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Public Law 88–114, approved September 6, 1963, removed the percentage limitation on retirement of enlisted men, Although the legal limitation has been removed, the Coast Guard imposed a limitation of 2 percent for the last half of fiscal year 1964. This was done to minimize costs and to soften the impact of the unplanned loss of experienced senior petty officers. The additional personnel to be retired will cost $90,000 in fiscal year 1964.

Average costs used to develop the 1964 estimates did not materialize and some delay in voluntary retirements was experienced pending final action on the military pay bill. The savings of $488,000 will be applied to the cost of this new legislation.

The cost of new legislation for "Retired pay" in 1964, amount being absorbed, and funds requested are summarized below:

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(In thousands) 1. Present appropriation or estimate2. Additional amount available (reimbursements)

$18, 800

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700 960

9. Estimated supplemental required.---
10. Estimated supplemental included in latest budget----
11. Date needed :

For obligation, Apr. 1, 1964.

For expenditures, Apr. 1, 1964. 12. Estimated expenditures from supplemental :

In budget Revised

$960 $700



In current fiscal year--
In next fiscal year.

Total ----
13. Actual obligations last 3 months:


1, 425 1, 223 1, 718


Additional funds in the amount of $700,000 are required in 1964 to cover increased costs of military pay rates authorized by Public Law 88–132, effective October 1, 1963. 2. Method of determining amount

The amount has been determined by costing the fiscal year 1964 military personnel and Reserve trainee plans at the revised rates provided by the new law. 3. Reason additional funds required

The public law was enacted after submission of the 1964 budget estimates and this cost could not be included in the regular budget for 1964. 4. Explanation of language provisions

No changes are requested in appropriation language. 5. Justification

The Uniformed Services Pay Act of 1963 (Public Law 88–132) increased the basic pay rates for officers and enlisted men. his act became ective October 1, 1963, and the increased cost of 1964 is shown below: Trainee expense:

Man-days Cost Drill pay-

294, 491 $271, 000 Active duty for training--

51, 562 81, 000

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700,000 Mr. Gary. You may address yourself to all three of them, Admiral. Admiral ROLAND. Yes, sir.



Mr. Chairman and members of the committee, I appreciate this opportunity to appear before you to discuss our need for supplemental funds in 1964. While the 1st session of the 88th Congress enacted military personnel legislation which cost $13,948,000 in 1964, I come before you requesting only $12,625,000, which constitutes an absorption of $1,323,000, or close to 10 percent.

I would like to discuss briefly each of the three pieces of legislation which were enacted too late in the year to be provided for in our 1964 estimates.


Public Law 88-114 removed the 1-percent limitation on enlisted retirements which was causing a backlog of enlisted personnel with 20 years service who wanted to retire. In 1964 the increase of 140 in enlisted retirements which we will be able to permit under the new legislation will result in $365,000 of separation costs and retired pay charges. The Coast Guard is absorbing this cost. As of June 30th of this year, we expect to have a backlog of about 155 who have requested retirement in 1964.


Public Law 88–130 provided for the forced attrition of officers to eliminate a "wartime hump” which was disrupting our normal promotional pattern and hindering efficient personnel management. Each of the other services has experienced the same problem and has adopted similar remedies. In 1964 the increase in separations is costing $300,000 and the Coast Guard is absorbing the entire amount.


The largest single element of personnel cost is, of course, the military pay increase, Public Law 88–132, which has increased personnel costs this year by $13,283,000. The Coast Guard is trying to absorb $658,000 of this amount. The table which follows analyzes the financial impact upon the Coast Guard by appropriation and legislation:

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By appropriation, we require $10.8 million for operating expenses; $1,125 million for retired pay; and $700,000 for reserve training, for the balance of the fiscal year.

The Coast Guard has carefully reviewed its estimates and we are satisfied as to their validity. Our personnel strength is close to plan, and any further absorption can only result in curtailment of badly needed maintenance of our operating facilities. The $1.323 million

$ which the Coast Guard is absorbing by no means reflects the total unbudgeted costs which the Coast Guard is absorbing in 1964. As this committee is undoubtedly aware, the Coast Guard has diverted planes, ships, boats, and personnel to the Caribbean area to conduct patrols in connection with the Cuban situation. It was also necessary to step up surveillance activity in Alaskan waters this past summer, and all at the requests of the State Department.

