Under present law, such permanently and totally disabled veterans receive between $43 and $75 a month if their income falls below $2,400 a year.

One of my bills, H.R. 15397 is aimed at upping that entitlement by raising monthly payments by as much as $40 and by increasing the annual income maximum to $3,600. Similar increases would be given to widows and widows with dependents. These increases would bring veterans pensions more in line with present living costs.

H.R. 15398 excludes payments of any kind-salary, retirement or annuity, endowment or similar income-from consideration as income when determining eligibility for pension of veterans over the age of 72. Other forms of old age insurance, such as social security and railroad retirement, do not take these sources of income into consideration, and it is unfair that veterans are subject to tougher pension requirements.

The third bill, H.R. 15399, eliminates disability requirements for veterans over 65 and veterans' widows over the age of 62. There presently is a 10 percent disability requirement for this group. Here again, this change would merely reflect a more realistic view of today's cost of living.

The last bill on which I would like to comment today is H.R. 4236. It provides that payments received by a disabled veteran under any insurance policy, State or National workman's compensation, or industrial accident law, or pension plan, shall not be included when determining annual income.

I have long been a supporter of increased benefits for veterans, and in closing I would like to emphasize that these improvements are badly needed in order to better serve our veterans, which of course is the main purpose of the pension program.

Mr. DORN. Thank you, Mr. Corman. Next we will hear from Congressman Richard D. McCarthy from the State of New York. You may proceed, Mr. McCarthy.

STATEMENT BY HON. RICHARD D. McCARTHY, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW YORK

Mr. MCCARTHY. My name is Richard D. McCarthy, and I am the Representative of the 39th Congressional District of New York.

Mr. Chairman, and members of the committee, I am happy to have this opportunity to testify on behalf of H.R. 15597 (and other legislation) which, if enacted, would prevent loss of veterans' pensions as a result of increases in social security benefits.

Veterans who have sacrificed to defend our country should not be penalized financially because of increases in social security benefits. There are many veterans in my district and many of them have written to me asking why they are financially penalized by decreases in their veterans' pensions because of social security benefits. Veterans are entitled to their full pension regardless of increases in social security benefits which they have also earned, but which, under present law, are considered income in determining eligibility for veterans' pensions.

The 89th Congress has indeed enacted a great wealth of new legislation in the field of veterans' affairs. Over $4.1 billion has been provided by Congress for veterans-more funds for medical care, medical

research, compensation, and pension than has ever been provided in any one of the 35 years of the Veterans' Administration's history. I am cognizant of the legislative action taken to insure that no veteran would suffer a reduction in or loss of his veteran benefits by reason of the contemplated general 7 percent increase in social security payments in 1964. Consequently, a law was enacted in the 88th Congress excluding 10 percent of social security and other retirement benefits in the computation of income for veterans' pension purposes. It also increased the pension rate as of January 1, 1965. This was done because it was expected that both the social security and the pension law changes would be enacted prior to January 1, 1965. Had this been done the beneficial results of legislation would have been apparent to all. However, the pension law with its 10 percent exclusion was passed in 1964, effective January 1, 1965, and the social security increase was not enacted until July 1965 with a retroactive effective date of January 1, 1965.

The reason I mention this is because if Congress was farsighted enough in 1964 to take legislative action to offset any reduction in veterans' pensions caused by the 1965 increase in social security benefits, certainly legislation to prevent loss or reductions of veterans' pensions resulting from social security benefits or certain other pensions should be enacted by Congress.

The legislation which I have cosponsored would not only exclude as annual income monthly social security benefits but also all non-serviceconnected disability and lump-sum death pensions. And it applies to all social security increases not merely the increase of 1965.

Mr. Chairman, I respectfully urge expeditious action by this committee on legislation to eliminate benefits currently regarded as annual income in determining eligibility for full veterans' pensions.

Mr. DORN. Thank you, Mr. McCarthy. Now we will hear from Congressman Matsunaga of the beautiful State of Hawaii. You may proceed, Congressman.

STATEMENT BY HON. SPARK M. MATSUNAGA, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF HAWAII

Mr. MATSUNAGA. Mr. Chairman and members of the committee, I thank you for this opportunity of appearing before you and expressing my views with respect to H.R. 2067, a bill that I have introduced to liberalize the veterans' pension program.

