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and Hawaii for the hospital treatment and care of veterans with non-serviceconnected disorders. Under these circumstances, I believe it would be unwise to enact this proposed legislation.

Advice has been received from the Bureau of the Budget that there would be no objection to the submission of this report to the committee.

Sincerely yours,

SUMNER G. WHITTIER, Administrator.

[S. 2235, 86th Cong., 1st sess.]

A BILL To provide benefits established by the Veterans' Readjustment Assistance Act of 1952 to persons who graduated from Air Force Reserve Officers' Training Corps training in 1954 and served on active duty for training in the Air National Guard before February 1, 1955

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That (a) section 1601 (a) of title 38 of the United States Code is amended by adding at the end thereof the following new paragraph:

"(10) The term 'active duty' includes service performed on active duty for training under section 99 of the National Defense Act of June 3, 1916, which began after June 30, 1954, and before February 1, 1955, by any individual who completed the course of training in the Air Force Resreve Officers' Training Corps during 1954, and accepted a commission with the District of Columbia Air National Guard."

(b) The first sentence of section 1612(a) of title 38 of the United States Code is amended by inserting immediately before the period at the end thereof a comma and the following: "except that in the case of an eligible veteran referred to in paragraph (10) of section 1601, he shall be entitled to initiate his program of education or training within three years after whichever last occurs, January 1, 1959, or the date of his discharge or release from active duty."

(c) Section 1801 (a) of title 38 of the United States Code is amended by adding at the end thereof the following new paragraph:

"(3) The term 'active duty' includes service performed on active duty for training under section 99 of the National Defense Act of June 3, 1916, which began after June 30, 1954, and before February 1, 1955, by any individual who completed the course of training in the Air Force Reserve Officers' Training Corps during 1954, and accepted a commission with the District of Columbia Air National Guard."

(d) Section 2101 of title 38 of the United States Code is amended by inserting at the end thereof the following new subsection:

"(d) For the purposes of this title, the term 'active duty' includes service performed on active duty for training under section 99 of the National Defense Act of June 3, 1916, which began after June 30, 1954, and before February 1, 1955, by any individual who completed the course of training in the Air Force Reserve Officers' Training Corps during 1954, and accepted a commission with the District of Columbia Air National Guard."

EXECUTIVE OFFICE OF THE PRESIDENT,

Hon. LISTER HILL,

BUREAU OF THE BUDGET, Washington, D.C., February 25, 1960.

Chairman, Committee on Labor and Public Welfare,
U.S. Senate,

New Senate Office Building, Washington, D.C.

MY DEAR MR. CHAIRMAN: This is in reply to your letter of June 25, 1959, requesting the views of this office with respect to S. 2235, to provide benefits established by the Veterans' Readjustment Assistance Act of 1952 to persons who graduated from Air Force Reserve Officers' Training Corps training in 1954 and served on active duty for training in the Air National Guard before February 1, 1955.

The Department of Defense, in the report it is making to your committee on this bill, is recommending against its enactment for the reasons set out therein.

This Office concurs with the views contained in this report and recommends that this measure not be enacted.

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Chairman, Committee on Labor and Public Welfare,
U.S. Senate, Washington, D.C.

DEAR SENATOR HILL: We are pleased to furnish the following comments in response to your request for a report on S. 2235, 86th Congress.

This bill proposes to extend eligibility for additional veterans' benefits to certain Air Force ROTC graduates who performed a lengthy tour of training duty as Air National Guard officers. It would amend title 38, United States Code, to prescribe that if their period of active duty for training began before the end of the Korean conflict (January 31, 1955) it would be considered to have been a period of "active duty" for the purposes of the principal readjustment benefits of the Korean GI bill-education and training; home, farm, and business loan assistance; and mustering-out payments.

As we understand it, the situation toward which this bill is directed arose from the inability of the Department of the Air Force to offer Reserve commissions and immediate active duty assignments to all of the 1954 graduates of the Air Force ROTC program. Instead, they were offered their choice among several alternate methods of discharging their military obligation. One of those alternatives was an immediate Air National Guard commission followed by a period of active duty for training not to exceed 36 months. According to information obtained from the Air Force, 1,513 individuals selected the Air National Guard option and were actually ordered to training duty by January 31, 1955. This is the group which would be affected by S. 2235.

Eligibility for the benefits we administer is generally based upon active military, naval, or air service. Active duty for training by National Guardsmen is considered to be active military, naval, or air service where a disability is incurred in such service. Hence, these National Guardsmen, like others on training duty, are eligible for the same benefits for service-connected disabilities as persons disabled during the Korean conflict on active duty. These include compensation at the higher war rates, hospitalization and outpatient medical care for a service-connected disability, and vocational rehabilitation, if needed. The principal benefits which are not available to them are the readjustment benefits which would be afforded by this bill.

During the past two Congresses, several bills have been introduced which would extend readjustment benefits to the affected group, but have not received favorable consideration. However, the bill (now Public Law 85-857) codifying veterans' laws, as passed by the House of Representatives, contained language which would have extended education and training and loan benefits to these 1954 Air Force ROTC graduates. These provisions were deleted on the Senate side.

