in checks received on September 1, 1965. For nine months these 28,000 veterans and widows enjoyed the 10-percent exclusion of retirement benefits before they received the increase. This created a situation whereby these 28,000 veterans and widows received a higher pension payment because the social security payment did not catch up so speak with the exclusion for the 9 months from January 1, 1965, to September 1, 1965.

This period has been described as a "windfall." If it is confusing, imagine what it is to the average veteran or widow. It is practically impossible to satisfactorily explain this to those who have suffered a reduction or elimination in their pension payments. While there has been an overall increase in the total payments received from social security and pension sources since 1964, the timing of the exclusion and the increases were such that the veterans and widows have suffered a sharp reduction in their pension payments.

In this regard the Senate has amended a House-approved bill (H.R. 14347) which, by the way, we call the Hanley bill, to include a provision that any increases under the Social Security Amendments of 1965, or under any future social security increase legislation, shall not be counted in determining annual income of veterans and widows to either VA pension or DIC payments. The Senate-approved amendment will have the effect of striking out the reduction suffered by these approximately 28,000 veterans and widows who received a social security increase on September 1, 1965.

The Veterans of Foreign Wars by national resolution is urging the Congress to increase the present 10-percent exclusion of public and private retirement benefits in determining pension entitlement to 20 percent. The bill carrying out this and other provisions approved by the delegates to our national convention is H.R. 14419. Consequently, our organization is urging your approval of the Senate amendment which will not count any social security increases since 1965. The exclusion of social security increases which have been approved since 1965 and all those in the future will have an almost universal application, since it is estimated even at the present time that almost 90 percent of all veterans are receiving some kind of social security retirement income.

With respect to the overall income limitations, our organization has endorsed the proposal that all income limitations should be increased by at least $600 a year. This would obviate not only the social security increase but any other increases which may have been granted to veterans and their widows under other retirement programs at the State, county, and city level or sponsored by labor unions, private employers or any other type of retirement plan. An increase in the income limitations on an overall basis for all steps of the pension program is fundamental to keeping the program up to date and in line with present-day economic facts of life. If the maximum $1,800 and $3,000 limitations were adequate in 1959, then it seems that with the tremendous economic growth of the United States since that time that these income limitations need to be upped in line with the American economic growth. While the rates were increased in 1964, the income limitations have not changed.

You are vigorously urged to favorably consider an increase in these limitations to reflect the rising economy and cost of living, which have

sharply increased since the passage of the pension act in 1959, which incorporated these limitations in the pension law at that time.

With respect to the pension rates, it is noted that last week the Congress cleared for the White House legislation for a military pay raise and for civil service employees. The annual cost of the pay raise for active duty military personnel is estimated to be $356 million. The annual cost for the pay raise for Federal civil service employees is $505.8 million. Both of these pay raises indicate recognition of an increased cost of living, which has occurred since the stepping up of the Vietnam situation. It would seem only logical and equitable that the Congress do as much for veterans and their widows, a great many of whom are existing in most meager and modest circumstances.

Your attention, in particular, is directed to the extremely low pension payment which is presently provided to the widows of World War I, World War II, and Korean veterans. The maximum pension payment payable to the widow of a veteran of these three wars is $64 a month, but her income must be equal to or less than $600 per annum. These facts speak for themselves. You are vigorously urged to favorably consider a substantial increase in all the steps for the widows of deceased veterans under the present pension program.

May I hasten to add that any increase in the pension rate should cover veterans and widows of all wars-including those of the SpanishAmerican War.

Our organization through the resolutions adopted at our most recent national convention, which was held in Chicago, Ill. last August, has spoken on several aspects of the pension program, including the reduction of pension payments, to $30 a month for veterans who are maintained in VA facilities. It would be deeply appreciated if at the conclusion of my statement copies of these several resolutions could be made a part of my remarks.

Mr. Chairman and members of the subcommittee, the Veterans of Foreign Wars strongly supported a provision in H.R. 1927, 88th Congress, which was rejected by the Senate Finance Committee when it considered that bill. This is the requirement that a veteran 65 or over must prove that he is totally disabled. The Veterans of Foreign Wars supported the removal of the requirement that at age 65 a veteran must demonstrate the existence of a 10-percent disability, which makes the veteran unemployable. Statistics which are included in committee prints of the House Committee on Veterans' Affairs, entitled "Disposition of Claims by Regional Offices" indicate that there are a small handful of veterans who are denied a pension because at age 65 or older he did not meet the 10-percent disability requirement. Likewise, another small percentage was found to be 10 percent or more disabled but employable. Admittedly, then, there is a very small percentage of veterans, probably less than 1 percent, who would qualify for a pension if the disability requirement were eliminated. This is quite different from the alarming estimates presented by the Bureau of the Budget which, in 1964, estimated to be 150,000 who were waiting in the wings to get on the pension rolls as soon as the disability requirement was eliminated.

