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exempt from the veterans law income computation. Bills have been introduced to exempt from 20% to 100% of all retirement income.

2. Exemption of Certain Types of Retirement Income.- Bills have been introduced to exempt' for income limitation purposes 100% of only certain types of retirement income. For example, one bill would exempt all monthly social security benefits, and another would exempt only railroad retirement benefits.

3. Exemption of Specific Social Security Increases.—Proposals have been made, and an amendment was introduced in the Senate last year, to provide that the amount of increase of Social Security benefits in the 1965 amendments should simply be disregarded in determining the amount of the veterans pension. If we applied this formula to the specific example I gave above, this would mean that the veteran would have received the social security increase and retained his $100 monthly veterans pension as well. As you all know, the Administration opposed this approach last year. As you also know, this kind of amendment was attached to the House passed bill, H.R. 14347, in the Senate this year. This amendment would exempt not only the 1965 increase but also all future social security increases.

4. Liberalization of the General Income Limits.Another approach would be an across-the-board increase in the annual income limits contained in the Veterans law. One bill now pending, would up the present plateaus of $600, $1200 and $1800 to $720, $1440, and $2160.

5. Waiver of Benefits.- My bill falls under this category whereby a waiver would be authorized of all or any part of monthly social security benefits and such waived benefits would not be considered as income for pension purposes.

Aside from the immediate effect of the approach I have taken, I have tried to convey with my bill a recognition that what we are now doing is of a stop gap nature and not re-examining and reappraising the Veterans Pension program or the Social Security program for purposes of identifying the direction that public policy should take in the future. In my opinion, such a stocktaking is absolutely imperative and must be done soon by Congress. I know that this Committee under the most able Chairmanship of my great colleague from Texas, Olin Teague has been doing this precisely and I want to join it in its endeavors. One of the reasons for this need is the fact that programs are overlapping, and, as a matter of fact, that is why we are here today. For example, in addition to the nonservice connected veterans pension program, we have the Old Age, Survivors, Disability, and Health Insurance program, the Old Age Assistance program, and the Medical Assistance for the Aged program, in addition to the programs we have already mentioned—Social Security and Railroad Retirement. Of course, the Veterans Affairs committee does not have jurisdiction over all of these programs and it is obvious that other committees will have to become sensitive to the needs of reform in this area of Federal legislation. For the overlapping programs are not only getting in each others way, they are getting in the way of the people whom they are supposed to serve.

Another reason for the need of general reform of Veterans law and pension programs, and an equally compelling reason, involves the principle underlying the non-service connected pension program, as has also been brought out by this committee. Legally, by statute and by judicial interpretation, these pensions are considered no more than gratuities of the Federal government.

In other words, no person has a vested right in a pension of this type. This appears to be to me unjust and unrealistic. It is degrading both to the recipients and the givers of the pension. For in my opinion, any benefit which Congress believes ought to be conferred, and particularly a veterans benefit, helps maintain the integrity of the nation. If there were no responsibility on the part of the Federal government for legislating these assistance programs, then there would be little reason for going to the trouble. The fact is, however, that there is a responsibility. And I fail to see how Congress can fulfill that responsibility on the one hand, and then say it is only conferring gratuities or gifts on the other. This is an inconsistency and it is very basic to the present law, in my view.

In speeches I have made on this subject, when I have spoken of the Federal government's responsibility toward veterans and their families, I have used the word "obligation. An obligation is the act of commiting oneself to a course of action. Yet, in the entire history of veterans legislation, what has there been to define the commitment of the Federal government to provide for the future welfare of its ex-servicemen and their dependents? We speak freely of gratitude to those who serve us in the armed forces, especially during times of dire need and war, but what is the real consequence as far as the veteran in concerned of such a sentiment? Gratitude is often forgotten, and momentary expressions of appreciation are sometimes fleeting things. I believe that it is time we cemented our responsibility to the veteran through the authority of a written declaration.

I hope therefore that the committee will take this opportunity to review not only the bills before it today, but the assumptions on which they are based and the entire structure of veterans' welfare legislation. Congress could do no greater service to the American veteran than to say to him that we recognize our obligation to him and to his dependents for serving his country as a member of the armed forces, and that henceforth the nation's gratitude will flow from this commitment.

I also believe that it is time for Congress to seriously consider a greater coordination of all welfare programs, veterans and others. For purposes of efficiency and economy it may very well be that it would be wise to reorganize the many Federal programs that operate in this area. I would hope that the proper committee make a rather extensive study of this matter and come up with recommendations for Congress to act upon. I would also hope that such a study include recommendations for modernizing these programs so that the Federal government may not be unwittingly legislating people into poverty. I realize that some assistance is far better than no assistance, but I see no reason why an affluent country like the United States has to say to a citizen in need of assistance, "we will grant you some assistance but you must remain poverty stricken and on a subsistence diet nevertheless." This is how I understand the implication of our welfare programs which provide for incomes far below the poverty definition of $3,000 per year. Continued progress and affluence demands, in my opinion, that we stretch outselves beyond this limited and outdated concept. Thank you. Mr. Dorn. We appreciate your summarizing the statement. Mr. GONZALEZ. Thank you very much.

