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Approvad For Release 2005/04/21 : ClA-RDP66B00403R000400280906-0 (No. 6) HEARINGS BEFORE SUBCOMMITTEE NO. 1 COMMITTEE ON ARMED SERVICES HOUSE OF REPRESENTATIVES EIGHTY-EIGHTH CONGRESS ON ER. 3006 TO AMEND TITLE 37, UNITED STATES CODE, TO INCREASE THE RATES OF BASIC PAY FOR MEM- BERS OF THE UNIFORMED SERVICES, AND FOR OTHER PURPOSES FEBRUARY 26, 27, 28, MARCH 5, 6, AND 7, 1963 Printed for the use of the Committee on Armed Services Approved For Release 2005/04/21 : CIA-RDP66B00403R000400280006-0 Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 COMMITTEE ON ARMED SERVICES EionTY-EIGHT11 CONGRESS, FIRST SESSION CARL vnisoN, L. MENDEL RIVERS, South Carolina PHILIP J. PHILBIN, Massachusetts F. EDWARD ataxia, Louisiana ARTHUR WINSTEAD, Mississippi MELVIN PRICE. Illinois 0. C. FISHER, Texas PORTER HARDY, Ja, Virginia CLYDE DOYLE, California CHARLES B. BENNETT, Florida RICHARD E. LANKFORD, Maryland GEORGE HUDDLEST014, Ja., Alabama JAMES A. BYRNE, Pennsylvania SAMUEL S. STRATTON, New York JEFFREY COHELA.N. California VICTOR WICKERSHAM, Oklahoma OTIS G. PIKE. New York JOE hi. KILGORE. Texas RICHARD H. ICHOR.D, Missouri LUCIEN N. NEDZL Michigan CLARENCE D. LONG, Maryland A. FERNOS-ISERN, Puerto Rico B.OEMET W. SMART, WI oomnies Georgia. Chairman I EA LIE C. ARENDS, Illinois LEON H. GAVIN. Pennsylvania WALTER NORBLAD, ONgon ILLIAM H. BATES, Meesachusette ALVIN E. OtONSKI, Wisconsin ?VILLIAM O. BRAY, Indiana FOB WILSON, Ca Moral'. FRANK C. OSMERS, Je., New Jersey CHAR (,Efi S. GUBSECR, California ritAN4 I, BECKER, New York TIARLES E. CHAMBERLAIN, Miehlipin ALEXANDER PIRNIE, New York I.URWARD 0, HALL, Missouri DONA I,D D. CLANCY, Ohio LOBERT T. STAFFORD, Vermont El) FOREMAN, Texas Butcomurratz 7.%-cl. 1 L. MENDEL RIVERS, PORTER HARDY, Ja., Virginia CHARLES E. BENI:I:TT, Florida GEORGE HUDDLESTON, is., Alabama SAMUEL S. STRATTON, New York JOE Af. 'KILGORE, Texas CLARENCE D. LONG, Maryland JOHN B. BLAND7ORD, eglined Soath Carolina, Chairman LEON H. GAVIN. PennivIvailia WIT.L-ANI FL BATES. Masonehusetts PON WILSON, rollfornla FRANK C. OSMERS. Is.. New Jersey CHARLES S. GUBSER, California Approved For Release 2005/04/21 :,CJA-RDP661300403R000400280006-0 Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 [No. 61 SUBCOMMIT'TEE NO. 1 CONSIDERATION OF H.R. 3006, TO AMEND TITLE 37, UNITED STATES CODE, TO INCREASE THE RATES OF BASIC PAY FOR MEMBERS OF THE UNIFORMED SERVICES, AND FOR OTHER PURPOSES HOUSE OF REPRESENTATIVES, COMMITEEE ON ARMED_SERVICES2_ SUBCOMMITTEE No. O. Washington, D .0 Tuesday, February 26,1963. The subcommittee met, pursuant to call, at 10 :07 in room 313?A, Cannon Building, Hon. L. Mendel Rivers (chairman of the subcommittee) prosidin.g. Mr. RIVERS. Let the committee come to order. Members of the. subcommittee, ladies and gentlemen, we are begin- ning here today on H.R. 3006, the most important legislative item this subcommittee will consider this year insofar as the personnel of our armed services are concerned. I would like to say at the outset that while we normally think of the armed services as conistimr of the Army, Navy, Air Force, and Marine Corps, and Coast Guard when serving with the Navy, never- theless the pay scales that we write into law also cover the commis- sioned officers of the Public Health Service and the Coast and Geo- detic Survey. Thus, there are seven services involved when we refer to the uniformed services. Before we hear our first witness today, I would like to make some observations about this proposed legislation. I have had an opportunity to study the bill and I have arrived at certain conclusions as a result of that study which lead me to the con- clusion that the bill should be modified in several major respects. The bill covers 19 separate items. The first and most important part of the bill is section 2 which con- tains the new proposed basic pay scales. The increases recommended range from $1.80 per month for an E-1 recruit to $120 a month for an E-9 sergeant major so far as enlisted personnel are concerned. The increases range from $27.70 a month -for second lieutenants to $95 a month for the highest officer grade. The increases in basic pay alone, on an annual basis, will exceed $985 In general, I believe the recommended basic pay increases are rea- sonable. For the first time in 13 years the entering pay of second lieutenants and privates will be increased. The major increases will be found in certain career enlisted points and at certain critical points in the officer pay scales. (1397) 85066-63?No. 6--1 Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/413g8p1A-RDP661300403R000400280006-0 General and flag officers, for practical purposes, receive on Iv a cost- of-living increase. 1 believe sonic minor adjustments should he considered by the sub- conunit tee, particularly in the grade, where an increment, in pay has been cut back frOill thts "over s years of service.' point to iteover 6 years of service" point, and in the W- .1 grade IA here the. maximum pay, just as in existing law, does not become effective until the W-4 lots completed 30 years of service. Since the law requires a W-4 to retire 60 days after the completion of 30 years of service, it would make better sense to me if that maximum increase took effect at the "over 26 year" point?because to me it scents senseless when it gets to 30 vears, you kick him oui and he doesn't get the benefit of it, so ht him get the benefit of it when he gets the promotion. With these exceptions, however, I lind myself in general accord with the proposed pay scales. Certainly they are modest, and in no instance could they be called excessive. In many areas military per- sonnel ?vill still draw far less pay than their civil service courrerparts, but nevertheless any pay increase is welcome to the recipient, and I recognize the fact that there. are financial limitations that must be acknowledged. Hut here are Is other items in this bill which must be discussed. ant not in agreement with sect ioo 2(b) of the proposed legislation which will be found on page 3 of I I.R. 3006. This section, in effect, provides that it member of the Reserves who is performing inactive duty trainimi for which he is entitled to pay will be paid under exist- ing pay scales and will not benefit by the proposed new rates. I cannot agree to a privosal that discriminates bet ween an obligated reservist and an unobligat . These youmr men have all served on active duly in one service or another while some of their civilian friends have IleVer per' f(winvd any military- service whatsoever. To discriminate between a reservist who has not f. ilhil led his reserve obligation and the reservist who continues his inactive dui v trainin!, on a V0111111 arc basis is unwise, and as far as I am concerned. I hope that sect ion of the bill will be eliminated. On page -4 of MR. 3006 is section 1, entitled "Constructive Service. Credit for Purposes of Appointment, Promotion, and Basic Pay.- This sect ion seeks to extend the awarding of constructive credit to those who hold postgraduate degrees in professions that are not now recognized for that purpose in exist in law. As you know, we award constructive credit today to physicians, dentists, veterinarians, lawyers, chaplains, and ccrt sin individuals who hold Ph. I rs in sciences allied with medicine. Hut under exist Our law, there is no method by which other indi- viduals can be awarded construct ivy credit for appoint mem. promo- ion, and pay purposes. As you will note in the iLiotlysis of this section, only phys'el:uis and dentists May now COMA their constructive credit for longevity pay purposes. This section would grant all who are awarded construct ive credit the right to count that credit. for longevity purposes. 1 do not quarrel with the concept. But the section, in my opinion, does not belong in it pay bill. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 1ntA-RDP661300403R000400280006-0 This is basically a promotion and appointment problem, and I would rather see this section considered in the so-called Bolte proposal rather than take the time to discuss its feasibility in this pay proposal. I would also call your attention to the fact that this section as writ- ten would vest in the Secretary concerned the authority to determine what postgraduate degrees would be recognized. I do not believe we should delegate this authority; I believe Congress and Congress alone should make the determination as to which postgraduate degrees will be so recognized. But beyond that, I would also call your attention to the fact that this section is not retroactive except for those who entered on active duty or were commissioned, or enlisted, less than 3 years ago. In other words, while this section would provide constructive credit to a newly commissioned lawyer, which he could count for pay purposes, it would only be applicable to a lawyer hereafter appointed, or a lawyer who has only served 1 or 2 years on active duty. This means that lawyers and others entering on active duty would receive longevity credit for their constructive service, but lawyers and those with postgraduate degrees already on active duty will not receive longevity credit, presumably on the theory that they have already served 3 or more years and therefore are drawing longevity credit for that period of time. In my opinion, this section requires far more consideration, and therefore I will recommend that this section be deleted from the bill so that the matter may be considered more fully at a later date. Now, if you will turn to page 11 you will find the section entitled "Retired Pay and Retainer Pay." This, of course, is a highly controversial section in the minds of many people. I would remind the subcommittee that in 1958 the Con- gress departed from the traditional concept of applying existing pay scales to the retired pay of those who had retired prior to the enact- ment of new pay scales. It is probably not correct to say that we fully departed from tradi- tion in 1958 because in 1949 we completely rewrote the disability retirement laws and, as a result, many thousands of personnel retired for disability, who did not have a sufficient degree of disability or sufficient length of service to qualify under the 1949 pay scales, have continued to draw their retirement pay under the 1942 Pay Readjust- ment Act. However, they received cost-of-living increases in 1952, 1955, and 1958. The section before you provides that individuals retired prior to June 1, 1958, who are paid under the Career Compensation Act, may recompute their retirement pay under the present pay scales that went into effect on June 1, 1958, and, in addition, receive a 5-percent cost-of- living increase in their retirement pay. Therefore, all those in receipt of retirement pay will be placed on an automatic cost-of-living ad- justment basis. In other words, the section provides that each year a determination will be made as to the cost of living, and whenever the culmidative eff ett of the increase in the cost of living equals 3 percent or more, retirement pay will be adjusted to the nearest one-tenth of 1 percent to reflect that increase. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/0442*: CIA-RDP66600403R000400280006-0 Now this makes the issue clear cut. The Congress is asked to de- ( lade once and for all which polio, shall apply in computincr eetirement pay. There will be many persons who will arynie that we should hot de- part from the old tradition of computing retirement. pay on the basis of new pay scales. There are oth erswho recognize t he fact t hal, there are nearly 350,000 mil ttary personnel on the military retired lists and hat this number is growing by 50.900 or more each year. Retneinent costs for mita ary personnel alone exceed Si billion annually, at at will exceed 53 billion annually in the years ahead. The proposal submitted by the Department of Defense peruits large group of offivers and enlisted personnel to recompute their retired pay under existing pay scales. Now I think I should remind the subcommittee that in 1958 we provided sonic rather substantial pay increases, par.icularly for the senior officers and noncommissioned officers. As a Atsult. thee has been widespread dissatisfaction among the more senior retired per- sonnel who, because they retired prior to .1one I, 1958, were net able to compute their retirement pay under the higher pay scales that went into effect on that date. These individuals, under the proposal before us, will be allowed to recompute under the. higher pay scales provided in the 1958 law, but they will not be permitted to recompute, their retirement pay on the proposed new is scales in this legislation. However, the pay increases recommended for the general and flag officers in the proposed legislation arc approximately 5 percent. and all retired personnel will receive a 5-1)q-rent. increase in their retired pay under the proposed legislation. Dollarwise, therefore, there will be relatively little differen2e for these more senior officers. On the other hand, those now retired are concerned about future pay increases. As I have said, the titne for decision has nos % been reached, and the Congress must make up its mind whether it will adopt t lie automatic, cost -of-1 iving adjust mem concept, st art mg now, or whether it will go back to the old concept of applying retirement pay to existing pay scales no matter when they go into effect. This matter has given me. much concern. But I have concluded. that we must recognize that retirement costs, although they are a part of our national defense costs, are reaching such staggering sums that unless we apply a reasonable principle to the retirement system we may well jeopardize the entire. retirement procedure. One of the great privileges that exist. today among military personnel is the privilege of applying for retirement regardless of age upon the completion of '20 or more. years of service. No other Government employee, and probably no employee of private industry. has this privilege., except FBI agents, to the best of Illy knowledge. However, there are ninny tirgument,t in support of this privilege, and I personally feel it. is something that must las retained. On the other hand, unless we take positive steps now to protect this retire- ment system. we may eventually be for-ed to change the Nit ire system. For that reason. I will stale now that I will support the rt4irement proposal submitted by the Department of Defense because I bAieee Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/2114ui : CJA-RDP661300403R000400280006-0 it does eliminate the gross discrimination that existed between those retired prior to June 1, 1958, and those who retired after that date, and at the same time provides a guarantee to all future retirees that they will automatically receive a cost-of-living increase wheneverthe cumulative cost of living goes over 3 percent. Under the provisions of this bill, no further legislative action will be necessary. Thus the retired serviceman's dollar purchasing power will be preserved and guaranteed. Stated another way, I have come to the conclusion that a bird in the hand is worth two in the bush. Now let me turn to another item in the proposal before us. You will find this on page 16, under the title "Submarine Pay for Mem- bers Training for Duty on Nuclear-Powered Submarines." . I recognize the fact that the Navy is having difficulty in obtaining volunteers for the POLARIS and other nuclear submarine programs. I do not believe we should pay submarine pay to a recruit who enters into this program, but I certainly believe that we should continue submarine pay for those who are already qualified submariners who are accepted for advanced training for nuclear submarine duty. This section is probably too broad, as written, but the concept is sound and I intend to support it. Likewise, I find myself in accord with section 7 of the bill which would provide incentive pay of either $55 a month for an enlisted man, or $110 for an officer, who is on duty "inside a high- or low-pres- sure chamber." Present law already provides incentive pay for those who are on duty as a "low-pressure-chamber inside observer," and the law would be amended to include duty in a low- and high-pressure chamber, regardless of whether or not the individual is an observer. . Also, I find myself in accord with section 8 of the proposed legisla- tion which permits an individual to draw two incentive pays. Today the law restricts an individual to one incentive pay. Right there, Mr. 131andford, give them an example of two incentive pays about the paratrooper or one of our dangerous missions. Mr. BLANDFORD. That is in the next paragraph. Mr. RIVERS. While there will not be many cases of this nature, nevertheless I believe that if an individual is qualified and is perform- ing duties in two incentive pay areas, then there is no reason he should not draw the two incentive pays. Ihave not seen a cost estimate on this section, but it will be very small. MT. BLANDFORD. 1 have a figure of $1,900,000. Mr. RIVERS. For example, we provide paratroopers incentive pay and we also provide incentive pay for those who handle demolitions. There are also paratroopers who must be demolition experts?and when you combine the two together, it is obvious that it becomes an extremely hazardous occupation. There is no reason why individuals performing duties of this nature should not draw two incentive pays. Next we come to section 9 on page 17 of the bill, which repeals the authority for special pay for sea and foreign duty. This special pay is applicable only to enlisted personnel and under this provision of law enlisted personnel draw amounts ranging from $8 for an E-1 to $22.50 per month for the E-7's, 8's, and 9's. This type of pay is intended to provide a small amount of compensation to the enlisted man who serves at sea, or is stationed overseas. In Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04l2j1): CIA-RDP66600403R000400280006-0 fiscal 1961 it is estimated that this provision of existing law will cost. approximately $133 million. The proposed legislation seeks to repeal this provision of law and substitute in its place special pay for duty involving unusual hardship :which will be found on page 12 of the proposed legislat ion. I am advised that the fiscal est innu-c! for 1964 for duty involving unusual hardship. if it is implemented, would only iavolve about $30 million. It is intended to be applicable to officers as well as enlisted personnel, and it will be in amounts equal to 15 percent or 25 percent of the basic pay of the member concerned. l'nder the proposal, we are asked to delegate to the Secretary of Defense the authority to deter- mine who would be cut itled to this extra pa:v. Today any enlisted man who goes to .sea, or any enlisted man who goes overseas, is entit led to sea or foreign duty pay. The subititute proposed would obviously be applieabh. to far fewer persons titan now draw sea and foreign dot y pay. Frankly, I do not believe we should repeal the present law which provides sea and foreign duty pay for all enlisted personnel. In the first place, if it is repealed, it will immediately result in many individuals receiving a very small pay increase after they liav.2 been led to believe they will receive a fairly substantial pay increase. In fact, in the case of E--1's, they would have to be protected against a reduction on a saved-pay basis, and continue to draw sea pay because the increase in their basic pay would not be equivalent to their sea par. I rather suspect that if we were to adopt the section dealing with unusual hardship that very few people now at sea. would qualify. I believe that any enlisted man who goes to sea for ext (gide(' periods of lime is Pm it led to some extra compensat ion. am very much afraid that if we eliminate sea pay we will seriously affect the morale of our enlisted personnel in the Navy and Coast Guard. I think the same reasoning is true in the case of our enlisted personnel who are serving overseas. T would he the first to admit that there are undoubtedly many in- dividuals dra wino- sea and foreign duty pay who are not cut ii led to extra compensat ion. For example, I don't believe that. an indi vidual assigned to a ship who is living ashore and who spends every evening home with his family should draw sea pay. And T find it difficult to believe thou duty in Wiesbaden, or Tokyo, or Paris, or Thmolulu, or Naples is diflicult duty. _1s a matter of fact, there are many enlisted personnel who would like to Lave more of this type of duty. But. the fact that there are some who are drawing sea and foreign duty pay where it is probably not justified does not con- vince MC that the entire concept of sea and foreign duty pay should be eliminated. Therefore, as far as I am concerned. I will not support. the proposed repeal of sea and foreign duty pay, evcn though it. will add $133 million to the cost oft he bill. On page 12, you will find section 10 which repeals the authority for responsibility pay. This pay has never been implemented by the Department of Defense. It was inserted in the 1958 Pay Act by the Senate, and the House Committee on Armed Services never con- sidered the proposal as a committee. Members of the commit tee NIVI remember we accepted it in Congress. It u is Inc nderstanding t Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/2114Q1A-RDP661300403R000400280006-0 the Army and Marine Corps are opposed to the implementation of this provision of law. As far as I am concerned, if the Department of Defense wants to repeal the authority since they do not intend to implement it, then I would have no objection. however, we should discuss the pros and cons involved. The question of whether or not we should approve section 11, on page 18, which provides special pay for duty involving unusual hard- ship will depend upon what we decide to do with sea and foreign duty pay. I can visualize situations that would fully justify the hardship special pay recommended in this provision. There are many remote areas of the world where our officers and enlisted personnel are serv- ing. Certainly nothing could be more remote than sitting in front of a radar screen on 'a mountaintop many miles from civilization. Certainly no one could quarrel with the unusual hardship of serving on a destroyer between New Zealand and McMurdo Sound near the Antarctic. Certainly no one can argue that living in the jungles of South Vietnam is not an unusual hardship. But there are also other problems involved which are not covered by this proposal?such as the unusual amount of temporary duty that certain personnel of our Services must perform. All of you have undoubtedly received correspondence from Air Force personnel, in particular, who have had their per diem allowance eliminated while on temporary duty. I will discuss this matter fur- Thor when we come to the family separation allowance provision. If we retain sea and -foreign duty pay, and I believe we should, then undoubtedly the provision dealing with unusual hardship should be eliminated. I don't believe we can justify both. We save $30 million annually by deleting this section. This leads me then to page 19 and section 12, entitled "Career Incentive Payment." The concept of this provision is that the services should be allowed to pay a bonus to certain individuals with critical skills ranging from $500 to $2,400 when they come up for their first reenlistment. Today, existing law provides reenlistment bonuses up to a maximum of $2,000 in the following amounts: On the first reenlistment, an enlisted man receives a bonus consisting of his monthly pay multiplied by the number of years for which he reenlists. On his second reen- listment, he receives two-thirds of his monthly basic pay times the years for which he reenlists. On his third reenlistment, he receives one-third of his monthly basic pay times the number of years for which he reenlists; and in the fourth and subsequent reenlistmonts, one-sixth of his monthly basic pay times the number of years for which he reenlists. But he may not be paid more. than the maximum of $2,000. You will be interested to learn that in fiscal 1962 the military serv- ices paid bonuses to 246,000 servicemen involving more than $133 million, or an average of about $500 per man. The present system of paying reenlistment bonuses would be phased out under the proposed legislation and in its place we are asked to substitute a career incentive payment which would amount to one payment at the first reenlistment. Those with the highly critical skills could receive as much as $2,100, and those with lesser skills as little as WO. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 1404 The theory behind this concept is that. the first reenlistment is the critical point in determining whether an individual will make a career of the armed services. And in support of this, the Department con- tends that those who have reenlisted once or more have it reenlistment rate of approximately SS percent. A.1.3, concern, however, is that by phasing out the present reenlistment bonus systetn, the career reenlistment rate of SS percent may begin to decline. Unfortunately, there is no way of knowing whether the second and subsequent reenlistment rates are affected by the present reenlistment bonus system. Frankly, I do not think we should adopt the career incentivt. system proposed in the bill before us because_ I think it. might have a very serious ailed upon future. reenlistmenLs. But in iuldition. I would like to call the subconanittee's attention to the fact that the Department of Defense has never fully imple- mented the proficiency pay system that was authorized in the 1958 pay act. That year, we authorized three types of proficien.7,y pay- ments for enlisted personnel with special skills. We authorized a P-1 rating in the amount of Sat a month; a 1-.2 rating in the amount. of $100 a month; and a P-3 rating in t he amount of Slat a month. You will be interested to learn that the maximum amounts paid today are $30 for P-i's, $60 for P-22s, and the P-3 program has never been im- plemented. At present, there are. 2.,225,000 enlisted personnel on active duty in our Armed Forces. Of this number, 205,000 enlisted personnel receive P--1 pay, and only 41,000 receive P---2 pay. Before we delegate additional authority to th a e Secretry of :Defense or authorize another system to encourage the reenlistment of those with critical skills, I tItink it might be wise if the. Department im- plemented the law we gave them in l958. For the reasons I have stated. I am opposed to the enactment of the career ticentive payment as suggested in the proposed legislation. That brings me to page .24, and special pay for those Nvho are subject to hostile fire. As you know, the Congress enacted a Combat Duty Pay Act in 1952, but under the terms of that law it is restricted to the geographical location of Korea. I might mention, for the benefit of the. subcom- mittee, that the Combat Duty Pay Act of 1952 was never considered by the Committee on Armed Services: it was added as a Senate amend- ment to a Veterans Affairs bill and became law. recognize that there are many arguments in support of a special pay for individuals who are exposed to enemy tire, bat the more I read this section, the more I foresee serious problems of implemernation. Beyond that is the quest ion of whether or not such a provision should be made retroactive for those who have already been subjected to hostile the in such places as South Vietnam, the Congo, and in air- craft that have been shot down by Communist aircraft or Communist missiles. This section, if enacted, may also involve us in some very interesting international complications. If we have, troops in certain parts of the world who are suppmsed to be there for training purposes, could we announce in an appropriation net that. they are being paid the equivalent of combaf duty pa-v? Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 14131-RDP661300403R000400280006-0 Beyond that is the question of the philosophy involved as to whether or not an individual should be paid extra pay -for performing the duties for which he is basically employed. For these reasons, I am of the opinion that the section should be deleted from the bill. Since there is no money in the budget for this provision, I am unable to project a cost savings if we delete this section: This takes us to section 15 dealing with an increase in basic allow- ances for subsistence for officers. At present, all officers are entitled to a monthly subsistence allow- ance of $47.88; the proposed bill would increase this amount to $77 per month. The estimated cost of this increase amounts to $120 mil- lion per year. The $77 figure was arrived at by multiplying the daily present ration allowance which is granted to enlisted men serving in an area where Government messing facilities are not available. I think there is little doubt that without increasing the subsistence allowance for officers, and particularly the officers in the junior grades, the overall increases proposed in this bill would not be adequate to bring about the results that are sought. On the other hand, I cannot justify in my own mind an increase in subsistence allowances for officers without taking some action to in- crease the $1.03 per day commuted ration now being paid to the 800,000 enlisted personnel who are allowed to draw this allowance, as well as those few enlisted personnel who draw the $2.57 per day allowance that is authorized when messing facilities are not avail- able. I believe, therefore, it would be desirable for us to consider establishing a statutory commuted ration of $1.25 per day for en- listed personnel who are permitted to mess separately. This would add $54 million a year to the cost of the bill. The figure of $1.25 will provide for the increase in the cost of food to the consumer, and will also represent the savings to the Government reflected in re- duced logistic support, messing facilities, and food handlers. I believe we should also increase the $2.57 per day now authorized for certain .enlisted personnel by 26 percent, or 68 cents a day, which is approximately the increase in the cost of food away from home since the allowance was last increased in 1952. This would add about $15 million a year to the cost of the bill. Insofar as officers are concerned, I suggest we increase their present subsistence allowance of $47.88 per month by approximately 6.6 per- cent?the increase in the actual cost of food since 1052. I suggest $51 a month, since this figure is divisible by 30 and is easier to administer. Such an increase will cost $13 million a year. However, since junior officers and junior warrant officers, in par- ticular, will be affected by this proposed reduction in the subsistence allowance, I further suggest that we increase the basic pay scales of all first and second lieutenants, and all MT-1's and W-2's by $15 a month; and that we increase all other officer and warrant officer pay scales by $10 a month. This will increase the cost of the 'bill approximately $47 million a year, but approximately 20 percent of this will be returned to the Government in income taxes. To recapitulate my suggestion on subsistence, let me say this: 1. The estimated increase cost of the subsistence allowance for Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/01144 : CIA-RDP66600403R000400280006-0 officers is $120 million annually. This was based on an increase of $29 it month. 2. No increase in subsistence was recommended for enlisted personnel. Aly proposal would result in the following cost. estimates: I. Establish a statutory ctuntuuted ration for enlisted perionnel of $1.25 a day over the present rate. This vill cost $:1.1 million a year. 2. Increase the $2.57 now authorized for enlisted personnel where messing facilities are not available by about 26 percent, or a cents a day. This will cost about $15 million a rear. 3. Increase the subsistence allowance for officers about 6.6 !percent from $47.88 to $51 a month. This is the increase in the cost of food since 1952. This will cost about $13 million a year. .1. Increase the basic pay scales of all first and second lieuttnams, and all W fs, and W-2's, by $15 a month. This will cost about $20,160,000 a year. Increase the basic pay of all other officers by $10 a month. This will cost $27 million it year. 0. Total cost of my proposal is $129,160,000, as opposed to the estimated $120 million for the increase in subsistence propoied in the bill for officers. 7. Part. of this cost will be returned to the Government in income taxes. 8. To offset this, however, future retirement costs will be increased as it result of increasing the basic pay scales. fully realize that my suggestion does not give. officers as much take-home pay as the amounts recommended in the Department of 1)efense proposal. (hi the other hand, we cannot justify a substantial increase in sub- sistence allowances for officers, without providing al increase for en- listed personnel in those areas where they are emitkd to draw either a commuted ration or a ration where messing facilities are not available. In my tentative proposal. I have tried to stay within the 81211 million figure that_ was recommended for the increase in subststence allowances for officers. My suggestion means that officers will receive from $11 to $16 a month less in take-home pay than the amount suggested in Cie-De- partment. proposal. If we restore the elllire autumn and put it in the pay scales, we will of course go well beyond the $120-indlion increase recommended in the hill for this provision. If the sub- committee decides to provide. further increases in the basic pay scales soI out officers will receive the increases proposed by the Depalment of Defense, (heti I will support. such a change. Tins will be up to the subcommittee. In taking this action we must. remember that subsistence allowances lia?e the advantage of being nontaxab:e, and the disadvantage of not being considered a part. of pay for retire- ment purposes. On the other hand, increases in basic pay are taxable, but kale the advantage of increasing retirement pay. Section 16 of the bill deals with the quarters allowances that are payable when a husband and wife are both members of the- uniformed services. This is a technical provision whirh. is not applicable to a substantial number of people. However, it is a correction that. is Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 : Alev-RDP661300403R000400280006-0 necessary in the law. It will benefit some, and wit houta savings pro- vision, would also bring about a reduction in allowances for others. Briefly, what the section will do is to provide that where a husband and wife are both members of the uniformed services and they are in the same area, then the husband may draw a quarters allowance pay- able to an individual with dependents unless either one voluntarily occupies Government quarters. Under existing law, each can draw a single quarters allowance but neither can draw any allowance if there are single quarters available to each of them on the base. Section 17 will be found on page 31, under the heading "Family separation allowance." This section is intended to permit an individual with dependents who is assigned to an area where his dependents are not permitted to be with him and there are no Government quarters available to him, to draw a station allowance which will include an amount equal to the basic allowance for quarters for a member without dependents. I can best illustrate the purpose of this section by giving an example. If a major is assigned to an area outside the United States, where there are no Government quarters available and his family is pro- hibited from joining him, he draws the quarters allowances payable to an officer with dependents. This allowance, however, merely covers the cost of his household in the United States. In determining his oversea allowance, however, he is only allowed the difference between the allowances paid to a member without dependents and the allow- ances paid to a member with dependents. The difference obviously is insufficient in many areas to cover the cost of commercial housing which he must obtain for himself. On the other hand, the title of the section is somewhat misleading for I believe that members of the armed services were anticipating an actual family separation allowance which would provide a sum of money to the head of the household when his family was separated from him because they were prohibited from joining the bread- winner. Certainly there are many costs that are incurred when a wife is maintaining a household without the assistance of her husband, not the least of which is fixing a leaky faucet, cutting the grass, shoveling snow, repairing the roof, fixing 'broken windows, and the multitude of other chores that undoubtedly add to household expenses when the husband is not present to do the work. In addition, it will be noted that this section is only applicable to an individual who is assigned to a permanent duty station. As I mentioned earlier, there is no provision in the bill which compensates the individual separated from his home for long periods of time on temporary duty. In addition, the Department of Defense recently eliminated the per diem allowances for individuals who are on tem- porary duty even for long periods of time if they are in an area where housing and messing facilities are available. have been impressed with the munber of reasonable and sensible complaints that I have received from well-meaning citizens who take exception to this elimination of per diem allowances. I think there are times when we are penny wise and pound foolish, and I think this is an excellent example. Personally, I believe the family separation allowance section in this Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04121 : CIA-RDP66600403R000400280006-0 bill, as written, should be modified, mid that we should provide an adequate benefit. Certainly we should not limit ourselves to a very minor part of a very large problem. I suggest we amend this section by adding the following language to section 17: When a member of the uniformed services with dependents is assigned to a temporary duty station for a period in excess of 30 days, his por diem allowance shall not be less than 1 per day. Except in time of war or national emergency hereafter del-tared by the Con- gress, when a member of the uniformed servkes is entitled to a basic allowance for quarters as a member with dependents, limier section -103, title 37, United Slates Code, as amended, and is assigned to a permanent duty station whcre his dependenets are precluded by competent anti ority from residing at or near his Permanent duty station, including duty aboard a ship, or when a member with dependents entitled to a basic allowance for quarters its a member with depend- ents, under section -103, title 37, United States Code, as amended, is assigned to a temporary duty station for a period in excess of 30 days, Le is entitled to ;t special family separation allowance of one-third of the quarters allowanc9 pay- able to a member without dependents for his grade. or :-.=20, per month, which- ever is greater. in addition to any per diem allowance to which the member may otherwise be entitled. This language will cost about $5U million a year, and will at, least recognize the costs involved in long family separations. I realize that language may have to be revised, but it will give N-01t the general idea of my suggestion. Section lk deals with the advance movement of dependents, bag- gage, and household yams. Today there is authority for such action, but ot* limier unusual and emergency conditions. The propa-ed sect ion would broaden this to take care of other situations in which it is necessary for individ- uals to return to the rnited States before a permanent chancre of station set of orders have been issued to the service member. That brings us to section 19 on page 34, dealing with travel and transportation allowances which are authorized for travel perfcrmed under orders that are cancelled, revoked, or modified. I ant in full sympathy with the objectives of this section for it would permit an individual to he paid for travel and transportation costs incurred after he has left his last duty station and has proceeded toward his new duty station, and then new orders are issued can- celling the original orders. However, I would call the attention of the subcommittee to Cita fact that this provision is retroactive. It is the only provision in the bill which is retroactive and I do not believe it would be wise for us to consider in this bill any provision which is retroactive. I believe this section should stand or fall on its own merits and that it should he considered as a separate legislative item. For that reason, I am of the opinion that it should he deleted from the bill. Section 00 of the bill deals with uniform allowances for officers of the re!rular components. As you Inow, Reserve officers now re- cieve a uniform allowance of S.20o upon entering on active duty. Under this suggested provision, all officers, Reserves and Regulars :dike, who herea'-fter enter on active duty will be authorized a uni- form allowance of $250. Frankly, I do not believe we can justify giving a uniform allow- ance to Regular officers. This is their .areer and they have tenure of Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 : pil&RDP661300403R000400280006-0 office. This is not true of reservists. While I recognize that regular officers of the Public Health Service receive this benefit, I do not believe we can properly extend this benefit to all Regular officers. This brings us to page 37 and readjustment pay for enlisted mem- bers who are involuntarily released from active duty. This, of course, involves the question of quality control. We have readjustment pay today for reservists and for Regular officers,. and this section seeks to extend readjustment pay to regular enlisted personnel who are released from active duty involuntarily or not accepted for an additional tour of duty after serving 5 or more years, of continuous active duty. This, in effect, is an extension. of an existing benefit to enlisted personnel of the regular services. It would entitle a regular en- listed man to as much as 2 years of basic. pay if he is not reenlisted. This section must be carefully analyzed by the subcommittee, be- cause there are arguments both for and against the proposal. Parenthetically, I handled the Reserve incentive-1 mean separa- tion bill now on the statute books, and we wanted to pay them when they got out. This reverses the whole philosophy. We simply want to keep the enlisted men, yet we give them a bonus to get rid of them. So I want the subcommittee to look at this thing pretty closely. Finally, we come to page 39 and the effective date proposed, Oc- tober 1, 1963. Last year I was impressed with the need for an increase in quarters allowances because allowances had not, been increased for 10 years. They finally went into effect, however, on January 1 of this year. 1 believe we are all convinced that a pay increase is fully justified for members of the uniformed services. But I know of no provision in this bill which has created more dissatisfaction among service personnel than the proposed effective date of October 1, 1963. Al- ready individuals have delayed requests for retirement; others who are to be retired involuntarily in the months ahead are complaining, with considerable justification, that they are being denied a pay increase which will not be reflected in their retirement pay because of the proposed effective date. And finally, there are those who argue that if a pay increase is justifiable, it is justified now. find myself in complete accord with these arguments. For that reason I am of the opinion that the effective date should be the first day of the first month following the month in which it is en- acted; and in addition to that, I believe we should insert a provision in this proposed legislation to the effect that any individual who retires during calendar year 1963 will be able to compute his or her retirement pay under the new pay scales when they go into effect. This will stop some Reserve officers who will soon be invol- untarily retired, from enlisting in the Army or Air Force and then applying for retirement after the effective date of the act. It will also stop many individuals from turning in to hospitals to wait out the effective date of the act. Finally, it will eliminate pressures on the services to retain individuals on active duty until the new law goes into effect. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/94q1 : CIA-RDP66600403R000400280006-0 Frankly, it will eliminate man v I liiuizs I eall'i now ,onceive of. sI let's put them all under the same tent and got it over with. Nov. members of the subcommittee. I have given you my candid observations ,and recommendations on the proposed legislation and I hope they will be helpful to you. Yon also ha VI' be hue von it com- mittee print NI:111dh. analyzes present law, proposed law, and provides continents concerning the various changes. liefore I conclude I tVollht like to say this: perhaps we may have deler 10 1 lie executive branch of the Government when it con :es to question of missile .thrust. weapons production. or awarding or can- celing contracts, lint he area of pay and benefits for the armed serv- ices. I am confident that we need not defer to anyone. The ConA it ti- t ion says we shall raise and support armies and provide for a itavv, and we atom, have this responsibility. We appreviate all of the recommendat ions that are lie borv ii.. but we also have some highly qualified experts of our own right here this committee. I believe that collectively we have more knowledge in the area of pay and benefits than any comparable group in the execu- tive branch of Government, iind I believe we should now proceed to demonstrate that competence. That is my short, concise statement. 1-,aught en] Mr. I Nun% Mr. Chairman, may I be permitted to compliment von tile comprehensive nature of your statement and on your conclu- sions. Mr. llivEas. Thank you. sir. Mr. Jimmy. I hope you will permit one other question. I t rust the chairman, who has expressed himself rather positively oil some provisions of the proposed bill, reserves the right to change his mind after he heats (he test imuny ? Mr. Itavnts. 'Well, I have already sa nit hat . Those of von who don't know the subcommittee have a lot to learn, and a surprise ahead. This subcommittee has It mind of its ovvo. We are complimented this morning having our dist ingiushed chair- man here. That demonst rates his intense interest iii t tis area. We have hind numerous and many nivel mugs with 1.11(` ChairMall, lilandford ;old 1, and he has gone over this bill many I hoes, and his presence here this morning demonstrates to all iii .V011 his (lilertilina- 1 ion that a fair and equitable bill be fortlicuminn from this session of the Congress. Mr. Chairman, would you like to say something Chairman ViNsoN. 'Mr. Chairman, I Via 111 I joi 1 Mr. Hardy Ii complimenting you On this very tine analytical statement. r think it lays before the committee the facts ii such a manner that yon can get right down to the controversy. eompliment you on your splendid analysis of it. Mr. ErvEns, Thank .you very much, Mr. Chairmao. We urn very appreciat ivy ancl grateful for your appearance. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 :101A-RDP661300403R000400280006-0 Now, we will hear from the Honorable Norman S. Paul, Assistant Secretary of Defense for Manpower. Mr. Paul, we will be very pleased to hear from you at this time. STATEMENT OF HON. NORMAN S. PAUL, ASSISTANT SECRETARY OF DEFENSE FOR MANPOWER Mr. PAUL. Thank you, Mr. Chairman. I want to emphasize, if I may, that the statement I am about to read is a statement of the Secretary of Defense, and to express kis regrets that he could not be with the subcommittee this morning. He is tied down with the German Defense Minister at the moment, and, as you all know, or many of you know, has just completed some GO hours of testimony before committees of the Congress. So, if I may, Mr. Chairman, I would like to read this statement, then submit myself to questions. Mr. RIVERS. Go right ahead, sir. Mr. PAUL. Mr. Chairman, members of the subcommittee: I welcome the opportunity to submit this statement in support of the proposed Uniformed Services Pay Act of 1963, which was submitted to the Congress by the Department of Defense on behalf of all the uniformed services. We are prepared to explain the bill in whatever detail the committee may desire. In this statement, however, I will limit my remarks to a discussion of the background and major objectives of H.R. 3006, which I hope will receive your favorable consideration. BACKGROUND AND MAJOR OBJECTIVES The proposed adjustments in compensation for members of the uniformed services are based upon a comprehensive staff study of military compensation undertaken during the past year by the Department of Defense at the direction of the President. I might add, Mr. Chairman, this study took 10 months of very concentrated work by a number of individuals. The bill now before you for consideration implements the President's recom- mendations concerning needed adjustments in compensation for service mem- bers contained in his budget message to the Congress for the fiscal year 1964. In his message, the President stated: In this era of increasingly complex weapons and military systems, a large part of the effectiveness of our defense establishment depends on the retention of well-trained and devoted personnel in the armed services. General military pay was last increased 4% years ago. Since then, higher wages and salaries in private industry have provided strong inducement for highly trained military personnel to leave the service for better paying jobs in civilian life. To help meet this serious problem, and in fairness to the dedicated personnel in our Armed Forces I will shortly submit to the Congress specific recommendations for increases in military compensation rates effective October :1, 1963." Since the primary function of the military pay system is to attract and retain sufficient qualified personnel to sustain our military forces at required levels of effectiveness, the .first phase of the Defense study of military compensation Involved an exhaustive analysis of the current and prospective manning situ- ation in the Armed Forces. Following the manning analysis, the compensation system itself was examined to determine if changes were necessary to improve the system, and the compensation adjustments which should he made for mem- bers in the different pay grades. Accordingly, in evaluating the merits of H.R. 3006, it may be helpful to consider the manpower situation in the Armed Forces today, and the retention problems which principally determined the pattern of he pay increases which we are proposing in this bill. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/9401 : CIA-RDP66600403R000400280006-0 TILE MANPOWER SITUATION IN TILE -kR.M1-31 FORM'S ENI..1s-rEo riltstix NEI. Procurcmcat The Armed Forces, with an enlisted strength of approximately 2.-4 million, are required to re dace almost one-half in n I hit ei I menalters annually, or ap- proximately one-lifth of the tidal enlisted force. All the armed services, except the Army. are meeting their enlisted manpower needs through voluntary enlist- ments. The Army continues to obtain a part of its requinffliebt fi:r new recruits from induetions. Voluntary enlistments undoubtedly reflect a sincere motivation on the part of mar young people to serve their rountry. There is lilt10 ctniihl, hoW0x0r. 11014. 1110 0X hit 011( -0 of the draft has been. a most important factor in this picture. llecause the art exists. tile 111.fljori ty 1,f young 111011 assume that they will be required to serve in the Art ii' Ft rips at some time after reaching the age of 1s1.:2 years. fliti0/1 Wilk' Ha' Armed Foreps have been quite successful in ohtaining the rtquired number if 1111'1 i for enlistml servire. Hwy have hail far less success in retaining them beyond the first enlistment or induction period. 'Mae retnlistmen- rates for first-term Hirst ter-niers are those who have served an initial aetive duly tour as a _Regular I Regulars are shown in chart l. There are it number of reasons for this, but two reasons stand out alive all others. First and probably foremost, is that a large mainber of men come into the military set-vire Wit Ii 110 illf0111 loll Of making it a pareer. The see aid reason is that the imy and other tangible incentives whit-ll the Aimed Fort-es min adrer have not kept lame with those of private industry and civilian govemmeut employment. and in fact lire insufficient tip induip barge numbers to continue in the military service as a career. (Chart 1 is :is follows :1 II A WI' 1.-lren 1/4/ awn! ratcs for firxt-term regulars, by major occupational groups, fiNcat year 1957 to fiscal pear 1962 Major ocoujoitIonal group All occupations round minim t Electronics (1118-r Le _ - - Administrative derma _ echanics and repairmen Crafts Services _ Nliscellanernp 11,57 .11.11 Al. 6 34. 5 4 25. 9 16. 3 .11.4 is. 5 1958 1959 11/r41 11151 19112 27. 30.11 21.2 2.5.3 27.4 21.3 24.6 18. 6 27.7 26. 6 24. 8 26. 8 Ir. 9 20.1. 25. 5 23. 2 2 22. 3 25. 8 26, G 27. 0 31. 6 24.9 27. 4 28. 8 32 2 32 3 22. 0 25.1 27. 2 29_ 7 33. 4 i 24. 1 2.5. 27. 5 34.5 17.5 211.7 32.11 33. 5 24. 4 21. 4 16. 1 20. r. 24. 1 Since 1957 the overall reenlistment rate of first-term regulars has th.ctuated Bround 1i ier cent. However, the rates vary ronsiderahly by career field and military slice-tatty. The lowest rates tire in ciectronies and other technical career fielits widen are in greatest demand by intinst ry. Mr. Chairman, I would like to say at this point, that the chart on page -I shows a fairly consistent reenlistment rate for first-telm reg- ulars. Although these are actualy figures. I would like to call the committee's attention to the fact that there is quite a variation within each of these categories (lint. I have indicated. Also, I would like to emphasize to the committee, as I believe I do in my statement, that the retention rates we desire in certain of these categories are quite different than they are in others. I will point that out later 05.1 115. Luy 6L5.t,43Mmatt. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 : CWRDP661300403R000400280006-0 Overall retention rates are useful as indicators of trends, but in the final. analysis it is the number of men retained by skill groups which is important. The military services have determined the desired percentage of careerists (regular enlisted men serving on a second or subsequent enlistment) for each skill grouping which is identified as the "desired career ratio." A desired career ratio of 65 percent in a particular skill would mean that 65 percent of all men in that career field should be careerists. 35 percent first-termers. As a general rule the higher the training costs, and the more complicated the skill, the more desirable it is for the career ratio to be stabilized at a high level. Rapid turnover of highly trained personnel boosts training costs and lowers the operational effectiveness of the force. In fields where the training period is short and training costs low there are certain advantages in replacing a large proportion of enlisted members very early in their careers. This minimizes future compensation and retirement costs without reducing combat effectiveness. For example, in the services category, a desired reenlistment rate there or career rate would be '25 percent. In other skills, such as electronics, it is much closer to 50 percent, or higher. The critical importance of our training and retention problem can be illustrated by the following figures : First, the total cost of technical training in the Depart- ment of Defense is nearly $1 billion per year. Nearly one-half of this cost is associated with the training of electronic technicians, because of the longer train- ing periods and the high cost of the training equipment. Our studies indicate that the average cost of initial training for the electronics specialist is approxi- mately $4,500, as compared to only $2,000 per man in administrative and clerical skills. For this reason the military services all recognize that there is a need for a relatively high proportion of careerists in the most technical enlisted skills, with desired ratios averaging aboilt 60 percent. Actual career manning in these skills, however, at present averages only about 40 percent for the Department of Defense as a whole. The situation I have described is, of course, an average picture which varies considerably by service and by individual specialty. The cause of the low tech- nician career ratios lies, of course, in the low first-term reenlistment rates in these skills. The reenlistment rate of individuals completing their second or subsequent enlistments is quite satisfactory, averaging almost 90 percent. Undoubtedly the military retirement system- is of paramount importance in the reenlistment decision of most individuals, who have completed their second enlistment. This generally occurs at about the 8- to 10-year point. Relatively few men feel they can give up 8 or more years of service toward future retirement even if offered substantially more salary in a civilian occupation. Under the military retire- ment system, a member receives nothing in retirement benefits if he leaves the service before completing at least 20 years of active service except, of course, in the case of a member retired for physical disability. In summary, there is abundant evidence that the critical retention problem in all the services is associated with retaining individuals in most of the tech- nical occupations upon completion of their initial term of service. OFFICER PERSONNEL General The experience composition of the officer corps is characterized by two peaks and an intervening valley. The largest numbers are in the 2 through 3 years of service group and the 19- through 21-year group. The valley is the result of inadequate retention during the past 15 years and small annual input of new officers following World War II. The 1- through 3-year peak highlights the turnover of personnel upon completion of their obligated service; the 19- to 21-year peak is the World War II officer "hump" as shown on chart 2, following. 85066--63--No. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 20044/21 : CIA-RDP66600403R000400280006-0 55,000 20,000 (5,000 (0,000 5,000 CHART 2.?Dol Iollker distribution by years of service. YEARS upylig II IS 4 514 IE 10 li (3 16 14 13 141 a III 04410 la el 63 BO 511 67 64 65 64 63 52 ao dit 41I 4? 44(45 'MEW 1????6 --- =MD ACTUAL ie 44 10 43 31 41 41 ZS 40 32:81315 t4 3? ET 36 54154 35 34 511 11 The ?mplications of this ' experience" distribution are of vital imp irtance to the Armed Forces, The Armed Forces have boon able to live with the shorttges in the 5 to 17 years of service group by assigning officers front World War II to positions which normally would be tilled by officers with less service and experience, and by assigning junior officers from the 1- to 4-y tar group to po- sitions normally requiring more service and experience. This, of course, has not been entirely satisfactory. Whatever other attributes a junior officer may bring to his tasks, he cannot bring experience. Although the services have benefited from the extraordinary experience level created by the World War 11 hump, it has created certain undesirable situa- tions. For example, it has limited the number of new officers that could be brought into the services. It has affected the normal rate of promotion by slow- ing promotions for those officers immediately behind the hump and by acceera- ling promotions for those officers immediately ahead of the hump. In ether words, it has generally disrupted normal career progression patterns. The shortages in the middle management group depict a situation unique to Ille military services. Unlike private enterprise which, when faced will a similar situation, can hire men of the necessary experience to fill the voids, it is necessary for the military services to bring aboard young inexperienced ofhcers anti hope to retain them, Procurement Prom a variety of sources, the services have obtained each year as many junior officers as force limitations would allow. Mille, the desire to serve their country undoubtedly plays a part in attracting new officers into the service, in a large olio it must hv ass:Ullied OW Ow P,Tistynce if the draft has been responsible in substantial part for uhis suir,v. Rf.ten t officer retention rates have varied among the services anti among the pronire- mem sources. As a group, service academy graduates are the most likely to remain in service: approximately 85 percent have remained beyond their obli- gated service period. Army and Air Force officers commissioned from officer Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 : iTIMRDP661300403R000400280006-0 candidate school (00S) have a retention factor of about 75 percent. Retention of Air Force aviation cadet graduates since 1957 has ranged between 65 and 90 percent. The reasons for the high retention rates among officers commissioned from these three sources are understandable. Graduates of the service academies are among the most highly motivated and career intentioned of all officers; their environment, associations, and experiences at the academies have brought them to this desirable state by well-planned steps. For the OCS graduate, the change from enlisted to officer status is a powerful career motivation. The aviation cadet program, by obligating its graduates to 5 years of service, tends to attract career-oriented volunters. Also their flight status entitles them to extra pay which undoubtedly enhances their career interest. However, these three sources together have been contributing annually only about 10 percent of the new officers required. The remainder enter through sources with much poorer retention experience. The retention rate of ROTC graduates, which is a major source of officer personnel, is a disappointing 33 percent. The Navy officer candidate school, which provides about one-third of the officers annually commissioned by the Navy, has had a consistently low retention rate of about 12 percent. Officers commissioned from the latter program serve an obligated tour of 3 years?then most of them return to civilian life. The major procurement sources for naval flying officers are the aviation cadet and aviation officer candidate programs; these sources have had, with the exception of Naval Academy graduates, the highest Navy retention rates, 45 percent and 30 percent, respectively. The services' inability to induce more officers to remain beyond their obligated period of service directly affects the quality of the middle-management group, and increases training costs. In order for the services to put into the career force annually at the 4-, 5-, and 6-year points. the 11,000 to 13,000 officers they require, they have had to accept from 93 percent to 08 percent of the officers who apply for indefinite career status. Obviously, from a quality standpoint alone, the military services would welcome an opportunity to be more selective. In addition, beter retention and selection is desired from a cost standpoint. Each officer represents an appreciable investment in precommission and train- ing costs. When officers leave after serving the minimum tour of duty these costs must be repeated with the procurement and training of replacements. ADJUSTMENT OP MAJOR ELEMENTS OF MILITARY COMPENSATION The military compensation system consists of several items that are received by all members, and other items that are available only under special circum- stances. Examples of the first are basic pay, quarters, and subsistence: examples of the second are flying pay and oversea pay. It is a radically different system from that which generally applies to civilians, where a single amount, called a wage or salary, is paid. Some of the items received by military per- sonnel are in cash, others are furnished directly to the member or his depen- dents, in kind. To facilitate discussion, I will use the term "regular compensation" of mili- tary personnel to include basic pay, quarters, subsistence, and the value of the Federal income tax exemption on quarters and subsistence, whether in cash or in kind. Tins is what they all get. While this is not wholly equivalent to the wage or salary of a civilian it is very largely so. Accordingly, I will discuss the existing system and the pro- posed changes in such terms. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005{I*321 : CIA-RDP66600403R000400280006-0 Chart 3 shows the relative proportion of each of these elements for two ?dicer and two enlisted it grades. In general, as you will see, the higher the grade, the larger basic pay bulks as a proportion of regular compensation. Chart 3 follows : CitAla 3 COMPONENTS Of PIGULAR COMPENSATION - RAL.`fl) ON PROPOSED RATES (SELECTED GRAD(S) Tax Advattage 7.5% Tax Advantage 8.1 % Saaektance 5.7% COLONEL Tax Advcritage 6.1% Subs Wow, 6.1% NO LIEUTENANT E- 7 (-4 Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 : irWRDP661300403R000400280006-0 The proposed adjustments to each of the elements of compensation were developed in the context of their effect on regular compensation. The proposed alterations in regular compensation which would be effected by art. 3006 were developed separately for officers and enlisted personnel. I will discuss the basis for the adjustments, the resultant change in regular compensation, and the estimated dollar impact of the proposed changes on the DOD budget. (A) OFFICER PERSONNEL For officers, the largest percentage increases in regular compensation which would be provided by UR. 3006 are in the first lieutenant and captain grades. The percentage increase becomes progressively lower with each higher grade. I believe that this pattern of increase will be most effective in meeting the junior officer retention problem which I discussed earlier. Between 1952 and 1955 the median earnings of full-time employed professional, technical, and kindred workers, a group generally comparable to officer per- sonnel, increased about 9 percent. The Career Incentive Act of 1955 increased the regular compensation of officer personnel by about 7.6 percent on the aver- age, with the largest increases given to the higher grades. Between 1955 and 1958 the median earnings of professional, technical, and kindred workers increased by 20 percent. The Military Pay Act of 1958 in- creased the total pay of officers to an average of 8.6 percent, and again most of the larger increases went to the higher grades; second lieutenants received very little increase, first lieutenants received a 4.7-percent increase, and the higher grades received increasingly higher percentage increases up to 21.9 percent for two-star officers. The 1958 pay adjustment was designed to retiavo salary "compression" and to increase junior officer retention by improving the long-term attractiveness of a military career. The percentage increase in regu- lar compensation in 1955 and 1958 is shown on table 1. Table 1 Grade 1955 1958 Grade 1955 1958 General 21. 5 1 28.0 lieutenant colonel 7.5 14.9 Lieutenant general 14. 1 22.2 Majoi 8. 2 0. 5 Major general 5. 8 21. 9 Captain 8.8 7.4 Brigadier general 6.3 21.2 1st lieutenant 8.9 4. 7 Colonel 8.1 10.2 2d lieutenan t 2.4 .7 1 Includes C/S. While it is impossible to say what might have happened to junior officer reten- tion in the absence of the 1958 pay adjustment, there has been little change in the numbers of officers retained since that time. About 12,000 officers a year have remained beyond a first tour of duty, and that is a number insufficient to allow the services appreciable selectivity. Between 1958 anti 1962, the median earnings of professional technical and kindred workers increased by 15 percent. In order to determine the probable effect of pay increases on the career moti- vation of junior officers, an extensive series of surveys was conducted. While these surveys are not reliable predictors of future retention they do provide a guide to the level of increase which is likely to have a significant impact. The surveys indicate that an increase of between $100 and $200 a month would sub- stantially raise junior officer career intentions. Higher increases indicate only marginal improvements. Development of recommended changes in the individual elements of regular compensation proceeded from a prior determination on the appropriate overall level of compensation for each pay grade. The proposed basic pay scales were developed after taking into account each of ?the other elements of compensation: the increase in the BAQ, which the Congress granted last year and became effec- tive on January 1, and the proposed increase (from $47.88 to $77 a month) in the subsistence allowance provided by section 15 of the bill. Illustrative examples of the present regular compensation for commissioned officers and the compensation which would be provided by H.B. 3006 are shown Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/1041/.21 : CIA-RDP66600403R000400280006-0 ill a Itaehment 1 ttt the end Of this statement. For a gi'lleral %%lilt :10 years' service. the proposed increases amount to a till a I ncrease of 0.0 percent. in regular vompensation. lour a raptain with s years cif serviei in the exbinple shown, a total increase in regular compensation of 17.4 percent. would i it pro- vided by this bill. During the past year Congress provided lilt ncrease in I lit ba-de II 1111:11 for quarters for members of the uniformed s,rvices. This iiwrease took ,.fffect on January 1. 19l1:, As this increase is now effect, it has been included in the -present compensation" ill I he examples vve have slaiwui. I. NI.IS FED l'1.11140N Almost 5 years have elapsed since the lust military pay aiEusi meld. In till interim some erosion has taken place in the real value of tIn these members and substant nil hiss rid:: live to the wage and salary gains of workers in the civilian econolliY. AS ill the case of the officer compensation review. changes iii I he wages of cottiltarable groups sinee 11112 Ivere examined ill the process of del erniming an appropriate increase in compensat ion for enlisted personnel. 11etween 1 9:i2 and llj 1 he Nvitge increase for Arm \--Air Force blue collar workers amounted to ii percent ; tiw ('alter lye Act: of 195:i provided tin average nu tease ill regular compensation of about, 11 percent. to t hose in grades E I and al tove. The pay 1 was ure, although. applied select its, alining pa,v grades, %vas aimed at increasingly ext reinely low ret el it loll across t he board. Between 1955 anti 195s hinc-collar WageS I 151` 17.5 pereent : the Militar.,- Pay Act of 1958 increased enlisted regular compensation in I.; I alai above by 7 per_ cent. By 1958 overall retention had become generally adequate. The praliliall had become selective; 111111 is to say, the services 11 Prt. unable to retain adi [mate numbers of enlisted personnel in niany teehnical oectipat ions. By June of 196:z. Army-Air Forel. wage board 141w-collar wage rates hail he?reased by Is iwreent over the level prevailing at tile time of the 111s pay a (lia,t1 meal IIIIIStratiVe examples of tilt' present regular IIrttlh}l'u.5ht tItli rm enlisted member: and the compensation which would be provided by ILIA. :1006 aro shown ill attach- ment 2, also at the end of I Iii St itteinviti refort?iirv to I t.xa !nide!, ?:homi it can be seen that for an E- 6 with 14 years of servive. he promiscil 12.7-1wrcent increase in baste pay amounts to 7.14-perciall increase Ill regular compemation. Poi. an 1.1-4 with 5 years Or Viol. the 17,f i-pi?-711.111 111(100:044. ill ,iasic pay aiwittuts Iii 8.9-percent increase in regular compensation. The largest increases have lawn provided for enlisted niendiers in pay run Its E-7. N-8. 111111 K-9 at the 26-years-of-service point. lintel the present pay scale. enlisted iii eillbVI'S in flay grqulcs F. ti and rcITive only ono lungevily in..rcase if $10 a month liehveen 20 and 30 yuairs of ,-,o;vice. NII hIlgI vity- increases are provided in the present scale for iin E 7 between 211- and :10-year service points. lilt. :4006 would correct these delicienvies by providing substantial increases for all three senior enlisted grades at the 22- and 20-year service points. At the year point. the amount of the increase provided is 14120 for pay grades E s awl E--9, and $100 for pay grade E 7. These inereases are designed to provide an incentive for longer careers of highly qualiied, experienced iiii'iiiitt'r IIInowt service requirements. Son-le-what ille sante pltiloophy Hutt applied in 1 9:",ti \dim the ladr.- preSs1011 was relieved ni lite officer pay rates. The proposed changes in eimitteiv?al len for the lower enlisted grades are based upon different considerations than those applicable to I In' higher grades. In illy judgmient, the level of pay is not a significant Partin. in the recruitment of en- listed personnel needNI for military duty. A sizable increase in ;my scale- :it the point of entry hito service Nv,ittlii have tittle effect in attracting more pia simnel or in linproving the quality of initial input. Under the proptised pay SI.:1 leg tilt' raw of 1,ity 1 ir meniliers in pay grade E- 1. with less than 2 years of service is :FS5 a niontli. In order o provide an ade- quate pay differential bet?vemi the three hi,WC.Si pay grades. the rales proposPd for members in grades E 2 and E--:1 I with less than 2 years of service) bre $95 and $11 5, respectively. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 : 9,WRDP661300403R000400280006-0 INACTIVE DUTY DRILL PAY Under existing law (section 206, title 37, United States Code), a member of the National Guard or a member of a Reserve component of a uniformed service performing inactive duty training is entitled to compensation for each regular period of instruction of at least 2 hours' duration at the rate of 1 day's pay (i.e., one-thirtieth of the monthly basic pay) for a member of corresponding grade on full time active duty. II.R. 3006 provides for an increase in the present rates of drill pay for non- obligated members of the Reserve components. This is considered necessary to enhance the ability of the Reserve Forces to retain members beyond the obligated service period. The proposed legislation provides: that a member of the National Guard or of a Reserve component of a uniformed service who has not completed. the obli- gated period of Reserve component service imposed by law would continue to receive drill pay based on the present rates of basic pay. At the same time, this change provides for appropriate recognition due those members who voluntarily have assumed an additional period of service after having completed that obli- gated period of service imposed by law. No change would be made by H.R. 3006 in existing provisions of law governing rates of pay for a member of the National Guard or a member of a Reserve component of a uniformed service when on active duty. All such members when on active duty for any purpose, including active duty for training, irrespective of whether they are serving an obligated period of service or not, would receive the same rates of basic pay as members of the Active Forces. The estimated DOD cost of providing higher rates of inactive duty drill pay for members who have completed the obligated period of service imposed by law is $27 million for fiscal year 1964 with an effective date of October 1, 1963. Mr. BLANDrolin. May I interrupt at that point, Mr. Secretary. It also contemplates a savings of $38 million by not paying that much to the obligated reservist on inactive duty training; is that not correct? Mr. PAUL. I believe that is an annual savings, yes. Mr. BLANDFORD. Thank you. Mr. PAUL. Mr. Chairman, if I could go to two major changes in our special pays. TWO MAJOR CHANGES IN SPECIAL PAYS H.R. 3006 would also effect two other major changes in the present coinpen- sation system for members of the uniformed services. The first of these changes would provide for a new system of career incentive payments. to replace over -a period of time the present reenlistment bonus system. The second change would repeal existing provisions for sea and foreign duty pay and provide instead a new special pay for duties involving unusual hardship. Career incentive payments The current reenlistment bonus is not well designed for the retention problem described earlier in my statement. It is paid to all individuals who reenlist, regardless of skill, and the $2,000 ceiling is received over several reenlistment periods. Consequently, its value as an inducement for initial reenlistment i.s minimized. At subsequent reenlistment points, other aspects of the compensa- tion system become more important, such as basic pay advances realized with promotions, and the accumulated equity in retirement. To replace the present reenlistment bonus entitlement II.R. 3006 would provide for a system of variable payments keyed to critical skills and applicable to all future first reenlistments. Designated "Career Incentive Payments," the new entitlement would provide variable payments up to a maximum amount of $2,400 to individual's reenlisting for the first time in the most critical areas. A mini- mum sum of $500 would be paid to all members reenlisting for the first time, irrespective of their skill criticality, provided the period of prior service and the period of reenlistment totaled at least 6 years. Men reenlisting for the first time in a noncritical skill and who later retrain into a critical skill would be entitled to receive the higher payment, less the amount of the payment received at the time of first reenlistment. This feature will provide a needed incentive :for voluntary retraining into more critical and arduous occupations in short supply. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/10$41 : CIA-RDP66600403R000400280006-0 Members on active duty on the effective date of Mit. WOG who are serving on a first or subsequent reenlistment would have to option of ren,aining unthr the present reenlistment bonus system. inerentental expenditure would be required for implementation or the career incentive payment system. It would by phased in with the funds now all to the reenlistment Imams. special pay for duty involving v11118,4(11 harthth Under I 1.11. 3006, additional compensation in the form of special pay at rates of 15 pereent and 25 percent ((f basic pay would he authorized for membt is of the uniformed services while on duty at specired locations or stations, mel :Wing sea duty. Concurrently. llw 1.111 11.-?,11111 rtls`::1 existing provisions for sett and foreign (NO' ;lay for enlisted members, exist itia III iv. extra ',ay is not authorized for commissioned or warrant I fficers assigned to oversea stations Ir sea duty, irrestiectivo of location or degree of -hardship" inviiived. Enlisted menthers iire authorized extra pay for "spa and foreign duty" ranging from *8 to $.22.50 per month, as the chairman f?tated in his earlier statemelit. The legislalive hisfory 4 ibis provision, however, makes ,?lear that i: was neither intended nor designed as a seleetive extra pay for duty at locations of unusual hardship. Consequently, the settle is the sante irrespective of location outside the vont mental United Slates. We believe I hat from tho standpoint of achieving 111:1X111111111 benefit from per- sonnel dollar expenditures, extra pay for duty at speeified remote. and isolateil locations ( including scant( sea duty) would Ice more effective than the present system of sea and foreign duty pay. The following conditions would govern tile entitlement to extra pay for duty in unusual inirdships. ii) Enlisted members and officers would be eligible on the same basis. (2) Only two rates of special pay would be authorized. This would reduce a. inneh as possible the problems inherent in attempting to effect subtle gradations in hardship. The amount of extra pay authorized for all grades would be 15 or 2:5 percent of basic pay, depending upon the "hardship" elassiliv:ition given to the partitailar station or locality. Provision of such extra pay as a percentage of basic pay rather titan a flat solo would be in accordance with prevailing law and practice elsewhere in the Federal Government. 