stantial increase in monthly benefits since August 1954. The bill provides for an increase in the monthly rate from $66.15 to $85.05 for a single veteran; from $78.75 to $100 for a veteran who is married and living with or reasonably contributing to the support of his spouse or has a child or children, if the veteran is 65 years of age or older or if the veteran has been rated as permanently and totally disabled from non-service-connected disability not the result of willful misconduct or vicious habits.

The bill also provides a raise from $135.45 to $146.30 if the veteran is in need of regular aid and attendance, and in the case of any such veteran, the Administration shall, upon presentation of a prescription made out by a duly licensed physician as specific therapy in treatment of an illness or injury suffered by such veteran, furnish such veteran any drugs or medicines therein prescribed.

Additional benefits are also available for widows of veterans of World War I, World War II, and the Korean war. The widow with no dependents will be given $64 per month, while a widow with one dependent will receive $83, with $15 for each additional dependent. Finally, this bill would raise the limit for annual income for an unmarried veteran and for a widow without children to $2,100, and for a married veteran, any veteran with children, or a widow with a child to $3,400.

I have received letters from all over the country testifying to the need of these veterans and their dependents for these increases. As one World War I veteran in my district wrote: "We do need it the way groceries are going up. It sure does hurt us." Another veteran commented that he hoped "old vets" would not be forgotten because "we are getting to the place where we need help." The widows of our veterans particularly are suffering and living in poverty because of the lack of adequate compensation.

We dare not neglect our responsibilities in this field any longer, and I respectfully submit this statement in strong support of H.R. 13939 and H.R. 11604.

In closing, I would like to thank the committee for its outstanding efforts in behalf of our veterans, and I know that they will continue to benefit greatly by your actions.

I request favorable action on both of my bills-H.R. 11604 and H.R. 13939.

Thank you, Mr. Chairman.

Mr. DORN. Thank you very much, Mr. Quillen. The next witness will be Congressman John Fogarty, whom we all know to be a very able Member of Congress for many years from the State of Rhode Island. Go right ahead, Mr. Fogarty.

STATEMENT BY HON. JOHN E. FOGARTY, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF RHODE ISLAND

Mr. FOGARTY. Mr. Chairman, I appreciate the opportunity to testify here today.

I have been concerned for some time about hardship suffered by some of our veterans and their dependents and survivors because of anomalous and inequitable effects of the present provisions for determining eligibility for, and the amount of, the pensions provided for needy war veterans and needy widows and children of veterans.

Considering that, to be eligible for a pension, a veteran or widow without dependents must come within an annual income limitation of $1,800, and a veteran or widow with dependents within a $3,000 limitation, it is quite obvious that for veterans, widows, and fatherless families-needy to begin with, and receiving pensions that range from $27 to $115 a month-every dollar of pension counts heavily. Yet, under present law an increase of a few dollars in a pensioner's income from sources other than his pension can actually reduce his total income. This unfortunate result occurs when the addition to his "other income" raises him into a higher bracket under the veterans' pension laws, with reduction or loss of pension in an amount that exceeds the increase in the pensioner's "other income."

Let me give one example. Let us take a widow whose income, other than her pension from the Veterans' Administration, consists of social security benefits of $800 a year and almost $400 more from irregular employment. Since her income is in the $601 to $1,200 bracket, she gets pension payments of $48 a month. In a given year her earnings from work may amount to a little more than usual-say $420. Since the additional income puts her into the $1,201 to $1,800 annual income bracket, her pension is reduced to $27 a month-a reduction in her yearly pension of $252 and a reduction in her total income of about $230.

I have introduced a bill, H.R. 11601, which would alleviate this problem. H.R. 11601 would permit pensioners to waive social security benefits they would otherwise receive where such waiver would enable the pensioner to avoid such a reduction in his total income. Thus, in the example I cited, the widow would be permitted to waive $20 of her last social security benefit checks for the year and the Veterans' Administration would be required to exclude the $20 so waived from her "other income." Thus she would, under my bill, receive total income of $1,776 instead of the $1,544 resulting under present law.