As a result of an accident involving a coastguardsman on official business in the vicinity of New Orleans, we are having to pay $275,000 out of our operating expenses appropriation to settle the resulting claim.

I will be very happy to answer any questions that the members of the committee may have.

Mr. Gary. Will the situation in Panama influence your activities in any way, Admiral ?

? Admiral ROLAND. It has not affected us in any way so far, and we do not foresee any effect from Panama.


Mr. Gary. Will you briefly outline for the record the purpose and provisions of the three public laws which caused this increase of $10,800,000 in your operating expenses?

Admiral ROLAND. Yes, sir.

Before the passage of Public Law 88–114, we were limited in the matter of retirement to 1 percent of our enlisted men per year. Also there is legislation which permits retirement at 20 years service.

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Well, we had a large backlog of people who wanted to retire and who were not able to because of this limitation. The backlog was getting worse; we got up as high as, I think at one time with only people with 26 years being allowed to retire and all of those between 20 and 26 were not allowed to retire; they were just put on a list which gained very large proportions.

So, they were not

Mr. Gary. Is this 20-year limitation the same at that imposed in the other services ?

Admiral ROLAND. Yes; the retirement at 20 years is identical with the retirement in the other military services.

Mr. GARY. Your retirement law is identical with the other services?

Admiral ROLAND. Yes, sir; but they did not have this limitation of 1 percent. We were unhappy with this limitation, it was also criticized by the General Accounting Office and other Government agencies, but this legislation removed that.

So, our people now can realize the benefits of the 20-year retirement when things get settled down.

As you may have noticed, I said we would have a backlog of 155 at the end of this year, so we are not doing this all in one swoop, we are phasing these retirements so that there will not be too much of an effect on the service. Of course, a lot of these people are chief petty officers and the loss of all of them at one time would have been pretty serious.


The next public law, Public Law 88–130, is the law which now enables us to control our career patterns in the Coast Guard for officers. Previously we had a fully qualified system of promotions so that no one would necessarily be retired or removed from promotion opportunity unless he was not qualified. We now have under this legislation a best qualified system so that those people who are at the lower part of the list are retired or separated. In this way we have a better officer corps, better control of career patterns, and another provision of this is that captains with 30 years' service are retired as they are in the Navy. This legislation is just about identical with the Navy legislation.

And the other is the military pay increase which covered all of the military services and is the largest item in this request. We have been spending at a deficiency rate by necessity and authorized

Mr. GARY. Which you are authorized to do under the law?
Admiral ROLAND. Yes, sir.


Mr. Gary. I notice you mention unbudgeted surveillance patrol in Florida waters in your justification material.

Will you give us some information on that activity?
Admiral ROLAND. Yes, sir.

Because of the situation in Cuba and the Cuban refugee situation in this country, as you are well aware, there have been a good many difficulties because of the desire of the refugees to get back into Cuba and, well, bomb and do whatever sabotage they can. The policy of this Government is to prevent this if possible or at least to prevent the violation of any of our laws that are involved in this.

With the forces that we have in Florida we are not able to carry out our law enforcement duties in this respect so we have had to take facilities from other parts of the country and put them down there for the duration of this situation. We do not see the end of it, of course, but these facilities which are down there now are there temporarily. I believe we have six patrol boats down there now and two airplanes with double crews so that they can fly continuously when required. Also six 40-foot boats have been moved temporarily to Florida.

These are the unbudgeted expenses in connection with this new patrol.

There may be something that I omitted.
That is about it.

Mr. Gary. Do you not have also to observe pretty closely there to prevent the smuggling of arms and contraband?

Admiral ROLAND. Yes, sir; this is part of what I meant.
Mr. Gary. That is part of the activity, smuggling arms?
Admiral ROLAND. Yes, sir.



Mr. Gary. I notice you mention a $275,000 compromise settlement for an automobile accident claim. Can you give us some details on that?

Admiral ROLAND. I would like to ask somebody else to do that if I

Captain TRIMBLE. This was a coast guardsman traveling between New Orleans and his station nearby. He was traveling in his own

. car on official business. The claim was for considerably more, but the Attorney General's Office is in the process of settling now for $275,000. Of course, under the Tort Claims Act, this has to be paid for out of the agency's operating money. This hit us this month, you might say.

Mr. Gary. The legal aspects of the claim were handled by the Department of Justice?

Admiral ROLAND. Yes, sir.

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