'Phe proposed rates of 15 and 25 percent are based on judgmental factor,,, in part, and in part upon consideration of the range I 10 21 percent now authorized for Foreign Service and civil service employees. Consequently, 15 percent of haste pay is considered the minimum amount necessary to achieve the intended purpose. The rate of 25 percent of .tasic pay would be authorized only for those stations or locations, including specified sea duty, which inv?)lve high degree of hardship. For planning purposes, it has been assumed that un- usual hardship pay would be paid to about 611,000 likenthers at an average t.nnual individual cost of $500, or a total DOD cost of approximately $22.1 million in fiscal year 1961. lit summary, the basis for the recommendation that a system of remote and isolated duty pay be authorized, and the authority for sea and foreign ditty pay be repealed, is that the purpose of both pays is the same: that is, morale. It would recognize. however, that from an etiuitable standpoint this extra pay should he provided on a selective basis with due regard given to the widely varying conditions under which our personnel serve outside the continental 1111111S of the United States. Al).11-STMENT OF' HETII:EMENT PAY Few issues in military compensation are as complex or as difficult as those affecting retired members of the military services and their ret rement or retainer pay. The complexity steins in major part ftom the host of retirement laws en- acted over past decades and the differing formulas prescribed In law for ,-iompu- tation of retirement pay for different categories of personnel. MR. WO contains two major provisions affecting present and future retire- ment pay for members of the uniformed services. The first provision would, in Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 : CIA-RDP66B00403R000400280006-0 1421 general, repeal existing provisions of law which authorize recomputation of re- tirement pay or retainer pay whenever the rates of basic pay for members on active duty are changed. A new system would be provided for adjustment of retirement pay in the future, based on increases in the Consumer Price Index. The second provision deals with the problem of what adjustments should be made in the retirement pay or retainer pay of members already retired, so as to provide a fair and equitable base for transition to the proposed new system of retired pay adjustment for all members in the future. I will discuss each of these provisions in turn. Until the Military Pay Act of 1958, adjustment of retired pay was linked to changes in rates of basic pay for the Active Force. The system of adjustment, referred to as "recomputation," involved adjusting the pay of retired military personnel on the basis of the active duty basic pay rates. Whenever the latter were changed retired members had their retirement pay recomputed. Apart from historical precedent, recomputation has certain advantages. Since retirement pay is based on active duty, disparities in rates of retirement pay between members of the same grade and length of service were avoided. More- over, a member retired either involuntarily or voluntarily, whether for age, physical disability, or length of service had no reason to seek a delay in his retirement. He knew that his retirement or his retainer pay would be the same whether he retired before or after a pending pay increase. Under recompu- tation the retirement date as such was not crucial since the level of retirement pay always bore the same relationship to active duty basic pay. On the other hand, some inequities are entailed in the recomputation system. The major one of these revolves around the issue of preserving the real value of the retirement annuity. Under recomputation, changes in retirement pay grew out of changes in the management needs of the active duty force, and these are not always consistent with preserving the value of retirement pay. For example, some grades have received a very liinited increase since 1952 while other grades have received a relatively substantial increase. Such selective increases are likely to be the basis for future changes in rates of basic pay; they are likely to be designed exclusively ?to meet the needs of the active duty force. And we believe strongly they should be designed to meet those needs. It would be inevita- ble for some groups on the retired lists to suffer real income erosion if strict adherence to recomputation were practiced. But the most important drawback of recomputation, Mr. Chairman, involves the inevitable constraint which it places on the management of the compensation of the active duty force, which must remain of paramount concern. When the number of retirees was modest relative to the number of men in the active duty establishment, the retirement cost impact of increasing active duty pay was minimal. In 1954 there were 5.8 men on the retired rolls for each 100 men on active duty. However, as the retired rolls increased with the pending retirement of large numbers of men who entered military service during World War II, the impact of recomputation would grow proportionately. Currently, there are 12 men on the retired rolls for each 100 in the active duty force; by 1970, assuming our active duty force remains at the current level, 25 will remain in retirement for each 100 men on active duty. By then, if a recomputation system were in force, the cost impact of changes in the active duty rates on retirement cost could have a profound and negative impact on efficient management of the compensation of active duty personnel. The most promising alternative we have found to recomputation is adjust- ment of retirement pay on the basis of increases in the Consumer Price Index. Placing future increases in retired pay on a cost-of-living concept would allow the Department of Defense maximum flexibility in managing the active duty forces, offer some prospect of holding the cost of the retired rolls within reason- able limits, and achieve the primary objective of stabilizing and maintaining the purchasing power of the retiree's annuity. Acceptance or this principle, however, does not reconcile the Government's obligation with respect to those members now on the retired lists who were de- nied recomputation in 1958. The question is whether they should be allowed to recompute on the 1058 pay rates with the explicit understanding that henceforth, all personnel retired, or to be retired, will have periodic adjustments to retired pay made on recognized changes in the cost of living. The alternative would be to apply the straight cost-of-living adjustment to all persons now retired, ir- respective of the base upon which their present retirement pay was computed. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/0$21 : CIA-RDP66600403R000400280006-0 For two reasons the Department of Defense has concluded that the first course of action should be taken and we recommend it to this eonnuittee: First, those who were in the active duty force prior to 1058 and were retired prior to June 1, 1058, bad every reason to expect that their retirement pay would be based on active duty pay scales at the time of retirement and thereafter. Re- computation was provided for by law and had been practiced for 100 year4. Iii other words (no notice had been given that the system woul(l change). Sccond, the objective of the 1958 pay adjustments was to correct 'compression' which had occurred since 1912, by raising most sharply the pay of those in the higher ranks. The 'compression' did not take place ecause the pay of the low grades was too high, but, rather, because that of the high grades was too low. rhus. those senior retired officers who were denied recomputation were in effect being told that while they were on active duty they had been underpaid, but that they would not be able to enjoy recognition of this fact ( as embodied in the 1958 Pay Act( through recomputed retirement pay. The cost of recomputation for this gyunp will aniount to $32 million for the lirst 12 months following the effective date of the bill. The lifetime cost is esti- mated at WO million, but of course this is a cost projected over some 40 rears in the future. After reconllmitithm based on the 195:S pay scalps f II Heise members whose retired pay is computed under the Career Compensation Act of 1940 (the 1958 scales are already applicable to the great majority of personnel heretofore re- tired), all those on the retired list would have their retirement pay increased by 5 percent, the increase in the Consumer Priee Index between June 1958 and I ha-ember 1962. All members whose retired pay is currently more than they would lativiye under the 195S scales (e.g., persons for whom the d-percent increase in 1058 was more than they would have received under recomputation on the 1958 scales) would retain their present rate of retired pay, increased by 5 percent. The overall cost of the 5-percent increase to all members On the retired list is approximately $56 million for the first 12 months following the effective date of H.R. 3000. Enactment of H.R. 2606 would require, Mr. Chairman, affil it band annual ap- propriations to the Department of Defense of $1.2 billion, not including an esti- mated increase in accruing retirement costs of $230 million. Apart froze the increase in quarters allowance which was voted by the Congress last year, this proposed bill represents the first increase In eompensation which the members of our Armed Forces will have received in almost 5 years?a period of time dur- Mg which the wages and the cost of living of both the public and private St ctors of our economy have increased substantially. Although the cost of the increases we are now proposing are substantial, we feel they are fully justified and in the national interest. In addition to the specific proposals before you, I wish to state that it is my hope that. in fairness to [he dedicated men and women of our Armed Forces, future adjustments in their compensation can be kept abreast of changes la the national economy on a timely :1[1(1 regularized basis. Toward this end, the De- partment of Defense plans to review military compensation annually. Changes in productivity and price levels as reflected in pay rates for the civilian sector will be used as a guide to determine appropriate adjustments in military pay scales. This procedure ?-ill result in more frequent and consequently more mod- est increases in military pay. In conclusion, Mr. Chairman. while I have been discussing badly needed adjustments in military pay. I should like to say that pay alone cannot insure degree id' dedication and sacrific which we demand. MU! receive, from the nit-mbers of our armed services. Whether or not we will continue to have the most eflemiye Armed Forces in the world will depend ultimately OIL the motivation of the people involved in it. This involves a combination of national and personal pride. of rootidenct. in leadership and of a feeling that the efforts :111(1 saerilices that the individual must make in serving his (-omit ry. particularly in time of peace, are respected and recognized by the C011111 ry as a while. An important element or this recognition, however. is proper compensation for the unique services be is rendering. It is to this element that I address toy statement today. and I wish to express my appreciation to the House Armed Services Committee and to this sube(aninittee for your prompt consideration of I Li. measures we have proposed. Thank you. Mr. Chairman. (The tables referred to are as follows:) Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 "0 "0 0 ? Examples of regular compensation for officers under present and proposed scales (H.R. 3006) CD a- [All figures are on a monthly basis] 11 Pay grade 0-10 - - 0-10 0-9 0-8 0-7_ - 0-6 _ 0-5_ Title Years of service Basis pay Quarters allowance Subsistence allowance Tax advantage Total, regular compensa- tion 0 Percent increase to basic CD pay only Chief of Staff General; admiral Lieutenant general; vice admiral_ _ Major general; rear admiral (upper half). Brigadier general; rear admiral (lower half). Colonel; captain Lieutenant colonel; commander Major, lieutenant commander _ Present H.R. 3006 Increase Percent increase in regular compensa- tion. Present H.R. 3006 Increase Percent increase in regular compensa- tion. Present H, R. 3006 Increase--. Percent increase in regular compensa- tion. Present H.R. 3008 Increase Percent increase in regular compensa- tion. Present H.R. 3006 Increase_ Percent increase in regular compensa- tion. Present _ 11.11. 5008. Increase Percent increase in regular compensa- tion. Present H.R. 3006_ Increase __ Percent increase in regular compensa- tion.Present H.R. 3005 Increase Percent increase in regular compensa- tion. 30 30 30 30 28 24 21 19 $1,875 $1,970 $95 4.2 $1,700 $1,785 $85 4.1 $1,500 $1,575 $75 4.0 $1,350 $1,420 $70 4.1 $1,175 $1,235 $60 3.9 $910 $1,000 $90 7. 5 $745 $835 $90 8.9 $630 $725 $95 10.9 $201 $201 $201 $201 0 $201 $201 $201 $201 $201 $201 $170 $170 $15.8 $158 $145 $145 $48 $77 $29 1.5 $48 $77 $29 1.4 $18 $77 $29 1.9 $48 $77 $29 1.7 $48 $77 $29 1. 9 $48 $77 $29 2.4 $48 $77 $29 2.9 $48 $77 $29 5-5 $148 $183 $35 1.5 $136 $160 $24 1. 1 $121 $143 $22 1.2 $112 $131 $19 1.1 $101 $117 $16 1.1 $74 $90 $16 1.3 $59 $76 $17 1.7 $49 $63 $14 1.6 62.272 $2,431 $159 7.0 $2, 085 $2,223 $138 6.6 $1,870 $1,996 $126 6. 7 $1,711 $1,829 $118 6.9 $1, 525 $1,630 $105 6.9 81,202 $1. 3.37 $135 11.2 $1.010 $1, 146 $136 13. 5 $872 $1, 010 $138 15.8 9.1 CD 01 5.0 5. 0 ? ? t?D 0 5.205 1:1 5,1 co CO 9. 9 C.4 52.1 15.1 co 05 E.rample8 nj reyular conipcn8ation for bgicer.N un (kr prrm'nt and proposed 3006)--Con 'mod 0-1 [ All figures are on a monthly bitS181 (D a. Pay grade -11 0 Title Years v( ser vice Basic pay QuarterS 41110walwe $130 $130 0 0 $120 $120 0 0 $110 $110 0 0 4.5 $145 0 0 $130 0 0 $120 Cl Sn 0 0 $110 $110 0 0 Subsistence allowance $48 $77 $29 4.3 $49 $77 $29 7.0 $48 $77 7.0 115 $77 $29 3.7 $48 $211 4 2 $48 $77 $29 4. 7 $49 $77 $29 7.3 Tax advent age $41 $60 $9 1.3 $37 $4e1 1. 6 $3.5 $41 66 1.5 1,412 $57 , $11 I . 4 $41 $60 $9 1.3 *37 $9 I. 3 $35 642 $7 2.3 Total. regular rani petisa- ion Pert.en4 inerek1S0 40 boSie Pay Only Xcro to 0-2 tri sr:3 W-4 . . W-3 0 -0 W-2 CO 730 Captain; lieutenant Flrxt lieutenant ; lieutenant (J.g.) Second lieutenant ; ensign_ Chief warrant; commissioned war- rant. Chlef warrant; rommnsioned war- rant. Clad vi arrant emmnnsioned war- rant, 11"orront officer, ?,%.,rrant office' Present H.R. 3006. Increase Percent increase in regular comt ensa- don- Present H.R. 3006 Increase Percent increase In regular compensa- /1.R. 3006 Increase........ ........ ..... Percent Increase in regular compensa- tion. Present ............. . . _ .... 11. 3006 Increase . ......... Percent increase in regular compensa- tion. Present H.R. 3006 Increase Percent Increase in regular compensa- tion. Present H.R. 3006 Increase Percent increase In regular compensa- tion. Present . H.R. 3006. Increase . Percent increase In regular compensa- tion. 4 0 24 21 IC 14 . .. 6460 $540 $80 11.8 $370 $43,5 $61', 11.3 $222 $260 $28 6.7 $543 $633 $92 liii . $470 $540 $70 10. 2 $406 6470 $64 10.2 $354 $405 $51 11.3 $679 $7147 Ills 17.4 $372 $678 $103 17.9 $415 6478 $63 15.2 8-792 $914 $132 111,11 3699 $71.17 9109 15.7 $;11 $712 $101 IA. 5 $547 $634 $27 16.0 17.4 17. 6 12, 6 ..-..... - ? ? 18.9 14. 9 . ..... 14.4 . _ _ NOTE.- The tax ad vantage is computed on the basis o(3 dependents, except 2 dependents for 0-2 and 1 dependent for 0-1. oo c 0 0-90009Z0017000t1?01700899dCltl-VI3 Examples of regular compensation for enlisted personnel under present and proposed scales (H.). 3006) [All figures are on a monthly basis] Pay grade Title Years of service Basic pay Quarters allowance Subsistence allowance I E. I I gH 4n W;s5 Total, regular compensa- tion Percent increase to basic pay only E-9 Sergeant, master; master chief petty Present 20 $430 $120 _ $31 $614 officer. H.R. 3006 $485 $120 $31 $670 12. t Increase $55 0 0 $56 Percent increase in regular compensa- tion. 8.9 0 0 9. 1 E-8 Master sergeant; senior chief petty Present 19 $360 $120 $31 $544 officer. H.R. 3006 $415 $120 $31 $599 15.::. Increase $55 0 0 $55 Percent increase in regular compensa- tion. 10. 1 0 0 10. 1 E-7 Sergeant; chief petty officer Present 18 $340 $115 $31 $518 H.R. 3006 8365 $115 $31 7.5 Increase $25 0 0 $25 Percent increase in regular compensa- tion. 4.8 0 0 4. 8 E-6 Staff sergeant; petty officer, 1st class Present 14 $275 $110 $31 $447 H.R. 3006 $310 $110 $31 2482 12.1 increase $35 0 0 $35 Percent increase in regular compensa- tion. 7. 6 0 0 7. 8 E-5 Sergeant; petty officer, 2d class Present 10 $240 $105 $31 $406 H.R. 3006 $260 $105 $31 $426 8. ; Increase $20 0 0 $20 Percent increase in regular compensa- tion. 4. 9 0 0 4. 9 E-4 Corporal; petty officer, 3d class Present 5 $170 $105 $31 $336 H.R. 3006 $200 $105 8.31 $366 17.1 Increase $30 0 0 $30 Percent increase in regular compensa- tion. 8.9 0 0 6.9 E-3 Private, 1st class; seaman Present 1 $99 1 $18 $31 $159 H.R. 3006 $115 1218 $31 $175 16.1 Increase $16 0 0 $16 Percent increase in regular compensa- tion. 10. 1 0 0 10. 1 E-2 Private; seaman apprentice Present 1 $86 1 $18 $31 $146 H.R. 3006 $95 1 $18 $31 $155 10. I Increase $9 0 0 $9 Percent increase, in regular compensa- tion. 6.2 0 0 6. 2 E-1 Private; seaman recruit Present 2 0 $78 1 $18 $31 $138 H.R. 3006 $65 '$18 $31 $145 9.1 Increase $7 0 0 $7 Percent increase in regular compensa- tion. 5. 1 0 0 5. 1 I Government cost of quarters in barracks. 2 linder 4 months. NOTE?The tax advantage is computed on the basis of 8 dependents in grades E-9, E-8, E-7, E-6; 2 dependents in E-5: 1 dependent in E-4; no dependents in E-3, E-2, E-1. Approved For Release 2005/04/21 :12114-RDP66B00403R000400280006-0 Approved For Release 2005/9N1 : CIA-RDP66600403R000400280006-0 Mr. RivEns. Thank volt very nitwit, Mr. Secretary. Members of the committee, I am going to ask the. subcommittee to meet this afternoon, and then, ask Mr. Blandford, to ask the Secretary some quest 101 IS. If you don't mind, we wiH come back here at 2 o'clock and ince; this a-ft ernoon. So the commit toe will recess until 2 o'clock I his a ft ernoon. (Whereupon, at 11 :55 a.m., a recess NA as taken unt il :2 p.m. the same (lay.) .?yrynNoox- SESSION Mr. litvERs. 'rite committee will come to order. Mr. Secretary, ill order I hat we get started here, down in the south- ern area of agreement, or disagreement, have you had a chance to look at lie statement I made ? Mr. Yes, sir I have. had a chance to look at it, Mr. Chair- man. I have not had an opportunity to, of course, discuss it with the Secretary or with the, services, as vet. Mr. I FARM You are up here representing the Secretary. You are supposed to be able to express your opinion. As far as the seivices aro concerned, they are going to do what you tell them, anyhow. Mr. 1).?i-b. They may have an opinion on sonic of these issues. We have not had a chance to discuss it with I hem. Mr. I !mow. If they express an opinion contrary to yours I would bo surprised. r. liivtats. Let us start on page 2 where we suggest a change in will ask Mr. Blandford to take on right there. Mr. I ILANroan. All right, sir. 1'11de]. present law, i he E-4 has the basic pay increment at (lie over-8-year i Ullit YOUI: proposal puts that hack to the over-G-year point. A rapid calculation indicates there are about 00,000 E-1's who have over G years of service who would be frozen at the over-G-year point at $210. Now, we are reducin.a bv one increment t he increase t here, and therefore I here are 90,000 individuals now serving on active duty who while r hey will get a pay increase in I his proposal, nevertheless they will be frozen at the over-G-year point rather than at the over-8-year point. If we should make any upward adjustments, a figure, say, of $10 a month, to take that to $220, I think the subcommittee should under- stand 1 hat any I Eine you make these adjust !twills in pay, for example, even a simple adjustment of $10 a month at that point, i.e. at the over- 8. increasing the pay $10 more than at t he over-G, would involve about $12 million. Mr. limeas. You start ol1 with the first, it would be roughly 40,000 I he first ? Mr. lir.A.Noroan. The breakdown in your hooks - - Mr. I:EVERS. There are about 10,(i00 allect ed. Mr. I ii,ANDrom). At t he over-8-year point there are DOW about 10,000. If von will turn to your tali in your hook-- Mr. ThivEas. Five or four ? Mr. lit.Axnroao. Tab -1. You will sce at the over-G-year point the E---1's by ninnber. The proposal is to take I lieni up $.1 0 a month which is quite a handsome increase, percentagewise, 16.7 percent. However, under present law they have a u 1(1i MI 011( 11 illcrense m their has pay Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 I1A-RDP661300403R000400280006-0 at the over-8-year point, and you propose to freeze them at the over six point. Now, what we are doing there, as you can see from the column, there are 40,743 E-4's who have over 8 years of service, 24,000 with over 10, 14,000 with over 12, 7,000 with over 14, and then it stretches out, you have even 8 with over 30 years of service. The only reason this point was raised is that, of course, out of a total of E-4's in this grade, and there are a total of 451,000, it is per- fectly obvious from a career viewpoint that the bulk of these people are making E-4 prior to 6 years of service, and those who continue beyond the 6-year point I think we can say, without being derogatory, have certainly not made the same progress in proportion to the vast majority of their counterparts in that grade. Is this the reasoning behind the reduction in the increment? Mr. PAUL. Yes, that is the reasoning behind it, that the majority of them achieve that higher rate prior to that time. Mr. BLANDFORD. Yes; in other words, to make it clear to the com- mittee, of the 451,000 E-4's there are about 90,000 who have 8 years of service, or more. Now, to bring in an increment at that point would cost about $12 mil- lion a year, and the question is, what do you obtain for that additional. $12 million, considering the fact that they also will get a pay increase, because the basic pay will stop at 210, and their basic pay today in that category is 190. So they will get a $30 a month increase notwithstand- ing the fact their increment stops at the over-6-year point. You do not recommend going beyond that point, Mr. Secretary? Mr. PAUL. We had not; no, sir. Mr. BLANDFORD. You do not now recommend we go beyond that point? Mr. PAUL. I don't recommend it, although there is some validity in your position on it. Mr. RIVERS. It stays at 210. Mr. BLANDFORD. Ile does get a $30 a month increase. It i.s just a question of whether he should get a $30 or $40 a month increase. That is really what it boils down to. Mr. TARDY. Do you know why we put that over-8-year cutoff point before? Mr. BLANDFORD. This was the promotion flow at that time, basically. This was the promotion flow. There is another chart in your book here which shows you the normal promotion points, and I think that you will find that the E-4?you will find on chart 6?that the average E-1 who was promoted to E-5 has 5.6 years of service, or 5.9 as a BOD average. Now, if this is the increment concept throughout the pay scale, it would appear to make sense, Mr. Hardy, that the pay scales must be geared to a normal flow of promotion, so that if your average man is getting promoted at average points in this career, then following the, ori.gin al concept of the Hook Commission and the changes made in the Cordiner report which we modified in 1958, when We cut back some of the increments, then it would make sense to stop this increment at the E-4 point at the over 6 years of service. Mr. Many. Well, that would seem to indicate that this period of Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/014r21 : CIA-RDP66600403R000400280006-0 promotion has moved, has been shorter?the period served as E---1 has been moved down to a shorter t ime 1 10111 it WaS Mr. BLANDFOIM. I would think nerhaps there has been some modi- fication. perhaps by a few months, perhaps a year. that I hey are niak- 1 ng somewhat sooner that what we %%TIT led to believe was I akino- place in 19:IS. Mr. I huov. if that is the case, this WOUld seelit to lilt reasonabie (-moil point. Mr. Iii,..,Norotzo. Yes. I think the only reason Mr. Rivers wanted 10 ii1'IJ1j it 011t iii ilK sltteiiitiit WaS III indiCat e hese factors have all been considered. In other \words. I here will be people who \VW say "why did you stop at the over 6, \viten exist tug law says over Sr' ow,W have the explanation as to why the Department did this. Now. I would like to ask, Mr. Chairman, if the I tepixtment hes any objection to moving the W---1 at the o? er-36-yea1's point at US5. back It) the over-29-vears on the reasoning. Mr. Rivers used I his morning that, We require our warrant officers IV- 4 to retire 60 days after they romplet e years of service. Mr. Rivnas. They should. because of the big untidier. Mr. No, sir; 1 th?ink that makes a lot of sense. Mr. RivEns. This will give him the benefit of the promotion. Mr. IIAlitiv. What does that do in terms of cost.? RIANI,Fum). $7s:),990. am I corrol in that ! liENADE. About S292.090. Mr. ItivEus. .1 year Mr. linAxoroan. A year, yes. Mr. RivE0s. Where does that take us! Mr. IleAxiwonn. 972. W---fs who Inive over G. and they will he drawitr- $6sri a month, rather than Ii;66.) a month. years SO011el than they would otherwise draw under the I woposal. Mr. Il Alloy. The increase as it is set 00 here in the bill is meaningless as far as tliese people are concerned. Mr. lii.ANot-oan. That is right. because they only draw it for GO days and t hen retire. Now, Mr. Chairman. if we are goinr to go through your statement I suggest we turn to something reasonably controversial, wit eh is sect ion '2 ( and I would like to refresh the sithcommittec's mild on this. There is about $:18 million iii volhere. What 'lie Department proposes to do- -and this only applies to inactive duty I raining. it. does not apply to net ive duty t raining or active duty. What the Depart- n tent proposes is I hat t hose persons who st ill have an obligated service ; in other words, people who must continue to serve in the Ready Reserve, by going to drill one night a week, or weekends, if that is necessary, will only be able to compute their basic pay, and they are entitled to a: 301 h of a month's pay. or I -day's pal: for 2-1lour's drill, and this has been traditional on the I 9:iS pity scales. In other words what the Department _.)roposes is tutul we freeze these individuals under existing pay scales, and not apply tile. new- pay wales to them. Time. chairman's position is that this is nut unjustified dis- crimination bet wee!' the obligated and moiling:tied reservists partici"- Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/2114tIA-RDP661300403R000400280006-0 larly at a time when only about 50 percent of the eligible males in this country are actually serving on active duty in one -form or another. Mr. HARDY. Find out how you got the number? Mr. BLANDFORD. The statement indicated it was merely the fact they have an obligated service, but certainly we ought to understand their position. Mr. Palm. That is substantially it. The fact that this particular group is serving through regular obligation, which usually runs be- tween the ages of 18 and 26, either through beino, assigned to Ready Reserve units following having been inducted for ''2 years, or as volun- tary enlistees, or part of the 6 months' training program. It was intended principally on our part to provide an additional incentive by raising the pay of the unobligated reservists, an incentive to have more of them to seek to continue in the Reserves. It does not reflect or was not intended to reflect, Mr. Chairman, the idea that we want to put our foot on the obligated people in the Reserve forces. Our interest is to have a maximum Ready Reserve force. There was no reflection intended by our proposal on the people who happened to be in the Reserves because they are obligated. Mr. BLANDFORD. The net result is that you do SO, is it not? Mr. PAUL. Well, there is a distinction between the treatment between the two ? that is right. Mr. ltvims. He walks into it with his eyes open, he knew what he was getting, the obligated? Mr. PAUL. Yes, sir. Mr. BENNETT. The principal desire is to cut down the expense of the bill. Mr. BLANDFORD. $38 million is involved in this. Mr. PAUL. I think the whole subject of drills is one on which there has been considerable discussion. Probably a lot more study ought to be given to it. The man is paid 1 day's pay -for 2 hours of drill, or 2 days' pay for a multiple-drill period. I think the only reason I can give, Mr. Chairman is the one I had in my statement. Mr. BLANDFORD. Chairman, would not take great exception if the commit- tee deleted that part of the bill? Mr. PAUL. Mr. Blandford, I really can't assume final responsibility in these matters. As you know, I am working for the Department of Defense. I have not exposed these to the Secretary. Mr. HARDY. That puts us in a right awkward sort of position, though, to try to work out anything here, with the expectation we have any understanding from the Department as to whether or not we are going to have strong opposition. I thought Mr. McNamara? you made his speech for him this morning. He didn't think enough Of this to come down himself. I thought you would be able to speak for him. We wouldn't have to ask anybody else. He couldn't come d.OV1111.06?'fle is with the German Defense Minister today. lYtq!"9 cc DIArilli)underst,a.ndthat. 0,00,0B,D. beneve you will. find this is the reason Mr. -Rivers nthaenNo.stsaistiaantiSmeereptary ?f Defense would. ,,Aav b o r. s statement, that Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/041/240: CIA-RDP66600403R000400280006-0 the responsibility for writing a pay bill is the responsibility of the Congress. Mr. RIVERS. lie told us what. he thought. Let's go to the next. thing. Mr. BATEs. Is there any other distinction? Mr. BLAxDroun. I was asking if the Secretary will agree with that Ste lenient ? Mr. Run,. Yes, sir. Mr. BLANDFORD. Therefore what. we decide to do is merely meeting our responsibilities. Mr. PAUL. Yes, sir. Mr. OSMERS. Mr. I3landford a moment ago mentioned how many People would be Etliected by this particular section, I believe. How many people. would be affected by this $38 in ? Mr. BLAxorono. 400,000-odd - Mr. PAUL. I have some figures on that if that will help. Approximately 960,000 people are in the. Ready Reserves now, Mr. Osmers. Of that number close to 69 percent. are in the obligated category. Under the chairman's proposal, they would be entitled to get the increased pay. Mr. OSMERS. And the increased pay that has been proposed amounts to about $38 million? Mr. Put. That would be the annual cost of the inere.ase. Mr. OSMERS. The annual cost of the increased pay for all of the obligated reservists. Mr. liLANDH am. No, sir. There is a $38 million SRN if you don't apply the new pay scales to the obligated reservists. There is, of course, also an annual increase, in the pay of reservists, because you will have many reservists drawing inactive duty pay for obligated and unobligated service. The question here is whetlwr you want to enact a law which will discrimnate between the obligated and unobligated reservists. it is as simple as that. Mr. Osmr.us, I am very glad to have the matter chili ied. Mr. BATEs. Is there any such distinction anywhere else in the law, with people of the same rank at di Greta pay ? r. PAt:L. Not, that I know of. Mr. Bates. Mr. Il.vms. In retired cases, of course, but outside of the ietired cases? Mr. PAt-h. Not that I know of. Mr. BENNEW. I was intrigued with something- you said, Mt. Sec- retary, although you said it was not directly pertinent to this. This is the first time I had this thought brought to my attention. You brought out, that these people actually are being favored at the. present time, because they put in '2 hours a day when others put in a full day's work. In other words they are being discriminated for. If that is your thinking, is there any law?or I ask is there ary law that requires you to pay them on a 2-hour basis or is t hat a regulation wit hin the Department ? 11-r. That is the law. Mr. BENNETT. Have you made any recommendations for chnaging the I o that law? nn amendment to the rArl.. Only to the extent of the present. pri Ill topos2/ the ?wig:area reservists, their pay would not f?now pq hef th?Jr. elle? ?16 artiVe (bay foreC. ThUt WOUld Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 1431 Mr. 13ENNETT. Personally it seems to me there is some merit in what you said along this line, but it seems to me like you said also, the thing ought to be handled in a different way. I don't like the idea myself of discriminating between people just because they are obligated or unobligated. This doesn't appeal to mo as being very logical. If you are going to bring about equality, maybe they ought to have equality. Maybe you ought to pay them more equally. Presently you say the benefits run the other way. So maybe you ought to bring it into the law to correct that. Mr. PAUL. It is a matter we are studying. We have no recommen- dations to make on it at this time. Mr. HARDY. I have this comment, if the Chairman will permit. We are talking now in terms of incentive and in terms of people perform- ing in the service' either reserve or otherwise. If they've got obli- gated service, you don't have to pay them an increase in order to keep them, is that right? Mr. RIVERS. If you have them obligated you have them obligated. Mr. HARDY. Of course that is right. The unobligated is a volun- tary proposition. Mr. PAUL. Generally, in our proposed active duty pay scales, the greater increases are at the points where a man makes the decision whether he is going to elect to make a career of the armed services. Lesser increases were made in grades where members are in an obligated_ category. Mr. HARDY. You don't have to give them a financial incentive in that situation? Mr. PAUL. No, sir. Mr. BLANDFORD. May I ask this question, Mr. Secretary. I am un- der the impression that the appropriation for paying these reservists comes out of the appropriation for reserves. Mr. PAUL. Yes, that is right. Mr. BLANDFORD. Now, then, this $38 million that you would save would merely accrue to the reserve appropriation, and if this section is deleted from the bill, this will not result in any net savings to the Federal Government as such, it will merely result in a net increase of $38 million to be available for reserve participation. Mr. PAUL. I believe that is correct. Is that correct? Colonel BENADE. That is correct. MT. BLANDEORD. Yes. In other words, we don't cut down anything. Striking out this section merely means the reserve appropriation will have to pick up the $38 million some place. Mr. PAUL. Yes, they would have to seek an additional appropriation. Mr. 13LANDForte. Not necessarily an additional appropriation, be- cause obviously they haven't anticipated this as yet. Mr. PAUL. No. Mr. RIVERS. Will you admit that we have a pretty fair observation here? Mr. PAUL. Yes, sir. Mr. BLANDEORD. Let's get to something that is really extremely complicated, and as the chairman has indicated for several reasons does not belong in this bill, and that is the question of constructive credit. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/041/V9: CIA-RDP66600403R000400280006-0 I a the first place, under the sect ion as you write :t, each Se.1:etary would decide which holders of post-graduate degrees would receive constructive credit. To refresh the committee's memory on this. I mention the fact we do have constructive credit today in many areas: doctors, dentists, veterinarians, chaplains, Ph. D.'s allied with medi- cine and lawyers. I foweyer, only physicians and dentists may count their constructive credit for longevity pay purposes. This is some- thing this committee did deliberately in 1957, in order to prmide an inducement to keep some of these doctors from leaving the service. It, has worked out fairly successfully, even though they lie way behind their counterpart in the Veterans' Administ rat n,ii. \e,ortlie- less, it stopped the exodus. -We made special provisions for dentists and doctors, insofar as constructive longevity pay is concerned. Let me tell you what constructive credit means, so we will under- stand what this is about : It is the concept that %viten you cuter on active duty you are presumed for promotion purpose:-; to have already served on active duty for up to 3, 1, or 5 years. Now, if this helps you for promotion purposes only, this means that you could come on active duty as a first lieutenant or captain, depending on the amount of constructive credit awarded to you, and then that makes yon eli- gible for promotion at an earlier (line. The theory behind con- structive credit is that if you went to college with John Smith, who, when he graduated, immediately weir on active duty in the Armed Forces, lie would now be a captain if he had, say, G years of active duty. On the other hand, if von had gone to law school at your own expense for 3 years, von would t la, 3 years behind him if you entered on active duty. Yet flie services are using you ai a lawyer, and they are taking your training and making use of it. So we give constructive credit to certain groups of people. But we only give constructive credit for longevity pay purposes by special law to physicians and dentists. Now, what the Department seeks here. and unfortunately this whole question is tied up with t In' so-called Nolte ligislation, which we do not have as vet, but is under active consideration in the I )e- partment of Defense. What we have here is it concept that we ,:hould allow each Secretary to provide constructive credit for those with postgraduate. degrees. Unfortunately, those degrees are not muned. This would be up to the Secretary to decide which postgraduate degree holders would receive this constructive credit, and beyond that is the fact that this provision, ai written, is not for pract ical purposes retroactive. This means a lot in dollars and. cents. I..rt air give you an example of what I am talking about. Two brothers fro to law school. One brother graduated from law school and was admitted to the bar 4 years ago, and came on active duty in the armed services. The other brother graduates this year, and enters on active duty under the proposal before its. I asked the departments to 1.1111 a cost analysis of what this would mean under this proposal over a 20-year period. Under this proposal the officer who is commissioned aria given constructive credit for longevity pay purposes, which would not be applicable to his older brother who has already served on active duty for 1 years, would receive St more pay than his older brother over a period of .20 years of service. Mr. GAVIN. What is constructive credit Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 lpfik-RDP661300403R000400280006-0 Mr. BLANDFORD. Constructive credit is a credit that is given to an individual who has obtained advanced training at his. own expense and, therefore, it is recognized when he comes on active duty that they should give him a grade commensurate with the amount of his training. Its purpose is to put him on the list so he will come up for promotion and be in the same grade his counterpart would be in who graduated from college at the time he did, but who did not acquire a professional degree. Mr. GAVIN. In other words, professional background entitles him to more consideration? Mr. BLANDFORD. That is it; yes, sir. Now, under these circumstances, Mr. Secretary, would you agree that in order to expedite a pay bill, and this is, after all, a pay bill, that this is more of a promotion and appointment problem than it is a pay problem, even though the constructive credit feature is involved here, and that it would be Mr. RIVERS. Don't you think it would be better to have it put in the report? Mr. PAUL. Certainly, it does have elements of promotion, perhaps predominantly over pay. It could have been in either piece .of legislation. We do feel quite strongly that this is a worthwhile provision, and as long as Congress is willing to consider it, just which bill they wish to consider it in is something we would defer to your judgment. Mr. BLANDFORD. Well, in the meantime, Mr. Chairman, may I sug- gest the Department further consider the very serious problem, when you have a, retention problem of officers, and when you say to an officer who served on active duty for 4 years, and this is the man you are trying to appeal to, when you say to that man, we don't care about you, we are only worried about the man who comes in next, you are not going to help your retention problem, because the retention problem involves the man who already has served 4 years. There is a retro- active problem here that must be considered. Mr. BATES. As a matter of fact, Mr. Chairman, the services select people according to their professional ability, and there might be two or three individuals competing for a certain school. The first year they might select the best man. The next year the second best man, the third year the next best man. You set this bill up so that the worst of the three would get entitled to more pay under this bill, according to the timetable. Do you understand what I am saying? Mr. PAUL. Yes. Mr. BATES. I think we ought to put this on the side and take it up separately. Mr. BLANDFORD. Yes, sir. Mr. IInuny. I think we ought to put it to the side, I don't know whether we ought to take it up or not. I have another problem. I don't know whether you want to do it here or not, but I know eventually if we do take it lit) I would like to have a clearer explanation made of why there is any merit in permit- ting constructive credit for longevity pay for a period when they weren't serving in the military service. That is what it amounts to. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 1-134 I can subscribe to the propriety of c,onstructive credit, but if you aro going to give a man credit for longevity pay based on the period of lime he wasn't even in the military services, then we better start a whole new concept. Mr. liArcs. It is just as good a case as somebody gett ing paid at graduate school while they were in the service. AEI% BENNETt. Iwo wrongs don't make a right. Mr. hams. No. Mr. HARDY. I le may have been in military service, and been st tidying. Mr. RIVERS. They wanted me to include all of tin' service academie,i in this bill. Mr. GAvix. While you are on the particular subject. take the three academies. flow long do they serve, say, the U.S. Military Acne:witty, how long are they required to serve after they graduate! Mr. l'o.ANDroan. Four years for all services now. Mr. ( ;.Vi. I N. For the Navy, too! Mr. BLANDFORD. All are 4 years now. We finally have them all uniform. It took quite a while to do it, but they are all uniform. Mr. RIVERS. This is a comprehensive bill, so comprehensive the chairman said he would appreciate it if we would get out a pay bill. This is why we want to tailor F as close as we can to a pay bill. We have had many conferences with t lie chaientan. and le? has heii here a lot of summers with us. Let us go to the next point. Mr. Ilr.Axnronn. If I may. unless von wish to get into retiree. and retainer pay, I -would like to leave (hat for the last discussion. Mr. GAVIN. What page is that ? Mr. Br:A:Norma). On pa!re3 of the cnairmau's statement, pages 3, 6, and 7, page 12 oft lir bill. I believe. Mr. Hiyrns. I /o you want to leave this until the last Mr. iii,iNnroun. I think this is going to create more questions than anything else. We could go back to it today, bat 1 won't like to consider eliminating smile of these other provisions we discussed in order that we can narrow the field of issues here :is much as possible. r. ItivEns. We pretty well agree with him on Ciat. on the re- tirement. pay. ,et us go to the next point. Mr. BI.ANIWURD. Let IIS turn to page 9 of the chairman's statement. l'affe 16 of t he bill. which is submarine pay for nuinbers trailing for duty on nuclear-powered submarines, f)age 9 of the chain-Ian s stateinent, and page. 16 of the bill. I think everybody understamk basically what the problem is, and that is we. have got to do something to pay these "submariners,' and I use that word advisedly, who, if they transfer, or are ordered to a school for advanced training in nuclear submarnes, lose their submarine pay while they are in school. Of course, this inetAis a considerable loss in their income, because they are now on submarines, therefore, they do not volunteer for this duty because they prefer to stay on snorkebt submarines. or the conventional submarines, and t lals retain their submarine pay. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 1435 The Navy has a very serious problem. The chairman's objection was that the bill as written was a little bit too broad. I might say that the subcommittee print that was prepared is a little bit too re- strictive. So somewhere in between is the answer to this whole prob- lem of submarine pay, I think we are all familiar with submarine pay, and also familiar with the fact that, with the exception of the double crews for the Polaris submarine if you are gone from a submarine I think it is for more than 15 days, there is one exception, I think you can be hospitalized for 30, perhaps, or maybe you can go on leave for 30, and be hospitalized for 15, one or the other, but sub- marine pay is something you lose very quickly if not assigned to and serving on a submarine. In that respect, it is different from flight pay. You can't make up submarine pay by going out and making four dives at a later date. This has been traditional and the Navy has no problem with it. There is a severe problem as far as the Navy is concerned today in obtaining volunteers for the nuclear force. Mr. BATES. Do we have a statement to that effect Mr. BLANDFORD. I am really quoting from the panel study on this, Mr. Bates. I am sure Admiral Smedberg will certainly comment on it in his testimony. Mr. RIVERS. I might say at this point to the chiefs of personnel? this isn't designed in anywise to proscribe your capacity to give your views in this hearing, whenever you are free to discuss them. I am sure you can discuss any area you want to. We want to get the views of the Secretary as relates to what is good and what is bad in my statement so far as he is concerned. We have only gone nine pages so far. Mr. BLANDFORD. Page 10 of your statement, Mr. Chairman, deals with inside a high- or low-pressure chamber. Now, we changed the law several years ago to provide special pay or incentive pay, not special pay, and we have got to be careful of terminology?special pay is one thing, and incentive hazard pay is something else. The present pay already takes care of the man who is a low-pres- sure chamber inside observer. However, that is not always the man who is in danger, as I understand the situation. There is as much danger in a high-pressure chamber, and it doesn't make much dif- ference whether you are there on duty or as an observer, you can get blown apart one way or the other, either inwardly or outwardly, depending on whether it is a high- or low-pressure chamber. I don't know what the backup evidence is in support of this, whether there has been any fatalities. I think if anybody who has taken the chamber test out at Andrews Air Force hospital?I have not, but I have been told about it to the point where I am not sure I want to take it now?when you are exposed to these various changes in pres- sure, that there are some very definite physical changes that take place in your body, and I am told sometimes for several days there- after you have trouble hearing, among other things. Mr. PAUL. That is right. Mr. 13LANDFORD. What is your justification, Mr. Secretary, for add- ing the high-pressure chamber, and also eliminating the word "ob- server"? Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/014R : CIA-RDP66600403R000400280006-0 Mr. PAUL. I think pretty much for the reasons you stated, Mr. Blandford. There is an increasing need for human volunteers in these fields of experimentation, particularly in the aeronautical field. As our air and undersea weapons get more sophisticated, these ex- periments are going to be more and more frequent, and more danger- ous. I don't know of any deaths that have occurred, but, as you point out it doesn't make any difference wbether you are there as an ob- server or subject, you are in the same chamber and subjected =ci the same dangers. There have been permanent physical injuries, that I do know. This is also a volunteer program. Mr. Timmy. In the incentive pay areas, how long do these -,ncen- t Ivo pay rates continue? Air. Iit...kxnFortn. Only while they are assigned to training. Mr. IIAany. Then it is of short duration? Mr. BLANDFORD. Well. the Only type of incentive pay that attaches to a man that can go through his career regardless of whethet lie is serving in the Pentagon or at an airfield, is flight pay. This is done for a very good reason, because of the fact that the man must remain proficient in flight, and he must fly so many hours a year, and do so much instrument flying, because, if he didn't do it, our accident rate would go up and we would lose more in loss of aircraft and men than the cost of flight pay. But this is the only one, to my knowledge, where the man can draw this incentive pay when he. is actually not assigned to a duty involving flying. In other words, where the primary duty is flying. All other incentive pays are tied in with the primary duty involved, such as handling demolitions, or as a paratrooper. A paratrooper, for ex- ample, under the regulations, I believe, if he is gone for 30 days he doesn't draw his paratrooper pay for that month. Mr. Thum-. If he is what for 30 days? Mr. BLANDFORD. The paratrooper who has gone away from his out- fit for more than :30 days?I am not sure of these regulations, they are different for the different incentive pays?but most all of them, other than the flight pay, attach only while I he man is assigned to and serving on that particular type of duty. Mr. RIVERS. That is right. Mr. BATES. how is that language going to read now? Mr. BLANDFORD. It will read?I will need title 37 to read the whole thing. Mr. RIVERS. You have it right liere,lia.ven't you.? Mr. IltAxnFoao. The law start i oft. INCENTIVE PAY HAZARDOUS urry (a) Subject to regulations prescribed by the President, a member of a uni- formed service who is entitled to basic pay Is also entitled to incentive pay, in the amount set forth in subsection (b) or (c) of this section, far the perform- ance of hazardous duty required by orders. For the purpose:; of this subsection, "hazardous duty" means duty? ( 11 As a crewmeinher, as determilast lly the Secrerary concerned, in- volving frequent alai regninr inirtioipal inn in nerinl fligin : (9) On hoard a submarine, including, in the case of nuclear-powered sub- marines, peritals of training and rehabilitation after assignment thereto, as determined by the Secretary cmicerlied, and including submarines under constructbm hi on the time builders trials begin ; Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 :1207-RDP66B00403R000400280006-0 (3) As an operator or crewmember of an operational, self-propelled sub- mersible, including undersea exploration and research vehicles; (4) Involving frequent and regular participation in aerial flight, not as a crewmember under clause (1) of this subsection; (5) Involving frequent and regular participation in glider flights; (6) Involving parachute jumping as an essential part of military duty; (7) Involving intimate contact with persons afflicted with leprosy; (8) Involving the demolition of explosives as a primary duty, including training for that duty; (9) As a low-pressure chamber inside observer? is the one we would amend to read?as a low or Mr. BATES. Just as inside a high- or low-pressure chamber. That is the only language? MT. BLANDFORD. Yes, but you see you have got to go back to the previous page?"for the purposes of this section. hazardous duty means duty inside a high- or low-pressure chamber." So if his duty requires him to be in that low- or high-pressure chamber, then he will qualify. General Accounting Office would require a set of orders directing him to perform that duty. Mr. BATES. There was some reason why they used the word "ob- server." Mr. BLANDFORD. I think in the original justification the point was they were putting people through these tests. The idea of the observ- er was to have somebody with them there all the time. You don't pay the man taking the test. If I go to Andrews and they put me through the pressure-chamber test, even if I am on active duty I won't draw the pay. The chap whose duty it is to be there day in and day out, while other people are taking the test, the word "observer" means he will pull me out if he decided I was decelerating too rapidly or something. Now, we have to prepare these people not only for the high pressure but the low pressure type of duty. Mr. PAUL. It is not only observers, either. It is the people who are actually the subjects of this test. Mr. BATES. That is what I wanted to find out. Mr. PAUL. It is not just the fellow, as Mr. Blanford said, who simply goes through to get his flight ticket, but the fellow assigned to that duty to test out a certain new type of chamber, or to withstand conditions that might be encountered in flight. He has to appear in that chamber a frequent number of times. He is assigned to duty in that particular field. Mr. BATES. Ho is a high- or low-pressure person. That is one set of circumstances. And the other is he must be assigned. Mr. PAUL. Assigned too, yes, sir. Mr. HARDY. He will be assigned to that for the purpose of taking the test. Under this he would be entitled to incentive pay. Mr. 13LANEFORD. Not unless it is his duty. Mr. BENNETT. Why does he take the test? Mr. BLANDFORD. I am saying it would be his duty to take one test, but not as a part of his continuing duty. Mr. BENNETT. It doesn't say anything about continuing duty in -the statute, as far as I can see. Mr. BATES. That is the reason I brought the question up, to try to determine exactly how you are going to work. Approved For Release 2005/04/21 : CIA-RDP66B00403R000400280006-0 Approved For Release 2005/N1 : CIA-RDP66600403R000400280006-0 -Mr. BLAND-roan. I think this colloquy right here will be enough for GAO to put in pret ty st ringent restrict ions. As a matter of fact, what we are talking about here is $145,000 a year. Nfr, ninny. Well, that may be $145,0(10 a year, hut you have got also of eligibility, if that arises. I don't know if we intended to eliminate any lucent ive pay to the fellow going down there just to be list ed, to take the test, himself. If we did, I don't believe that we have got it in this language. .May we have in the colloquy, but I think we ought; to be sure what we are talking about. We also have anot her sect ion here that. comes right on behind it, and I hat is this question of double incentive pay. Mr. thvgas. That is right. Mr. IImmv. If an individual is assigned to duty inside, a. low- pressure chamber for a couple days a month, and he is assigned to duty in connection with handling demolitions for a couple days, or something, is that going to constitute a basis for double incentive pay ? Mr. BLANDFoao. Mr. ITardy, let me suggest since General Bowman is working on regulations, if they are completed?aro they cow plete by any chance, General ? General BowmAN. I didn't hear the question. Mr. TILANnroun. have you completed the regulations applicable to low- and high-pressure duty ? General liowmAx. No. We are working on that. Mr. BLANoraitn. I would suggest, Mr. Chairman, we attempt to put in the hearings at this point t he proposed regulations that will control the payment of this pay. Mr. IImarr. I can see an awful lot of opportunity for abuses of this thing through regulations unless we do have an understanding of what is involved. Mr. BLAxiwonn. We can certainly put it in the report so there won't be any question. Mr. lb vEas. I think we. ought to know exactly what they are, Mr. MA-Nut-olio. We can put. it in the report before they complete the regulations. There will be no problem. Mr. PATTL. We can set the basic conditions for it. Mr. BLANFouo. I think we. understand basically what we are talk- 111.!r about. Mr. Timmy. If the duty of the individual involves two or more of these responsibilities that would en( it le him to incentive pay, and they are ,oncurrent, and have any considerable duration, why, certainly, he oui-dit to be entitled to two incentive pays. That is the thing W2 were talking about a minute ago. If. however, t here is a limited period in the same calendar period of time. in which he is involved in one and then in another, I iave a little t rouble understandini, how in ti .e. world he could be enti.Aed to two pa:vs. Mr. BLANDroun. I think, Mr. Chairman, Mr. Hardy's point is well taken. I think we ought to be pretty clear here so there. isn't any possible abuse, because if there is they will lose the whole thing. Act nallv, there is $1,941 ,000 contemplated in fiscal 191.11-. for the double incenlive imvnienis That isn't very many people. This is tie next subject. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 : CilfgFDP66600403R000400280006-0 It goes right into what Mr. Hardy is talking about. Now, for example, it would be a little bit silly to pay a man flight pay and then have him come in once a month to go through a low-pressure chamber and have him draw two incentive pays. Mr. HARDY. That is exactly what I am talking about. Mr. BLANDFORD. We ought to know before we approve this exactly what they have in mind. That goes to the double incentive. We already discussed it. The example is the paratrooper who is also a demolition expert. I think they jump separately, but notwithstand- ino' I wouldn't want to involve myself in either one. notwithstand- ing, brings us to sea and foreign duty pay, and the question Mr. RIVERS. What page? Mr. I3LANDFORD. Page 11 of your statement, section 9, page 17, of the bill. Now, this is a $133 million item. The chairman this morning ex- pressed himself clearly without any reservation as being opposed to the section which would repeal sea and foreign duty pay. Mr. RIVERS. I believe I can be backed up pretty strongly by Admiral Smedberg. Mr. HARDY. As a matter of fact, I showed the Secretary yesterday a letter, that convinced him we ought not to eliminate sea and foreign duty. Mr. PAUL. That was a very impressive letter, Mr. Hardy. Mr. BLANDFORD. In that case, let US go to the next subject, Mr. Chairman. Mr. BATES. You ought to take at least 5 minutes for $133 million. Mr. I3LANDFORD. Mr. Bates, to be perfectly honest, I have yet to meet the first individual who recommends the enactment of this section. Mr. BATES. Well, behold the Mr. PAun. Well MF. BLANDFORD. With present company excepted, of course I have to except the Secretary, who is giving the Secretary of Defense's position in this matter. But this is a serious problem. It is a serious problem because you are in effect saying to many people now serving at sea that after this long-vaunted pay increase you are about to get we are going to give you the grand total of a $2.50 a month increase. The letters we are getting indicate that this and the effective date are the sorest points in this pay bill, without any doubt. I am sure if the author of the Reader's Digest article, the Drake article, had gone from the District of Columbia directly to a naval base, where a ship had just put in and told the crew they were going to take away sea pay, there would have been a couple of paragraphs added to that article about elimination of sea pay. This is an important part of an enlisted man's income when he goes to sea. It is an important part of an enlisted man's income when he is overseas. It has been tra- ditional since 1942 to pay people extra pay when they are overseas, or when they are at sea. It may not purchase the sort of thing that the Department of Defense would like to see purchased insofar as quality control is concerned. But you can't run the armed services with just technicians. Somebody has got to do some fighting now and then. These are the people that are involved here. This is the common, ordinary seaman variety type of man. He may not know exactly what happens when he pushes a button, but he knows when to push the Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 20051(1021 : CIA-RDP66600403R000400280006-0 button. This is the man who keeps the Navy and Coast Guard going, who mans the outfits overseas, this is the man who is serving in South Vietnam, this is the man serving in Berlin, this is the man serving in Okinawa. If you start taking this kind of money away from him, then all the morale effect you are trying to create is going right out the window, because it is perfectly obvious the $133 million taken away here is only to be replaced by a $30 million item, a great portion of which could go to officers. Mr. PAUL. May I speak to this, Mr. Chairman? Mr. RIVERS. Yes. Mr. PAUL. It is true that the unusual hardship pay that we are pro- posing would apply to a considerably lesser number that preksently are entitled to sea and foreign duty pay. it may well be that the reFtric- tion we placed on the number that, would be eligible for that pay cuts it down a little too fine, considering the needs of the services. But I would like to say we have felt and do feel that sea pay and foreign duty pay, and I would say particularly foreign duty pay, penults certain people to draw a special pay for reasons we are not aware of any justification for. This pay was, as I understand it, originally set up as a morale pay, something to give men a little bit more who were operating under special conditions. There are certain areas of the world, Mr. Chairman, as you pointed out in your own statement, that can hardly be described as placing any undue hardship on the individual concerned. In fact, these assignments are very much sought after. So I do think that. whatever the desires of the committee are, we ought to be permitted to review this whole subject of whether or not across-the-board blanket application of this type of a pay is really in our best interest. Are webuying anything by it? And, by the same token, if we take it away from certain of these individuals, am we losing anything? I believe that probably something between the position we have taken and the complete restoration of all these pays makes more sense. Mr. Chairman, just one other thing I would like to say on this. I do think we ought to give some recognition to the difference in the typo of oversee, or sea duty certain individuals have to perform. Now, again, as you pointed out in your statement, duty down in McMurdo Sound is not all the same as duty in certain areas of the Caribbean. There are certain places where the hardships are con- siderably greater than others. I have seen some of them, I am sure you gentlemen have, too. I would urge we don't throw out the window the concept cf the differential between degrees of hardship, because there are degrees of hardship. My only plea to this commit tee would be, lc: us take a good, long look at this one before we completely restore one awl completely do away with the other. Mr. i3ATEs. Mr. Secretary, did you ever give any thought to the averaging out of the different set of circumstances that people meet during a career? In other words, if we are trying to equate every- thing simultaneously, we just can't accomplish that. But over a pe- riod of a career, some duty you get is good, other duty is not so good, some is a little bit in between. But it averages out, generally. The Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 1441 old chief petty officers used to say it all adds up on 30, something like that. . . I think we run into quite a problem here trying to equate every duty, as there are all kinds involved. Mr. BLANDFORD. Mr. Chairman, I think the Secretary's point coin- cides pretty much with your own statement to that effect, that there are certainly areas of sea pay, very limited areas of sea pay, for ex- ample, duty on a harbor craft, we will say a man who goes home every night for dinner, and who may be piloting the tug around in the har- bor at Norfolk, you can hardly say he is entitled to sea pay to the same extent a man who goes aboard a carrier or destroyers and maybe puts, into his home base maybe twice in 14 months, or something of that nature. There is a considerable difference. I think the chairman pointed that out in his statement that them are areas of sea pay and oversea pay. where probably it is not justified. Mr. RivEns. You gave an analysis of a tug in a harbor. I don't know anything rougher than a service on a seagoing tug. Mr. BLANDFORD. If they are at sea, yes. Mr. RIVERS. If they have to be called out to go offshore in a storm or something, they don't have it easy all the time. It is hard as Mr. Bates says, it is difficult to average it out. Mr. PAUL. Yes sir; that is a very pertinent remark. Mr. GAVIN. W110 reaches the decision now as to what the status is? Mr. BLANDFORD. Sea and oversea pay is not subject to regulation. Mr. I3ATEs. The ship must be a commissioned ship, isn't that still the criterion? Mr. BLANDFORD. Admiral Sinedberg can answer that. Admiral SIVIEDBERD. We do not give sea pay to yard and district craft today. A fleet tug, however, Mr. Chairman, as you say, which does go out long distances, and tow in ships, does get sea pay, but the yard and district craft do not. Mr. BATES. Even though they are commissioned? Admiral SMEDBERG. No, sir; they do not. Yard and district craft are not commissioned craft. Mr. BATES. My point is, years ago wheel' this was put into effect, the criterion was whether or not a ship was commissioned, is that still in effect? Admiral SMEDRERG. I would say people in any commissioned ship would draw sea pay, sir, I can't think of an exception. Mr. BATES. I know in 1942 they specifically mentioned a commis- sioned ship. Mr. BLANDFORD. Mr. Chairman, may we go on into page 18, section 10, dealing with responsibility pay? Now, just to quickly summarize this law, this law was put in as a Senate amendment and is applicable if it s ever implemented Mr. RIVERS. What page are you on, applicable, if uss ? Mr. BLANDFORD. Page 18. This section would repeal the authority for responsibility pay. This has never been implemented. Under the law the Secretary may designate positions of unusual responsibility which are of a criti- cal nature to an armed force under his jurisdiction, and may pay Special pay in addition to other pay prescribed by law. Approved For Release 2005/04/21 : CIA-RDP66B00403R000400280006-0 Approved For Release 2005/00444 : CIA-RDP66600403R000400280006-0 If they are so designated, they would receive monthly pay rates of $150 for the 0-6, $100 for the 0-5, $50 for the 0-4, and $50 for the 0-3, and parenthetically, that is probably the way we should have written proficiency- pay, and we wouldn't have these reduced payments going on today. The Secretary concerned shall subscribe the criteria as to who is eligible for this special pay, and not more than 5 percent of the num- ber of officers on active duty in an armed force in pay grade 0-3, or not more than 10 percent of the 0-4's, 0-5's, and 0-6's may be. paid special pay. This has never been implemented by the Department. Tho Department now wants to repeal it. Stated, I think, more sim- ply, the Navy and Air Force would implement it if the Secietary of Defense approved their request, and the Army and Marine Corps would prefer not to implement it. It is as simple as that. The posi- tion of each of the Deputy Chiefs of Staff on responsibility pay will undoubtedly be stated if they are asked to do so. I think this basically is something that the Senate. put in, but on the other hand we concurred in it when it became law, and perhaps you might want to direct your questions at the various Deputy Chiefs of Stair when they testify. Mr. PayEns. Of course we are equally responsible, we accepted it in conference, but it is not our baby. Mr. BLANDFORD. Mr. Chairman, that takes us to hardship pay, which of course in your statement you indicate that if we do not re- peal sea and foreign duty pay we would probably not be able to justify having both. The Department, of course, proposes unusual hardship provision in lieu of sea and foreign duty pay, the dollars indicating obviously the number of people who would get this would be considerably less than those who are now getting sea and foreign duty pay. It may t . be that. the subcommittee may wish to have both, with the understanding that an individual could not draw both. Mr. HARDY. Since we are going to pass over the other one for fur- ther study, I thing the things are so related? Mr. BLANDFORD. That is the point., we ought to go on to the next one. Mr. RivEns. Yes. Mr. BLANDFORD. That takes us to page 19, section 1,2, career incen- tive payment. Now this proposal submitted? Mr. GAVIN. Will you tell us what page you are on, please? Mr. 13nAxorortn. I am on the bottom of page 14. Mr. GAN. Where is it in the bill. Mr. BLANDFORD. Page 19, section 12.. This is the proposal that would eliminate or phase out and even- tually eliminate the present reenlistment. bonus sptent. You have heard Mr. Paul's st atement and this is one of the qutaity control concepts that the pay panel recommended to the Secretary of Defense. Under this proposal an individual would receive one payment, only, other than the individual mqualifying---would receive one payment. only of up to $2,100 if he was in a highly Tit ical skill, oi! $500 in a less critical skill, and I presumeI tint anyonm being reenlistkal would draw $500. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/214461A-RDP661300403R000400280006-0 Mr. PAUL. Yes. Mr. BLANDFORD. There are arguments on both sides of this ques- tion, there is no doubt about that. The theory is that 88 percent of our people today, reenlist if they have once reenlisted. Thus there is some question as to whether there is any necessity to pay a man a re- enlistment bonus at, say2 in his 8th or 10th or 12th year. The rest of the idea is that this would give the Secretary a tool to use when he needed certain skills. For example, if they were short of electronics experts, you could attach a $2,400 price tag to a man who would reenlist one time, in that critical skill, and he could get up to $2,400 so long as his combined service, prior service, and reenlist- ment, were 6 years or more, if I remember correctly. Is that right ? Colonel BENADE. The draft bill does not so specify. Actually it was intended in the administrative regulations which would imple- ment this that the period involved would be 10 years, to reach the maximum of $2,400. Mr. BLANDFORD. The Department's point on this current incentive payment is that this would be a method of paying people for a skill that is needed at the time. Now, it might be that a year after that they have all the electronics specialists they want. I was amazed to find the other day, when I made a trip for the subcommittee, that we are in very short supply in the Air Force of mechanics on propeller-driven aircraft. The me-- chanics in that area are in short supply, because most people have been concentrating on jet aircraft. And they have a reenlistment problem, and they also have a shortage in this particular skill. Now, certainly, I know Mr. Paul will have other arguments in support of this. On the other hand, there are other arguments against this, one of them as the chairman has pointed out is that the Department has never utilized the law we gave them in the first place. We set up a proficiency pay system in 1958, and this subcommittee worked long and hard to come up with proficiency pay system. We bragged to the world it would be possible for an enlisted man to make $10,000 a year under this pay proposal. The law was written so a man could get up to $150 a month profi- ciency pay if he had a real critical skill. Mr. RIVERS. I remember that vividly. Mr. BLANDFORD. We used a figure of more than $10,000 for the E-9, drawing $150 a month, and the pay of the E-9, and everything else that went with it. Now, the Department has only implemented proficiency pay to the tune of $30 a month, or a buck a day for the P-1, $60 a month for the P-2, and we have never implemented the P-3, but now they want authority to buy critical skills by giving them a lump sum payment of up to $2,400. We don't know what we are going to do to our present reenlistment rate which is presently high, it might start to go down if we take out the present reenlistment bonus system. rfleis another factor here and that is that human nature being what it s, once you have handed an individual $2,400 in one lump sum, which seems like a lot of money at the time, after he has bought that second- hand Ford, or whatever he buys with it, that same inducement no Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/F414kCIA-RDP66B00403R000400280006-0 longer exists. There isn't any inducement thereafter to stay in the service, it is a one-lump-sum payment. Parenthetically, I might add all of it is taxable in one year for income tax purposes. Anybody who figures this out today, is going to figure that as a factor to be taken into consideration. The man won't get. $2,400. You just tell hirn he is going to get $2,400. Then the Government will take at least 20 per- cent of it. back, because it is subject to taxes. So there are many arguments on both sides of this point, but probably the best aronment against the section is the fact that the Department hasn't even imple- mented the law we have already given them. Mr. PAUL. Well, the idea of the career incentive payment, and as a matter of fact the idea of the current reenlistment bonus, is that it is an incentive pay. 1 think this WaS reflected in the action of the. Con- gress in 1949 when this whole system was changed to provide more money after the first obligated tour. Therefore, Mr. Chairman, what we are proposing here is not an entirely new system. It is a proposed change in the current system. As of now, 57 percent of the money that is in the menlistment bonus system goes to reenlistments beyond the first one. I think me have reliable figures that indicate the. retention rates beyond that first re- enlistment are pretty good. Mr. IIARDr. Why don't we cut it off right there, then, and save some money, instead of going into this other deal that you stated in here. Mr. BnANcn-Ann. The answer, Mr. hardy, is the possibility that the 57 percent reenlistments now taking place, may be due in part to this reenlistment bonus. We don't blow how much effect this present reenlistment bonus system has on the present high reenlistment rate. If we change it we may find to our sorrow that this had a very impor- tant part in the high reenlistment rate. But this is the problem we face. We don't know the answer to that. Mr. BExxErr. May I ask a question again? Mr. PAUL. Yes, sir. Mr. BENNETT. Couldn't you use the legislation we have to accom- plish about what. you want to do in this? Is there anything that. says under that proficiency pay it has to stay with the man forever; can't it come or go as the man is needed or not needed? Mr. PAUL. Yes, sir; it can, and should. Mr. TinxxErrr. Why don't you make that work? Mr. PAUL. Well, we feel that. both proficiency pay and career in- centive payment. are needed to get at. the problem of the retention of critical skills. They are different things. The advantage of the career incentive payment is that it has its maximuni. impact at the time a man is about to make that big decision. It. is flatly stated to be a bonus. On the other hand, the proficiency pay provides n. continuing incen- tive to the man in the service to acquire a specialty, to acquire a skill that is needed by that service, and then to maintain that skill. Mr. HARDT. You already have a certain reenlistment:: bonus now. You also have a proficiency pay system. A rid I think von would be in lot bet lee shape if yot would cc4ne in here having tried to utilize what you have got, hut you haven't done it. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 : 914eDP661300403R000400280006-0 It may be that you've got a good point in suggesting that they be cut off at 10 years, I don't know, maybe the reenlistments would go, down after that if you did, but if your reasoning is correct, then it would seem to me the sensible thing to do would be to continue on the present reenlistment bonus schedule, cut it off at 10 years, and see what happens to it. Mr. BENNETT. I am looking to the other side of this coin. What I think you ought to do is take the proficiency pay bill you have now and get it as close to this sort of thing you are asking for as you can get it. It looks to me like it could be identical, and the same motives could be stimulated in either case, it seems to me. Mr. PAUL. It is directed to the same problem. Mr. BENNETT. You already told me, maybe I didn't get my question across to you, but I thought I got the answer from you that if a man was very proficiency in something you no longer needed, like threading needles, making a sail or something, you could get rid of the proficiency pay paid to him, because he is no longer needed. If that be the case, it looks to me like you could use this proficiency pay to get the quality of man you needed. Mr. PAUL. That is right, there is no difference in that sense. It is related to critical skills, and the degree of criticality can change. Mr. BENNETT. They can utilize the proficiency pay more nearly to what you wish. Mr. GUBSER. Mr. Chairman, is the theory behind dropping the re- enlistment bonus after the first reenlistment that the man has enough years of his life invested already and it can be presumed he would be more than likely to continue at his career? Mr. PAUL. Tlfat is a big part of it, Mr. Gubser. Mr. GUBSER. Now, you are talking here about the seventh year in most cases, aren't you? Three-year enlistment and four-year re- enlistment? Mr. PAUL. That would be the average, yes, sir. Mr. GUBSER. Do you have the figures about the difference in the reenlistment rate of a man in the 7th year of his career, or entering the 8th year of his career, and one entering the 12th year of his career? Mr. PAUL. I don't have those. Mr. GUBSER. I would suspect it would be very significant, because a man can turn his back on 7 years rather much more easily than he could turn his back on 11 years, it seems like. Mr. GORHAM. We have done extensive surveys on career intentions and have looked at the actual rates of reenlistment by year of service. In general the rates go up, as you said, from the 7th to 12th year. At about the 10-year point rates approach 90 percent, in some cases go above 90 percent. At the 7-year point the rate is approxi- mately 70 percent or 80 percent. Mr. GUBSER. You would say that there is a marked difference between the first and the second reenlistment? Mr. Gonunm. That is the sharpest difference. Mr. GUBSER. Still a considerable difference between the second and third, but from then on it is the same? Mr. GORHAM. I would say between the second and third reenlist- ment there is a marked difference. 85066-63?No. 6 4 Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005{(14(21 : CIA-RDP66600403R000400280006-0 Mr. GLIISER. Didn't you say about 20 percent. a little while ago? Mr. GORHAM. In the neighborhood of 10 to 20 percent. I would have to check the figure. At this point in a man's career he has much invested toward a. 20- year retirement. At 10 years if he leaves the military department he gets nothing out of the retirement system. Mr. GAVIN. That. particular individual you were trying to select knew that after he served maybe two terms, two reenlist merits, and got a bonus for it, he was going to get cut off. He may say, "Well, what is the use of getting in now? After 10 years they are. going to st-op the bonus. Why do with the Navy or any other branch?" They will find out quick enough what you are going to do, and it will determine their future and their decision. What would you do? Would you take a job if you knew you were going to get no bonuses, and then after the two bonuses they i.vere going to take it away from you ? Mr. PATTI,. Tinder our proposal, Mr. Gavin, anyone who is presently beyond the first reenlistment would continue_ to get his reenlistment bonus until he has reached the maximum of $2,000 he is now entitled to. Mr. GAVIN. You are talking about 10 years, now? Mr. BLANDFORD. It is prOSped iVe in application, Mr. Gavin, because there is a savings provision to retain the present law for those who have already reenlisted once. But the point, that you make is a point that Mr. Rivers made, and that is, we are dealing here with an unknown quantity. We just don't know whether the present favorable reenlistment rate of those who have already reenlisted one or more times would be seriously affected by this phase-out of this present reenlistment bonus concept. Mr. CI-Avg-N. Ile would be. I presume, if he couldn't do better on the outside, but if he could do better on (lie outside he certainly is not going to stay in the Navy. He is going where lie gets more money. Mr. GUITSER. Mr.Chairman, if I may continue. I presume the Department has come to the. conclusion that the reenlistment rate would not be adversely affected if cut off after the first reenlistment. If you come to that ...onclusion, maybe you must have had some hard, concrete scientific evidence to back up your con- clusion. What was it? Mr. PA-t-r,. As I say, we can get more detailed figures and submit them for the record, but the retention rates after the first- reenlistment are really very good. The amount of a reenlistment bonus that a man gets on his first reenlistment-and later 'ones gets progressively smaller under the pres- ent system. I don't believe that to give a. man a few hundred dollars for that later reenlistment, when he already has 1 he investment c.f munher of years in the service, is going to swing him one way or the other. A tut the retention figures appear to back us up. Mr. GAvtx. You are talking about S2,-100---t hat isn't a few dollars. It would't go down to a few hundred dollars on the se2ond or third one. wimld it ? Mr. BLANDF(1111). 11 is :1 one-shot prf,posit 1011 1111(11'1' I Ile priripOSill sib- mit led by the Department, unless they requalify under a critical skill. I tut, a.!rain, Mr. Chairman, we are dealing here wit h tie same prob- lem 1 lint confronts industry. and everybody else, but ilw Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21140A-RDP661300403R000400280006-0 ices are in a little different situation. We seem to always concentrate on the critical skill man, and yet the armed services must depend on the man who is doing the fighting' basically. I think we have got to be careful that we don't get carried away with this idea that a man who simply is a good barman doesn't have a critical skill. We have lots of thesepeople. We may not have as many people who understand black boxes, but that black box is only going to be as good as the man out in front with the rifles. And yet you are going to give that man as little as $500 and the man with the critical skill $2,400. This is what worries me. Now, we have got a built-in system to take care of the critical skill man, with the P-1, P-2, and P-3 proficiency system; I still contend the chairman is absolutely right. Let us implement the law we have got first before we apply the evils we know not whereof. Mr. ItivEns. I think it might be well to ask the Secretary what is wrong with P-3, that you don't want to implement ? Mr. PAUL. Well, Mr. Chairman, we started off very slowly on the old proficiency pay system. As of now, 245,000 enlisted men are receiv- ing-?