The question presented by this bill is peculiarly one of military status. The legal effect of the bill would be to presume that an extended period of training duty under these special circumstances was "active duty" for the purposes of readjustment benefits now available only to those who were in a true "active duty" status during the Korean conflict.

Our information on the matter lends support to the view that the training duty performed by this group was similar in many respects to the extended active service performed during the same period by many others who were actually commissioned in the Air Force Reserve. It is our understanding that this problem has been extensively considered by the Department of the Air Force.

Since the basic question depends so much upon the exact factual situation and the distinction from a military standpoint between training duty and full active duty, we believe the committee will desire to look primarily to the Department of Defense for recommendation on the merits of this proposal.

We do suggest one additional factor which may bear on consideration of the bill. Readjustment assistance is intended for use during a temporary period after leaving military service. This is evidenced by the requirement under the Korean GI bill that an educational program must be commenced within 3 years after separation from service. We understand that in most instances the 3-year tour of training duty for this National Guard group was reduced to 2 years. Hence, with few exceptions, these officers were apparently released from duty more than 2 years ago. This would suggest that the need for readjustment benefits, particularly education or training assistance, does not exist in any large number of cases at the present time.

It is estimated that the total additional cost of direct benefits for education and training under this bill would approximate $500,000. In a peak year, the cost probably would not exceed $180,000. Administrative costs would add approximately 4 percent to the amounts for benefits. We note that this cost estimate is appreciably lower than that submitted on a similar bill, S. 3005, 85th Congress, in our report of April 18, 1958. This is due to our assumption that during the 2-year period or longer that these veterans have been out of service many of them will have completed their readjustment to civil life.

It is estimated that the administrative cost for loan guarantee benefits would approximate $20,000 during the remaining years of the loan guarantee program. We make no attempt to estimate the costs of mustering-out pay under subsection (d) of the bill, that being a matter for the Department of Defense.

I am submitting the foregoing analysis with the hope that it will help the committee in appraising this bill. I am not prepared to object to the bill's enactment but, as indicated, I feel that the committee should look primarily to the Department of Defense for recommendation. Under the circumstances, I refrain from making a definite recommendation on the merits of this proposal.

Advice has been received from the Bureau of the Budget that there would be no objection to the submission of this report to the committee. Sincerely yours,

ROBERT J. LAMPHERE,
Associate Deputy Administrator

(For and in the absence of Sumner G. Whittier, Administrator).

Hon. LISTER HILL,

DEPARTMENT OF THE AIR FORCE,
Washington, March 8, 1960.

Chairman, Committee on Labor and Public Welfare,
U.S. Senate.

DEAR MR. CHAIRMAN: Reference is made to your request for the views of the Department of Defense with respect to S. 2235, 86th Congress, a bill to provide benefits established by the Veterans' Readjustment Assistance Act of 1952 to persons who graduated from Air Force Reserve Officers' Training Corps training in 1954 and served on active duty for training in the Air National Guard before February 1, 1955. The Secretary of Defense has delegated to this Department the responsibility for expressing the views of the Department of Defense.

S. 2235 is similar to H.R. 2578, H.R. 4433, and S. 3005, all of the 85th Congress. Its purpose is to extend to those Air Force Reserve Officers' Training Corps cadets who graduated from colleges in 1954, were appointed in the Air National Guard of the District of Columbia, and were ordered to duty under section 99 of the National Defense Act, as amended, in 1954 and 1955, the same benefits under the Veterans' Readjustment Assistance Act of 1952 as were provided for personnel who were on extended active duty in the Armed Forces between June 27, 1950, and February 1, 1955. The Veterans' Readjustment Assistance Act of 1952 (the Korean GI bill of rights) provided benefits to certain individuals who were on active duty in the Armed Forces during the period of Korean hostilitiesJune 27, 1950, to February 1, 1955. Among the benefits provided are educational and vocational assistance, mustering-out payments and guaranteed home loans. In 1954, due to numerical limitations on the number of officers who could be utilized in the active service, it was necessary that the Air Force discontinue the practice which it had formerly followed of calling to active duty all graduates of the Air Force ROTC program. As a result, only a limited number of the 1954 Air Force ROTC class who did not apply or qualify for flying training could be

commissioned and called to active duty. The remaining graduates were given certificates of completion and were afforded the following options:

(a) Acceptance of Reserve commissions and appointment in the District of Columbia Air National Guard for 3 years' duty under section 99 of the National Defense Act, as amended, as Air National Guard officers attached to Air Force units.

(b) Enlistment in the U.S. Air Force as airmen, third class, for a special 2-year enlistment with subsequent commissioning in the Air Force Reserve after completion of active duty.

(c) Remain in civilian status and await Selective Service action along with other college graduates.