One of the situations in which my bill would be particularly helpful is that arising when there is a general increase in benefits under social security, which constitutes much of the "other income" of recipients of veterans' pensions. The 1965 increase in social security benefits, by augmenting the "other income" of some pensioners by modest amounts, resulted in terminating their pensions or dropping their pension rate to a lower dollar level, with the result that in some cases there was a net loss to the pensioner. This caused real hardship for some needy veterans and families.

The Congress, in anticipation of a social security benefit increase in 1964, enacted legislation that, beginning with 1965, excluded from computation of a pensioner's "other income" 10 percent of the income received from public and private retirement programs and plans, including social security benefits. As a result some veterans and widows got increased pensions and, since a social security benefit was not enacted in 1964, the increase in their pensions was an increase in total income. But this increase was, in effect, taken away from them, and in some cases people were made ineligible for pensions, when the 7-percent increase in social security benefits was enacted in 1965. If H.R. 11601 had been in effect, the pensioners who had their pensions reduced or eliminated by the 1965 social security increase could have remained eligible for a pension, or maintained their previous pension

rate, by waiving part or all of the social security benefit increase. Under H.R. 11601, the Veterans' Administration would not have counted the amounts waived in computing income for pension purposes, and so these needy veterans and widows of veterans would have been able to avoid the unintended effect of having their incomes cut back. My bill would of course avoid similar problems in connection with increases in social security benefits in the future.

At present, I should point out, the Social Security Administration does allow waivers of benefits under its administrative procedures, providing the person requesting waiver wants to waive the full amount of a monthly benefit. However, under present law, the Veterans Administration counts a social security benefit that is waived as "other income" just as though it were actually received. My bill is drafted to provide for specific statutory authority for the waiver of all or part of a monthly social security benefit, and also to provide that the amount waived shall not be counted as income for veterans' pension purposes.

When it is considered that the average monthly pension paid to disabled veterans is about $87, that the average to widows with children is about $90, and that the average to widows alone is about $54, it is obvious that these pensioners need to receive every dollar of pension for which they can qualify. H.R. 11601 would help to meet this need. I urge that you give it your favorable consideration.

Mr. DORN. Thank you so much, Mr. Fogarty. We will next hear Congressman Craley of Pennsylvania. Go right ahead, Mr. Craley. STATEMENT BY HON. N. NEIMAN CRALEY, JR., A REPRESENTATIVE IN CONGRESS FROM THE STATE OF PENNSYLVANIA

Mr. CRALEY. Mr. Chairman and members of the committee, I appreciate the opportunity to appear before the Committee on Veterans' Affairs. This committee is charged with attending to the needs of a group whose bond is their service to their country. Under the leadership of the chairman, the Honorable Olin E. Teague, this committee has consistently and effectively carried out that responsibility.

Mr. Chairman and members of the committee, I am here today to represent a bill I have proposed, H.R. 11874: To amend title 38 of the United States Code so as to provide that monthly social security benefit payments shall not be included as income for the purpose of determining eligibility for a pension under title 38. It is my intent in this legislation to assure that social security benefits shall be excluded from the computation of income under the laws governing payment of pensions to veterans, widows, and children.

Conservatively speaking, as many as 30,000 Veterans' Administration pensioners themselves will receive reduced pensions as a result of 1965 increases in the amount of social security benefits received by the pensioners or their spouses. On December 1, 1965, the Pennsylvania House of Representatives adopted House Resolution No. 146 recognizing this problem and requesting the Congress of the United States to amend the Veterans' Pension Act to provide that social security benefits received by pensioners and their spouses shall not be considered in determining the amount of pensions paid veterans.

The reason for this is as follows.

Pensions are payable to veterans and to widows of veterans on the basis of financial need as prescribed in the pension laws. Financial need is determined by the amount of the annual income of the veterans or widows outside of the pension paid by the Veterans' Administration. Regardless of the source, with few exceptions, dollars reduce financial need. Social security payments are considered as real income and are counted in the determination of annual income for pension purposes.