`pro" pay of one kind or another. I was not a participant in the initial decision not to go ahead with the P-3 payment, but I believe one of the essential reasons why the service request for pilot programs was turned down was that it was felt that the whole proficiency pay system needed a thorough going over, and that we ought to explore different directions. I would agree with this committee that we have not administered this program to the degree intended. I think one of the problems has been that the system itself, has been a mixture of an award proficiency for critical skills and for outstanding performance. As you know, the legislation has both elements in it. The services have administered this program quite differently. I think we have got to find a means, and, in fact, the Secretary has instructed me to come up by the middle of March with some proposals, that will make more sense out of this system. When we are able to do that, Mr. Chairman, and I think we will be able to do it, we will be able to give the system a better test. Whether or not $100-plus in a P-3 payment would fit in properly into that system, I can't say right now, Mr. Chairman. Mr. HARDY. Could we get back a little bit to the origin of this proficiency-pay thing ? All the services were enthusiastic about this thing, as I recall it, when we considered it in the committee. My re- collection, we could be wrong, but I think it is correct, was that all of the services were highly desirous of this particular program. That was going to enable them to keep these key people. Then, after you get it, you decide you don't want to use it. It is not the kind of thing that ought to be rehashed. Then, I would no right back to the questioning. If my memory is correct, the testimony that was given to us by the military people that testified misled us. That was their own thinking, reflecting the attitude of the folks at home. Mr. HARDY. Maybe it isn't the military, maybe it is the OSD that is responsible. Mr. GAVIN. The colonel was here in 1958, weren't you? You were familiar with what we were going to do, and how the plan was per- Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/413: CIA-RDP66600403R000400280006-0 fected with, such accuracy we were going to really save money. Do, you remember that? rememberthe Joint Chiefs of Stall', they?the brilliant statements they made. Can you tell us why this law that we passed at that time was not implemented and carried out? Colonel BENADE. Mr. Gavin, I don't think I have anything tO add to what Mr. Paul has said. The record speaks for itself. It has been a great deal short of the authority that this committee wrote into law.. Mr. GAVIN. Talk a little louder, will you, please? Colonel BENADE. The program to date admittedly is a great deal less than the authority which was granted by this committee in the 1958 pay bill. The figures don't as yet show we have experienced any substantial increase in retention as a result of proficiency pay, but that is probably because the level of proficiency pay has not been enough. Mr. GAVIN. How much did Mr. Cordiner think we were going to. save? Mr. BLANDFORD. $5 billion. Mr, GAITIN. I remembered the figure, I wondered if you fellows did.. Mr. PAUL. Mr. Chairman, if I left the impression with Mr. Hardy,. that I said that the services were against this proposal, or Averen't 100 percent for it, I didn't mean to. They have ahvays been for it. Mr. Timmy. Let us get this thing straight. Mr. RIVERS. One at a time. Mr. HARDT. I would like to find out exactly what the picture is. I take it from what. you just said, Mr. Paul, that the services do want to use it, and OSD has not, notwithstanding the fact Congress put it into law. They say we have a little better bill for you here. Is that the purpose of it? Mr. PAUL. Mr. Hardy, the services would have wanted to im- plement it to a_ much larger degree than they have been permitted todo, that is quite right. What you are saying is right. The number of people in the program now has increased to 254,000 people. We are hoping to revise the rates of proficiency pay. We are working on that very actively right now. The services are 100 percent in favor of it. Mr. HARDY. Well, this bothers me. This kind of retention bonus for reenlistment?to mo is not the kind of thing that is likely to produce what you seem to want, and I really would feel a whole lot better about trying to consider a change in the statutory provision if there had been a pretty good test of what is in the law now. There hasn't been. And if your basic assumption is correct, that you don't need to pay reenlistment bonuses beyond 10 years, I would be perfectly willing to modify the law and save a little money on reenlistment bonuses, and let you accomplish the objective in another way. But T don't see the justification for increasing the reenlistment bonus the way you have set it up here. I think the point Mr. Bland- ford made is correct. particularly, at this first reenlistment point. with I e younger people you are Irving to retain. Jr you give them a big hunk of cash, there is going to be quite a few of them dissipate it pretty fast. Then after that, the morale is going- to be worse than it %void(' have been before the payment. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/211:49A-RDP661300403R000400280006-0 Mr. PAUL. Very few of them would get $2,400, Mr. Hardy. That would be the absolute maximum. And that would be for a 10 year total enlistment. Mr. HARDY. I am not sure that you have the ability within the serv- ices to pinpoint your selection of your people so that you come up with a satisfactory and result. Mr. Chairman, that is all I want to say on that, but I do think it might be pertinent to inquire, as Mr. Gavin suggested a minute ago, where the $5 billion is we saved, if somebody will ever find it we will have enough money to cover this particular bill. Mr. GAVIN. In fact, we could increase it. This bill is only $1,200 million. This was 85 billion we were going to save in 1958. It must be somewhere. Wherever it is it might be used to improve this legislation. Mr. BLANDFORD. Mr. Gavin, I might mention that Mr. McElroy was Secretary of Defense at the time, and after listening to some of the questions asked by this subcommittee, when he finally testified on the ?pay bill, he said that he could not say that there was going to be a $5 billion savings, and be didn't want to say there was going to be a $5 billion savings. The only thing he was willing to say was that it would improve the efficiency of the armed services. He would never say there was going to be any dollar savings in this. Mr. Cordiner could still argue, that if we adopted his proposal, as he wrote it, that it might have saved $5 billion because of retraining savings and things of that nature. Mr. IIARDY. And he could be just as wrong as he was when he wrote it. Mr. RIVERS. I think he wanted to abolish longevity. Mr. 13LANDFoRD. Yes, sir; step-in-grade increases only. Mr. HUDDLESTON. Mr. Paul, what would be the saving in this partic- ular provision when we repealed the old reenlistmc-t bonus and in- stitute this one-shot proposition recommended by the Department ? Mr. PAUL. There wouldn't be any saving, Mr. Huddleston. Not in the first year, or the first years of it, at least. Because you would con- tinue on, under the old system, those who had already received the first reenlistment bonus. Mr. HUDDLESTON. What would be the savings by the time 1968 came around? Could you come up here and report to us what we had saved by making this change ? Mr. PALL. I think we can give you that figure. Mr. GORHAM. In 1964, we are planning to spend for first-termers $57 million for reenlistment bonuses under the current reenlistment bonus system. For career people we plan to spend $94 million for a total reenlistment bonus allocation of $151 million. Mr. IIUDDLESTON. That is what you would be spending. My question was, what would you be saving? Mr. GoRnAm. I understand. The $94 million planned for next year would be reduced each subsequent year, as the career personnel in the system begin moving out. Enlisted men, who move into the career force subsequent to the effective date of the pay bill will not receive reenlistment bonuses. Each year after next there would be a reduced amount for the reenlistment bonus. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/0410: CIA-RDP66600403R000400280006-0 Mr. IIt-onnEs-rox. Do you have any estimate as to the amount we would actually save ? Mr. Goat 1.131. If you spend just what we are now spending en first- termers, but reallocated among skills of different degrees of criticality, we would spend something- on the order of $60 million. Mr. l'At-h. Instead of $151 million. But that would be several years off, and that may he a low figure, because there probably ought to be more money than that in a reenlistment bonus or career incentive payment. system. Mr. II unnixsToN. Mr. Secretary, do you have records with regard to the various provisions in this bill, the figure that we would :-ave by this legislation, similar to what Mr. Cordiner gave us back in l95ti, of the Sri billion we would save in his recommendations ? Mr. l'Atn. I think it is an impossible figure, Mr. Huddle:4cm. I don't think we can give you a figure that would stand up any better than that $5 billion figure did. Mr. lartmaxs-ralc. 1 appreciate your honesty, Mr. Secretary. Mr. Os:strats. On this question of reenlistment pay? the history looks so good for the second and third term reenlistments that I for one would not like to monkey with it. I think maybe if we removed this reenlistment bonus in tin' second and third hitches, we might very well be having the problem in these hitches. Is there any way of going back into history before the reenlistment bonus concept was started and seeing what the reenlistment percentage was for the first, second, and third terms, and see if there had been any major change since this -reenlistment bill was put into effect ? Mr. Yes, sir. Mr. GrolitiAlt. In 1954, t lie reenlistment bonus system was changed. A larger portion of the bonus was given to the. first- reenlistment, and a smaller one to the subsequent- ono. Following the 1051 change there was a continued rise in career reenlistnients. Mr. linANDroito. 1 'n fortunately, however, that is not quite - - -- Mr. ( jouillaM. You added some money to the bonus at the time. Mr. BrANDroun. That is not quite ,_!orrect. If you took tine man's pay grade, and multiplied by the number of years at which he re- enlisted in that pay grade, and then took two-thirds of the pay, the next time he came up for reenlistment, that might well have exceeded the monthly pay when he. reenlisted the first time, because of his higher grade. o the. figures wouldn't prove anything. Mr. OSMERS. What is the problem? Why hasn't it been completly implemented ? II as it been budgetary?the Budget Bureau said you can't have the money for it?or when, is the problem! Mr. PAUL. This is a problem of several years' duration, Mr. Osmers. T don't think I can give you all the reasons, because I just don't know what they were. 1 do know that the problem we have right now is that in sone cases if you applied a proficiency pay of greater than $30, which is roughly the difference in pay bet ween different grades. you ,ould havc an in- version?that is to say, a lower grade person in a gi VA1 skill might get. more than the person who was of a higher grade. This, in turn, raises certain command problems, but I think the main difficulty is that serv- ices have administered this proficiercy pay quite differently. The A ir Force has put almost 100 percent. if not 100 percent, in crit ial specialties. critical skills. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 :1bi-RDP66B00403R000400280006-0 The Army and the Navy have treated it somewhat differently. They have applied it, in most cases, to the critical skills, because those are the regulations, but they have also applied it as an outstanding achievement award. This is perfectly in accordance with the statute and perhaps in accordance with their needs, but the fact of the matter is that there has been an inconsistency of administration, and what we are now trying to do it find the right way as far as all the services are concerned. One of the things we are thinking about is having a functional specialty, or purely critical skills aspect, and apply our proficiency pay to just that, and in addition to have outstanding effectiveness awards handled as a separate matter. I don't think the system as it is now laid out in regulations?and this is our fault, not the Congress, because we are the ones who have to write these regulations?makes a sharp enough distinction between the two elements that an intended to be covered. Mr. BLANDFORD. I might add, that the law also permits you to ad- vance a man to a higher pay grade, so you wouldn't have a pay in- version. Mr. PAUL. Right. Mr. BLANDPORD. We had that in mind when we wrote it. If this man is that critical, or can do a job better than the average can, pro- mote him. Mr. PAuL. Right. Mr. BLANDFORD. Give him the pay of that grade. Then you go back to the Appropriations Committee and say the law says we have to do this under regulations, and therefore we have to pay it. Mr. OSIVIERS. You say the services like this "pro" pay. It doesn't reflect that in a lot of mail I am getting. There has been criticism of the "pro" pay, that it sets up sort of special cheeks, and so forth, with- in the services, and I wondered if you ever made a study within the services of the man who had it and didn't have it, as to its popularity, and so forth. Is there a morale factor in the services today ? Mr. nun, Certain aspects of this system are definitely aimed at morale. I will ask Mr. Gorham to back me up on this, because he has been charged with studying this particular pay. I know from my own experience in talking to enlisted men, that a great many of them feel that this annual examination that has to be taken?I am talking now of Army enlisted men?is not fair. They feel that, given the strict percentage limitations on the amount of people that can draw this pay, one fellow who happens to take exams better, gets an advantage over the other. Some people perform better, although they are not too good at taking examinations, and this has created a certain morale problem. I think that there are other aspects of the system that have, too. Mr. OSMERS. I would hope we have the service secretary, or chief of staff, or somebody come in and talk to us about it. Mr. BLANDFORD. They are all here, Mr. Osmers. Mr: OSMERS. Making a complete documentation as to whether it is working in their particular service, or not. Mr. BLANDFORD. I think One of the reasons it is not working is it has never been implemented properly. You will note the law does not limit the number of people who can draw proficiency pay. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005%11 : CIA-RDP66600403R000400280006-0 Mr. OSMERS. Somebody is limited, I would like to find out really who. Mr. BLANDFoal). I think you will find it. in the comptroller's office of 051) if you look hard. Basically, that is where the question is; it is simply a question of money. Mr. STaArrox. Mr. Chairman. Mr. Secretary, going back to the question raised, I think by Mr. Gubser, earlier, with respect to the bonus question. You mentioned on page 16 of your statement that you made a little study as to what would be needed_ to keep the junior officers in, and you determined that an increase of $100 to $200 a month would make a substantial -difference. You conducted some kind of a survey there. You don't go into it but I don't know whether you had a Gallup poll or what it was. Now, was there any similar survey with respect to reenlistments, or was this something based on another consideration? Mr. PAL-i,. Mr. Stratton, Mr. Gorham was the head of our pay study group. I would like to ask him to answer that question, please. Mr. GoanAm. We did conduct surveys of both officers and enlisted men. They were unique surveys, in which we asked different groups of men, whether or not their career intentions would change if their pay went up by a certain amount of money. For example, if the members of the committee were the enlisted force, we would have asked the three members to my left, whether $50 ould have made the difference between them staying in or leaving the service. The next three members we would have asked whether $75 would make the difference. The next, $100. We then drew up a series of? Mr. STRAIrroN. I tun asking you whether you did the same kind of thing with regard to the reenlistment bonus? Mr. Gointm. No, we did what I described only in terms of monthly pay. We did conduct another series of surveys which indicated to us how men regarded immediate dollars, that is, bonus money, as com- pared with increments to his monthly pay. We found that men, in general, preferred immediate dollars, that is, discounted future dollars :it a very high rate. Let me use an example. Mr. STa.krrox. A bird in the hand is worth two in the bush? Mr. GokitAm. That is right. That is why we regard a 'veil] stinent bonus essentially very efficient. That, is not to say you can't pay a man money? Mr. S'ra.vrrox. My question was whether the issue was raised whether you made any attempt to survey the question whether a re- enlistment bonus at the first reenlistment was more effective than at the second or third. But. you didn't make any such study? GoatiAm. Yes, let me answer your question now. I have been beating around the bush. apparently. We found that the reenlistment. bonus influences the first reenlist- ment. inore than it does .the second and subsequent reenlist merits. It .doesn't appear as a major factor for those in their second and third reenlist ments. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/211:49A-RDP661300403R000400280006-0 Mr. STRATTON. Well, now, this would also, I would think, be some- thing that you could justify, and I think to some extent you were doing that also on the basis of your statement that after the first reenlistment then you have an investment in the service in terms of retirement which you can't brush aside, lightly. Mr. l'Aue. No, and you can't cash in on it until you reach retirement. eligibility. Mr. STRATTON. I know many who got called up in the Korean con- flict, for example, reserves, wanted to stay on, as they had acquired 2' more years in the service, they said we might as well make a career out of it. This idea, perhaps in contrast to the other members of the committee,. seems to appeal to me, Mr. Secretary. The only thing that I can't understand is why your initial increase isn't a little bit more substan- tial; if you are really trying to do a job on the first enlistment it doesn't seem to me an increase from $2,000 to $2,400 is really very significant,, especially if you are going to knock off $2,000 on two or three succes- sive enlistments? Mr. PAUL. I think the difference, Mr. Stratton, is that in the case of the $2,400 he is paling it all at once. The $2,000 is the maximum now that a man can get throughout his whole career. He doesn't. realize anything like $2,000 on his first reenlistment. Mr. STRATTON. Oh, I see. In other words, what would be the maxi-- mum that he would get on his first enlistment? Mr. PAUL. IIe gets one month's basic pay times the number of years. of his second enlistment; $1,200, I think, is about the maximum he could get for that. Mr. STRATroN. Now, one other question, also with regard to this matter of oversea pay versus hardship pay. If I understand this correctly, you are proposing a kind of hardship pay in place of the oversea pay. Now, does this hardship pay also embrace the hazardous, duty pay, and you are going to have these two grades that would deal with both hazardous duty and hardship, or will this be over and above what you get for flight pay and submarine pay, and so on? Mr. PAUL. This is entirely different from hazardous duty pay.. Hazardous duty pay is related to the rigors that the man, himself, has. to undertake, the dangers he risks as a result of that duty. For ex- ample, flying an airplane, or being in a submarine. Unusual hardship pay refers to the conditions under which he lives.. There are an increasing number of men in our services today who, are in some specialties. For example, in the radar technician field, a man, if he is adept at a certain type of radar technique, is likely to end up in hardship posts a good deal of his career. Mr. STRATTON. Up on the top of Blue Mountain in the Adirondacks ? Mr. PAUL. For that reason we think there should be some gradation in compensation, in consideration of the degree of hardship a. person has to undertake during his career. In other words, I don't think, in certain technician grades, Mr. Bates, that it does necessarily even out at 30. Mr. BATES. That would be reflected in the rating, rather than the location? Mr. PAUL. Yes, sir. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 1454 Mr. Slim-1.?x. Your proposal is, there would be 25 percmt for very hard hardships, and 15 percent for not, so hard; is that correct? Mr. 1t-i. Yes, those would be the two categories. You could put it into more categories titan that. 1 believe Mr. Cordiner proposed a series of different categories of hardship, but we think that it would complicate the system to make it inure than two. Mr. STa.vrrox. What is the oversea pay now, is it 10 perevnt Mr. PALI.. It goes front $8 to $22.50 a month, depending rn the grade of the individual involved, J is the sante everywhete. other words. wherever he is. as long as he is overseas or at sea. :Mr. STRATTox. Thank you. Mr. lit.ANDronn. Mr. Chairman, may I suggest i hat we take two items, subsistence allowance and family separai ion allowance. and just briefly discuss them, and then at 4 o'clock take the Deputy Chad's of Staff for Personnel, Inbcause they ItaVe !Veil hero all day, and -tomorrow we have scheduled outside witnesses, and then perhaps tomorrow a Fier- noon we can go Imck to Mr. Paul, awl i the Deputy Chiefs mild be here tomorrow afternoon. we could continue this. Mr. flExNErr. That will be 5 o'clock every day. Arr. IiI.ANDFORD. Ten to twelve in the. morning. Mr. liENN arr. It is none, of my business, but I do not think this com- mittee ought to run on the basis of adjourning at live. Mr. 131?kxnrotto. The only point is to try to !)-et. the Deputy Chiefs' test nuttily. Mr. liENNETT. 1 (100 mind today. but it should not be permanent. Mr. ItivEas. I would like. thourrh, to :ret the Deputy Chiefs of Staffs this afternoon. We will not do it every day. We are not going to try to rush this bill, we will t ake our time and do it right. I f we can't finish it this week, we will finish it later. 11 we can't get the. Secretary tomorrow, we will get him to come on Thursday. Mr. PAT-L. ..kny time, Mr. Chairman. Mr, InvEns. I do want to .get the personnel chiefs before we adjourn this afternoon, then we won't try to do this all the, time, late at night. Of course, it would suit me, but I know my schedule is different from anybody else's. I will do what the committee wants to do, that is the main thing. Mr. Bt.:km-wont). Mr. Chairman, I would like to discuss briefly with Mr. Paul your suggestion concerning subsistence. As We know, there was a $29 a month increase ill subsi4tence allowance for officers in tins bill, and nothing for enlisted personnel. The third major part, of the mail that is coining into the committee, is the resentwent on the part of enlisted personnel that the subsistence allowance has been increased for offivers, and there is not lung in the. bill for enlisted personnel. I am informed by DOD the. cost or food has gone up 6.6 percent since 19:-.).2. Also.. I understand that the cost of food away from home, that is, the meals von buy in restaurants, has gone 26 per,!ent since 1952. -Presumably the subsistence for an officer is to cover his expenses when he eat M.g in a commissioned officers' mess or eating at a mess aboard a naval vessel. There is an interesting surcharge levied against, an officer when he eat sin an enlisted ITIVSS. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 1455 Basically, however, the officers subsistence allowance, which has undergone several changes over the years. It used to be that officers in certain grades received three subsistence allowances, up to as high as $66 a month for certain grades, but when he got to be a colonel, it dropped. There isn't any rhyme or reason in subsistence allowances. The $47.88, which appears to be such an incongruous figure in the law today, was a result of a 14-percent across-the-board increase in allow- ances which we agreed to in conference in 1952. I don't think that we can say correctly that it was based upon any set of figures or any- thing else except that 4 percent was alloted to the basic pay and 11 percent to subsistence and quarters allowance. But if we can assuine, however, that $47.88 is a reasonable figure, then the officer is really only entitled to an increase in the cost of food because presumably that is what he is paying for when he eats in a commissioned officers' mess or eats at a mess aboard a ship. Now, unfortunately, the enlisted man basically is subject to two types of rations. There are only 811 that get the third type so that is really meaningless. The enlisted man has traditionally been fur- nished food in a messhall, but he also is allowed to subsist out, that is, -subsist on his own, on what is known as a commuted ration. This means he is allowed to mess separately, and we have only allowed him the actual cost of the food to the Government. Now the actual cost of the food to the Government varies from year to year, and the last adjustment was made downward, I think, from $1.05 to $1.03. This means that when an enlisted man is allowed a commuted ration he draws $1.03 a day provided he does not eat any meals in the mess- hall. This, then, is what his wife uses as a cost figure for buying her food. However, if we translated the actual cost of feeding that man, am of the opinion that it would be considerably in excess of $1.03 a day. Now, for purposes of comparison, what we have done in the pro- posal before us here, as far as the chairman is concerned, is to take the $120 million, which was the amount that we set aside in this pro- posed pay increase for increasing subsistence allowances for officers, and divide that money up much more equitably than the Department proposal, insofar as enlisted men and officers are concerned. We increased the commuted ration and suggest it become a statutory ration of $1.25 a day. We increased the $257 that the man now gets if messing facilities are not available by 68 cents a day, which is 26 percent, because that is the increase in the cost of eating away from home. The subsistence allowance that was suggested in the Department proposal is a significant part of the junior officers' pay increase with- out which the increase would not approach the $100 figure Mr. Gorham was talking about, and the amount which, the junior officers said would be the amount of money that would make them think twice about making a career of the armed services. If we take away the entire $29, from the second lieutenant or the first lieutenant, and only give him the basic pay increase, then we fall short of the $100 increase per month, in increased, pay that the junior officer said would be impor- tant in his consideration when it came to a question of making a career of the service. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2oo5/oft4m : CIA-RDP66600403R000400280006-0 So the chairman has suggested, because the figures eon& out. to $129 million as opposed to $120 million for subsistence, that we increase ilia officers' subsistence front $1-7.88 to $51.00, that we establish a. statu- tory computed ration of $1,25, that we increase the $2.57 for messing. facilities, when they are not available, by 08 cents, and that we then give the junior officers, first and second lieutenants and WA's and a $15 a month across-the-board increase. This would cost :71;20026.000. Then increase all ot her basic pay scales for officers by $10, which comes to some $27 million. NOW, adding all of these figures up, the proposal that the chairman offers as a substitute collies to $120 million as opposed to the $120 million that the Department proposal submitted for only increasing the subsistence allowance of officers. This still will not bring the junior officer up to the point that the' Department thought was neceary from a take home pity viewpoint to. make it as attractive as the Department proposal. So the question here is, Should we do something with the enlisted man's subsistence allowance ? That is the first question. Would you comment on that, Mr. Secretary'? Mr. IZINTEns. Ask him why they were left out. Mr. PAUL. 'Well, with respect to the commuted ration change, Mr. Chairman, that is propose,d here, of $1.25 frankly, it is hard for me to say whether I think that is a good idea, or whether that is the right amount. This is an awfully hard figure to compute, and I don't know how you can arrive at a good figure. The figure of $1.03 a day is based on the cost of the ration, and, as I understood it, that has been the statutory requirement. So I am at a loss, Mr. Chairman, to comment specifically on the c,ommuted ration change. Mr. BLANDFORD. I am at an equal loss because all we did was multi- ply 800,000 by 22 cents, and came out with $54 million, when we added up all the other figures we came out to $129 million. The $129 million that is in the chairman's proposal is awfully close to the $120 million that you people were going to spend on officers alone. I think Mr. Gorham would agree that there is an added charge- -let's put it this way, if 800,000 enlisted men suddenly de- scended upon the messhalls of this country, and said take your com- muted ration, I don't want it. I will eat every meal in the mess hall, I think it would cost you considerably more than $1.03 a day to feed them. Mr. PAUL. Of course a lot more would be eating there at that. time. Tho average might go up or down, I don't know. Mr. HuorieEsToN. I think Mr. Paul is trying to answer this series of questions with a recommendation in the cold. Ik is coming back tomorrow afternoon. Why can't we ask him to give us his reaction at that time. It would be a little more meaningful. Mr. BLANDPORD. We can do the same thing with the rest of the provisions, also. Mr. Chairman. Mr. ITAany. I think it ini!rht he a :.zooil idea if we could have a little clearer understanding of the basis for doing some of these things. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/211:49A-RDP661300403R000400280006-0 Actually, we are working on a completely irrational approach to the proposition, even the thing which Mr. Blandford has suggested, we are taking $15, simply multiplying it with an arithmetical figure. That isn't very logical. You took a $77 figure there for your officers, not based on anything that is rational at all. It obviously was a device to try to increase somebody's take home pay without any logical basis for it at all. It is not related to the cost. Mr. RIVERS. Let me explain this to the committee. Mr. Hinny. I am talking about what Mr. Paul says. Mr. RIVERS. That is exactly the reaction Mr. Blandford and I got. ?We tried, after we had gotten all this legerdemain, or whatever we want to call it, we tried to figure out a way to say within that $120 million. The nearest we could get to it was S129 million. Ana I right, Mr. Blandford? MT. BLANDFORD. Yes, sir. Mr. Itivinns. Then we found out the junior officers were short changed. We are just trying to find out a way to stay close to the $120 million. Mr. HAnny. Mr. Chairman, I think we ought to back up and do this whole thin?. over. I think the approach that the Secretary has made in these subsistence allowances are just as cockeyed as it can be. I don't think we ought to undertake to use that as a device to give a lower officer grade an increase in base pay to which they are reason- ably entitled. Mr. RIVERS. You remember I said in my statement the committee will have to work it out. Mr. HAnny. I certainly agree; I am going to go to work on that $77 thing. Mr. RIVERS. Let's see if we can work out something a little better on this. Obviously, they don't want to take my suggestion, and I don't think we like theirs. Mr. Secretary, thank you. We will excuse you. Do you think he will be back tomorrow afternoon? Mr. BLAND-FORD. I think he will be here tomorrow morning also. MR. PAUL. Yes, sir. Mr. RIVERS. You are prepared to stay with us? Mr. PAUL. Yes, at any time. Mr. RavEns. General Vittrup, we will ask you to come up and say what you have to say on this. STATEMENT OF LT. GEN, RUSSELL L. VITTRUP, DEPUTY CHIEF OF STAFF FOR PERSONNEL, US. ARMY General VITTRUP. Mr. Chairman and members of the committee: I am happy to have the opportunity to appear before you in support of the Uniformed Services Pay Act of 1963. The Secretary and the Chief of Staff of the Army in their appear- ances before the House Armed Services Committee and the Depart- ment of Defense Subcommittee of the House Appropriations Commit- tee have already expressed their views on the importance of a pay raise for the military services. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/14) CIA-RDP66600403R000400280006-0 In this respect I know of no way to better emphasize the position of the Army than to quote from General Wheeler's testimony: "I should like to state briefly at this point that the Army is highly apprecia- tive that the Congress has always recognized In this scientific age that men are not machines, that high morale and esprit de corps do play an important part in operational effectiveness, and that investments in personnel benefits do ;itty divi- dends in the increased effectiveness, motivation, and usefulness of the individual. This recognition and understanding of the value of the individual to thy modern military service is baste to our continued development and improvement. lt Is plain, I think, that the Army's greatest resource is the professioaal-style soldier with the highly specialized skills needed to man the modern army. Our ability to attract, develop, motivate, and retain people of this caliber depends to a large extent on such things as troop housing, pay, benefits, family and bachelor quarters, and family life. I strongly support the need for a pay raise for the military, and believe there is agreement on this point generally. At the same time, I recognize that there will be some controversy as to the amount of the raise. I am content to leave decision on this in the calm:dile I ands of the Congress anti this committee, since there is no logical ,vay one eat equate salary received with the sacrifices which the nom and women itf the Army are making now and are prepared to make when called on. I krillg been in the, personnel business during the past couple of years aird having had the problem of trying to get a soldic-r with the right qualifications at the right place at the right time, particu- larly during the Berlin buildup, and the Cuban criss, and to concur- rently meet other high priority requireMents including Vietni;in and Korea, certainly makes me realize(lie great inqmrtance of not only getting but retaining, on a long-term basis, competent people. Cer- tainly adequate pay is a major factor in such retention. I ani sure that it is not necessary for me to undertake to amplify this point fort her with this committee. Mr. Chairman this concludes my statement. Mr. IZTVEIN. Thank you very much. Are there any questions? .Jr. I Noir-. I have just one, Mr. Chairman. General, I wonder if you can tell the committee what contribution your office or the Chief- of Staff (Alice or the Secretary of Army's Ake made in the, preparation of this pay legislation that has been before us. General Vryruce. I didn't get the question completely. Mr, I Nail-. I want to know what contribution you and the Army 111:0 to in the preparation of this bill we are considering. General Vilma-v. Actually, sir. as aas been indicated, this special committee niade most of the study in connection with the bill. The Army, the same as I believe the other services, made certain in- put, to that committee in data and little studies on the side that they requested. We also ?went over certain action officers, so to speak, and made presentation to them on certain things like the ability to retain certain people in certain categories, and such as that. V. I Nan% Did you advocate this particular approach, this ap- proach of the reenlistment, bonus? General ViTracr. To the best of my knowledge, we did-- Mr. HARDY. Don't you know whether the Army did or not, Gen- eral? This is your baby. This is your responsibility. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 :1311*-RDP661300403R000400280006-0 General Virritur. We did not advocate that particular "gimmick" so to speak Mr. Timmy. That is what I asked you. General VITTRUP (continuing). In the preparation of the study. However, at the time we had an opportunity to comment, we did not object. Mr. HARDY. So it was passive acquiescence? General VITTRUP. Sir, you said that. [Laughter.] Mr. BLANDFORD. Mr. Chairman, may I ask a question? General, you heard Mr. Rivers' comments on the proposed bill? General VITTRUP. Yes. Mr. BLANDFORD. Would you advocate the elimination of oversea pay? General VITTRUP. The position taken by the Army at that time was that we would not object to the elimination of the oversea and foreign duty pay, provided the remote duty pay was implemented to a com- parable and commensurate degree. Mr. BLANDFORD. Do you think $30 million for unusual hardship and $133 million for sea pay indicates that would be the way it would be implemented? General Virritur. I do not. Mr. HARDY. He knew we were going to take care of that, didn't you General? Mr. RIVERS. Did you read the statement I made this morning? General VirrRur. Yes, sir. Mr. Rivims. Do you agree with this last paragraph, where I said we had some professionals on this committee? General VITTRUP. Yes, sir. Mr. RIVERS. Thank you, General. Mr. STRATTON. May I ask the general a question? Mr. RIVERS. Excuse me. Mr. STRATTON. I didn't understand your answer to Mr. Bland- ford's question. You say you would have no objection to elimination of oversea pay, provided the pay given to those on remote stations was increased by a comparable figure. General VITTRUP. What I said, I believe, I can quote it exactly here: We have no objection to the elimination of sea and foreign duty pay in its current form. It should be dropped only if compensatory pay on a commensurate basis is added in the form of remote and isolated duty pay, and family separation allowance. In other words, to compensate; these two things are to a degree in the same category. Mr. STRATTON. You are saying Mr. BATES. You don't want to give it a different name? Mr. STRATTON. If I understood you correctly, what you are saying is you don't mind the elimination of the oversea pay provided those who are actually in remote stations are compensated accordingly on the basis of their hardship, is that correct? General VITTRUP. That is the idea. MT. STRATTON. NOW, the amount of money that is Spent in total doesn't have anything to do with it, does it? Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/9462)1 : CIA-RDP66600403R000400280006-0 There would be presumably fewer people who would be undergoing these actual hardships and would in fact he overseas, or would in -fact be at se-a, isn't that. correct ? General Vrrntur. Not necessarily. Mr. STRATroN. Not everybody as the chairman hinmelf pointed out eloquently in his statement?not everybody overseas could be said to be in a hardship stat-us. General V rrrace. No, sir; but. the percentages used in the compu- tation, either 15 or 25 percent. I would think would sort of up the ante on the amount of money involved?the number of people you have in Vietnam, for example. They are. drawing foreign duty pay now, but if they were given it 25-percent differential in pay, rather tilian the foreign duty, there would be some. difference in the pay ArhiCh they would receive, I would think, Mr. STRATTON. It is conceivable, is it not. even if 3 on were to give this higher pay, that the total munbers would be smaller, so therefore the total figure would lie less? I took .Mr. Mandford to suggest that because the totals were different, that. this had some significance which I didn't. quite understand, but you agreed wit ii his St a tement. General Virratie. My feeling is that he order of magnitude of $133 million versus $30 million leaves sound t lung left to be added to the $30 million. Mr. STRATroN. In oilier words, your idea is there ore so many people. who are in a hardship status, that if you were to give a larger bonus to those who are in a hardship status, the total amount expended would be pretty much the same? General Vrrntur. Pretty close. Mr. RivERs. Would you say that you would like for the committee to look at this pretty hard? General Virrniu r. Sir? Mr. RIVERS. Do you say you would like -for the committee to look at this whole deal very carefully'? General Vrrnunr. Yes, sir; I am sure they will. Mr. RivEas. You wouldn't object, would you? General Vrrriaur. No, sir. Mr. RIVERS. Don't let's give the man any more trouble. The first thing you know somebody is going to ask him how many people are in Vietnam, how long they have been in Vietnani, and under what arrangements they got there, and all these things, that the public doesn't generally know. Don't let's ask the General. We want to see him live a little longer. Mr. BENxErr. Section 312 of this bill, page 24, provides for spe- cial pay relative. to hostile fires, something comparable to combat pay. Do you favor inclusion of that? General Vrrnwir. Yes, sir. Mr. BENNETT. There is one section of this that does give me some concern, however, the overall section I am very much in favor of, but I have some question about subsection 4,. i which says, this pay will be paid when a person is captured by a hostile force, or become miss- ing under circumstances indicating hostile action was involved_ It. seems to me this might be subject to criticism of being; contrary to public policy to pity somebody I hat was ruptured. I am not saying it is throwing aspersions on anybody, hut I never heard of paying people for that event. a Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 : W1RDP661300403R000400280006-0 General VITTRUP. That is sure a possibility, sir. Mr. BENNETT. Wouldn't you look on this as a negative force. in this particular section? Do you have any comments you would like to make on that particular subject? General VITTRUP. I didn't register on that particular point, to be perfectly honest with you, when I looked at the bill. Mr. BENNETT. YOU do favor combat pay? General VITTRUP. Very definitely. I think the people that are being shot at, ought to get a little better shake than the others. Mr. RIVERS. Thank you, General. STATEMENT OF VICE ADM. W. R. SMEDBERG III, DEPUTY CHIEF OF NAVAL OPERATIONS (PERSONNEL AND NAVAL RESERVE) AND CHIEF OF NAVAL PERSONNEL Admiral SMEDBERG. Thank you, Mr. Chairman, gentlemen of the committee. I am, as you know, the Chief of Naval Personnel. I am also Chief of the Bureau of Naval Personnel. Then I am Deputy Chief of Naval Operations for Naval Personnel and the Naval Reserves. It is a great privilege to me to be able to testify before this com- mittee on behalf of a pay bill for the uniformed services; the first military pay bill since 1958. Since that time there has been an ad- justment in the allowance for quarters, but other important fields of basic pay, subsistence allowances, and hazardous duty incentive pays have not been increased. It is my belief that very few of the citizens of this country are aware of the degree to which the compensation received by the military man has declined relative to compensation in industry and in all other government activities since the military pay revision in 1958. During this period, military men have been subjected to financial pressures of two types. First, the pressure of a slow but steady in- crease in the cost of living totaling close to 5 percent. Secondly, the economic pressure generated by the continuing rise in compensation of employees at all levels in the overall national economy. This in- crease has been estimated at anywhere from 18 to 23 percent by various sources, even more in some areas known to me. The effect of these two pressures has been particularly severe on the Navy. Navy families, because of the nature of our calling, are for the most part concentrated in the areas where the cost of living is highest; namely, around the great cities and seaports of this country. The skill specialties which are so essential to the effective operation of our modern Navy are the very ones in the greatest demand in the civilian economy, and the ones for which the greatest financial inducements are offered. In addition to economic pressures, there is a third important factor which adversely affects the Navy's retention of skilled personnel. I refer to the long and frequent deployments of ships away from home ports, which is required by the Navy's role in the cold war, with re- sultant family separation. During calendar year 1961, the last year for which compiled statistics are available to me at the moment, the crews of three essential types of combatant ships in the U.S. Navy? carriers, cruisers, and destroyers?spent 70 percent or more nights 85066-63?No. 6 5 Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/H1221 : CIA-RDP66600403R000400280006-0 away from home. Durimr a 4-vettr tour of duty, days away iron' home for men in such ships totals approximately 3 years out tit) 4. The Nay v is also being squeezed by !he increasinii sophistication of our hardware vliiclt has intensified i 1.() need for longer and more expensive trainiwr of personnel before t !ley can become skilled in the operation and maintenance of our complex weal mus systems. Thus, failure to retain personnel beyond their first enlistinvit ill many of the technical ratings is a matter of continuing grave concern to me. As Chief of Naval Personnel, I am responsible to the Secretary of the Navy and the Chief of Naval Operations for providing trained per- sonnel for Mir ships and their weapons systems. Al:ty I give you an example taken from the records of a division of a ship engaged in missile research. As you know. a division is an important functional part of a ship's organization. This division of which I speak normally has 11 electronics tech- nicians ranging front third class (E-1) to (.1iief petty officer ( h-7). Duritnr the past Is months, the enlistments of 12 of the 1:1 have ex- pired. One chief electronics technician with 161/ years' service re- enlisted. The II who did not reenlist ramred in g.rade from third class t E-4) to chief petty officer I.; -7) with 4 s) years' service. We know that seven left for jobs in industry with a startitn, salary of ::46t)t) per month strataht time, plus overtime and an expense allow- ance. These men Were 11i1Vd by six different electronic.; firms, at least four of which are known t() have excellent ret irement, hospitalization, and insurance plans. I II IIIN' the last 2 years, .1% ilaY0 lost 19 machine accountants to industry. Frnfortunately, these, are not. isolated incidents. 'Ile number of skilled petty officers in (Tit ical ratings lias been subjected to a st catty erosion. Our shortage. of these petty offieers, as of On ober 1962. vin- over 32,000 in our critical ratings ta'Ione. We also have a substantial shortage of experienced officers, over 4.0uo, in the grados of lieutenant and lieutenant commander zdone. Admiral Anderson, in his statement before this full committee, spoke of the _Navy's challenging problem of rapid turnover of personnel. This is. of course, primarily due 10 our inability to reir.in sufficient numbers of our skilled technical personnel. The actual umnbers in- volved. are startling aIld Will be of intm.est to this committee. If ant sure. I want ti digress a, little from my text here because I see it (lc:esti:I. sax quite what I meant. I wanted to say the number involved in the I turnover of our personnel, the numbers are startlinlr, and will be, of interest to this con midi ee, I 'm sure. We are talking about a total turnover in this present fiscal year. 1963, of 290,000 officers and men who are either entering or leaving the Navy-144,2:52 entering and 14:),907 leaving. For fiscal 1964. we forecast that, under present conditions, the turnover will be about 300,000 officers and men. As this committee is well aware, the Armed Forces are proud that ours is a profession of service. But. office.ff, and men must have a reasonable wherewithal for themselves and their families. An adequate increase in pay is clearly imperative. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 1463 In my fourth year as Chief of Naval Personnel, based On experience gained under three different Secretaries of the Navy and the three Assistant Secretaries of Defense (Manpower) , I am convinced that, without such adequate recognition of the value of our officers and men, the Navy will be in serious straits in the next few years. am confident that today, as in the past, this committee will take the necessary action. I am grateful for the opportunity to testify. This completes my prepared statement, Mr. Chairman. I might say, sir, incidentally, because you have a lot of what I like to call gold, instead of brass here today, I have brought a second-class electronics technician with me who is in the back of the room. I will bring him every day I am here before your committee. I took him off the cruiser Long Beach. He is drawing the highest pro- ficiency pay authorized, $60 a month. He has a wife and three small children. no is the nuclear reactor console operator on the nuclear cruiser Long Beach, and I really brought him because I was shocked to the core when I read the other day in an official piece of paper that his opposite number in the SS Savannah, the only merchant nuclear ship, draws $14,000 a year, and his union is negotiating for a 50-percent increase for him. This young fellow gets $397 a month, with the highest proficiency pay we can give him. Thank you, sir. Mr. RIVERS. I have so many questions I want to ask, maybe I better let Mr. Hardy start off. Mr. HARDY. I wanted to ask the same question I asked General Vittrup, just what did your office, or the Secretary of Navy, con- tribute to this piece of legislation we have before us? A chili ral SMEDBERG. I will say first, sir, we contributed the same group of people to work with Mr. Gorham's committee. We made presentations outlining our problems. In the short time that we had to see the results of the committee, both our Secretary and Admiral Anderson protested vigorously against this career incentive payment system. The letters are a matter of record, I'm sure. Mr. f ARoy. The incentive reenlistment? Admiral SMEDBERG. This career incentive payment system we are talking about, the reenlistment bonus; yes, sir. Mr. STRATTON. Were very much against it, Admiral, did you say? Admiral SMEDBERG. Yes, sir, they expressed very strollg views against this proposal. Mr. STRArroN. The present system? Admiral SMEDBERG. No, sir; I'm talking about the proposed system. Mr. HARDY. The system that is contained in this bill, is that right? Admiral SMEDBERG. The system that is contained in the House bill, not Mr. Rivers' bill. Mr. HARDY. That is what I'm talking about, the House bill. Admiral SMEDBERG. Yes, sir. MI:. HARDY. I think, Mr. Chairman, we ought to have at least in our hearing record, a copy of these, so that we can understand fully the arguments that have been made on this point so that our record will be complete. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005{V1 : CIA-RDP66600403R000400280006-0 Mi'. RivEits. Can we get those, Mr. lilititlford .Mr. Bi.,,NDFoRD. I think it is really a question here of executive communications, which I don't like to raise, but I presume if. the com- mittee requested the Navy to submit. to it its recommendations con- (erning the career incentive payments that there will be little the Secretary of the Navy could do except to comply with the request. \Ii' IIiiy That is the request I am making, Mr. Chairman. I hope you will honor my request. Mr. RIVERS. Let's see if we can't get that. Mr. lin:km:wow). May I ask, Mr. Chairman, in that connection, if Admiral Smedberg thinks this bill, as written by DOD, %yin go it long way toward solving the Navy's problem? Mr. Ilium% In light of the procedure - BLANDFORD. Well, the DOD bill, as a whole.. Mr. Rivnits. I assumed Admiral Smedberg didn't recommend we discontinue the sea pay. Admiral SMEDBERG. To answer the first question first, sir, if I may, although the seniority is less. In my opinion I definitely feel that the problems of retention which we now face in the. Navy will continue to exist under this bill. Mr. BLANDEORD. You think that the chairman's proposal is an improvement? Admiral SMEDBERG. AS I see it I think the chairman's proposal is an improvement, sir. Mr. BLANDFORD. You think this will do more to help solve your problem of retention? Admiral Smr:Denizu. 1 think it will help more, sir. Mr. BLANDroaD. It won't solve. it? Admiral SMEDBERG. No, sir. Mr. BLANDFORD. Are you satisfied with the increases provided for officers? Admiral SMEDBERG. Personally, sir, I am not. Mr. BLANDroun. Do you think we have made sufficient increw-e for he junior officers? Admiral Su metilai. Personally I do Lot feel, sir, that---I don't want to volunteer in formation, I want to express my views, but I can't express my views--1 don't feel t hat I can volunteer information, sir. Mr: ILrmy. Then we will just have to give you a whole flock of questions, Admiral. I appreciate your situation. Admiral Sm Eminim. Yes, sir. Mr: IlLANDForm. Do you think the senior oilicers?lets put the ill [est ton this way: Do you feel the junior officers look to the increases provided here for the senior officers, and that this enters into their consideration as to whether they are going to make a career of the Navy ? Admiral Sur:Denim. I personally feel very definitely that is the case, particularly with the best young officers, the smartest ones, the ones we want most to keep. Mr. BLANDFORD. Obviously the Navy did not recommend the elimination of sea pay? Admiral S:11EDISERG. We did not, sir. Mr. Itivnits. Did you protest it.? Admiral SMEDBERG. We did, sir. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 IRINk-RDP661300403R000400280006-0 Mr. HARDY. If that was in writing, Mr. Chairman, I ask we have a copy of that, also. I think we need this in order to understand this better. Mr. RIVERS. If we can get that?Mr. Blandford, see if you can get that. Mr. Bates, do you have a question? Mr. BATES. Fiscal 1961, why such a large increase in the turnover? Admiral SMEDBERG. It is not a great deal larger, sir. It is only about 10,000 or 12,000 more, 290,000 to 300,000. Mr. BLANDFORD. That is in and out, both, sir. Admiral SiVIEDBERG. It is an in-and-out total. Mr. BATES. It is in and out, oh, all right. Admiral SI'vIEDBERG. It is a total of 10,000 in and out, or about 5,000 each way. Mr. BLANDFORD. Do you think, Admiral, the chairman's suggestion which has not been thoroughly discussed, but contained in his state- ment concerning a family separation allowance for all personnel who are truly separated from their families, and the illustration you have given here of a man going to sea, and being actually at sea 3 out of 4 years, do you think this family separation allowance the chairman has suggested would help to alleviate the situation? Admiral SmnneEno. Yes, sir, it is one of the finest things I have heard in a long time. Mr. BLANDFORD. You would endorse the family separation in the concept Mr. Rivers has proposed? Admiral SMEDBERG. Heartily, sir. Mr. RIVERS. I wish we had time to read the letter here that was handed to me by somebody. If the committee will give me a second, I would like to read a little bit of it. Mr. IIAney. Second. Mr. RIVERS. Read starting right here [indicating]. Read starting at No. 1, and read on through there. You spoke of that electronics young man on Long Beach. Admiral SMEDBERG. Yes, sir, who is here now. Mr. RIVERS. HOW he compared with a man on the SS Savannah, NSS Admiral S1VIEDBERG. No, it is the SS, Steamship Savannah. i Mr. RIVERS. This letter s from a captain, comparing himself with a civil service employee. Admiral SAIEDBERG. Yes, sir. Mr. RIVERS. I want you to hear that. Read that. Mr. BLANDFORD reading: "In view of the recent pay increases for professional civil service personnel, the small amount of information that has leaked out with respect to the potential military pay increases has been most disquieting, in fact, almost insulting. At the comparable service position level, civil service personnel will receive approximately a 20-percent pay increase by January 1, 1964. The only infor- mation I have been able to gather with respect to our military pay situation ostensibly because Secretary McNamara has maintained a veil of secrecy over this matter is that captain will be recommended for a pay increase of about $45 per month. If this is true, then I find the entire pay situation insulting with respect to the military-civilian relationships in our activities. I am not against the pay increases for our civilian engineers. Their increases have made their pay somewhat equitable with their commercial counterparts Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/213 : CIA-RDP66600403R000400280006-0 * GS -11 and above civilian personnel making up to approximately $4,O00 more per year than I will be earning including allowances as of January 1, 1964. consider this to be a most unhealthy command and management situation. I feel that I ctintribute just as much technically and considerably more in ad- ministration and deeisionmaking on technical matters as any civilian engineer in a certain laboratory. I am sure that this situation provaik in other labora- tories and activities of the Navy, and in ships, perhaps to even a greater degree. My pride has been wounded sorely and the pride is about all we have left in our profession. I would take such retirement action most reluctantly since I have loved the Navy and it has been fair and just with me in the past. Gf course, l as an individual don't really count for much in the Navy but I feel there must be hundreds more who are going to have the same thoughts and conclusions and the Navy and Government cannot afford to lose our collective services. I request this matter be brought to the attention of those in uniform who are working with the pay study groups and/or the Secretary If the Navy. Mr. IttvEits. This is a thing that is on my mind. If we look at these things as a slide rule proposition. anti crudirw it solely to rgures, they talk about quality control, we don't have any. We are dealing wit it human beings, and there is no suffi thing as slide ride thiaking. The slide rule thinking is bad for morale. We have so frequently used uniform services up and down the breadth and length of this country. I lived in the shadow of a naval shipyard all Inv life. I used to work in a naval shipyard. We don't like to seecleavwe "s, latween civilian personnel and (Aver personnel. To let these things get so far out of line is disturbing me. It is destructive in my opinion, of something that you can't buy with money. If one dedicates one's self, and realizes someone is overlooking this, IL is solnet hing you can't put your hand on, but it is a tra!dc thing. It is a tragic thing.. You can't evaluate these people. If they are losing interest and wanting to get mit all over lie lot, front the lowest to the highest. It must bring you the sante heartache that I feel. You must, see a "j ill ion- cases. I have got ten so many. Mr. Blandford is my repository. I don't know how many you get. Admiral SA! tamEtio. You have expressed my personal thoughts far better than I could, Mr. Chairman. In my own Bureau, and in all of our bo menus, we are having I his same sit nation. Our division dii eetors !low have many people working for them who are drawing more money than they who have the full responsibility and the ant horny for all the decisions and judgments that are made in t he division. Mr. 1:ivEtts. '[los is what is dist urbim, ine. When I vompilod nv statement ,1 put it in. NIr. I I Atinv. 1 was thinking along this line, Mr. Chairman. It is an ext remelv serious sit tuition, and I am wondering what we can do from it practical standpoint in view of the pay raises that have been ap- proved, I believe another one goes into effect soon----in view or I mi tem, I think most of us who are realists believe there is no prospect. of getting a military pav bill that would twerconw t his inversion sit _union hat you have I wen talking about. Now, you are bound to have a rather rough morale sit nation. where you have military personnel and ci% ilian personnel working in the same area. perhaps the military personnel even supervising the civilian personnel, and the civilian personnel getting considerably more n pay titan the military. I don't know what the answer to it is. I think it perhaps obviously would not be a provision for prohibit ?irg the employment of a civilian Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/211:47A-RDP661300403R000400280006-0 at a higher pay rate than the military supervisor, but there must be some way that we can approach this. Do you have any suggestion? Admiral SMEDBERG. I can only say, sir, it is my personal conviction that if this is not corrected, it is going to be very bad for the military services. Mr. BLANDFORD. Mr. Chairman, I think we should bear in mind that we have a serious imbalance, or have had in the past a serious imbalance in the armed services personnelwise. One of the great problems that we always face in a pay bill is that we separate the concept of pay from the concept of career management. Perhaps the ideal system would be one day to write a pay bill and a promotion bill simultaneously. Then you would have your attrition rates established by law. About the time you get an attrition rate established by law, you come across a situation such as Korea or the Berlin crisis. Then your attrition system falls by the wayside. One of the problems that we face, which was brought to my attention the other day, that there was a recommendation at one time in 1958 that if the 1958 Day increase were to be put into effect, then they would reduce the numoer of colonels and captains serving on active duty. This has not been possible, because of a variety of things that have come up since that time. Then we had to pass a hump bill to get rid of captains, in order to provide promotion opportunitiesi for com- manders then we had to force out commanders, n order to get pro- motion opportunities for lieutenant commanders. On the one hand we talk about an officer who retires because his civil service counterpart is earning more money, and on the other hand, we talk about forcing out a commander who wants to stay be- cause there isn't any place in the promotion system for him. What I am saying is that when you combine pay and personnel management together, and try to consider these as isolated parts of the whole, you just don't come up with a really intelligent approach to this matter. I believe when the Bolte proposal is considered and thoroughly analyzed and we get together, that is, the services come closer to- (Yether, on uniform promotion procedures, that thereafter, someone is going to have to sit down and write a pay bill commensurate with promotion opportunities. It is going to have to be tied hand-in-glove. Mr. RivEas. Of course, Mr. Bates makes the observation that the rate by which obsolenscence has overtaken the fleet, this deficiency in your personnel will be all right, because you are not going to have any fleet to put them on anyway. We ought to wake somebody up and get this fleet going. I just don't know what is going to happen, frankly. I am just as indecisive as the rest of you. The only thing I know, is that our fleet is getting obsolete much faster than we modernize. We can add up 2 and 2. Your personnel is in the same situation. I have been in Congress 23 years, and I never have heard anybody discuss, in the annual pay increases for the Post Office employees? I never hear anybody worry about the budget. They pick out the thing, and away we go. Mr. BATES. I wonder why that is, Mr. Chairman? Mr. RivEas. You know why that is. I never heard anybody worry about the budget in that bill. They just give a raise, and that is it. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/042g CIA-RDP66600403R000400280006-0 But here we are with people who arc charged with the responsibility for the security of this country proseribed by a budget figure, and it is disturbing. That is why this letter was real I, that is why I wanted this letter read here. Mr. Multifold., what will they make: these civilian employees ? Mr. IinAxDrom). Actually, the figure of about $:.1.,100, a GS--14 will make betweeen $3,000 and $3.500 room than 0-6. Now you can sub- tract from that the retirement feature, because of the fact that the civil service individual must. contribute toward his own retirement. don't want. to get into that aspect of it, because you would ae here forever when you start discussing who contributes most or who has the better system. But. you can subtract, about 61I percent. from that figure of his total pay and you will find that the G5-1-1.-- -and there used to be relatively few of them, and I have the lig,aires. we have many inure. GS-14, n, and it;, now?there is about a $2,50H-a-year difference, if you consider many factors, and you can argue that figure one way or the other. We try to make this apply to 15,00to 0-- Ws, for example. It s obvi- ous there aren't 15,000 0- 6's who have 6 or S 14's working for them. We probably have some 0-6's, who probably have a GS-3 working for them . .am not being critical of this at all, Admiral. What I mean is, in imlitary pay system, as in a Government. pay system, the good man, the average num, and the fairly borderline case, and the outstanding man, all draw the. same pay. That. is why it is impossible in my opinion to ever try to compare military pay wit 11 industry. In industry you promote the man and make him president of the Ford Motor ( 'o., t heii inake him Secretary of I )efeitse, if he is a really eapable individual. We have below-the-zone selections. Tkre do have selection 11.1) to the grade of captain, and then we have selection on to admiral. We, try to do this on a. best, fitted system. We try to work in a system that will produce the best men for the jobs. but we also know we have to use promotion in order to get people pay increases. The difficulty here. is that you have got lieutenant colonels who are doing fatalistic jolts. In industry they would probably be making $:;5,00() a year. On the other hand, you undoubtedly have 0-5's who are ruining small post exchanges some place, who would do well if they got $6.000 a ear in a comparable position in industry. This just happens to be the. luck of the draw, as to where a man is serving at the. time. his next assignment might. put him in an im- portant position. This is all part of the military system. This is why the comparisons are so_ unfortunate, because the man that sees this, the man who has the GS-1.-I working for him, is the man who at that moment is unhappy, and he is the one who applies for retin2ment. Mr. RIVERS. We don't want to get too much into philosophy here. Mr. Stratton. Mr. STRATrox. I would like to get the Admiral's point. 0' view here. It is my understanding that you like to answer questions, rather than express your point of view. Admiral, do I take it that you favor this bill or you are against- I I. personally? Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21144A-RDP66600403R000400280006-0 Admiral SMEDBERG. I support a pay bill, sir. Mr. STRATTON. Well, now, is your recommendation for a higher increase? Admiral SMEDBERG. Yes, sir. Mr. STRATTON. What was the difference between your recommenda- tion and the bill? Admiral SMEDBERG. Well, I would say roughly, where this bill is ap- proximately 13 percent, or the bill is 11 percent, we honestly can't find where that 14 percent is I would say that the minimum neces- sary to bring the military man back into a comparable level today in the economy of the United States would be something on the order of 23 percent, which is just what the civil service has had in the last 41/2 years. We need comparability in government. I am not worried, myself, about the comparability in industry. I agree that we can't have that. Mr. STRATTON. I don't want the philosophy of it, Admiral, I think we all agree on that, and I think we also recognize this is probably an impossible goal. I want to know what the Navy recommended. Did you recommend a 23-percent increase? Admiral SMEDBERG. No, sir; we did not make a specific percentage or dollar increase. Mr. STRATTON. That would be what you would recommend? Admiral SMEDBERG. Yes, sir. This is my own personal opinion. Mr. STRATTON. Is this a straight across the board, or do you disagree with the way in which this thing is allocated between the various ranks? Admiral SMEDBERG. It would not be in my opinion straight across the board, sir. I think that the attention that has been given to the middle-grade officers is excellent. I think that that is going to correct some of our problems in the salary area. The lieutenant (junior grade), the lieutenant, and lieutenant commander. I think the ensign is woefully short, in comparison with all his fellows. His increase is barely that of the cost-of-living increase since he had his last raise 10 years ago. I feel that the enlisted middle grades are getting about one-half of what they need to have to live decently. Where they are given $20 to $35 a month, it should be $40, $50, or $60 a month, in my opinion, to enable them to live decently like Americans. Mr. STRATroN. What about the higher ranks? Admiral SMEDBERG. I honestly -feel the smartest young man will not be very much attracted by the salaries of the higher grades. The percent increase of the higher grades, as I read it, is equal to or just less than the cost-of-living increase during the east 41/2 years. Mr. STRATTON. You don't recommend?you still don't recommend a flat increase in each particular grade? Admiral SMEDBERG. No, sir. I think this committee is far better equipped to do that than I. Mr. STRATTON. Well, I am sure the other members are, but I am just one member. I don't know how we can do it without getting rec- ommendations from those who deal with this kind of thing. It would seem to me any pay bill would be an almost impossible job. I would like to get your recommendation, Admiral, with respect to the Navy. How much should ?we give the admiral, how much the Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/27Q CIA-RDP661300403R000400280006-0 captains, how much should we give the aiyrent ice seaman, 011(1 so on ? It seems to inc this would be helpful, Mr. (. itairman. Mr. IIIvEns. I don't think the Admit al made any such proposal. Admiral SmEnnEno. No, sir. Mr. STRArrox. I am 1 rying ill girt. hint an opportunity to uresent ii io us. Perhaps he could !rive it for the record. Mr. RivEns. 1)0 you have an v such st tidies ! Adndrid SAIKIMERii, I lave NV(' IldieS! Mr. Ili vEas. l lave you any such list of stig!rest ions he asked for A dllitral SAY EmtEuc. I have not made up ;1.. del ailed par bill no, sir. We. have very definite ideas, some of which I just s!ated in response to quest ions. r. STiLkyruti. 11.(.1 llw tmv to pursue some or these oilier ihiiiis then. A(111111111, to F ry to .0-et .vour thinking. This is for "ltidance for me. It is all very well fO o i ilk ahout how inadequate t he bill is and it is all very well, of course, to talk about how t here is no dollar rum re, but we are talking about I ax cuts and t rying to reduce the expendit ores to !Meet it. and it does Seen] to Me we Int ye to be as responsible on this committee Os any other commit tee is. What about this reenlistment bonu-z? Do I understand Hilt von aro in favor of the present system, and you don't reeuninnoid any chanpv in ii? Admiral SmEnttruG. No, sir that isnot correct. STaArrux. What elnuvre would von recommend A Sum I personally feel that the present proposil uvill not increase t ret ent ion rate of the men we need to kt,li with us. Mr. STa.vrrox. Would you oppose any increase in the reenlistment bonus f(o. the first reenlistment as a method of I rvi 1.e. to attr.,.et the men that von want /. Admiral SNIT:Dm:1m. I personally feel, sir, that the present reenlist- ment system has been very effect he in ratings, other than the (Tit ical ratings. For the crit ical rat iffo-s, it is obvious to its we have to offer 0 lot more than ha VP been ()Grit-1p% or we wouldn't be :12,000 petty racers sl tort in those critical ratings. 'We frankly feel that a bonus such as the Dept it mniemr of De feme pro- poses superimposed on the present bonuses might do the trick. Mr. STRAryrox. Superimposed on it, rather than substi t ut Ni for! Admiral SmEnnEao. Yes. sir. For instance, we mn't honestly see that 'there is much at t rani ion for a radarman-second to know that he can ,01,( sc,4titt Wlivn today lie knows he ran get $.2.000. Now it is I Inc he can't get it all at once, hot I am not cell ;ii ii that ?-ett ing it all at Onee is the alt riot ivy thing that it is porported to be. We think that t he reason we have a 90-percent or bet ter reenlisment late a ft er the first reenlistment. and we do not have that in our critical rat imrs, the men who do reenlist, and they are splendid people, reenlist about 80 percent for a career. Mr. RivEas. Al that point. Mr. Stratton. may I interject here ? If we were to implement he P-3 that would give him SI 50 a month. That is $1,800 a year. A dm iral SMEDRERG. Yes, sir. Mr. RIVERS. That $2.400 is a lump payment, as Mr. hardy says, he may wake up tomorrow morning and say, I spent all my money, I bought that broken-down Ford. or what ver it is. now 1 :Lin hooked for 4 more years. Whatever it is, tomorrow it is all .?.one. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/2114K-RDP661300403R000400280006-0 Under this P-3, he woul.d get $150 a month, and something to go along with. I suspect that is why I made my statement. We ought to give that a fairer try. Admiral SMEDBERG. Were you telling me or asking me, Mr. Chair- man? I am not quite certain. Mr. RIVERS. If I started telling you, I would be speaking to the wrong man. Did you hear what I said? Admiral SMEDBERG. I did hear what you said, sir. I am in a bit of quandary, because I have supported, for some years, a greatly in- creased "pro" pay for the Navy. And that was after coming from command of the 1st Fleet 2d Fleet, 4 years ago, when I was against it. In the fleet. T was against because there was great bitterness, and there still is today, among the enlisted men. For example, two petty officers, the boatswains mate- second, who comes off the forecastle after 18 hours in freezing weather, comes down and sees the electronics technician-second, working in the warm compartment and drawing more than he does every pay day.. It is a constant, every other week, irritation to that man to see this other fellow whom he thinks isn't working as hard as he is, getting more pay. There are two sides to this question, Mr. Chairman. I personally feel that the bonus at the point, of reenlistment is preferable because that is a one-shot deal, it is not known to everybody else, really. It is between the Government, and it isn't brought to light in the ship every 2 weeks at the pay table. That is my philosophy. Mr. RIVERS. As against the full implementation of the P-3? or P-2, or P-i ? Admiral SMEDIVERG. Yes, sir. I feel the "pro" pay is a very valuable tool if properly used, and have stated so during the past over 3 years. Mr. BLANDFORD. Isn't that the answer, Admiral? Admiral SMEDBERG. It is hard to say what the answer is, sir. Mr. S'17RAVION. I would like to return to my line of questioning. Admiral, do I understand you to say, then, that the implementation of the Department's recommendation with regard to eliminating the bonus on the second and subsequent reenlistments would, in your opinion, jeopardize the reenlistment rate for the Navy? Admiral SMEDBERG. Personally, I think it would harm it, sir. And I think it fails to recognize something that I think is tremendously important. And that is, that all men of high mental caliber are not necessarily in the critical skills, nor does loyalty, dedication to duty, and effectiveness, necessarily go hand in hand with skills and mental capacity. We have perfectly wonderful men in this Navy in other than the critical ratings, and we need them?all of them. We can't lose them by taking away from them what they have today. Mr. STRATTON. How do we take care of the gentleman that you brought with you here, other than just a general pay increase? Admiral SMEDBERG. The reason I brought him, sir, was in the thought that perhaps at some time in this hearing you might like to ask him a question. He was picked from the cruiser _Long' Beach. I asked that a man with a wife and several children who was a nuclear reactor operator be sent down here. :1 asked him when he came into my office, how much more money per month would he feel be would need to make the Navy a career. He hasn't made up his mind yet. He is in has 7th year. He is drawing top "pro" pay. He said he felt Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/V2: CIA-RDP66600403R000400280006-0 that $100 a month might make the difference to him. lie is right here, you could ask him, if you have time later. I will keep him as long as this committee would like to have me keep him available. Mr. STRATTON. May I ask just one more question, Admiral, and that is, with respect to the recommendations on retired personnel, Do you favor that part of the bill? Admiral &MOBERG. After a long struggle, sir, I have come to the reluctant conclusion that that, is the best solution in the long-range interests of the country. I'm going to be one of the people who will someday perhaps be inclined to say, in my old-age retirement, well, these fellows are getting all this extra money, but I don't think now that I will honestly think I am entitled to it. Mr. STRATTON. Thank you, Admiral. Mr. thvnits. Mr. Long? Mr. Lox?. Admiral, will this bill, inadequate as it is, in your opin- ion, improve morale_ and increase enlistment ? Admiral SMEDBERG. Yes, sir, it is bound to improve morale. I don't honestly feel it will increase retention, and I say retention, sir, because frankly we get enough enlistments. Our failure is not iii Mr. LONG. I meant reenlistment. Admiral &MOBERG. Yes, sir, reenlistment. It will not encourage, in my opinion, rcenlistments beyond?in the critical ratings. The differential is too great, sir. Mr. LONG. On chart 1, on the Secretary of Defense's report, ()L. page 4, there are a whole bunch of reenlistment rates here for first-term reg- ulars, these puzzle. Inc a little bit. I wondered if you could clear Up that puzzle possibly, Admiral. I hink the last pay increase went into effect in 1958 ? Admiral SMEDBERG. Yes, sir. Mr. LONG. Do you have that table there, sir? Admiral &MOBERG. No, sir, I don't. Does somebody have the table? 1 have it now, sir. Mr, LoxG. It shows as you mi!rht expect in 1959 there was an increase in reenlistment rates for first-term regulars, that is what you might expect as a result of the increased pay. But the thing: that puzzles me is that in 1960, the year following that, reenlistment rates went way down, and as a matter of fact, the average of 19")9 and l900 then is substantially lower, 25.6 percent, than it was in (958. That puzzles me. Just why that sharp decline in reenlist- ment, rates from 1959 to 1960 occurred. after that rather encourigin7 rise. And die!' I am further puzzled by the fact that, from flail on. in 1961-62, there is an increase in the reenlistment rate in pract ieallv every category, occupational category, plthough I gather that there has been no substantial improvement in pay, or incentives. These rates baffle me a little bit. 1 have a feeling we perhaps ought to know what the reason for them is, to understand possibly what effect the proposed pay bill might have. Admiral SmEnenact. I can only say, Mr. Long, these, of courso, are all I he services. LoNc. That is right. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 : pegRDP66B00403R000400280006-0 Admiral SMEDBERG. And I have compared these figures with my own in the Navy. They are somewhat alike. Just for your own information, my own Navy figures in 1959?or take 1958?were 22.6, first-term reenlistment. Then 1959 was 23.4, a slight drop in 1960, to 21.3, then at 27.8 in .1961, a 28.3 in 1962. Mr. LONG. Yes. Admiral SMEDBERG. We are very proud of those increases in the face of the situation. Mr. LONG. I wonder how you can explain them in view of the fact that the pay hasn't really?how could you explain that drop in 1960, which for all three services is very severe' and extends to every single occupational category, and then second, how would you explain the improvement since then? Admiral SMEDBERG. I find it impossible to explain it, sir. I have asked my people that question. We are trying to find the answer. We don't know it. Mr. BLANDFORD. I think I might be able to suggest to you, Dr. Long, some of the possibilities. You will find that your reenlistment rates will have something to do with your enlistment rates and in the years when they occur; for example, following the pay increases in 1952, 1955, 1958. Now you will notice that 1962 figure, the civilians got a pay increase, and the theory is when the civilians are getting a pay increase the military cannot be too far behind. In this case they are, but in 1962, people started talking about a pay increase, and that is when this pay study started. So therefore, you have a slight increase in reenlistment rates in 1962. Now, you will find that your 1960 rates probably reflect the 1956 enlistment, you see. By that time the effects of the 1955 pay increase had worn off, so that you didn't have quite as many people enlisting for the 4-year period. Mr. LONG. Kind of an echo affair. Mr. BLANDFORD. These are echos, plus the fact you get the Berlin crisis in here in 1961. That enters into it. You have the Lebanon crisis in 1958. All of these things are factors in enlistment rates, and therefore they are a factor also in reenlistment rates. Mr. LONG. Do you find your reenlistment rates are very well cor- related with the unemployment rate? Mr. RIVERS. That is what I was going to say, the economic picture affects it some in some areas? Admiral SMEDBERG. It is hard for me to say, sir, as far as I can see the employment in this country for the people we want is very good. Mr. LONG. Yes. Admiral SMEDBERG. And they are siphoning our people from us. Mr. RIVERS. Has this been true for a long time? Admiral SMEDBERG. It has been true for several years, sir, and it is getting more and more true as the offers from industry to our people increase in size. Mr. BLANDFORD. I think the most significant figure, Mr. Chairman, and Dr. Long, is to look at the 1959 improvement over 1958. This is an indication of what happens when you come up with an "honest to God" pay increase. Mr. LONG. That is right, I pointed that out. Mr. BLANDFORD. 1958 was a very good pay increase. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/1044j1 : CIA-RDP66600403R000400280006-0 ),II'. 'Atm:. That was very encouraging, tts I say, hut the dropott in 111(t) occurred. I wonder if we will look for something similarly dis- couraging alter t his pay increase. llivEns. Thank you very much, Admiral. We will start oil witii General Stone tomorrow morning, and ask you to come then. We will also hear frni, General Diamond, General 'Ferry. Mr. BLANDFono. Dr. Diamond is represent ing General Terry. Mr. ItivEns. .ktliniral, have the young man stay around here a few da vs. We will meet again tomorrow ttt In o'clock. ( Whereupon, at 5 p.m., the committee. recessed to reconvene at 10 a.m., Wednesday, February 27, 19(13.) HULSE ( REPRE:sENTATI VES, COMMITTEE ON A IIMED SERV :CES, St-ecommrri FA-. No, 1, Wt./ !on. O.C.. 1' t:how-1.y 27., The subcommittee met, purstumt to adjournment, at 1 0:12 a.m., in romn 1:I-A, Old House Office Building, lion. L. Mendel Riveis (chair- man of the stilicommittN.` ) presiding. Mr. llivrns. Let the committee come to order. I want to announce that we will he unable to meet this aftermon. We, have business on the floor. The chatrn tan wants us to be on the floor at that t inn'. So those we cannot hear this morning, and who are scheduled, if you will he here tomorrow morning promptly at Ill o'clock Ave will take up exact ly where we left off. 1st here anything else f BLANtwonn. NO. would like to 1nsert in the record at this point a letter front the deart etnerit its front 11w College of Engineering.. I liivei511v of Texas, concern n1p. salary levels of professional engineers. (The letter is as follows : ) Congressman lloNiElt ii (MSC Offire Waxhinyton, .lEAR CONGREss M I N THo(INliEltItti : Ii ter has been engaged in profeisional en4ineering for more than rit) years- -sometimes for industry, sometimes t'or the Government and again fur university-level engineering education. This hits int hided personnel selection for the Intcritational Harvester Co., the Tetinessce Valley Authority- at Knoxville, the U.S. Embassy at Lundifit under civil .--erviee, the United Nations at Ankara. Turkey, and the faculties at the University of Tennessee and the I Tniversity of Texas. I ne principle those of us involved in such engineering and scientific sa lection needs to be emphasized. In closely related assignments in engineering at each level, a high degree of uniformity must he maintained. This is especially true in Federal offerings otherwise the harmony and efficiency as between services disintegrate out of all proportion to the saving made by the lower paid units of such services. Currently, there is it hill proposing a much larger pay increase for tile civil service personnel of the United States than for the military personnel ie?isigned. to (I() mostly civilian duty especially in the fields of medicine, sanitary engi- neering. public health engineering and indus7rial hygiene. For strategic reasons these men must he prepared to go anywhere or any place under U.S. orders but during peacetime are assigned to civil duties In sewerage, health water suPPly and inedival services in States, cities. hospitals and g,)vernment research laboratories. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21149A-RDP661300403R000400280006-0 The inconsistency of different levels of compensation for the same or similar professional engineering assignments is most noticeable when the recruiting agents of the several U.S. services visit our engineering and scientific colleges and universities. It is not possible for an engineering faculty adviser to give the interviewed graduates at the bachelors, masters, or doctorate grades a justified reason for one U.S. service to have one pay scale and other divisions to have a higher or lower scale. I would recommend that H.R. 3006 be amended to place the salary levels of men of professional engineering and scientific level on a comparative and equi- table basis whether employed by the Civil Service, the Tennessee Valley Author- ity or the civil activities divisions of the Armed Forces. Sincerely yours, W. R. WOOLEICII, Dean Emeritus and Professor of Mechanical Engineering, College of Engineering, the University of Texas. Mr. RIVERS. Just before we call the first witness, I want to enter- tain Mr. Hardy's request that you obtain from the DOD the position of each Department on this proposal transmitted to Congress. Mr. ILkuoy Mr. Chairman, I would, if you don't mind, prefer that we defer putting that request in the record until after we had had General Stone's testimony, because there are certain aspects of it I think may clear up some of the data we need. Mr. RIVERS. We will defer that. We will begin this morning by hearing Lt. Gen. William S. Stone, Deputy Chief of Staff of the Air Force for Personnel. General Stone, we will be pleased to hear from you at this time. You may proceed, General Stone. STATEMENT OF LT. GEN. WILLIAM S. STONE, DEPUTY CHIEF OF STAFF, PERSONNEL, HEADQUARTERS, U.S. AIR FORCE General STONE. Mr. Chairman and members of the committee, it is a pleasure to appear before you today to discuss the matter of mili- tary pay and allowances. This is my ...first opportunity to testify be- fore your committee since my recent return to the Pentagon. It is reassuring to see several familiar faces and to recall the many pieces of legislation beneatinir military personnel which this commit- tee has developed and sponsored. It is particularly gratifying to renew my acquaintance with several members of this committee and to acknowledge the collective experience, ability, and judgment of all the members. President Kennedy, in his message accompanying the Federal Serv- ice pay reform bill, made quite clear his hope that Federal employees would be paid at a rate comparable to industry. I-lis desire was carried out by Congress insofar as civil service pay is concerned. I suggest that the military pay should also be comparable to industry, and certainly not less so than civil service pay. Please notice, I do not say equal, but comparable. In the balance of my statement I will make frequent use of the civil service pay rates only as a means of making meaningful com- parisons with other civil pay rates. i The Air Force joins n prior testimony advocating the need for a military pay raise. From a philosophical standpoint, I believe that military people should always be compensated at a level which im- plicitly recognizes the military profession as a dignified, respected, Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/176: CIA-RDP66600403R000400280006-0 and honorable one. As the users of some of the most expensive and complicated military systems and hardware, it is also vitally im- portant that, we attract and retain the highest possible caliber of peo- ple. We cannot ask our people to continue to live under conditions substantially inferior to those enjoyed by personnel of like ability and experience in the civilian segment of our economy. The Air Force agrees that the goals of the pay proposal before your committee will help to achieve both of these ends. In attempt ing to achieve those goals, however, we must face up to the fact that a period of 1 i years between pay adjustments has been too long. The gap but \\*Veil military and other types of oay has become too wide to be overcome easily. Still, it must be overcome, or at least significantly reduced. I have appended a series of charts to this statement and I would like to refer now to the first one. The source of the first chart is the Endicott Survey published in the Management Record of the National Industrial Conference Board. It covers 352 college campuses, surveyed by 218 companies. You see that the average college engineering graduate is made a more attrac- t ik-e offer than we can make and that the take-home pay differences exist throughout the years. might add parenthetically, that these 218 companies hired about 15,000 college graduates in 1962, which is about the annual income, input, of new officers into the Air Force each year. The proposed pay rate for a second lieutenant may not attract the high quality young man we must have in the Air Force to operate and maintain the complex systems we employ. The sharp young man we need sees that the starting military iialary is lower than what he could get in civilian life-- he knows that law will set forth his promotion opportunities and his pay. He looks at the future. lie knows that in the military he will be required to make frequent moves. that he will often be separated from his family; that he may be required to serve in isolated and unpleasant places. On balance, it isn't a very attractive career picture when eompared 70 the relative stability and higher pay of civilan pursuits. Recent letters requesting retirement from officers clearly pointed out their devotion to the military life, their wholehearted willingness to serve and the satisfactions they obtain from serving their country in uniform. The tenor of these letters ran be easily summarized simply io the statement : they can't afford to stay with us. Of course, the young man we want, faces a milim ary obligation. However, he may join the National Guard and not have to leave home, or, he can be inducted and be out in 2 years. If, however, he elects to become an officer in the Air Force, he is obligated for 4 or 5 years. Many are taking a chance on the draft. If our pay rates do not be- come more comparable, we must expect to attract even fewer good people than at present. Charts 2 and 3 are illustrative of imbalances that have taken place since 1949. These charts do not intend to infer that the civilian and military grades are equal?rather, they tend to illustrate how the pay rates have grown further apart as the years have passed. This is true of all civil service pay rates--and because the civil service pay Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/214nIA-RDP661300403R000400280006-0 rates are now comparable to industry; these charts illustrate clearly the lack of comparability of military pay?even with the proposed in- crease you are now considering. The upshot of this situation is that we have retention problems. For example, in fiscal year 1962 we needed 13,000 reenlistments in technical skilled fields to meet our requirements. We actually ob- tained about VT percent of our desired input; for fiscal year 1963 we need 17,000 reenlistrnents in critical skills. At this time it looks as if we will obtain approximately 60 percent of our desired input and this even in light of the normal rise in reenlistment rates just prior to a pay bill. Anything less than 100 percent of our objective is of course unsatisfactory. Lack of continuity and pyramiding training costs are but two of the reasons. In the officer area, we are retaining approximately 41 percent of our young officers beyond their minimum obligated tour of duty. Within this overall rate, rated officer retention is 56 percent, nonrated officer retention is 21 percent, scientific and engineering officer retention rate is 20 percent, with some skills in the scientific and engineering areas as low as 7 percent. It is anticipated that retention in the future will be even more diffi- cult because about 90 percent of the officers we are now procuring have college degrees. This will increase their chances of obtaining jobs outside the military with far more attractive pay scales than those we can offer. It is not unusual for an officer to leave the service as a lieutenant with pay of approximately S6,000-1958 rate?per year and within 12 months command a salary of $10,000 in either industry or civil service. In a recent service publication, a former staff sergeant wrote? Because civil service offered higher pay and faster promotions I, a 30-year-old staff, picked up my Air Force discharge along with my newly won bachelor of science degree and accepted a position as a GS-7 in the procurement field at Fort Hood, Tex. In addition, he stated? Now, two and a half years later, I am a GS-9 (compared to a first lieutenant). I have a civilian secretary, a second lieutenant, and three sergeants working for me, and I am eligible to join the Officers' club if I so desire. When we consider comparability, which is so sorely needed, we should include all grades and ranks. I need not go into detail on the senior officers' responsibilities for vast amounts of the Nation's re- sources and the demands on them for the highest degree of manage- ment skill. The influence of adequate compensation at the top as a factor in attraction and retention at the lower levels should not be overlooked. The capable, ambitious young man who aspires to suc- ceed will look further than immediate salary in selecting his lifetime career. His goal is the top, and he naturally will examine the remu- neration at this level when making his carrer decision. I note that the proposed pay increase for the Chief of Staff is $95 as compared with a $120 increase for a chief master sergeant. This committee will hear detailed testimony on all the features of this bill. I will not take any more of your time at this point. I will conclude my remarks by saying that the record of this committee reveals an intense interest in the welfare of the military man. I have 850(36-68?No. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04141g CIA-RDP66600403R000400280006-0 the utmost confidence in the. collective experience, ability, and judg- ment of the committee to recommend an equitable bill which will suit the needs of the service. I would like to thank the entire committee for its nterest., ai d com- men(l your counsel, Mr. Mandford, for his assistance and sympathetic underst amling of our problem. (The charts above referred to -Nos. 1, 2, and 3-- -are as follows:) CHART 1 COWPARISON OF ANNUAL INCOME OF COLLEGE GRADUATE (ENGINEERING) IN AIR FORCE (NONFLYING) AND PRIVATE INDUSTRY (MIL INCOME: BASIC, HAS, BAQ) (Proposed Basic Pay) (IN HUNDREDS) ? $110 99 $10872 El Air Force Industry $8868 $8976 88 77 $7056 $7235 ^ 66 ? 55 $4896 ? 44 (+$2160) (41633) (+$1896) ? 33 ? 22 - 11 0 ONE YEAR SERVICE FIVE YEARS SERVICE TEN YEARS SERVICE Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 :1iWRDP661300403R000400280006-0 CHART2 SALARY COMPARISON 0-5 with GS-14 1949 to 1964 DOLLARS (1000) 18 17 _ _ 17250 16245 16 _ 15 _ 142901 14 _ GS-141 13275 13260 13 ? I t OSD 120401 1 Proposal 12 _ 117661 r- 11520 0-5 11 10600 10272 10 98001 9516 9 8952 91% 90% 85% 87% 81% 72% 77% 8 tii tiI i it __I I 49 51 53 55 57 59 61 63 65 NOTES: 1. Computed at maximum pay points. 2. Civilian salary includes Base Pay only. 3. Military salary includes Base Pay, BAQ and BAS. 4. OSD pay proposal for 1963 includes $29.22 in increased subsistence. 91% 7.$17,250 $15,697 Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/0601 : CIA-RDP66600403R000400280006-0 DOLLARS (100) 45 _ 40 ? 35- CHART 3 SALARY COMPARISON E-3 with GS-3 1949 to 1964 4135 4195 4075 ( GS-3 3430 31780 3190 30 ? 2890 25 ?2238 2424 77% 20 ? 15 ? 10 ? 5? 2586 ' E-3 76% 75% 71% 66% 72% 2682 3018 2730r_ir OSD Proposal 0 IlliIIIIIiI 49 51 53 55 57 59 61 63 65 NOTES: 1. Computed for E-3 with over 4 years and GS-3 in step 4. 2. Civilian salary includes Base Pay only. 3. Military salary includes Base Pays BAQ (1 Depend), BAS, Reenl Bonus, and Clothing Allowance. 4. Computed on an annual basis. 77% X $4195 $3230 Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 1R-RDP661300403R000400280006-0 Mr. RIVERS. Thank you very much, General Stone. I want Mr. Blandford to ask a question for me concerning these men assigned to isolated posts, for the record at this point.. Mr. BLANDFORD. General Stone, the Air Force in particular has a problem with people who are assigned to remote. duty stations. I am speaking of the radar technician and the electronics personnel who are operating radar stations, and that type of an assignment. They have in many cases the misfortune of being in a skill which actually sends them from one remote area to the next. They may come back to civilization for a year, but they can almost rest assured their next assignment will be on the top of a mountain someplace, or up around Point Barrow, Alaska. There is a suggested provision in this bill which may or may not be sufficient to include them, but what would you think of the concept of paying these individuals a family separation allowance equivalent of not less than $30 a month, or one-third of the quarters allowance to which they would be entitled if they were without dependents, as some compensation for this onerous type of duty to which they are constantly exposed? General STONE. Mr. Blandford, Mr. Chairman, the situation is not limited to these radar operators. We have many different skills where the requirements are principally overseas, and principally in areas where the locality of the service is remote, isolated, away from a com- munity. In one particular case, for example, we have most of the airmen and officers in this career field serving in isolated places overseas. This is in the security business. We train these people at great expense. They go to a remote station where there are few facilities. They are separated in general from the normal aspects of civilization, as we know it, and after one enlistment or one obligated tour of duty as an officer, they say, "that is all for me," and leave, and we have to train another one; and some of these skills require extremely long training periods. . For example, training in the Chinese language. It takes a very long time, and it is a very expensive proposition. We get the use of the man for. a year or so, then he goes out in civilian life. I think that the !provision you speak of would be an assistance in this area. Mr. BLANDFORD. You would endorse this family separation al- lowance concept proposed in the committee print the chairman has prepared? General STONE. I would. Mr. BLANDFORD. Do you think that the proposed bill sent over by the Department of Defense will accomplish this objective? General STONE. In the overall context? Mr. BLANDFORD. Yes, Sir. General STONE. I noticed in Mr. Paul's statement yesterday, Mr. McNamara's statement read by Mr. Paul, that he said that the purpose of the military compensation system was to attract and retain per- Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/044g1 : CIA-RDP66600403R000400280006-0 -,onnel in the services. II that is the object .; ye, I don't think thu this proposal ?i 11 IIWVI it. Mr. II.yanv. What_ other object ive could there be. General, if that is not the objective? What would you think the objective is? General SToxr.. Those are the proper objectives, I ut I (kiln thildi the bill will meet them. Mr. lit.ixtwoun. You heard the chairman's statement yesterday. Would you endorse in general what he said ; that is, (Jr would You consider that his subcommittee print is an improvement over the DOD bill ? General STONE. I think there are some very excellent. features of the committee print. There are some deletions with which we_ concur. On the whole, I think that the committee print is a manageable ap- proach to the problem. I would like to see a higher rate of it included, however. AFr. InvEits. In what area ? Mr. iit.ANDFotin. That is just- what I was going to ask. General STONE. Well, there are several areas, but it_ is a d!flicult thing to summarize in a few words the entire pay scale. Mr. lIATEs. I )id yon have any chance to prepare any tables, General Stone? Gellel'a I STONE. Yt'S, Sir iii ant icipat WO Might be asked for a recommendation, we constituted a group of officers from all the major commands Of the Air Force in the United States, and they studied this problem for several weeks and canie up with a proposed pay scale that they would think would be adequate_ to do the job of restoring the historical relationship bet ween military and civil service pay. Ac1 tinily. they in general are pretty close to the. committee's print 0I1 the first increment. They have followed (lie civil service pLy bill format in that they broh.e it into t wo increments realizing the gap bet ween mil it arv and civil service pay is too great now to be elh? mated in one change. The first one is generally the same as the com:nil tee print.. as amended by the Chairman's remarks yesterday. For example Mr. IIATEs. Do you have copies of this, General? General STUN I 11:1VV only one copy here. Mr. TIATEs. Would you have some ir tide for the committee ? General STaxE. Yes, sir. Mr. lit,ANnFortn. Also, insert that copy in the bearing at this point. Mr. RIVERS. Put that in ihe record at this point, General Stone. General SToxr. All niurht t The cl tart s re f erred to above by General Si OlIP rot low Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 AIR FORCE PAY PANEL PROPOSED RATES Officers - First Increment GPACI, CLUTUaIVE YEARS Ciuri Over OF SLUICE Over _ 07er 26 Over 18 Over 20 Over Over 22 26 Over 30 Urder Over Over Crver Over Over C/S 217 2170 2170 2170 2170 2170 2170 2170 2170 2170 2170 2170 ,170 170 11850 1965 11965 1.70 0-10 138 1440 1440 1440 1440 1500 1500 1615 1615 1735 1735 1850 ?0-9 1220 1265 1290 1290 1290 1325 1325 1380 1380 1500 1500 1615 ,615735 735 0-8 1105 1105 1175 1175 1175 1265 1265 1325 1325 1380 1440 1500 1560 1570 L560 0-7 9151985 985 985 1030 1030 1090 1090 1150 1265 1355 1355 1355 1355 p.355 0-6 665 705 760 7601 760 760 760 760 775 905 950 975 1035 1120 120 0-5 535 570 615 615 615 615 635 670 720 775 825 855 890 890 890 0-4 460 490 525 525 535 560 600. 635 665 695 725 725 725 725 725 0-3 385 410 440 490 515 540 570 600 630 630 630 630 630 630 630 0-2 305 345 420 435 450 465 490 510 530 530 530 530 530 530 530 0-1 265 280 355 365 380 395 410 430 450 450 450 450 450 450 450 er .pay tables: Pay rates are based on the asstmption that subsistence rates will be increased to $7Y.10, If this increase is not provided then the basic pay rates must be increased by $29.22. AIR FORCE PAY PANEL PROPOSED RATES Officers - Second Increment 1 ?ROE Over Over Over OWIJIATIVE ovr1 Over YEARS Over OF SERVICE Over Over Over Over Over Over Ilnier Over Over C/S 12225 2225 2225 2225 2225 2225 2225 2225 2225 2225 2225 2225 225 225 225 0-10 2015 2015 2015 2015 2015 2015 2015 2015 2015 2015 2015 2015 2015 .12 015 p2015 0-9 1780 1780 1780 1780 1780 1780 1780 1780 1780 1780 1780 1780 1780 1780 11780 ----1 0-8 1605 1605 1605 1605 1605 1605 1605 1605 1605 1605 1605 1605 1605 1605 1605 0-7 13911395 1395 1395 1395 1395 1395 1395 1395 1395 1395 1295 1395 1395 1395 0-6 1010 1010 1010 1010 1010 1010 1010 1010 1010 1010 1060 1100 1145 1245 1245 0-5 725 725 725 725 725 765 800 840 875 910 965 1000 1045 1045 1045 0-4 545 580 620 620 650 680 710 750 785 820 860 860 860 860 860 0-3 415 450 490 530 555 585 615 645 680 680 680 680 680 680 680 0-2 340 380 450 470 485 510 530 550 570 570 570 570 570 570 570 0-1 285 320 405 415 435 450 465 490 515 515 515 515 515 515 515 Footnote for officer pay tables! Pay rates are based on the assumption that subsistence 7.-a-Tes will 1547-ITITRE-55?$77710. If this increase is not promided then the basic pay rates must be increased by $29.22. O-9000szoop000ticovooe99dau-vi3 : Iletbigooz aseeieu JOd 130A0iddV AIR FORCE PAY PANEL PROPOSED RATES Airmen - First Increment GRADE OUNLLATIVE MRS OF SL,RVICE Unier 2 Over 2 Over 3 Over 1 over 4 6 Over 8 Over 10 Over 12 over 1.4 Over 16 Over 18 490 Over 20 Over 22 0,mr 26 1 Over 30 E-9 435 445 455 475 510 540 570 570 E-8 255 275 285 295 365 375 385 395 405 415 425 450 500 500 E-7 305 315 335 345 355 365 375 385 410 450 450 E-6 220 240 250 260 1 270 280 290 300 310 320 330 330 330 330 330 E-5 190 210 220 230 240 250 260 270 280 280 280 280 280 280 280 E-4 160 180 190 200 210 210 210 210 210 210 210 210 210 210 210 E-3 115 145 155 165 165 165 165 165 165 165 165 165 165 165 165 E-2 100 120 120 120 120 120 120 120 120 120 120 120 120 120 120 E-1 90 110 110 110 110 110 110 110 110 110 110 110 110 110 110 -----1 Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 14S6 to tossu to 0 to to N o0 0 N N r-4 0 4. 11 to In to 0 TI to In In N 0 0 N 0 C',4 .- 0 ,I . , 1 , VI a) VI 0 ?r to to to N 0 o N 0 N .-I 0 4, .-I l to c to o o o to ..... to o N ,4 to C3) N N ..4 4. to o to o o o co sr to o N 4 to CO N N 41 4 to 0 to 0 0 0 N CI .1. to to N 0 N N .4 .4 .--i L1TIVE nA.115 OF SI Ova r I Ove TOvc 10 12 14 .495 1 5051 520 01 0 in 0 0 0 CO to sr to to N o 01 N ...I r-4 .-1 to In to 0 0 0 IC) to N to to ea 0 ea N .-. ,.4 .-. o 0 0 C. 0 0 sr ,-. in 0 N ,... VI OS N N .-i ?-? o to to 0 0 CI in o N 0 0 N o N .4 o .4 0 0 to 0 0 0 ea CO 0 N to N o N Cl .-4 .-. . , Cb to 0 0 0 0 0 0 to t- N sr N 0 N N -4 .4 e-I ,n In to In 0 o 0 N 10 N N 01 40 ea .-4 .1) 0 et) 440 0 0 CO Ul sr N .4 CU 04 N4 .4 .-4 0 0 -0 00 0 ,-, 0 0 o 0 N Oi .4 .4 ---.--- ._ CO t- to st, sr VI N .4 1 i ,... 0 to 1 3 to i 42 1 41 I 03 i to to I C4 i C4 General. rt Ni. I WOffid MU, to suggest that this is a t wo-ine;..ement iIIIIT11:4V. 011V rifillti In effect lye at this time, and the other one in the followiti7 fiscal ycan BLANDrup.D. In hisr words. do I gat her i hat ?vlutt you. 0.1e sav- ing is that we might find under this bill that we would be in the posi- I 1011 Wht'll' letirod 1)P1'S01111e1 1611 he guaranteed 0 ,:ost-of-living increase. while act ire dut v personnel do not have the :it'll& guarantee? General SToNr. That is right. Mr. lir,ANDriam. Arc you saying that there shoidd be language, t least an indication. \Odell is what the Secretary indicated in his statement. that there should be :in annual review of military ply ? ieneral ST,INE. I think that would be most. advisable, at least every 2 rears? but lint :1110W a - or .`i-year span to take place hot Wppn renews. Mr. I IAIZDY. This int'r(911011 al arrangement you aro talking about, Clem-nil. is 'that patterned after the civil service pay iiirrease of last .vear Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/214851A-RDP661300403R000400280006-0 General STONE. Yes, sir; it is. It is patterned after that. In that regard, it is in two parts. If you will refer to that chart that I had in my prepared statement, the objective of this pay scale is to show what it would take to bring military pay into the same area of comparability with civil service pay that it used to have prior to 1949, and before. That is about a 10-percent differential. Mr. HARDY. As soon as we finish discussing the content of this, Mr. Chairman, I woud like to get into a little of the background of it. Mr. RIVERS. Mr. Blandford, you have developed that, haven't you? Mr. BLANDFORD. As I understand what General Stone is saying, there is a wide discrepancy today between military pay and civil service pay and, of course, there has been a very substantial increase in the higher civil service classifications. I found every place I went, as a matter of fact, in a recent trip to some of the military bases, that a lot of people are leaving the military service to take civilian posi- tions and practically do the same job at substantially more pay. I might add parenthetically, that the charts?may I ask if the charts reflect the contributory retirement system? General STONE. No. I would like to refer to these charts, comparing an officer pay scale with civil service, and another one compares an en- listed pay scale with civil service. Mr. RivERs. I think we ought to acknowledge, too, at the outset, while we, of course, agree with the objectives of the statement of Mr. McNamara's presented to us by Mr. Paul, that we agree with the objectives; so do you. But there is a fact of life we must acknowledge, and that is the fact we have working side by side with our uniformed man, enlisted and officer, a civil service employee, and the fact there is a discrepancy and a growing difference between the comparable salaries, at least that is what the military feel, is causing a lot of trouble. We have got to recognize that, and while I think we must abandon the idea of trying to compete with industry?we can do something about competing with our own creatures; to wit, the civilian employee, and the Congress shoud not, in my opinion, put the civilian in one area, the military in another, and permit this cleavage to continue,. This is a. fact of life we must acknowledge, Mr. Bland- ford, and that is where you come in, what you found on your trip, and everywhere I go--you take that letter that I read by some captain in the Navy, everywhere I go we hear these military people referring to the various degrees of civil service salaries, the discrepancy and wide difference in comparable salaries paid these two groups of Government employees. General STONE. Mr. Chairman, the study group that we organized that I have just spoken of went back into the history of the relation- ship between civil service pay and military pay, and they found that prior to?in 1949, and prior thereto?that there was something on the order of a 1.0- to 20-percent differential historically between the two. This I suppose is to compensate for the fringe benefits the military en j oys. Mr. RIVERS. That is why Mr. hardy wants to get this philosophy. General STONE. The retirement system of on.e service versus the other. That was historically a differential that seemed to be a reason- able one. Now, this differential has gotten larger, and it is up around the 25- to 35-percent point now. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/4)3 CIA-RDP66600403R000400280006-0 lir. 1 kiwi-. Yon say it is bet \Awn 25 and 30 percent now. General ? General S'roxf:. About 25 and :15 percent , yes. Mr. I Nun-. P,ei ween 25 and 35. lir. lit vEas. Alter the last increment ? General Salon:. Includim, the proposal before volt today: It A? DOD proposal. Mr. I ham-. Ifow long has 1 he study group you have been talking about been working on his comparision ? General S-roN E.. s I recall, sir, there were about 20 officers involved for a period of about a month. Mr. Ilt,.?xnroun. I onvened January 7, 1961, to be exact. Nit% IIAnnY. That is I he st tidy :rroup you are referring to? General SToN-r.. Yes, sir. Mr. I kliny. General, in order to got this thin!, in proper I erspee- tivP? I would like to ask you a question I asked both, General Viii nip and Admiral Smedberg. What was the Air Foree called upon to do, and what did it con- Film( a in the formulation of this bill we have before us? General S'N-roxt:. As von know, sir, t'!ie Department of Defense orga- llized a. pay study .n-rottp muhsr the sponsorship of Mr. Gorham who was here yesterday. We were asked to provide some personnel for that study .0Toup, and, as I recall, we put four people on it. Then we were asked to contribute stat ist ics and data as asked for by the study group. We. WPM lint a part of the study .0-roup, except flail we had some people On it. Mr. TTAlloy. You were not invited to volunteer? General STONE. We were asked for no recommendations. no. Then when the pay study was completed they submitted to us their proposals as I recall, on the 15th of October, and we were allowed about 2 weeks in which to make comment. We did submit comments on the proposals of the pay study group. We were not asked, how- ever, to comment on the bill that was submitted to the Congress except as to its legal and technical sufficiency. ITAnny. I was going to ask you that question next. If you had been requested to comment cm this bill, now, you said you were not requested to comment on the bill. Can you tell the committee whether here were sip-nificant changes made from the first proposal and the final draft, as it, was submitted for introduction into Congress? General STONE. Yes, sir: the proposals of the pay study group, as recall,liad 28 different suggest ions. Some of those were dropped en- irely. Some were put into the bill using the philosophy that was concurred in by our service and not concurred in by others, and vice versa. Mr. IT.kany. So there were. some sig,nifirant changes? General STONE. Yes. Mr. Timmy. And there was no opportunity for the services to com- ment after those changes were made? There was no request for you to comment on it? General STONE. There was no official request for oomment. I did have. a conversation with Mr. Paul ancl his staff one day rd at ive to the overall provisions that they contemplated putting- in II a' bill. How- ever. T didn't, as I recall it, see the bill, itself. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/214891A-RDP661300403R000400280006-0 Mr. HARDY. Now, this study group that you have mentioned made a comparison?see if I have this correct?of military pay with civilian pay. Is that overall civilian, or just the civil service? General STONE. We made the comparison with civil service. Mr. HARD-3c. Do you know whether a. similar study or comparative study was made by the Gorham group or any of. its subgroups? General STONE. I think they made several different approaches to the problem. One of them was a comparison with civilian pay. Mr. HARny. Are you familiar with a subcommittee of that group headed by Admiral Settle that was supposed to have made a study on this bill? General STONE. No, sir. Mr. }TARDY. You don't know whether there was a comprehensive study made by any subgroup of the Gorham group? General STONE. I know that Mr. Gorham at the outset made several different approaches to the problem, and whether those could be con- sidered official positions of the study group, or not, I am not qualified to say. Mr. HARDY. Mr. Chairman, I would like to interrupt this testimony just long enough to see if we can find out from the DOD represen- tative about this. I have information that such a study was made, and, if it was, I would like to request that it be provided along with the communications submitted by the several services in connection with the original proposal. Mr. RIVERS. Mr. Blandford, can you find anybody you can contact on this? Mr. BLANDFORD. Colonel Meyers is here, Mr. Chairman, from DOD. There was a panel, there was a study group. I think General Pepper, Admiral Settle, and others?there are two different boards, some of them served on the same board, as a matter of fact, but actually the President appointed Mr. Clarence Randall as the overall panel study chairman to conduct a study of military pay and civilian pay as far as that is concerned. This morning's paper indicates apparently there has been another recommendation for even further increases in 'civilian pay, which is certainly going to boost the morale of the armed services considerably. Then these recommendations, as I understand, were studied, and Mr. Gorham had a study group working with this panel, and they in turn submitted their recommendations to the Secretary of Defense. But believe that what actually happened here is that the White House had a study made up of civilian and military personnel, I think mostly civilians from the Randall Committee viewpoint. Then they in turn farmed out the problem of military pay to the Gorham group, who in turn submitted their recommendations back to the Secretary of Defense who transmitted them to the President, and the Randall Committee and this is what came out in the bill that we have before us. Now, I am sure that somewhere between the original study that was prepared and what came out in this bill, there is probably a very sub- stantial difference. I don't think there is any doubt about that. But I assume, also, that the President, after consulting with the Secretary of Defense, had to consider this as a part of the national Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/042)il CIA-RDP66600403R000400280006-0 defense butlg-et as to just how far he could go in recommending in- creases in 'MTh ;try pay at tins 111111'. Arr. I 1.hinv, It. Is my informat ion that there wits a subgroup, or subcommit lee, or whalexer you call it. of the overall commit tee headed by Admiral S(t( le, wilt) did ,r?ro into an extensive comparativi. study of civil service and military pay. Now, i r that I, tile (list' I think it would he helpful to this commit tee to ha 1.-e before it the information which the Gorham g-roup and whi('li 1)01) had before it, that enabled it to arrive at the recommendat ions wit ii as much chtrit y as they have got. I honk it tnig-ht he helpful also to relate that or compare it with 1 he st udv Nyhich the st tidy group General Stone ha, mem jotted made for he A ir Furry. t !hid: also, Mr. Chairman. it wou:d be helpful i Mr. Paul would tell us a lilt le bit more about t he rt.asons that he was completely sat is- to submit, tins hill without :lny opportunity for the services to continent On it after lie put it in final form. Mr. lityrits. Ile will be Intel; tothorrow. Mr. Nonatn. I would like to ri ad. Mr. Cliairnlan, a letter ad- dressed to l'resident hued 1 /ecenther 20, 1962. irAtr. Ain. PRE:imp:NT. tin hcitatt of my ,?iillem.rues th.? panel on Federal l'a,v Systems. I tDinsmit herewith our report on the inajor military compensa- tion proposals which wiil be presented to the Congress in its tii?xt session. Our report is unanimously supported in principle by the members of Ito' panel Who are I;en. lunar Bradley. Mr. John .1. C,rsine. Mr. Marion B Folsom. 'rheo- dor, ttowser, Mr. Itobert A. Lovett. Mr. tli,rge Meitity, 3,1r lion K. l'ricti, Mr. Sidney Stein, .Ti'.. NIr. Clarence II. Itandall. Mr. Meany has wo spveific liscients ,tst forth in the attached letter from him. It is our understanding the Secretary of Ifpfense wishes to make the proliosal. Ii it invi.ts with your approval, release of our report by the While House and the Department of I ielense simultaneously with the statement of the Seen-Lary of I )(dense might be helpful. The panel has liven grateful for Ibis ovportunity to participate in a most important undertaking. and Nye trust our 'Ivor( IA ill la, of assistance to you and I ile I )eparnitellt of Defense. CI,11:ENCI. it. ii.?);11.1f.1.. (?if riirmu it, .1(1 rixory l'u,tri, l't.ift.1-01 Pap 5ll8tci?. My. 1;11-Eus. INies have a schedule Ate.re? ULAN-tit-mut. I don't have the roport suggested by that panel. liut my impression would lie that die panel study would be ver.,- close o what is contained in I he I )01 ) hill now-. Mr. IllvtA:s. Well. let me. ask von a quest ion. 1)10'S 11011 COM(' Under hp hem lin!, of Exeent ivecommunicat ions ? r. Ph..kxotlazo. Yes, sir. Mr. I klinv. It is all under the heading of Executive communica- t ions, Mr. Chairman., but I tell you, if we start inquiring in that amt we will not be through forever. We have to have access to this infor- mat ion. if it is going, to enable us to do a job on this thing. Mr. Ittx-Eus. Mr. Blandford, is there any way we can get a copy of that schedule? Mr. I Emmy. AVe can ask for it Mr. TitAxoroun. We can certainly ask for it, Mr. C'hairman, Mr. ItivEns. You ask whoever is the person to ask. We will start oil with that bridge anti see how far we o-et in that area. Approved For Release 2005/04/21 : CIA-RDP66B00403R000400280006-0 Approved For Release 2005/04/MiCIA-RDP661300403R000400280006-0 Mr. IIARny. We are talking now, Mr. Chairman, of all of these documents, communications from the three services, that were sent following Mr. BLANDFORD. Four services. Mr. Timmy. From the four, that is right?that were set follow- ing Mr. RIVERS. When you speak of that, always refer to four services. Mr. BATES. Three establishments. Mr. RIVERS. Three establishments and -four services. Mr. HARDY. Mr. Chairman, I just can't believe there will be any questions on the part of the Secretary of Defense to provide us with this information. Mr. RIVERS. I don't, either. Mr. Ilmmy. If they don't give us that information, we have to con- duct a study. It certainly will be helpful. Mr. Rivims. See what you can do on Mr. Hardy's request, Mr. Blandford. Mr. BLANDFORD. I would like to ask, if I may, whether the Depart- ment of the Air Force has ever recommended further implementation of the proficiency pay system? General STONE. Yes, sir; I think that the record is pretty clear that we have been consistent all along in our recommendations relative to the proficiency pay provision that was incorporated in the law, and for the first 3 fiscal years of its use, that is, 1959, 1960, and 1961, we were provided with the proficiency pay that we asked for. Mr. BLANDFORD. Dollarwise? General STONE. Both in terms of the numbers of people who could get it, and the dollars that went with it. Mr. BLANDFORD. To your knowledge, has the Air Force ever asked for authority to implement the law for the P-3, at $150 a month? General STONE. Yes,, sir; we asked for it in the 1964 budget, but it was denied. We asked for -full implementation of the proficiency pay at the highest, rates. Mr. RIVERS. That is $150? General STONE. That is $50, $100, and $150, for P-1, P-2, and P-3, and we were given the $30 and $60 limits on both P-1 and. P-2, and nothing for P-3. Mr. RIVERS. Now, right at that point, to follow up that line of thought, as a conclusion. Had you gotten what you asked for? when was that? General STONE. This was in fiscal 1964 we asked for that. Previous years we had asked for only P-1 and P-2, but we were limited in pre- vious fiscal years to the $30 and $60. Mr. RIVERS. If this thing were fully implemented, how far in your opinion would it go to relieving you of some of the conditions that have been brought to the attention of the committee? General STONE. I think that if we were allowed to implement pro- ficiency pay to the limits expressed in the law, that we could do a great deal to eliminate the rapid turnover of our enlisted force, increase our retention, and thereby reduce training effort. Mr. BATES. Why do you recommend the -full implementation? General STONE. We were testing this thing, frankly. We did ask Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/14.62CIA-RDP661300403R000400280006-0 for a higher rate on the, lower P- I and P-2 grades, but we didn't want to go whole. hog all at once until we felt our way along. Mr. BATES. You were satisfied from your experience that in fiscal 1964, you should go the whole distance? General STONE. Yes, sir. Mr. RIVERS. Did you do this after having tried carefully to evalu- ate and equate its effect throughout the Air Force, or did you decide on this after you didn't see any other avenue to investigate, you just thought you would take this and 3ee what you could do. Which is the reason for it? General SNE. I think actually the reason we asked for it was our experience in the past with the rower levels of proficiency pay had shown us that this was an effective means of remunerating tbe young men who take the expensive, types of training. We relate the use of proficiency pay to the retention rates in a par- ticular skill, the cost of training in that skill Mr. RIVERS. That was the reason for it? General STONE. Yes, sir; and the attraction for that skill in civilian life. Consequently, we found that this did have a tendency to keep people in the services if we could pay it to the highly skilled personnel t hat it was intended for. Mr. RIVERS. Does that cover it? Mr. BIANDEORD. There is another important subject to be men- tioned. \Tr. I? ivEns Go ahead, Mr. Bennett. ATV. BENNETI'. I understand you that you are going to put in the record and furnish to this committee an analysis of proposals that your group in the Air Force has worked up, which would bring about. an approach to comparability between civil service and military pay; is that correct? General STONE. Well. I had been asked to put these pay scales in. Mr. BENNETT. Does it do what I said, or does it do something less or more ? General SToxE. It does what you said; yes, sir. Air. BExxErr. This this proposal been discussed with people in the a no ied?other armed services? General STONE. No, sir; except for one short informal briefing with riny and Navy representatives, this is strictly an Air Force study. We. were not asked to submit it to anybody. Air. BEN xETT. Has any estimate been made as to the comparative costs between the Department of Defense bill and the bill which you would suggest? General SToNE. The first increment of this hill, insofar as the A ir Force alone is concerned, would add about $15 million to the pro- posals submitted to you by the Oilice of the Secretary of Defense. Mr. BATEs. Fifteen? General STONE. Fifteen. Mr. BENNEa-r. That is very negligible, I might say? General STONE. That is for the Air Form alone. The second incre- ment, would be a very sizable one, almost the same size as the whole package this year. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 :14?P661300403R000400280006-0 Mr. 13EmvErr. As I have approached this problem, with this discus- sion since we started, and also as I approached it before, I have the feeling I am in a well-produced automobile, setting out on a 5,000- mile journey with a governor that restricts me to 10 miles an hour. I feel frustrated about this. I feel the armed services are entitled to much better pay than the Department of Defense bill, and I hope some mechanism can be established by this committee to make a practical approach to this matter. It seems to me that you approached it practically when you sug- gested doing it on an increment basis, doing it not only for 1 year, but doing it for 2. It does eliminate some of the disadvantages of the long delays that we have had in the past; that is, it looks forward to the fact that maybe there would be another delay, and maybe we won't act on this field of activity next year. Of course, really, it should be looked at every year, in my opinion, to get a good approach to it. I hope you will present the proposals you have to the other branches of the service, and I hope we can have some comment from them in this hearing with regard to this, because I think we, and the Armed Services Committee, have the responsibility to bring forth a bill we think is best for the country. We all voted on the civil service hill. Most of us voted affirmatively on that bill. Certainly members of tins committee who know the sacrifices made in the military, and know the responsibility, the necessity for them, are not inclined to do less by the military than we do by the other. Of course there is the other aspect of this which you are going to meet on this coming Friday. The people are actually drafted to serve in the military service. To me it is an offensive thing that we would have to draft people and then not pay them adequately for their services. I hope that something can be done, I certainly hope you will present your proposal to the other branches of the service, and I would like to ask you specifically, now, have you ever done that? Have you ever presented your proposal to the other branches of the services in a formal or informal manner? General STONE. To my knowledge, it has not gone to the Depart- ment of Defense or the other services officially. It may have gone to them informally. Mr. BENNETT. Well, could you do that today? Could you give it to them today? General STONE. Yes, sir. Mr. BENNETT. I would like later on during this hearing, if we can, to have their comment on it. Maybe there would be some adjust- ments.they would like to make. I would like to approach this from a realistic standpoint to see whether we can't increase the amount of this bill, so you won't have to have another immediate pay raise in the immediate future. I think they need a raise, that is all I have to say. Mr. BLANDEORD.. General, for the Air Force, in particular, if the mail we are receiving is any indication?this elimination of per diem has really very adversely affected morale, particularly in the Air Force, and I am sure in the other services. This is a very minor part of the cost of maintaining our armed services, but it certainly has a very deleterious effect upon the individual. 85066-63?No. 6 7 Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 1494 I was in GoIdboro, N.C., mut learned from a sergeant that. when one of their units returned from the Cuban crisis, and they had been entitled to a commuted ration of $1.03 a day, that, when they returned. because they were being fed by the Army, or the Air Force, at McDill. I presume, that each of them was presented with a? bill for $1.80, as a result; of their having been gone for 2 months. It turned out, of course, they were drawing commuted rations, and I think they were getting 81 a day per diem, so the difference between the $1 and the 81.03, meant they owed the Government 3 cents a day for every day they were on temporary duty. I hive you received a great amount, of correspondence on this per (hem ? General SroNE. Yes, sir. As I understand, the loss of the 3 cents a day--there wasn't any bill presented, they just lost the :1 cents a day for this period of time. Mr. IitAxuroun. I understand it amounted to $1.80, as a result of GO day of temporary duty. General SToNE. This is right. Mr. BLANDFORD. Tilt, interesting thing about this per diem is the effect has been devastating and the cost to the Government is in the neigliborhood of 814 million. General SToxn. It is a very small figure. Mr. IltAxm:min. We. have a provislon in the subcommittee print which is certainly extremely modest, but at least it 1...ruitrantees a per diem of $1 a day for the man who has gone on temporary duty for more. than 30 days. That may be insufficient, but at least it. may be an ndication on the part of Congress if accepted that the committee re,?ognizes and the Congress recognizes that these per diem payments are something to which the individual is entitled when he is away on temporary duty. Would you endorse that portion of the committee print which guar- antees at least $1 a day per diem for these people? These are unit movements. I understand they have also reduced to some. extent the per diem payments to individuals on temporary dui y orders; is that correct? (;eneral STONE. There are some limitations placed upon it that you must eat in a Government mess if one 13 available. Mr, Iii.ANnyollo. You lose. 40 percent of your per diem, I 'oelieve, if you occupy Government quarters, and you lose .52 percent if you eat in a Government mess, and the other 8 pet-cent is for you, you can have all that is left, 8 percent of the per diem, which is to cover the cost, of your laundry and incidentals, and everything else that goes with it when a man goes on temporary duty. This is the sort. of thing the chairman referred to when he said at times we are penny wise and pound foolish. I won't. ask you whether you agree it. is penny wise and pound foolish, but you certainly agree it has had an adverse effect? General STONE. I certainly do. Mr. llivErts. I am glad I coined thir. expression. ILaughterd General S.siNE. I would agree with that. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 1495 Mr. BLANDFORD. General, yesterday Admiral Srnedberg said reluc- tantly he agreed because of the situation and the cost of retirement and the fact as Mr. Gorham pointed out, that in 1970 there will be 25 people on the retired list for every 100 people on active duty?he re- luctantly went along, with the DOD retirement proposal, and acknowledged that it probably was the only solution to the problem of retirement. Do you agree with the DOD proposal insofar as retirement section is concerned? General STONE. Yes, sir; I do. Mr. BLANDFORD. You do agree with that? General STONE. Yes, sir. I see no other feasible way of approaching the problem. Mr. Itnany. General, you are expressing disagreement even if you have a modification in the pay, as you propose? General STONE. I don't quite follow your question. Mr. HARDY. The pay scales that are set up in this bill are relatively small, at least in the higher grades. Actually the cost-of-living in- crease with respect to retired personnel would be perhaps just as much percentagewise as the pay increase. So that you wouldn't have much difference if you permitted a continuation of the old system of adjust- ing retired pay to reflect increases in base pay. But now under your proposal, as I understand what you testified to, a year from now you would propose a considerable increase in base pay. General STONE. Yes. Mr. HARDY. You are still willing to go along with the 5-percent adjustment or the cost-of-living adjustment in retired pay? General STONE. Yes, sir; I am. Mr. lInany. You know there will be a rather different picture of relationship if you have a substantial increase? General STONE. I think this will always pertain any time you have a future pay raise, that there is going to be an argument about the point. Mr. HARDY. I think that is correct. But if we accept that premise now, I have a little difficulty understanding the rationale which goes back to June 1958. I mean, if it is proper to do that, make your ad- justment based on the pay increases which were granted at that time, I have a hard time understanding where you say now you shouldn't do it in the future. General. STorTE. I think the essential point in 1958 was this was done with no notice, so to speak. Mr. HARDY. You have a point on that. General STONE. Yes. Mr. HARDY. Do you think an amendment of this bill making it mandatory on the Secretary of Defense to reevaluate the military pay every time the civil service receives a pay raise would be a pretty good way to begin it? General STONE. I would recommend that there be a periodic review. I don't know that it is necessary to tie it to civil service pay raises. Mr. BLANDFORD. As I understand the law now requires there be an annual review of civil service pay. Of course, this can be done administratively. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/011/M : CIA-RDP66600403R000400280006-0 Mr. RtvEus. I am talking about requiring the Secretary of Defense, or whomever is responsible, to make a comparison of the report, to reevaluate or recommend, or somethina along the lines, making them take official cognizance of what civil service. pay is, the discrepancy or disparity at each Mr. BLANDFORD. Mr. Rivers, it is lull into this biE. It is perfectly obvious if the cost of living goes up for retired personnel, it goes up for the active-duty personnel. Therefore, if they conic up with a 0-percent increase in cost of living for the retired, it is true for the active list. Mr. MYEns. Tlw reason I say that. I read by the public press last night that t he GAO recognizes now by an art of i he Cong ress passed in 1961 that the Government unions can have a. checkoff made against I he members of the union. Now, we do, down where I come froi a, a lot of things now we. dub i't used to do. I find from my knowledge of the union people we have in South Carolina that they don't work for nothing. When they get this chec-koff from all these Government employees, they are going to de- mand results. They aren't going to be satisfied with a pay increase yesterday. Lots of times they come to me and say, we are for you, but you haven't done anything for me since last week. Now, whenever they get a pay i ncruse?year a f ter year?somebody has got to look out. for the military, unless you favor a checkoff, too. >o you want a. checkoff on VOUr salary ! tieneralSToNE. We don'1 want any unions. Mr. RtvEns. These fellows who are going to get these cost-of-living raises. Somebody has got to look out for the military, and it might be well, Mr. Blandford, that we may put something in this bill to bring this to the attention of those who mem ,y the ivory chairs. and so forth. Mr. BLANDFOR.D. May I respectfully disagree to this extent. I think Mr. Rivras. You can di Sagree all you want. Mr. BI-\ NTWORD. Yes. II Jaugh ter. 1 Mr. RIVERS. That won't get you anything. Mr. Br-km-wont). I don't_ know how far I will get. I would like to point this out, and this is a personal opinion. and therefore it is worth nothing. But if we put a cost-of-living provision increase- in this pay bill for active duty forces. that is all the active duty force will ever get in the future. Mr. PtIVERS. That isn't what I said. I said we can require a report to Congress--I am thinking out !mid-- pointing out to Congress. the discrepancy between, as Mr. Bentptt has brought forth, the military and the eivlians. We don't havet hat now. Mr. BLANDroan. That would be a &Greta proposition. But if we go into the proposition of attempting to adjust military pay scales on the cost of living, then we would be on very dangerous grounds. Mr. RIVERS. I agree with you. I think there should be a respcnsibil- ity on-somebody in the hierarchy of the military to take cognizance of the things you brought to Our attention, and make an official report to the Congress. Mr. WiLso-N-. On this problem of retirement pay, based on cost of living, you are going to build in the problems in the fin lire that are going to be just as bad as these inequities created in the 1.158 act, unless Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 : AIR-RDP661300403R000400280006-0 the active duty pay has some reasonable cost-of-living type approach in the future, because if you start monkeying with the pay scale, as we do in nearly every one of these pay bills, to try to adjust in certain areas, the people who are retired subsequent to that, and get the retired pay based on that different proportionate increase, are going to create the same problem that is being created now. Mr. RIVERS. I wanted to say this, we face the facts of life here Mr. WILSON. You are facing a future fact of life which is almost going to be impossible to live with, too. Mr. RIVERS. No, that isn't exactly right. In 1958 we broke faith with tradition. Now, we are telling them that we do face this fact of life, at least, Mr. Blandford, they will know what we are going to do when we make this decision. We certainly don't want to jeopard- ize the system. Mr. GUBSER. Mr. Chairman, would you straighten me out, though? If you change the tradition, change the policy, we would still, as Mr. Wilson points out, have the practical matter of different retirees draw- ing different retired pay, isn't that right? There would be discrimi- nation? Mr. BATES. That is right, it has got to be, after the next pay increase. Mr. RIVERS. After the next pay increase, yes, when this goes into effect. Mr. BLANDFORD. You have always adjusted pay?the only time we didn't was in 1952, that was a straight 4-percent increase in basic pay. The House bill was 10 percent of basic pay and 10 percent of allow- ances, and it came out of conference at 4 percent of basic pay, 14- percent allowances. Now, this is the problem that the Congress faces on this retirement question. I believe this is what Admiral Smedberg said yesterday, and why I believe you have taken the position that you have taken. There comes a time when somebody has to make a decision as to what they are going to do with the cost factor that is going to become so staggering when it hits $3 billion a year, then the meat ax principle goes into effect, and the whole retirement system may be jeopardized. We may well have to go back to the original Hook recommenda- tion that no one, including enlisted personnel, be allowed to retire until he attains the age of 50, for example, with 20 years of service. One of the great attractions today for all of the services, particularly for the enlisted personnel, is that a man Can serve 20 years, a high school graduate, for example, if he enters the service at the age of 18 or 19, can transfer to the Fleet Reserve, or retire, and draw retire- ment pay at the age of 38 or 39, and start a new career with a guaran- teed income. These are the things that could well be jeopardized in the years ahead. I am confident this is what was in Mr. McNamara's mind? I won't say in Mr. McNamara's mind, I don't know what is in Mr. McNamara's mind?but it certainly was in the minds of many people when they studied this retirement problem. We have a serious problem on retirement. There will be discrim- ination in the future. We would be naive to think we will not make adjustments at various basic pay scales as the conditions warrant. We may find that we have to do more to attract people at the captain- Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/94/3231 : CIA-RDP66600403R000400280006-0 major level. We may find we are going to have to increase the pay of the Chiefs of Stall's of the services to something commensurate with the responsibility they would have if they were head of a bottling plant, which is what they certainly don't get today. But these are the factors we have to face in this matter, Mr. Chair- man, and there will be discrimination in the future, it can't be avoided. Mr. Wresox. But, Mr. Blandford, if you are basing the reason for change in the retirement system on the cost in the future, then at some time we are going to have to do violence to the whole concept of retired pay, there is no question of that. Mr. TinaNoroae. You did, violence to it in 1949 to start with when you changed the whole disability retirement system. Actually, this kernel was planted in 1040. It was indicated in 1952. It finally came to fruition in 1958. This is not new, as far as the retirement problem is concerned. It has been coming for a long time. Now, what we are doing in this bill, what the chairman's position on this matter is, is this: You are guaranteeing a cost-of-living in- crease-so you are therefore guarant eeing. the purchasing power of the man who retires. Mr. RivEns. When it attains a cumulative 3 percent. Mr. BLANDFORD. When it goes to 3 percent_ or more, you adjust his retired pay that way. Tho point is, the man who decides to retire and live on his retired income will be guaranteed the same standard of living he had the day he retired. It is just that simple. Mr. Wnistrs. The problem is not going to be now, the problem is in the future. You are going to have 0111' prO1 iINI1 Or the other. Mr. BLANDFORD. That. is true. Mr. WILSON. I think eventually we have to make. a complete study and complete overhaul of the entire retirement system. Mr. BIANDFORD. This is what is coming, and if we are not careful we are going to force on the services, in my opinion, a very severe restriction on the retirement privilege-. Any way you cut fhe cake, in spite of the "black box" operations we have today. the armed services is still a young man's game, by and large. This is the reason we en- courage men to retire at 20 years' serviee, in many eases. This is the reason that we have compulsory retirement for warrant officers at the end of 30 years' service. Perhaps the law is going to have to be modified for general officers at a later date. Perhaps the mistake we made in these pay scales is that we don't put. the largest increment in for general officers at. the 35-year point, for example, to discourage people from retiring at 30, but I would like to repeat for this subcommittee something that people don't. seem to quite fully understand. There is no legal right to retire on 20 years of service. There is no legal right to retire on 30 years of service. This comes as a shock to a lot of people. General Stone has come over his desk requests for retirement upon the completion of 30 years of service. The only right the individual has is the right to submit the request for retirement. The only statu- tory right to retire is upon the completion of 40 years of service, or at mandatory age points. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 : CIA9RDP661300403R000400280006-0 Mr. BATES. It has always been that way. Mr. BLANDFORD. It has always been that way. If you want to con- trol this administratively, the President could simply say, I am not going to have a general officer retire until he is 62 years old, or com- pleted 35 years' service, or until he has completed 40 years of service. These things are coming. But we have got to face, in my opinion, the facts of life today that the retirement costs are going to be over $3 billion a year in the near future. Mr. RivErts. That is why I say that in 1958 we abruptly and with- out notice broke tradition. We are trying somewhat to repair it now, and in the future give a cumulative concept. And I think as a fact of life, we have got to recognize that. We certainly don't want to jeopardize the whole thing, somebody coming in and taking it out on people who can't talk about it. It always happens. Mr. WILsox. Let me give you one case, on the retirement provision as suggested. If someone is retired and has been retired previous to the enactment date of this bill, and is retiring at a given rate, some- one in that same category retires a year from now, does his pay reflect the increase in the rates, the pay we have adopted in this bill? Mr. BLANDFORD. I think the answer to Mr. Wilson's question is "No." Let us put it this way: If anybody retires in 1963, under the com- mittee print, they will be able to compute their retirement pay under whatever the pay scales are that go into effect this year. Now, what you are going to have, you are going to have?and some- thing that I might remind you of is that when you retire effective January 1, 1963, the pay that you got on December 31, 1962, is what controls. You don't get the pay that was in effect January 1, since you don't draw basic pay that day, therefore you were not in receipt of basic pay on the first day, therefore you go back to the pay scales in effect on the 31st. You were retired at midnight. Now, it is true that even in this pay proposal here, we are increas- ing some places, say, the pay of a colonel 8 or 9 percent, so that the colonel who retires this year, even though we bring those retired prior to June 1, 1958 up to the 1958 pay scales, will be drawing more re- tirement pay than a colonel who retired in 1957. But this is true of Members of Congress. Mr. WILSON. The enactment date will be another day of infamy. Mr. BLANDFORD. We are trying to help that as much as possible. Whenever you put a proposed effective data in, way off yonder in the future, then you have everybody staying up nights trying to figure out a way how to beat it. That is what they are doing right now. General STONE. How to stay in. Mr. BLANDFORD. They are going to stay in. The Army and the Air Force Reserve officer has a built-in system. You don't apply for retirement in the officer grade you enlist. You are going to have more majors walking around as EA's, than you can shake a stick at. Mr. Rivrats. Mr. Gubser. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 200504421 : CIA-RDP66600403R000400280006-0 Mr. Gu'ism'. General, earlier in your statement you spoke chow; the present differential between military and civil service pay in compar- able areas of responsibility somewhere between 25 and 31-) percent. You indicated that tins had grown wider, and that it had been tra- ditionally around a certain percentage. What was that General STONE. Referring to these chirts again, trailitionalv it has been somewhere on the order of 10 to 20 percent, depending or. the grades involved. Mr. GUI:SER. That, 10 to 20 percent has always been accepted, be- cause the military has fringe benefits which tile. civil service employee does not have. Maybe it is not possible, but I would like t ) allocate that 10 ro percent, if we could. Now, 7 percent of it would obviously be retirement, because you do not, have a contributcwy system. and Ile civil SVI'Vice does. I.. think the civil service cunt rihnt i()11 is 7 pPrceiri, isn't it e Mr. IkAxiwonn. Yes. Mr. Gunsm. That takes care of part of it. Miele does the rest come from? General SToNE. There are certain Mconie tax deductiims that. are allowed miltary that are not allowed civilians. For example, you do 1101 pay Mecutie tax on allowances. We hut ye certain commis-gsarios, post exchanges, theaters, officers' clubs, rereational facilities, that are available that aren't available in all eases to a civilian. The Department, of Dc fense. actually made quite a study of these fringe benefits. Mr. litAxororin. Ilospilahizal ion being the biggest one. Mr. GunsErt. What about the privilege of hospitalization and the privilege of hospitalization for your dependents or your wife? Would you say that has been considered rather significant in fringe benefit? General SrroNE. For those people who needed it, it certainly is. You have to get sick to enjoy that fringe benefit, though. Mr. Guusr.a. it has been my experience. and I would like you to check me and see whether or not my experience. is typical, but in my contact with active duty military people, and also retired people. I have found that the privilege- in the past it has been almost a prac- tical guarantee- - of hospitalization after retirement, has been one. of. the greatest incentives to maintain a milli ary career, and to :Lecept- I-ubstandard pay during your working life. Would you agree with that ? General SToxu. T would think this is a very important thing, par- ticularly to a retired person. Mr. OUBSER. Let. us for a moment think of the active duty people. Perhaps the young second lie.uten ant doesn't think much about hos- pitalization after he retires, but I would suspect lieutenant colonels, on up, begin to think more of it as t ieir career progresses. Is that correct? General STONE. I think I could summarize by saying, hospitaliza- tion that is afforded military personnel and their dependents, both on active duty and after retirement, is a very significant, point in all of. their minds. Mr. GuBsr.a. Would you_ go so far as to say. General, that in your personal opinion this mbrht be very close in importance to the retired pay, or second in importance?not. close, second? Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 : CJAIRDP661300403R000400280006-0 General STONE. Well, at the moment, as the chairman said, the medical care of dependents of retired personnel is on a purely space- available basis, and it is getting tighter all the time. Mr. BLANDFORD. Mr. Gubser, may I just say that this subcommittee itself several years ago anticipated this problem. It has been accen- tuated, as you know, with the construction of new hospitals which are not allowed to take into consideration the retired load, and this subcommittee had a provision in the medicare bill which would have permitted the Secretary of Defense to establish a medicare program for retired personnel and their dependents. The Senate in its wisdom deleted that section. I think the action of this subcommittee indicates its foresight at the time when we put that provision in the bill which unfortunately did not become law. But the ultimate answer to this problem' as you have indicated, :is either going to be to provide more space for retired personnel?and we are heading toward a very substantial number, 50,000 or more a year, going on the retired list?we are either going to have to provide more space or a medicare program, one of the two. I think Mr. Bennett has introduced a bill on that. MT. BENNETT. Yes. Mr. GUBSER. Is it your understanding, General, that the present policy is that the medical care for retirees and their dependents is gradually going to be faded out of the national policy? General STONE. The present policy, as I understand it, is, in the construction of new hospitals, this will not be taken into consideration as a criterion for the size of the hospital. Mr. GUBSER. And as a practical matter, General, as the number of retirees increase, and the present hospitals are phased out and replaced with newer ones, that do not include such beds, the national policy is going to be that there will be no medical care -for retirees and their dependents, isn't that right, as a practical matter? General STONE. As a practical matter it certainly appears it will be sizably reduced, and maybe eliminated. Mr. GUBSER. In light of what you have said, and I am positive every man and woman in this room will concur in what you said, this is a very important fringe benefit, that it rates way high, insofar as its influence not only upon the morale of the retired personnel, but active duty personnel. Don't you think this is a rather serious thing, serious national policy we have embarked upon, and don't you think it is having an adverse effect upon the morale of the active duty officers today? General STONE. Well, it is a hard one to evaluate, unless we make some survey. I would estimate that the senior officers who are in the?more or less?the eligibility zone for retirement, start to contemplate this, yes. If they see civilian jobs available to them, they would probably tend to go to those. 31r. GUBSER. Mr. Chairman, I would just like to say here, I think we have pretty clearly established this morning insofar as this tradi- tional 10-20 percent differential is concerned, we have always gotten by with lower military pay because we did offer the privilege of medical care upon retirement. Mr. RIVERS. That is one of the factors. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 200510401 : CIA-RDP66600403R000400280006-0 Mr. GUBSER. That is one of the factors. I think we established it- has been a rather considerable factor. Certainly we don't have facts and figures to back it up, but commonsense and logic show it has been a considerable factor. for one, think it is an absolute crime for us to consider a pay bill and to allow this differential to continue and at the same time ::Cloix a national policy to stand without question that we are going to take this privilege away from retired personnel. If we are going to take it away, if that national pol is goin,, to stand, then I think we ought to up the pay scale in this bill enough to take care of it so they can provide for it through private means and their own investment. Mr. RIVERS. Of course, we can't take care of it in the pay bill. Mr. GuesEn. We can, too, Mr. Chairman. We can put enough extra in it so they can go out and buy an old-age medicare plan. Mr. InvEas. This wouldn't be the place to do it. We will address it along (lie lines Mr. Mandford said. Mr. GunsEa. Yes, here we are, where we are bleeding our hearts about everybody over 62, and here we have people that have given their careers and lives to their country, they have been underpaid the whole time, and we are not going to give them medicare. It is ridiculous. Mr. WH.sox. Mr. Chairman. Mr. GUBSER. I am through. Mr. ItivEas. Would you answer his question? Who is next ? Mr. WiLsoN. I just have one question. The general mentioned among fringe benefits that were important, the subject of commissaries. I realize commissaries are taboo. I wonder if any survey has been made recently that would indicate. just what commissaries meant to military personnel. Mr. RIVERS. We cut them down so much it doesn't mean much any more. Mr. BANDFORD. The answer is "Yes." Mr. WILSON. I would like to know the monetary value of it, if pos- sible, to the average family, of a commissary. General STONE. I think annually a review is made of this whole commissary problem. Mr. Wit.soN. I would appreciate, Mr. Chairman, if -,ve could lava it on the record. I would also like to know if your survey showed what members were living in an area where they were entitled to commissary, and what members didn't. It seems to Inc there is an area there where a lot of them are going to be precluded from taking advantage as they do in other areas, of these fringe benefits, unless they live in a speifie area. General STONE. In general, the Office of Secretary of Defense is required to make this review every year at the direct ion of the Secre- tary, I presume. One of the items involved is whether or not there are commercial facilities in the area that are of equal accessibility and where the prices are reasonable. And if that is true, then a commissary is not cut horized in that particular vicinity. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 aMA-RDP661300403R000400280006-0 You will find in large metropolitan areas commissaries are not usually authorized. Mr. RIVERS. Thank you very much. Have you finished? Mr. WILSON. Yes. Mr. Riviats. Thank you very much, General Stone. The next witness is Maj. Gen. Alfred Bowser, G-1, Marine Corps. General BowsErt, we would like to hear from this other branch of the service. General BOWSER, you may proceed. We will be very pleased to hear from you. STATEMENT OF MAJ. GEN. A. L. BOWSER, ASSISTANT CHIEF OF STAFF, G-1, U.S. MARINE CORPS General BOWSER. Thank you, Mr. Chairman. Mr. Chairman, members of the committee, it is vitally important at this time that an equitable compensation rate be established for mem- bers of the Armed Forces. This is so, not only for essential assistance in accession and retention of personnel and to compensate for increases in the cost of living, but to establish an adequate base level on which future increases for active and retired personnel can be computed equitably. Fair and adequate compensation for members of the Armed Forces is essential if the necessary quantity and quality of personnel to man, motivate, move, and fight our modern war machines are to be recruited and retained in the service. Compensation rates must be comparable to those paid elsewhere in our society for similar talents, skills, cap- abilities, and responsibilities. Otherwise, we cannot compete success- fully for the caliber of personnel required to properly staff and man our organizations that are being faced with equipments and situations of ever-increasing complexities. It is not intended to leave the impression that money is the panacea to the military problem of accession and retention of personnel. Proper compensation is merely one part, but a vitally important part, of those factors which make a career attractive to the individual. The growing demands for highly skilled, motivated military personnel, in an environment where the rewards of civilian society are plentiful cause us to reflect on the current and future status of our personnel and what will best contribute to our ultimate objective. This objective is a complete and attractive career pattern in which the military man enjoys professional prestige, an earned sense of accomplishment, and a living standard equal to his civilian counterparts based on demonstrated ability and exercised responsibility. Our pursuit of this objective will be materially assisted by improved economic status of the serviceman since this status is recognized as a prestige symbol in our society. The rates of monthly basic pay proposed fall short of raising mil- itary compensation to a level comparable to that in other segments of our economy and the Federal Government. Accordingly, the pro- posed pay schedule is disappointing. It is hoped that further in- creases will be made by the Congress. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/Q4,121 : CIA-RDP66600403R000400280006-0 It appears that an inequity exists in the subsistence allowance when rations in kind are not available. This allowance should be de- termined and regulated administratively on the basis of average daily cost to the member of subsisting himsalt on a civilian basis and should be the asme for all personnel. officers and enlisted. At the present. tune there is no such allowance for officers. The proposed basic allowance for subsistence for officers in this legislation would correct this situa- tion as the proposed rate is based on the present allowance for enlisted members -when rations in kind are not available. However, it. Is ex- pected that adjustments in this rate will be made in the future and accordingly provision should be, made to apply the rate to all personnel. The loss of sea and foreign duty pay will a (Teel over one-fourth of-the marines on active duty. It is believed that an emolmnent for certain sea and foreign duty should be included in the pay legislation for the benefit of those marines spending tours at sea or on foreign stations such as Okinawa, Vietnam, Thailand, etc. The assuirrjition that remote and isolated pay will apply to only about 60,000 persons would indicate that few deserving sailors and marines aboard ship or on foreign duty can be included in that, number. In the consideration of special pays. the interrelationship of the present reenlistment bonus, proficiency pay, and the, proposed ineen- two payment are such that I would like, to discuss them together. The Illarme Corps accepted the proficiency pay but has never fully agreed with this concept. It was accepted because it was unfair to exclude our troops from the. system applied throughout the services. Wo have no proof that it has aided relent ion, and most, marines dislike proficiency pay because they feel it is discriminatory. Most marines would rather see the money allocated to proficiency pay redistributed into a more adequate basic pay scale. It is my firm belief that proficiency pay should not, be cont inued. but be replaced by the career incentive payment plan. However, as the latter plan is designed to favor technicians almost exclusively, it fails to provide an adequate personnel management tool to afford the selectivity desired in the retention of those troops which are the back- bone of the corps. Loyalty, leadership, dedication to duty, and ef- ficiency are. essential qualit ins in the so-called noncritical as well as the critical skills. Career attractiveness should be such that reenlist- ment selectivity can be applied to all career fields. The training lead- time needed to develop the required leadership and ability in the platoon sergeants of our rifle platoons is greater than that necessary to attain technical excellence in various specialties. Accordingly, it is felt that, the present reenlistment bonus should be modified to con- centrate payments at the first and second reenlistment points, and that an incentive payment for technician retention should be superimposed thereon. The Marine Corps has consist Nit ly opposed comlmi pay on the basis that men in uniform are paid to defend their country regardless of exi , i st in conditions. and combat pay is difficult, if not mpossible, to administ er equitably. Tt is not believed that combat pay should be included in in il it ary compensation. Personnel who are qualified and actively participate in more than one hazardous occupational specialty should be authorized to draw the Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/211:5RA-RDP661300403R000400280006-0 incentive pay for those hazards. Specifically, Marine Corps reconnaissance units require some members to be qualified and participate in scuba diving as well as parachute jumping. In the interest of equity, we are pleased to see th.at the exposure to Zuble hazards will authorize payment of double incentive pay in the current proposed legislation. There has been much discussion and evaluation of the fringe benefits of the services, but seldom has there been discussion and evaluation of the adverse conditions under which many members of the Armed Forces serve. The international political situation extant since World. War II has imposed unprecedented requirements upon our military personnel. Constant alerts, frequent maneuvers and deployments, and extend field and afloat duty, demanded as a matter of routine, have generated a high degree of social instability and severely disrupted family unity. For example, a member who is required, either by service needs or overriding personal considerations, beyond the control of the member himself, to serve overseas without dependents, is incur- ring financial hardship. Even if we assume that Government quarters and subsistence are provided, or adequate compensation in lieu thereof, there still remains the very real expense resulting from absence of the service member from his family and their residence. There is a need for compensation that will provide the serviceman's family with the means to purchase those services which are normally provided by the man of the house in the way of "do it yourself" repair and labor. Promotions of enlisted men and officers within the Marine Corps have come to a virtual standstill. This has been caused, we feel, by anticipated increase in rates of retired pay upon passage of the current pay bill. It would be of great assistance in manpower management if an earlier effective date could be realized for this pay bill. Such action in equity should entitle those force outs of June 30 to retired pay under the new bill. ir, this concludes my statement. I will be happy to answer any questions the chairman or members of the subcommittee may have. Mr. RIVERS. As usual, General Bowser, the Marines let you know where they stand, and are not asking for any special favors. You pretty nearly agreed with us. My lawyer respectfully disa- greed with me, like he respectfully disagrees with you on proficiency pay. Mr. BLANDFORD. I think, Mr. Chairman, in that connection, perhaps Mr. WILSON. We will hear from Major Blandford now. Mr. BATES. Captain. [Laguhter.] Mr. BLANDFORD. I was a pfc at one time, so I will start off as pfc. Maybe I can work my way up. Do I understand, aeneral, the reason the Marine Corps is opposed to proficiency pay is the method of implementation? Would I be correct in assuming that if you could provide more proficiency pay, and if you did not have to base it on a skill concept, that you would probably then be in favor of proficiency pay? In other words, the assignment of profi.cien.cy pay to a billet, rather than to the individual, because he possesses a skill? General BOWSER. I would say in response to that, that it would be more palatable to us, yes. But there still is the point mentioned yes- Approved For Release 2005/04/21: CIA-RDP66600403R000400280006-0 Approved For Release 2005/049A : CIA-RDP66600403R000400280006-0 terday by Admiral Smedberg in his testimony that this is a difierence seen at, the pay table on each payday. Mr. BLANDFORD. Let us analyze that, General, having once been a platoon leader, I had the pleasure of recommending a sergeant for promotion to platoon sergeant. I didn't make friends of the other men when I recommended one man to be a platoon sergeant.. Mc."-IrvEtts. We have that problem when we nominate postmasters. Mr. BarEs. We don't have that any more. [Laughter.] Mr. lia.aNDrolle. The platoon sergeant goes up to the pay tab;.e, and he draws additional pay. Now. I presume every staff sergeant who didn't make platoon sergeant is unhappy. The same thing is true in proficiency pay. Why, for examp::.e, in a Marine platoon would you have unhappiness under those junior to be platoon sergeant if every one of those sergeants knew, if he could ob- tain the grade of platoon sergeant, then by assuming that. billet he would qualify for proficiency pay. What is the difference between that and giving a man proficiency pay because he is a combat leader? General Bow-star. You still have the differential between the people of that same rank, who are not in that billet and who are not striving for that billet. Mr. BLANnroun. That is true, the man striving for platoon sergeant, then he goes from that duty, say, to headquarters. Marine Corps, where they may say that he isn't entitled to proficiency pay. I ;in this is not a new concept, this is true of oversea pay, the man is oversea, draws oversea pay, and when he comes back from overseas, he no longer draws oversea pay. The idea is that you are attaching proficiency pay to the billet. _I am only suggesting that one of the problems with proficiency pay has been a reluctance to administer it in the was the Congress int ended it to be administered. The law is the shortest provision, I believe, in the Pay Act, and yet it could involve an expenditure of millions and millions of dollars, and in our opinion, if it were properly imple- mented, and given to individuals on a billet basis, it could produce the results that you seek. Certainly, it is not right to say to a man who is 50 miles behind the lines, that because he is fixing a radar set that lie is entitled to more pay than the platoon leader or the platoon sergeant who is in combat. This is the difficulty with proficiency pay, but the law is broad enough to cover this subject. It is not confined to critical skills. Mr. WiLsox. You are getting away from proficiency pay, at least the concept of proficiency pay, to put it on the billet basis? Mr. BLAxnFortn. Not necessarily, because you wouldn't, assign the man to the billet if he. didn't have the proficiency. Mr. ItavEns. I don't think Mr. Blandford is going to persuade the Marines. Can you write it so you can accept it? General BOWSER. I would like to ainplify to this extent, Mr. Chair- man. We are on record to the Subcommittee on AppropriationF of the House that we have never been able to truly measure profictei.py pay for two reasons : (1) The width of its applied t ion: (2) the amount. We are in agreement with the statements which have been made by the Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 1507 other services, as well, that we really felt we couldn't get a measure of it until we had more, both in amount and in application. And I will modify my statement here to that extent. Mr. Jimmy. Be careful you don't differ too much from what you told them. General BOWSER. I am not, because we told them this annually. Mr. HARoy. I am not in the least concerned with what you told them, I am trying to get the facts here. Mr. BLANDFORD. As I understand, General, given leeway you think proficiency pay could become a useful tool even in the Marine Corps? General BowsErt. I believe it could, but we still would like to see a superimposition of an incentive plan. Mr. BLANDFORD. What you are really saying is the present reenlist- ment bonus law should be modified, and you should only have the bonus paid at the first and second reenlistment, and then on top of that, in order to keep the critical skill people happy, then there ought to be an additional incentive payment for those with critical skills. What you are saying is that the corporal has to be encouraged to reenlist, also, and the sergeant, even though he may not be able to take a radar set apart and put it back together again. Nevertheless, he does know how to operate a BAR, and to tell men where to go and how to get there. General BowstaL That is right. Mr, BLAND-FORD. So he is doing as much or perhaps more in many ways for his country than the man on the radar set. Then you face the problem, of course, all things being equal, that it is a little easier in the economy, theoretically, to obtain a man who can fire a BAR properly than it is to find a man who can repair a radar set. This gets back to the supply and demand situation. What you are saying is you need a combination of systems, a reenlistment bonus, and then per- haps an implementation, a full implementation of the proficiency pay system to see how it works; is that correct? General BOWSER. That could be done. Mr. "WiLsoN. Or a specialist incentive is what you are talking about. You are specific in picking out exactly the skills where you have trouble in reenlisting. Mr. BLANDFORD. That is right. Mr. Wilsow. Give them a bonus, and then an additional bonus. Mr. BLANDFORD. The specialist concept is not new, the Army had it for years. General BOWSER. We did too. Mr. BLANDFORD. It was possible for an E-2 to walk into the post exchange, and take out his pay check, which would be in excess of that which an E-4 would receive, for example, because he was a specialist. It was just that he didn't have the grade. He couldn't go in the NCO Club, but he had more money than the NCO. This system was finally eliminated because of the concept of pay for responsibility which is supposed to be the concept of the entire pay system. This is an indica- tion,. Mr. Chairman, of why writing the pay bill to apply to seven services, all. of whom have different problems, is one of the most diffi- cult tasks in the world. It is the easiest thing in the world to criticize, and the hardest thing in the world to produce something that is ac- ceptable to everyone. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/724;: CIA-RDP66600403R000400280006-0 Mr. ErvEns. You are absolutely right. Writing the pay bill here is hard, for any service. Mr. WILsox. What we need is deunificat ion. Mr. (linsna. Mr. liairman, may I ask a question on proficiency pay ? Arr. RIVERS. Yes. Mr. Clunsiat. The proficiency pay award is in accordanee with the law written in Hr.'s. ls it to be awarded only in recognition of a special or hard-to-get skill, or is it ever awarded on a basis of outstand- ing performance in an ordinary skill? Mr. lir,Am-wonn. Let me read the law on profieieney pay. An en- listed member of a uniformed service who is entitled to basic pay and designated as being specially proficient in it military skill of the uniformed services concerned may (1) be advanced to an enlisted pay grade that is higher than his basic pay grade at the time of his desig- nation and lie-entitled to the basic pay and special or incentive pay of I hat higher grade or (2), in addition to other pay allowances to which he is entitled receive the rate prescribed in the following table for the proficiency rating to which he is assigned. Now, to go back to the language as being specially proliciew: in a military skill," every aspect of lice combat antis involves a skill. It is a mistake to consider proficiency pay as beim, a ern ical skill. It is not what Congress intended. This was intended as a means of !riving special pay to those people NVII0 (10 an above-average job but who are frozen for a variet v of reasons from promotion. We even allowed you to advance people in a pay grade. I don't know of broader provision of law that could involve more money than that one provision. I know of no lam that leis been talket1 about more and about Nvhich less has been done. Mr. Ginsuu. Well, wouldn't it be possible under that languago for, taking a hypothetical case, for a cook, it mess sergeant, who had done ab outstanding job, reduce the cost. per man of rations, and wouldn't it lie possible for him to get proficiency rating? Mr. Iii.ANDpain. Absolutely. _Anybody in this room who has been in combat knows that if lie liad to ,'hoose bet. ween a_good 13A1 man and it good cook, it. would be a hard choice. Mr. IIminr. It is a lack of implementation of the DOD. Mr. BLANDForin. We go back to this every time, Mr. Hardy. Mr. ( ensEtz. I was on the subeominittee, at least ore member. the thin!, I had in mind more was performance, rather than necessarily tic sotther. Mr. liLv.-Noroan. It is ridiculous, actually, to say it is only for cri rival skills. I don't know anybody in the armed services other titan a kid in boot_ camp, who doesn't have a skill, and he is developing a skill. General flowstm. We do .give awards for outstanding effect iveness. BLAN-nrotio. I don't care what kind of terminology You Ii e- actually you could if you wanted to, if the 1)01) would let you do it, and they wouldn't?you could give this to every enlisted man in the Marine Corps; there is no limit to this. You could take a platoon and say every man in a platoon is entitled to proficiency pay. Mr. I Emmy. We would fuss with them, too. Mr. 13LA.Noroan. Somebody would fuss with them. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 :14A-RDP661300403R000400280006-0 Mr. RIVERS. There has never been any conscious effort to carry out the philosophy of that provision of law. It hasn't been done. It has never been tried to be made to work. Mr. Blandford has characterized it. There has been a lot of talk about it, very little done about it. General BowsER. May I say one thing, though Mr. Chairman, in that respect, that each service will have a slightly varying problem in the implementation in this no matter how the wordage is made. Mr. TARDY. They suggest there shouldn't be something different than civil service. General BOWSER. That is quite true, Mr. Hardy. Mr. BLANDFORD. May I read in that connection, Mr. Chairman: The Secretary concerned shall determine whether enlisted members of a uniform service under his jurisdiction are to be paid proficiency pay under either subsection (a) (1) or (a) (2) of this section. Mr. RIVERS. Where are you reading? Mr. BLANDFORD. I am just indicating this is up to the Secretary of each department. Mr. HARDy. Yes, subject to the direction, authority, and control of the Secretary of Defense. Mr. ItivERs. We agree with you that the effectiveness of this should be reappraised. We are glad you agree. Mr. BLANDFORD. YOU prefer the committee proposal to the DOD proposal? General BOWSER. Yes, we do. Mr. WILSON. The purpose of the proficiency pay is to maintain status. Have you made any study of your troops to see whether having proficiency pay available to them is any great factor in their wanting to make a career of the Marine Corps? General BOWSER. We made no statistical studies, Mr. Wilson. We have done a lot of questioning through the Inspector General, Com- mandant's visits and visits to the staff members. Our general feeling we get from this is that the average marine feels that this is discriminatory; that is, he doesn't like the idea even among those who draw this pay will tell you that they don't like to draw it as opposed to some man that they feel is doing just as good a job in his own field. Mr. WILSON. In other words, you set them aside in a special cast? Mr. RIVERS. I think Mr. Blandford put his finger on it, the law says military skills, the DOD says critical skills. I think that is the area where you interpreted what came out of DOD, rather than what came out of Congress. General BowsErt. One thing we might as well face up to here, too, Mr. Chairman; there is always the limtation that dollars are involved in a thing like this. As I indicated before in my testimony the last couple years to the subcommittee on appropriations, that the applica- tion of this with a dollar limitation will always be difficult, and to apply it widely enough to make it effective, I don't know whether we have these kinds of dollars. Mr. WILSON. If you had your choice, would you have it apply to all services? General BOWSER. Speaking for the Commandant and myself, I would eliminate it. 85066-63?No. 6--8 Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/0,4411 : CIA-RDP66600403R000400280006-0 Mr. Iii us. Thank you very much, General. Mr. Sra.vrroN. Mr. Chairman. Mr. RIVERS. Mr. Stratton. Mr. STRATTON. General, your statement states you would make changes in reenlistment-bonus arrangement by emphasizing the pay- ment for the first and second reenlistments. Does that mean that you basically agree that when you get beyond a certain point the built-in factors, the built-in investment in terms of retirement is a more im- vornIt. motivating factor than the bonus, itself? General Bowsru. Yes, sir; I believe that is correct, Mr. Stratton. We are talking about roughly 12 years, if you take a reenlistment, the first reenlistment of 4 years, the second reenlistment. of 4 years, piled on the original enlistment, we are talking about roughly the 12-year point. Mr. STRATTON. Basically, you agree with the Secretary of Defense on this broad principle, but you would extend the ticentive to the second reenlistment as yell as (lie first 1. General llowsra. I would, indeed, sir. I think the second one is a very important one. Ei,dit years on an 18-year-old average enlistee, he is only 0. Ile is not too old to .0-o to something else. But if you add 4 more years to that, and make him 30 years old, and 12 years' service. then he has got a real decision facing him. Mr. STRATrox. ;mural. you also men:ion?perhaps th is was touched on when I was out of the rootn?an incentive payment for technician retention. This would be an incentive --another kind of reenlistment bonus, is that what you had in mind, for technicians? General Bowsra. Yes, sir; for technicians. Mr. STa.vrrox. When you refer to technicians in the Marine Corps, what are you thinking about primarily? General Bowstm. Well, we have curtain missile repairmen, missile electronic repairmen, aviation ordnance mechanics, aviation mechan- ics?both jet and prop. I am speaking of those, generally, in that category, the category we are paying 100-percent proficiency' pay. Mr. STaArrox. These people you feel would perhaps be retained more effectively by this device than by the proficiency pay? General Bowsm. Yes, sir; we do. Mr. STRA1TON. Thank you very much. Mr. PAvElls. Thank you, General. General Bowstai. Thank you, Mr. Chairman. Mr. Itivnts. The next witness is Dr. Diamond, of the Public. Health Service. Dr. Diamond, we are. glad to have you here. We will be pleased to hear from you, Dr. Diamond. You may proceed. STATEMENT OF DR. MURRAY A. DIAMOND, ASSISTANT SURGEON GENERAL Dr. DIA:nom). Thank you, sir. Mr. Chairman, I appreciate this opportunity to testify on H.R. 3000, a bill to amend title 37, 'United States Code, to increase the rates of basic pay for members of the uniformed services, ard for other purposes. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 : Qt4IRDP661300403R000400280006-0 Members of the uniformed services, including commissioned officers of the Public Health Service, have not had an increase. in basic pay for almost 5 years, and we join with the other services in urging the 'Congress. to enact pay increase legislation during the current session. H.R. 3006 represents a forward step in the resolution of the com- plex pay problems affecting the uniformed services. However, as stated by both the Department of Defense and the President's Advi- sory Panel on Federal Pay Systems, a continuing study of these com- plex problems should be undertaken so that the compensation system of the uniformed services can be kept abreast of changes in the national economy. The commisioned corps of the Public Health Service is composed of approximately 4,500 commisioned officers who are in professional and scientific specialties related to the health fields. Of this number over 50 percent are medical and dental officers. As officers in many of the professional and scientific categories that compose the commis- sioned corps are in short supply, the Service has its problems in recruiting and retaining qualified personnel in these categories. I .ain sure that the other uniformed services, as you have heard, are faced with the same problems in the same professional and scientific fields. One of our major problems during recent years has been the high .attrition rate among our younger officers. Despite the fact that many of these officers are serving their obligated service under the Universal Military Training and Service Act, and would undoubtedly leave upon completion of such service regardless of compensation levels, I believe that the pay increases for pay grades 0-2 and 0-3 will gen- erally assist the service in retaining more of these younger officers for longer periods of service and perhaps for career service. More- over, it is my opinion that the increases proposed under H.R. 3006 for pay grades 0-1 through 0-1 are most encouraging and will decid- edly assist the Public Health Service in recruiting and retaining the younger officer. One of the provisions of the bill which we believe will be of further .assistance is that relating to constructive credit for basic pay purposes for persons holding postgraduate degrees in those areas specified by the Secretary concerned. This provision will benefit officers in the scientist and sanitary engineering categories which, next to medical and ?dental, are two of the most critical manpower shortage categories. The basic pay increases that will be authorized on original appoint- ment because of this provision will, I am sure, be a definite recruit- ment aid. There are two other provisions of the bill on which I would like to. comment briefly. These provisions would authorize for our com- missioned officers certain active duty benefits on the same basis that they are authorized for members of the other uniformed services. The first of these involves the uniform allowance. Under section .20,(b) of the bill the present uniform allowance authority for com- missioned officers of the Public Health Service would be amended to permit the payment of a uniform allowance to any officer, regular or reserve, regardless of grade, who is required by directive of the Surgeon 'General to wear that uniform. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005c011/21 : CIA-RDP66600403R000400280006-0 The second provision. which relates to the Public Ifealth Service, is contained in section 18(d) of the bill. This provision would ainend the Public Health Service Act to permit commissioned officers of the Public Health Service to ship a privately owned automobile at Gov- ernment expense on an oversea assignment . At the present time our rommissioned officers are the only group of Federal personnel who do not have this entitlement. U wish to thank you again, Mr. Chairman, for the opportunity to testify on H.R. 3006. If there are any questions, I will be glad to answer theni. Mr. It ivnus. 'chunk you very much. Dr. I riamond. Any questions from any member of the committee ? Mr. BENNOrr. Mr. BLANDr(un. I was under the impression. Dr. Diamond, that, officers of the Public Health Service, up to the grade of 04, do get a uniform allowance. )r. DtAmoNn. That, is correct. Mr. RivEas. Thank you very much, Doctor. Now. Mr. Blandford, what about the other two wit 110tiSCS ? Mr. BLANDruan. Mr. Chairman, I would like to insert in the record at this time a statement from the American Veterinary Medical Asso- ciation supporting the principles of the provisions of I I.1L 3006, and a statement from the American Legion and a letter from the VFW. Mr. litvEns. That may be done. (The letter and statements front the American Legi,m, the VFW, and the American Veterinary Medical Association are :is follows :) ANItatICAN VETERINARY MEDICAL ASSOCIATION, Wusilington, ,r) C. Re nit. 30911, Mill Congress, to Subcomniittee No. l, Committee lin Aimed Services, House of Representatives of the United :79 lutes Mr. Chairman and members of the committee. I am I IF...... J ... . Wash- ington representative of the American Veterinary Medical Association, and sheak for the association regarding H.R. 3006. in lieu of a formally prepared statement it i requested that the record show the American Veterinary Medical Association supports in principle the yovi- sions of H.R. WOG, the Uniformed Services Pay Act if 19113. STATEMENT OF WILLIAM C. DOYLE. CHArRMAN, NATIONAL SECCRITY COMMISSION, TIFF: AMERICAN LEGION. IN SUPPORT OF 11.11. :tunci :qr. Chairman and members of the subcommittee, last Octobt-r in Las Vegas, Nev., the -14th Annual National Convention of the American Legion, upon re!oni- mendation of its convention committee on nidlonal security, unanimously adopted Resolution 397 supporting a pay increase for members of our Aimed Fort's. The American Legimi recognizes that the perral sluice World War II is unique in the annals of our history as a nation. Never before has it been necestutry, short of all-out war, to nmintain such high levels of manpowor in our active military forces. Never before have we been faced with the demands for technically trained personnel to 11M 11 the weapons systems guarding the security of the Nation. These same technicians needed by our Armed Forces are in great demand by civilian industries. Herein lies the problem. The solution obviously is to tailor II,R. 3009 to meet these needs. A. thorough study of the provisions of H.R. 30tHi lends our organization to the conclusion that while the bill will gc it long way in meeting the problem and fulfilling the objectives sought hy the American Legion's Resolution 397, there are certain areas which we believe should be strengthened. For the record, the text of Resolution 500 is presented below fl its entirety : Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/211:MA-RDP661300403R000400280006-0 Whereas, the security of the United States depends on poised and ready military power in-being; and Whereas, our military strength can be measured by the courage, dedication, ?and training of Americans in uniform at the time of meeting enemy attack, and it is therefore necessary that our military forces be composed of the highest type of citizens; and Whereas, it is necessary to offer some benefits to offset the many hardships imposed by a military career in order to attract to and hold in the military services our best citizens; and Whereas, the American Legion has always strongly endorsed and supported the principal of adequate benefits for Armed Forces personnel: Now, therefore, ,be it Resolved, by the American Legion in national convention assembled in Las Vegas, Nev., October 9-11, 1962, That we reaffirm our position supporting an increase in pay for our comrades in service, to the extent that compensation received will be more nearly equal to that which could be gained in civilian life in their various specialties and professions; and our support for increased bene- fits for our Armed Forces in housing, professional services, and in commissary and PX privileges, as an expression of the appreciation of the American people for the dedication of service personnel to the defense of our Nation. Let me say at the outset that an increase in service benefits is long overdue. No one seriously questions the disparity between certain segments of the mili- tary forces compared with civil service or private industry. However, industry does not hold out a 20-year retirement to its skilled workers or its manage- ment team. Industry has long recognized that a trained and skilled worker must be re- tained if the company is to succeed. While it is not within the immediate pur- view of this subcommittee, serious study should be given to the matter of retaining both enlisted and officer personnel beyond 20 years. Increased finan- ?cial incentitives will partially bridge the problem, but constantly dangling the 20-year retirement before men about to enter the Armed Forces has a profound effect on service beyond 20 years; a time when the officer and the enlisted man are valuable members of the defense team. Adequate machinery now exists to weed out the incompetents. Is it not equally important to retain the "cream of the crop" in service at least for 30 years by some means other than finan- cial incentive which, of course, must be included in the package. Earlier in this statement, I spoke of the unprecedented demands for highly trained technicians in the armed services, who are also in demand by industry. These, with few exceptions, are in the enlisted grades, and in my opinion, the increases in benefits make up a package that is woefully inadequate to com- pete against industry. I have personally talked to jet mechanics and electronic specialists, skills for which industry is bidding high, and these young men with very few exceptions are leaving the service for industry. To raise their benefits package to com- petitive levels, we will have to go far beyond the 'provisions of H.R. 3006. Soft skills are no problem in the Armed Forces, but why continue blanket increases when the crux of the matter lies in keeping skilled manpower in the Armed Forces? Selective pay for the needed skills must be the answer. The savings in the cost of training new men to replace highly trained technicians who leave the service would offset a major portion of realistic pay increases. Sea pay and hazardous duty pay must be retained. By dropping sea pay as proposed by the Defense Department, a second-class petty officer?even with the increase provided by that proposal?would receive a mere $9 more a month. That's just about $2 a week, hardly enough to make staying in service attractive as far as financial considerations are concerned. For chief petty ,officers with 18 years who would lose sea pay the situation is even more ludi- crous. Under the Defense Department's proposed pay bill, without sea pay, the 'chief petty officer would receive the trilling increase of $2.50 a month, which figures out to about 60 cents a week. While we wholeheartedly subscribe to bringing pre-1958 retirees up to the levels of the 19,58 Pay Act, we view the proposal to again provide a different method of computing their retirement pay as a serious breach of faith. Sec- ondly, the "cost-of-living" feature further complicates an already complicated pay system. With one notable exception, retired pay has always been directly related to active duty pay. The American Legion saw no need to depart from -this formula in 1958 and it sees less justification for it today. I therefore :urge your committee to peg retirement pay to active duty pay. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/0M: CIA-RDP66600403R000400280006-0 Another matter on which Our national commander has publicly expretsed his opinion concerns eliminating from the proposed pay increases members of the Reserves serving obligated periods in the Reserve. In his statement National Commander Powers observed, and I quote: "The American Legion, by action of its national conventions has long advo- eated a fair and equitable pay system for cur men and women in military uni- form, whether they are on active duty or whether they scrve the country in f he Reserve Forces. "The American Legion is quite haj py. of course, that lire Departluent of Defense is proposing to the new Congress a pay raise for our military. It is long overdue. "However. the American Legion feels it is grossly unjust that the Defense Department wants to use t wo separate criteria for paying reservists. The leadership at the Defense Department seems to have forgotten that the re- servist with a compulsory obligation contributes as muutt to the military readiness of the country as does the volurteer reservist.. We cannot eoutpre- hend how they can rationalize paying a volunteer reservist 0 higher settle dur- ing weekly drills and paying compulsory reservists a lower scale. The proposal is not at all equitable and it is unfair to nor reservists with obligatory ierviee. Such an action can have only the worst kind of demoralizing effect on these men." We agree with you, Mr. Chairman, that paying all of the reenlistment bonus at the end of the first tour would have a most serious effect on future reen- listments. We also agree with your opinion that an individual should be per- mitted to draw two incentive pays. In this connection, we are of the distinct opinion that the dangers of hazardous duty are the same for members of our Armed Forces whether they be officers or enlisted men. Why then should officers receive more hazardous duty pay than enlisted men? Differerices in quarters allowanres between enlisted and personnel appear to deserve special study. For It Is not true that an enlisted man with three children has the same obligations to adequately feed and clothe his family, and provide for the creature comforts, as does the commissioned officer? In conclusion, the American Legion supports H.R. 3006 and offers for consid- eration changes which we believe will more adequately meet the vexing prob- lems which plague our Armed Forces. VETE:liAxs OF FOREIGN WARS OF TIIE UNITED STATES, Washington, D.C., March 1963. lion. L. MENDEL RIVERS, Chairman, Subcommittee No. 1, Mouse Armect Services Commatee, U.S. House of Representatiees, Washington, D.C. DEAR MR. CHAIRMAN: This letter is in response to your kind invitation for the Veterans of Foreign Wars of the United States to apprise the subcommittee of its views with respect to the proposed Armed Forces pay legislation (H.R. 3006), which is now under consideration by your subeounnittee. The Views expressed in this letter are based upon resolutions adopted by tire delegates to the V.F.W. 1902 National Convention, and reflect the longstanding interest of the V.F.W. in matters pertaining, to Armed Force.; personnel. Addi- tionally I would like to point out that, I his statement is submitted on behalf of Mr. Byron B. Gentry, commander in chief of the Veterans of Foreign Wars of the United States, and with his approval. The V.F.W. comprising a membership of 1,300,000 oversen combat veterans, has throughout its existence, vigorously supported adequate and fair pay scales for military personnel. Because of the !woad military experience reflected within its membership, the believes its views in matters pertaining, to pay, as well as other conditions of military service. are based upon a background of mature, knowledgeable. and varied military experience. The following are observations of a general nature as to proposed legislation : A. pay increase is long overdue for military personnel. `Ms is demonstrated, the V.F.W. believes, through any authoritative comparison with the trend a pay scales in business and the civilian element of Government. The V.F.W. strongly supports an increase in Armed Forces pay. There is a basic observation which the V.F.W. consIderA pertinent to the overall subject of military pay : It is our firm conviction that on inueh emphasis can be placed upon detailed comparisons between military and civilian?busIness Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21ARIA-RDP661300403R000400280006-0 or government?pay scales. Such comparisons must of necessity be arbitrary and artificial and hence can be very misleading. There is, the V.F.W. firmly be- lieves, no sound and accurate measure of comparison between military and civil- ian scales of remuneration. The reason is simple: There is no business or civilian pursuit similar to that of the Armed Forces. Accordingly, there is no measure by which a man can be fully paid in money for assuming the respon- sibilities and trust upon risks inherent in military service. One cannot devise a pay scale for prolonged separation from family; nor, does the nature of mili- tary service admit an 8-hour, 5-day week. The business of national security goes on around the clock. There is no civilian pay scale applicable to crews on the long underwater voyages of a Polaris submarine; for flying the China Coast surveillance patrols; for flying high and low level photographic missions over the Russian military forces in Cuba, or for night flying from the darkened decks of carriers in a pitching sea. Even the risks of peacetime maneuvers and training exercises, routine to the military man, have no counterpart in civilian life. Also, the responsibilities entrusted to noncommissioned and commissioned officers, both in terms of the value of materiel, as well as responsibility for command in combat are not paralleled elsewhere. As a general observation regarding the pay scales proposed by H.R. 3006, the V.F.W. believes that, while the raises are a step in the right direction, they are not adequate. The V.F.W. is deeply concerned over the maner in which military pay has dropped in relation to corresponding pay for civilian government em- ployees. This situation is unfair to military personnel and it is dangerous to our national security. Never before has the need been greater for attracting and retaining the highest type of military personnel. The military profession should not be so demonstrably downgraded in relation to other lines of endeavor. Following are specific comments: Retired pay.?The V.F.W. believes in the continuation of the longstanding principle of basing retired pay upon current active duty pay scales. This is fair and equitable, and it is the system which those in the service have come to expect will be applied to them when retired. However, from the practicable standpoint it must be recognized that the problem involves sharply increasing costs and it would be less than realistic to contend that Congress is not genuinely concerned about this matter. While supporting and urging the continuation of basing retired pay on active duty pay, the V.F.W. additionally recommends that if there is a departure from this system, then a fully fair and adequate alterna- tive be provided. Pay scales.?The principle of proper pay for responsibility is not adequately reflected in the proposed scales. This becomes increasingly serious in the higher ranks. Remuneration should be secured those in positions of trust and respon- sibility. This is not only possible from a standpoint of those now in service, but it is necessary ?to attract able personnel to those positions in the future. It is recommended that the pending bill be rectified in this respect and that the matter of adequate pay for positions of high trust and responsibility be thoroughly considered by the President's Committee on Executive Pay. Sea pay and oversea pay.?Both sea pay and oversea pay should be continued, should be adequate, and should not be arbitrarily restricted as to rank or re- cipient. One of the inescapable expenses, from the standpoint of the serviceman, is his added expenses necessitated by separation from his family. As anyone who has served at sea or overseas well knows, there are additional expenses incurred as a direct result of such separate duty. It should be emphasized that these extra expenses are experienced by all military personnel with families, and for that reason such allowances should go to all ranks. The termination or inadequacy of sea pay allowances would, in the practical effect, mean that the serviceman serving at sea would be paying a financial penalty for performing such vital and indispensable services to our Nation. The same theory applies to oversea pay for those separated from their families. Pay for reservists.--There should be no discrimination in pay scales between obligated and unobligated reservists. To differentiate between the two in mat- ters of pay would be to violate the principle of equal pay for equal work. Any pay discrimination between obligated and unobligated reservists would result in a lowered morale and other serious personnel difficulties. Effective date of increase.?There is no sound reason why the pending pay increases should lag substantially behind pay increases for civilian governmental employees. A lag in according a pay increase to military personnel leads to the conclusion that civilian pay increases are, in part, being paid by the servicemen Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/0412k: CIA-RDP66600403R000400280006-0 through continued lower pay scales for the military. Such a situation is unjusti- fiable from the morale standpoint. The pending pay bill, in the opinion of the V.F.W., should be made retroactive to the effective date of the recent pay increase for civilian employees of the Government. In conclusion, I take this opportunity to express the V.F.W.'s admiration and appreciation for the long and arduous work which you, your subcommittee, the full committee, and the extremely able staff have so long devoted to matters pertaining to the interests of the personnel of our Armed Forces. The V.F.W. firmly believes that. the House Armed Services Committee under the leadership of its chairman, the Honorable Carl Vinson, has been directly respon3ib1e for much of the key legislation benefiting our service personnel for many years. Thanking you again for the opportunity to submit this statement, containing some of the views of the Veterans of Foreign Wars of the United States in the matter now before you, I remain Very respectfully, J. D. Ifirrfn. Mr. II !VERS. Whitt is next ? Mr. lir,ANDronn. I don't know, Mr. Chairman, what your time schedule is. The Coast Guard and Coast and Geodetic Survey are. represented, but have no prepared statements:: is that correct, Capt am n Hicks? Captain McKs. Yes. Mr. BLANDFORD. Come up and kiss the book, if you will, Captain. Mr. InvEns. .Capt a in I ricks, have a seat.. Captain Hui Ks. Mr. Chairman, as I said I don't have a stiu.ement, but I would like to express an appreciation for the opportunity to ap- pear here. to add our concurrence to the statement of the other wit- nesses that these pay increases are necessary if we are to recruit and attract the personnel we need to accomplish our mission. Mr. lityms. In other words, you subscribe to the general pi inciple that an increase is needed ? Captain McRs. Yes, Fir. Mr. 10.vEns. You haven't studied the bill ? Captain theKs. Yes, sir; we have. Mr. lilVERS. have you studied our proposal? Mr. I ficlis. No, sir; I have not seen that one. Most, of the -a large part of the bill, most of the controversial items do not pertain to us, because we do not have an enlisted service. We have only commissioned officers. Mr. lir.Axnrono. It ow many oflicers do you have? 'aptain 111 cics. 200 is I lie a ut hurized strength now. Mr. I Imam-. You are affected by the retirement provision? Captain llicKs. Yes, sir. Air. 11.kuoy. Do you in general subscribe to that approach to the retirement problem? Captain IlicKs. Like Admiral Smedberg, reluctantly, I think the conditions are such we have to. Mr. ltimis. Certainly yon agree with its, it ought to be brought up just a little bit. You wouldn't object to that ? Ca pt;tin Hicks. I thin k t hat is one of the biggest, questions about the liming, why it is so far in the future. Mr. fivator. Are there any specific provisions of it \yith which you disagree? Captain ThcKs. Not specifically: no, sir. Mr. RIVERS. Thank you. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/2116-gA-RDP661300403R000400280006-0 Mr. HARDY. If you have an opportunity?did you have an oppor- tunity to comment on it before the DOD sent it over here? Captain Hicks. Yes, sir; we did. We made comments, and some of the comments are included in the bill. Mr. HARDY. Will you furnish the committee with a copy of those comments? Captain Hicks, Yes, sir; I will furnish them. One more thing, those comments were furnished by telephone. Mr. Timmy. You got a memorandum of what you told them, haven't you? Captain HICKS. I will have to write one on it. Mr. HARDY. You mean you don't have any record of what you told them? I could mess you up in good shape, and you couldn't prove I did you wrong. Captain Hicks. I had it in rough draft. The changes, particularly important to us, there were two items in the bill. Mr. STRATTON. Why should the Secretary of Defense be able to sat- isfy the nonmilitary services more effectively than he does the others? You don't have to answer that. Mr. RIVERS. Ile just goes along for the ride. Thank you very much, Captain Hicks. Captain HICKS. All right, sir. Thank you. BLANDFORD. Who was the representative of the Coast Guard? Mr. RivEas. Have you got a written statement, Admiral? Admiral KNUDSEN. No, sir; I do not. Mr. HARDY. Come on up here and give us one right quick. Mr. RIVERS. Who do you agree with, us, or the DOD? Admiral KNUDSEN. Partly with you, sir, and partly with the De- partment of Defense. Mr. RIVERS. Give the reporter your name?Rear Admiral Knudsen, chief officer Admiral KNUDSEN. Personnel, U.S. Coast Guard. Mr. HARDY. You are not proscribed by the Secretary of Defense. He must have given you carte blanche to tell us how you felt. Admiral KNUDSEN. I think we have to say we support the bill. However, I could answer some questions on it here. Mr. HARDY. You don't want to volunteer anything? Admiral KNUDSEN. Well, first, I would like to have something added here, if it please the committee. Mr. RIVERS. Yes. Admiral KNUDSEN. This is in section 2, on page 2, and footnote 2. That reads? While serving as a permanent professor at the U.S. Military Academy, the 'U.S. Air Force Academy, basic pay for this grade is $1,165 if the officer has over 31 years of service computed under section 205 of this title, and $1,245 if the officer has over 36 years of that service. We would like to add, to strike out the "or," after "U.S. Military Academy," and say "U.S. Military Academy, U.S. Air Force Aca emy, and while serving as a member of the permanent commission teaching staff at the U.S. Coast Guard Academy." Mr. RIVERS. Put that down, Mr. Blandford. Mr. BLANDFORD. The reporter has it, I hope. Approved For Release 2005/04/21: CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/g,1p CIA-RDP66600403R000400280006-0 Mr. IIAnny. I think it might be a good idea if you could (rive us It memorandum. Mr. RIVERS. Give us a memorandum on that, would you? Admiral KN-unsEN. Yes, sir. Mr. lii,ANnroan. I might add at this point, Mr. Chairman, this subject, of course, was passed by tie House, more than a year ago. 'There is no indication on the part of the Coast Guard they were in- terested at that time, and there apparently was no indication of in- terest on the part of tlw Coast Guard this time until today, or yesterday, actually, and, in addition to that, the Senate would not consider the bill we passed last Congress, which would provide the special increment for the permanent professors at West Point. I think before. any action is taken-- Mr. Ilimas. We are not taking any action. Mr. xtwono. No. What I :on suggesting, Mr. Chairman, before this is discussed as a legislative proposal. that it ought to be made quite clear as to whether the professors at. West Point and the pr)fessors at the Coast Guard Academy are in exactly the same situation. I don't know enough about the Coast Guard law to know. Now, as I understand the professors at West Point, they are selected for these positions, and they thereafter give up all other opportuni- ties for advancement except as they may be promoted up to lie maxi- minn grade professor, then they can stay on until age 65, I believe, it is, but they never return to the life. Is this the same situation? Admiral Kxunsr,N. This is the same, except for t he age 62. ME. BI.ANDFORD. The problems that come up. Admiral, are that there are differences in the system in the Army and the system in the Coast Guard. This is a kind of leap-frogging operation, if you put the Coast Guard in, then somebody else comes along who has a Oifferent system and they say we want him, also, but we have a different retire- ment age. I am merely suggesting if we are going to do this for all the services, the Air Force--the academies?if we are going to have this situation, the law should be the. same for all of them as far as permanent appointments are concerned at the academies? Admiral EiNunsEN. We do have permanent appointments. They are appointing a permanent commissioned teaching staff at the Academy. In other words, we may pull some of our men from civilian life, give them a commission. Ile is advanced in the various gmdes to captain. Mr. Br..x-xuroan. How do you give him constructive credit? Admiral K-xcnsEN. We do not give him constructive credit, except in smile cases where he has a subject or has knowledge of a subject which would especially warrant it. If-you mean our authority for Mr. MANDFORD. What I am getting at is this, Admiral: As I understand in the. Army, the man has to actually accumulate service. In other words, he is not qualified for this over 31. until he has had 31 years of actual service. Now, if we come in with the Coast Guard, we may discover that you can appoint a man to, say, the, grade of commander, and then he has construct ire credit, and he may only serve 10 years as a professor. but he would be drawing the same pay as a professor at. the Military Academy. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/2115gA-RDP661300403R000400280006-0 These are the only things I am raising. I don't know the answers to them. Mr. RIVERS. Mr. BI andford, this is going to involve, going to all of these things, a lot of time. I would suggest the Admiral see you and discuss these things in your office. MT. BLANDFORD. All right, sir. Mr. RIVERS. Maybe we can work out something along the lines of his proposal. MT. BLANDFORD. I am not trying to throw cold water On it, Mr. Chairman. I am indicating if we do this, we ought to be sure of what we are doing, that West Point should be under the exact same condi- tions as everybody else. Mr. RIVERS. You can talk with Mr. Blandford to see if you can work out something to submit to the committee. Admiral KNUDSEN. All right, sir. Mr. RIVERS. Do you have any other observations? Maybe you would have done well if you had written a statement for us. Admiral KNUDSEN. I could appear tomorrow. Mr. RIVERS. What else do you think about the situation? Would you tell us? Admiral KNUDSEN. Well, we feel that perhaps the pay scale could be changed slightly. In fact, we favor more of a comparability with industry, and also with the civil service. Mr. RIVERS. You take both of them. Admiral KNUDSEN. Well, we are losing a number of our technical people to private industry, so we feel it should be related more to both civil service and to private industry. Mr. RIVERS. This is a problem, we recognize that. Mr. Timmy. Did you make any comment of that kind to the Depart- ment of Defense? Admiral KNUDSEN. Yes, sir; we did. Mr. HARDY. Would you provide us with a copy of that letter? Admiral KNUDSEN. I haven't it today, but I will, sir. Mr. BLANDFORD. This is an additional in this bill for the Coast Guard for one individual. For the first time the Commandant of the Coast Guard will draw the same pay and allowances as the Commandant of the Marine Corps, Chief of Staff of the Army, and so forth. This constitutes a $4,000 personal money allowance, and this has been approved by OSD and approved by the Secretary of the Treasury. Admiral KNUDSEN. Yes, Sin Mr. BLANDFORD. This question wasn't raised by the Coast and Geodetic Survey, and I suppose it would be probably a little difficult to justify this for the Chief of the Coast and Geodetic Survey with only 200 officers. What is the size of the Coast Guard, Admiral?total strength, and number of commissioned officers? Admiral KNUDSEN. We have about 3,010 commissioned officers, about 1,000 warrant officers, and about 27,100 enlisted men. Mr. BLANDFORD. About 32,000? Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/0412.10: CIA-RDP66600403R000400280006-0 Admiral KNUDSEN. Ii0Ofildy ; yes., sir. STa.verox. Mr. (7hairman. Admiral, do your personnel got sea pay while they are at sea! Admiral livt-usEN. Yes, sir we do. Mr. STa.virrox. Are you in favor of el iminatimr that ? Admiral Kxt-osEN. No, I t hink we would like to retain the, pay. I would like to say, I he bill, on the remote and isolated duty, also in- cludes sett pay. but doesn't spell out very \veil just what sea pay is InValit. If his could be elaborated on in the bill. maybe we would be willing to give up I he sea pay. and adopt the proposal Imre in H.R. 3006. But in the absence of that, we prefer to stick to sea. pay. Mr. Rivras. You better underst and it pretty good. You don't want to !rive up anythinrr. Mr. STR.vrrox. What. about reenlistment, do you liave this problem, too? Admiral KNI7DsEN. We have the same problem as he Navy and all the other armed services, as far as that is concerned. Mr. STa.vrrox. Are you in favor of the proposal the Department has offered on that, or would you stick to the original Admiral KNUDSEN. The Department seems to have had tho reten- tion of crii ical rates in mind when this was dra Ned. We also face the same problem. (hi the other hand, we have a number of men in of her rat e.;, boat- swains and mates, for example, who are in charge of numerous small boats, and stations that we have, and are very loyal and dedicated men. We feel that they should also get an increase in some way. Now, under this proposal they would only get $50('. A critical man would get $2,40u. After all. as Mr. Bland ford has pointed out, we do need people who know how to change t he t ubes, and push the buttons, but we. also need oilier people to run 'lite service. Mr. STuArrox. Is it. t rile, as far as tlw Coast livard is concerned, if a, young man comes into the C'oast Guard, he is not going in pri- marily to satisfy a military requirement, he is going in because pre- sumably he is interested in the. possibility of making it. a career, so that to that. extent, you have less of a reenlistment problem. Is that true, or doesn't it. work out that way? Admiral KNI-nsr.x. No: I heard Admiral :'?;inedber,r's testimony. Our reenlistment rates are approximately the satin' as the Navy, for the first reenlistment, and also for subsequent reenlistments. Mr. STRATTON. Thank you. Mr. litAxoronn. Do we have any representative --not representa- tive?may I ask. Admiral?I am ahead of myself. Are you going to process legislation to eliminate I he meritorious 10-percent addition in retirement pay for enlisted personnel? I think as long as we are in this subject we ought to indicate that we have jurisdiction ovt r your pay scales, but we have no jurisdiction whatsoever over your ret irement provisions, other than disability retirement. Frankly, I did not know lint il I read the Comptroller General's decision practically all of your enlisted personnel retired at a substan- tially hip-her retirement pay than the counterparts in the oilier SC1T- ices. Is the legislation being processed to eliminate this. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21;RIA-RDP661300403R000400280006-0 Admiral KNUDSEN. Legislation has already been written, Mr. 131 andford, has been cleared by the Bureau of the Budget, and will :shortly be introduced to the Congress. Mr. BLANDFORD. Thank you. Mr. RIVERS. Thank you, Admiral. ADMIRAL KNUDSEN. Yes, Sir. Mr. RIVERS. We will begin tomorrow at 10 o'clock, and will not have an afternoon's session today. I think we will start off with Congress- man Baldwin, and then Admiral Denfeld?do you wish to have Admiral Denfeld second? Mr. BLANDFORD. Yes, sir. Mr. RIVERS. We will start off with Congressman Baldwin, and we will take you after him, Admiral Denfield. I think we will get to the rest of the witnesses, also. We will see you gentlemen at 10 o'clock. (Whereupon, at 12:20 p.m., the subcommittee adjourned.) HOUSE OF REPRESENTATIVES, COMMITTEE ON ARMED SCIENCES, SUBCOMMITTEE NO. 1, Washington, D .0 ebruary 28,1963. The subcommittee met, pursuant to adjournment, at 10 :10 a.m., in room 313-A, Old House Office Building, Hon. L. Mendel Rivers (chairman of the subcommittee) , presiding. Mr. RIVERS. Let the committee come to order. Mr. BLANDFORD. I would like to insert in the record at this point, Mr. 'Chairman, if I may, a letter from a career serviceman unsigned, a letter that covers many of the points we are discussing here and :covers them very well. I would also like to insert in the record a statement by the Vet- erans of , Foreign Wars and Maj. Gen. William II. Harrison, Jr., president of the National Guard Association of the United States, on H.R. 3006, and a statement from the National Society of Professional Engineers. I would also like to insert in the record at this time two statements I requested the Public Health Service to furnish the committee con- cerning the situation in the Public Health Service, particularly with reSpect to comparability of the pay of the commissioned officers of the Public Health Service and the pay of their civil service counter- parts who are doing practically the same work at rather substantially higher incomes. (The documents referred to are as follows :) DEAR CONGRESSMAN RIVERS: Sir, we in the armed services thank you sincerely for speaking out in such it fine manner on the military pay proposal, as quoted on page A-6 of the Wash- ington Post for Wednesday, February 27, 1903. I am especially pleased to know that a fellow southerner will not be dictated to by the administration, while in performance of his duty of representing the people of our Nation. I am sure you and your colleagues will consider carefully such things as: 1. Raising the pay rates to provide a really living wage?not just a pittance. .2. Making the raise effective as soon as possible. Even though the Secretary Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/01/21): CIA-RDP66600403R000400280006-0 of Defense staled that a pay raise for the armed services is -urgently needed," he contradicts himself by setting an effective date of October 1. Believe me, we need the raise now. 3. Finally, a matter IA hich effects many servicemen, all of the services have been "pushing" higher education. So. for the past d years I have been -.going to night school wherever I was stationed, After much work, last June 1 received a master's degree. After giving up hundreds of nights with toy family. studying weekends, and spending precious money. I find my efforts were almost in vain. Even though I have a master's degree I receive the same pay as men without even a high school diploma. My promotions come at the same time and rate as theirs. Now, is that an incentive to work toward a higher education? My two neighbors received their M.A. degrees at the same time as I. One, who worked for a large business firm, received a promotion anti a large salary increase. The other one, working for the Department of Comm( ice, was moved into a position two grades higher, which brought a big raise also. Me. in the Armed Forces. I am still in the '41 1111. grin lo noticing the sant salary had 4 years ago. I do have a new piece of paper on my wall, but that's all. Now the Secretary of Defense proposes to credit servicemen who had an advanced degree before tht?y entered the service. That is tine: a good incentive to attract better educated personnel. But, what about those who sacrifice i great deal during their service? Please, sir, make provisions for these folks who have and are struggling to better educate themselves in order to clo a better jolt for their country. In closing, we servicemen and our families will he watching the newspapers amt waiting for more won Is from you and your fine eonnnittl'e. Please, sir, do not let us down. Most respectfully, A ItEEIL SERVICE /if AN. STATEMENT RV m.k.J. 'WILLI A NI II. IBM:ISDN . JR. PRESIDF:N T, -NATIONAL GUARD ASSOCIATION OF THE UNITED STATES Mr. Chairman and members of the committee, I ant pleased to have this op- portunity to appear before you in behalf of the National Guard Assort:1:ton of the United States in support of the proposal to increase the rates of basic pay for members of the uniformed services as set forth in H.R. 3006. Over 4 years have passed since the last adjustment in the rates of basic at pay and in our judgment the upward revision of existing rates Is not only eco- nomic Justice but economic necessity. What constitutes an equitable increase over the prevailing rates is a natter upon which yon gentlemen have received intuit expert testimony and we shall subscribe to whatever is determined as your best judgment. Suffice It to say, that the stead3.? advance in the cost of living since the last military pa 3 raise has caused a steady erosion of that pay. There are three specifk proposals in tlw bill to which I should like to invite your attention. They are (1) the proposal to pay the obligated reservist at a lower rate than his counterpart \vim serves without an obligation ; (II) the proposal relating to uniform allowances: and t 3) the proposal pertain.ng to retired pay. The Defense Department plan to provide for a double standard of pay between the obligated and the unobligated reservist has been termed in some quarters as "grossly unjust." I can think of no more apt description. In it society which takes pride in justice and equality for all anti at a time when our national efforts are being directed at the highest levels to providing equity of trealmeat for all or our citizens we can only characterize this Pentagon proposal as a retrcgrade step. We in the National Guard, living part civilian and part military lives, st.etul a large degree of our thin. talking the young men of this country into voluntary military service. The attractiveness of military life, even part-time military service is a moot question. Guardsmen, of course, have already decided that service in the National Guard in behalf of Slate and Nation is loyal and worthy, and the response of hundreds of thousands cif such men in times of emergency or war has adequately demonstrated this fact. Members of the National Guard don't sit around and wait for a national emergency or war before signing up ti'i Approved For Release 2005/04/21 : CIA-RDP661300403R000400280006-0 Approved For Release 2005/04/21j29A-RDP661300403R000400280006-0 serve their country. They volunteer at an early age and perform the drudgery of peacetime training often at great personal sacrifice and hardship, and often un- der great difficulties in the lack of appropriate arms and equipment, seeking to. prepare themselves to defend their country when the need arises. Over the past number of years, hundreds of thousands of young men of draft age have escaped a single day of military service so that the burden of such service falls upon the relative few who volunteer. The Pentagon would now have us tell these young men who volunteer that they are second-class citizens because the law provides that a volunteer in the National Guard incurs a military obligation. Likewise, the volunteer who enlists in the Active Forces and serves for 2 or more years and those inducted through selective service incur a military obligation. Upon their release from active service, their training and military skills are of great benefit to the National Guard and other Reserve components but, under the Pentagon proposal there would be little or no inducement for them to enlist in the National Guard or participate in an active drilling unit of the Reserves if they were to receive a lesser compensation for their services and be characterized as second-class reservists. We strongly urge that this inequitable proposal be striken from H.R. 3001. Secondly, that part of the bill which provides for revision of uniform allow- ances fails to correct a glaring injustice which has existed for a number of years and the correction of which the Department of Defense has concurred in most recently in its report to this committee on H.R. 4788 during the life of the 87th Congress. This bill has been reintroduced by the Honorable F. Edward Hebert of Louisiana, as H.R. 2506. H.R. 3006 proposes certain changes to the matter of uniform allowances with which we do not take issue. The injustice which it fails to correct is as follows: Section 305(b) of the Career Compensation Act of 1949, as amended, now codified into section 416(a) of title 37, United States Code, authorizes a Reserve officer a $50 uniform maintenance allowance upon completion of 4 years of service in a Reserve component, if he otherwise meets the requirements of that section. The Comptroller General of the United States has ruled the phrase "in a Reserve component" means that the 4 years of service must be performed in the same component (32 Comp. Gen. 502, 512, and 514). As a result of this ruling, a Reserve officer is not qualified for the $50 allowance if his 4 years of service are a combination of service in more than one component of an Armed Force, such as, 3 years in the Army National Guard of the United States and 1 year in the Army Reserve. This ruling applies with equal force to Reserve officers of the Air Force who may serve in both the Air National Guard of the United States and the Air Force Reserve on a consecutive basis. Title 10, United States Code, sections 3351, 3352, 8351, and 8352, recognizes the desirability of providing ease of movement of Reserve officers between the Army Reserve and the Army National Guard of the United States and between the Air Force Reserve and the Air National Guard of the United States. Such provisions are desirable because of occasions in which changes in civilian occupa- tion require Reserve officers to move to new locations where conditions may not permit continued assignment to an Army National Guard unit in the case of an Army National Guard of the United States officer, or to an Army Reserve unit in the case of an Army Reserve officer. However, upon arrival at the new ben- tion, many Army Reserve officers have secured appointments in the Army Na- tional Guard, and continued their Reserve service in the Army National Guard of the United States, and conversely, many Army National Guard of the United States officers, upon discharge from the Army National Guard, have become members of actively participating Army Reserve units. In spite of the fact that the uniform of both components is identical and in both cases the members are Reserve officers of the Army, they may not combine their service because of the gni:Mentioned ruling by the Comptroller General of the United Stntes. Accordingly, we recommend that Subsection (a) of section 410 of titic) 37, United States Code, be amended by striking out the words, "in a ileSerVe com- ponent" where they appear in that subsection and substituting in lieu thereof the words "in one or more Reserve components." ? However, Mr. Chairman, if it is determined by this committee that the subject of uniform allowances is more properly a part of a separate legislative proposal we would certainly acquiesce in such determination and defer our foregoing re- quested amendment to the time when such proposals may come before the Armed Service Committee. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04941: CIA-RDP66600403R000400280006-0 Finally, we turn to the eon( roversinl matter of retired pay. Much has been said and written subesquent to the enactment of the Military Pay Act of 1958, regarding the pros and cons of the retention of the time-nonored custom or recomputing retired pay on the basis of periodic increases in active duty pay rates. The National Guard Association of the United States has consisteutly es- poused the prinviplv Of recomputat ion HMI continues to do so. In our judgment, any other proposal destroys a principal, and one of the few remaining, benefits available t 0 those who are willing to don a military uniform on a long-term career basis. Ever since World War II, there has been continual attack on what have been termed fringe benefits enjoyed by the military. It is a known fact itha compensation for the services performed anti the hazards ineurred by mem- bers of the uniformed forces cannot be equated equitably with those available In (nosiness or industry, nor even with those granted to civilians employed by tlw U.S. Government. Admitted failure in this attempt at equitable adjustment makes it even more mandatory that the secondary reward of recomputattion be retainell as an added incentive to Oar milieary men and women. Nonetheless, Mr. Chairman, we are cognizant of the signficance of the re- marks made in your opening statement relating to this subject, and we are of the opinion that If the Congress determines once and for all to sever this link between active duty pay and retired pay. military personnel should be fore- Wart1C11 of this definite policy. The major pay increases made in the 1(458 military pay bill actinic(' to those in the higher pay grades, whereas the present bill favors those in the lower grades. Those retired prior to (95S would now receive retired pay based on the pay scales of the 1958 act plus a cost of living increase. It would appear for more fair and equitable to us to provide that those retired prior to the effective date of this new pay net base their retired pay on the pay scales of the new act and thereafter, these individuals would receive only cost-of-living increases. This would poi all those presently retired on an equal basis in that each individual retired would then be aware that he would I hereafter receive only the cost of living inereases, We have appreciated the opportunity extended to us to present 0117 views on 11.11. 3000. Thank you. NATIONAL SOCIPI I" OF PlIOFFSSIoNAT ENGINEERS, Washington, D.C., February 23, 1963. Hon. L. MENDEL RIVERS. Chairman, House Armuti 'rrl'irr,s Subcommittee No. 1, U.S. House of Repre- sentatives, Washington 25, D.C.. DEMI Mn. Ilivsats: As an organization representing many engineering officers in the uniformed services, Ilw National Society of Professional Engineers would like to present for your consideration certain comments relative to the military compensation proposals currently before your subcommittee. It is respect- fully requested that these views be made a part of the record of the current hear- ings. 'Phe national society is a nonprofit membership organization composed of registered professional engineers in virtually every speciaiized branch of en- gineering practice and type of employment, including the military services. All of the society's approximately 00.000 members are licensed under applicable State engineering registration laws, and are affiliated through 53 State and ter- ritorial societies and about 450 local community chapters. Through a sneeica task force of our professional engineers in government section, the society has for a number of years devoted attention to the problems anti factors involving recruitment, retention. and utilizotion of engineers in the uniformed services. This task force has worked closely with key leaders in the commissioned en- gineering components of all services with the objective of achieving high quality engineering for Government projects. These activities Imre covered a wide range of suldects, including the need for improvement in piatressional develoP- meta, environment, and via opensatIon. Studies and observations made by our Insk force have clearly demonstrated that present military compensation is not compentitive with other opportunities tr> "vvz Au bit" c.fig'illeelW. flat? tha t dila la tie& eafitribuh,....kwhwanthim. to tho serious loss rate of engineering manpower in the military ' t avs. servoies, Tiwr em Is particularly acute among the younger engineering officers. The high loss Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/1A-RDP661300403R000400280006-0 rate among engineering officers completing their obligated service, in many cases exceeding 85 percent, is costly, inefficient, and destructive of the manpower base needed for the future development of vital professional and executive leader- ship. In testimony before your subcommittee, the Department of Defense has graphically portrayed the problems faced by the services as a result of the low retention rate among all categories of officers completing their obligated service. It has also indicated that this low retention rate may be largely attributed to the difference between military and civilian compensation available to this group. This retention problem is even greater among engineering officers be- cause of the proportionately higher salaries paid by industry for qualified graduates in this field. As an example, starting salaries reported by the college placement council for recent nontechnical graduates averaged $493 per month, while those for graduates in engineering, physical science, and mathematics averaged $592 per month, a difference of almost $100 per month. This approxi- mate dollar difference continues to exist for from 5 to 10 years following gradua- tion. Thus, in the case of engineering and scientific personnel, the military serv- ice is at its greatest competitive disadvantage during that period when its younger officers do not have enough time invested to consider themselves com- mitted to a military career. It is evident to the national society that upward adjustments in basic mili- tary pay allowances for all commissioned officers, as presently being considered by your subcommittee, are easily justifiable in view of increased salary scales generally and higher costs of living. It is our belief, however, that the greatly increased need of the uniformed services for highly qualified professional and scientific officer manpower, together with the steadily rising salaries which this group may command in the civilian economy, point to the need for additional compensation factors specifically attuned to the recruitment andl retention of trained, specialized personnel. In presenting this view, we wish to note that similar expressions have emanated from other groups concerned with this matter ?the Scientific Manpower Commission, the Folsom committee, which studied the personnel problems of the Public Health Service, and the Advisory Panel on Federal Pay Systems, which presented recommendation to the excutive branch relative to the legislative proposal currently before your subcommittee. We would like, therefore, to present two specific proposals for the consideration of your subcommittee which we feel would greatly increase the ability of the uniformed services to recruit and retain adequate numbers of trained profes- sional personnel. J. Constructive credit for purposes of appointment, promotion, and basic pay Recommendation.?The principle established by section 4 of H.R. 3006, to authorize up to 3 years of constructive credit to officers holding postgraduate de- grees in designated fields, should be retained. Eoplanation.?As the technological programs and activities of the uniformed services become more complex and sophisticated, the need for engineering and scientific manpower becomes more important in terms of quality, as well as quantity. Except in the fields of medicine, dentistry, law, the ministry, and veterinary medicine, there is no provision in current law to recognize the shortage and need for individuals possessing postgraduate degrees in vital scien- tific and engineering specialties. We note, in contrast, that provisions covering Federal civilian salaries do recognize this problem, and that the Civil Service Commission has acted to provide higher starting salaries for engineers holding postgraduate degrees. We believe that the provision proposed in H.R. 3006 would put the uniformed services in a better position to attract and retain the more highly trained and qualified personnel that they require. In addition, if broadened to cover officers now on active duty, it would act as a stimulus to promote further professional development among those already committed to a career in the uniformed services. 2. Incentive pay for engineers and scientists Recommendation.?Officers in engineering, scientific, and other scarce cate- gories of personnel. The expanding requirements for engineers and other scien- mined on the following scale: $100 per month during the first 2 years of service, $150 per month after 2 years, $200 per month after 6 years, and $250 per month after 10 years. 85066 63 No. 6 9 Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/U96CIA-RDP661300403R000400280006-0 Explanation.?This recommendation is directed at the problem of attra,ting scarce categories of trained personnel, Experience In the military services has demonstrated that the extra compensation provided for doctors and dentists has resulted in the retention of substantially higher proportions of these cate- gories of personnel, The expanding requirements for engineers and other scien- tific personnel in the services clearly Justify the extension of the incentive pay principle to these and other scarce disciplines. Coniparions of uniform service compensation scales with industrial scales indicates that such Incentives would go far toward making military salaries reasonably competitive. We appreciate the opportunity to submit comments to your committee on be- half of the professional engineers in the uniformed services, and hope that these views will receive your serious consideration. Very tuly yours, ROBBINS, ETCCUtive Director. DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE, Washington, December 11, 1962. MM. ROBERT S. MCNAMARA. Secretary of Defense, Washington., DX'. DEAR MR. SECRETARY : I IhOUP.III I should bring LO your attention my serious concern over the recommemlations of the Department of Defense relative to the compensation of members; of the uniformed services, one of which is the Com- missioned Corps of the Public Health Serviee. I have written to the Chairman of the President's Advisory Panel on Federal Pay Systems about this matter, and enclosed a copy for your Information. The needs of the Public Health Service. as well as the other uniformed serv- ices, for scientific, medical, and professional personnel will be difficuli; to meet under the schedules currently recommended. We believe that a pay structure which takes greater account of the comparability prineiplo, recently recognized In the Federal Salary Reform Act for civil service personnel, is both feasible and necessary to correct the inadequacies of the present proposals, particularly for the pay grades 0 5 and above. For this reason, my enclosed letter to Mr. Itnntlall urges that the comparability principle be given serious consideration by his Panel in its review of the current Pay proposals, with a view to developing a salary structure more in line with this principle. Sincerely, NIIIONY CEI EBREZZE, Secretary. THE SECRETARY OF HEALTH. EDUCATION. AND WELFA Washington, November 31. 1962. HOD. CLARENCE RANDALL, Chairman, President's Adr sory Panel on Federal Pay Systems, Washinkton, I Wm{ Mn. RANDALL, im November 33, P162, the Secretarti of Defense sent you the recommendations of the Department of Defense concern rig the compensation of members of the uniformed services, one of which is the Commissioned Corps of the Public Health Service, The Commissioned Corps of the Public Health Service is composed of approxi- mately 4,500 officers in pay grades 0-1 through 0-8, most of whom are in profes- sional and scientific categories which are in short supply. The recruitment and retention of these officers has become increasingly difficult in the past few years due largely to the inadequacy of the existing pay structure. The structure proposed by the Department of Defense is inadequate. particu- larly for the pay grades 0 3 and above. te recruit and hohl health related Per- sonnel needed to fulfill effectively the mission of the Public Health Service. The principal reason for this defleiency is the apparent abandtument in tl,e higher levels of the principle of comparability with industry. As the President stated in his niesige of February 20, 1062, to the Congress. when transmitting the Federal Salary Reform Art : Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 ifil9k-RDP661300403R000400280006-0 "Yet these are the very levels (upper levels) in the career service in which our need for quality is most acute?in which keen judgment, experience, and competence are at a premium. It is here that we face our most difficult per- sonnel problems. It is at these grades that we employ our top scientists, doctors, engineers, experts and managers. * * * As a practical matter, the fuU principle of comparability cannot be applied to the higher salary levels of Government; but I consider adequate adjustment in our top executive and pro- fessional positions to be the most vital single element of correction in this entire proposal." In a letter of October 30 to Assistant Secretary of Defense Norman S. Paul, commenting on the pay tables then being considered, the Surgeon General of the Public Health Service noted the inconsistency between the rates proposed for grades 0-5 and up this principle of comparability, and urged that those rates be increased substantially. Unfortunately, only one minor change was made, and the proposals now before you reflect the same disregard of the com- parability principle. I strongly support the position previously expressed by the Surgeon General. I am unaware of any reason for determining that this principle, recently incor- porated as an underlying tenet of the Federal Salary Reform Act, is inapplicable to the compensation schedules for members of the uniformed services. I urge that the President's Advisory Panel on Federal Pay Systems give serious con- sideration to a salary structure more in line with the comparability principle. Only if this is done will the uniformed services be able to meet adequately their needs for scarce manpower in the health and related fields. Sincerely, ANTHONY J. CELEBREZZE, Secretary. DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE, Washington, D.C., October 30, 1962. Hon. NORMAN S. PAUL, Assistant Secretary of Defense (Manpower), Washington, D.C. DEAR Mn. PAUL: Thank you for the opportunity to review and comment on the proposed basic pay tables and other proposals transmitted by your letter of October 16, 1962, and Mr. Gorham's letter of October 25, 1962. In sending to the Congress a salary increase bill on February 20, 1962, the President stated (H. Doc. No. 134) : "Accordingly, the salaries for services they (Federal officers and employees) perform should be fixed under well-understood and objective standards, high enough to attract and retain competent personnel, sufficiently flexible to motivate initiative and industry, and comparable with the salaries received by their counterparts in private life. To pay more than this is to be unfair to the tax- payer?to pay less is to degrade the public service and endanger our national security. "Yet these are the very levels (upper levels) in the career service in which our need for quality is most acute?in which keen judgment, experience, and competence are at a premium. It is here that we face our most difficult person- nel problems. It is at these grades that we employ our top scientists, doctors, engineers, experts and managers. * * * As a practical matter, the full principle of comparability cannot be applied to the higher salary levels of Government; but I consider adequate adjustment in our top executive and professional posi- tions to be the most vital single element of correction in this entire proposal." I have quoted from the President's message at length because I believe that he has forcefully and succinctly expressed the position of the Public Health Service with respect to the proposed pay increases in pay grades 0-5 and above. Certainly, we are entirely in accord with the pay increases proposed for the lower grades and believe that such increases will greatly assist the service in retaining younger officers for career service, but we fail to understand the reason for proposing inadequate increases in the higher grades. The rates proposed for these grades are, in our opinion, absolutely inconsistent with the position of the President. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/q : CIA-RDP66600403R000400280006-0 II has been suggested that the proposed small increases in toay graces 0-5 and 0-6 may have a relationship to tiw value of fringe benefits. 1 have dismissed this suggestion for the following reasons 1. The fringe benefits system of the uniformed services is geared to I lit 1111era- 1 tonal needs of such services and should not constitute a primary consideration in establishing pay levels. 2. As the value of such benefits was obviously nut considured in establishing I he lower grade pay levels, we feel it should not have been used in estal?lishing upper grade pay levels. The man who is selected for promotion to lay grades 5 and 0 0 is either reselling or has reached that period in his life where both his family ci.t lenses and his job responsibilities are reaching a maximum. Both such aspects should be recognized by adequate compensation (I) to reward the man for his long years of career service and his advanefs1 administrative and/or command restroisibil- Hies and HD to permit the man to meet reasonable family obligations without undue sacrifices on his part. The proposed increases in these grades will not therm to either sit nation. (hi page 12 of the material transmitted by your letter of Itctober 10, it is stated : "However, all the services report a uniform laek of success in retaining engineers, research and development specialists, medical officers and other specialists most highly sought by the civilian economy." I am sure that the Pay Study Group must have obtained current information on the incomes of professional and selentHW personnel outside lite Government. I need only say bore that the proposed upper grade pay levels fall short of such incomes. Such pay levels are not even competitive with the pay levels provided II r similar grades under the recently enacted Federal Salary Reform Aet. Al- though we are fully aware of the fact that in certain scar(a? categories of per- sonnel, Federal salary levels ran never hope to equal income levels from non- governmental sources, it is difficult to believe that the uniformed seryi??s will permit themselves to be outclassed by other Federal pay systems. We strongly urge that the Pay Study (Ii up and the Department of Defense substantially increase the protaised basic pay levels of pay grades ()-5 and ttbove. We nave objeutions to In voinments to present on Hie other proposal: trans- mitted by you and Mr. Gorham, except those which we presented to Mr. Gorham by letter of October 11,1962. Sincerely yours, LUTHER I,. TERRY, Surgeon Got oral.: COMPARABILITY OF COMMISSIONED OFFICER l'AY GRADES -5 and 0-0 it lift. :RBBi TO .APPROPRIATE CIVIL SERVICE PAY GRAF/P:8 The last year in which both civil service and commissimied pay rafts were adjusted was 195s. Therefore, I am using Iii relationsbill that existed between the civil service and commissioned pay rates in 1958 as a basis for evaluating the commissioned officer pay rates proposed under H.R. 30110. In Audying these rola- tionships, it was found that a major problow ?vurthy of immediate consideration was the deterioration of pay comparability of grades () 5 and 0 0 to civil service grades GS 12. GS-13, GS-14. and Gs-in. In this discussion, I am turning my at [coition to tlwse particular comparisons. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 :1621k-RDP661300403R000400280006-0 Charts have been prepared to demonstrate the relevant relationships between civil service and commissioned officer pay rates at appropriate grades. The range of pay used for each grade is the minimum and maximum pay of that grade. The commissioned officer pay rates include basic pay, basic allowance for quarters and basic allowance for subsistence. The charts also show for the commissioned pay grades the pay which would be received by an officer en- tering each grade under the most favorable circumstances. As service for pur- poses of within-grade increases is cumulative over an officer's entire career, an officer normally enters all grades but pay grades 0-1 and 0-2 at some step above the minimum pay of the grade. In these charts 61/2 percent has been deducted from civil service pay in order to take into account the fact that this is a retirement deduction which is made for civil service employees, but not for commissioned personnel. Since com- MiSSiMied personnel do not pay Federal and State taxes on subsistence and quarters allowances, lids tax saving has been added to the commissioned pay rates. The pay rates have thus been adjusted for the major cash differentials which affect civil service and commissioned pay. In charts 1 and 2, the upper halves show the relationship existing in 1958 between the commissioned pay at the 0-5 (chart 1) and 0-6 (chart 2) grades and the civil service pay at the GS-12 through GS-14 grades (chart 1) and at the G8-13 through GS-15 grades (chart 2). The relationships of the commis- sioned 0-5 and 0-6 pay under H.R. 3006 to the civil service GS-12 through (1S-715 pay effective January 1, 1964, are shown on the lower halves of charts 1 and 2. In addition, the commissioned pay rates necessary to maintain the same relation- ship of the commissioned 0-5 and 0--6 pay proposed in H.R. 3006 to the civil service pay effective January I, 1964, are depicted in the lower halves of charts I. and 2. A comparison of the 0-5 and 0-6 pay as proposed in H.R. 3006 with the pay necessary to maintain the same relative comparability as was present in the 1958 civil service and commissioned pay schedules yields the amounts shown in table. I. Included in the table are minimum and maximum pay, and the pay of an officer entering the grade under the most favorable circumstance. TABLE 1 Minimum Most favor- able entry Maximum 0-5 pay: H.R. 3006 19, 795 $11,387 $14, 033 Necessary for comparability 10,042 11,612 15,630 0-6 pay: H.R. 3006 11,452 14, 913 16, 869 Necessary for comparability 11,646 11,815 19,251 Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 CHART 1 CIVIL SERVICE PAY RATES FOR 05-12 THRU 68-I4 EFFECTIVE JAN.12,1956 UNDER PL 85-462' PAY RATES FOR COMMISSIONED I 1,714 1 PAY iiRCIE 05 EFFECTIVE JUNE 1,1956 I 401 UNDER PLE15-422* Le,san . CIVIL SERVICE PAY RATES FOR GS-I2?THRU GS-14 EFFECTIVE JAN.5,1964 UNDER PL. E1-793" PAY RATES FOR C0tAMISSIONED PAY GRADE 05 UNDER IliL 30,00 PAY RATES FOR COMMISSIONED GRADE 05 NECESSARY TO MAINTAIN THE SAME COMFA RAWL:TY WITH CIVIL SERVICE PAY HATES AS EXISTED IN 1956 Adjusted for tax saying 'Adjusted for retlremen1 13 11,387 OS t110331 ?1 1 I :rietn i I ! I I i I IP:,0401_ ___ ejsu a_ 7,000 10,000 13,000 11,000 AMOUNT IN DOLLARS Dolled line shows the minimum compentatIon which would be received by on officer entering the grade under the most favorable circumstances Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/2115?tIA-RDP661300403R000400280006-0 CHART 2 CIVIL SERVICE PAY RATES FOR GS-I3 THRU G$-16 EFFECTIVE JAN.I2, 1958 UWER P.L. 85-462' PAY RATES FOR COMMISSIONED PAY GRADE 06 EFFECTIVE JUNE 1,1958 UNDER P.L. 85-422* 63-54 10 617 12,413 I - 06 19627 CIVIL SERVICE PAY RATES FOR GS-I3 THRU GS-I5 EFFECTIVE JAN. 5, 1964 UNDER?P.L. 87-793' PAY RATES FOR COMMISSICNED PAY SHADE 06 UNDER H.R. 3606* PAY RATES FOR COMMISSIONED GRADE 06 NECESSARY TO MAINTAIN THE SAME 'COMPARABILITY WITH CIVIL SERVICE PAY RATES AS EXISTED IN 1958 7,600 *90 13,000 16,000 19,000 AMOUNT IN ?DOLLARS 166 12,885 , 1 1 14,6791 93-it 14,647 18,017 OS-14 12,730 16,096 IS-13 I 10,963 134143 06 14,913 1 111,452 16,8691 15,816 19 2501 *Adjusted for los saving 'Adjusted for retirement Dotted line shows the minimum compensation which would be received by an officer entering the grade under the most fumble circumstances Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/2430CIA-RDP661300403R000400280006-0 Mr. Invnts. !hies that take I he place of Dr. I I:tgan NI I. Iii.ANDruno. No, sir; they testfv at a later lime. Mr. RivEtts. Ion don't have General I farrison's ?ante on lien., do Volt! Arr. Ilt.Axiwono. No, sir; because his statement is now in the record. Mr. NivEns. Thv commitIvr MO1111110' \VIII he pleased to hear from our dist inguished colleague, ( 'ungres)-man john 1illiii of (iii fun! ift. I. Baldwin. we will be happy to hear from you at this t.ine. STATEMENT OF HON. JOHN BALDWIN, CONGRESSMAN FROM THE STATE OF CALIFORNIA r. PoLnwn\-. Thank you, Mr. Chairman. I would like to devote niv testimony this morning to that section of IBIZ. ,1006 deals with I he ref red pay and retainer pay of members or former members of t he uniformed services. T'he sect ion covering This nattier is sect ion of the bill, which begins on page 11 and ends on page 1('). sig.] ion as 11 is now worded pro\ ides that menthe!, of the armed seryives W11.0, before June 1, I95s1, Nvpre entitled to retired pay or re- tainer pay under the rates ()I 1,:tie pay that were in effect in the Career Compensat nal Act of 19-11.4, art tun it led to hare t recullt- 011 ed under t he rates of basic pay that \Veil' ill (4(41 oil i lie day before the effect ive date of the bill which you now hove under consi(kration. As I understand this provision, this would adopt the principle of equal izat ion of retired pay up to the present t ime. However, I he hill bars the use of this principle insofar as the active ditt, pay increases granted hy this hill are concerned. Those now rot iced would not receive I heir' 111)Ward adjust- ments computed as a percentage of the new active duty pay rates. The bill simply contains a provision (sec. 5(e)) which states that fat ore adjustments in retired pay or retainer pay will be determined by changes in the cost of living. rl'his, therefore, means that the principle of equalization of retired pay of military personnel will be dropped effective with the dare upon which this bill is passed. I do not t kink this change in basic principle should he adopted but rather I would like to revommend tLat this committee revise section 5 of Hit 01; to state clearly that the principle of equalization of retired pay of military persom.el will apply not (Oily with the pay increases in the present bill but will con- tinue as the principle to be applied in the future when subsequent laws are enacted to increase the pay of military personnel on act ive duty. It seems to me that a fundamental principle is at issue in conuect itm with this whole moiler. The traditional basis upon ?vhich ref ited pay of retired military personnel has been computed has hero out ii e basis dun it should he a percentage of active duty pay of military pe-sonnel current ly serving ill t he A tined Forces. Military personnel now retired or those voittemplatinu? ret irenwhi ithder-:.tood this principle would continue in effect in the future as it has been in the past. For Congress to change (Ids basic pi inciple would he to cause not only the present retired personnel hui personnel Ito'' on it ivy duty and oilwrs (.0'1'1(9111d:1i ing gtOt II.tr on it i Ye hutv t Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 1533 feel we have not given any consideration to maintaining the historic relationship between retired pay and active-duty pay. I feel that such a basic change will adversely affect future reenl istments and the future desirability of service in the Armed Forces of our country. President Kennedy in 1960, took a clear-cut position upon this issue and stated he intended to support, when elected President, the equaliza- tion of retired pay on the basis of the historic percentage relationship to active-duty pay. This committee unanimously recognized this principle in 1960, when this committee approved unanimously II.R. 11318, a bill authored by Congressman Kilday of Texas, to restore this equalization principle. The bill then. passed th.e House of Representatives M that year imanimously and went to the Senate. however, it was not acted upon by that body. I have introduced a bill, H.R. 1022, which contains the exact lan- guage of the bill which was enacted by the louse and by this com- mittee in 1960. I should like to recommend that you revise section 5 of the attached bill along the lines of my bill, H.R. 1022, to restore the basic principle of equalization of retired pay in accordance with the rates of active-duty pay. This is the only way that justice can be given to those now retired from the military service and to those who will be retiring in the future. might say that the principles contained in my bill, H.R. 1022, were supported by the Defense Department both in 1960 and 1961, as the Defense Department in both years submitted favorable reports on this The Defense Department has now changed its position but I think its original position was the proper position and the only fair and equitable position to take. I hope very much, therefore, that this committee will revise section 5 of hl,R. 3006 to give recognition to the principle of equalization of retired pay as a percentage of active-duty pay for both all personnel presently retired and for personnel who may retire in the future. Mr. RIVERS. Thank you very much, Mr. Baldwin. Mr. Bates, do you have any questions? Mr. BATES. Mr. Chairman, the gentleman from California has made an excellent statement as he always does. I would like to ask one question. What would you suggest for the situation we had a year ago, where we increased the allowances but not the basic pay? Mr. BALDWIN. I would handle it in the same way it has historically been handled in the past. My understanding of the past relationship was there was a percent- age relationship between pay and retired pay, and I think that principally is the one that should be followed. Mr. BATES. But if we increase merely the allowances, and not the base pay, upon which it is predicated, under those circumstances that would mean people on the retired list at that particular time would re- ceive no increase at all? Mr. BALawix. That is correct, but they haven't done so in the past, those that were retired. So that would not change the historic relationship. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/2IcIA-RDP661300403R000400280006-0 Mr. BATEs. They wouldn't get the increase? Mr. BALDWIN. 'that is true. Mr. BATES. I don't know why the Defense Department has changed its position. I remember we had tint situation, if you will recall. of equalization of pay bet ween Boston ind Port smouth. which t le Presi- dent, supported when he represented Massachtsetts. Ile doesn't advocate I hat now? Mr. BALDwIx. that is my underst Mr. !ham% The gentleman from Massachusetts, Mr. Bates, has been recommotalim that a long time. Mr. BATEs. That is ri!dit. Arr. InvEns. Mr. I hardy. Mi. HARDY. I am sorry I missed the opening of our colleague's presentation. Mr. Ift-DDLEsTox. NO questions, Mr. Chairman. Mr. InvEas. Mr. Bland ford Mr. Iii..sxDroan. No, sir. no questioAs. Mr. InvLits. Thank you very much, Mr. P,aldwin. I might say as usual the genet Intim from California takes :1 strong stand on behalf of those on active ditty and those -who rot ire. I want to congratulate you on a very concise and, as usual, strong and un- equivocal statement for t hose whom you seek to help on any subject matter w-ltere it involves the taking of a stand. He is always vigorous. Ile i.salwmuvs unequivocal, and this has been an excellent statement. I want tot hank you very much. Mr. BALrywix. Thank you, Mr. Mr. InvEns. The next witness now is A dmi ral Denfeld. I lave a seat, Admiral. Admiral DENFELD. Thank you. M T. ( 'hai in tan. STATEMENT OF ADM. LOUIS E, DENYELD, U.S. NAVY, RETIRED, RETIRED OFFICERS ASSOCIATION Mr. Rts-Eas. Admiral Denfeld represents Retired Officers Associa- tion. I might say, members of the committee, that we have the distinct. pleasure of hearing from an old friend of this committee, a former Chief of Naval Operations, who has been such a stalwart defender of the rights of both active and retired officers and enlisted men, in the Navy Department. don't think the admiral has been before our committee since the B-36 hearings. Admiral Th.:NI-ETA). 1949. Mr. RIVERS. The 13-36 incident. I think things are a little different now, Admiral. Admiral DENFELD. That is right. Mr. Mynas. We are very happy to have you, and so well. Now, you may testify any way you want to. Mr. BAITS. You know, Mr. Chairman, he made presentation at that time, that in the book which o see you looking such a wonderful is given out now Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 1535 portraying the Capital and different scenes in Washington, the Ad- miral is testifying before the Armed Services Committee in one of those pictures there. Have you ever seen it ? Mr. RIVERS. I might say, Admiral, you did so much good for the Navy when you were Chief, it will take a long time for anybody to change it. Admiral DENFELD. Thank you. appreciate being here, and I appreciate seeing so many of my old friends, especially the chairman of this committee, and the senior Republican, and the next senior Democrat, who are all friends of mine. Mr. Chairman, and members of the committee, I am Adm. Louis E. Denfeld, U.S. Navy,, retired, president of the Retired Officers Associa- tion, with headquarters in this city. Our association consists of over 54,000 members, representing retired officers of all of the seven uni- formed services, including both Regulars and Reserves. The association appreciates the opportunity to appear today before this distinguished committee in connection with its consideration of the proposed Uniformed Services Pay Act of 1963. The sectional analysis of this bill which was transmitted to the committee explains, in detail, the purpose of its various provisions. Accordingly, the Retired Officers Association proposes to confine its remarks to those provisions specifically applicable to retired personnel. In view of the fact that the pending bill proposes, drastically, to modify the military pay and retirement system so as to pattern it after the laws relating to civil service annuitants, insofar as the computation of retired pay is concerned, it would seem appropriate to observe that an analysis of a previous study of the military retirement system re- veals that it cannot, in any meaningful way, be compared with civilian retirement systems. This point was forcefully presented in the Cord- iner committee report which, in general, formed the basis for the Mili- tary Pay Act of 1958 (Public Law 85-422) . The report in question stated, with respect to this matter, in part, as follows: Military retirement is in itself a unique form of retirement possessing char- acteristics not found in any form of civil retirement. Its importance stems from the fact that retirement income is counted upon to provide an economic base for the eventual transition from military to quasi-civil status. Even a full military career is a relatively brief one and service personnel, often at the heights of their productivity, family obligations and financial commitments, are forced to alter their standard of living to the reduced economic level imposed by retirement. All but a few must continue at least part-time active employment to augment their inadequate retired compensation. While the retired civilian is a free agent, the military member, because of existing dual office and dual compensation laws, cannot avail himself of certain types of employment for which he often is best suited. This is in contrast to the "free agent" status of the retired civilian. * * * No other Federal or private retirement system is beset by so many quali- fications, restrictions, and forfeiture clauses. Unlike most civilian retirement programs, the individual is unable to withdraw his equity nor is it conveyable. On the contrary, it is a personal credit which attaches to the military principal only, and cannot be bequeathed to survivors * * *. The Cordiner committee report also contains these significant remarks: Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/2316: CIA-RDP66600403R000400280006-0 Military retirement is the final and continuing. phase of ...ta lionorabl. active duty career. Retired officers and enlisted personnel remain subject to the Uni- form Cotle of Military Justice. or partirillar signiikanee is the fact that all at leer. in a legal sense. continues to -hold 1,1fice" and retired personnel_ are sitb- ject to involuntary recall whenever the Secretary determines there is a need for their serviees with the avtiVt. duty force.' On this matter of possible recall to active duty. l'ornaer President Woodrow Wilson made some pert inent comments. The following is quoted -from the opinimi of the 17.S. Court of Miltary Appeals in .the case of the 1. ailed Nialcx V. Ihio rel. it. .S.C.M.A. ( l Ii IS) dated Octobe.r 13, 1958, when the count had before it tin question of the amenability of a retired officer to trial by general court-martial: * * Not without significance is the language of President Wilson in his veto of a measure which would have terminated amenability or retired perstlinel to by court-martial. This is what he sold, in part : "* * * IL thus appears that; both the legislative and judicial branches have drawn a sharp distinction in status between retired officers, who are rigard,NI and governed at all times as an eln.ctire reserve of skilled and exiiefienclut officers and a pOtt'lltini sOnn't, or military strength I on the one hand) and mere pensioners ton the other hand)." The court cunt noted : I fficers on the retired list are not mere pensioners ill any silts!' of the word. They form a vital segment of our national defense. for their experi- ence and 11101 tire judgment are relied on heavily in times at' emergency. The s;daries that they reel ye are ma solely recompense for past seuvires, but a means devised by Congress to assure their Fivailabilily and prop- redness in future conrhigencies. :rho :11)0'a' (1110tali011 iS POEISIStent With h he S110E9110111 made- to the I louse A mined Services Commit tee on April S. 1900, hv t lieSecret a ry of 1)e-fense Mr. Gates-- when he said: * * A retired 1110/1111Pr of the Armed Porces is still a part- -and an importatit part?of our defense team. lie also said that this was "an invaluable concept .- The question has been raised as to the justification for the military tvt trement system being the only one t hat. gears retired pay to active duty pay. The fact is that this is not the case. Any justice or udge of the United States who resigns after having attained the age of 70, and after having served at least 10 years, continues to receive the salary he was receiving when he resigned. On the other hand, any justice or judge, who retires, under the same conditions, continues to receive any increases provided by Congress for active duty judges. This is for a very good reason, namely, the retired Federal judge?like the retired military ofliver--remains avail- able for the. performance of the duties of his office following retirement. .1i feature of ret iremtmi which is peculiar to the military?and not generally known?is that, when the pay of active duty personnel . ts reduced, that of retired personnel is similarly decreased. In other words, the t ime-honored principle of ?Taring retired pay to active duty pay is not confined to pay increases. This is shown by the ac- tion of Congress on four separate occaslons. Th i Tile reductions n lues- 11011 applied equally to both act ive and retired personnel and ranged from sl to r; percent. Inv..luntary royal] I it-Owe fluty I. restrlarad 11, periods of war ..r gut Outlet niarzeney Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 :1081-RDP661300403R000400280006-0 Another characteristic, nonexistent in other retirement systems, is that the Congress, in setting the active duty pay rates, takes into con- sideration the retirement equity officers are accruing. In other words, they receive less pay than they actually earn based upon this consid- eration. To state it another way, retired pay is earned pay for which, in effect, a contribution is made. A statement by Mr. Charles R. Hook, who was chairman of an ad- visory committee on service pay, would appear to be pertinent to this matter. The statement in question was made in 1955 when Congress was considering the bill which became the Career Incentive Act of that year. The statement read as follows: Total compensation should be recogniy.ed as including all elements, basic pay and allowances " and deferred compensation such as severance, retire- ment, and survivor beneAts. Each is an essential of a balanced and interrelated program and should be judged in relation to the whole. AS to the question of retired pay being earned pay, the Honorable Robert L. F. Sikes, Representative from the -First District of Florida, expressed himself forcefully on this recently when he indi- cated his opposition to proposed legislation which would have denied certain retired officers the right to receive their full retired pay when holding a Federal. civilian position. He stated, on this occasion, that? It demolishs the time-honored concept that military retired pay is earned for services rendered. During the course of a debate on the floor of the House of Repre- sentatives on April 7, 1960, the Honorable F. Edward Hebert of Louisiana in explaining the reason he had abandoned the bill which he formerly sponsored, stated as follows: I abandoned the original bill because the gentleman from Texas?Mr. Kilday? convinced me that retired---military?pay is something that was earned and should not be taken away. (Congressional Record of Apr. 7, 1960, p. 6974.) The Honorable Paul J. Kilday, at the time the ranking majority member of the House Armed Services Committee, and then generally recognized as the foremost authority in the House of Representatives in the field of military pay and retirement, appeared as a witness before the House Subcommittee on Special Investigations on July 84 1959, when that committee was considering the matter of conflict of interests, pursuant to House Resolution 19, 86th Congress. The Congressman, on that occasion, made a statement very pertinent to the point now under discussion when he sa,id : I didn't want the record to stand that there is no contribution made because I think that our committee is pretty well convinced that we have adjusted?down- ward?the pay scales in view of the fact that there was no contribution made. ( See p. 39 of hearings.) He then went on to say, in effect, that if contributions had been re- quired, the pay of active duty officers would have been increased sufficiently .to. cover the cost of the contribution involved. Finally, it is desired to point out still another characteristic which is peculiar to the military retirement system. This is the fact that retired pay is not computed on the full active duty compensation of Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/1354g1 : CIA-RDP66600403R000400280006-0 the individual involved. His active duty compensation consists of (a) basic pay, and (b) allowances for quarters and subsistence. The mil- itary retirement pay is computed on the basic pay part only. As an Illustration, a colonel with 60 years of service who was retired prior to Juno 1, 1958, would receive $136 additional retired pay per month if his pay was computed?like other retirement systems pro- vide-- - -on his full active duty compensation. Since the inception of the military pay and retirement system, it has been practically the undeviating policy of our Government that the pay of a retired officer is to be geared, directly, to the active duty pay of an officer of the same rank and length of service. Thus, when the law under which these two officers were paid was amended to change the pay of an active duty officer, that of the retired officer was, automatically, adjusted correspondingly. During approximately 100 years since the military retirement system was instituted, there have beer, two laws enacted that pro- hibited all retired officers from recomputing their pay on the Etales established in such laws for those on active duty. The first occurred in the enactment of the Joint Service Pay Act of 1922, which denied the officers retired prior to its effective date, the right to compute their pay on the scales provided therein for active duty officers. This was recognized as an inequity and the Senate, 2 rears later, passed a bill to restore the tradit tonal right, but. there was no House action thereon. Both I louses of Congress passed a bill to restore the recomputition principle in 1920. This was when it enacted Public Law 204, 69th. Congress. This bill was passed by a vote of HO to 16 in the House, and by a voice vote in the Senate. The Senate report on this bill (S. 361, 09th Cong.) stated that the result of the action of Congress in 1922 was that? * * * while granting the benefits of the new pay legislation to an officers who retire after July I, 11)22, deprives all officers retired prior to that date of said benefits, thereby violating the basic law under which these officers gained their retirement rights. There is no justice in two pay schedules for equal merit and equal service. The. House report on the corrective legislation enacted in 1926 (IL Rept. No. 857, 09th Cong.), dated April 12, 1926, pointed out Unit? The pay of retired officers is not a fixed sum nor is it a specified sum hut it is 75 percent of the pay of the rank upon they are retired; that is three- fourths of the pay of officers of similar rank still on the active list and not three- fourths of the pay at the time of retirement, When the bill was being discussed on the floor of the House of Representatives on May 5, 1926, the majority leader made the fol- lowing significant statements: (1) It is not a question of what Congress can do but of what Congress in all fairness ought to do. (2) I say that we cannot afford to take any other position regardless of what it may cost, than to equalize the pay between these old ()laws and the more recently retired officers. I )urinp- the debate on the floor of t lie Douse the following state- ments were made by Congressman Speaks. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 1539 Mr. Speaker and gentlemen of the House, this is a very simple proposition in- volving a matter of justice and equity only. Regardless of the fact that argu- ments will be presented which are in some way related to the subject, and which may have a tendency to confuse members, the question of honorable pro- cedure is the sole principle to be considered. The language of the statute (retired pay statute) was regarded as a definite promise and moral contract, and throughout their years of service with the colors, officers felt that they were being compensated in some degree for lost op- portunities in civil life by the assurance that when their days of active duty were completed the Government would stand by the terms of the law under which they had been serving and grant them the retired pay and emoluments agreed upon. * * *. The association submits that the above reasoning is just as sound today as it was in 1926. The other departure from the basic principle of relating retired pay to the aCtive duty rates occurred when the Congress enacted the Mili- tary Pay Act of 1958 (Public Law 85-422). This, like the Joint Service Pay Act of 1922, prohibited personnel retired prior to its effective date (June 1, 1958) from computing their pay on the rates established therein for active duty personnel, while allowing such computation for those retired on or after that date. A bill to restore this traditional principle?H.R. 11318, 86th Con- gress----was passed by the House of Representatives on May 12, 1960, without an opposition vote, after having been approved by the Armed Services'Committee in a similar manner. The bill was, in due course, referred to the Senate Armed Services Committee, and later to a sub- committee, for its consideration, but no hearings were held on it. An identical bill was, also, made a part of the Department of De- fense's legislative program in 1961 and 1962. Contingent requests to cover the cost of the bill were included in the budget for the fiscal years 1962 and 1963. Again, however, the Senate did not take any action on the bill. Neither did the House because of its reluctance to act on it in the absence of any assurance that the Senate would do so. This, as you will recall, was not forthcoming. The Department of Defense's pay bill proposal, H.R. 3006, if enacted in its present form, would repeal the existing authority for automatic adjustment of retired pay to reflect the changes in active duty pay. It would substitute, in lieu thereof, a formula based upon the changes in the cost of living. During a press conference held in the Pentagon on January 3, the Department of Defense spokesman was asked, in effect, how he could reconcile sponsoring recomputation to correct the inequity resulting from the 1958 law, and, at the same time, advocate the creation of a similar inequity in the forthcoming bill which H.R. 3006 would do, if enacted in its present form. He attempted to rationalize his position by stating, in substance, that prior to the passage of the Military Pay Act of 1958, there was a presumption that retired pay would be adjusted to reflect the latest active duty rates. However, he contended that the action of the Congress in 1958 when it prohibited recomputation destroyed the validity of such presumtpion for the future. The Department of Defense's letter transmitting the pending bill to the Congress was Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21649A-RDP661300403R000400280006-0 consistent with the presumption theory \viten it indicatud that it was the position of rhe I kdeltSe I kpartnivnt that the effect of the 1958 Act was to serve notice that the system of computing retired pay would be chamred. We submit that the pertinent legislative history in connection with t LIP point does not support such a co1 chtsion. hi the first place, if the Congress had intended to abandon the re- comput at ion principle as a part. of the military pay and retirement system \Olen it enacted the pay law of 1958 (Public Law 85-122), it would have repealed the basic slat mory am horizations for such re- comput at ion. ii. did. not do so. I merely prevented their applica- tion to the provisions of that particular law. As a result, they are as much a part of the law today. as they were enacted. In the second place, the house of Representatives, less than 2 years after enactment of llw 1958 pay law, showed by its clear-cut action that it did not, agree will' the conclusion of the Department of Defense spokesman. This was when the House, without an opposiCon vote, passed a bill which removed the prohibition against recomputation of pay that was contained in the 1958 law. However, the House in passing this bill, did not repeal the continuing statutory authority for recomputation of retired pay. In the third place, the debate on the floor of the Senate on April 29, 1938?when it passed the bill dint became the pay law of that year? showed the Senate did not mean to abandon the recomputation prin- ciple. During the debate various Senators?including four present members of the Armed Services Committee, namely, Senators Jack- son, Symington, Ervin, and Goldwater?expressed their misgivings regarding the omission of the normal recomputation authority front the pending bill, and their hope for early reconsideration of the matter by I be Congresc. hiring the course of t he debate Senator Symington stated his regret at, the treatment accorded ret ired officers but that, n order to assure :lassage of t lie bill, it appeared necessary to do so. Senator ( ;0- dwater :indicated that it was loi the .-::1111(' FeVei011 that he refrained front offer- ing an amendment to correct Elie situation. Both of these Senators subsequently sponsored hills to ren rove die 1938 Hey' ty. It is thus apparent that a realistic appraisal of tilts Senate debate is not consistent, with the conclusion that it was the congressional intent to serve not tee of an impending- change in the method of com- puting ret ired pay in the future. (hi the contrary, it demonstrates that. the Senate, reluctantly, agreed-- --as a temporary expedient--to omit the usual recomputation authority in order not to jeopardize passage of the-overall bill. Let, us assume, for the purpose of disetts,sion, that the action of the Congress, in 1958, when it prohibited recomputation of retired pay did, m fact, have the effect of serving "notice" that, the system of re- computing retired pay would Ian changed_ This assumption, natural- ly, suggests the quest ion of where this leaves those who had completed their careers and retired prior to reeeiving the so-ea Iled notice. This included more than 5o,000 officers. and in excess of 57,090 en- listed men. nanv officers in this category had served ou active duty in both World Wars, and a consnkrable ninulicr iii both Werld Wars Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 1gfk-RDP66B00403R000400280006-0 and the Korean conflict. The careers of some embraced a period of 40 years or more. Throughout their service with the colors there were on the statute books laws providing that their retired pay would be adjusted to conform to the changes in active duty pay. After comple- tion of the military careers to which they had committed them- selves?upon entry to the service?they find that one of the benefits they had rightfully relied upon during their careers will be denied them, if the bill H.R. 3006, is enacted in its present form. It would seem fair to say that, for a notice under the conditions out- lined in the case to be of any significance there must have been some reasonable course of action open to the recipients of such a notice. With respect to the group involved?the pro4958 retirees?there was no action they could take. This proposed change would be tanta- mount to a repudiation of a right established by the Congress. As the committee knows, laws involving changes in the pay and retirement provisions of existing laws have, customarily, contained savings clauses. It is submitted that, if the Congress in its wisdom should decide to change the existing standards and requirements for retired pay computation, such changes should apply only to those who enter upon careers in the uniformed services on or after the effective date of the changed policy. Our suggestion, if adopted, would mean that those. who commit themselves to a military career after enactment of this bill would do so with a full awareness of what they can expect with respect to retire- ment -pay. At the same time, it would keep faith with. those who had already carried out their obligation by completing a full honorable career. The basic objective of Public Law 85-422, and of the Cordine,r Com- mittee report on which the legislation was, in general, based as you will recall, was to provide a military pay system designed to attract and retain qualified personnel for active career service. By permanently divorcing the computation of retired pay from the current level of active duty pay as the proposed legislation would do, one of the most compelling incentives contributing to the, attractive- ness of military service on a career basis would be sacrificed. This action was contrary to the philosophy and recommendations of the Cordiner Committee, as is shown in its report wherein it is stated: The Committee has therefore concluded that the incentive value of the existing military retirement program depends to a major degree upon its integral rela- tionship with active duty compensation and the confidence which has been built up in the military body that no breach of faith or breach of retirement contract has ever been permitted by the Congress and the American people. It is this unique characteristic which serves to counterbalance many of the limited aspects of military retirement pay and has made it one of the most influential selling points in the recruitment efforts of the services. The uniformity of compensation thus achieved is considered appropriate and the inclusion of retired personnel within the new compensation system is consid- ered by the Committee to be a mandatory and essential feature fully in conso- nance with the long-established principle that retired compensation must always remain closely related to current active duty pay. To depart from this principle would not only break faith with the individual currently retired, but would have a most serious and adverse effect upon the retention rates of personnel currently on active duty. The feeling seems to be rather prevalent that the authority for gearing retired pay to active duty pay is rather nebulous, and that 85066-63--No. C ?10 Approved For Release 2005/04/21: CIA-RDP66600403R000400280006-0 Approved For Release 2005/011V : CIA-RDP66600403R000400280006-0 it is based on a practice rather than on actual statutes. It would appear desirable to state the facts that dispel any such idea. This particular point arose during hearings conducted by the Sen- ate Armed Services Committee on June 7, 1962, when the Secretary of Defense, Mr. McNamara, was a witness. On this occasion, Secre- tary McNamara made the following statement as to his understanding of the matter : delft recall that the law stated that retired pay would remain a constant, or would continue to have a constant relationship to active duty pay as active duly pay changed subsequent to retirement. I understood that was a practice rather than an action required by law * ? The Secretary was requested to check this point, and have the appro- priate data ill connection therewith inserted in the record of the hear- ings, which he did. The information subsequently submit ted to t he Senate Armed Serv- ices Committee by Secretary McNamara demonstrated, beyond any doubt, that the. authority for reeomputation of imy by retired officers was definitely based on clear provisions of law rather than on a mere practice. This statement, submitted by Secretary McNamara dis- closes that the Comptroller General has also consistently held that this was so. his position has been that. the matter was so thoroughly established in longstandin7daws on the subject that it was unneces- sary for a particular pay bill to provide, specifically, therefor. The submission by Secretary MeNamara on this point traced the provisions of law which authorized such recomputation. Typical of the laws quoted was that relative to the Navy. and Marine Corps which is found in section 6149, United States Code, title 10, and reads as follows: * * * the retired pay of each retired officer of the Navy or the Marine Corps should be computed on the basis of rates of pay provided by law, at the time of his retirement, for officers on the active list. If after the retirement of any such officer the rates of pay for officers on the active list are changed, the retired pay to which the officer is entitled shall be recomputed on the basis of the new rates. In view of the above, the Retired Officers Associat:on respect fully submits that the justification for the proposed change so as to pattern the military retirement system after the system devised for civil serv- ice annuitants is not apparent. There is a_group of officers to which it is desired to invite the com- mittee's particular attention. They constitute the group retired for physical disability prior to October 1, 1949?who, under the Career Compensation Act of that year (sec. 411) were permitted to elect to receive the Pay provided in that law, if they could qualify therefor ?or to continue to be paid under the laws in effect prior to enactment of the Career Compensation Act. Many chose the. latter course. As a result of certain developments which could not be foreseen, this has been to their disadvantage in many eases. 1"nder the terms of the Ca- reer Compensation Act, however, the election once made was final. This law, however, provided that another group of officers retired for nondisability reasons, automatically receive their pay based on the scales contained in the old laws, or the Career Compensation Act, whichever is greater. In other words, the physically disabled are in a disadvantageous posit ion vis-a-vis the group ref iced for reasons other than physical disability. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 1543 The association believes that this group deserves an opportunity, again, to elect to receive their pay under the Career Compensation Act as was originally authorized in that law. The Secretary of Defense, Mr. McNamara, recently stated that the enactment of a military pay bill was long overdue. We heartily concur with the Secretary's statement. Lcordingly, it is recom- mended that the committee approve an effective date as hereinafter indicated, rather than October 1, 1963, as proposed in II.R. 3006. It is considered pertinent to invite attention to the steady erosion of military retirement benefits, an erosion taking place when retire- ment benefits across the Nation, generally, are expanding. Physical retirement benefits were greatly restricted by the Career Compensation Act of 1919. The right of medical and hospital treatment on a facil- ity-availability basis is fast becoming of minimal value and in many cases nonexistent. The expanding activities of Government and, the increasing parti- cipation of business and industry in Government contracts have nar- rowed opportunities for employment because of the Dual Compensa- tion and Conflict of Interest statutes. The proposed reduction of re- tired pay benefits would be a further signi [leant element of erosion. We urge that the committee do not approve this additional step in the direction of rendering the military service less attractive as a career. To summarize, the Retired Officers Association recommends that the bill, H.R. 3006, be amended to provide that: (a) Personnel retired prior to the effective date of this bill who are in receipt of pay under the Career Compensation Act of 1919, as amended, be authorized to recompute their pay upon the basis of the active duty pay scales established in the pending bill. (b) The following be excepted from the new proposed system of adjustment of retired pay that is contained in this bill: (1) Retired personnel who, on the day before the enactment of this bill are in receipt of pay under the Career Compensation Act of 1949, as amended, and (2) Personnel who are on active duty on the day before enact- ment of this bill. (c) Personnel retired for physical disability prior to October 1, 1919, and who did not elect to receive pay under the Career Compen- sation Act of that year be authorized, for a period of 5 years subse- quent to enactment of this bill, to reelect to be paid under that law, as originally provided therein. (d) The effective date of the bill be July 1, 1963, or the first day of the first month following its enactment, whichever is earlier. The association is prepared to submit, for the committee's considera- tion, language which it is believed appropriate to carry out the proposed amendments. In conclusion I would like to say that this committee has a long and distinguished record of leadership in the processing of legisla- tion beneficial to the members of the uniformed. services. We are confi- dent, therefore, that the action the committee takes on the pending bill?and proposed amendments?will be consistent with the enviable position the committee has justly established in this field. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/41,p1A-RDP661300403R000400280006-0 Thank you very much, Mr. Chairman, and menthers of the oin- ii (Y.. toi HIP privilege of a ppearn tg- before you I oday. Arr. lh VERS. Thank volt, A clinical Den feld. Admiral Denfeld do you have a In w degree? Admiral DEN FET,!). NO, I do not. r. itviais. I don't, think I Iii vv ever seen a st longer legal document. Admiral 1.4:xrrin. I have a lep-islative assistant who is a lawyer. Mr. Itivnts. We know Admiral I louse]. is a dist inguished member or the bar, hut this is one of the strongest statements it has been my pleasure to list mi to. You take a strong and unequivocal stand. I would just like to ask you one question about those 1,949 retirees who went out on disability. They had the right of election ? Admiral DEN-I-Ern, That is right.. Mr. litytats. And then when they found out they made the wrong elect ion, they want, to come back and say, we want something else? Admiral IYENeEr.u. That is right. Mr. Hiveas. You know they didn't it ally income tax on that ? Admiral DENFELD. I know that. Mr. lirvEas. So I don't_ feel as strongly about them as I do about. some of the others. Nevertheless, You made a very tine statement, and as usual you represent not one segment but all of them. Admiral DExF.Er.n. That is right. Mr. litykats. I a m glad to see you take such a position. I have no further questions. But I do want to congratulate you on a very fine statement. Let me say this, also. This is an important question, and I think it is um, of the most important parts of this I kill. This is one of the, most important questions this committee m going to have to sell. We are going to have to conic, to a decision. Arr. 1 Luny. I was going to say, Mr. Chairman, it is mighty good to see Admiral Den held back before the committee. I ant delighted he is back. And I compliment. him on having such it compre'lensive statement on this very difficult stihjoct. It is going to be hard to wrest le with it. How we wind up with it, 1 wouldn't want to fore- cast at this point. Art-. Ilivras. Mr. lilandford. Mr. Iii,ANorono. I would like to say, Mr. Chairman, that of all the arguments presented on the pros and cons on this question of recom- puting retirement pay, this is beyond a. doubt the most, comprehensive and the most factual that has ever liven submitted on this entire quest ion. This certainly makes the issue as clear as possible. I don't oelieve that, if you had 15 attorneys, you could have found I additional argu- ment in your behalf. I think the statement covers every single possi- ble argument in support of your position, and it is certainly? there for I I le committee to make a decision. Mr. Rivrits. That is exactly what I tried to say. 'Laughter.] I. don't know of any that has been more comprehensive. Mr. 11.-kany. Mr. 'Chairman, I think while we arc complimenting him. we ought to give a little credit to our friend Admiral Houser. Mr. It IVEEK. We don't want _AA mica] I rouser to be out of it job. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/214:5CIA-RDP661300403R000400280006-0 We don't want you to rest on your own, we want you to .prepare some other legal arguments for the future. This is a splendid state- ment. Admiral HousEn. Thank you, Mr. Chairman. Mr. GAVIN. I want to congratulate Admiral Denfeld, too, on a very tine, clear statement, understandable, and we appreciate it very, very much. Admiral DENFELD. Thank you, sir. Mr. GAVIN. We appreciate your being here with us today. You have earned and deserve the respect and admiration not only of the committee, but of the American people, for your very distinguished record over a long period of years, and this statement merely supple- ments the fine work that you have always carried out. Admiral DENTELD. Thank you, Mr. Gavin. Mr. RivErts. Mr. Bennett. Mr. BENNETT. I also want to congratulate the admiral on his fine statement, and I was impressed by the thoroughness with which he went into it, and I also was impressed by the authorities he cited. But, you know, there isn't any Member of Congress that really wants to end the privileges which you seek to continue, and the prob- lem is, as was stated earlier in this hearing, as to whether or not a continuation of this policy would jeopardize the continuation of any retirement benefits or any substantial retirement benefits that are now enjoyed. The legal situation, from a strictly legal standpoint, I believe, is that Congress could legally abolish all benefits for retirees, because you have never made a technically legal type of contribution to the program. I am talking about law, now, and decisions of courts, which would decide this. I went into this sort of thing long before I came to Congress. This came up in my practice, and I think as a matter of law, I am not trying to lay down any law, but it was at least 30 or 20 years ago, that if you hadn't actually contributed anything in dollars, specifi- cally along the line, you had no contract status in court to sue to en- force the things in the retirement system. So this leads me up to this point: I, myself, have not yet been convinced that the picture is as dire as people say it is if we do con- tinue this program. But if the committee should find that it is this. dire, and this serious, that it might jeopardize the entire retirement program in the future, what would you think about the possibility for these that come on later of having a required statutory contribu- tion .mvolved to a retirement system? Then they would be able to sue. Then they would be able to go to court and say, "Well, here is a pro- vision in my retirement system, this is what I paid in under, and I have a right to be acknowledged in court." .What would you think about that as a procedure, keeping faith with people, and also preventing this collapse of the retirement system? Admiral DENPr.t,n. Well, I rather agree with you that I can see no reason for the collapse of the retirement system. I think while we are spending a lot of money for retirement pay, that is what we have to pay for having won two World Wars, and two very major ones, because, as I remember it, in the First World War we had about Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/44391A-RDP661300403R000400280006-0 4 million people under arms, and in the Second World War we had over 11 million people under arms. And if we hadn't won them, we wouldn't be worrying about the retired pay, we wouldn't be here, there wouldn't be any. 1 am sure the Germans and .1aps haven't got any retired f,ay. But I think in everything that has been done, and everything that the military personnel has considered, while they haven't made any con- tribution as far as money is concerned, they certainly have made con- tributions in other ways which is just as good as the business of contributions of so much money. Mr. BENxErr. But it is not, of course, from a legal standpoint, a contribution which would allow you to come into court and enforce the pension rates, as far as 1 understand. And you could if you con- tributed dollars every month. I would like to repeat the question, though, maybe I was too loquacious is how I stated it, the question would be in my mind whet her you would prefer going to a system of having some contribu- tion made by those on active duty as a. thing to be preferred over ending these benefits which, as you stated, have been earned in the pat.. In other words, we come to a situation where we have to end this program, would it be better to try to save the program by requiring some contribution in the future if we have to do that, if those are the only two alternatives? Admiral DEN FELD. I think, Mr. Bennett, if that was to be con- sidered, that- they ought to have high-pressure, or a high-powered board to laiss on that sort of thing, then the Congress ought to take real serious?make serious considerations of the whole questions be- fore any action was taken. 1 don't know enough about that sort of legal contribution to make an opinion at the present time. But I think we certainly do need to look into it, if it is going to be necessary. Mr. BENNErr. Thank you very much, Admiral, for your very thoughtful help and contributions. Mr. RivEns. Mr. Bates. Mr. BATEs. Admiral. do I understand that title 10 still includes that section to which von referred on page 15? Admiral Housrat. Mr. Bates, it does. We took it from the state- ment submitted by Secretary MeNiunara to the Senate Armed Serv- ices Commit tee, here. Mr. BATES. That sort of conflicts with the 195S a-ct, doem't it? Admiral nu:sae. Well, Mr. Bates, no. sir. This is a continuing authorit ThU 9.iS act merely precluded application of those laws to the provision of that specific act.. Mr. REVERS. Suspends the operation? Admiral Hot:slut. Yes, sir. Otherwise, Mr. Bates, there wouldn't be in this bill here a proposal to repeal all of those laws. Mr. BATEs. In other words, that is really an exception to the standing report? Admiral HousErt. That is right. Mr. ITAnny. As I recall it, there was a provision written into the 1958 act which specifically? Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 1547 Mr. RIVERS. Would apply to that. Mr. HARDY. Yes. It eliminated the application. Admiral HousEn. That particular law. Mr. HArtny. That one act. Admiral Housnu. Yes, sir; that is right. Mr. RIVERS. That is my understanding. Admiral HOI7SER. That is right. Mr. BATES. Is that notwithstanding any other provision of law, or was it a specific reference? Admiral HOUSER. Notwithstanding any other provision of law, that was the language. Mr. BATES. That would be merely because of the controversy that has surrounded this point, but not necessarily because it was in fact a matter of law; isn't that correct? Admiral HousER. Well, Mr. Bates, the continuing statutory au- thority for recomputation pay has been on the statute books for years. and is still on the statute books today. On two occasions the Con- gress in enacting a pay bill, one in 1922, said words to the effect, not- withstanding other provisions of the law, no one on the retired list before the effective date of this act would be allowed to COIDDIAP, on the scales provided therein. That was roughly the same language in 1922 and again in 195g. Mr. HARDY. There wasn't any question about the legislative intent, because that was fully discussed. Admiral, you were around before all of us here, and you are fully aware of it. Admiral ROUSER. Yes, Mr. Hardy. Mr. RIVERS. Mr. Huddleston. Mr. HIIDDLESTON. Mr. Chairman, the statement Admiral Denfeld has given to the committee will be extremely valuable to us in arriving at the equitable and fair decision on the matter of recomputation of retired pay. The research and thought that has gone into it in certainly something that the committee is deeply appreciative of. I wasn't a member of this committee at the time of the B-36 controversy, Admiral, but if your statement was as strong and forceful and logical at that time as it has been this morning, I am amazed that you didn't prevail in your arguments in that controversy. Mr. HARDY. He did all right with the committee, but somebody down on the other end of the Avenue is the one he didn't do too well with. Mr. HUDDLESTON. In 1960 I was coauthor of legislation to equate the retired pay. I served as a member of Paul Kilday's subcommittee when we handled this legislation. We worked through this full Com- mittee of the Armed Services, and then on the floor. Along with Mr. Kilday and other members of this committee we were all disappointed. Actually, the final action taken was not to correct this inequity. I am sure everything you said is so logical and forceful the commit- tee will give full consideration to your statement. - Thank you for coming before us, Admiral. Admiral DENEELD. Thank you very much. Mr. RIVERS. Mr. Stratton. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/042, : CIA-RDP66600403R000400280006-0 Air. STRATTON. AdMind. I 11Olik We have a real problem hero vi Ii respect to these wo considerations Air. Bennett has referred to, one, the operation of the ..1etive Forces, and the other the oblip-at ion that WV have to our rot ired personnel. I. :lilt wondering, Mr. Chairman, if we might be able to get from the committee counsel. and I don't see him here at the moment, some nd ivat ion of the ext ent of the problem of the Secretarv of I )efense, as out lined to us. II ow many people do we have receivin!, retirei pay in comparison with the number of people on active did v, for example, and are the bulk ofthem offieers, or the bulk of them enlisted person - lad What is the difference in the cost comput at ion bet %%Ten the recoil t- mendat ions of thin Secretary and I he proposal that we return to the original system ! Mr. lixtrs. About. 93 billion, Ii h ink. Arr. invrtts. we will have I hat in the record. Sra.vrroN. Maybe that is contained in the statement, but I don't recall it. It seems to me this is the crucial issue as Mr. Benne,t has indicated. We are being told, as I understand it. I here are t Vo prob- lems involved. One is if we tel Hill to the original proposal, we could get into such an overwhelming financial problem that, as Mr. Ben- net t says, it Nyould jeopardize the ent ire ref wed pay system. We don't want to do that. Secondly, if I remember nw Secretary's statement, this also ms a Ii miting factor?provides a limiting factor on our matiagemeit of he Art i ye Forces. I think the Secretary's statement said that if we feel that we need some part icular invent ive to get a number of officer.; in a particular grade, we can't proceed with that without taking into account the effect this is going to have in financial terms on our retired I ay. The Secretary, at least, indicated to us that this was becomim, a burden or could become a burden in the future. Now, I in not con- vinced that he has made his case to us, and that is why I ant asking for Iiiis information. My question is this, .kdiniral : You held a position of great respon- sibility in the Navy. Do you feel that it is a. reasonable point of view to say that in dealing with personnel problems relating to the A.:?tive Forces that the effect 1 liat these act ions are going lo have on the retired personnel should he a. limiting factor, or doesn't it make sense to say that provided we deal with our retired personnel fairly, that, we ought to be able to handle the current personnel problems without hav- ing to be tied to this other question of what. the total cost is going to Ire in terms of retired pay? Admiral DExrr:Ln. Mr. Stratton. as you know, I had during my active duty a lot of personnel experience. Mr. STRATrox. I know that. Admiral DENFELD. And my opinion is that the administration and the Government can find the money to treat the people fairly, both active and retired. Mr. STa.vrrox. Well, it seems to me that, Admiral, if T may sa.c so. that is a pretty sweeping statement. TIere we are confronted now Willi1 military budget that is :4:,54 billion. the fourth highest. m the history of the Nation. We have had some proposals made in tins tom- Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 aPA-RDP66B00403R000400280006-0 mittee which I didn't go along with that would increase it still fur- ther, and there are people who feel very strongly we ought to have even more weapons. Now, we are being confronted with a pay proposal that is going to cost a lot of money. And there are other recommendations that are being made that are going to up the cost even further. Obviously, if we are going to try to reduce our expenses to meet the reduction in taxes that we are in favor of, there has got to be a line drawn somewhere. It does seem to me that there isn't an absolute failure of a limit in terms of costs. I am wondering whether you wouldn't agree?maybe this is asking too much, but you know the personnel problems?whether you wouldn't agree that the problem of handling. personnel for the active service ought not to be entirely dependent on the question of what these changes are going to do in terms of retired pay for those who retire later on? Admiral DENFELD. Well, I think that we should furnish the money necessary for the active duty, but I see no reason, in this day of free spending, why we should jeopardize the retired list and the influence on the entire military personnel by picking out the retired personnel to pinch pennies with. Mr. STRATTON. Well, this I think is the question before the com- mittee, and I must say that the distinguished chairman's comment at the time of his statement seemed very persuasive to me, that the pro- posal of the Department of Defense is not in any sense an unfair pro- posal, and if we are faced with this problem it seems to me that perhaps our primary responsibility has got to be to the operation of the Active Forces. Before I make up my own mind, I would like this information that have requested. Mr. RIVERS. It is in the record; Mr. Blandford will furnish it. Mr. STRATTON. It seems to MC we have to weigh these two alternatives. Mr. RIVERS. Mr. Kilgore. Mr. KILGORE. I have no questions. I want to thank Admiral Denfeld for his fine statement to the committee. Mr. GAvia.r. I suggest we might do a little cutting on foreign aid, and give it to these men who have served their country faithfully and devotedly and loyally, and cut in some other spot, rather than try to effect any cuts in the retirement of our Army personnel?Domestic -Peace Corps, and do other things?various programs that have been submitted. Perhaps we can investigate some places where cuts can be made so we can readjust the retirement on a fair and equitable basis -for all of those people who have served. Mr. RIVERS. Thank you, Mr. Gavin. Mr. Kilgore, had you finished? Mr. KILGORE. I did. Mr. RifvER.s. Dr. Long, Mr. LONG. .A dmiral?thank you, Mr. airman?A.dmital, I want to tell you how pleased I am to see you here today and read this very effective statement. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/011120 : CIA-RDP66600403R000400280006-0 I served briefly under you. You were Chief of the Bureau of Naval Personnel, but you were so high up and I was so low down I never did get to see you. It is a pleasure to see you here today. I was persuaded to sonic extent by what Mr. Stratton had to say. 1 think the factor of cost will probably be important in very subtle ways, because there is so much money. 'Wrongly or rightly, there is just so much money- you can get the country to spend on national defense. The possibility that these things are going to affect the retired might at some time have something to do with. what we 'would be willing to spend currently on our current armed :,ervices. I was reminded, as I listened to you, that professors would alo like an arrangement whereby their retired pay would be geared to the active duty pay of those who are succeeding them, because many of them have suffered badly. I think retired people in all walks of life would like this, but, of course, it is very hard as a practical Hatter to get it. I think there is one argument you made that perhaps is somewhat more persuasive to the uniformed services than it would be in other walks of life, say professors, and that is that, as you point out, a large percentage of retired officers are in fact called back into service. There is a readiness to serve factor here in the case of your uniformed services that you may not have in other walks of life. I wondered if you could tell us for the record just how large a per- centage of retired officers are in fact called back into service from tune to time? Is this an important, practical factor here ? Admiral DENFIELD. Well, of course, in times of emergency, a national emergency, we recall practically all that we need. And that is a large percentage. Those \rho are physically able. In the_ First World War we didn't recall so manv, bat in the Second World War we recalled practically everybody because we were so much in need of sending all the able active boys to the fronts, JUI the Pacific and Atlantic, that we_ used a great many of them on shore duty, and a great many of them on shore jobs overseas. It is a group we really need in times of emergency, there is no question about that. Mr. LONG. I think it would benefit your argument if you could get sonic actual statistics in the record as to how many people were called back in die Korean War and World War II, because in many ways that is your most persuasive argument. -You are paying people for readiness to serve here? Admiral DEN FELD. That is right. Mr. LONG. And you don't have this in ninny other walks of life. Admiral DENFELD. That is right. Mr. LONG. That is all I have. Mr. RIVERS. Thank you, Doctor. Mr. Gubser. Mr. GUBSER. Admiral, I would like to compliment you on your splendid statement, that was not only well written and well con- structed, but I thought delivered with a conviction that can only come from a deep-rooted believer. I know you believed every word you stated. You heard our counsel mention. I believe yesterday, or the day be- fore--incidentally, I might preface my remark by saying I am com- pletely with you on the principle of recomputation. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/2g55c1A-RDP661300403R000400280006-0 You heard our counsel state the other day that we were fast ap- proaching the situation where the impact upon the Federal budget of military retired pay would be about $3 billion. Of course, that is a matter we must be concerned with. I am wondering if your association, which of course is dedicated to the national interest, as well as the welfare of retired officers, has given any thought as to how we can meet that impact, and whether or not the recomputation would still be justified in spite of that impact on the Federal budget? Do you have anything to say on that subject? Admiral DENFELD. We have given it a lot of consideration, and at the present time we feel that the retired personnel should be treated the way they have been heretofore in this recomputation. If the time comes when we can't get the kind of pay we think we are entitled to, then I think all branches of Government better tighten their belts, and see what we can do for the overall picture. Mr. GUBSER. You will forgive me if I attempt to rephrase what I think you mean, and give you the opportunity to say "no." You feel that the scope of the Federal Government is constantly expanding. We are constantly taking on new services and new con- cepts of Federal responsibility, one you mentioned, the domestic Peace Corps, as an example. Do you retired officers feel perhaps we better continue to make good on previous moral commitments that we have had, rather than taking on something new at this time? Admiral DENFELD. I think you have put it very well. Mr. GUBSER. If the economy can absorb all of these new fancy, f an- dangled programs that are coming down to us, and Presidential mes- sages every other day, perhaps it can absorb its traditional responsi- bility of the retired military personnel. Would you go so far as to accept that? Admiral DENFELD. Well, I think this country is taking on a great many things, because they are really the leading country in the world today, and we have to be in the forefront of some of these things, like the space?money spent on space, and the like. But I don't think it is necessary to spend all the money we do for the things like foreign aid, that sort of thing, because I don't think the results have indicated that they have been that successful. Mr. GUBSER. Admiral, would you think it would be a fair statement to say that the retired personnel, military personnel, look upon this as a whitting away of a fringe benefit, to military services? Admiral DENFELD. Well, I think we have been subject to the fringe benefits being taken away for a good many years. This is just another way of cutting down on the retired personnel. Mr. GuusER. After a lifetime of military service, wouldn't you say that the fringe benefits were one of the incentives that were of- fered to you and others to maintain yourself in military careers? Admiral DENFELD. I am sure that is the way we felt when I entered the Navy in 1908, but times have changed since then. Mr. GUBSER. Well, now, yesterday we talked about another fringe benefit, and taking it away is an announced policy of the Federal Government, because we are not going to build any new hospitals with beds to take care of military retired personnel and their depend- Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/2352C1A-RDP661300403R000400280006-0 erns. With the tremendous increase of retired military personnel, which we know is coming, with the gradual obsolescence of existing hospitals, with the program of not lmilding new hospitals to accom- modate beds for retired personnel, isn't it obvious this is another fringe benefit dint is going by the board? Admiral DENFEI.D. I have personal experience with that. Lecause a great many of my friends are now getting to that age when they need hospitalization. They are having an awful hard time gating it because, of sonic of them living in parts of the country wlare there is no hospitalization available, and even in places where t lere are hospitals, as you say, there are very few beds available for the retired persomwl. Mr. GI-est:EL So if we abolished I he traditional concept of recom- put at ion we are abolishing it at a time when we are taking away still another fringe benefit that has been traditional to military per- solute% isn't that right ? Admiral DENyrr.?. That isright. Mr. Grestat. If we have to do this thing, abolishing the principle of reeomputat ion, by the recognition of some of the fiscal realitiei of lite, would von believe perhaps the blow might be softened a bit if we would--if the Congress would reassert the policy that we are going furnish medical service and hospital'zation for yet ired persoynel and their dependents! If we could restore that, would that soften the blow somewhat ! Admiral DENyELD. -Well, I think most retired people at t he present ime feel that they have been entitled to it, and it is slowly belt g taken away from them. M. Gt BSE1Z. Well, I think they look upon it, not as an entiKlement, but more or less as an unquestioned privilege. I think that might be better way or wording it. But have you found, as I have found, that actually that abolition of rights to medical treatment and hospitalization, and this privilege of medical treatment and hospitalization. is a matter of deep concert to retired personnel? Admiral DENYnnn. Yes, I am sure it is. Mr. &EMBER. To me I think it is an even greater concern to them than the question of retired pay. That is what we are diseussiqg here. Admiral DENrEno. It is of equal concern. I think. Mr. ( it:DKr:it. That is all. Mr. R G ivrits. Thank you, Mr. ubser. Thank you: Mr. Blandford. do you have any queitions? Mr. BLAND-voun. No, sir; I have no questions. Ma'. lit vEus. Thank you, Admiral Denfeld. DENFELD. Thank von. sir. NCr. RAN-rats. The next witness is Sgi . William M. Beni. Mr. IZEIN. Yes, sir. Mr. Riveus. We will hear von at this time. Mr. ( ;AVI N. Are you a civilian now. Sergeant Mr. NE1N. As of November. last year: yes. sir. M-r. I: I VERS. iiave a seat. Sergeant . I not im on my list here I have all the officers' associations ahead of von, but since Mr. Gavin is the most dist inguished sergeant on I hi. tttiIiili iii 01' - - Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 1553 Mr. GAVIN. Along with Mr. Rivers, too. Mr. RIVERS. We figured we ought to hear from you, too, at this time Mr. REIN. Thank you, sir. Mr. RIVERS. It will be a pleasure to hear from you at this time. Sergeant Rein. STATEMENT OP M. SGT. WILLIAM M. REIN, U.S. ARMY, RETIRED Mr. REIN. Mr. Chairman and members of the subcommittee, I am M. Sgt. William M. Rein, U.S. Army (retired), national executive secretary of the Association of Regular Army Sergeants. Our asso- ciation is a worldwide organization of career sergeants devoted to en- hancing the moral leadership, prestige, and usefulness of the non- commissioned officer corps. In furtherance of this objective, our association has in the past presented to this committee the feelings of its members on legislation affecting the benefits of military personnel. T am appearing today to express our association's strong support for a pay raise for all the members of the Armed Forces and to acquaint the subcommittee with the changes we feel are needed to make H.R. 3006 the fair and adequate pay legislation so vitally needed and re- quired by all military people. We would like to express our appreciation to this subcommittee for giving the pay raise bill priority attention and scheduling these early hearings in the midst of a very heavy and burdensome load of legisla- tive work for all members of the Armed Services Committee. We are sure we do not have to expand at length to this subcommittee on the need for a pay raise for military personnel. Adequate testimony on the need for such a raise has already been given during these hearings. Military men have not had a raise since 1958. Civil serv- ice personnel have had two raises in that time and a third will go into effect January 1, 1964. Congress, of course, would not have voted these raises if it did not feel that they were justified. Cost of living has climbed significantly for the military man just as it has for the civil servant since 1958. While we feel the average increase provided in the pay bill submitted by the Department of Defense-14 per- cent?is fair, we hope the subcommittee will keep in mind that this is merely the overall average and that in some cases the raise is sig- nificantly less than 14 percent. We recommend that the subcommittee, in adjusting the pay tables, assure that the minimum increase be at least 10 percent. We par- ticularly ask this assurance in instances where compensation systems are changed, such as in section 9 of the bill which would eliminate foreign duty pay. Under the bill as now drawn some long-service career noncommissioned officers who would get a basic pay raise but lose foreign duty pay would get a net increase of only $9 a month. We would. remind you that from the standpoint of the Government's objective .in passing this bill?which, as stated by the Secretary of Defense, is to encourage trained technical personnel to make military service a career?a raise of only $9 a month would have precisely the opposite effect than that intended. We urge that the minimum raise provided for all those with more than 2 years' service be at least 10 percent. