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That concludes my statement, Mr. Chairman; but we will be happy, I am sure, to answer any questions that we can.

Mr. Dorn. Thank you, Mr. Daley. I have a few questions.

The Veterans Administration and the Bureau of the Budget, as I recall, did oppose the war orphans' scholarship program.

Is that correct?

Mr. Daley. We expressed the view that we were unable to recommend that, Mr. Chairman.

Mr. Dorn. And that program subsequently passed the House and the Senate without a dissenting vote and is now working satisfactorily; is that right?

Mr. DALEY. I would ask Mr. Coile to comment on that. I believe it is true though, sir.

Mr. Coils. There is no question about the bill having been enacted, and it is in operation. Of course, there have elapsed a very few months of actual operation; but insofar as we can observe, it is proving a satisfactory benefit.

Mr. DORN. Mr. Whitener.

Mr. WHITENER. I would like to ask Mr. Daley: You say that it costs how much in the next 5 years?

Mr. DALEY. Twenty-five million dollars, Mr. Whitener.

Mr. WHITENER. And the bill would set aside around $100 million, so that would take care of it for the next 20 years without any appropriation from any other agency; is that right?

Mr. Daley. One hundred million dollars is proposed to be provided from the funds of the Trading With the Enemy Act in a special fund to be described as the fund for children of disabled war veterans.

We are unable to give you any comment or information concerning that aspect of the bill, Mr. Chairman and Mr. Whitener.

We feel that the committee, as we said in the report, will probably look to the Office of the Alien Property Custodian for that information.

What consideration will be involved, there, we would not be in a position to say.

Mr. WHITENER. As a representative of the Administrator of Veterans' Affairs, you would certainly be in a position to take it from nontax sources; would you not?

Mr. Daley. I would not be able to express an opinion as to that, Mr. Whitener. Certainly, if the bill were enacted, the manner in which it should be financed would be a matter for overall executive branch consideration and congressional consideration, and the extent that some appropriate form of financing which was other than appropriated funds could be authorized properly, would be a question for your consideration.

Mr. WHITENER. Of course, your department or your agency discussed this matter, you say, with the Bureau of the Budget and they concur in your views?

Mr. DALEY. Yes, sir; our report was cleared with the Budget Bureal.

Mr. WHITENER. In talking to the Bureau of the Budget, did you have any discussion as to the number of children in these foreign comtries that we have been plowing money over there to help educate in those countries?

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Mr. DALEY. Our procedure, Mr. Whitener, whenever we prepare a report at the request of the congressional committee involved, a new legislative proposal or involving any legislative proposal, is to route our report through the Bureau of the Budget.

Mr. WÄHITENER. Yes, sir.

Mr. Daley. And the Bureau of the Budget under the appropriate directive from the executive branch normally, if time permits, clears our proposed report with the other portions of the executive branch which might be interested or concerned, arrives at a consensus, and then advises us of the views of the executive branch as to the disposition of such a proposal.

In this particular instance, because of the urgency, we did not have any time for any across-the-table discussions with the Bureau of the Budget.

Mr. WHITENER. Let me ask you this, Mr. Daley, in a brief way: Is the objection of the Veterans Administration that they do not want to be bothered with administering this additional program?

Mr. Daley. Not at all, Mr. Whitener. It is our practice, of course, in reporting on any measure which proposes a new benefit to attempt to recite as much of the legislative background of all collateral proposals as we can, to invite attention to the former deliberations, previous deliberations of the committee or the Congress on collateral matters; and if, as we suggest here, there seems to be a precedential aspect which would be seized upon in connection with further measures, more liberal measures, we feel it is incumbent upon us to advise the committee of that circumstance so that the Congress can consider and make its own deliberations as to the validity of the proposal.

Mr. WHITENER. Then you feel, or your agency feels, that there is some likelihood that the precedent would be set, which would ultimately mean going into the taxpayers' pocket to support the program; is that it?

Mr. Daley. The precedents that we refer to or the precedential aspect that we refer to is that granting an educational aid to children of permanently disabled or totally disabled veterans might cause agitation for similar benefits to the children of the veterans rated less than totally disabled in a descending scale; and we can anticipate that there would be agitation for problem or individual cases, despite the fact that a particular individual might not be considered totally disabled or permanently disabled.

