(5) My bills would eliminate the net worth test. At present, a veteran can lose eligibility for a pension simply because he has savings or property which he can use, even if he has no regular income. This would not be permitted under the legislation I have introduced.

Mr. Chairman, it seems to me that there is an urgent need for improvement of the pension system along the lines I have just outlined.

Unfortunately, as a number of witnesses have indicated, the enactment of the new veterans' pension law 2 years ago did not result in all the gains that had been expected for veterans and their dependents. According to figures supplied by the Veterans' Administration, less than 13 percent of the veterans had benefited under the new law as of June 15 this year. Moreover, it appears that the way the new law will work, it will result in many veterans eventually getting lower pensions than they would under the older provisions.

At

One of the problems of the new law enacted in 1959 is that the income requirements are so stringent. If he is to get a maximum pension of $85 a month for a single veteran, the veteran may earn no more than $600 a year. This means that a man must be almost destitute before he can be eligible for a pension. the same time, the whole range of benefits in the pension system is too low. The proposals before the committee would correct this situation by permitting a single veteran with no dependents to earn up to $1,200 a year while still retaining eligibility for the highest benefit which would be raised to $100 a month. Corresponding changes would be made along the line for veterans with dependents or their widows eligible for nonservice connected disability pensions. This would add a note of realism to the existing scale of veterans pensions and permit individuals who have earned the right to pensions through service to avoid the humiliation of the deepest poverty.

In connection with this same problem, I strongly favor the provision to exclude a wife's income in determining whether a veteran is eligible for a pension. We are talking here, let us remember, about pensions for permanent and total disability. Veterans already suffering from physical disability and the emotional strain of not being able to work to contribute to the family income should not be required to undergo the further pain of being made an economic adjunct of their wives.

I should also like to comment here on the hospital provision. Under the existing law, as I have explained, a veteran hospitalized by the VA has his pension limited to $30 a month. The excess may be paid to his family if he has dependents, but if he has no dependents, the money goes back to the Government. This leaves the single veteran with no backlog to meet normal expenses that may continue despite hospitalization, and no backlog to meet special new expenses attendant on his discharge, for example, for special posthospital drugs and medication.

I believe it is fairer to go back to the old system, as proposed in my bills, to reduce hospitalized veterans' payments by 50 percent but give him the amount deducted when he is discharged from the hospital. This would leave him with some resources against high costs and continuing expenses.

Mr. Chairman, at this point I think a few words would be appropriate on the nature of veterans' pensions. A lot of people mistakenly think that they are a dole. That is not the case. We have been talking for the last few minutes, as I pointed out earlier, about benefits for totally and permanently disabled veterans. The aim is to maintain income through pensions of persons who earned them through service in the Armed Forces. The pensions are not public assistance and there has never been any intention to keep the pensions so low, or the eligibility requirements so stringent, as to maintain the recipients just at a subsistence level.

Mr. Chairman, that concludes my discussion on non-service-connected disability pensions and the amendments contained in my bills, H.R. 6053 and H.R. 6054. The basic justification for granting this pension is that veterans of the First World War have not received benefits equivalent to those enjoyed by veterans of other conflicts. Veterans of World War II and the Korean war were eligible for terminal leave pay, unemployment compensation and social secuirty credits for the time they served in the Armed Forces. Veterans of World War I did not receive any of those benefits.

More important, perhaps, World War II and Korean veterans received one almost priceless benefit that World War I veterans did not: the GI bill of rights. The GI bill entitled World War II and Korean veterans to on-the-job training and academic education. To individual veterans able to get training for a trade or profession in their youth, the GI bill education benefits are worth literally tens of thousands of dollars in increased earning capacity over their lifetime. Aside from the cash income, however, I call these benefits priceless because for many, educational opportunities deeply enrich the enjoyment and appreciation of life in a manner that added income never can.

World War II and Korean veterans also received the benefits of the veterans housing program-benefits not given to World War I veterans.

I have made this comparison between World War I and World War II veterans simply to show that the veterans of the earlier war did not get anything like the benefits given to veterans of the more recent conflicts. It is for this reason that I believe World War I veterans should receive pensions-$102.37 a month in my bill, H.R. 5668-subject to income limitations but based on service alone rather than on disability. Most of the World War I veterans are now past 65. A GI bill obviously would not help them at all. The best way to give these veterans their just due, in the light of what later veterans received, is to grant them the pension I have described.

