Mr. LIBONATI. Yes; that is right. Mr. GLEASON. Was only $2,897, and we are paying a pension at that point if the veteran is married. Mr. LIBONATI. And do you find that there is a variance between the locality in which these families live, whether they live in rural areas or urban areas? Isn't there some difference there? Mr. GLEASON. Would you repeat that, sir? I am sorry, I just got a message that I wanted to check. Mr. LIBONATI. Do you find that in certain localities, geographical loci, or a question of urban or rural persons, that there is some difference in the question involving the earnings? Mr. GLEASON. Well, this would be, I think, only natural in certain geographic areas, Congressman, the same as living costs would be different in different parts of the country. Mr. LIBONATI. I mean the fact that the average farmer in accordance with the statistics given us has earnings of a thousand dollars owning a farm, as the income from that farm, certainly with the food and everything being raised there and all the real necessities of life which represent maybe two-fifths of the expenditures of the city fellow who works for a living and must buy his food. Mr. GLEASON. Well, Congressman, I don't believe that the Federal statutes permit us to differentiate, and I would not think that it would be a good thing to differentiate amongst the citizens of our own country who have served in time of war, whether they were a farmer or whether they happen to work in a bank or in an industrial organization. Mr. LIBONATI. Yes, but the cost of living figures would indicate that need in one place would be of a lower figure than need in another place where the cost of living is relatively high. Mr. GLEASON. Well, I would say, Congressman, that if the Congress in its judgment feels that way, that I believe, then, that it is up to the Congress to amend it, because I don't believe that the Federal statutes now permit it. Mr. LIBONATI. Well, when most of our populations are drifting to the cities, and there were once 10 million families living on farms, and now there is wholsesale abandonment of small farms because of the competition of syndicates that makes it impossible for individual families to follow active farming unless they have $50,000 to put up for investment in machinery and large acreage. I would say that need should be relative. The purpose of need is to place the person in a position where he can get the necessities of life at normal costs where he lives. Mr. GLEASON. Well, Congressman, I think that in Public Law 211 this is taken into consideration, insofar as it's humanly possible for us to do so, in the sliding scale. Mr. LIBONATI. Thank you. Mr. TEAGUE of Texas. Any other questions on pensions? Mr. GLEASON. Mr. Chairman, might I interrupt for a moment to read a statement. Mr. TEAGUE of Texas. Yes, sir. Mr. GLEASON. Mr. Chairman, in response to your earlier inquiry I would like to take this opportunity to discuss a matter which I feel warrants favorable consideration by this committee. I am referring to bills H.R. 177 and H.R. 221 to extend the war orphans' educational assistance program to the children of those veterans who are permanently and totally disabled as a result of service during a period of war or during the induction period. War orphans' educational assistance has proved to be a most worthwhile benefit. However, at present, this assistance only becomes available when the veteran dies. In many cases we must recognize that a permanently and totally disabled veteran has problems in providing for the education of his children which are comparable to those his widow would face if he died. We recommend that this situation be corrected and that the educational assistance be made available to him by the enactment of this legislation. Mr. TEAGUE of Texas. Thank you, Mr. Administrator. For the benefit of the committee and the people here, this represents a major accomplishment. He has been interested in this personally and has been helping on this since January. Mr. GLEASON. And I just got the word. Mr. TEAGUE of Texas. So I thank you, Mr. Administrator. Mr. LIBONATI. I want to compliment the Administrator. We have known one another since his boyhood, and his career has been bejeweled with accomplishment. His sacrifice for the serviceman is well known. I know he serves in an uncomfortable position, knowing practically everybody in the services, at all levels, and I want to say this: Although we disagree on questions involving the basic formula upon which these laws should be based, necessarily our disagreement is primarily one of the ability to pay, and the appropriation as approved by the administration to carry the responsibility of recommending these bills sort of handicap him from doing as a person what he can't do as an administrator. Thank you very much, sir. Mr. GLEASON. Thank you, sir. Mr. TEAGUE of Texas. I would like to suggest that I wish the gentleman from Illinois could go down and live on a Texas farm a little while. I think he might change his mind about the farmer's life. Mr. LIBONATI. I was in Texas in the First World War, San Antonio, and when I entered the portals of San Antonio, they were hanging 11 men. Mr. TEAGUE of Texas. I would also like to suggest that if it was so nice on the farms, farmers would not all be moving to the cities. Mr. LIBONATI. I don't think the servicemen are a selfish lot, either, but when they say they can't get along with what they receive, we ought to give some credence to their plea in the hearings before this committee, and I maintain that I will always be one who