In 1964, under Public Law 88-664, several amendments were enacted to improve the existing veterans' pension laws. However, there are still many flaws which must be corrected if all veterans are to realize the benefits to which they are entitled. Thirty thousand non-service-connected disabled veterans are presently faced with unjust limitations on the types of income they may receive while remaining qualified for a veteran's pension. My bill, H.R. 2067, is intended to remedy the inequities involved in determining income limitations for veterans' pension purposes.

The first provision of my bill would exclude public and private retirement payments from the determination of the amount of pension a non-service-connected disabled veteran may receive. This would have a twofold-purpose. First, it would eliminate the type of confusion and inequity that has arisen from the 7-percent increase in

social security payments which has reduced the overall benefit realized by some veterans; and, second, it would provide appropriate measures to cope with such increases in the future when civil service retirements, railroad retirement, and other private retirement plans raise their cash benefits.

In addition, it would erase the confusion which stems from the two pension systems now in effect. The old pension system, that is the one in effect prior to June 30, 1960, allowed a flat pension of $66.15 to be paid monthly as long as yearly income was under $1,400 if the veteran were single, or under $2,700 if the veteran were married. The new pension system, established by Public Law 86-211, and in effect since June 30, 1960, is based on plateaus of income received; that is, the less income earned, the greater the pension allowed. veteran covered under the old system may elect coverage under the new system, if it means a cash increase over his present pension. But, under the new law, the veteran who was not covered by the old law has no such option. This I contend is not only unduly confusing but also highly unjust to those who became applicants after June 30, 1960.

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The second provision of my bill deals with the spouse's income, which should not be, but is, included in the veteran's income for pension purposes. This practice creates an undeserved financial hardship on the veteran and his family, who must meet the rising costs of living with a limited income. Furthermore, inclusion of the spouse's income applies only to the veteran who is placed on the pensions rolls after June 30, 1960. A complete exclusion of the spouse's income for all pensioners would be the equitable thing to do.

Next, the "net worth" eligibility test, which considers both the pensioner's income and hls entire assets before he is granted a veteran's pension, ought to be abolished. This test serves only to penalize the veteran who has had the forethought of providing himself with a savings account, a home, and/or some outside investments, while favoring those who have not had the prudence to do likewise. It too, like the spouse's income, applies only to those applicants after the June 30, 1960 cutoff date. The amendments which I have proposed in the third provision of my bill would end such unfair discrimination.

And, finally, I propose the end of pension reductions for those veterans with no dependents who have had the misfortune of being hospitalized for 2 or more months. It is wholly unrealistic to think that all of the pensioner's outside or personal expenses can be met by an income of $30 a month, the amount prescribed under current law. Moreover, the injustice is compounded when the reduction is applied only to those who became hospitalized after June 30, 1960.

In conclusion, Mr. Chairman and members of the committee, the veteran who is receiving a pension is already coping with some disability, which has affected his financial status, or with the advancement of old age, which has curtailed his earning capacity. My bill would alleviate the veteran's financial burden which is presently imposed on him by inclusion of outside income in determining his ellgibility for pension payments. Passage of this measure would greatly clarify and make more equitable the two concurrent pension systems for non-service-connected disabled veterans. I therefore strongly recommend it for favorable consideration by this subcommittee.

Thank you.

Mr. DORN. Thank you, Mr. Matsunaga. Now we will hear another of my colleagues on the Committee on Veterans' Affairs, the Honorable Paul Fino. Paul, go right ahead.

STATEMENT BY HON. PAUL A. FINO, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW YORK

Mr. FINO. My reason for introducing H.R. 13593 is the same reason I offer in urging this committee to report the bill to the floornamely, that this bill would provide a $100 monthly pension to a very small, deserving and needy group of America's veterans; those who fought in the Philippines during the first decade of the 20th century.

These men are our first Asian veterans. Like today's soldiers fighting in Vietnam, they fought tough guerrilla insurgents under conditions totally unlike any they had ever before experienced. Between 1902 and 1914, or thereabouts, they fought through the islands of Samar, Leyte, Jolo, and Mindanao, putting down the uprisings of cannibals and headhunters. So tough was this fighting that some veterans of it won Congressional Medals of Honor. But today, they are old men-and needy.

