dealt with in paragraph VIII of Veterans Regulation No. 10, which was amended by section 2 of Public Law 439. supra, and which H. R. 6557 is designed to amend further.

If the bill were enacted, the provisions of paragraph VIII, supra, would read as follows (proviso proposed by the bill being italicized):

"PAR. VIII. An injury or disease incurred during military or naval service will be deemed to have been incurred in line of duty and not the resut of the veteran's own misconduct when the person on whose account benefits are claimed was, at the time the injury was suffered or disease contracted, in active service in the military or naval forces, whether on active duty or on authorized leave unless such injury or disease was the result of his own willful misconduct: Provided, That venereal disease shall not be presumed to be due to wilful misconduct if the person in service complies with the Army or Navy regulations requiring him to report and receive treatment for such disease: Provided further, That the requirement for line of duty will not be met if it appears that at the time the injury was suffered or disease contracted the person on whose account benefits are claimed (1) was avoiding duty by deserting the service, or by absenting himself without leave, materially interfering with the performance of military duties; (2) was confined under sentence of court martial or civil court: Provided, however, That disease, injury, or death incurred without willful misconduct on the part of the service person shall be deemed to have been incurred in line of duty if the sentence of the court martial did not involve an unremitted dishonorable discharge or if the offense for which convicted by civil court did not involve a felony, as defined under the laws of the jurisdiction where the service person was convicted by such civil court."

Under the language of the bill, every disease, injury, or death, not due to willful misconduct, incurred by a service person while in confinement under sentence of a court martial or a civil court would be deemed to have been incurred in line of duty unless the court martial sentence involved an unremitted dishonorable discharge, or the sentence of the civil court involved conviction of a felony, as defined by the laws of the jurisdiction where the person was convicted. It is not clear whether disability occurring prior to the actual remission of a dishonorable discharge is intended to be presumed to have been incurred in line of duty after such remission is made effective. As commissioned officers are dismissed rather than discharged from the service, the bill, if enacted, could be construed as requiring that any disability or death suffered by a commissioned officer while confined under sentence of a court martial was incurred in line of duty.

H. R. 6557 presents a question of national policy for determination by the Congress, as to whether persons referred to in the bill (and their dependents) whose disease, injury, or death is incurred without willful misconduct on their part while in confinement as prisoners for unlawful acts-by which acts and confinement they rendered themselves unable to perform their service contracts with the Government-should be afforded compensation benefits on a parity with those veterans (and their dependents) whose disease, injury, or death was incurred without willful misconduct on their part while in a duty or leave status in keeping with their service contracts.

It is difficult to understand on what theory disability or death occurring while in confinement under sentence of a civil court could be deemed to have been incurred in line of duty. While there are some cases disallowed, where the veteran was confined under sentence of court martial, which may be thought to involve appealing circumstances, legislative changes designed to relieve in such cases would require reconsideration of the basic principle supporting existing legislation and consideration of possible inequalities which might result as to cases disal