The 88th Congress, recognizing that the contemplated increase in social security payments would cause the pensions of some veterans and widows to be reduced or terminated, enacted Public Law 88-664. This act provided that 10 percent of all payments to an individual under any private or public retirement program, including social security, would be exempt from the computation of income for pension purposes. The report with the House bill indicated that the intent was to permit thousands of individuals who are receiving social security payments and who are on the borderline of the income limitation of the pension law to enjoy the increase in social security benefits recently voted by the House *

* *

At that time, however, H.R. 11865, containing the 5-percent_increase in social security payments, was not enacted into law. The 10-percent exclusion, nevertheless, became effective January 1, 1965. The Social Security Amendments of 1965, passed in July of 1965, increased benefits by 7 percent across the board retroactively to January 1, 1965. These benefits did not actually take effect until the early fall of 1965. For some 9 months, then, the veterans enjoyed the 10 percent exclusion provision before being affected by the increase. During the past months, since the enactment of the Social Security Amendments of 1965, I have been contacted by numerous elderly veterans whose pensions have been reduced because of the 7-percent increase in benefits granted annuitants by that legislation. This unfortunate situation occurred because the annual incomes of some veterans were thereby pushed above the plateaus established for pensions. By law the veteran is entitled to a benefit of: $100 a month, if income is $600 or less; $75 a month, if income is $1,200 or less; $43 a month, if income is $1,800 or less; nothing if income is over $1,800.

When and if the social security increase in the 1965 amendment pushed incomes above these plateaus of $600, $1,200, and $1,800, respectively, benefits were reduced, or, in the case of a veteran whose income went over $1,800, entirely eliminated. The following is a specific example.

Pre-1965: A veteran drawing $54 a month in social security ($648 a year but $582 after 10 percent exemption) prior to 1965 amendments would have been entitled to $100 a month in non-service-connected VA pension. Total annual entitlement under both programs would have been $1,848 a year.

Post-1965: After 1965 amendments such a veteran's social security benefit would be raised to $58 a month ($696 a year but $626 after the 10 percent exemption) but his veteran's pension as a result would be reduced to $75 a month.

Total annual entitlement under both programs would be $1,596, or $252 less than if the social security increase had not been passed.

Mr. Chairman and members of the committee, this is, indeed, an unfortunate situation for our veterans. I believe there are two separate concepts involved here. The annuities under the Social Security Act are based upon the contributions the individual made during his working years; the veterans' pensions are based upon the sacrifice the individuals made, in finances and personal sacrifices, to protect our freedom, to serve his country. A grateful nation should justly reward its veterans; not penalize them for having contributed to the progress of the Nation during peacetime. Therefore, I feel very strongly that social security annuities should have no effect on a veteran's pension.

There are other compelling reasons for this legislation I propose. It seems to me unfair and unwise to take from the veteran something that has once been given. The 10-percent exclusion became effective, as I have indicated before, some 9 months before the Social Security Amendments of 1965. Thereby many veterans got used to pensions, funds, income that had formerly not been possible before the 10-percent exclusion.

Some will argue that the increase in his social security benefits makes the veterans' pension unnecessary. Mr. Chairman and members of the committee, I believe that if pensions are based on need, then clearly this is not the case. Many of these veterans receive only about $2,000 a year income to support a man and his wife. If the criterion for determining poverty is an income of less than $3,000 a year, one can hardly oppose increasing veterans' income by excluding the social security benefits when determining eligibility for veterans pensions. Need would still be the determining factor in assessing pensions.

I wish to thank the committee and the chairman for your attention and interest in this legislation.

Mr. DORN. Thank you so much, Mr. Craley. We will now hear one of the members of our committee, the Honorable Teno Roncalio, of the State of Wyoming. Teno, just go right ahead.

STATEMENT BY HON. TENO RONCALIO, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF WYOMING

Mr. RONCALIO. Mr. Chairman, under present law, persons whose names are entered on the Medal of Honor roll and who express a desire to receive a special pension, are paid $100 a month for life. This special pension is in addition to all other payments under laws of the United States. I recommend passage of my bill, H.R. 11582, which would entitle the widow of a Medal of Honor winner to receive the same special pension which her husband might receive if he were still living.

Due to the stringent criteria established for awarding a Medal of Honor, it is incumbent upon us to make special provisions for the widows of medal winners-those who need it most.

To qualify for a Medal of Honor, a person serving on active duty in the Armed Forces of the United States must distinguish himself conspicuously by gallantry and intrepidity at the risk of his life above and beyond the call of duty. These particular requirements make it probable that a good many Medal of Honor winners will have been killed in action. Thus, many of the medal winners, who gave their