Yet for some reason, the powers that be do not think that this service constitutes wartime service, so the veterans of it get no pension. Will the same fatuous argument be offered to deny, at some time, the eligibility of our Vietnam veterans? After all, no war has been declared in Vietnam. Perhaps our fight in Vietnam is just an "expedition," too. I understand that when a Medal of Honor was awarded recently at the White House, a retired brigadier general who had won a Medal of Honor in the pacification of the Philippines was there. If Philippine service was dangerous enough to merit Medals of Honor-and if the memory of it is good enough to put alongside of Vietnamese gallantry (as I think it ought to be), then surely Philippine pacification service deserves a pension.

There are very few veterans of the pacification of the Philippines left. Perhaps a few hundred. They are in their eighties, and many of them are needy. I daresay that when they were fighting in the Philippines, 90 percent of American opinion was unaware of their efforts or danger. Their casualties were higher, in proportion to their numbers, than our casualties in Vietnam. But if these veterans were forgotten a half century ago, the Congress can rectify that wrong by remembering them now, in their hour of need. We can let them profit-belatedly from the attention that the Vietnamese war has focused on our military commitment (past and present) in Asia. I am sorry that the Bureau of the Budget is strongly opposed to this humanitarian gesture. One hundred dollars monthly pensions for these few hundred men would involve a cost per pensioner of $1,200 a year, less than 20 percent of the yearly cost of a Job Corps trainee. I hope this committee will favorably consider H.R. 13593.

I urge this committee to report favorably on my bill, H.R. 1694, for the simple reason that a person who is receiving a pension thinking he is entitled to it-one which he has been receiving for at least 10 years has come to rely on this pension and ought not to be deprived of it.

It is too simple a thing to say that a person should be flatly cut off when his original ineligibility is determined. So long as the person is acting in good faith, the Government, by giving him this pension, has induced him to rely on it, and perhaps change his economic position. What I am trying to convey here is a concept similar to the rights a good faith purchaser may get in a chattel which the seller had no right to sell.

I believe that the Government is the party that ought to be held to the technical computations of eligibility, and that after 10 years, the Government should lose the right to rectify its mistake because of a presumption of reliance on the part of the pensioner, which reliance the Government should be deemed to induce by having paid the pension for 10 years despite (what should be) a liability for strictly checking eligibility. I am suggesting that if the Government should be deemed to have a strict obligation to both taxpayers and pensioners to strictly check on pensioners' eligibility, the pensioner ought to be able to rely, after 10 years, on the simple fact that the Government is paying him. Many of the persons who might find themselves in a situation like this are old or disadvantaged persons. They are just the ones whose reliance on the pension is likely to have been greatest, and who would be most distressed by the loss of it. I do not think it is too much to ask of the Government that it bear the burden of effectively checking on pension eligibility. After 10 years, the relying pensioner should not have to bear the burden of bureaucratic failure.

I hope this committee will report H.R. 1694 favorably.

Mr. DORN. Thank you so much, Paul. We appreciate your coming Our next witness will be Congressman Ullman from the State of Oregon. You may proceed, Mr. Ullman.

over.

STATEMENT BY HON. AL ULLMAN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF OREGON

Mr. ULLMAN. Mr. Chairman and members of the committee, I deeply appreciate the opportunity to testify in support of my bill, H.R. 14263.

It has been my continuing interest to provide adequately for the pension needs of our World War I, World War II, and Korean conflict veterans, and for their widows and children. As we all appreciate, these men and women have given service to their country which cannot merely be valued in terms of dollars and cents. It is the duty of the Congress to periodically reexamine the provisions for their welfare in the light of changes in the economy.

The Bureau of Labor Statistics reports that the Consumer Price Index has risen to 112.6 percent of the 1957-59 average. Over 3,000 major labor contracts, benefiting almost 2 million workers, contain escalator clauses pegging wages to index fluctuations. The veterans' pension system possesses no such built-in flexibility. In this period. when the cost of living is rising, the pensioner or his widow must use the same marketplace as the industrial worker.

Mr. Chairman, the amendments to the Veterans' Benefits Act which I am proposing, are not going to provide veterans or their widows and children with the luxuries of life. In fact, providing $100 for unmarried veterans with incomes of less than $2,400 per year, and $105 for married veterans with incomes of less than $3,600 per year,