Mr. WHITENER. So your agency anticipates a position that we might arrive at where your agency would be called on to carry out a program other than is called for by this particular bill; is that right?

Mr. Daley. That is an aspect of it, and also we wanted to call to your attention or recall to you the fact that the committee had considered this matter when the committee was considering the War Orphans' Educational Asistance Act of 1956.

Mr. WHITENER. That looks like a pretty good place to get the money to educate the children of these disabled veterans.

I may say further, if I may say so, I am a little bit at a loss to reconcile some of these things we hear, where we have in our budget things like items to study the problem of students above the highschool level, and Presidential Commission To Study Education; and then foreign-aid requests to help educate students in those countries, where children in this country who had their fathers crippled up or killed, are not getting all they should; and it seems to me to be just a little bit peculiar that the Bureau of the Budget would recommend on the one hand to give a bounty, to use the word you used in your reporting, to those various groups, and not give one to those whose fathers were crippled up in the service of their country, to say that to go in there and fill up the gap would be a bad precedent.

I am not asking you to comment on it. Unless somebody could help me get out of this state of confusion, or this state of gymnastics, which the Bureau of the Budget has been in, I do not know how we are ever going to get around to evaluating the merit of these propositions which the Bureau of the Budget approves on the one hand and does not approve on the other hand.

Mr. DALEY. I suppose the international situation gets into that, and I would not attempt to discuss that. We know that there has been considerable discussion concerning the merits of overall programs of a beneficial nature for our own citizens and our own veterans as opposed to the foreign-aid situation, but that is out of my area.

Mr. WHITENER. I am sure that your suggestion is right, but then, on the other hand, every time they have a meeting of the scientific groups in this country at civic clubs we hear constantly, and read it in the papers, that the international situation, insofar as we are concerned, is not good in one respect, and that is they tell us that Russia is producing regularly so many educated boys and girls in scientific fields more than we are.

If we can take the child of some totally disabled veteran and make another Charles F. Kettering or a great scientist out of him, through using these enemy funds, it seems to me that brings us up in the field of international relations, and one of these days some of us had better think about building up our own people instead of building up groups in foreign countries who are our friends today but not necessarily tomorrow.

Right here in Washington today and I do not usually go into these Jong statements—the folks are riding about looking at cherry blossoms, which are the results of the bounty, so to speak, of our great friends in Japan, which were given to us before 1941, and think what they did to some of my kin and maybe some of yours and our friends in World War II, and think of the people they took away from their work and profession, and still they were our great friends when they gave us these cherry blossoms.

So, when we talk about foreign affairs, we overlook the need to build up our own people.

I apologize for saying so much. I turn it back, Mr. Chairman.

Mr. Dorn. Mr. Daley, one of the members here said that they think the Attorney General and the Secretary of the Treasury or their representatives ought to be heard from. What do you think about that?

Mr. Daley. We would respectfully suggest that.

Mr. Dorn. I was interested in your testimony about the administrative cost on the part of the Veterans' Administration concerning this particular program.

Mr. COILE. Our admininstrative costs are generally in the neighborhood of 4 or 5 percent.

Mr. Dorx. Which is good, incidentally.

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Mr. COILE. We do not think that the administrative costs in this bill would be out of line with what our experience has been in other types of benefits.

Mr. Dorn. Then, Mr. Daley, it has been suggested that each case would have to be considered on an individual basis. That would not necessarily add an undue burden to the Veterans Administration; would it?

Mr. DALEY. We raise a question there, Mr. Dorn, concerning the desirability of some clarification because of the fact that there has been a distinction made in some of our programs between permanent total disability and tabular total disability as such; and, it seems to me, we need some clarification on that, as you proceed with your deliberations.

Mr. Dorn. Mr. Daley, do you think a man on the present rate schedule being permanently and totally disabled, if he has several children, with the present inflationary condition of the country, could afford to send his children to college ?

