time to time to keep pace with other changes in our society. The current monthly payment to eligible veterans is just not sufficient to guarantee a decent retirement. Each week I receive heartrending letters from veterans and their widows who are unable to live on their allotments. This comes about because the last major adjustment in veterans' benefits was in 1960. Being aware of the rising cost of living, we are all aware that in the last ten years the Cost of Living Index of the Department of Labor has increased 161⁄2 points. Yet the income schedule for veterans has remained at its 1960 level.

A further disadvantage comes from the fact that the law presently requires that a veteran's benefits be reduced in proportion to any increase in his income. The reason we get so much constituent mail on this point is because the person drawing a private pension does not face this type of income limitation provision— his benefits are constant-they are not affected by income from other sources, such as Social Security.

Much complaint arose when the recent increase in Social Security benefits caused an actual reduction in total income for some veterans because of the income limitations which prevail in the laws covering veterans' benefits. It is difficult for a veteran to understand why his neighbor on a private pension plan is able to keep all the increase and can accordingly live better. Moreover, it is difficult for him to understand why income limitations for veterans' benefits are below those currently accorded persons who are receiving welfare payments. Additionally, it is to be noted that current income limitations on veterans are often at or below the poverty level as defined by the President's Council on the Aging. I understand that under a non-service connected disability, wherein a single veteran has an income between $600 and $1200, he will have his benefits reduced; yet this income level is substantially below the poverty level of $1500 as defined by the President's Council.

Putting such burdens on these men to whom we owe so much is difficult for me to understand. Thus, I am supportlng H. R. 15499, H.R. 15500 and H.R. 15501.

The first of these bills, H. R. 15499, will increase pension benefits to veterans of World Wars I and II and the Korean War.

The second bill, H. R. 15500, will allow veterans to earn more in personal income and still be eligible for pension payments which they need.

Finally, H. R. 15500 will remove all income restrictions on veterans who have reached age 72. By the time they have reached this age, the living expenses of retirement have absorbed savings. They deserve all the consideration thay can be given.

Gentlemen, I urge you to remind them of our gratitude for their sacrifices by adjusting the pension schedule for veterans, their widows and their orphans so as to adequately reflect this gratitude.

Mr. HANSEN. My appearance here today is actually in response to constituent mail. I am sure your committee is aware of the protestations that have been made by people in the veterans groups, and I think you are to be commended for taking a good, square look at the situation that has developed.

As all of you know, within the past few years the social security benefit schedules have been improved. There have also been some changes made in this matter of disadvantaged criteria, figures that are used in determining whether or not a person has entitlement to certain things. I think it is high time that the legislation on veterans' pensions be updated so that they more realistically fit not only presentday needs, but be placed on a comparable basis with other pension programs and the social security program, as it is in operation today. With that, I will close and again say that I would appreciate filing a statement in written form.

Mr. DORN. You have that permission.

Are there any questions on my left?

"The gentleman on my right?

Thank you, Mr. Hansen.

Mr. HANSEN. I want to thank you very much for your time.

Mr. DORN. Our colleague, the Honorable Edward Gurney, from Florida, is here.

Mr. Gurney, I know you represent a lot of people who have retired in your great State of Florida, so your testimony is of particular interest to the committee.

STATEMENT OF HON. EDWARD J. GURNEY, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF FLORIDA

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

As you have pointed out, I suppose the Congressmen from Florida are particularly interested in this because we do have a great many retired citizens in our State.

I have three bills before the committee H.R. 11456 and two others. The first one deals with this unfortunate circumstance which was created last year when we delayed passing the social security increase. Of course, what happened was, although we did try to make an adjustment for this increase as far as veterans pensions are concerned, there was a delay in passing the social security increase so some veterans received their increase in pension, and then later on, when the social security increase took effect, it put them over their lower income limits and Uncle Sam had to ask them under the law to give back part of their pension they had received and, of course, this put many of these people in an awkward and distressing situation.

I have received many letters from veterans in my district and what my bill would do is simply this: It would permit a veteran to accept that portion of the social security increase which would not put him over the income limit and permit him to continue to receive his pension. It seems to me to be a fair bill and I would hope that the committee could act favorably upon it.

The other two bills have to do with the increase in pensions that many of us are interested in, in Congress. It doesn't actually increase the pension rate applicable to veterans. It does increase the income limits. Generally, what is done here as far as veterans are concerned is increase the income limits from $600 to $800, from $1,200 to $1,500, and from $1,800 to $2,400. Then as far as veterans and widows with dependents are concerned, it increases them from $1,000 to $1,400, $2,000 to $2,500, and $3,000 to $3,600.

In effect, what it does, of course, is increase the amount of money a veteran will receive in pensions. My understanding was that in the last increase in pensions that the Congress gave, that was about 6 years ago, in 1960; it is obvious that the dollar doesn't purchase nearly as much as it did then. As a matter of fact, it has eroded considerably in the past year. My hope and thought would be that the Congress could ajust the pension rates of the veterans so they are not penalized by the rising cost of living and are able to continue living now as they did, say, 6 years ago.