Those ROTC graduates who accepted enlistment in the Air Force and those who were inducted into the military service under the Universal Military Training and Service Act before February 1, 1955, having been subjected to all of the incidents of full active service, are eligible for benefits under the Veterans' Readjustment Assistance Act of 1952. However, the approximately 3,500 graduates of the class of 1954 who accepted the option of a tour of duty under section 99 of the National Defense Act, as amended, in an Air National Guard status are not eligible for such benefits as they do not meet the requirement of the Veterans' Readjustment Assistance Act that personnel must have rendered "active service" during the period from June 27, 1950, to February 1, 1955, to be eligible. The graduates who accepted the Air National Guard option were advised that their duty status under section 99 precluded their being eligible for statutory veterans' benefits available to officers called to active military service under other provisions of law; and, presumably, this advice was taken into consideration by them in deciding which option to select. A total of 1,513 graduates who elected the option of an appointment in the District of Columbia Air National Guard were actually ordered to duty under section 99 by January 31, 1955. The remainder of the approximately 3,500 were not actually ordered to duty under section 99 until after January 31, 1955.

The Department of the Air Force recognizes significant differences in the status of officers on duty under section 99 as compared to that of officers who are in the "active service." Among the significant differences are that the former officers are exempt from oversea service, are not subject to the Uniform Code of Military Justice, and cannot serve as accountable officers for property or funds. It is the view of the Department of the Air Force that readjustment-type benefits provided by the Veterans' Readjustment Assistance Act for persons who served in the "active service" should not be extended to personnel whose only service during the qualifying period was in the status of "duty under section 99."

It should be pointed out also that there are personnel other than the 1954 ROTC graduates covered by S. 2235 who do not qualify for the benefits of the Veterans' Readjustment Assistance Act.

Enactment of S. 2235 would be unfair to many other persons who also could not qualify for benefits for reasons not within their control and particularly to the classmates of these individuals who elected not to accept Air National Guard appointments in order to enlist and accrue veterans' benefits.

For the foregoing reasons the Department of the Air Force on behalf of the Department of Defense is opposed to enactment of S. 2235.

Since the benefits which would be granted by enactment of S. 2235 are administered by Veterans' Administration, the Department of Defense is unable to estimate the fiscal effects of its enactment.

This report has been coordinated within the Department of Defense in accordance with procedures prescribed by the Secretary of Defense.

The Bureau of the Budget has advised that there is no objection to the submission of this report.

Sincerely yours,

LEWIS S. THOMPSON,

Special Assistant for Manpower, Personnel, and Reserve Forces. Senator YARBOROUGH. Of course, we occasionally have a series of bills on which we can hear the testimony on all of them at the same time. But since these bills cover different types of subject matter, we will take them up one at a time.

First we will hear testimony on S. 2201. Both of the distinguished Senators from Alaska are here, Senator Bob Bartlett and Senator Ernest Gruening.

We will be glad to hear from you in such a manner and order as you gentlemen may determine. You may proceed in your own way.

STATEMENT OF HON. ERNEST GRUENING, A U.S. SENATOR FROM THE STATE OF ALASKA

Senator GRUENING. My senior colleague has very kindly yielded to me, as I seem to have a pressing engagement in my office.

Mr. Chairman, I wish to thank this subcommittee for giving me an opportunity to make a statement in support of this bill, S. 2201, which would authorize the Veterans Administrator to furnish care which is needed by veterans in Alaska and Hawain who suffer from non-service-connected disabilities.

The need for introducing this bill came about as a result of an inadvertent disadvantage to veterans in the new States of Hawaii and Alaska occurring with the advent of statehood.

As I am sure you are aware, there is a provision in existing legislation which authorizes the Veterans Administrator to contract with private hospitals for the care of veterans with non-service-connected disabilities in territories and possessions of the United States and in the Commonwealth of Puerto Rico. Before Alaska and Hawaii became States this special provision of law was applicable for the benefit of veterans living there.

However, with the coming of statehood this valuable benefit was lost, as the law does not provide for contracts for hospital care of veterans with non-service-connected disabilities in the States.

The effect of the law results in an unintentional but serious discrimination against veterans living in the two new States.

The reasons that the present state of the law is discriminatory against Alaskan and Hawaiian veterans and the reasons for this corrective legislation are the same.

The first reason is that there are no veterans hospitals in the States of Alaska and Hawaii. Thus, although veterans may receive care in other Government faciilties, they are dependent upon the uncertain availability of space in other hospitals and they are denied the special consideration and care which they, as veterans, may obtain at hospitals which are built for their use alone. In the event that, due to administrative requirements or lack of space, they cannot be cared for in other Government facilities in Alaska and Hawaii they must travel thousands of miles for admission to Veterans' hospitals in other States. As a result, they must bear cruel separations from home and families at a time when they need the comfort of familiar persons and surroundings the most.

The geography of the two new States constitutes the basic reason for the necessity of this legislation.

Veterans in both States are separated by great distances from veterans facilities in other States where they might receive care to which they are entitled. In the State of Alaska veterans are not only separated from other States by enormous distances, but even within the State they may find themselves located in places which are hundreds

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