Now, far as the other pension adjustment is concerned, I must admit that I am not skilled in this matter of veterans' pensions and I suppose really not many Members of Congress are, except this committee. We do rely on your judgment and good sense and in the short time I have been here, I have been impressed with the work your committee has done.

My feeling there really is this, that we should take whatever action is necessary in adjusting these outside-income limits in order to try to keep our veterans abreast of the rising cost of living and protect the pension and its purchasing power. Beyond that, I honestly can't speak with any degree of knowledge because I know that the picture is a complicated one and I just don't have the expertise to comment upon it and give you members of the committee any good advice. Mr. ADAIR. I certainly share your view that one question we have to face is this matter of income limitation.

In my opinion that is one of the greatest irritants that exists today with respect to our veterans population because there is a feeling that it is unfair. As you suggest, it doesn't take into account present-day living costs, so I am glad to see you stress that as one matter to which we ought to give rather prompt attention and I share your views on

it.

Mr. GURNEY. And then there is the whole question, too, of some of these veterans who are certainly able to do some outside work, or their spouses are. To me, it has never been right, or seemed right to put a limitation upon a man's earnings or a woman's earnings that either prohibits them or discourages them from working. This just doesn't seem right.

Mr. ADAIR. Regardless of age?

Mr. GURNEY. Yes; regardless of age. As a matter of fact, I share this same point of view with regard to the whole social security picture. I don't think it really corresponds with other retirement systems and I think that whole principle is involved in here too.

Now, I know we have started out in this fashion and I don't think perhaps we can discard the whole idea, but certainly we can adjust it upward to accommodate our problems.

Mr. ADAIR. Thank you.

Mr. DORN. Thank you, Mr. Gurney.

Mr. GURNEY. Thank you, Mr. Chairman and members of the committee.

Mr. DORN. Your testimony has been most beneficial to the committee and we appreciate your comments. We welcome now the able gentleman from Florida, Mr. Herlong. Syd, we will be glad to hear from you now, and you just go right ahead.

Mr. HERLONG. Thank you, Mr. Chairman.

Mr. DORN. I want to personally welcome you to the committee. We know how busy you are, as a member of the Ways and Means Committee, and we are grateful that you would take this time to come and give us the benefit of your viewpoint concerning some of this legislation.

I might say, on the side, that I regret not having attended the Herlong family reunion in my congressional district.

Mr. HERLONG. You should have been there, because you are an honorary member of that clan, Mr. Chairman.

67-235-66- -9

Mr. DORN. Yes, sir. I am glad to have my home folks come before the subcommittee.

Go right ahead.

STATEMENT OF HON. A. SYDNEY HERLONG, JR., A REPRESENTATIVE IN CONGRESS FROM THE STATE OF FLORIDA

Mr. HERLONG. Thank you, Mr. Chairman.

I am here in the interest of H.R. 14143, a bill which I introduced. I shan't go into it at length except to tell the committee that the purpose of this bill is to give the same benefits to World War I veterans who have been declared totally and permanently disabled for a period of 20 years the same benefits that Spanish War veterans are getting today.

Now, I have not gone into the cost of this, or how many veterans would be affected by this. I am sure that the committee would want to get a report from the Bureau of the Budget before anything was done on this, but I did want the committee to give consideration to this and to try to build up the file to the point where they could take, I hope, appropriate action on the bill.

It is a very simple bill. If there are any questions any member of the committee would like to ask about it, I would be very glad to attempt to answer them.

Mr. DORN. Mr. Kornegay.

Mr. KORNEGAY. Thank you very much, Mr. Chairman.

First, let me join with the chairman in welcoming our distinguishing colleague, Mr. Herlong, of Florida, to the committee. We are grateful, certainly I am, to see him. He is a longtime personal friend of mine. It is always a refreshing experience to hear words of wisdom come from him.

I have just one question to ask you, Mr. Herlong, with reference to your bill.

That is, does it provide that the World War I veteran would be continuously, 100 percent disabled over a period of 20 years before entitlement begins?

Mr. HERLONG. That is right.

Mr. KORNEGAY. And then he would be entitled to the same benefits as the Spanish-American War veterans are now getting?

Mr. HERLONG. That is exactly right; yes, sir. It is just that simple. Mr. KORNEGAY. It certainly sounds like a reasonable proposition. A man who has been permanently disabled for that length of time, there is no question about the fact that he needs help of some sort from some source.