The reduced costs of administration and medical examination by eliminating the total disability requirement at age 65 would more than offset the additional cost of the handful of veterans who would qualify as the result of the elimination of this requirement.

On another provision, when the veteran's wife is working, her earned income does not count in determining entitlement to a pension for the veteran. However, upon her retirement, up to $1,200 of her retirement income is counted. This has worked a considerable hardship on many veterans, who not only suffer a drastic reduction in income caused by the retirement of the spouse, which is further compounded by the counting of his wife's retirement income which, in some cases, has caused the pension payment to be reduced. Thus it would seem fair and equitable that if the wife's earned income was not counted that it should follow her retirement income should not count in determining the pension payment.

As stated previously, membership in the Veterans of Foreign Wars is limited to those who have served honorably in the Armed Forces of the United States during a war, campaign, or expedition for which a badge or medal was authorized. Included in the campaigns and expeditions are many which occurred long ago in far-off places. For example, starting shortly after the official end of the Spanish-American War, there has been a succession of skirmishes and engagements involving Armed Forces of the United States right up to and including the present engagement in Vietnam..

Unfortunately, for years gone by, the Congress has never approved legislation recognizing service in the Armed Forces in these campaigns and expeditions as being equivalent to wartime service for the purpose of entitlement to veterans benefits administered by the Veterans Administration. The official ending of World War II did not occur until December 31, 1946, although the treaty ending hostilities was September 2, 1945. For the purpose of entitlement to GI bill benefits, a veteran of World War II was defined as one who served up to and including July 25, 1947.

On the other hand, although a large number of veterans served overseas after the official ending of World War I, these veterans are entitled to no benefits, unless they served on or before the actual ending of World War I, which was, of course, November 11, 1918, There is one exception to this definition of a World War I veteran and that is in the case of those who served in the U.S. military forces in Russia for the period between April 6, 1917, and ending on April 1,

1920.

It is encouraging to note that the Congress is changing its attitude in this regard with the latest example being the cold war GI bill, which was enacted during this 2d session of the 89th Congress. While the cold war GI bill has not extended every veteran's benefit to cold war veterans, it has gone further in this respect than any other previous legislation for veterans who have rendered so-called peacetime service. The hope and strong recommendation of the Veterans of Foreign Wars is that the Congress will correct a long-standing inequity and injustice by recognizing the service of a small handful of veterans who served in our Armed Forces during periods of hostilities which were recognized as equivalent to wartime service by the awarding of a campaign badge or medal. This can be done by having these veterans included under the provisions of the laws administered by the Veterans Administration. The great need for most of these campaign veterans is pension and medical assistance since the great bulk of them served in campaigns prior to World War II. The VFW bill carrying out this provision is H.R. 3224, which was introduced by the distinguished chairman of the full committee, Mr. Teague of Texas.

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Before winding up here, Mr. Chairman, I wonder if I could bring up another item which I do not have in my prepared statement which has to do with the Tax Adjustment Act of 1966.

Mr. ROBERTS. Yes.

Mr. STOVER. On March 8, 1966, the Senate added an amendment, called the Prouty amendment, to the Tax Adjustment Act of 1966, which provides for the payment of social security cash benefits to all persons aged 70 or over. This law, which was signed by President Johnson on March 15, 1966 (Public Law 89-368), provides monthly benefits up to a maximum of $35 under the social security system to all persons who are or will attain the age of 72 before 1968 and who are not covered by social security. A woman who would otherwise be eligible and is married to a man who qualifies for the $35 will receive a benefit of $17.50 a month. For those individuals who receive less than $35 a month, or for married couples who receive less than $52.50 a month, that amount will be reduced by whatever other money they may be receiving from Federal, State, or local government retirement systems.

Here we have an example of a rock-bottom minimum retirement program for the citizens of this Nation. There are no income limitations or means test. Thus, a veteran and his wife whose income would lie between $2,000 and $3,000 a year is entitled to $48 a month, under the laws administered by the Veterans' Administration. However, in the event that same couple was never covered by social security, they would be entitled to $52.50 a month.