This concludes my testimony, Mr. Chairman, I want to thank the committee again for this opportunity to appear, and I urge it to act favorably on the proposals before it. Thank you.

STATEMENT REGARDING H.R. 397, BY HON. CRAIG HOSMEr, a RepreseNTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA

Mr. Chairman, I urge your favorable consideration of H.R. 397 which I have introduced providing that capital gains from the sale of a home by a veteran receiving non-service-connected pension, his widow, and children, shall not be considered as income under pension laws administered by the Veterans' Administration.

I point to the case in 1958 of a widow who was granted a small $50 per month pension upon the death of her World War I veteran husband, providing she did not earn over $1,400 in any one year. She had started buying her home but was forced to sell when the city needed the property for city improvements.

This widow bought the property for $5,500, selling it to the city for $6,000, and at the time of the sale she still owed most of the purchase price. The law required that the $500 be added to her meager earnings as a practical nurse, giving her more than $1,400 that year, and disqualifying her for her greatly needed pension.

It is to assist people such as this widow that I introduced this bill first in the 86th Congress and again at the beginning of this Congress. It is grossly unfair that Veterans' Administration benefits should be reduced or terminated when a beneficiary gets a small profit on the sale of his home.

STATEMENT REGARDING H.R. 2904, TO PROVIDE FOR Payment of PENSIONS TO WORLD WAR I VETERANS BY HON. CRAIG HOSMER, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA

Mr. Chairman, I introduced a bill to provide for the payment of $100 monthly pension payment to World War I veterans because I believe they did not receive the advantages awaiting them at the end of World War I that were provided for the men who fought in World War II and the Korean conflict.

I am not speaking in support of my bill but for favorable action by the committee on any bill that will help pay this debt to the veterans of World War I. I have concluded that the provisions of H.R. 3745, introduced by Representative Winfield K. Denton, and some 35 other identical bills, are desirable. These measures ask for an increase over the old pension rate of $78.75, and they contain income limitations, which I feel are in keeping with today's cost of living. They include the eligibility or period of service which must be performed for such payment. In defining or interpreting income for limitation purposes, they provide that only earned income shall be computed. This I believe is proper because in my judgment it is contrary to sound economic doctrine in a free enterprise system to penalize a person who has, by sacrifice and thrift, managed to build up an annuity or retirement program.

The cost of the program provided in these bills would be about $1 billion less than the estimated cost of legislation supported during the last Congress by World War I organizations. The first year's cost of the previously recommended legislation was estimated by the Veterans' Administration to be $1,940,384,000, reflecting initial or increased awards to some 2,395,200 veterans. On the other hand, the estimated cost for the first year of the program provided in H.R. 3745 would be about $942,327,000, reflecting initial or increased awards to some 1,564,700 veterans.

Most of the veterans of World War I are 65 years of age and over. Many of them are afflicted with illness of a chronic nature, such as arthritis, diabetes, tuberculosis, ulcers, and heart conditions. Along with other elderly jobseekers, they are found to be too old to work. The income of retired veterans is on the average less than half of the average income of American families. More than half of World War I retired veterans, who are married, are attempting to survive on income uncomfortably below the costs of a minimum budget for such couples. We cannot rest contentedly with the knowledge that half of our World War I veterans live at an economic level which, at today's costs, can only be called poverty. Almost half of these veterans have less than $1,000 annual income, and for many of this group, social security benefits, averaging $74 per month, are the mainstay of income. The incomes of a high proportion of retired World War I veterans must be recognized as below any decent level required for adequate housing, proper nutrition, medical care, and all other ordinary items in a standard of living deemed proper.

I urge the committee's favorable action on this legislation.

STATEMENT OF HON. GEORGE Huddleston, Jr., a RepresentATIVE IN CONGRESS FROM THE STATE OF ALABAMA IN SUPPORT OF H.R. 3286

Mr. Chairman, I appreciate the opportunity to testify before this committee in behalf of my bill, H.R. 3286, which would permit the concurrent payment of pension or compensation with retired pay to retired servicemen. This proposal is one which, I believe, would merely close a loophole in existing regulations and laws.

The Department of Defense has stated as its policy that "Retired pay is earned income and constitutes deferred payment for services already rendered."