will champion their cause when it's right. Mr. TEAGUE of Texas. Mr. Saylor. Mr. SAYLOR. Mr. Administrator, I am delighted to find that you had a bill that you were for. Most of these proposals that you have had since you have come up here you had Mr. TEAGUE of Texas. Let me say the Administrator is, too. Mr. GLEASON. Mr. Saylor, let me say, really, I had nothing to do with your being called to the White House this morning. Mr. SAYLOR. I am concerned with some statements which in your statement that you gave to this committee on the 3d of April, and some others which you have here in your report today, and Í would like to ask you about some of them. Now, at the American Legion Rehabilitation Conference, you gave strong endorsement in the proposal to restore the rights of veterans to insurance. And I quote what you are supposed to have said: And then there's a major item on which we certainly see eye to eye with the Legion *** the reopening of national service life insurance. We supported this action last year, and I pledge you right here *** that the VA will go right down the line with the Legion this year and fight for the passage of this most necessary bill that will bring an added measure of equity into our insurance. I will have more to say about the reopening of GI insurance later on in my talk with you today. Then you said: Secondly, is to follow the American way of calling a spade a spade. The GI bill proved itself *** the value of GI insurance has proved itself over and over. And I can tell you right now that this administration-from the President on down-will not be frightened away from continuing to fight for a reopening of national service life insurance by any ill-founded attacks-particularly when we know that we can count on you of the Legion. And we have no intention of selling our VA hospitals for a song to those whose favorite tune is "VA Medicine Is Falling Down." And that's the end of your quotation. You reiterate your support for this proposal in your present statement. Mr. GLEASON. Most strongly. Mr. SAYLOR. I have ascertained from the Bureau of the Budget whether or not the position of the administration has changed from that that was indicated on June 27, 1962, when it reluctantly acquiesced in the reopening of national service life insurance. My information is that this reluctance still exists, and that the administration's view is that this question is one entirely up to the Congress to decide, and it's not pushing or advocating any particular course of action. Now, with that background, what basis do you have for indicating the enthusiastic support of the President for this proposal, in view of the statement from the Director of the Bureau of the Budget that, and I quote: "In summary, therefore, we do not regard this sort of legislation as necessary"? Mr. GLEASON. Well, the President, as the Chief Executive Officer of this administration, is in favor of it, and I would like to ask Mr. Meadows if we could have the letters which were transmitted to the committee this morning with the approval of the Bureau of the Budget, in regard to these? The first paragraph-this is addressed to the Honorable Olin E. Teague, chairman, Committee on Veterans' Affairs, House of Representatives, Washington 25, D.C., dated May 28, 1963-reads: DEAR MR. CHAIRMAN: In response to your request for a report on H.R. 196, 88th Congress, I am pleased to advise your committee that I strongly support the enactment of legislation to authorize, for a limited period, the granting of national service life insurance to veterans heretofore eligible for such insurance. And the last paragraph, Mr. Saylor, is: Advice has been received from the Bureau of the Budget that there is no objection to presentation of this report from the standpoint of the administration's program. Mr. SAYLOR. In other words, you expect that the Bureau of the Budget, when it sends this report to the chairman, will change its position from last year? Mr. GLEASON. Sir, this is a communication that we have received from the Bureau of the Budget, and I have personally received it from the President, and I don't believe that there will be any change in the position whatsoever. Mr. SAYLOR. Then if there isn't going to be any change, then the Director of the Bureau of the Budget said to us last year he did not regard this legislation as necessary. Now, that's a far cry from an endorsement of a piece of legislation. Mr. GLEASON. Well, Mr. Saylor, might I say that I got my approval from the President; and the President has assured me of his support, and all I can do is reiterate that. On June 27, 1962, the Veterans' Administration reported favorably to the Veterans' Affairs Committee on the general purpose of H.R. 11832, and submitted the Veterans' Administration's draft bill for consideration by that committee. The Bureau of the Budget on the same date addressed a letter to the chairman of the Veterans' Affairs Committee stating that although they did regard legislation of this sort as necessary, they had no objection to the reopening of national service life insurance for a limited period, along the lines proposed by the Veterans' Administration. Now, that's the official position of the Bureau of the Budget, and of this administration. I can't speak on behalf of any one person in the administration from a personal standpoint or their own personal viewpoint, but I can state emphatically that the President has approved. (The following was received later for the record.) EXECUTIVE OFFICE OF THE PRESIDENT, BUREAU OF THE BUDGET, Washington, D.C., May 28, 1963. Hon. OLIN