I will submit a more detailed statement, Mr. Chairman and members of the committee, but essentially that is the purpose I am here for, in support of these bills.

(The statement referred to follows:)

FURTHER STATEMENT BY THE HONORABLE EDWARD J. GURNEY

Mr. Chairman, the bills which I have introduced concern two aspects of veterans' pensions. H.R. 11456 provides simply that a veteran may accept any portion of the 1965 or future Social Security increases which would be to his benefit and refuse that portion which would put him over the pension limits. H.R. 12127 and H.R. 12128 call for an increase in the extremely low outside income limits for veterans and widows of veterans receiving pensions and a 10 percent raise in the pension paid to a veteran's widow.

The problems which have arisen from the Social Security and Federal retirement increases which this Congress authorized last year began with the passage of P.L. 88-664. This law exempts 10 percent of a public retirement program's payments from computation of income for pension purposes. It was passed when Congress expected that Social Security increases would occur that year. When they did not go through, 28,000 veterans across the nation had increases in their pensions or became eligible to receive pensions which they would not normally have received.

Now that the increase has been passed, they have lost this added income from the pensions. Many have been ordered to pay back the difference and their meager checks have been diminished to cover the "debt." This loss will create significant hardships for those who have adjusted their living habits and budgets to include the increase.

I grant you that they were not intended to have this windfall at all, but we are talking about people whose incomes are in the range of $2,000 a year. They were led to believe that they were getting an increase, not a temporary respite. The reason for increasing the Social Security benefits was to offset the increasing cost of living which has caught these retirees in a difficult squeeze. If they are simultaneously to lose another portion of their income, they are not receiving the benefits which should be theirs, and which I, and I believe most other members of Congress, intended to be theirs. In fact, in the past when Congress has increased Social Security payments, it has usually accompanied these increases with correspondingly higher limitations on veterans' income in order to insure that they would receive the full benefit of the Social Security increase.

In order to combat the injustices I have cited, I have introduced my bill, H.R. 11456, allowing those veterans who received additional pension funds under the 10 percent exclusion last year to be exempt from overpayment provisions and to allow the recipient of a veteran's pension to waive any portion of a Federal retirement or Social Security increase which would put him over the limitations set by the Veterans' Pension Act. This system, as opposed to setting an arbitrary percentage, will protect each veteran according to his need and keep right on protecting him against future increases.

I have had numerous letters from retired disabled veterans in my district and all over the nation telling me about the sizeable reduction which they have had in their veterans' pensions because of a small increase in their Social Security payments. One man in my district had an income of $1,080 a year from Social Security before the 7 percent increase was passed. After taking the 10 percent exclusion he is allowed in calculating his income for veterans' pension purposes, his income amounted to $972. This placed him below the income limit of $1,000 allowed by the Veterans' Administration to receive a pension of $105. The $105 brought his total income to $195 a month, a little less than $2,350 a year. This, I might add, is $650 below the amount that the President has set for his definition of "poverty."

Then we voted to increase his Social Security by 7 percent, giving him an extra $75 a year, or $6 a month. Shortly after that, however, he got a letter from the Veterans' Administration reminding him that this $75 made his annual income $1,040, even with the deduction. Since his income was over the $1,000 limit, his pension was reduced to the next level of $80 a month. Under present law, he cannot refuse the Social Security increase; consequently, for a $6 raise, he must lose $25 a month, which amounts to a loss of about $230 a year.

Under the bill I have proposed, the disabled veteran about whom I have been speaking would be able to accept $27 of the $75 available. This would bring his income, for pension purposes, to $999 a year, and he would still be eligible for his pension of $105 a month. His increase would be small, but at least some increase, and of most importance, he would not be losing a large percentage of his income. Since this would apply only to this year's and future increases, there would be no additional people on the rolls. It would mean a saving in Social Security and retirement funds.

H.R. 12127 and H.R. 12128, the other two bills which I have introduced, deal with an increase in the income limits for veterans and widows of veterans and with a raise in the pension paid to veterans' widows.

Prices on all goods and services have risen steadily for the past few years and show no sign of stopping. The people who are hardest hit by this inflation are those who have to live on a fixed income. They still receive the same amount of money which they have received since 1960, but their money does not buy as much as it did.

Yet in spite of this situation, the disabled veterans who are no longer able to work and the widows of men killed defending their country still have the same unrealtistic limits set on their outside income that they had in 1960.

Among the many letters I have received from constituents about pensions to veterans and widows of veterans, one lady writes:

"I am only fifty-five years old and five years from my Social Security. As you know, I get $64 per month and am only allowed to earn $600 a year. A grand total of $1,328 a year. That forces poverty right on your front doorstep.' Another example is a disabled veteran with an outside income of $605 a year from his Social Security and modest investments, who receives a pension of $75 a month, or $900 a year. His total yearly income then is $1,505. Poverty is also on this veteran's doorstep.

