Mr. GARY. The next item we shall consider is the U.S. Coast Guard and there we have, first, a deficiency request for $10,800,000 for operating expenses. The appropriations for fiscal year 1964 was $249 million.

We have testifying on this item Adm. E. J. Roland, the Commandant of the U.S. Coast Guard. Admiral, we are very glad, indeed, to have you with us and we will be glad to hear from you at this time. Admiral ROLAND. I have a prepared statement and it covers more than the $10,800,000; we also have an additional request under retired pay and reserve training.

Mr. GARY. If your statement covers all three of those, the 1964 appropriation for retired pay was $33,600,000, and the deficiency request is for $1,125,000; the 1964 appropriation for reserve training was $18,800,000, and the deficiency request is for $700,000, that is to be derived by transfer from "Salaries and expenses, Office of the

Treasurer."

We shall insert the justification at this point in the record. (The justification follows:)

TREASURY DEPARTMENT-U.S. COAST GUARD

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 current fiscal year..

In next fiscal year--

Total.

13. Actual obligations last 3 months:

October_.

November_.
December.

10, 800

In budget

$10,800

Revised $10, 800

1. Purpose

JUSTIFICATION OF NEED FOR FUNDS

Supplemental funds in the amount of $10.8 million are requested to cover that portion of unbudgeted costs of new personnel legislation which cannot be absorbed. Increases in pay of military personnel, authorized by Public Law 88-132, and the separation or retirement of additional military personnel, authorized by Public Laws 88-114 and 88-130, will result in increased costs to this appropriation in fiscal year 1964 totaling $11,375,000.

2. Method of determining amount

Military personnel plans were priced at the old and new rates of pay for each grade. The resultant difference was the cost of the military pay raise. The additional personnel to be separated from the service or retired because of new legislation was determined. These numbers were then applied to the various elements of separation costs (severance pay, terminal leave, travel, etc.) and a total cost developed.

3. Reason additional funds required

The public laws were enacted after the 1964 appropriation was approved. For this reason the increased costs were not included in the 1964 estimates or appropriation.

4. Explanation of language provisions

No changes are requested in appropriation language.

5. Justification

Public Law 88-114, approved September 6, 1963, removed the percentage limitation on retirement of enlisted men. Under this legislation 140 additional enlisted men will be retired in fiscal year 1964. The separation costs for terminal leave, travel, etc., will be $275,000.

Public Law 88-130, approved September 24, 1963, amended 14 U.S.C. relating to the appointment, promotion, separation, and retirement of officers of the Coast Guard, and for other purposes. Under this legislation, 89 additional officers will be separated or retired in fiscal year 1964 with increased separation costs of $300,000. This unbudgeted expense is also being absorbed by allocation from other programs.

Public Law 88-132, approved October 2, 1963, effective October 1, 1963, amended 37 U.S.C., to increase the rates of basic pay for members of the uniformed services, and for other purposes. The cost of this new legislation for the 9 months applicable in fiscal year 1964 is $10.8 million.

Because of lag in military personnel plans, we expect to be able to absorb the additional costs resulting from the first two items totaling $575,000. Not involved in this estimate is our plan to absorb the impact of increased travel allowances, the unbudgeted surveillance patrol in Florida waters and a $275,000 compromise settlement of an automobile accident claim.

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

11. Date needed: for obligation, Apr. 1, 1964; for expenditures, Apr. 1, 1964.

1, 125

Additional funds in the amount of $1,125,000 are requested to cover that portion of unbudgeted costs of new personnel legislation which cannot be absorbed. The Uniformed Services Pay Act of 1963, Public Law 88-132, increased retired pay costs of the Coast Guard. Public Law 88-114 removed the percentage limitation on retirement of enlisted men.

2. Method of determining amount

The Uniformed Services Pay Act of 1963, by changing rates of basic pay, increases costs of persons retired after its effective date. The act also provides for recomputation or percentage increases in retired pay of persons retired prior to the effective date. A summary tabulation by pay grade and years of service was made of persons on the rolls who retired prior to June 1, 1958. Their retired pay was either recomputed using June 1, 1958, active duty pay rates or it was increased by 5 percent whichever yielded the larger increase. Members who retired between June 1, 1958, and 1963 were given a 5-percent increase in their retired pay. The cost of planned retirements for 1964 was determined by using the old and new rates. The difference was the increased cost of the pay increase.

The removal of the 1-percent limitation on retirement of enlisted men made a large number of men eligible for retirement. As a result, there will be 140 more retirements by enlisted personnel than were planned during the current fiscal year. The cost of these additional retirements for the applicable portion of the year was determined by multiplying the number times the rates for the months they will be on the rolls.

3. Reason additional funds required

These public laws were enacted after the 1964 appropriation was approved. For this reason the increased costs were not included in the 1964 estimates or appropriation.

4. Explanation of language provisions

No changes are requested in appropriation language.

5. Justification

Public Law 88-132, approved October 2, 1963, increased the rates of pay of retired members. The total cost of this legislation for all elements during fiscal year 1964 is $1,523,000.