E. TEAGUE, Chairman, Committee on Veterans' Affairs, House of Representatives, Cannon House Office Building, DEAR MR. CHAIRMAN: In response to an informal request from your committee, there is attached a copy of the report of the Bureau of the Budget on H.R. 11832, 87th Congress, a bill to amend title 38, United States Code, to permit, for 1 year, the granting of national service life insurance to veterans heretofore eligible for such insurance. The position expressed on this legislation is still the Bureau's position on similar legislation in the 88th Congress. Sincerely yours, Enclosure. PHILLIP S. HUGHES, Assistant Director for Legislative Reference. EXECUTIVE OFFICE OF THE PRESIDENT, BUREAU OF THE BUDGET, Hon. OLIN E. TEAGUE, Chairman, Committee on Veterans' Affairs, DEAR MR. CHAIRMAN: This is in response to your request for views of the Bureau of the Budget on H.R. 11832, a bill to amend title 38, United States Code, to permit, for 1 year, the granting of national servicelife insurance to veterans heretofore eligible for such insurance. H.R. 11832 would establish a 1-year period, beginning approximately 1 year after the date of enactment, during which nondisabled servicemen and veterans, who served in the Armed Forces of the United States, during the period between October 8, 1940, and January 1, 1957, would be eligible to apply for new insurance under the national service life insurance program, or increase protection now held, up to a maximum $10,000. The bill would establish a new trust fund, designated the "postservice insurance fund," to receive income from premiums, investments, and appropriated funds, and to pay claims, dividends and administrative costs. Nondisabled veterans and servicemen who applied for such insurance during the 1-year period would be charged for the additional administrative costs resulting from their participation in the insurance program. H.R. 11832 would also permit service-disabled servicemen and veterans to be granted insurance under the nonparticipating service-disabled veterans' insurance program during the same 1-year period. H.R. 11832 is, therefore, similar in many fundamental respects to H.R. 6164, upon which the Bureau of the Budget reported adversely to your committee July 5, 1961. Our reasons for opposing enactment of legislation to reopen the veterans' insurance program as reflected in our report on H.R. 6164 related to the serious problems we foresee in relation to existing servicemen's and veterans' survivor benefits programs; the lack of relationship between the proposed reopening and any service-related need or Government obligation; the lapse of time, both since the termination of the military service periods and the closing of the insurance program; the duplication of the facilities and resources of commercial insurance companies which would occur; and the significant cost to the Government involved. We have carefully reviewed our previously expressed position. While the review has confirmed our view that there is no compelling need or Government obligation to reopen those long-closed insurance programs, the Bureau of the Budget would not object to a limited period of reopening during which eligibility to take our insurance and keep it in force would be restricted to those not in military service who between October 8, 1940, and January 1, 1957, would have been eligible for insurance. If so limited, or our most serious concern would be eliminated-i.e., to the potential adverse impact of reopening on the existing comprehensive program of benefits for servicemen and for ex-servicemen deceased from service-connected causes. We believe that rates for this insurance should be based on the most modern actuarial tables, that it should be fully self-supporting as to administrative expenses and benefit costs, and that the policies issued should be nonparticipating (any surplus funds to be transferred to the general fund of the Treasury). In summary, therefore, while we do not regard legislation of this sort as necessary, the Bureau of the Budget would not object to legislation limited along the lines outlined above if the Congress sees fit to enact such legislation. The Veterans' Administration is transmitting a draft bill, in its report to the committee, which provides an acceptable program for reopening. Sincerely, DAVID E. BELL, Director. Mr. SAYLOR. All right, now, on page 16 of your statement that you gave us here on the 3d of May, you indicate that on the basis of new information obtained on a questionnaire processed by the Bureau of the Census that between 7 and 8 million veterans might be interested in applying for insurance. This insurance would be on a new table of mortality and would be at no expense to the Government. Obviously it would be limited to able-bodied veterans and those able to pass a physical examination. At the same time you advocated the reopening of insurance for able-bodied veterans, you indicated your opposition to providing total disability income protection for those veterans who experience connected, and who do not have the maximum amount of insurance now provided by law. I assume that you would also be opposed to the proposal to raise the waiver age of World War II groups, and make it compatible with World War I at the age 65. And further, that you would favor giving the service-connected disability insurance on World War II rates which able-bodied veterans pay and receive dividends thereunder. Now, why do you favor this action for the nondisabled, non-serviceconnected group, while refusing to take affirmative action for the |