Mr. DALEY. There is no doubt about that, Mr. Chairman.
Mr. Dorn. Mrs. Dwyer, I am sorry; did you have some questions?
Mrs. DWYER. I have no questions.
Mr. Dorx. Does the staff director have other questions?
STAFF DIRECTOR. No.

Mr. Dorn. That completes the questions then. Thank you, Mr.
Daley.

Mr. DALEY. Thank you, sir.

Mr. Dorn. The next witness, and I am going to take them in the order in which they are listed here, is Mr. Francis J. Henry.

STATEMENT OF JOHN R. HOLDEN, NATIONAL LEGISLATIVE DIREC-
TOR OF AMVETS, PRESENTED BY FRANCIS J. HENRY, NATIONAL
SERVICE OFFICER OF AMVETS

Mr. HIERRY. I am Francis J. Henry, national service officer of AMVETS, and I am here today representing them and presenting the statement of Mr. John Holden, our national legislative director, who is out of the city.

Mr. Chairman and members of the committee, we of AMVETS appreciate this opportunity to express our views on H. R. 5930, a bill to provide educational assistance to the children of veterans who are permanently and totally disabled from wartime service-connected disabilities.

AMVETS support wholeheartedly the enactment of this measure into law, and offer our commendations to the gentleman from South Carolina, Mr. Dorn, for introducing this worthy legislation.

In 1954, the AMVET national convention unanimously adopted a resolution urging the Congress to enact legislation that would provide educational assistance to the children of service-connected' deceased and totally disabled veterans. This resolution was reiterated at the 1955 national convention.

Early in 1956, this committee moved to the consideration of this subject, and reported II. R. 9824. This bill, of course, was enacted into law and became the War Orphans' Educational Assistance Act of 1956, Public Law 634.

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Mr. Dorn. Pardon me, Mr. Henry. I would like to add the emphasis that the Veterans Administration and the Bureau of the Budget opposed that law, and that it subsequently passed by a unanimous vote in the House and in the Senate, and it is working nicely.

Mr. HENRY. That is significant, sir.

During the course of hearings on this subject, AMVETS testified that H. R. 9824 was not broad enough in the class of beneficiaries it encompassed, but did represent a step in the right direction.

We indicated that favorable action on the bill as written should not be jeopardized by controversy over the inclusion of additional categories, but that its provisions should be extended to the totally disabled at a later date, if warranted.

It is the considered opinion of AMVETS that sufficient time has elapsed to determine that Public Law 634 is a good law and that it would be in the best interests of the Nation to extend its provisions to the children of those veterans who are permanently and totally disabled as the result of their war service.

This view is supported by a resolution adopted at the most recent national convention of ANVETS commending the Committee on Veterans Affairs for its role in the enactment of the War Orphans Educational Assistance Act and urging that its provisions be extended to the service-connected, totally disabled group.

Certainly, the same arguments that warranted your support of the existing statute relating to education for war orphans would apply to the totally disabled. In either case, the breadwinner of the family, either because of disability or death, is unable to provide for the education of his children. The fathers' sacrifices have prejudiced their children's opportunity.

Arlded to the handicap imposed by their fathers' sacrifices is the fact that the burden of paying for our wars and the increasing costs of government will fall upon these same children.

It follows then, in the judgment of AMVETS, that a sense of justice requires nothing less than complete acceptance of the idea that the Federal Government has a responsibility to assist in the education of these children.

In the bill before you today, the Federal Government is offered the means of discharging its obligation with no additional burden upon the Treasury of the United States.

II. R. 5930 proposes to finance the costs of this program from funds aceruing from moneys and properties vested by the United States under the Trading With the Enemy Act.

In this connection, your attention is invited to the fact that the Senate Judiciary Subcommittee on the Trading With the Enemy Act is at this moment holding hearings on legislation advocating the return of seized enemy assets to their former owner. AMVETS are vigorously opposed to this legislation, and are so recorded in testimony before that committee.

In reparation agreements with both Germany and Japan, our Nation agreed to waive all rights to war reparations. In return, it was agreed that the United States would keep the vested properties as our only reparation.

Germany and Japan also signed agreements to repay their citizens for the losses they sustained.

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