And a veteran with a wife and two children to support, who has a yearly income of only $1,005 from his wife's earnings or other sources, receives only $80 a month or $960 a year. His total yearly income is $1,965, which is almost impossible for four people to exist on.

H.R. 12127 is designed to ease the burden of inflation on these disabled veterans, and H.R. 12128 provides for widows of veterans. Three income categories are used to determine pensions for veterans and widows of veterans. Those whose income places them in the lowest of these receive the largest pensions. By increasing the limits, those in the lowest levels of each category will be included in the next group below them and hence receive a larger pension. My proposals are shown in the following table:

Veterans and widows without dependents:

Present income limit of $600..
Present income limit of $1,200.
Present income limit of $1,800-

Veterans and widows with dependents:
Present income limit of $1,000..
Present income limit of $2,000-
Present income limit of $3,000__

New

$800

1, 500

2, 400

1, 400

2,500

3, 600

Under H. R. 12127 the veteran mentioned above, who has an outside income of $605 a year, would fall within the lowest limits and receive a pension of $100 a month, bringing his yearly income to the far from princely sum of $1,805. This is not too much, but it is better by far than the $1,495 we allow him now. The veteran with a wife and two children and an outside income of $1,005 would be able to draw $115 a month, for a total income of $2,385.

H. R. 12128 would provide the same benefits for veterans' widows, which H. R. 12127 provides for veterans, and in addition would increase the pensions paid to them. Presently these pensions, at their highest rate, for a widow with children amount to only $80 a month under present law.

The time is long overdue for a reevaluation of these unfair low limits, which force our old and sick veterans and veterans' widows to live on incomes far below our accepted levels of poverty.

Mr. HANLEY. I thank the gentleman for a fine statement. His proposal relative to the voluntary reduction of social security income precludes the possibility of jeopardizing the veteran's pension. I think this is a very, very fair proposal and I recommend it be given every consideration.

Mr. DORN. Mr. Kornegay.

Mr. KORNEGAY. Let me also welcome my good friend from Florida. I appreciate his appearance here.

I do want to call your attention to the fact that, I think it was about 2 years ago, we amended Public Law 86-211, raising income limits. I don't recall the exact amount, but I think the House version

of the bill was pretty much in line with your suggestion of $1,200 to $1,400, and $1,800 to $2,000. I don't remember exactly what happened, but as well as taking care of other deficiencies such as the exclusion of the spouse's earned income, and allowing deductions from income for funeral expenses of the spouse and expenses of the last illness, and that type of thing. However, regretfully, when we got all the way through the legislation process, and particularly through the other body, it didn't reflect the complete will of this committee but, of course, we had tried to do what we could. I again commend the gentleman for recommending this measure and also for pointing out what is a terrific problem and that is what happens every time there is a modest increase in social security. The veteran may gain $7 in social security and lose three or four or five or six times that much by having his veteran's pension reduced.

As I understand your suggestion, Mr. Gurney, it is to allow the veteran, if he so desires, to not accept the increase in social security? Mr. GURNEY. Which would place him above an income limit which would reduce his pension.

Mr. KORNEGAY. In other words, if it would be beneficial to him not to accept it, then he would have the option and could exercise the option of not accepting the increase in social security?

Mr. GURNEY. It seems this would give us a flexible formula so we wouldn't be faced with this hard problem where you have a law that covers hundreds of thousands of people, of hurting some-and indeed, it does hurt some when you place them over and then say, "No, you can't take it and you have to give it back."

Mr. KORNEGAY. I am in accord with your suggestion. We put the 10 percent in to take care of the situation, but I am afraid it didn't do the job.

Thank you so much for coming.

Mr. TEAGUE of California. Mr. Chairman, I certainly concur with the statements made by Mr. Kornegay and Mr. Hanley. Also I want to thank Mr. Gurney for making some very reasonable and practical suggestions and recommendations which I am sure this committee will carefully consider and, I hope, act favorably upon. Mr. ADAIR. Mr. Chairman, the witness, Congressman Gurney, has been very helpful to us this morning.

As everyone in this room knows, when we talk about amending the pension laws, we are opening a great variety of questions: amount, age, period of service, limitations on income from other sources, and

many more.

If it were concluded that all of these questions which, I think in themselves as you have suggested are meritorious, could not be resolved in one bill, have you established in your own thinking any order of priorities that is, proposals which should be placed, perhaps, ahead of some others?

Mr. GURNEY. Well, Mr. Adair, I do think the bill I talked about first, this social security adjustment bill, is an important one. I don't think it affects a tremendous amount of veterans so with regard to this committee and Congress acting upon it, as far as that is concerned, what I think it would do is alleviate some hardship to certain veterans, but certainly not affect your overall veteran pension picture.

So I think the committee and the Congress could act on this bill and really perform a service to these veterans with hardships...