1937, it must be considered that the 1937 act carried authority for reappropriating $21,000,000 from the unexpended balances of the 1935 and 1936 appropriations under this same heading. Consequently, there is a total of $101,120,000 available for the fiscal year 1937 and, compared with this total, the estimate for 1938 shows a reduction of $12,368,000. Analyzing this decrease to establish the base for 1938, consideration must be given to the estimated unobligated balance of 1937 funds, totaling $8,973,173. This leaves a difference of $3,394,827, which reflects the estimated reduction in expenditures payable from this appropriation by reason of the definite limit of beneficiaries to qualify. Benefits of this kind are only payable to veterans who are permanently and totally disabled or the dependents of veterans who died during the comparatively short period that this form of insurance was in force. The peak load has been reached and expenditures should decline gradually from year to year in the absence of subsequent liberalizing amendatory legislation. Summarizing the actual and estimated expenditures during the fiscal years 1936, 1937, and 1938 by major purposes, the following tabulation clearly illustrates the trend of payments and the basis for formulation of the 1937 estimate: In brief explanation of the major purposes shown in this summary, it may be stated that "Disability awards" are the monthly disbursements made directly to those veterans who became permanently and totally disabled while carrying this form of insurance, and such monthly payments are determined on the basis of $5.75 per month for each $1,000 of such insurance carried at the time the disability was incurred. "Death awards" are the monthly disbursements to beneficiaries of deceased veterans, determined at the rate of $5.75 per month for each $1,000 of this form of insurance carried and in force at the time of death. "Lump-sum disability awards (compromises)" is a new type of settlement in litigated insurance cases authorized at the time insurance litigation was transferred to the Department of Justice by Public, No. 78, Seventh-third Congress, approved June 16, 1933. In these instances the Department of Justice may, with the permission of the court, settle a suit for insurance without trial in an amount less than the total sued for. "Lump-sum payments (beneficiaries)" are those disbursements made to the estates of deceased veterans for the commuted value of the remaining installments upon the death of the named or recipient beneficiary. Upon the death of the named or recipient beneficiary it is provided that the remaining unpaid installments due under the contract of insurance shall be commuted to exclude unearned interest to date and paid in a lump sum to the estate of the deceased veteran for distribution under the law of the State of residence of the veteran at the time of his death. "Transfers to Government life-insurance fund" are those payments made from this appropriation to the trust fund specified to meet obligations sustained by that fund incident to the extra hazards of military or naval service of persons so engaged while protected by Government life policies. "Refunds" represent the disbursements made in returning to the veteran any premiums paid by him through dates which are later found to be subsequent to actual proof if permanent and total disability which matured the policy. "Retroactive payments" involve disbursements of accrued amounts for a period of time elapsed between the current determination that permanent and total disability actually exists and the effective or beginning date of such disability. These payments are largely involved in litigated cases although they do arise in other cases where there is submitted to the Veterans' Administration adequate original proof of sufficient disability to mature the policy. The attention of the committee is now directed to chart no. 2 under the title "Military and Naval Insurance" in the books before you. That statement shows the actual disbursements for the fiscal years 1931 through 1936 and the estimated disbursements for the fiscal years 1937 and 1938 by months, number of beneficiaries, and types of payments. With your permission I will insert the chart in the record at this point. ADJUSTED SERVICE AND DEPENDENT PAY The next item of appropriation is "Adjusted service and dependent pay", for which an appropriation in the amount of $2,000,000 is requested for 1938. This appropriation covers payments of the amounts due under the World War Adjusted Compensation Act in cases where such benefits are not covered by the issuance of an adjusted-service certificate. Sections 401, 601, 603, and 608 of the act specify the types of payments to be made from this appropriation. The amounts appropriated under this title are continuing appropriations and there remained available as of July 1, 1936, an unexpended balance of $829,675, provided as a part of the 1937 Appropriation Act. Based upon the trend of applications being received at the time the 1937 appropriation estimates were compiled, that amount would have been approximately adequate to cover expenditures through June 30, 1937. However, due to the unusual conditions which have arisen as the result of the publicity attendant to carrying out the provisions of the Adjusted Compensation Payment Act, 1936, enacted January 27, 1936, it is quite evident that a deficiency will occur in this appropriation for the fiscal year 1937. Beginning shortly after the enactment of the aforesaid legislation an unprecedented and wholly unexpected influx of new claims was received, which apparently reached its peak in the month of October 1936, when a total of 5,293 new claims payable from this appropriation were approved, such number amounting to a total in one month of more than half of the aggregate number received during the entire fiscal year 1936. Without doubt, many potential beneficiaries who had been asleep upon their rights, or without specific knowledge of entitlement, became suddenly alert after all of the Nation-wide publicity given to the passage of the Adjusted Compensation Payment Act. During the first 4 months of the fiscal year a total of 10,314 claims were approved and it is estimated that a maximum of 32,934 will be administratively certified during the present fiscal year. It is also anticipated that these claims will continue to come in in a decreasing volume during the fiscal year 1938, when it is expected that a total of 26,675 will be favorably acted upon. Based upon the foregoing facts and assumptions, the estimate is submitted under this title for the fiscal year 1938 in the amount of $2,000,000. The following tabulation summarizes expenditures for this purpose for prior fiscal years and comparatively the estimated requirements for the fiscal years 1937 and 1938: For the information of the committee I now invite attention to chart no. 3 under the title "Adjusted service and dependent pay" in the books before you, which shows the actual and estimated number |