More important perhaps is that there is no income limitation on this $35 or $52.50 a month, so that a nonveteran or a nonveteran and his wife can receive either $35 or $52.50 a month when he would otherwise be disqualified for pension payments because he would be over the income limitations.

At age 72 a nonveteran can receive more money, more pension under this Federal pension program approved in the Tax Adjustment Act

of 1966 than a veteran.

It is true that the social security program is a retirement program, while the veterans' pension program is a disability, unemployability program. The underlying philosphy of the two programs, therefore, has brought about what appears to be a rather weird result when the two programs are placed side by side.

Since the Congress and the President have agreed, the President by signing the act, that the minimum level for any person in these United States who reaches age 72 must be at least $35 a month or, if married, $52.50 a month, then it is suggested and recommended that this rock-bottom minimum level be the base from which the veterans' pension program will be structured or built upon.

These, Mr. Chairman and members of the subcommittee, constitute the recommendations of the VFW. The final adjournment of the 89th Congress is now coming into view, and it is the hope of the VFW that this subcommittee and the full committee and the House and Senate will approve a bill in line with our recommendations as expeditiously as possible.

Thank you again for this privilege to present the views of the VFW concerning this most important legislation.

Mr. ROBERTS. Without objection, the resolutions mentioned by Mr. Stover will be made a part of the record at this point. (The resolutions follow:)

RESOLUTION No. 277-WAIVE INCOME LIMITATIONS AFFECTED BY INCREASE IN SOCIAL SECURITY PAYMENTS

Whereas, the passage of increased Social Security benefits during the year 1965, will markedly affect those veterans and veteran's dependents receiving non-service connected benefits; and

Whereas, the possibility of overpayments as a result of the increased Social Security benefits is a real threat to those receiving such non-service connected benefits; now, therefore

Be it resolved, by the 66th National Convention of the Veterans of Foreign Wars of the United States, that we go on record favoring legislation that will direct the Administrator of Veterans Affairs to excuse or waive any overpayments during the calendar year of 1965 if such overpayment results directly or indirectly from any increase of Social Security benefits granted in 1965; and

Be it further resolved, that we endorse and support H. R. 10435, such bill in effect waiving any overpayments of veterans pensions for the year 1965 resulting from enactment of the Social Security Amendments of 1965, and for other purposes. Adopted at the 66th National Convention of the Veterans of Foreign Wars of the United States held at Chicago, Illinois August 13 through August 20, 1965.

RESOLUTION No. 3-VETERANS' ADMINISTRATION PENSION PROGRAM

Be it resolved, by the 66th National Convention of the Veterans of Foreign Wars of the United States, that we seek approval of the following recommendations by administrative changes or legislation, as applicable:

1. Substantial pension rates, income limitations, and regular aid and attendance allowance increases.

2. Classification of participation in campaigns and expeditions involving hostilities as wartime service for pension purposes.

3. Support of legislation to authorize VA benefits to veterans and their dependents based on a discharge of acceptable character notwithstanding the receipt of a discharge of unacceptable character from subsequent service.

4. Present 10% reduction of public and private retirement benefits be increased to 20%.

Adopted at the 66th National Convention of the Veterans of Foreign Wars of he United States held at Chicago, Illinois, August 13 through August 20, 1965.

RESOLUTION No. 12-SUPPORT COLD WAR GI BILL FOR CERTAIN VETERANS

Whereas, it is evident that members of our Armed Forces are actively participating in armed hostilities throughout the world; and

Whereas, many servicemen are serving in areas where hostilities are capable of breaking out at any time; and

Whereas, these servicemen are not eligible for many veterans benefits which were made available to wartime veterans; and

Whereas, our government has recognized that service rendered in some areas is more hazardous than the usual peacetime service; and

Whereas, it has been traditional for the United States to recognize the sacrifices. of those of our Armed Forces who have served in time of war; and

Whereas, the V.F.W. recognizes that the earning of a campaign medal for military service is comparable to wartime service, now, therefore

Be it resolved, by the 66th National Convention of the Veterans of Foreign Wars of the United States, that we support legislation which will elevate to wartime service all benefits including compensation, pension, education, hospitalization, rehabilitation, loans and any other veteran benefits to those veterans of the Cold War who are recipients of a Campaign badge or an Expeditionary_medal. Adopted by the 66th National Convention of the Veterans of Foreign Wars of the United States held at Chicago, Illinois, August 13 through August 20, 1965.