Compensation stemming from injuries received while in the service of the Nation such as that provided for by Veterans' Administration is wholly unrelated to a retired serviceman's deferred income. In short, these are two different forms of compensation paid for two entirely different reasons. If a man is entitled to VA compensation it is by virtue of his being found to have injuries to a compensable degree which reduce his present earning power. The same situation applies to receiving social security disability compensation or benefits under the old-age and survivors insurance program.

I think that this situation should be adjusted so that our retired servicemen could receive the full amount of compensation and retired pay they are entitled to. I favor early action on this legislation to correct a situation which is working a hardship on so many of our retired veterans.

Thank you.

STATEMENT OF HON. HAROLD T. (Bizz) JOHNSON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA

Mr. Chairman, as author of H.R. 4677, one of the companion bills to H.R. 3745 introduced by our able colleague from Indiana, Hon. Winfield K. Denton, I would like to add my fullest support to the enactment of this legislation.

I feel that there is no doubt as to the need for this legislation. With but a few exceptions, veterans of World War I are beyond 65 years of age and many of them are in their seventies.

We in Congress have been made aware of the seriousness of the problems which all our senior citizens face when they reach their later years. Many studies have been made of this problem and I am confident you are familiar with these, but I would like to make some brief comments about the problem.

First of all, many of our veterans of World War I now are retired or are unable to find work because of their age. Some of those who retired did so only because of mandatory retirement ages of 65. Thus we find these veterans faced with continuing high costs of living and reduced incomes. Certainly, they must pay for food, clothing, housing, and medical care; yes, even taxes. This continues in spite of the substantial reduction in incomes.

Many World War I veterans have no social security benefits and many who do are trying to eke out an existence on the bare minimum which only just this year was increased by this Congress to only $40 a month.

Veterans of over 65 years, with their many chronic conditions, need a greater volume of drugs and medicine on a steady, rather than an intermittent basis. The records are full of examples of older veterans putting off critically needed medical care because of their fear that costs of medicines prescribed by their doctors would be excessive. Retired veterans often have little or no assets to help pay for medical care.

Regardless of how you figure it, one fact remains clear: Incomes of many World War I veterans is below that considered adequate in this day and age. It is my firm belief that these people deserve consideration. Their needs are pressing.

I was one of the sponsors of the legislation introduced last year, but this year I go along with the program now under consideration. This would save the country nearly $1 billion as compared to that proposal initially advanced last year. This would reduce the number of veterans who would be able to participate, but I do believe that those who would benefit through the enactment of H.R. 4677 or Congressman Denton's H.R. 3745 would be those with the greatest need. Mr. Chairman, I appreciate the opportunity to present this statement and urge your favorable consideration of this legislation. Thank you.

STATEMENT OF CONGRESSMAN VICTOR A. KNOX, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MICHIGAN

Mr. Chairman, I appreciate the privilege of presenting to the distinguished membership of the House Committee on Veterans' Affairs this statement in support of my bills, H.R. 6199 and H.R. 6200. In deference to your busy schedule I will be brief. The Committee on Veterans' Affairs is to be commended for scheduling hearings on pension legislation affecting the some 21⁄2 million World War I veterans still living and also those surviving widows and children of such veterans who find it financially difficult to provide the daily needs for themselves. H.R. 6199 which pertains to survivors of veterans of World War I would amend title 38 of the United States Code to provide a monthly pension of $65 for the widows of World War I veterans subject to an annual income limitation of $2,000 for widows without children and $2,400 for widows with children. This would modify the present pension program of existing law for widows of World War I veterans so that the program would be a separate and permanent pension act. Under my bill in order to be eligible the widow of the World War I veteran would be required to have been married to the veteran for a period of 5 years or more and for any period of time if a child was born of the marriage. The restrictions imposed on income would be the same as those under the pension law that expired June 30, 1960.

I am sure you will agree with me that it is reasonable to assume that the employment opportunities for the widows of these veterans have been greatly lessened due to their ages. Taking these factors into consideration it can hardly be expected that their average annual incomes would exceed $2,000. It is also reasonable to assume that minor children would, with the advance of time, become a decreasing factor in benefit cost and eventually the widows without children would be the sole beneficiaries of my proposed bill.