Mr. HERLONG. I would like to say, along the line I just heard Mr. Gurney testify, in connection with this business of updating the earnings entitlements of people who are veterans in order to permit them to draw non-service-connected benefits, I am sure every member of the committee recognizes the fact that this limitation was set at a time when the cost of living was much lower and I want to echo the statements made by Mr. Gurney, in stating that I would hope that the committee would do something about updating these earnings limitations, too. This is on another subject, but I did want to get that in the record.

Mr. DORN. Mr. Hanley.

Mr. HANLEY. I want to commend the gentleman from Florida for his interest and concern with respect to the plight of the World War I veteran, and certainly in view of the fact that their ranks are rather rapidly diminishing, I would agree with your proposal, that their status be equalized with that of the Spanish-American War veteran. Mr. HERLONG. Thank you very much, sir.

Mr. DORN. Mr. Teague.

Mr. TEAGUE of California. Sydney, I thought almost all of the retired veterans had gone to California.

Mr. HERLONG. No, sir. We have quite a few of them in Floridaand are very happy to have them there.

Mr. TEAGUE of California. I am sure you are. Mr. Gurney and your good self having appeared here this morning, your recommendations seem reasonable to me, and we thank you for bringing them to us. Mr. HERLONG. Thank you.

Mr. DORN. Mr. Adair.

Mr. ADAIR. You didn't touch upon this, but have you given any thought to the desirability of increasing the general level of pensions or is it your feeling that a correction of one kind or another in the income limitation might make a pension rate increase unnecessary?

Mr. HERLONG. I have previously introduced bills having to do with increasing pensions, but in my judgment if we take care of this updating of the earnings limitations, it will do the same thing at much less expense and take care of those veterans who really need the help, take care of them better than they are being taken care of at this time.

Mr. ADAIR. Then, if I understand you correctly, you would feel that it would not be necessary to give thought to both the income limitation and a dollar increase in pension payments?

Mr. HERLONG. Mr. Adair, it is purely a practical proposition as far as I am concerned.

Mr. ADAIR. I understand.

Mr. HERLONG. I think we have a better chance to pass the other one, I mean increasing the earnings limitation, than we have of increasing the pension, and I do not believe we can do both. That is my view on it.

Mr. ADAIR. Thank you.

Mr. HERLONG. Thank you, Mr. Chairman.

Mr. DORN. I might say, again, on behalf of the chairman, that I personally and I am sure the subcommittee agrees with me that we are deeply grateful, particularly for your coming here, because of your long experience on the Ways and Means Committee in dealing with the problems concerning the senior citizens of our country.

Mr. HERLONG. We have to raise the money to pay for these things. Mr. DORN. I want to express, publicly, my personal appreciation to you for perfecting a lot of our legislation which affects every senior citizen in the United States of America, as a member of the great Committee on Ways and Means.

Therefore, I particularly appreciate your coming here.

Mr. HERLONG. Thank you so much, Mr. Chairman. I appreciate this very much. I want to thank all of you very much. Mr. ĎORN. Mr. Gonzalez.

I might say to the subcommittee Mr. Gonzalez represents an old stomping ground of a lot of veterans. I have spent some happy moments there in San Antonio.

We are delighted to have you with us this morning and I am sure the committee will benefit greatly from your testimony.

Mr. GONZALEZ. Thank you. I hope you will have a chance to return to San Antonio.

Mr. DORN. Thank you, sir.

Mr. GONZALEZ. It is still called the "mother-in-law" of the Army and we do have quite a veteran population.

Mr. DORN. At this juncture, if you will yield to me

Mr. GONZALEZ. Certainly.

Mr. DORN. Some people like to call my district the mother of Texas. Travis and Bonham, were both from my district, you know; Benjamin Rusk and Samuel Maverick and many others came from my congressional district.

Mr. GONZALEZ. Very true.

Mr. DORN. So, maybe there is a relation there between my district and the "mother-in-law" of the Army.

Mr. GONZALEZ. Oh, there is no question of that. In fact, the Maverick name is still looming large in the city that I now represent, and they certainly do have their origins in our country. I do not know how Texas could have been populated if it had not been for that

area.

STATEMENT OF HON. HENRY B. GONZALEZ, A REPRESENTATIVE

now.