Mr. DORN. If the members of the subcommittee have any questions, I would be grateful if they would ask them of you at this time.

Mr. KORNEGAY. I have no questions. I just want to express my appreciation to our good friend and colleague, Mr. Gonzalez, for taking the time to not only come here, but to prepare what I know is a very fine treatise and statement on this subject.

Mr. GONZALEZ. Thank you very much.

Mr. KORNEGAY. This subcommittee welcomes you and we, as you know, pay a lot of attention to what you say. Mr. GONZALEZ. Thank you very, very much. Mr. Donn. Mr. Hanley.

Mr. HANLEY. Mr. Chairman, I, too, want to express my commendation to you, Mr. Gonzalez, for what appears to be a very comprehensive report on the subject we are discussing here today. I do not have any questions--well, perhaps one brief one.

Do I interpret the proposal that all social security benefits would be eliminated as reported income?

Mr. GONZALEZ. All or part would be authorized to be waived. Mr. HANLEY. All or part? Mr. Gonzalez. When computed for purposes of income, yes, sir. Mr. HANLEY. Thank you very much. Mr. GONZALEZ. Thank you, sir. Mr. Dorn. We certainly appreciate your coming before the committee.

Mr. GONZALEZ. I share your sentiments, Mr. Chairman. Mr. DORN. Thank you very much. We will hear now our good friend and colleague on the Veterans' Affairs Committee, Bob Secrest from Ohio. Bob, you just go right ahead. I know the subcommittee members will appreciate your thoughts, because we all know of your interest in this and any other legislation which deals with veterans' benefits.

STATEMENT BY HON. ROBERT T. SECREST, A REPRESENTATIVE

IN CONGRESS FROM THE STATE OF OHIO

Mr. Secrest. I appreciate the opportunity to appear before my colleagues this morning and to say a few words in behalf of the eight pension bills I introduced which are pending before this subcommittee at the present time. These bills are:

H.R. 1167. Provides that where a Spanish-American War veteran's widow has remarried, the widow shall be deemed to be the widow of the veteran if the second marriage was to a Spanish-American War veteran who has died, and she has no entitlement because of the death of such veteran to whom she was subsequently married.

H.R. 2655. Excludes for income eligibility purposes public or private retirement, annuity, endowment or similar plans or programs until the amount of payments received equals the amount of contribution.

H.R. 2658. Liberalizes the provision of the payment of pension to individuals who are in a VA hospital or domiciliary.

H.R. 5181. Increases pension rates by 10 percent.
H.R. 6343. Increases the rates of pensions by 10 percent.

H.R. 6408. Increases both the rates of pension and income limitation.

H.R. 6409. Redefines eligibility criteria for pension with regard to employment and disability.

À.R. 6410. Excludes $10,000 of private life insurance in determining pension eligibility.

I have had a keen and continuing interest in non-service-connected pensions since I first came to Congress over 30 years ago. I am proud of the fact that my first major vote cast was against the so-called Economy Act in 1933. It drastically altered the pension structure then existing. Subsequently, nearly all the changes which the Economy Act provided for were altered until a more liberal pension program ultimately came into existence.

I have been impressed by the testimony presented to the subcommittee from several witnesses, but I wish to commend particularly the representative of the American Legion, Mr. John Corcoran, who presented a list of laws which had been enacted in this Congress which provided "welfare type benefits for Federal beneficiaries.” Such items as the Appalachian aid program of $1.1 billion; Elementary and Secondary Education Act of $1.344 billion; Uniformed Services Pay Act of 1965 of $1.048 billion; Public Works and Economic Development Act of 1965 at $665 million; Economic Opportunity Amendments of 1965 of $1.8 billion; Higher Education Act of 1965 of $672 million; Foreign Aid and Assistance Act of 1966 of $3.3 billion; Military Pay Increases Act of $357 million; Federal Employees Pay Increase Act of 1966 of $506 million. Excluding an $8 billion figure attributable to the Housing and Urban Development Act of 1965, these figures total over $14.5 billion, and, of course, there is pending now an extension of the antipoverty program of $1.75 billion. All of these programs except the Foreign Aid and Assistance Act had my wholehearted support.

Now, Mr. Chairman, along with the American Legion, I am not condemning these programs, most of which I supported. I do think that they stand in sharp contrast to the programs which are now being administered in the non-service-connected field for veterans.

I am indebted, too, to the testimony of Mr. Frank W. Stover, of the Veterans of Foreign Wars, in calling attention to one of the provisions of Public Law 89–368, which provides a minimum payment for persons over age 70 or more from social security--payment of $35 for a single individual or $52.50 for a man and wife if they are not otherwise covered. This, it should be emphasized, would go to nonveterans and veterans alike, but is, in effect, a flat payment to all those in this category with no income limitation or means test.