H.R. 6200 pertains to the veterans of World War I themselves and would amend title 38 of the United States Code to provide a monthly pension of $100 for World War I veterans subject to an annual income limitation of $2,400 for single veterans and $3,600 for veterans with dependents. All honorably discharged veterans of World War I who served in active wartime service for a period of 90 days or more, or honorably discharged after having served less than 90 days for a service-connected disability which is recognized by the Veterans' Administration, shall, upon reaching 62 years of age when there is a disability existing of not less than 10 percent and there is reasonable medical evidence to substantiate that such a disability will continue throughout the remainder of the veteran's lifetime, be entitled to a monthly pension of $100 a month. If the veteran is in need of regular aid and attendance the monthly rate would be increased by $70. Under the provisions of H.R. 6200 a veteran's income would include social security and retirement pay, less the veteran's contributions; the veteran's share of jointly owned stocks and bonds, saving bank deposits and the dividends or interest accruing thereon; and other such personal income.

The veterans of World War I and their widows deserve the small pension increases proposed in H.R. 6199 and H.R. 6200. It is my belief that we can make this pension program more adequate for those who need the help most if these

pensions are based on some proven need, and not granted to all regardless of income or ability so provide for themselves.

For those veterans who were on the pension rolls before July 1960, from 1946 to that time their pension only increased from $60 to $66.15 monthly for a veteran under 65 and from $72 to $78.75 for a veteran over 65. In the same period widows' pensions only increased from $42 to $50.40 monthly. I am sure that I need not recite to the members of this committee what has happened to the purchasing power of the dollar in a similar period. I might add at this point, that I have received numerous complaints concerning the determination of a veteran's eligibility under the present law.

Mr. Chairman, I think one of the things about my bill H.R. 6200 that is not included in other bills pending before your committee is that the benefit eligibility is related to benefit need and would not be available to veterans fortunate enough to have income over amounts prescribed in the bill. This in my judgment is an equitable and appropriate modification. The suggestion for its inclusion was presented to me from members of one of the outstanding veterans organizations in my district. It is a meritorious proposal in that it tailors the Federal program to answering actual need of a significant number of our veterans who have served their Nation in time of war and who now must necessarily look to their Government for help in their declining years.

Let me conclude my statement by commenting briefly on the budgetary aspect. I recognize that what I proposed will result in the expenditure of additional Federal funds in behalf of the veterans of World War I. The exact expenditure involved will be furnished to the committee by actuaries and experts of the Veterans' Administration. It is my conviction that caring for the veterans of our Nation who need financial help is more appropriately a function of the Federal Government than are some of the proposed Federal expenditures that are now being provided by State and local programs. Therefore, I believe that in terms of establishing a priority for the application of Federal funds a very high priority should be given to this deserving and urgent need and that we must meet the cost of the program by delaying some of the suggested Federal programs that encroach upon State and local prerogatives and traditional functions.

I request that your committee give favorable consideration to these legislative proposals.

Thank you for this opportunity.

STATEMENT OF HON. FRANK KOWALSKI, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CONNECTICUT, in Support of H.R. 5021

Mr. Chairman and members of the committee, I should like to begin my talk by discussing some of the problems now facing the veterans of World War I. In 1917 this Nation faced a crisis. Our way of life was threatened by the holocaust in Europe. Millions of the Nation's young men were called upon to leave their normal pursuits and defend the Nation on the battlefields of France. In 1918 the fighting ended with the victory of the Western democracies, primarily because these young men arrived in time to turn the tide. It is no exaggeration to say that their sacrifices were largely responsible for that victory. When these young men returned from the wars, they were left to make their own adjustment to civilian life. There was no GI bill to help them make up for the lost years, and equip themselves to work in our rapidly developing industrial economy, But, that was over 40 years ago. The problems of the World War I veteran

are here and now.

There were on June 30, 1960, about 2,700,000 living veterans of World War I. Their average age was over 66. These men and their families are facing the great problems of old age. Many of them are disabled, many have found that changes in industrial organization have made their skills obsolete. As I have already noted, they did not have the advantage of any GI bill. Many of them were already too old to be able to obtain full advantage from the social security system inaugurated in 1935. Much of their working life fell in the depression period of the 1930's and they have not had full opportunity to save and provide for their old age. Thus, many veterans of World War I are now finding it difficult to maintain themselves and their families in a decent and dignified way. It seems to me that the debt of honor owed to these men can never be fully discharged. Nevertheless, the Congress of the United States and the people represented by the Congress will recognize their obligation to help the World War I veteran with his problems.