IN CONGRESS FROM THE STATE OF TEXAS

Mr. GONZALEZ. Well, Mr. Chairman and members of the committee, I endeavored to leave with the committee copies of this testimony which is somewhat lengthy and I am not going to burden you with it I know that you have others to be heard. You have had a lengthy hearing and I welcome this opportunity to compliment the subcommittee for giving us the attention that you are at this time. I notice that in the bills that you are considering, including mine, the bills fall into five different categories. Mine falls into the last of those categories.

The general categories, the way I have listed them, would mean that some called for an expansion of the retirement income exemption, others for exemptions of certain types of retirement income, others for specific social security increases, others for liberalization of the general income limits, and, then, the fifth general category which we describe as general waiver of benefits.

It is in this last class that we have here now that my bill falls. My bill would authorize all or any part of monthly social security benefits and such waived benefits to be considered outside of the purposes of income and pension calculations.

Actually, I think that it is a wonderful opportunity to go into this needed reform, as well as the overall stocktaking on the general question of veterans' benefits and pensions.

I believe that it is actually an extension of what the Congress did, in the 88th Congress which, again, I compliment this committee for being instrumental in bringing about, because in all fairness, had it not been for the 88th Congress which provided social security

exemption for the first time, there would not have been any kind of consideration.

So, if it is all right with you, Mr. Chairman, I will dispense with the reading of this lengthy presentation, offer it for the record if it is all right, and leave it up to your discretion as to whether you fell I can answer questions or enlarge on the bill.

Mr. DORN. Mr. Gonzalez, without objection your fine statement will be included in the record.

(Mr. Gonzalez' statement follows:)

FURTHER STATEMENT BY THE HONORABLE HENRY B. GONZALEZ

Mr. Chairman, Members of the committee on Veterans Affairs, I am very pleased and grateful for this opportunity to appear before you in behalf of my bill, H.R. 11394, which provides that certain social security benefits may be waived and not counted as income. The purpose of the bill, as with the others the committee is considering during these hearings, is to amend the law to prevent the loss of veterans' pensions because of the increased social security benefits.

We are all familiar with the facts that under the veterans' laws the amount of pension payable is determined by the amount of other annual income. Of course, the term "pension" has come to be used for a variety of meanings including non-service connected pensions, and service-connected "compensation" benefits such as disability compensation, dependency and indemnity compensation, and death compensation. In addition there are the "service" pensions received by a relatively small number of veterans of wars prior to World War I, and the "special" pension to veterans who have been awarded the Congressional Medal of Honor. In these hearings we are considering only the non-service connected pension granted to veterans who have no disabilities arising for service in the armed forces and for their dependents.

In 1964, Congress in enacting Public Law 88-664 excluded from a veteran's income for eligibility and computation purposes "10 per centum of the amount of payments received under public or private retirement, annuity, endowments, or similar plans or programs. The purpose of the exclusion, of course, was to prevent any person receiving a non-service connected veterans pension from suffering an actual reduction in benefits of the prospective social security increase. But the present problem arose when the social security increase did, in fact, cause some recipients to go above the various plateaus of income limitations.

As an example, a veteran drawing $54 a month in social security ($658 a year but $592 after the 10% exemption) prior to the 1965 social security increase, would have been entitled to $100 a month in non-service connected veterans pension. His total entitlement under the veterans and social security programs would have been $1,858 a year.

However, after the 1965 amendments, his social security benefit was raised to $58 a month ($696 a year but $626 after the 10% exemption) but his veterans pension as a result was reduced to $75 a month. The reason for this reduction was that despite the 10% exemption of social security income, his total income was still above the first plateau of $600, and his veterans benefits are therefore reduced from $100 to $75 a month. This veterans total annual entitlement under both programs in this instance is only $1,596, or $254 less than if the social security increase had not been passed.

In fairness, I think it ought to be pointed out that prior to 1964 no exemption for social security income existed, and when an individual's income exceeded one of the income limitation plateaus, there was no relief for him and his veterans pension was automatically reduced. The 88th Congress wisely provided for the first time an exemption to avoid to some extent this result and the 88th Congress should be complimented for this vision and good sense. We are here today in order to try to improve upon what Congress did 2 years ago. What the 88th Congress accomplished was a beginning towards the overall goal of improving and strengthening the Veterans Pension program and I am confident that the 89th Congress can do even more in this direction.

My bill represents one method of relieving the veteran from an increase in his social security income. Other methods have been suggested. In fact, the bills that have been introduced in the House in the 89th Congress on this subject can be divided into 5 categories:

1. Expansion of Retirement Income Exemption. The 1964 10% exemption could be liberalized so that a higher percentage of retirement income would be