We hear much today about the so-called negative income tax and a $3,000 poverty level. Three thousand dollars is the ceiling on nonservice-connected pensions, and if a veteran and his wife get above that figure they get no pension whatsoever from the Veterans' Administration.

We should increase not only the rate of pension but the income limitations applicable to such pensions. Învolved in the latter category is the question of waivers of retirement, social security payments, annuities, and an exclusion of certain items from income.

I think that an adequate case has already been made for liberalization of the non-service-connected pension program and that case has my full support.

While not a part of these hearings, I am happy to note that a related bill, H.R. 12723, which I have had the honor to sponsor, has received a favorable report from the Veterans' Administration. It provides that so-called old law pension cases, that is, those on the pension rolls who are receiving the rates that were effective prior to June 30, 1960, will be entitled to receive the drugs and medicine which are now provided for the aid-and-attendance cases of the new law, Public Law 86–261. This applies only to the aid-and-attendance cases and the old rate for this group is $135.45.

Mr. Dorn. Thank you, Bob. We are happy now to welcome to the committee the Honorable Don Clausen of California. You may proceed, Congressman.

STATEMENT BY HON. DON H. CLAUSEN, A REPRESENTATIVE IN

CONGRESS FROM THE STATE OF CALIFORNIA

Mr. CLAUSEN. Thank you, Mr. Chairman, for the privilege of appearing before you today in support of my bill, H.R. 13289. This bill will correct an oversight that has caused many veterans—and dependents—to lose pension benefits to which they were entitled, and I am pleased to be able to summarize the bill and urge its enactment to this distinguished committee.

When the House passed the Social Security Amendments of 1965, it was not our intent to deprive veterans of any assistance they were receiving under the Veterans' Pension Act of 1959. The benefits provided to veterans and their dependents is well earned in service to their country and when those benefits are inadvertently reduced, we must act quickly and effectively to restore the accidental cuts.

The non-service-connected disability pensions of veterans of the two World Wars and the Korean conflict are based on a formula which makes the amount of the pension dependent upon the annual income of the veteran. For example, a veteran with no dependents, earning less than $600 per year will have a pension of $100 a month. On the other hand, if he makes over $1,800 he will not receive a pension. Thus, by increasing the benefits of the social security program, we raised the annual income of many veterans and dependents to a point where their benefits were reduced or, as in many cases, were lost altogether. This effect was not the intent of Congress, and I am sure it is now the intent of Congress to correct this problem.

The legislation before us today will correct the situation simply and effectively. Its provisions will amend the Veterans' Pension Act to exclude from annual income any increase in social security payments attributable to the enactment of the Social Security Amendments of 1965. I firmly believe this is the best way to eliminate this great injustice and to restore to the veterans and their dependents the assistance to which they are entitled.

I think it obvious to anyone familiar with the situation that many people were deprived of benefits due to enactment of the social security amendments. This group included many surviving widows of servicemen to whom the pension is a major portion of their income. We must therefore amend the law to clarify the situation. The legislation before us today will assure that no veteran who qualifies will lose benefits because of a legal conflict. It is only fair and equitable to take this means of resolving the problem for the people affected.

In conclusion, may I urge this committee to take favorable and rapid action on this bill so that we may see its enactment during this session of the Congress.

Mr. DORN. Thank you so much, Mr. Clausen. We appreciate your help. We will now hear our good friend, Congressman Quillen of Tennessee. Mr. Quillen, you may proceed.

STATEMENT BY HON. JAMES H. QUILLEN, A REPRESENTATIVE

IN CONGRESS FROM THE STATE OF TENNESSEE

Mr. QUILLEN. Mr. Chairman, I am extremely pleased that the committee has begun hearings on my bills, H.R. 11604 and H.R. 13939, together with numerous other measures dealing with veterans' pensions. It goes without saying that these bills go into areas that are in need of immediate attention.

I would first like to discuss my bill, H.R. 11604, that would prevent loss of veterans' pension benefits as a result of an increase in social security benefit payments under the Social Security Amendments of 1965. The social sceurity changes were made retroactive to revert to a situation that was expected to exist at the time the pension bill was enacted in 1964. However, it was not realized then that this would work a hardship on some who are receiving pensions, hardships which they could not and did not anticipate. I do not feel that we should penalize any veteran or citizen for the delays involved in legislating, and I, therefore, urge that this bill be given favorable consideration.

The second bill in which I am deeply interested is H.R. 13939, to increase the rate of pension payable to certain veterans of World War I, World War II, and Korea, including their widows and certain other dependents. This bill is a companion bill to H.R. 13217, which was introduced by you (Hon. Olin E. Teague of Texas), Mr. Chairman.

The beneficiaries of this bill, those who qualify for pensions prior to July 1, 1960 (known as the old part III law), have not had a sub

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