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/41ACIA-RDP661300403R000400280006-0 The association appreciates the statement of February 21, 1963, made by the chairman of this subcommittee, in which he pledged his efforts for an earlier starting (late of the pay raise than the October 1, 1963, date originally contemplated in the Defense proposal. We urge that, the subcommittee make the bill retroactive to March I. of this year. As the association's executive committee stated in its state- ment on the pay bill in January, delaying the raise to October 1, 1963, would be a tragic blow to morale. The association also appreciates Chairman Rivers' opinion, as ex- pressed in his February _21 statement, that, officer subsistence should not be raised without any change in the subsistence allowance for enlisted men. The onlisited commuted ration, now set at $1.03 a day, has not been increased on a current basis and has actually been ad- justed downward. We hope that the subcommittee will raise the commuted ration and ask that this be stated in law to assure that it will be provided. We IWO:1111)1PM' a ration of $1.25 per day. In reference to the recommended basic pay scales, we must record our honest convict ion that the recommended increases for senior general officers are too low. If increase on a percentage basis are fair for all others these senior officers, with the enormous responsibility they shoulder in today's cold war, should also have percentage in- creases averaging 14 percent and not less than 10 pereerit. We particularly point this out bearing in mind the reports that the pro- posed subsistence increase for officers are not justified and that only basic pay can be included in computing retired pay. The Association of Regular Army Sergeants applauds the announce- ment by Secretary of Defense McNamara that military pay will be reviewed annually in the Defense Department and raises recommended in line with raises for civil service personnel and increases in the private sector of the economy. The executive council of Association of Regular Army Sergeants recommended such a review in its state- ment on pay issued in early January of this year. On other changes in the military compensation system proposed in the pay bill draft, the Association of Regular Army Sergeants recom- mends the following : Proficiency pay: Addition of a statutory requirement in the pay bill for higher rates of proficiency pay. The Defense Department has never used the proficiency pay authority voted it by this subcommittee in 1958. In order to give the subcommittee's original proposal a fair chance to work, an amendment should be added to the it bill, re- quiring the use of the P-3 step with a minimmn pay for P-3 of at least $90 a month. This is still $60 a month below the $150 figure originally authorized by this subcommittee. It, is impossible to say how effective the proficiency pay authority might be in holding highly trained technical personnel in service until that authority is fully used. There is clear evidence the authority Nvon't be used unless the Congress requires it. Lortirevity steps: We wholeheartedly support. the addit ional fogies, (longevity steps) for enlisted grades proposed in the pay bill. We feel the cutback of fogies in 1958 in the enlisted corps was a mistake and encouraged the early retirement of many men who might have :3erved useful 30-year careers. We oppose the cutback in the 8-year fozv for Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/211AA-RDP661300403R000400280006-0 the E-4 as proposed in the bill. That fogy comes for many just be- fore the reenlistment point. We also suggest that the subcommittee consider the feasibility of an additional fogy after 28 years for senior enlisted men (E-7, E-8, and E-9). We feel it would encourage many of these men to delay their retirement from the 26-year point (date of the last fogy in the proposed bill) to the 30-year point, retaining ex- perienced men in service for another 4 years and delaying their eventual addition to the retired rolls. Sea pay:_ We have already expressed our feeling that any change in foreign duty pay that means a cut for those now receiving it should be accompanied by corresponding raises in basic pay. lite must say, however, in behalf of our fellow noncommissioned officers in the Navy, that cutting out of sea pay is unwise. Duty at sea always entails separation from one's family. It entails special burdens and strains for which the man should always be compensated. We would suggest to this subcommittee that separation from one's family for an extended period?a month or more?is a just criteria for awarding special pay, call it sea pay, remote or isolated duty pay, foreign duty pay, or what you will. We hope that any change in compensation systems for men overseas will always provide for the extra pay historically provided if they are separated from their families. Retirement computation: We recommend an amendment to this bill to provide that enlisted men, in computing their retired pay, may use their reserve service the same as officers can in making such compu- tations. Mr. Chairman and members of this subcommittee, no item that has been brought to our attention by our members has caused such a morale problem with members of the enlisted corps as this one discrimination. The cost of the change would be minimal. A separate bill to accomplish this needed equity has been introduced by Representative Wilson, a member of this subcommittee and by Senator Inouye, a member of the Senate Armed Services Subcommit- tee This subcommittee could solve the problem quickly with an ameetired pay: ndment on this bill. The Association of Regular Army Sergeants supports R the principle of recomputation of retired pay on the latest pay scales for all retired personnel. This historic principle has been in effect m-qt retired pay law passed in 1861 and is a right that military men have been led to expect during their entire careers. We are aware of the deep concern of this subcommittee -for the long-range cost of military retired pay. We would ask you, however' to carefully consider two points: The comparative cost?the actual cost to the Gov- ernment of the civil service retirement system, even though it is a contributory system and the impact on military career planning on the determination to make military service a career by those most needed by the Armed Forces of our Nation in these troubled times. Retirement study: Finally, we urge this committee to undertake a study or to commission a study of the comparative merit, to the serv- iceman and to the Government, of a contributory retirement system for military personnel. We do not feel this problem has had defini- tive study and now, with the sweeping changes recommended in the retirement system, is the time for such a study. We are mainly con- cerned with the military man's equity in his retirement, we are con- Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04= : CIA-RDP66600403R000400280006-0 cerned that his retirement should lie considered a right and not a privi- lege, and we are concerned that lie is not able to leave any equity in his retirement system to his survivors. We hope the subcommittee ask itself this question: If the civil service retirement system was not a contributory system, would not a move have. been made long ago to change it because of costs, as is now to be done. with military retirement ? And we ask the subcommittee to consider the ease of a 30-year military man who dies in an accident shortly after his retire- ment. II e can 'leave none of his retirement to his survivors, though a civil servant, in a similar situation, can leave his survivors an equity I hat is wort It ninny times what he has contributed to the retirement fond. The career, lengt It of service, military ret ime is the forgotten man in determining retirement equity. We hope that regardless of the system finally adopted, military retirement will be recognized as earned retirement and the career soldier will be giver a just equity iii his retirement. would like to express my thanks to this subconun'ttee for hearing the. views of the Association of Regular Army Sergeants. Our as- sociation is aware that this subcommittee is one of the great bulwarks of military personnel morale and that your members serve on u. non- partisan basis for the good of the Armed Forces. It has been a privi- legn to testify before you. Our association stands ready to heln the subcommittee further in any way that it can. Thank you, gentlemen. Mr. Timms. Thank you, Sergeant Rein. I want to congratulate you on a very fine statenasnt. Thank you for the time and etfmt you have put into the actual contents of the position of your association. Mr. Gavin, do you have any questions? Mr. GAVIN. I think it is a very excellent statement and very practi- cal and realistic and sound. I heart ily concur in the rucommendationq that. he makes. We will give it further study. Mr. REIN. Thank you, sir. .Mr. GAvix. I am glad to see a serYeant make such an excellent state- ment. It gives the general officers the opportunity to hear a sergeani in act ion, which they solid t imes don't have. Mr. RivEns. We have the most eloquent one On the COMMItf cc. Mr. ILkuer. Did Mr. Gavin ever hold a rank in your organizat 'on? It seems to II1P he at least ought to be an honorary nieinlier. Mr. RIVERS. Thank you, Mr. Rein. Any question by members ofthe comm t tee? Mr. GUBSER. I have a question. Mr. IlivEus. Gubser. Jr. Chasm May I ask a question, Sergeant, tnai 1 wouli nke you to answer as an m(hil-(hual, and not as a represent at h-e of .'.-our :issociation. I )o you want to dot hat 1. I )0 von look upon I lie possibility you will receive hospitalization, for yourself, and your dependents, on retirement, as an ininortwet incentive for a continuation in a military career ! Mr. REIN. Yes, sir. Mr. Guesral. Do you think it is a very import ant one? Mr. REIN. Yes, sir. I may need it one of these days. Mr. Ginsra. Thank you. Mr. Ilivrais. Mr. Blandford. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 1557 Mr. BLANDFORD. I would like to ask the Sergeant whether the $1.25 commuted ration for the enlisted personnel was something you agreed upon before you heard Mr. Rivers' statement or after Mr. Rivers' statement? Mr. REIN. Definitely, sir, our statement was in before Mr. Rivers' statement. Mr. BLANDFORD. How did you arrive at $1.25 ? You can be very helpful to this committee. Mr. REIN. Mr. Blandford, we sent a study out to the field. We took an average of the answers that came in. Mr. HARDY. That is about the basis Mr. Rivers had for his figure I believe, Mr. BLANDFORD. Mr. Rivers was foresighted. The point I am making is that you did base this on a sample? Mr. REIN. Yes, sir. Mr. BLANDFORD. And the average was that $1.25 would more nearly approach the actual cost of the food of the individual who was eating home, for one individual ? Mr. REIN. Yes, sir; one individual. Mr. BLANDFORD. You feel $1.25 would be a very fair amount? Mr. REIN. Yes, sir ; I do. Mr. BLANDFORD. Do you think the $2.57 should also be increased by 26 percent which was the increase in cost of eating out since 1052? Mr. REIN. Yes, sir; I do. Mr. RIVERS. Thank you very much, Sergeant. The next witness is a distinguished representative of the Reserve Officers Association, Col. John Carlton. Colonel Carlton, you may proceed. Mr: GAVIN. I note our very good friend, Colonel Boyer, is here this morning. He is usually active and turns in a very fine performance for the Reserve Officers. We have had the colonel before the com- mittee for many, many years. Colonel Boni. Thank you, sir. Mr. RIVERS. Go ahead, Colonel. STATEMENT OF COL. JOHN T. CARLTON, EXECUTIVE DIRECTOR, RESERVE OFFICERS ASSOCIATION OF THE UNITED STATES Colonel CARLTON. Mr. Chairman and members of the committee, we appreciate this opportunity to appear before you in connection with 3006, a bill to increase the rates of basic pay for members of the uniformed services, and for other purposes. The matter of the compensation and other benefits for the military personnel of our armed services has always been of primary concern to this association. This is not only because it affects officers of the reserve forces who constitute the majority of our membership, but because it is of vital concern to people, who?we contend?are still the most vital instrument of any armed force, notwithstanding the rapid advances of technology in the art of warfare. This, then, is close to the heart of our objectives; ROA was charted by Congress o work for a sound military policy that will provide for adequate national security. 85066-63?No. 6-11 Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04{2 CIA-RDP66600403R000400280006-0 'rho bill before you, which was only made public a few short weeks ago when it was introduced by your distinguished chairman, is com- plicated and lengthy and contains many proposals in addition to an upward adjustment of basic pay rates. The bill is complicated in some respects and contains a number of unrelated items which tend to make this something of an omnibus bill. We would like, with your permission, to address ourselves to what. we see as the major features of the bill. These are; first, of course, the pay scales; second, the relation of active duty pay to retired pay; third, the relation of active duty pay to Reserve training pay; and, fourth, the timing or effective date of the pay provisions of the bill. We have been told?and the public has been told?that the Depart- ment of Defense proposal is the product of long and exhaustive study by experts in the field of military pay and compensation. It is well known that a study group did labor long and hard, in comparative isolation. ( o develop a comprehelisive pay proposal. Wo also know that this study group hind as advisers a nuriber of senior, mature, and experienced officers, all retired and of the general or flag rank. We know that the advice of these senior officers was submitted to the Secretary of Defense. We. also know that this pro- posed pay legislation was referred to the Secretaries of the three serv- ices rind to the military chiefs of the various armed services, all who dissented in varying degrees to ninny aspects of the bill. Vet after all of this. we are convinced that the pay scales pioposed by the Department of Defense have no relation to those considered adequate by any of these agencies. All these studies, all these expert advices. then, appear not to be reflected in the propHed bill. Wu in the Reserve Officers Association have confidence in tho judg- ment of the senior members of the pay study group and the Secre- taries and military Chiefs of the services. We do think, therefore, that increases ought to be more on the order of those originally pro- posed by the pay study group. It is obvious that the pay scales proposed by the Department of Defense do not represent increases in the magnitude that haie been afforded employees of the civil servce since the last military pay raise in 1058. If the civil service pay rates were justified on the basis of com- parability with private industry. it appears that military personnel shall suffer even more in comparability with them. Mr. Chairman. we are aware of t he very grave responsibil it ies placed on your committee indeed. on the whole Congress. in re!rard to the liscal stability or the Government. We know of t cosi of supporting our Military Establishment. But if we are to depend on this Establishnwnt to secure our freedom and that of much of the rest of the world, we cannot do it wirli second-rate personnel. And we cannot keep and retain lirst-rate personnel s.vit hout adequate compensatimi. Not only would it be foolhardy to do so, btu we catuatc in all justice expect them to take the risks of a military eareer nor expect I mclii to subject their families to t he- insecurity. separat ions, and lliks of a military life without adequate compensation. We cannot expect them to live by patriotism alone. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/041A-RDP661300403R000400280006-0 Thus, we urge you, in your experience and judgment, to assure yourselves that the legislation you develop here does provide adequate and fair compensation to these outstanding professional citizens who sacrifice SO much and upon whom we depend SO much. To go to another aspect of the bill, we would like to comment briefly on the proposal that "obligors" shall receive no increase in drill .pay. It is stated that this "is based on a concept that a reasonable differ- ential should exist between the rates of drill pay for members serving an 'obligated' period of service and those who voluntarily assumed service obligations." We think this statement falls of its own weight, begs the issue, and is totally unrealistic. Most persons who have "obligated" service have that obligation as the result of a voluntary action. of their own. Even if this were not so, we categorically oppose any action that would put those who fulfill this "obligation" (or privilege as we would prefer to call it) to their country in a second-rate status, -financially or otherwise. No such invidious discrimination is made against obligated personnel on active duty. Certainly the application of this descrimination during a reservist's period of obligation will destroy his incentive to continue to be active in the Reserves after his obligatory period is completed. A proposal roughly parallel to this was submitted to your committee during hearings on the 1958 pay bill, and was wisely and promptly discarded. We trust that it. will be discarded again. We feel most strongly that purely budgetary considerations influenced the Defense Department in its proposal. regarding the computation of retirement pay. We agree that the problem of the rising cost of retired pay is one of serious concern. We understand the caution with which the administration and the Congress approach this subject. These appear to be fixed costs that will represent a great burden on the taxpayer. However, we think that the problem has been inflated beyond reasonable proportions. We agree with the Randall Committee that perhaps some of the problem can be solved in other ways by the Department of Defense. Over the years, there developed in the historic pay structure for the Armed Forces the absolute requirement of an equitable retirement system for people who are exposed to far different problems than any other group in the country. We do not need to remind this committee of the unsettled life of the military and of the -financial burdens it places on them. It has long been recognized that "you never get rich" in the service. It was because of this inability to accrue an estate while in the military, and in recognition of uniformed services as a way of life for both the serviceman and his family, that the historic retirement policy was adopted. A part of that policy has been that a retired person's pay .shall continue to be proportionate depending on his length of service and grade at retirement?to his active duty counterpart. This has been part and parcel of the deal a man accepts when he undertakes a military career. I am sure if any member of the com- mittee were to ask this of any military man beyond his first hitch, the answer would always be the same?it is and should always be part of the system. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/MUCIA-RDP661300403R000400280006-0 surply the costs-- -resulting from 1,Vorld War IL Korea, :Itid the cold war?are .hip-h. But a more objective organization, perhaps, than ours. the University of Michigan Study Group, to whom this problem was referred by the Senate Armed Services Committee, st :tied t hat t 'use costs sl mid d be accepted by die Nat ion as an inevitable. deferred cost of hese military act ions to preserve our count IV. We are I nclined to believe that a majority of our citizens would agree with them. And realist Hilly. the costs are not high, compared to some other governmental programs of perhaps less direct effect on our national de fete-... This particular problem sutlers also, we think, because of 1 he im- pres:-?ion I hat t lie only defenders of I his system aro rel ired personnel. That is not so. rilley ittay be the most vocal, but alp by no means the most numerous. As we have said before, every military Man on act iVe duty looks to the traditional retired pay formula :Is sacrosanct. I our military- -and military leaders --could say so, they \Vold(' lin:nil- tflonsiV a.rrree that this is one of the prime incent iVi s toward career Iii the service. To destroy this principle will have a (Trust ic elfect on t he procurement and relent ion of otir most effect itea-id dedicated mil i- t ary personnel. The retention of this principle would not ''ins a dead hand on adm Mist rat ion of act ive personnel." Instead its el iiii hnition would lay a dead hand on the conscience of our public attitude toward I he milit :try service. We feel sure 'that this committee and the House of Represer tatives agree with us, else you would not have passed T [R. 1 1:;1 8, 80th Con- gresS, \Odell would have restored the relationship of retired pay to act INT (hay oa Last ly, and briefly, we see no justifiable reason for deferring I he effecti ye date of any pay increase finally incorporated in this measure. M tlit an' people are iong overdue a rake in pay. To delay it is only to ask t hose who sacrifice most to sacrifice again. To conclude, Mr. Chairman, we recommend-- ( 1) That the pay scales provided the member:4 of tire Armed Forces, Regular and Reserve, be determined on the basis of :tdequate compen- sation for selected, devoted, professional personnel. who, by nataire of I heir din ins and responsibilities and because of the risk.-: and hazants t always face, make personal and family sacrifices beyond that of any segment of our American society, and that these pay scales not be reduced or inhibited by any arbii rary budgetary dp-erminatiol (2) That the discriminatory feature relating to Recive training pay he eliminated (3) 'flint the retired pay of military personnel shall now and hence- forth. lie computed on the pay rates authorized for tel ive dut y per=on- nel and shall be adjusted accordingly in any future adjustment of act I ye dlny pay rates: and ( 1) The pay increases provided in your bill become effective on the first day of the month following the month in which it is enacted. Now, Mr. Chairman, one other request. I would like to make. Ti is mornimr the committee of tel ired leaders in ROA had a meet lint, a breakftn t meeting. There were some 70 or SO officers there, retired officers They unanimously adopted a very brief telegram, a very Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 1561 compelling telegram, we think, and dispatched it to us as chairman of this committee and to Mr. Vinson as chairman of the full committee, and we would like to ask you if you would place that telegram in the record. I think Mr. Blandford probably has it. Mr. RIVERS. It will be placed in the record. (The telegram is as follows:) non. CARL VINSON, Member of Congress, House Office Building, Washington, D.C.: The retired committee and the National Council representing the entire mem- bership of the Reserve Officers Association, meeting in Washington, D.C.' this date, voice concern over administration proposals contained in H.R. 3006 now under consideration by your Subcommittee No. 1. The abandonment of the historic relationshiup between retired pay and active duty pay breaks faith with all military personnel not only those retired, but all who have chosen a career in the armed services. If such a proposal is adopted this action, coupled with corrosions of other time-honored emoluments and perquisites, will eventually destroy military service as a way of life for many thousands of devoted citizens. We urge that the provisions relating retired pay to active duty pay be restored in law as a permanent part of the military pay system for the Armed Forces. NORMAN M. LYON, Captain, U.S. Naval Reserve, Retired, Chairman, Committee ROA, JOHN J. FOSTER, Major General, A FRES, President, ROA Colonel CARLTON. There is a very moving article from Readers Digest by Francis Vivian Drake, the military editor of the Readers Digest, who makes a very moving plea for emphasis on men over equip- ment, and pointing out that: the most valuable part of our Military Establishment is personnel. The committee can :file this or place it in the record, whichever you wish, but I wish the committee had time to read it. I know the time is up, and we are not going to take up your time. But we feel strongly on this. 1 want to thank you for the privilege of being here, Mr. Chairman, and for the courtesy of the committee. Mr. RIVERS. Without objection, you may put. it in the record. (The article is as follows :) WE'VE GOT THE PLANES?WHAT ABOUT THE MEN? Given the present state of the world, we need the Tactical Air Command to protect this country. As a result of a shortsighted economy ruling, our national security is in jeopardy (By Francis Vivian Drake, military editor of the Reader's Digest) Late last fall, a group of young men standing watch at a domestic Air Force base sprang into action when phone bells shrilled suddenly and commands rasped from an overhead squawk box. There followed a mass dash for the locker room, a hustle into garish survival suits, the clamping on of chalk-white Martian helmets. Before the hands of the base clock had jerked ahead an hour, only jet con- trails, streaking like ghostly arrows for the West, suggested the whereabouts of the young men. Nineteen flying hours later there they were, transplanted, as if by magic, 10,000 miles to the far side of the earth, braking to a stop on the wind-flogged runways of Okinawa, the free world's island fortress in the East China Sea. The flight was a practice mission, made no headlines, yet was astonishing on three counts: the planes weren't long-range bombers, they were single-engine Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/41A2CIA-RDP661300403R000400280006-0 fighters; each crew consisted of but one man, trained to discharge, singlehanded, the functions of a six-man team ; each plane, in addition to heavy tionament, was lilted to carry missiles and nuclear weapons sufficient to obliterate the toughest military target in the world. .1.7,ven more remarkable, this performance, which only a few years back would have been scoffed 81 as iniPosslide, today is routine (approximately 1,000 flights a year for the officers and enlisted personnel of the Tnctical Air Command, whose top-level training directive reads: "Every plane and air crew is to be ready to deploy on 1.1 moment's notice, day or night, in all_ types of weather, to any area in the world." So swift lots been the transition of the IS. fighter froiii a secondary plane into a deadly long-range striking weapon that the public is largely unaware of the priceless advantage that TAC's super planes have added to our national-defense pa-tore. Its space-annihilating Century lighters --the 1-100 Super Sabre, RE-101 Voodoo, F-101 Starlighler, 1-105 Thunderehlef?represent the most versatile airplanes ever devised by man. Although each weighs 15 tons or more, it can outmaneuver anything that flies. The Si arlighter holds the world's altitude retard of 103,305 feet for operational aircraft, and the Thunderchief has stretched its range to 1,500 miles. (It was a TAC 111"-101 that lirst procured low-levet photographic proof of Cuba's missile bases; during that crisis 1,0(10 TAC lighters stood ready to take off on a moment's notice.) While the big nuclear bombers of the Strategic Air Command stand as a major deterrent to all-out war, 'PAC's globe-trolling troubleshot-Let's are prepared to deal with limited or "brush-fire" outbreaks. As an answer to continuing cold- war pressures, a large part r TAC has been integrated into the newly created Strike Command. Ifeadquartered at MiteDill Air Force Base in Tampa, STRIKE includes not only the lighter-bombers but entire airborne d visions-- paratroopers, ski troops, commandos, sirticinlists la guerrilla lighting, 150,000 men in all. Each complement is a self-supporting team, trained to operate any- where in the ?vorld, engage the enemy tonight, lighting on anybody's tunas, con- ventional or nuclear. The Lebanon crisis in 1058 provided a graphic illustration of the effectiveness of these troubleshooters. The Conununists, using Iraq as a tool, threatened to take over the whole Middle East and capture the greatest oil reserves in the world. The Lebanon Republic. facing imminent invasion, appealed for help. Within 12 hours and 30 minutes TAC flew 0,7(X) utiles nonstop to the NAT( I base at Encirlik, Turkey. between Soviet Russia and 1.elottion. Before Lily Com- munist invasion could get underway, TAC was interlocked withr -r.gat.es the Army and Marines, and the forces of the U.S. Sixth Flea. The enemy threat collapsed in 4 days. How can TAC's spearhead have such decisive deterrence l'he answer lies in its awesome power. The automatic cannon of an F- I04 or F-105 fire more bullets in 30 seconds than a 400-man rifle company can deliver in 20 minutes. Against enemy attack-planes, they carry heat-seeking Sidewinder missiles, which pursue a jet and fly up the exhaust pipe. Against tanks and troops they are armed with Bullpup air-to-ground missiles, TNT or nuclear, guided by radio from the cock- pit. If the big whistle blows. 'PAC's bomb racks are already fitted to let fly clusters of nuclear bombs of such power that each lighter can cause more destruc- tion than thousands of World War II flying filaresses. TAC it consists of 55,000 men, expertly commanded by Gen. Walter C. Sweeney, Jr., front his headquarters at Langley Air Force Itase, a. Most of the men are stationed in 12 other bases between Florida and California. To keep itself honed to a sharp edge, TAU normally rotates squadrons every months to bases in Italy. Spain, France, Turkey, and Okinawa, sending them off with the same spares and ammunition they would need in case of War. This iS an exceptionally difficult jilt) fin- the young men who fly :hese ii tug brain- and body-torturing missions. Ash it' from being in superb physical condition, a Cent ury-class-liglacr Pilot is regaired to be jack of a dozen specialties, and absolute to of oil? gunner, bombardier, engineer, navigator, meteorologist, radar. and electronics expert. His cockpit ls a nightmare agglomeration of dials, gages, controls, levers, gunsights, grips, valves. On either side of him are shelves packed with long lines of switches and buttiins, which he has been trained to It blintififfiled. Even his control stick is stnikled with grim surprises: assorted triggers that operate the plane's weapons. Ills seat is a rock-hard buatpack. his pillow a para- chute, its oxygen bottle digging into his spine. l'oulticed Lao his survival suit, Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 :g[fg-RDP661300403R000400280006-0 he must remain nerveless at all times, for the forces at his command are more deadly than the entire armament of a battleship. So exhausting are the long- range missions that often at journey's end a pilot has to be lifted like a baby from his sonic monster. Most nightmarish en route job is the refueling operation, which often takes place at night high above a churning ocean. Until 1964 TAC will not have a fleet of KC-135 jet tankers, which can fly fast and high above the weather; it has been obliged to refuel its world-record speedsters from propeller-driven KB- 50's, thereby adding risk to an already hazardous procedure. Glutted with fuel, the KB-50's cannot climb above 20,000 feet, an altitude at which dense thunder- heads and furious turbulence frequently gang up to challenge man's right-of-way reducing speed virtually to stall point in order to latch onto a trailing fuel line at the tanker's maximum effort-400 m.p.h. In spite of the these and other hazardous procedures, TAC's accident rate is an amazingly low 1 percent per 7,000 flying hours. This speaks volumes both for the caliber of the men who fly the planes and for those who keep their finicky mechanisms in tip-top running order, for without supermen even superplanes are just so much impotent metal. And now comes the unhappy fact: TAC's manpower outlook is so gravely critical as to give cause for national alarm. Why? The answer is that, despite superlative skills and the intense pride the men take in their work, circumstances are forcing them to quite the service in droves. Shockingly, in the first 8 months of last year, 71.3 percent of the first-term skilled airmen (who maintain today's fighters and should logically become the career men of tomorrow) walked out when their time was up. During the same period more than one-third of TAC's master pilots indicated their intention to resign. They are quitting for two reasons: the cumulative strain of ever-increasing family separations; and the Defense Department's recent and shortsighted cancellation of per diem allowances for temporary duty, making it virtually im- possible for even the most dedicated men to afford to carry on in the service of their country. The drain on family exchequers is eclipsing the patriotic challenge. On temporary duty (TDY), officers and men are required to make oversea trips lasting for months at a time. Even when they are in the United States the necessity for keeping abreast of the latest techniques frequently takes them away from home for further training. In 1960, F-100 pilots, backbone of TAC, were ordered to spend an average of 168 days away from home; in 1961 the figure rose to 176, in 1962 to 197; the estimate for this year runs to 215 days. About 98 percent of TAC's combat pilots are married men on whom these absences inflict a double-edged hardship. First, they are seldom around to share in family interests, problems, emergencies. Second, TDY now imposes the ad- ditional expense of having, in effect, to maintain two establishments simultane- ously. Formerly the costs thus incurred were offset by a special allowance?$6 per diem for officers, $1.50 for airmen?which just enabled personnel to scrape by financially. Last July, abruptly and incomprehensibly, the Department of De- fense canceled these allowances. The effect has been catastrophic, and from a study of the following outline it is not hard to understand why. When an officer is ordered on TDY, family expenses go on as before?for, as any houeswife knows, savings from having one less mouth to feed are negligible. Rent, utilities, upkeep of home and car remain unaffected by the husband's absence; the necessity for hiring sitters, to release wives for marketing, becomes an extra factor. Official surveys show that TDY today is costing officers $292 extra per month; in terms of 1963's TDY commitments, that is over $2,000 per year. So little is left from income (base pay for a captain is $440 per month, plus $180 flight pay) that it is no longer possible to make ends meet. Since the men of TAC are shouldering the overwhelming responsibility of pro- tecting world peace, it is not to be wondered that this shabby treatment has left them with a deep-down hurt. Here are some of the comments taken verbatim during an official survey: From an F-100 pilot with a B.S. degree in engineering: "If the allowance is not restored, I must, with deep regret, resign my commission. A service career has been my goal for 20 years, but I cannot continue to pay the Air Force for the privilege of living away from my family." From a major with 12 years' service: "A few years ago it was a privilege to be a fighter pilot. Now I am on TDY approximately 9 months a year, and it is im- possible 'for me to save enough money when I'm at home to take care of added expenses when I'm away." Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/014/1211 : CIA-RDP66600403R000400280006-0 Prom a staff sergeant (11 years' service) with three children "1 eat as cheaply as I can on TDY, just One meal a day at snackbars, hut even so I can save little to send home. Were just about broke." .From a mechanic years' service) : Each time I've been on Till' it has cost me money, but now the allowance is gone I can no longer afford to stay in. l've been offered a civilian job that pays twice the money for identical work, live days a week, and double on Sundays." When it canceled the TI/ 1". allowances the Department of Defense proclaimed that the cuts would effect a saving of $3 million a year in TAC alone. Nothing could be further from the truth. Since the measure was pass(d last summer. the actual loss of taxpayers' investment is heading toward -10 tin es that figtrT --the forfeiture of more than $120 million of skilled manpower. Few taxpayers realize the sky-high costs they must pay to train topnotch lighter pilots and mechanics. No less than $2.42.000 Is required to lout it lieutenant through 2 years of Air Training Command. Aftor that he graduates ti TAC, and by the time he has racked up an average 7 years of service- -1,700 lvairs of lighter time, qualifying him to fly any mission anywhere tile figure stands at more than half a million dollars. The loss in war readiness when top-trained men walk out, and the con iequent loss to our national security. are incalculable. In these times of everlastiug Com- munist-inspired llareups, TAC dares not relax its readiness tor a minute. The time has come for responsible citizens to make themselves heard. They should seek out their Congressmen before it is too late find insist that this un- American "economy" maneuver be revoked and that a squarer deal be .granted the men to whom we all owe so much. Mr. ItivEtts. The ROA, as usual, makes a strong and helfpul state- ment. 1 want to thank you for your con t ribut ion. Colonel CARLTox. That tic. you. 1 r. Chairman. RivEas. Is Dr. McCrary here ? Dr. MuCa.kar. Yes, sir. Mr. RivEus. Dr. McCrary, we will be pleased to hear you at this time. STATEMENT OF V. EUGENE McCRARY, 0.D., AMERICAN OPTOMETRIC ASSOCIATION Dr. MrClimtv. Mr. Chairman and members of the committee, first of all, I would like to thank you for the opportunity of appearing be- fore you I his morning in presentinz this test unony. My name is V. Eugene. McCrary. I am an optometrist practicing in College Park, Md. I commenced practicing with in father in Green- ville. S.C., in ltrio. Subsequently I moved to Maryland. I served as president of the Maryland Optomet ric Association. a member of the hoard of examiners ill optometry for the State of Maryland. and as optometric consultant to the industrial vision program of the U.S. Naval Laboratory. My appearance I 10 re is (IS trttstee consult alit to Ole Department of National Affairs of the American Optometric Association. In World War II, I- enlisted in the Navy at the age of 17 in the. combat iir crew program. Following my discharge I obtained my professional t ram- ing as an optometrist and served again during. I he Korean conflict :2 years as an optometry officer in the Mi'diefti Corps of the Navy Reserve. At the present t ime 1 bold a Reserve commission as a full lieutenant. As we understand it, the purpose of this bill is twofold : _first, to adjust the compensation of all members of the Armed Forces to bring it up to the increases which have taken place in the cost of' living. and. second, to provide an inventive for specially qualified personnel to make the military a career. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 1565 There are on active duty M. the armed services approximately 400 optometrists holding commissions with ranks ranging from second lieutenant to colonel in the Army and Air Force and ensign to captain in th.e Navy. In 1942 when Admiral McIntyre was the Surgeon General, the Navy was the first of the armed services to commission optometrists as Reserve officers in their Hospital Specialists Corps. By V?J Day there were approximately 135 optometrists on active duty in the Navy with commissions ranging from ensign to lieutenant commander. The Army, which at that time included the Air Corps, now the Air Force, refused to commission optometrists and permit them to practice their profession. The result was that over half of the optome- trists who served in the Army during World War II held commis- sions in various branches of the Army but were not allowed to prac- tice optometry, although their professional services were badly needed. In order to pretend to provide corrective eyewear for the Army per- sonnel, which included the Air Force, the Army took an assortment of their enlisted personnel, including undertakers, blacksmiths, farmers, and laborers, whom they attempted to train as refractionists in a period of 90 days. They were known as the 90-day wonders. The situation was so intolerable that, in spite of the strong opposi- tion of the War Department and the American Medical Association, the House passed an Optometry Corps bill without a single dissenting vote and the Senate did likewise. However, the bill did not reach President Truman until after V?E Day, with the result that he vetoed the bill, but only after he had the assurance from the War Department that in the postwar reorganization they would provide commissions for optometrists in the Army as was being done in the Navy. The result was that, in 1.947, Medical Service Corps laws were en- acted. These provided for commissioning of optometrists both in the Regular Army and the Regular Navy. Subsequently, the Air Force became a, separate Department, and they, too, have commissioned optometrists in their Medical Service Corps. The fact that optometrists were commissioned during World War 1.1 in the Navy is responsible for the fact that many more optometrists continued in active duty in the Navy after V?J Day and the optometric "hump" in that service is in the grades from lieutenant commander to captain rather than in lower grades. The Army and Air Force, on the other hand, have, had difficulty in persuading their optometrists to embark on military careers. It is not in the best interests of the visual welfare of the Army and Air Force that the overwhelming majority of their optometry officers revert to civilian status at the earliest possible moment. In this day and age of manned aircraft which exceed the speed of sound and are capable of flying into space and returning, not to men- tion our missile program, there can be no question but that vision is an important factor in the production and operation of our modern weapons and their systems. Our association has a committee on visual problems in aeronautics and space, the chairman of which is an associate professor of the School of Optometry at Ohio State University. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 I .-1,16 .1 member of the committee is Lt. Col. Floyd M. Morris, r SAF, MSC, School of Aerospace Medicine, Brooks Air Force. Base. May I quote from the remarks of Major General Kneiss, Surgeon General of the Air FOree : The optometric profession is twrforming an Increasingly important role in the aerospace age. While the research of Air Force optometrists is nemssarily de- voted to problems related to military requirements, the results of our research may have far-reaching henetits in man's efforts to conquer !..pace. I. would also like to call your :Went fion to some rentarks by a former Secretary of ( 7.ont I am informed that. research by optometric and medical experts in many highly specialized industries has proved conclusively that there is a close correlation be- tween good visual performance and successful working performance on specific jobs. Indeed, a worker with an undetected visual defect can be not July a lia- bility to production, but also a liability to himself and his coworkers. Statistical evidence has conic to my attention which reveals that two out of three adults have inefficient vision, which can handiCap their work and personal job ad%-ancentent opportunities. .Nlillionm of dollars have been saved annually by American industry through increased efficiency, eye protection, and qualitative as well as quantitative production, Beginning July 1 of this year, doctors of medicine and dentistry will be commissioned, originally, with the rank of captain, and, to- gether with the veterinarians, will be drawing $100 a month special pay. This special pay was provided by the draft doctors law which authorized the payment of St 00 a month bonus to physicians, den- tists, and veterinarians who volunteered for service rather than wait- ing to be drafted. No doubt some. of you gentlemen are thinking that it takes a minimum of i; years for a physician to qualify for an M.D., or a dent ist. l'erImps you are not aware of the fact that it takes 5 or i; years, at the college level, for a man or woman to qualify for a pro.fessional degree in optometry which is necessary in order to secure an MSC eommission. Many of our optometrists have successfully completed more than years at I ite college level, and yet they are commissioned only as second lieutenants or ensigns. This also results in their being assigned many lionprofessional duties, although I hair ba6:log of patients is very heavy. There is another fallacy which prevails ill the Defense Depart- ment?namely, that they have an adequate supply Of optometrists. It is true that while optometrists have never been drafted under the draft doctors law, to my knowledge, neither have physicians or demists. Last. year it was necessary for our association to assist the AMIN- in their campaign to secure their needed opt owl tic manpower. The armed services could well use half again as many optometrists as are now on active duty. The reason they are not doing SO is because ofthe difficulty in securing billets, spaces, or slots for them. The officer strength of the Medical Service Corps is determii.ed, not by the need for optometrists but by the overall need for medical ad- ntinist rat ors, pharmacists, sanitary engineers, biochemists. physicists, optometrists, and other specialists 111111 are included in the Inaizeup of the Medical Service Corps. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04i/27: CIA-RDP66600403R000400280006-0 The need for optometrists in civilian practice as well as in the Armed Forces is so great that the States of Florida and South Caro- lina are offering scholarship grants to high school students who will enter one of our schools of optometry. The House Committee on Interstate and Foreign. Commerce, in the 87th Congress, amended H.R. 4999 to provide Federal matching funds for new schools of optometry of the enlargement of the facilities of the present institu- tions. The bill with this provision in it was reintroduced in this Congress as H.R. 12, and hearings have already been held on it. but, so far, no action has been taken by the committee. Counsel informs me the committee is meeting in executive session. this morning. Let me give you a brief sketch of the educational background of the optometrists who have been commissioned in the armed services during the present fiscal year. Each one has been graduated from one of the accredited schools and colleges of optometry. They are Massachusetts School of Optometry, Boston Mass.; Penn- sylvania State College of Optometry, Philadelphia, Pa.; Ohio State University College of Optometry, Columbus,. Ohio; Indiana Univer- sity Division of Optometry, Bloomington, Ind.; Southern College of Optometry, Memphis Tenn.; University of Houston College of Op- tometry, Houston ; ilex.; Los Angeles College of Optometry, Los Angeles, Calif.; University of California School of Optometry, Berkeley, Calif.; Pacific University College of Optometry, Forest Grove, Oreg. might pause. here. to mention the fact that the retiring dean of that school is a West Point graduate, class of 1920, who served in both World War I and World War TI and is a former president of the American Optometric Association. And, finally, Illinois College of Optometry, Chicago, Ill. I am pleased to state that I am an alumnus of this school. Each has had at least 5 years' training at the college level and the great majority of them have had 0 to 7 years' training. Our schools and colleges of optometry . have a very thorough and scientific com.- prehensive curriculum, and I would be very happy to file a copy of the curriculum for the committee's reference if you so desire. While this presentation has dealt. primarily with optometry and those of our profession who are in the armed services, we are not, ask- ing for any special treatment in this legislation. We believe that the members of all professions whose special training and knowledge has been gained through 5 or more years of college training should be eligible for constructive service credit purposes of appointment, pro- motion, and basic pay provided his education is in a field "designated by the Secretary." The amendments which T. suggest are broad enough to cover all of the various categories in the Medical Service Corps of the three serv- ices 'and other arms of the service as well. They are as follows: Insert after the words "postgraduate degree" where they appear on page 4, line 14, the words 'or a baccalaureate or professional degree awarded by an accredited institution, the curriculum of which con- sisted of not less than 5 years." Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/211:INIA-RDP661300403R000400280006-0 The same amendment would be made on page 4, line 21; page 5, line 7; page G, line 2; pag,e G, line 15; page 7, line ?; and page 7, line 12. ie.fore concluding, Mr. Chairman, I would like to state I was unable to attend the hearings Tuesday, but following the. preparation of the statement which I have just made, my attention was called to the remarks of the chairman Tuesday morning, in which, ifItit i correctly informed, he said with reference to what degree should be recognized, and I quote, "I do not believe we should delegate this authority. I believe Congress should make the determination as to what postgrad- uate degrees will be recognized.- Far be it from me to attempt to argue that point with the chairman and members of the committee. But. I would like to add it the views of the chairman on this point. prevail, I hope that optometry will be one of the degrees specified in the bill. Mr. II tvEas. Thank you very much, Dr. McCrary. caul understand why yon are about to give up Grecnvilk for Maryland. Dr. Mt:CRARY. I have to admit when I hear ''C.trolina Moon," I am overcome with nostalgia. Mr. Itivtats. We art! very glad to have von. 1)1.. Ab?Crary. and your distinguished attorney. inv friend Bill Mac6.acken. told me he was cumin!, up. We are glad to see you. We are very happy to flt.iie your statement. Your suggestions will be taken under serious considera- i ion. I h.. AicntARY. Thank von very much, Mr. Chairman. We feel this item of granting constructive: credits will certainly help serve as an inducement to get smile of our bright young men to choose military optometry as a career, and it will also help in the retention of our men who are now on duty. We would like very much to inaintain higher level of retention with regard to our optometrists in service, and we feel the granting of constructive service for their professional I raining would certainly help enhance this retention situation. Mr. Ilivrits. 'lltank volt very much. Mr. Blandford, Mr. BLANnroan. I would just like to make one continent, Mr. Chair- man, that the doctor was very kind in his statement that he did not ment ion the fact that at one time the optometrists were lying drafted as privates and were being used as optometrists. With Mr. Mac- Crarken's able assistance we eventually solved that problem. Mr. InvEas, I wanted to say that. I am glad you did mention that. lb, did an excellent job. Your persuasimi brouo-ht the inequity referred to by our counsel to our at tention. Dr. McCamtv. I think it is generally agreed by all three services it was in the best interest of the visual welfare of the services. I think it is also in their visual welfare that this encouragement he given to the men to make military optometry a career. If they can get some must run t lye credit as a result of the amendment of this bill, it will go a long way, first to getting the men out of college to volunteer for the service, and secondly, to get those once they are in to stay iii. There is a. big difference in the pay, and not only in the pay but the extra duties assi.oned, and one thing and another, between a captain and a second lieutenant. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/01%1): CIA-RDP66600403R000400280006-0 When they see they are all -working in the health field, in the medical service, and when they see their fellows who just had maybe 1 year or at most 2 years more than they did, drawing captain's pay, and being relieved of a lot of duties that they have to take on as second lieutenants and ensigns, it has a tendency to discourage them from making the military a career. Mr. RIVERS. Thank you very much. Any questions by any members of the subcommittee? Thank you very much gentlemen. The committee will meet at 2 o'clock. We have four more wit- nesses. I hope we will be able to complete the hearing with the re- maining witnesses here this afternoon. We will not meet on Friday. The full committee will meet on the extension of the draft bill. We will meet again at 2 o'clock. (Whereupon, at 12:10 p.m., the committee recessed until 2 p.m. the same day.) AFTERNOON SESSION Mr. RIVERS. The committee will come to order, please. The next witness we have, Mr. Blandford, is Mr. Lovci. Mr. BLANDFORD. Yes. Mr. RIVERS. IS Mr. Lovci here? Mr. Lovci. Present. Mr. RIVERS. Come in, sir, have a seat at the table, sir. How do you pronounce that? Mr. Love'. That is Lovci, it is pronounced phonetically the same as it is spelled. Mr. BLANDFORD. Mr. Chairman, may I put in the record at this point the statement by Mr. Patten, executive director of the Naval Enlisted Reserve Association? Mr. RIVERS. Without objection. (The statement is as follows:) STATEMENT OF TOM PATTEN, EXECUTIVE DIRECTOR, NAVAL ENLISTED RESERVE ASSOCIATION, ON H.R. 3006 Members of the subcommittee, we in the Naval Enlisted Reserve Association wish to thank you for the privilege of making this statement concerning H.R. 3006, and we do further believe that this presentation echoes the sincere senti- ments of all enlisted members in all Reserve components. Without the use of extensive verbiage, and quite pointedly, we (as enlisted reservists) seek parity in all instances, in this matter, with our active duty coun- terpart, and also duly express our revulsion at any suggestion, however slight, that there be any differences in the proposed pay scales whether a person be obli- gated or nonobligated, on active or inactive duty. Yet we differ with the concepts which caused the proposal's evolvement, and its underlying philosophy?it is quite doubtful that, even with implementation, this bill will (as is presented) enhance the enlisted retention factor. We do offer that the proposal should be projected on a purely humane approach?in other words whether an enlisted person is career bound or not, let this great Nation support him in a reasonable, just manner consistent with the much- heralded prosperity levels in this freedom-loving productive land of ours. However we measure the serviceman's compensation, however great it be, it will never be great enough ; life itself cannot be graduated in terms of "dollars and cents." While we obligate this serviceman through our system of laws for our protection, then in like fashion we must pay for his service and protection? while he remains a part of the services of the United States. In conclusion we, as enlisted reservists, have faith and pride in this committee's Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/211i9A-RDP66B00403R000400280006-0 vast efforts on behalf of our servicemen. We are conlideni that tie same will continue In the future, and that enlisted reservists will be assured equitable treatment in all respects in H.R. 3006. Thank you. AIr. H trims. Have :t seat, Mi.. Lovci. Mr. Lovci. Thank you, :gr. Chairman. STATEMENT OF JOSEPH M. LOVCI, DISABLED OFFICERS .ASSOCIATION Mr. liivEus. Would you give the reporter your statemet Mr. BLANorono. Ile has it. Mr. Invicas. You may proceed, Alt. Lovei. Alt. Lovci. I ant Joseph M. Lovci. national adjutant of the Dis- abled Offivers .1ssociat ion. Alembors of our grim') have been retired because. of line of dui v disability. On Irelialf of t he din ill member- ship,I appreciate the opportunity to express our conviction; concern- ing the. bill H.R. :lout;, It. proposed amendment to lit he 37 of t he United States ( 'ode. In some respects, t he aforement ioned bill is considered forthright- :Hid equitable. First. I will make 1.ietit ion of t hese certain provisions Wit lam( reference t o t heir placement; in the bill. Uat es of basic pay are to lie adjusted?this is ot e segment that war- rants our complete support, and 1 might add, one that is somewhat. overd tte in light (lit he general economic situation. Our stand is also affirmat ive with respect to I he catchphrase title of lines 7 and 5, page 4, of t he bill, which provides for -Constructive Service Credit Purposes of Appointment, Promot ion and Ik.sic Pay." Likewise, we support certain provisions, other than I hose. enumerated below: imperfections or omissions that are evident in the proper are mentioned liereaf ter. 1 urge the. inclusion of legislation to return to the realistic till).- honored poliev that members of t he Armed Forces who Lave been retired for reason of disability ineurred ill milk art- service be paid on. Hie basis of 75 percent of the base pay and longevity they would re- ceive, were they on active duty at that. time. UR. 3006 does not satis- fy this requirement. The Career Compensation Act of 19.19, Public Law 35 tilst Con- gress. as amended, Mit mliv was heralded as the statute to provide solu- tion for the matter. And it. did reasonably well. But it did not, and could not , as written, authorize bestowal of 75 per..!ent of current base pay to manv disabled officers who as a matter or material ?eressity were obligea to request compensation from the Ve'. ('rails A buinistra- ion in lieu of retirement pay, which tun il recently has been accepted as a deferred ineome provision attachimr to he renumerat ion of (lie Armed Forces. It is now readily ascertainable that this concept of 75 liercent of cur- rent I tasie pay for disabled officers has lost mull favor in cert tin quar- ters but not with our association whi,711 is comprised solely of t he Aker war crippled. If II.B. 3006 is to be a I ruly equitable. revision of pay, including ot her important in issues, it is suggested I hat you seriously con- sider placimr all disability ret irees on the basis of I. pircent. of current Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/211:5NA-RDP66B00403R000400280006-0 1958 pay. Disparities occurred in the 1955 Pay Act, some company grade officers were not permitted the small percentage pay increases granted that year solely by reason that they were considered "short service" personnel, i.e., had less than 3 years of active service. Gentlemen, the service of these officers cannot be reduced to a system of measurement in most cases. Company grade officers, it is gen- erally allowed, are numbered most heavily among the casualties by virtue of the duties which they perform and the hazards which this entails. Should this engender retirement pay discrimination ?I earnestly request your exploration and consideration of this situation which I have outlined. The recomputation pay reform included in H.R. 3006 has been requisite for some time, but yet for some who could benefit from such. legislation, nothing is afforded them. Upon enactment .of the Career Compensation Act, a proviso was made for those who chose to, that they might elect to receive retirement pay pursuant to the higher scale. Since that time, their choice has in many cases resulted in the receipt of a lessor amount of pay than that to which they would be entitled were they given the chance to again reelect under the 1958 base pay rates. Is this economic penalty imposed on such individuals a just one? should they be held to a statute which in itself deprives them of re- election rights to which they are presently denied? I believe not. The right of reelection here again is advocated and provides substance for the circumstances Which we commended to your attention that it be included in the proposed legislation presently under consideration. It is interesting to note that the Current average Consumer Price Index, which takes for its base the years 1957-59, was reported at 105.4 for the year 1962. But prior to the adoption of this new base' on or about February 1962, the previous base encompassed the 1947-49 peri- od and an average index of 129.8 was recorded for the calendar year 1962. In other words, a shift to a higher base period was made, thereby tending to show a relatively smaller paper increase in the cost of liv- ing. How does this affect our members whose amount of retirement pay is geared to the 1942 Pay Act, as amended, and who have received only the intercurrent percentage pay increases of 4 percent in 1952, 6 percent in 1955, and 6 percent in 1958? In reality these compounded pay increases total 16.85 percent, whereas the Consumer Price Index (1947-49 base) has risen 29.8 percent. The difference, therefore, constitutes a slide of approximately 13 per- cent in the purchasing capacity attributable to this form of retire- ment pay. H.R. 3006 would authorize a 5 percent increase that by the farthest stretch of imagination, or even through the most adroit manipulation of figures, could not restore to equitable balance this pay situation which has deteriorated so deplorably. Specifically these excerpts are supplied from the report of the Dis- abled Officers Association and Policy Committee, in convention as- sembled, and unanimously adopted at the San Francisco convention on June 29, 1962. (a) Retirement pay for disability from the Armed Forces shall be Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/014/ii : CIA-RDP66600403R000400280006-0 based on the pay and longevity as if the individual was on present active duty. We urge the enactment of legislation to return 7. o the traditional policy that members of the Armed Forces who have been retired for reason of physical disability incurred in the military service, shall be paid on the basis of 75 percent of tl e base pay they would receive if they were on active duty. II)) We favor and recommend favorable action on recomputation (equalization) and further, we urge Congress to grant the right or re- election to all personnel retired for hisahi1it y prior to the Career Compensation Act of 1949, as amended. c ) All pay increases promulgated and granted by Congress to the Armed Forces in the future shall be granted retired personnel proportionately. In summation, I particularly invite the attention of this subcom- mittee to the following items which we believe would indeed provide an acceptable complement. toward the perfection of H.R. 3006. 1. Permit the right of reelection to members of the Armed Forces retired prior to enactment of the Career Compensation Act of 1949, and as an alternative, we have (a) but preferably allow recomputation for all members retired under statutes in effect preceding the 1949 act. 2. Alternative to this, it is advocated that a realistic 12 to 15 percent raise be authorized for retirees paid pursuant to other than 1949 act, as amended. 3. Permit the adjustment of retirement pay for certain disability retirees credited with less than 3 years' service who were not accorded the normal pay increase provided by the 1955 Pay Act. 1 desire to express my gratitude for this opportunity to appear before the House Armed Services Subcommittee No. 1, Mr. Rivers as chairman. invite any questions that might be of interest. Mr. RivEtts. Thank you very much, Mr. Lovci. Are they any questions the members of the committee would like o ask? Mr. BATES. Mr. Chairman, in response to one of his alternative plans here, for those who assume the 1958 rate, plus the 5 percert ad- ditional as has been suggested?how does that, come. out, on a pet cent- age basis? Mr. Low". Are you addressing me. sit? Mr. BATES. Do you know the answer? Mr. BLANnvoitn. I happen to have the statistics. It would lie in- teresting?and this is very much in line with what Mr. Lovci is say- rig?itis interest iwr to note that nil he I 9.-iti pay inftrease, assuming re- computation is permitted, 50,781 officers will receive an increase in I heir retirement pay as a result of reccimputation, but in the case of I 1,:";:;8 retired officers, I Lw 6-percent increase that they got in was larger than lilt' pay ilIC11`;t:-0 I hat they would have liven provided under the 1955 pay scale. Mi. vc . Yes, that is true. Mr. lit,Aticovoito. Now, this of colir:?4' i the figure you want, and it happens to be exactly what Mr. Lovei is talking about, that the riateat bulk of these people. of 11w 11.111.7,773 are caw alas. 1.s:17 are tirsi lieutenants, and 1,285 are second lieutenants, hut you will be hippy to learn there is one major general in that group. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/211:56U-RDP661300403R000400280006-0 Now, the point of this problem I think has probably been called to your attention by the Disabled Officers Association here today, and previously, and also by a First Lieutenant McCloud, whom I presume is a member of your organization ? Mr. Lovci. He is a member. Mr. BLANDFORD. And I might say a very able member from the viewpoint of being able to present the facts and do tremendous statis- tical studies on this matter. Mr. Lovci. A very able member who was seriously disabled in World War I. Mr. BLANDFORD. I think he feels in his own mind quite justified in taking a strong position that the law does not recognize the man who assumes responsibility and then because he has few years of service is retired for disability in combat. This, of course, is a part of the pay system. Exactly what Mr. Lovci is talking about here, that a man, particularly in wartime, may go up fast to the grade of captain with 2 or 3 years of maximum service, then when he is retired for disability?and let's forget whether he recom- putes at 75 percent or whether he computes on the basis of the degree of disability, because in the cases that you are talking about these people for the most part would still be entitled to 75 percent; that is, maximum retirement. Mr. Low'. True, but his case is an exception to this, and we have others like it, or similar. Mr. BLANDFORD. I am saying, most of your members are members that are quite severely disabled, and would probably run 60 to 75 per- cent even under current ratings of disability? Mr. Lova" Well, I would expect. Mr. BLANDFORD. In the past the pay increases have been so small, because we have not increased the pay of the obligated man, if you remember, the man with under 2 years service, and with only small increases at the early stages, that as a result the cost-of-living increases have always exceeded the increases in basic pay. Now? their case is valid from their viewpoint, because in many cases these people must go to the Veterans' Administration, where actually the amount of compensation they can draw from the VA is higher than their retirement. pay. There isn't any question about it. I don't know what the statistics are, but I am sure there are many of these officers who are drawing compensation from the VA. This would be par- ti.culary true of an officer who needs an attendant, or the special pro- visions for those who are blind, or the paraplegic cases. Mr. Lover.. Statutory Mr. BLANDFORD. Yes, the statutory extra compensation allowances that are provided. However, this has been a problem I believe since the first retirement laws went into effect in 1862, that the short-term officer who is paid the lowest?at the lowest rate because pay increases by longevity, then goes out on a lower pay if he is unfortunate enough to be retired for disability very early in his career, because the 75 percent multiplier is always applied to a basic pay scale that is considerably smaller than if then he had stayed on even in the same grade, and continued to serve for 30 years. 85066--63?No. G---12 Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/010241 : CIA-RDP66600403R000400280006-0 Mr. Lovci. And if f might interject in this particular ease, he is deemed SO percent disabled, of course, which emit led Ilim to 75 wrcent of retirement pay. lit?Axroan. Yes. Mr. Low'. Iint under the 1955 Pay Act, as you know, theie was only a raise of percent for first or second 'lieutenants and first lieutenants with under 3 years of service. BLANnam. Yes, I renientber it very well. Again, Mr. Lovci gets into the sante problem we face with every single pay bill. The (tidy time that you have complete equal fly in a pay bill is when yon agree upon a flat percentage LT everybody re- gardless of their status----so long as you apply a flat percentage either 10 their retired pay or basic pay scales. this is the only way you ever get complete equality at least to keep them where they were. Nil% IA wci. True. Mr. BLAsnroun. We did this in 1952, and your people were not adversely affected in 1952. because everybody got a 4 percent increase. ii didn't make any difference what law you retired under, you got a straight 4 percent. In 1955. and hero we are faced with the same oroblem again. it was a question of retention. A IwoJs looking ahead to the future, of the problem of retaininp? people. S'o we made spot increases in the basic pay scales. I lere we are doing it again. It is recommended again, because they have got to develop a inethot that will improve the quality of the people who stay in the armed services. What your judgment indicates is the same thing that Mr. McCloud who has been writing to tile Committee on Armed Services about for? since 1949, to the best of my knowledge, perhaps not. quite that early, and I might say, very intelligent letters. He has been complaining hat the disabled man. disabled early in his career, must for pratical purposes go to the V...k tini be treatea as an enlisted man, even though lie assumed the responsibility of an officer. On the other hand, you can take the position that if he is correct mu this assumption, then we should also apply the same principle .to I he master sergeant, the man who rose quickly .from an E-1 to a mas- ter sergeant. in. 2 years, and yet longevity increases there :L..e Si) insignificant that. he too lias to go to the VA. Mr. Lovcr. That was not an exclusion by oversight. But, of course, we tit) represent the disabled officers. Mr. lit.AxDroun. Yes. What I am saying is this problem is just a built-in part of the problem of the whole retirement system. Mr. Mynas. Let's confine ourselves. Let's not get too far off of the hings we are talking about. Mr. BLAxorono. Well, this is a very ;lliportant part of it. W-nit I am indicating here, is the reason for the inequality they are telling us about here today, for the disabled officers. There isn any real solu- tion to it unless you decide to set up separate retirement systems for people retired with short. years of service. rlso answer Mr. Bates question, the percentage was 11,000 as opposed to 50,000: 50,000 officers would receivc increases under reemnputa- 'lion, 11,000 will not receive increases. This is where the cost-Of-living increase will be higher than the adjustment in the pay scales. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 1575 Mr. BATES. What would be the maximum I Some of those are senior officers, and that would be rather significant. Mr. BLANDFORD. The maximum for example, the difference for ad- justing to present pay scales in the case of the chief of staff, for ex- ample, an 0-10, the monthly retirement would go from $1,014 a month to S1,275 a month plus the 5-percent increase in the bill. Mr. BAITS. That is rather significant for somebody in the senior grades. Mr. BLANDFORD. The increase will range Mr. BATES. Say from 0-5, up to there, what would that be? Mr. BLANDFORD. I haven't got that .figure. Mr. BAT-Es. Is it also in the lower ranks that you have that diversion? Mr. BLANDFORD. Yes. Basically you will have 108,000 enlisted men who would receive minor increases ranging from $130 for the E-7, to the lowest which would be $13 for an E-1, a year. 108,000 enlisted personnel who would do better under recomputation than the 6-per- cent increase in the cost of living, 37,390 enlisted personnel who do better under the 6 percent cost of living than they would have done if they had recomputed under the 1958 pay scale. Mr. HARDY. That is the increase in the 1958 pay scale for that particular group was rather small? Mr. BLANDFORD. That is exactly right. Mr. Lova. Then, of course you have the factor of the 5-percent increase which is advocated, Which, according to the Bureau of Labor Statistics indicates that if you are going to take the compounded in- crease and compare that to the schedules that they had, that increase hasn't been very great. Now this is for those individuals who are being paid under laws in effect prior to the enactment of the 1949 Career Compensation Act. In other words, the 1940 or 1942 law was amended in 1946. Mr. BLANDFORD. The only difficulty in that, Mr. Lovei, which I call to your attention, is if you figure it that way you better take into con.- sideration the 10-percent increase in 1946,. which was substantially more than the cost-of-living increase. So to be actually accurate in your comparison, if you go back to 1942, it levels off at a -much more significant increase than would appear if you used the date of retire- ment as the example, that is all I am saying. Mr. Lovm. But then we are getting into the recomputation. - Mr. Timmy. We are getting into a detail here now. Are there any further questions? Thank you very much. Mr. Blandford, who is our next witness, Mr. Scanlan? Mr. BLANDFORD. Mr. Scanlan. Mr. HAEnv. Mr. Scanlan, will you come up, please. Mr. Lam. It has been a pleasure, gentlemen. Mr. ILNitny. Mr. Scanlan, the committee is glad to have you. Have a seat. You can present the views of the Fleet Reserve Association; we will be glad to receive it. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04ffl : CIA-RDP66600403R000400280006-0 STATEMENT OF FRED J. SCANLAN, NATIONAL SECRETARY, FLEET RESERVE ASSOCIATION Mr. -SCANLAN. Thank you, sir. Mit'. Chaim:in and dist inguished memhers of this committee, I ant Fred .1. Scanlan, F.S. Navy, retired, national secretary of the Fleet Ileserve Association, represent ing- our more than 52,000 members, both active and Mart ive, who are vitally coir:erned with the provisious of the bill before your committee. 1 ant confident that our association represents the views of a large segment of the personnel of the Navy and [a rine Corps. I have prepared a statement which I Ivould like to present to he committee. The Uniformed Services Pay Act of 1963, introduced as MIL :;006, 88t11 Congress, appears to be an excellent pay bill which, with some modifications, will he of benefit to all menthers of the Armed Forces, hot ii active and retired. Certain provisions of this bill will provide incentive which will help solve some of our service-manning problems, provide for reenlist- meats in critical skills and thereby reduce the costly training programs. We must obtain our recruits from what is referred to in industrial circles as a "seller's market ." We must he prepared to pay the price and offer additional inducements which will enhance 1 lw possibility of these vault!, tnen making the service a career. The Fleet Reserve. Association believes that there should he an immediate adjust Ment in military pay scales to bring them into closer balance with Government civilian pay scales, and those prevailing lit private industry. The so-called fringe benefits for military personnel on active duty, and for those on the retired list, have been seriously curtailed during the past 20 years. The huge chain supermarkets, the chain drugstores and the discount houses equal or surpass our military stores in many items on the market. Hospital benefits, once considered a long- cherished and earned right for those who have served from 20 to 40 years on active duty, are in serious jeopardy because of .rite permissive character of such services which have crept into the law since 1913. M-any of the larger industrial organizations have better retirement and hospital plans for their personnel t hail those in effect for the military. Our civil service counterparts enjoy better hospital plats, survivors' benefit plans, and take-home retirement pay than do our service personnel. One example of this is a comparison between the civil service survivors plan and the servi('emares family protection plan: The par of a Navy commander (-0-5) in the medium retired group would he :;:50-1- per month. l'inler the serviceman's family pi o- tection plan he would have withheld from his retired pay S54 per month: his widow would revive $'22F, per month, which would ic increased to S329 per month at pa7e 62, when she qualified for social security benefits. The civil service retiree, possibly in time grade 1_2 roup, would ret ire in a slightly older a7e group (55 as compared will) I lie. -IS years of a age for the Navy commander). The civil ervi,e annuitant would receive S:590 per month. [[is survivors' benefit ph..n vvould cost. him S37 per month, and his widow would receive $325 per month, 1-e7ardless of her age at that I i me. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 1577 The Secretary of Defense, Robert S. McNamara, in forwarding the military pay bill, commented on the retired pay situation. He cites the example of a colonel retired on May 1, 1958, after 30 years of serv- ice; and a colonel retired on June 1, 1958, the difference in pay between the two officers who have identical services is. approximately $1,000 per year. Are we going to perpetuate this inequity? We believe the Department of Defense's approach in computing retired/retainer pay is most unrealistic. Every man on the retired rolls and on active duty has been told by the recruiting officials that his retired pay would be based upon the active duty pay scales. I well recall while serving on recruiting duty explaining that fringe benefits, consisting of hospitalization rights, commissary, PX ( shi p' s- store in the Navy) and retired pay based on active-duty pay was par- tial compensation for the low pay and long and arduous hours of work demanded of the military man. There are thousands of enlisted personnel now retired who earned only $21 or $36 per month for many years during the 1920's, the 1930's and early 1940's. It is dishearten- ing to the service man to be told he is expecting too much after he has faithfully completed his part of the contract. By other action the Department of Defense is taking steps to curtail hospitalization privi- leges for retired personnel and their dependents. The commissary privileges for the military are under constant attack and costs have increased to the point where savings realized in many areas are mean- ingless. If the faith is not kept with these men then I must predict the present active duty man will think twice before he decides to make a career of the military life. Gentlemen, we may spend billions of dollars for the best military hardware in the world, but if we do not have the trained and dedicated career personnel to man this equipment, it will not reach its full utilization when it is most urgently needed. The male citizen who performs no military service has an unfair economic advantage over those who are inducted or enlisted in the military services. Some of these men serve for 2, 3, or more years. Others make the military service their career in the service of their country. The man who stays at home has many advantages in life. He can remain with his family. He can buy a home as he is not on the. move every 2 or 3 years. He gets a head start in competing for civilian employment. The career service man can seldom hope to overcome this .handicap when he returns to civilian life. I am quoting herewith from a national magazine, "Newsweek," issue. of February 4, 1963. This magazine has a circulation of ap- proximately 2 million, with perhaps a reader coverage of twice that amount: Around the world, while other Americans clucked over the prospects of a record budget's spending, military servicemen?some 2.7 million strong?griped that so little of it would boost their pay. Last week Lloyd Norman, Newsweek's Pentagon correspon dent, reported: The Armed Forces are downright unhappy with Secretary of Defense Robert S. McNamara's new pay bill proposing an average of 14.4 percent increase? at a cost of $900 million more in fiscal 1064 added to the $12 billion annual military payroll. The cost of the pay boost beginning October 1 would rise to more than 1.2 billions in later years. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 (578 They keep nibbling away at our pay and privileges until we are second-class cif '/A'flS--- grill ed a Navy petty officer in Norfolk. Talk about segregation. What do you think they are doing to us? What worried many professional military men is that the servicemen's status is declining not only below the professional, technical, and mauagenunt per- sonnel in industry, but below civil service. A reflection of the erosion in the prestige of military service was disChised in a recent Department of Defense opinion ?ilirvey. Teenagers ranked military officers with college professors in fourth place on a list of ID occupativns, but equated enlisted personnel In 14tlit place with bookkeepers and 111161111011. Adults rated officers in seventh place between grade-school teachers and farnwrs, put enlisted men near the bottom with garage mechanics and barbers. Newsweek, in addition to the above, has commented upon the fact that many service families are living in substandard housing areas and because of limitation of income, would qualify- for re-lie. pay- ments. Such startling facts as are brought out ill this article present a very poor image of the career military man. It cannot help but have a deleterious effect on our recruitment and manning pr&?lems. Recommendat ions: I -mkt. section 206(a ) of title 37, United States Code, commencing in line 1, page 3, of this bill, the Fleet Reserve As- sociation believes that all military personnel ordered to active duty should receive the same basic rate of pay, based on grade and service. On retired and retainer pay, commencing on line 1G, page 11, of this bill, we recommend that retainer and retired pay of the members of the uniformed services be geared to active duty basic pay, the time- honored custom for more than 100 years; that the rates be as pre- scribed in section 2(a), section 203 of title 37, United States Code, commencing on line 5, page I, of this bill. That basic pay in future years be not changed; that future increases in basic pay be based on a study of the consumer price index, as set forth in paragraph 1401a, chapter 71, title 10, United States Code, commencing on line 15. page 13, of this bill; and that future percentage increases obtained in this manner be applied to those personnel entitled to retaine and retired pay. The pay increases recommended in several grades do not compensate for the increase in the cost of livin!, during the past 10 years. Civil Service employees have had several increases in pay since 1952 em- ployees in civil industry have had several increases during this period cif time. Tlw. union officials are constantly seeking to improve the pay scales and fringe benefits. Iii furthering this concept of paying an adequate wage for career military personnel, the Fleet Reserve As- sociation recommends an increase of approximately 5 percent for flu. officers and enlisted personnel indicated on attached enclosure (A). The Fleet Reserve Association rejects the concept- of special pay for dutv involving unusual hardship as being unreal ist ii mid very difficult to administer. This type of pay is described on page 18, line 5, of this bill. Instead, we recommend the retention of special pay for sea_ and foreign duty, page 17, line G, of this bF1 tind covered in section 3o5, title 37, United States Code. At present these monthly payments range from $8 to $22.50 per month. We further recommend that all warrant. officers and commissioned officers in pay grades 0-1 and 0 -2 be ent i fled to such imy. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/2179 ? CIA-RDP661300403R000400280006-0 i5 Under proficiency pay, as contained in paragraph 240, title 37, United States Code, we recommend that such pay be abolished as it has not accomplished the job it was designed to do?retraining critical skills in the military service. We have received several thou- sand letters in the past 5 years, including more than 50 percent from those now in receipt of proficiency pay, who are unhappy because of the inversions occurring and the constant fear that their next duty assignment may not carry such an increase and they would be required to revise their scale of living downward. Instead, it is recommended that all personnel, including critical skills, who are in all respects qualified for advancement in grade, be paid an amount equal to one- half the basic pay and allowances which would be due them in their next higher grade. On line 1, page 18 of this bill, we recommend retention Of authority for responsibility pay. While the Department of Defense has not used this authority since the passage of the 1958 Pay Act, it may be useful in insuring the retention of officers below flag rank who are contemplating voluntary retirement with less than 30 years' service. Career incentive payment (reenlistment allowance) as described on page 19, line 3, of this bill: We believe that an increase in the re- enlistment allowance or bonus is long overdue. We recommend that the allowance for critical skills be increased from $2,400 to $4,000 and be spread over a period of 16 years; further, that the allowance for noncritical skills be increased from $500 to $3,000 and be spread over a like period of time. To differentiate so greatly between the two types of career enlisted personnel will certainly result in a decrease in reenlistments of those in noncritical skills. The Fleet Reserve Association is of the opinion that the subsistence allowance for enlisted personnel should be at the rate of $2.57 per day. The subsistence allowance currently in effect in some instances is figured at $1.95 per day. In paragraph 311 (f ), section 12(a), chapter 5, title 37, United States Code, commencing on line 17, page 21, of this bill, we recom- mend that the wording 'Secretary of Defense" be deleted and the wording "Secretary of the uniformed services concerned" be inserted. Effective date: This item is contained on page 39, line 6, of this bill. The Fleet Reserve Association, realizing that an increase in pay for the Armed Forces is long overdue, recommends that the effective date of this bill be January 1, 1963, or the first day of the month following the passage of this bill. I have appreciated the opportunity of appearing before the com- mittee and expressing the views of the Fleet Reserve Association. I shall be happy to answer any questions relating to any items contained in this statement. I do not have any figures on the cost of some of my recommendations. I believe that the retention of sea and foreign duty pay will not differ greatly from pay proposed for special pay for duty involving unusual hardships. I am of the opinion that incentive advancement in grade would ap- proximate the present cost of proficiency pay. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 I Exhibit A above referred to is as follows :) EXIITIIIT A PropoRed pay rates E-1 (7ra4.1t4 I ()vox 12 I OVVF i .1 ' 1 320 i 25.) 5O I 241 Over 16 1 Over 8 ON or a) Over 22 Over 26 E 4i 315 ; 325 336 346 ! K-7 352 ! 352 373 383 1 391 430 472 \V-1 409 " 425k 441 457 ! 472 ! W., 4441 :: 452 478 . 493 i 509 530 ()-3 499 ; 630 1 514 5 5.1 5311 ; 546 1 567 588 604 (1 -1. 557 1 698 730 1 761 ; 0-5 69:4 ' 740 7118 1 1445 ; 877 'i 913 0-6 771 71N 924 ; 971 ! 99'2 ! 1.050 1,139 i ? I _ Thar finishes my statement, sir. Mr. MyEns. Thank you very much, Mr. Scanlan. Are there any questions from any of the members of the committee? Mr. Timmy. Mr. Chairman, the only question I have, I notice the revonimendat ions for the reenlist ment allowance, for critical skills, to be increased from $2,400 to $4,000. What is the basis for selecting the figure. of $4,000? Mr. SCAN1?1N. Well, it hits been $2,o01) for several years, now, for all ratings. On a. scale of 20 years, you could get $2,000. It is about the only time that enlisted men get a sufficient bonus to put a downpay- Inca on a home, or buy a new ear. He doesn't, have that opportunity as a serviceman, where he would have that in industry where they do pay bonuses occasionally. think by phasing him out for 16 years we would keep the people who are borderline eases, who think :hey may want to quit after 12 years, when they are 30 years of age. Mr. Munn% If you phase that. over 10 years, I don't know what your maximum payment would be at any one reenlistment. have you figured that out? Mr. S(71NLAN. No: I believe that would be an administrativo prob- lem. Mr. IlAenv. I am thinking in terms of how much it would mean Fl) the individual reenlisted man as he reenlisted. ILow much would he get in order to make the downpayment on the house? Mr. ScANI.A.N. I believe the first bonus should be $1,000 after com- plet ing the first cruise. Mr. HARDY. It depends on using a figure multiplied by.a number (if years for service, and related to the number of years in his reenlist- ment ? Mr. ScAxt-vx. Yes, sir. Mr. LIAM/Y. But 1 was just trying to understand whether you had any basis lor this particular figure, or whether this just scented to you to be a reasonable figure to promote reenlistment ? Mr. SCANLAN. That is right.; yes. Mr. Thumr. Thank you. Mr. IiivEas. Mr. Bates. Mr. BATEs. No questions. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/211:56A-RDP66B00403R000400280006-0 Mr. BLANDFORD. Mr. Scanlan, you say that in letters you have re- ceived from the members of Fleet Reserve about proficiency pay, most of them have complained about it, or are opposed to the payment. We have heard that before. Would you say most of the complaints are because of the fact the law has not (a) been adequately implemented, or (b) they have to take an examination every year, or (c) they are never sure they are going to continue to ,o-et it, or is it the entire concept of proficiency pay they are opposed to? Mr. SCANLAN. I believe it is the entire concept. Where you have a low-rated man, where there is a limitation in the amount of money available, and you have a lower rated man in a division, one or two, the only two that can get it, drawing the proficiency pay, and some senior-rated men, chief petty officers, or first class, who may be drawing less pay than the second-class petty officers. Mr. BLANDFORD. Well, aren't you recommending practically the same thing, however, when you say it should be half the basic pay in the next grade ? Mr. SCANLAN. If he is qualified. Mr. BLANDFORD. What is the difference between half?what is the difference to the man who draws the pay, whether he gets it based on half the pay of the next higher grade or as proficiency pay, it is still a greater amount of money? how does your solution solve the problem of the objections you receive to the concept of proficiency pay? I don't quite follow you. Mr. SCANLAN. Incentive promotion would be available to all of them. Mr. BLANDFORD. That is available to everybody now. Mr. SCANLAN. -Well, I am talking about their block by quotas, now. Mr. BLANDFORD. Well, the law also permits them to pay proficiency pay by giving the pay of the next higher grade, that is already in the law. Mr. SCANLAN. I don't see it implemented. Mr. BLANDFORD. Yes, it is in the law. This is probably one of the biggest blank checks Congress ever gave the Department of Defense, and it is one they haven't filled out yet, on proficiency pay. Mr. RIVERS. T. might say, Mr. Hardy wasn't the only one on the com- mittee who belonged to the Fleet Reserve. Had you finished? Mr. BLANDFORD. I was going to ask about the $1.95, when messing facilities are not available, the law says not to exceed I think $2.e. Are you advising this committee that there are people who are in areas where there are absolutely DO messing -facilities available what- soever,_and are only drawing $1.95? S Mr. CANLAN. No. Mr. BLANDFORD. Isn't this the case where the man may have break- fast in the messhall and then be assigned to a duty where he gets a pro rata of the $2.57, and that knocks it down to $1.95? Mr. SCANLAN. I wrote to the Department of Defense about it. It is a figure they are using to pay the man terminal leave pay now. They do not pay him based on the $2.57, they pay him based on the $1.95, and in figuring his terminal pay. That :figure has been in effect, to the best of my knowledge, for over 30 years, $1.95 a day. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04122 CIA-RDP66600403R000400280006-0 Mr. litAxDroan. Well, that is a subject that I niust confess my ignorance about. If he is get ting $1.95, as a terminal leave allowance, per day, isn't this for quarters and subsistence? Mr. Sc. NLAN. Yes. Arr. BLANDFORD. That isnot justsubsistence? Arr. SCANLAN. Quarters and subsistence. Mr. Bi.. NDFORD. I el)11.1(111?t figure out where the S1_95 came in to subsistence. I have no further questions on that. Mr. It lyrics. Thank you very much, Mr. Scanlan. We appreciate very much your statement. The next one is Dr. Hagan. Dr. Hagan, we will be pleased to hear from you on behalf of the Commissioned Officers Association of the U.S. Public Health Service. You may have a seat arid proceed, sir. STATEMENT OF DR. THOMAS L. HAGAN, COMMISSIONED GELICERS ASSOCIATION OF THE U.S. PUBLIC HEALTH SERVICE )r. HAGAN. Thank you, Mr. Chairman. Mr. Cincinnati and members of I his subcommittee. I tun Dr. Thomas L. lIagan, retired dental director of the U.S. Public Health Service. .1 am indeed grateful for ticis opportunity to appear before (lie com- mit tee to present the views of flue Commissioned Officers Association or the U.S. Public I TPalth Service on 11.11. :MN, a bill "to increase the rates of the basic pay for members; of the uniformed services, and for (it her purposes." The Connnissioned Officers Association of the U.S. Public -Health Service represents approximately 3.100 members. w Inch number in- cludes over 70 percent of the career active duty personnel of that service. These members are physans, dentists. scientists,. engi- neers, nurses, and (it her categories of professional personnel in the Cc?nmissioned Corps of the Public Health Service. At the outset, the Commissioned 0111,ers Association urges Congress to enact pay increase legislation. The association gcneraly supports I F.I. 3006 but feels Eliot in certain areas this proposal not meet the current needs of the Public Trealth Service. The association agrees with that port ion of the Randall Committee report which was presented to the President , ?vhich states that in order to achieve further feasible reforms, the Department of Defense and of her interested agencies will undertake. further st tidies looking toward achievement of a pay system which will make it possible (a) do compare total military compensation with total compensation In other pay systems. and I hi to attain comparabiliy between military compensation arid other compensation in the broad sense of equality of treatment throughout careers. Tito Randall Commit tee fun her stated that ? carefully documented annual reviews of the adequacy of military compensa- tion levels can he combined with further substantive studies to accelerate remedial action. Such annual reviews also are needed to give assurance that timely adjustments will be proposed in military compensation which are com- mensurate with those recommended for Federal civilian compensation. The proposed increase in the lower grades nutty help to some extent to solve the recruitment problem at 111"iis level. I fowevt r, the Public Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 : RDP66600403R000400280006-0 health Service is faced with an acute problem in the recruitment and retention of experienced scientific and professional personnel to pro- vide leadership for major research and national health programs. This is particularly true at the senior and director grade levels, 0-5 and 0-6. The Public Health Service Commissioned Corps is unique in that its entire personnel is derived exclusively from professions in which they are trained outside the service and qualified prior to com- missioning. Its programs involving extensive research and national health leadership not only require medical and dental competence but engineering, scientific, and related professional staff which are in short supply. In order to maintain the continued high standard of programs vital to the health of our Nation, pay insuring proper re- cruitment and retention should be provided to these officers. We urge that the committee and the Congress provide higher proportionate increases in the base pay for the 0-5 and 0-6 grades. The Public Health Service faces a serious morale problem in re- taining its high caliber commissioned officers due to the lack of com- parability between the civil service pay system and that of the com- missioned corps as has been stated publicly by the Surgeon General and the Director of the National Institutes of Health. The year 1958 was the last in which both the civil service and commissioned pay rates were adjusted. However, as a result of the last of three civil service pay raises since 1958, the final step of which goes into effect in 1964, previous levels of comparability between the two systems have sub- stantially deteriorated. This lack of comparability jeopardizes the essential career system of the Public Health Service when officers who supervise civil service personnel receive $150 to $200 a month less pay. It is further hoped that this committee and the Congress will con- sider additional pay for scientific, engineering, and other highly trained professional categories in short supply. This will greatly as- sist the Public Health Service in recruiting and retaining better qualified scientific personnel for longer periods of service. It is sug- gested that the committee may construct some provisions authorizing the Secretary of the Department of Health, Education and Welfare, on recommendation of the Surgeon General, to establish additional pay up to $250 a month, similar in principle to provisions already established in other Federal personnel systems, to provide for these groups. This provision would allow for elimination of discrepancies in pay among officers of allied professions operating at the same echelon. The relatively higher salaries offered by universities, research cen- ters, and major State and local health departments, for highly quali- fied biomedical, scientific, and professional personnel, constitutes still another difficulty to the Public Health Service in the recruitment and retention of its commissioned officers. This situation was graphically pointed out by the Advisory Committee on Public Health Service Personnel Systems which was chaired by Marion B. Folsom and contained in the committee report of March 20, 1962. Tho Randall Committee report took cognizance of the importance of the Public Health Service situation and listed as one of the further problems deserving consideration "the need for special pro- Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/9441 : CIA-RDP66600403R000400280006-0 visions in the military pay system applicable to the compensation of professional personnel in the conunissioned corps of the U.S. Public fealth Service." Mr, Chairman, I would like to enter in the record a short addi- t ional statement of sonic importance. o committee questioning of certain witnesses yesturday, an obser- vation was made that the nonmilitary groups are the only ones in favor of tins bill. Mr. Chairman, as a representative of the Commis- sioned Officers Association of the Public Health Service. I would like to emphasize that the officers of the Public Health Service are rot in favor of all aspects of this bill, nor is the management personnel of the. Public I health Service; although Public Health Service direct test imony indicated that ILE. 300G was a forward step in the resolu- ion of complex pay problems, serious concern exists, Mr. Chairman, with respect to the disparity between the pay of the 0 .5 and 0 6 pay grades, and pay for comparable responsibility level of the civil service grades. This feature of the bill will provide very little help in recruitment and retention of highly qualified officers who are so sorely needed. In summary, the Commissioned( fficers Association of the V.S. Public Health Service recommends : 1. Increased pay in the 0-5 and 0- 6 pay grades. 2. Provisions for additional pay at the discretion of the Secr.lary of Health, Education, and Welfare for certain shortage and highly trained categories. I wish to thank you, Mr. Chairman, for the opportunity tit present testimony on behalf of the Commissioned Officers .kssociat ion of (lie U.S. Public I [call It Service. Mr. RivEas. Thank you very much. Mr. HARDY. Let me ask him one question, Mr. Chairman. Doctor, you referred to testimony, I suppose, from Dr. Diamond? Dr. HAGAN. Yes, sir. Mr. HArtirr. I just. wonder if Dr. Diamond's testimony with respect to the general acceptance of this bill was a reflection?do you have any knowledge whether this \vas a reflection of any instruct ions from upstairs? In other words. I ant wondering whether you have the same iiroh- lem in IIFW that the military services have in i lie Department of Defense? Dr. HAGAN. Mr. Chairman, Mr. Hardy. I think if there had been time for direct questions of Dr. Diamond you would have received tlie same kind of comments. Mr. TIARDY. We just didn't ask him the right questions? Dr. HAGAN. I don't want to be critical, sir. Mr. IIAnny. I am not. crit ical, and I don't want you to be critical, but I want to find out. what the situation is. Dr. HAoAN. I think that is it, essentially, sir. Mr. HAtenv. The aspects of Diamond's testimony showed unquali- fied support of this legislation as a step in the right direction. You think that may have been a reflection of top-lex el policy rather than his own personal views? Dr. HAGAN. Well, of course, it was An administ rat ion bill Ito was talking to. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21ggIA-RDP661300403R000400280006-0 Mr. HARDY. Of course, of course, a reflection of the chain of com- mand, I take it? DT. HAGAN. Yes, sir. Mr. HARDY. Thank you. Mr. BENNETT. Doctor, were you here during most of the hearings? Dr. HA.GAN. Yesterday's hearing Sir. Mr. BENNETT. Were you here when the Air Force testified? Dr. HAGAN. I got in the last part of it. I hope I can remember it. Mr. BENNETT. Do you remember the improved kind of bill he had in mind? Dr. HAGAN. No, sir; I couldn't bear him very well from where I was sitting. I got in late. Mr. BENNETT. He had a sanctioning through the Air Force of a number of people, with a bill that came up in two increments. They had a bill something like the bill before us here and another incre- ment attached to it which was going to go into effect next year, which would lead this committee to have another hearing next year. It seems to me if you feel this bill needs improvement you might get in touch with the Air Force, because they have been instructed to get thi.s idea over to other branches of the services and let us have the views of other branches of the services. I would suggest if you really want to improve this bill from the standpoint of improving the amounts, you might find that a possible vehicle by contacting the Air Force and getting their proposed sub- stitute, and then let us have your views on that, as a matter of put- ting it in the record later on. It seemed to me to be a pretty good idea. Dr. HAGAN. Thank you, sir. I don't know if the Air Force will give us the bill, but the Public Health Service may be able to obtain it. Mr. BATES. What is your problem with 0-5 and 0-6? Dr. HAGAN. I think Mr. Blandford this morning received from the Public Health Service a statistical chart, if it is the one I think it is, that makes a very definite comparison between the pay grades and the inequity between the pay. Mr. RIVERS. I have a chart here somebody handed me, Mr. Bates, yesterday. Dr. HAGAN. That isn't mine, sir. Mr. RIVERS. Comparing the 0-6 with the GS-14. Dr. HAGAN. Yes, Sir. Mr. RIVERS. It starts off. in 1949, and how they were close then, and how the 14 had pulled off to the extent of, oh, I think some $1,500. Dr. HAGAN. I think that is what this chart will show, sir. Mr. BATES. Isn't that the Air Force statement? Mr. RivERs. It probably was, yes. I am going to show this to the committee. Originally it was his idea legislation would keep these two areas very close. Now, the G5-14 has left them. Dr. HAGAN. That is right, sir. Mr. HARDY. Mr. Chairman. Mr. BATES. Was this in General Stone's statement? Mr. HARDY. I have a chart here that is supposed to be?it hasn't any signature on it?but it is supposed to be the Gorham comparabil- ity study. Mr. RIVERS. Restricted to civil service people. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04fgAti CIA-RDP66600403R000400280006-0 Mr. I LARDY. Yes. It shows a comparison. It is not broken down, where you can get the actual dollars, but it_ indicates that a (S-14 currently is just slightly above an 0-5, considerably below an 0-6. An executive GS-14 would lw a lilt le more. above the- 0-5, but still wouldn't beat the 0- -G. I )r. HAGAN. I don't have those data, Mr. I lardy, I am sorry. Mr. Itivims. I said 14, ii was (1S-15. They started back hem in 1949. they vere pretty close. Mr. I landford, do you have any quest ions? Mr. litAxDroan. Only t his point, Mr. Chairman, that the Randall Commission indicated there was a problem for the Public I lea Ith Service. and I think the problem probably can be summetl up by saying t hat in the Public I [malt h Service more t ban anyplaee else you have civil service physicians, dentists, and scientific personnel? Dr. HAGAN. Principally scientific personnel. lit,Axnronn ( rout liming). Working side by side with the com- missioned officers of 11w Public I kali I, Service living in the szn?e city, doing exactly ilw same work, and receiving $3,0{10 a year more salary. It that about it ? )r. II MIA N. About it. I think you are ?SSC!) iahlv correct, sir. Mr. Iii.AxDroun. This, of course, is true of t he other services, except you don't have such a poignant reminder of it lit the Navy. for example. because yon don't have a Navy civil service doctor in the same dispensary. Dr. I [AGA N. 'lint is t rue. NI F. BLA NIM110). So I he prObleIll is 1 lie sanie ill I he other services. Any doctor today in t he armed services can go to the Veteran's 1(1- iii ion. fill out a him 57. and be assured of at least $2,000 a year more t Ilan he is making now. Dr. IIAGAx. Vint is right. 'Mr. BLAxnroan. No matt yr %vim( grade he is now in. Dr. II-AuLtx. Yes, sir. Mr. ItivEtts. Is there anything else, Mr. lilandford Mr. Ih.ANDronn. No. sir. Mr. HI VEUS. 'thank von very much, Dr. Hagan. I )r. 1 LGA N. Thank you very much. liivras. Our next wit ness is 1 he concluding witness. Mr. John hel her. Is Mr. Keller here? Mr. Ilizocrwortn. Yes. M but we have a representa- tive from the ("oast Guard. Mr. Rivtats. Cmne up and give the reporter your name. Mr. WI 'TWEE?. i f Warrant 011icer Whit weir, '.S. Coast Guard. Mr. ItivERs. I lave a seat, sir. You :UV going to speak On behalf of Mr. Keller. STATEMENT OF CWO JOHN A. KELLER, U.S. COAST GUARD All'. WW1' \VER. Mr. Chairman, it. is a privilege to appear on behalf of Mr. Keller and the Warrant Officers Associat ion. I would like to enter on behalf of Mr. Keller and die associat 'tin, an addendum for our statement. I have Iwo copies here, one for Mr. HIa:dford and one for the clerk, or to whomever it should go. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21891A-RDP66B00403R000400280006-0 Mr. RicvEns. All right, go ahead. (The addendum is as follows:) This statement is in response to the statement of Hon. L. Mendel Rivers, chair- man, Subcommittee No. 1, House Committee on Armed Services, and is in addition to the statement that was previously submitted to this committee.. Our association would like to go on record as heartily approving the following recommendations: (1) That the H.R. 3006 will be made effective on the first day of the first month following the month in which it is enacted. (2) That any individual who retires during calendar year 1963 will be able to compute his retirement pay under the new pay scales when they go in effect. For reasons given in Chairman Rivers' statement both these provisions are most necessary and equitable. We applaud the increases in the basic pay scales of $15 for W?l's and W-2's and $10 for W-3's and W-4's. However, we still firmly believe that the four warrant officer pay scales should be identical to the first four commissioned officer scales. John A. Keller, chief warrant officer, U.S. Coast Guard. Mr. WnrrwEn. I would like to have noted, Mr. Chairman, my service career runs very closely parallel with Mr. Keller from the standpoint of rank, time in service, and general chronology, the fact that we pro- gress generally through the same pattern throughout our past 22 and 23 years. The statement of C.W.O. John A. Keller, U.S. Coast Guard, indi- vidually and on behalf of the Chief Warrant Officers Association, U.S. Coast Guard. My appearance here, and this statement, is with the knowledge of Admiral Roland, the Commandant of the Coast Guard, I might add at this point. Mr. BATES. Where is Mr. Keller today? Mr. WIIITWER. Due to illness in the family, he is unable to attend, sir. (Reading:) My name is John A. Keller, and I am a chief warrant officer on active duty with the U.S. Coast Guard. I appear before this subcommittee of the House of Representatives Armed Services Committee both individually and as an author- ized representative of the Chief Warrant and Warrant Officers Association of the U.S. Coast Guard, of which I am the vice president and chairman of the legislative committee. I have served as an active member of the U.S. Coast Guard for 22' years. I enlisted in the service at the age of 18, at the rank of apprentice seaman, upon my graduation from high school in Lynch, Nebr. It was my intention, as it still is, to make my career in the Coast Guard and to serve my country as an active member of this service. After 181/2 years as an enlisted man, I was appointed to the rank of warrant officer. During that time, I served in various parts of the United States and the Pacific area. The Warrant Officer Corps makes up approximately one-fourth of the officer corps of the U.S. Coast Guard. It takes an average of 15 years for an individual to attain the rank of warrant officer in the U.S. Coast Guard. Many serve as long as 18 or 19 years before attaining that rank. By this time, each individual is proficient in at least one specialty with many years of practical experience. These specialized experiences are both vital and necessary to the Coast Guard in order to carry out its functions in the realm of national defense and domestic protection. The Coast Guard warrant officer carries responsibility with his rank equiva- lent to that of higher officers in the armed services. Warrant officers in the Coast Guard serve as commanding officers of certain types of buoy tenders, lightships, and harbor tugs. They also serve as commanding officers of supply depots, radio stations, group commands, and lifeboat stations. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04% : CIA-RDP66600403R000400280006-0 Yet for all this responsibility under the present pay status they are compen- sated at substantially lesser rates than those of individuals serving in the armed services holding comparable commissioned grades. Although commissioned officer grades and the corresponding warrant, officer grades have identical entitlement to quarters allowance and weight allowances for shipment of household goods, the warrant officer is discriminated against in the pay scales. For although the individual assignments and responsibilities generally are the same as higher ranked officers both in the Coast Gnarl itself and the other serviees, his rate of pay is signifirantly less. On behalf of the Chief Warrant Officers Association, it .s our feeling that here is a definite need for a revision in the basic pay scales of the Armed Forces. Specifivally, the Chief Warrant and Warrant Officers Association believ,2s that it would be fitting and proper that the basic pay scales of the warrant officer grades be made equivalent to those of the first four officer grades, i.e., W4 equivalent to 0-1; W-2 equivalent to 0-2: W-3 equivalent to 0-3; and W-4 equivalent to 0-4. In order to correct this apparent inequality, we submit that there should be a revision in the basic pay scales to reflect compensation for the warrant officer in the Coast Guard equivalent to his line of responsibility and his tenure as a member of that organization. The warrant officer, in general, has been neglected in the Acid of equality of pay. Some services, such as the Navy, have seen fit to phase out the warrant officer and to substitute his duties with that of a limited duty officer. However, b is my understanding that the policy of the U.S. Coast Guard is to keep its Warrant Officer Corps as an equivalent part representing approximately 25 percent of its commissioned officer corps. Under the present situation, men serving in the grades of E-8 and E-9 can and do draw salaries higher than those of Coast Guard warrant officers under whom they serve in the various respon- sibilities of the Coast Guard. In order to attract the best caliber of men to serve in the Warrant Officer (7orps of the Coast Guard, and to serve as warrant officers in all of the other services, it is necessary that their basic pay rates be more equivalent to what they could earn as civilians. We further believe that retired pay should be directly related to activ2 duty scales. To omit a provision of this kind would be to discriminate against retired members who have devoted their lives and energies to the service of their country both in times of peace and war in harrying occupations. I would like at this point to read from the addendum. However, it has been provided for the record. In conclusion. may I express my humble appreciation and gratitude to this esteemed committee and its honored members for listening with such patience to my statement. I sincerely hope that my single voice will not be drowned in the sea and the multitude of the other witnesses appearing before this 7ommission. Respectfully submitted. .Tony A. KELLER. Chief Warrant Officer, 17..N. Cease Guard, Vice President, Chief Warrant and Warrant Offieurs Association, U.S, Coast Guard, Chairman, Legirlatire committee, Chief Warrant and Warrant Officers ,Issociation, U.s. Coast Guard. Mr. RIVERS Thank you. Mr. Whit w-er. It looks like we have gotten a lot done that you wanted done. Mr. Wit rrwEa. Yes, sir, you have. r. RtvEns. We have got down to :3 and .1. :11r. AVitrtwEa. Yes, sir. E UVEllS. how much did our revised bill allow ? Mr. BLANnroan. I think actually it was more---it was merely an oversight on the part of Mr. Keller. He did not include the endorse- ment- I am sure of moving the :;Z(tSt:',., of the AV I. back to the oyer-i).6 point . I assume you are not opposed to that. Mr. WorrwEa. No. sir: Mr. Blandford. Mr. RIVERS. You don't object to that ? Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/2115 A-RDP66600403R000400280006-0 Mr. Wurrwmi. No, sir; I think Mr. Chairman, our endorsement here is far short. We heartily agree in many other instances. Mr. Keller was attempting to keep this brief and touch on the major points. Mr. &vim-is. I was impressed with a letter sent to me by one of your organizations from Baltimore. It brought ou the problem of E-9's, Mr. Blandford. I wish you would explore that. Mr. BLANDFORD. This will not be new to the Coast Guard Warrant Officers Association. I might say in preface to my remarks, that strangely enough this little organization consisting I think of about 1,900 members out of a total of about 2,100 warrant officers in. the Coast Guard, almost singlehandedly convinced the Department of Defense and this committee that we should have a Warrant Officer Act which this subcommittee wrote in 1954. All other warrant officers have benefited as a result,, because the warrant officers never had a statutory promotion system, they had no guarantees, no guaranteed consideration for prOrtlet1011.7.110W they have. However, the Warrant. Officer Act- is the basis. .fpr the iiNged.dis7 crimination in the pay scales now. Remember, we wrote the Warrant Officer Act in 1951.- We created the E-9- mid E-8 grades in 19iS- Mr. PayEas. 'That is right, we wrote that. - Mr, BLANDFORO.. The E-8 and E-9 grades Were to relievea trettlell- dons compression in the enlisted grades where there was AO tilaee for the enlisted man to go, and the average man was obtaining a . grade- of EJT at about the 12-year point. Therefore, he was losing interest. Tie couldn't .go. beyond 'that.. So we created E-8 and E-9 grades. Prior to that, in 1954 for the first time in thehistory of -warrant officers, and parenthetically I might add warrant officers are even older than commissioned officers in history?that the warrant officers had no guaranteed statutory promotion system. So we provided in. the law t'that for permanent promotion they would serve not more than 3 years as W-1, not more than 6 as W-2, not more than 6 as W-3, and 6 as W-4, and then we also said that upon the completion of a total of 30 years of service-60 days after completing a total of 30 years of service, warrant officers must retire. That is the reason that we suggested that the increment be moved back to the over-26 point. Now, we wrote the Warrant Officer Act in 1951. At that time it was our intent, and I. must say that this has never been implemented by anyone except the Marine Corps to any extent at all, but it was our intent that the warrant officer program would be available to an en- listed man who had about 6 or l'years of service. He could then elect to choose whether he wanted to go into a career as a warrant officer. He might want to go in to OCS. lie might want to gO into the Navy LDO program if in the Navy or Marine Corps, or he could continue on in the enlisted program and get the highest enlisted grade. But the warrant grade was supposed to start with W-1, with about 6 or 7 years of prior enlisted service. This was fine, and every- body thought it was a great idea, except that no one paid any attention to it, because they are still commissioning people as W-1's with 17, 18, and 19 years of service. they Now to the best of my knowledge, there. is no reason why tly can't commission a man as a W-2, of W-3, if necessary, in order to make 85066-63?No. 6-13 Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/041/21:: CIA-RDP66600403R000400280006-0 his law intelligently adinini Acre, I. But t he discrepancy bet Nyco' the E?s and E-9, and the W-1 awl W-2, is because they are making them warrant officers, when they !lave many years of eillisted service, and they are not implementing the law which contemplated that these warrant officers would be made al about the 6- or 7-year point, when they would be E--1's, not E-7's. S's, or 9's. Today a man who wants to buconte a career serviceman, should make up his mind whether he wants to become a career enlisted man, and he can go up to the E-9 grade, with a maximum pay of $560, or he can decide he will become a warrant officer. It is harder to get, but he can go there because maximum pay under the proposal is $685, or he can try to go to OCS, where he takes his chances as a commissioned officer, but the pay scales that were written in the law are geared to the implementation of the program, and frankly I submit that it would he impossible to equitably write a pay scale to fit a situation that has been created by poor management. Mr. RIVERS. Well, I will tell you, the Navy is getting ready to do away with the warrants. Mr. BIANDFORD. And the Marine Corps is expanding. Mr. RIVERS. The Marine Corps is expanding; yes, that is correct. Mr. BLANDFORD. Yes. Mr. RIVERS. I was more impressed that the need was in the Coast Guard. The Coast Guard has these little stations all over the United States, on the mainland, in Alaska, Hawaii, and everywhere. Sonic of them are in charge. This was brought out, and it is indispensable to the Coast Guard. It impressed me very nmeh, what you said. Mr. WurnvEn. Thank you, sir. Mr. RivErts. No branch of the service has really got the service out of the "warrant" rank as has the Coast Guard. T listed to see it phased out in the Navy. If you can't use them, they must have a reason for it. It brings me to this. In the development of the philosophy of your retirement, pay and everything, you don't have anybody really plug- ging for you, when these things are written. Like, for instance, you come here, about this business of the pay. Mr. WurrwErt. Yes, sir. Mr. RIVERS. I feel very strongly about what you have said. Mr. IIAnwv. I think Mr. Blandford put his finger on the prchlem; it is more a problem of administration. Mr. RIVERS. There is poor mind nist rat ion all over the lot. You take the $1.03, for enlisted men, that is the silliest thing I ever heard of. Mr. WIIITWER. Mr. Chairman, we felt that we did have an area in which you, the committee, might be interested in knowing where there were some problems, and we presented it sincerely, and, I hope. effec- tively. We do not hope for a final resolve of a problem of this kind on a minute's notice, but we would like to get it in the record. Mr. BLANDroan. Mr. Chairman, I would= like to suggest that if the Coast Guard or the Army or anyone else wants to solve the warrant officer problem, and put the. warrant. officers on an equitable basis, that they merely have to accelerate the promotion points. This is not new. Temporary promotion has been with us for many, many years, now. If they want to bring the warrants up faster, so that they can adueve Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 1? CIA-RDP661300403R000400280006-0 591 the higher pay to put them on a parity with the officer scales where they really belong, that all they have to do is make them eligible for promotion that much sooner, and they have solved it. You don't have to write a new pay scale to do it. This a question of administration. Mr. WrinwER. Mr. Bland-ford, our promotion schedule now is in line with what you recommend now, 2, 4, and 4, as against the maximum 3, 6, and 6. I presume you know this? Mr. BLANDFORD. Yes, I do. Mr. WiurwEn. They gave us the benefit of the doubt on that point; at least td this point. Mr. BLANDFORD. They are trying to solve the problem. So actually you will 'eventually, when you move into the $685 maximum for a W-1, be very close to the 0-4 grade? Mr. WIIITWER. Yes' sir. Mr. RIVERS. I still think I don't like that E-8 and E-9 being the highest rate of pay. Mr. HARDY. Mr. Chairman, that wouldn't make any difference. If the E-8 and the E-9 are supposed to be comparable with a higher level of the warrant officer than the W-1 and W-2, that is where the problem is.? Mr. BLANDFORD. Not only that, but you see every second lieutenant Mr. Rivnas. A warrant officer is not an enlisted man. An enlisted man gets more than an officer. It just doesn't make sense to me. Maybe you can persuade me at some other time. Mr. BLANDFORD. If you will look at your pay scales, you will See there are many, many enlisted men who draw twice as much as the second lieutenant. Mr. RIVERS. They are worth more than the second lieutenant fresh out of college. You can't compare them with a warrant officer or a boatswain's mate, to save your life. You know god and well you couldn't compare an ensign with a boatswain's mate. Mr. Hminv. You let the man get more than a commissioned officer. Mr. Rivigis. He is entitled to more in that case. Mr. W I ITWER. Our sole defense in anything we have ever tried to do has been the fact that we feel that, we have something to offer to our organization, and constantly try to offer it to our best. At some point in a man's career, presently in the Coast Guard, at about 12 to 15 years, he must make a decision whether to become a warrant officer or an E-8 or E-9. Now, if he continues in the E-8 and E-9, he continues to develop his technical skills, be does not take on any additional command. He takes on no command responsibil- ity?none of the responsibilities of an officer, even though he be a junior type officer. Mr. RIVERS. I think Mr. Bates agrees with me. The Coast Guard is giving us extremely valuable service. Mr. WTIIITWER. Thank you, sir, for the kind words. Mr. RivERs. I think I would fike some time for somebody to tell me how many Coast Guard stations we have got in this country; everywhere you look they have a station. They have these boats running over every harbor in America. I get this thing from the Merchant Marine Committee, where I am a very unimportant mem- ber. I know a little something about what you people do. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/Q412J : CIA-RDP66600403R000400280006-0 I. think the Coast Guard, Mr. Bland ford, as you have observed, does a wonderful job. Gunsrn. I wonder if, in a short period of f ime, you could explain the difference between the Coast Guard retirement. system and the Army, Navy, Air Force, anal Marine Corps retirement system. Mr. Wurrwiai. The retirement system Mr. Gunsrai. Yes. Mr. Wittrwrii. .ks applied to re Officer Corps'. Mr. Gummi. Yes. Mr. Wurrwrai. As far as I know, the laws and regulations governing re .t lie sante. There may be some (title !fence in the other service as far as implementation of this is concerned. I eouldn't testify to that. Mr. Iii.ANnroito. There is one difference to which I think Mr. Gob- ser is referring, that is one the GAO brought out not long ago, :hat a commissioned warrant officer, temporary commissioned warra at of- ficer, for example, who holds a permanent enlisted status, or (veil a temporary officer in the Coast Guard, which I never knew until I read about it the other day, a temporary commander, Coast Guard, or 'oast Guard Reserve, who had held a permanent enlisted status, and had a 4-0 record for this whole career, draws 10 percent more. re- tirement pay because of his having held this enlisted status, than the commander who graduated from the Coast Guard Academy. Mr. GUISSER. While you are on active duty you, of course, are en- titled to use the facilities of the U.S. Public Health Service. Mr. WiirrwEn. Yes, sir; and under medicare, other military medi- cal facilities. Mr. GuBSElt. What medical benefits do you have as a retiree, ii' any Mr. WIIITWER. In the present progression of things, T will be en- titled to less as time goes on, with the present programing for new hospitals awl that sort of thing. I our about, I figure, 61,f2 years away front retirement., but I feel our medical benefits. will be far less if the present trend continues, when I retire, they will be less than thy are now. I will he allowed hospitalization and medical care for myself and my wife at this point. Mr. Gunismt. You have a Public Service Hospital; is that cight ? Mr. Winfrwra. Yes, sir. I believe I would still he able to go to the nearest medical facility, Government medical facility, on this basis. Mr. Gunsr.a. In other words, a person who is now retired from the Coast Guard, has the right, to go to the nearest Government. medical facility, is that right? Mr. WITTTWER. I know he has the. right to go to the nearest Public Health Service facility, and T believe this active duty privilege ex- tends into his retirement. Mr. lif.ANDFORD. It is now true, Mr. Gubser. We. wrote the Medi- care Act here, if you remember, and there was some confusion everuil years ago when Coast Guard personnel had to go to Baltimore to go to the Public Health Service with the main Navy dispensary sitting down on Constitution Avenue. We finally got that squared away. Now, all members of the uniformed services may use medical fa under the jurisdiction of the uniformed services. Mr. WITITWER. Even into retirement, Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/215.91A-RDP661300403R000400280006-0 Mr. BLANDFORD. Yes, on a space available basis. How much space will be available, is something else. MT. WHITWER. Yes, sir. Mr. RIVERS. Thank you very much. Mr. WILITWER. Thank you, Mr. Chairman. Mr. RIVERS. Mr. Blandforcl, this is the last and concluding witness? Mr. BLANDFORD. Yes, sir. Mr. RIVERS. We will have a full committee meeting tomorrow. I don't think we .can conclude the draft tomorrow., do you? Mr. BLANDFORD. NO, we won't complete it probably until Tuesday. Mr. GUBSER. I would be interested in knowing whether the full committee is going to meet Saturday. Mr. HARDY. Mr. Chairman, before we adjourn, we have requested certain documentation which I trust will be forthcoming before very long. I have received a copy of a communication from Admiral Set- tle, expressing his dissent from certain recommendations, which I would like to turn over to Mr. Blandford. I also have before me a document which purports to be the section on comparability from the study. I turn that over to Mr. Blandford for his perusal. It has charts, Mr. Chairman, of comparability, which don't seem to me to jibe with the ones that you had here a moment ago. I believe they are in the data either presented or requested, which was information with respect to the projected cot of the re- tirement system under this proposal in 300G. I believe there is also some information concerning what the projected cost would be if the recomputation on the basic rates were provided all the way down the line, instead of miffing off with the ones before the 1958 act. There has been a question in my mind, and I am not sure whether this has been requested, but there has been a question in my mind as to the current cost to the Government, projected cost, of the civil service retirement. ITas there been any request for that, Mr. Bl dford ? Mr. BLANDFORD. Not to my knowledge. The only thing, as I under- stand the situation?I may be incorrect, but I have read portions of the report?the contribution for civil service retirement comes no- where near establishing the fund that will be necessary to pay civil service annuitants, because there are conStant additions made or bene- fits granted under this program, such as guaranteed minimums, when there are increases, that were never covered by the annuities. Mr. HARDY. That, is what I understand. That lathe reason I raised this question, because if we are going ?to talk about the projected cost of military retirement, usinc, a recomputation on the changes in basic pay, then I think we ought to have before us at least so that we will have all of the factors to consider?we ought to have before us a similar projection of the cost to the Federal Government of civil service. Mr. RIVERS. Well, for a million people, I think that is about how many there are, the cost is about?here it says 1.38 billions in 1958. Estimated annual cost of the military increase is practically 1.2. It covers 2.68, is that right? Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/M.',CIA-RDP66B00403R000400280006-0 I. I inAxDFoito. Well. .Ws. would he the act ire ulutv forre? What you have are approximately 3.-iti.000 people now in the retirel list at a cost of 8L620 million. Mr. RivEas. This t hat 1 ha ve, in order for I he military pay increases to be comparable wit III hose already enaeted for the civil service, their annual cost should be approximately 2.68 times 1.38. or 3.7 billion. HARDY. Thal is an annual cost. Mr. RIVERS. Yes. Mr. I [maw. I don't know what the solliTe 01 Hon IS. Mi. RIVER. I wollId like for you to see this. Mr. [Emmy. Since we are not going to meet for a while. I think if we conld have as lintel' of this data assembled as we can it Nt ould be helpful. Mr. linANDronn. I will try to get the information for you, Mr. Hardy. The problem, of course, is, you are comparing .\ Ir. IlAitoy. Apples and peaches. Mr. I ii..xxormin. Thal is right. Ii possible to ret ire in the civil service with only 5 years of service, Then we hal e different. retire- ment ages. Mr. Rtynas. The Post Office has about Li. Mr. fin:cum.-inn). Yes. The difficulty is, for example, xyLen you project. a cost for a chief petty officor who retires at the age of 38, and t ransfers the Fleet Reserve, then the cost of !hat man over his life expectancy is going- to be considerably inure titan one wlic retires at a litter age. Mr. II I think we need to recognize these. facts. MT. BLANDFORIL I Wi II try certainly to get as much as I can. Arr. izivElls you can find out what the civil service annual cost is. Mr. Iinallonono. I think von will find--1 ani not sure von will find? you will find out what t he i1overnment pays out, but whet lien you find out how 11111(711 I Ile (4n-eminent has to contribute. in order to come out even for just the payment that year is something else. :qr. I 1 Alan% Somebod v noisa have made an actuarial projeetion. Mr. RIVERS. I think so, too. Mr. BLANDFORD. I Would assume SO. ME. RIVERS. See if you can find out. Mr. lilandford, thinking out loud, we may Inure to have another meeting with Mr. Paul. Mr. BLANDroan. We haven't covered the proposed family separa- tion allowance. We have not even discussed the readjustment pay for regular enlisted personnel who are separated or who are not reealisted. And we actually did not. discuss with Mr. Paul retirement. costs, and I think that perhaps between now and Tuesday, with this much notice, that they may be able to get some fig-tires on retirement, such, as Mr. Hardy and you have suggested, Mr. Chairman, so that we could have as much information on this question of projected retirement and civil service retirement as we can possibly get together to make some sense out of it. Mr. RivEns. You do the best you can. Mr. fir.,xxErr. Try to Hind out about that comparability study, see how much this will cost, for the Air Force. Mr. BLANDFORD. I was told. I don't know how correct this serv- ice, whieh is the first increment would cost about $4,1 million, but the Approved For Release 2005/04/21 : CIA-RDP66B00403R000400280006-0 Approved For Release 2005/04/215.1A-RDP661300403R000400280006-0 second increment would go over a billion dollars. I don't know if this is correct or not. It is a rather staggering sum. Mr. BEN-NETT. Let us make it comparable. We voted very glibly for the civil service people. Mr. BLANDFORD. You get into the same problem Mr. Hardy indi- cated, comparing apples with peaches. This is where I always get lost on a comparision study. I know there are GS-15's working for colonels, and I know the GS-15's make more money than the colonels. Maybe the reason why the GS-15's are working for the colonels, is there is a general in charge who wants a colonel running the shop, and he doesn't want a GS-15 running the shop, which is understandable in a military organization. But in my own mind, I find it difficult to try to correlate even the civil service rating. I '' 4Trant you it is easier to compare civil service ratings than it is withindustry, but I don't know whether a GS-3 is comparable to an E-1, E-2, E-3, or E-4. I don't know what to compare it with. Mr. BENNETT. There is one thing pretty clear, after these hearings, and that is we have rather generously, and I don't think there is any doubt about it, treated the civil service employees, and here we are taking a rather niggardly approach to the military. Frankly, I can't quite understand it. Mr. RIVERS. What we do?it is clear to me, as it is clear to Mr. Blandford, where he first went over this thing. The first crack out of the boy Mr. Blandford increased this bill $289 million, even to get it where we could look at it. Mr. BENNETT. I still think it is too little. Mr. RIVERS. This bill was written with one eye on the budget. Mr. BLANDFORD. I think, Mr. Chairman, there CRII be no question about. that. We face this now, as we did in 1949. We always face the question of how far can you go beyond the amount of money that is presumably contained in the next year's budget. It constantly faces us. Now, Mr. Bennett's point, and I think the point where you can make a comparison, is that you can look at the pay of, say, an 0-5, with a GS-14, as it was, say, in 1949. Mr. RIVERS. That is right. Mr. BLANDFORD. Then you develop the spread Mr. RIVERS. That is what I have in my hand. Mr. BLANDFORD. The difficulty with that is, I suppose, the Federal employees' representatives could come in here and say, "Well, has it ever occurred to you that the civil service was grossly underpaid for all these years?" Mr. krviats. I had a magazine come to my office this morning, and I open my mail early, before anybody out here ever gets up, and I saw on the front of it, as long as there is inequity in the pay of the postal employees, there is a need for a union to represent them. Mr. BENNETT. You also have to remember, tomorrow we are going to be considering the draft. Mr. RIVERS. That was quite interesting. And the postal employees, I don't think they have had an increase in 3 or 4 months. [Laughter.] What is it you started to say? Mr. BLANDFORD. The situation is going to be a very lot worse in 1964, believe me. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/4G CIA-RDP66600403R000400280006-0 Mr. UtvEits. 'Ile only people I know who are not entitled to an increase are tlie Milliners of tlw Congress. Mr. BATES. That is right. I. 1 NDFORD. t heir stairs? Mr. liivnts. And their stair. Mr. blivElls. The commint.t. will 11. in recess nut il the cal of the ( 'hair. Mr. Bland ford, do ?vhat you can. I. lin.k xim am. I will (10 vhat I can. Whereupon. at p.m_ the sultcommittee adjourned ii itil the of ('hair.) 1 hit. ur REPIZI.sEN.FATIVES, .(111,11 r ?VIZAIF.1) S rliCUM M ['MIA', Nu. 1. [1-a-vh. lioton. 1).(".. 1. u(.vd(f .11,lielt /96.3. 'I'lw subcommittee incl. pursuant to adjournment, at 1(1:41) in room 313 A. Cannon Oilice Building, lion. L. Mendel Rivers (chairman of the subcommittee) presiding. Mr. III vEtts. Let t he committee come to order. _Members of I lw committee. we arc cont Muni!, 1110 hearings on the :1006, the miiit ary pay bill. Last week we completed our testi- mony of both the Department and the other witnesses, and tint-. morn- ing we want to begin the reading of the bill in ...xecutive session. This morning we are pleased to have the distinguished Seretary for Manpower, _Mr. Paul, to sit with us wink. we begin the reading of the bill in the. hopes that we can, this nmrnin..r, complete our 1111- tierstanding on some areas I hat are quite vital to the bill. Now, Mr. Blandford---- Mr. linAsoFinto. Ves sir. Do you ?valit Ni Use 1hr connnitt PO print or use the bill as introduced? Mr. Rivnus. Why don't- we take the committee print ? Mr. lir,AxInfoun. All right, sir. Mr. litvEus. Now. Mr. 1Ilandford, pm take up right there. r. 14,ANDroun. In the interest oft ine, Mr. ( 'hairman, and ill order to make some policy decisions that have to be made here, of course, the fins( correct ion that has been proposed in the pay scale deals with the pay for professors at West Point. This is a simple correction. The amount recommend 1 et. at the end of 30 years of service or over 3t; years of service. is $1,2-15. which would be $10 a month mole than a brigadier general makes, and because the man is st ill a colonel it is sm,gested that that amount be reduced to *11,..2:1:t. which wr.uld be lite maximum amount_ of pay of a bri!radier general. Mr. RivErts. That is in our print. Mr. 131.ANDFonn. it's, sir. r. OsmEltS. Mr. Chairman, an inquiry. Wliat 1)1112:0'1 Mr. N..% ximant. Page .2. M r. Ivirs. -What_ is that change Mr. lit,Axtwoan. There isn't ally lbw On it. So under the small print, 1111der " Ienrs of service- under the in I, down half way on the page when ii says "While serving as a permanent professor at U.S. Military Academy or the U.S. Air Force _kcitdenly, basic pay for Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 1597 this grade is $1,165, if the officer has over 31 years of service computed under section 205 of this title, etc." Mr. RIVERS. Has everyone got a copy of the committee print? Where is that on page 2? Mr. BLANDFORD. There isn't any line. Mr. Osmigas. Above "Warrant officers." Mr. BLANDFORD. Yes, thank you. Now, you will recall that the Coast Guard asked for identical au- thority. Unfortunately, I do not have a comparison of Coast Guard laws with the Military Academy, and as a result I think personally it would be an error to attempt to extend to the Coast Guard a benefit that is intended for West Point when we don't know what the Coast Guard retirement laws are. This is another one of the problems that we always run into. Mr. RIVERS. Have we ever attempted to legislate in the Coast Guard area? Mr. BLANDFORD. Only on basic pay Scales and on disability retire- ment. We do not have jurisdiction over the U.S. Coast Guard Academy. Mr. RIVERS. I know that. Mr. BLANDFORD. I think it is a mistake for us to attempt to write something into the law, even though it would of course be a benefit to them, without understanding what their basic law is. I suspect, as was indicated here by Admiral Knudson, that there is a difference in retirement age. I understood Admiral Knudson to say that professors at the Coast Guard Academy continue on to age 62. I don't know how many other variations there are in the law. The information has not been furnished to me. I think it would be a mistake for us to go into an area in which we have no jurisdiction. Mr. RIVERS. We won't consider the Coast Guard. Mr. BLANDFORD. The next suggested change, Mr. Chairman, is that the W-4 at over 26 years of service, as opposed to over 30, you will recall the testimony that the Coast Guard warrant officers, all war- rant officers, are required to retire when they have .completed 30 years of service, 60 days after completion of 30 years. Mr. RIVERS. For pay purposes we are going to let that take effect at over 26. Mr. BLANDFORD. Yes, sir. Mr. Rivras. Does everybody understand that? Mr. Blandford has reasoned that it is senseless to raise them and then retire them. If you are going to raise them, let them take benefit of the pay. Isn't that right? Mr. BLANDFORD. Yes, sir. Mr. OsivrERs. I am assuming by process of deduction that in the serv- ices other than the Coast Guard, armed services, we permit warrant officers to remain beyond 30 years. Mr. BLANDFORD. No, Sir. If I said "Coast Guard," I should correct myself. We wrote a Warrant Officer Act in 1954. to apply to all war- rant officers, and all of them must retire at that point. Mr. GAvrist. Automatically. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 1598 Mr. BrANDroion, The Secretary keep them on, but for all prac- tical purposes the law requires them to retire 60 (lays after completion of 30 years of service. Mr. OsmEus. This is all warrant officers? Mr. BLANDForm. All warrant officers. Mr. Rivsats. Can we come to agreement on that? Without objection, we accept that proposed change. Mr. litAxnronn. All right. The next, is on page 3. There seems to be almost universal agree- ment t hat we should not distinguish between an obligated reservist and an unobligated reservist on inactive duty training. I don't know how much discussion you want to have on this subject. There is $38 million involved here, but, as the chairman indicated in his statement we have today 58 percent of people who have attained the age of 26, ha ye had some form of military service. Now. those who do SerVe certainly should nor lw discr minified against by putting them on a different pay scale than those who volunteer beyond their obligated period. That is what this proposal would have done. Mr. liavEas. 1 might say Mr. lilandford had considerable corre- spondence on this. Mr. lii,ANDroun. Yes, sir. This is an irritant to practicaLy every organization, the ROA and others have testified against this. 1.t dotes add. $38 million to the cost of the bill, but on the other hand there is grave question in the minds of many as to whether there should ever have been any attempt to take it away. If we can agree out tile del et.i011- Mr. Osestnas. Mr. Chairman, again only for the purpose of clarity. ii we delete (It), we then give to all reservists, obligated and nn- obligated, the same pay scale? Mr. 13 IANDFORD. Yes, sir. Mr. OSMERS. And in doing this wc increase the total cost of the bill bv 8;18 million? Mr. BLAsnroan. Yes, sir. Mr. Rivtais. Let's hear front Mr. Paul m that. Mr. Paul, we have invited you here because we would like to hear what vou have to say about this. Secretary PAUL. Mr. Chairman, I think first of all on a technical point of the amount of increased costs, in fairness to the conanittee think I should inform you that our estimate is that--and this is a new one we have developed?that the increased cost will not be $38 million, it will he in the 20's rather than the 30*s. if that assists the committee in its determination, Mr. RivEas. Ti does assist. You have heard the discussion. Do you feel it will kill the Defense Department if we put them MI nit equal basis? Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/215.9FIA-RDP661300403R000400280006-0 Secretary. PAUL. 1 don't feel it would kill us, n.o, sir, in answer to the chairman's question. Mr. RIVERS. Without objection, let's come to agreement on that. MT. BLANDFORD. We will delete that section. Mr. RIVERS. This will remove an irritant from a great section of these people. Mr. lluddleston talked to me about it. What is the next? Mr. BLANDFORD. Seeti011 3 is contract surgeons. Mr. BATES. We are all through with that section. Mr. BLANDFORD. Yes, sir. Mr. B.Aws. Mr. Chairman we have had interruptions in OUT hear- ings and a lot of us have read matters that have hot been read into the hearings, so that I am not quite certain at this time just what is in the hearings and what has not been put in. Now what have we got actually in the hearings on the computations of pay and, why we _gave_ certain rates to certain individuals? MT. BLANDFORD. The testimony reveals that in the study made by the Pay Panel, that one of the big -factors was to increase the pay of first lieutenants, second lieutenants and captains, and also in the more senior NCO grades, and what they attempted to do was to get at the retention points and come up with a figure which they felt would be sufficient to increase the retention of personnel. And that has already been testified to. Mr. BATES. Right. Now how about the senior officers? Mr. fiLANDroitn. There is a straight cost-of-living increase. I think that all of the services, and I now have their comments here; it is rather thick. The. sum and substance of the comments of the services on the basic pay scales .are that the pay scales are inadequate. Well, this is not surprising that the departments would consider these to be inadequate, and I think that Mr. Paul submitted a memo- randum to me for insertion in the record and which I shall read into it at this point: In connection with the proposed rates of basic pay the personal views of the service Secretaries, the Chairman of the Joint Chiefs of Staff, the Chiefs of Staff of the Army and Air Force, the Chief of Naval Operations and the Com- mandant of the Marine Corps were requested by the Secretary of Defense in a separate communication. In general, the views expressed were that higher rates of basic pay for some enlisted and officer grades than those being considered by the Department of Defense were justified, particularly for second lieutenants and officers in the ranks of lieutenant colonel or colonel and higher. I don't think there is any secret that the Departments are unhappy with the increases provided for the senior officers. Mr. WILSON. In the past, or this bill? Mr. BLANDFORD. No; in this bill. think we must face a reality here with regard to the basic pay scales for senior officers, that until we settle this retirement question Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/2i) CIA-RDP66600403R000400280006-0 once and for all. I doubt very much whether we are going to be able to decide upon basic tnty scales Th1 11w more set dor olliceri. You couldn't very \veil put in a substantial increase for senior officers and then reenact a 1058 cutoff date as we did in 1058, without recreatim, discrimination against those retired prior to the effective daft- of this act. Now, whether this was behind their reasoning or rot, I do not know. I know that. the Randall Committee is still studying executive pay, and I am informed that this study also includes the pay of more senior officers in the armed service. I personally feel that tint it this subcommittee makes up its mind as to what they are. going to do on the retirement sect ion, that you can't settle anything else that is in the bill, because the retirement sect ion is vital to any further consideral ion of basic pay scales. Mr. HATEs. Ihive we read into the hearings the percent increase by 9 rates Mr. 13.L.kNo1'onn. Not into the hearinas, but this will be put into the report . It is an average increase of 1.1.4 percent . Mr. BATES. That doesn't mean much. Mr. 13LANDFOIM. Ii doesn't mean a thing. Mr. 13.m....s. Do we have the specific increase by rate? Mr. 131,A:comity). I have I he increases here. Mr. BATES. I ask that eh her be put in the hearing or in the report. or 1)0th. Mr. (liairman. Mr. RIVERS. you got t Ind e Mr. BLAxnroan. 1 have a breakdown here, Mr. tliairman, which was prepared, which indicates every grade, what the percent age of increase will be in every grade and using typical years of service. R \IAN. -Whose proposal an you reading Irma ? Mi.. BLANDFmai. This is prop,spd iii ILE. :1006, mot the subcommit- tee print. Mr. InvErts. This is the department 1\Ir.13"..kxnFouo. I )(part inent proposal. Mr. RivEns. Let's insert that at t his point. (The Department proposal is as folli.ws:) Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Examples of present pay and allowances with those proposed in Hi?. 3006 OFFICERS Pay grade Title Number in grade, fiscal year 1964 Typical years of service Present Alternative or additional Monthl2 amount Proposed in E. R. 3006 Percent increase Type Monthly amount Monthly amount Dollar increase . , 0-10_ Chief of Staff, Chief 4 30 Basic pay $1. 871.00 1$1,970.00 $91.00 5 of Naval Opera- Personal allowance 2 333.33 2 33333 0 0 ' tions, Colman- dant, U.S. Marine Quarters allowance with dependents 2 201.00 Quarters allowance without depend- ents. 2 $160. 20 2 201. 00 0 0 Corps, Chairman, Subsistence allowance 2 47. 88 Flight pay (if eligible) 165. 00 2 77. 10 29.22 61 Joint Chiefs of Total, monthly 2, 457. 21 2.181. 43 124. 22 5 Staff. Total, annual 29, 486. 52 30, 977. 16 1,490. 64 6 0-10_, General, admiral__ 31 80 Basic pay 1, 700. 00 11, 785. 00 85. 00 5 Personal allowance 2 183.33 2 183.33 0 0 Quarters allowance with dependents_ _ 2 201. 00 Quarters allowance without depend- ents. 2 160.20 2 201. 00 0 0 Subsistence allowance 2 47. 88 Flight pay (if eligible) 165. 00 2 77. 10 20.22 61 Total, monthly 2, 132. 21 2, 246. 43 114.22 6 Total, annual 25, 586. 52 26, 957. 16 1,370. 64 1 0-9._ Lieutenant general, 105 30 Basic pay 1, 100.60 11, 575. 00 78.00 6 vice admiral. Personal allowance 2 41. 67 2 41. 67 0 C Quarters allowance with dependents__ 2 201.00 Quarters allowance without depend- ents. 2 100.20 2 201.00 0 C Subsistence allowance 2 47. 88 Flight pay (if eligible) 165.00 2 77. 10 29.22 61 Total, monthly 1, 7C0. 55 1, 894. 77 104.22 C Total, annual 21 486. 60 22, 737. 24 1, 250. 64 f 0-8_ Major general, rear 484 30 Basic pay 1, 350. 00 11, 420. 00 70.00 1 admiral (upper half). Quarters allowance with dependents.. _ 2 201. 00 Quarters allowance without depend- ents. 2 160. 20 2 201.00 0 C Subsistence allowance 2 47.88 Flight pay (if eligible) 165.00 2 77. 10 29.22 61 Total, monthly.. 1, 598. 88 1, 698. 10 99.22 C. Total, annual 19, 186. 56 20, 377. 20 1, 190. 64 1 0-7._ Brigadier general, 668 28 Baste pay 1, 175. CO 11. 235. 00 60.00 6 rear admiral (lower half). Quarters allowance with dependents__ 2 201.00 Quarters allowance without depend- ents. 2 160.20 2 201. 00 0 ( Subsistence allowance 2 47.88.Flight pay (if eligible) 160. 50 2 77. 10 29. 22 61 Total, monthly 1.423. 88 1, 513. 10 89.22 1 Total, annual 17, 086. 56 18, 157. 20 ?, 070.64 f 0-6___ Colonel, captain 15, 183 24 Basic pay 910. CO 1,000. 00 90.00 1( Quarters allowance with dependents_ _ 2 170. 10 Quarters allowance without depend- ents. 2 140. 10 2 170. 10 0 1. Subsistence allowance 2 47. 88 Flight pay (if eligible) 245. 00 2 77. 10 29. 22 61 .... _ Total, monthly 1, 127. 98 1. 247. 20 119.22 11 ee tootnotes at enO ot table. 0-90008Z0017000t1?01700899dati-481. 1?Z/170/900Z aseeleu JOd 130A0iddV Examples of present pay and allowances with those proposed in II.R. d006-COntinued OFFICERS Pay grade Title Number In grade, fiscal year 1964 Typical years of service Present Alternative or additional , I Monthly amount , . Proposed in I I .11. 3006 Percent Increase Type Monthly amount Monthly amount Dollar increase Total, annual $13,535. 76 $14,986. 40 $1,430.64 11 0-5- Lieutenant colonel, 37, 1s7 21 Basic pay 74.5.00 835.00 90.00 12 counuander. Quarters allowance with dependents_ _ 2 157.50 Quarters allowance without depend. ants. '$130.20 1 157. 50 0 0 Subsistence allowance 1 47.88 Flight pay (if eligible) 245.00 '77.10 29.22 61 Total, monthly 950.38 1,1109. 00 119. Z/ 13 Total, annual 11,404. 56 12,835.20 I, 430. 64 13 0-4 Major, lieutenant 50.572 19 Basic pay 630.00 725.00 o5. 00 15 commander. Quarters allowances with dependents 3 145. 05 Quarters allowance without depend- eats. 1 120. 00 I 145.05 0 Subsistence allowance I 47. 88 Flight pay (if eligible) 240.00 '77.10 29.22 01 Total, monthly Eaz. 93 047,15 124.2: 15 Total, annual 9,137& le 11, 365. Sill I, 490.64 it 0-3 Captain, lieutenant. 105,071 8 Basic pay 460.00 540.00 80. 00 17 Quarters allowance with dependents '130.05 Quarters allowance without depend- eats. 1105.00 1130.05 0 n Subsistence, allowance I 47. 88 Flight pay (if eligible) 185.00 1 77. 10 20. 22 Cl Total, monthly 637.93 747. 15 109. 22 17 Total, annual 7,655. I ti 8,965. )41 1,31(1.61 17 0-2 1st lieutenant, 53,913 4 Basic pay 311).t8) 435. lgi 65.1*) 18 lieutenant (junior grade), Quarters allowance with dependents.. tiulatisUume allowance 1 120.00 3 47. 88 Quarters allowance without depend- 293 10 cots. Flight pay (if eligible) 150.1141 1 120. (X) 3 77.10 o 0 29.22 61 Total, monthly 537.88 632.10 94.22 18 Total, annual . . 0, 4.54. 36 7, 58.5. 20 1,130.114 lb 0-1 2(1 lieutenant, 50, 400 0 Basic pay =2. 3(12511. 00 27. 70 12 ensign., Quarters alloA efillt* WW1 dependents_ - 2 :VI 10 Quarters allowance witl at dr pen - I 141.20 , 710. 10 ants. 0 0 Subsistence allowance 2 47. 88 Flight pay (if eligible) MO. OU 3 77. 10 29.22 61 'l'otal, monthly 380. 28 437.20 56.92 II . Total cumual _ 4, 563. 36 5,246. 40 683.04 II W-4 Chief warrant, 2,1447 24 Basic pay 543.00 1135.00 92. 00 17 commissioned warrant. Quarters allowance with dependents.. 1 145. 05 Quarters allowance without depend- 2 120. 00 eats. 1 145. 05 0 0 Suitsistelim allowance = 47. 8S Flight pay (if aligibirj 165. fi6 : 77.1C 2. 22 Gi Total, monthly 755.1)3 857. 15 1'21. 22 it Total. annual 8. 831. le 10. 285. 80 I. 454. 04 16 W-3 W-2 W-1 Chief warrant, commissioned warrant. Chief warrant, commissioned warrant. Warrant officer..... 5,621 5,906 2,452 21 18 14 Basic pay Quarters allowance with dependents_ _ Subsistence allowance Total, monthly Total, annual Basic pay Quarters allowance with dependents.. Subsistence allowance Total, monthly Total, annual Basic pay Quarters allowance with dependents Subsistence allowance Total, monthly. Total, annual 470.00 2 130. 05 2 47. 88 647. 93 7, 775. 16 400.00 2 120. 00 2 47.88 573.88 6,886. 56 354.00 2 110. 10 2 47.88 511.98 6, 143. 76 Quarters allowance without depend- ents. Flight pay (if eligible) Quarters allowance without depend- ents. Flight pay (if eligible) Quarters allowance without depend- ents. Flight pay (if eligible) 2 105. 00 130.00 2 95. 10 135.00 285.20 130.00 540.00 2 13n 05 2 77. 10 747.15 8,005. 80 470.00 2 120. 00 2 77. 10 667. 10 8, 005. 20 405.00 2 110. 10 2 77. 10 592.30 7, 106. 10 70. 00 0 29.22 99.22 1, 190. 64 64.00 29.22 93.22 1, 118. 64 51.00 29.22 80.22 002.64 15 0 61 15 15 16 61 16 16 14 16 16 ? LI 0 a. 0 ms M th8 )1> CO ENLISTED E-9 E-8 E-7 E-6 E-5 Sergeant major, master chief petty officer. Master sergeant, senior chief petty officer. Sergeant 1st class, chief petty officer. Staff sergeant, ptty officer 1st class. Sergeant, petty offi- cer 20 class. 13, 589 35,978 111,100 227,866 396,826 20 19 18 14 10 Basic pay Quarters allowance with dependents Subsistence allowance Total, monthly Total, annual Basic pay Quarters allowance with dependents Subsistence allowance Total, monthly Total, annual Basic pay Quarters allowance with dependents Subsistence allowance Total, monthly Total, annual Basic pay Quarters allowance with dependents_ _ Subsistence allowance Total, monthly Total, annual Basic pay Quarters allowance with dependents Subsistence allowance Total, monthly Total, annual $450. 00 2 120. 00 231)90 580.90 6, 970. 80 360.00 120.00 23090 . 510.90 6, 130. 80 340.00 2 114.90 2 30. 90 485.80 5, 829. 60 275.98 2 110. 10 2 311 90 416.00 4, 992. 00 240.00 2 105.00 2 30. 90 375.90 4, 510. 80 Sea and foreign duty pay Quarters allowance without depend- ents. Flight pay (if eligible) Proficiency pay, P- 1 Proficiency pay, P-2 Sea and foreign duty pay Quarters allowance without depend- ents. Flight pay (if eligible) Proficiency pay, P-1 Proficiency pay, P-2 Sea and foreign duty pay Quarters allowance without depend- ents. Flight pay (if eligible) Proficiency pay, P-1 Proficiency pay, P-2 Sea and foreign duty pay Quarters allowance without depend- ents. Flight pay (if eligible) Proficiency pay, P-1 Proficiency pay, P-2 Sea and foreign duty pay Quarters allowance without depend- ents. Flight pay (if eligible) Proficiency pay, P-1 Proficiency pay, P-2 $22.30 2 85. 20 105.00 30.98 60.98 22.50 2 85.20 105.00 30.00 60.00 22.50 2 75. 00 105.00 30.00 60.00 20.00 2 70.20 100. 00 30.00 60.00 16.00 2 70. 20 90.00 30.00 60.00 $485.00 2 120. 00 2 3n 90 635.90 7, 630. 80 415.00 2 120. 00 2 30.90 565.90 6, 790. 80 365.00 a 114. 90 2 30.90 510.08 6, 129. 60 310.00 2 U.O. 10 2 30.90 451.00 5, 412. 00 260.98 2 105.00 2 30. 90 395.90 4, 750. 80 $55.00 0 0 55.00 660.00 55.00 0 0 55.00 060.00 25.00 0 0 25.00 300.00 35.00 0 0 35.00 420.00 20.00 o 0 20.00 240.00 13 0 0 9 9 15 0 0 11 11 7 0 0 5 5 13 o 0 8 8 8 0 0 5 5 See footnotes at end of table. 1:a.antiiliN pall and 1(11olca)w29 th r,.,!e .EN.LasT1.:10 _ . , 1 'resent Number Typie..I in grade, years of ____ . ...?_. _ ? pruip...).,:cd in 11.1....;!!!?; 4'onlinuet1 _ Title 3006 ..1:',..rnative or liddition.d grade .___ fiscal year SerViee amount 11184 T.: Pe 'Monthly :i.Iont Id.) I ilIlIr ;manna amoinit lic?rease E:- Corporal, his y 451,344 5 Basic pay. $170.011 21e,i fiireign duly pq $13. ot 1200.00 3,30,00 !leer 341 class. glliteterti fillOn 111111.1H depend - 2 105. 00 QUarter, 11110Wanee Si 1jliIil ill 2 70. ?21.1 00 ti CMS. :41.11)SiSrenee allowance. 30.90 Flight Iti13? Of eligible:. tio 31). 90 0 Total, monthly 341.5.90 Proficiency 'toy, P-I 30.4! :135 1)11 30.00 Ill Thtal, 0.11111oti 3. 6711, SO Proficiency pay, P 2. 60.191 1,41144 811 360.(1) 111 E-3 Private lot class, 5451115111. t3.10, 727 I Basic pay ,,,,, - . ........... 99. 37 Sea and foreign duty pay 9.10 115 Pi IF,, 63 10 Quarters tillutA HIM. 51 ilhoul tieftentl- eta., or 1 dependent. rz.m Quarters allowance :with 2 di pciolents. 57.20 0 Subsistence allowance 2 30. 90 Quarters allowance with 3 or more 2 105.00 2 3(1.1.41 dependenIs. 0 Total, nand lily lbS. 47 Flight pay If eligible I Sr,. (4) 201.10 15 63 Total, annual ", 2'25 64 Proficiency pay: .44) 1144 (it). (K) 12. 413. Al , 107.56 E-2 Prii. ale, seaman 326. 541 1 Basic pay 7=451 Bild foreign duty pay 8. (K) 95.1i0 9.20 11 appointive. (Anglers allowance w itho)tl or 1 de- pendent. 20 ()waters allowance with 2 11.1.0[Hk:111s 1 tkft. It) 2 55 20 :4ultsistenoii allowance 30.90 Quarters allowance with 3 or more 2 105.00 f 30.110 0 dependents. Total. Total, 011110.11 171.100 2,062.03 Flight pay ilf eligible i 541.0(1 101.011 9.'20 l'rolicieney pay: P 30 01.1 P-2 60.00 I 2.173 20 : 1111 411 E-1 Private, seaman 179,911 0 Itasic pay recruit. Quarters alloN1 alne 111111,411 or I de- 714,44) 7,5.74) Sea and foreign duly pay 8.00 Kr:? 00 7.00 I Quarters allowance w 011 2 dependents 2 03 10 5.5 211 it II ' pendent. Sulisisteme allowant?e 231) Quarters allowance will: :3 or inure 1142,44) 34).90 II dependents. 0 'rola!, imin11113 ..... 164.10 Flight pay ilf 74.1 1.111 171 lo 7 00 Total. :mined 1,919020 Proficiency y ? I'-1 ... 30 00 P-2 . ... . 434(44) :7)451:4.24) 44410 4 of livinc ineroc.e. ItTini11111111 :01001111 of retired 1,3V: For 1,Tieth of ,erejee reimt of 7 '1'0, free. basic pay at 20 years. For permanent ilifial4lity,3n percent of basic pay hul not ban 2.1 ioler 4 months. '2'S Toe:T..11f tinies 3 ears of service. For lellifiOntry pemoil of busk, pay 1111 IMS thall 2I5 percent times years of service. M11X01111711 M11011111 of retired pay, 75 'advent if basic pay. tifax111111111 15tyable illhe member Isis 30 years of service or at least an 40 percent disability rating. O-9000szoop000ticovooe99dau-vi3 teitio/gooz aseeieu JOd 130A0iddV Approved For Release 2005/04/21 II9*-RDP661300403R000400280006-0 Mr. BENNETT, Could I insert a -few things at this point Mr. RIVERS. If they are on this point. MT. BENNETT. One of them is a comparison . of military pay and benefits of U.S. employees Mr. BATES. That is my next point. Mr. RIVERS. Do you want that in? Mr. BATES. Yes. - Mr. BENNETT (continuing). Which is prepared by John Ford, who is the Army Tines Publishing Co. Mr. RIVERS. Navy-Air Force Times. Mr. BENNETT. Correct. The other one is a letter which I received today from the Assistant Secretary, Mr. William Gorham, who is here, who responded to things that I asked him with regard to this same general question. - I would like to have thorn both inserted in the record. Mr. RIVERS. Wi tilOat objection. (The letter above referred to is as -follows:) ASSISTANT SECRETARY OF DEFENSE, -Washington, D.C., March 5, 1963. DOH. CITARLES 11 BENNETT, House of Representatives. DEAR MR. BENNETT: This letter is in answer to your questions regarding (i) the comparative compensation of military personnel under H.R. 3006 and the com- pensation of civilian employees under the recently-enacted civil service pay scale, and (ii) recent trends of military and civil service pay scales. To answer these questions, three-tables are attached with the following comments: 1. Comparative compensation of civil service and military per$onnel Table 1 shows typical salaries for civil service grades GS-3 to GS-18 computed for the pay scales which become effective January 1, 1964. Table 2 shows military compensation for career enlisted grades E-4 to E-9 and officer grades 0-1 to Chief of Staff. Included in military compensation are basic pay, basic allowance for subsistence, basic allowance for quarters and an amount representing the tax saving arising from the tax-free status of the allowances. The sum of these four elements comprises the closest approximation to civilian salary. Personnel re- ceiving their quarters or subsistence in kind are excluded from the comparison. The figures shown in these tables represent the median compensation that will be received by persons in the respective grades. These are computed in such a way that approximately half of the persons in each grade receive less than the specified amount and half more. As such, I feel that they are more representative of the comparative levels of civil service and military pay scales than are mini- mum or maximum figures for each grade. 2. Trends in military versus civil service pay To show these trends, one civil service grade ( GS-14 ) and two military grades (0-5 and 0-6) have been selected. This does not imply any direct linkage be- tween these grades; they are merely used for illustrative purposes. They were chosen to include the senior military and civilian grades, in which you expressed particular interest. Table 3 shows dollar amounts of compensation from 1946 to 1964, and the military pay for 0-5 and 0-6 as a percentage of that received by the GS-14. It can be seen from these two tables that military and civilian salary changes roughly paralleled each Other. Sincerely, WILLIAM GORHAM, Deputy Assistant -Secretary (Special Studies and Requirements). 85066-63?No. 6-14 Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/O441 : CIA-RDP66600403R000400280006-0 TABGE 1.?Typical salary of civil service employees by grades as of Jan. 1, 1.96 tirade 1 Median Grade Median ? - - t 14-3 $4250 " 05-11 $9,200 (18-1 4, 700 ' 05-12 10,600 (1S-5 5,300 " 05-13 j 12,500 GS -6 5.500 ,: 05-14 14,634) (114-7 6.400 ?' 05-15 16,800 (15-8 7.100 - 05-16 16.800 i IS -9 7.600 05-17 18,500 (15-10 8,4801 08-18 20,000 : ? UTE.?Median for each grads. TABLE 2.?Typical regular compensation of military personnel under H.11. 3006 (officers and career enlisted grades) Grade Median !- Grade Mcdlan E-1 F1-5 E-6 E-7 E-8 E-9 t)-2 (1-3 $4, 400I, 0 -4 $12,000 5,200 'I 0-5 13, 700 5,900 0-6 13,100 6,300 '0-7 19. 500 7,200 .1 0-8 21,500 8,1300 ; 0-9 23,800 5, 650 ' 0-10 26, GOO 8.200 1 Civil service 29,200 9,600 . NOTES I. Regular compensation for median years of service for ear.th grade (except 2c1 lieutenant, entry grade). Basle pay, BAQ, GAS, and tax advantage. 2. Tax advantage computed on basis of 0-I, E-1, E-2, E-3, 1 dependent; 0-2, E-4, E-5, 2 dependents; 0-3 through civil service, E-6, E-7, F1-8, E-9, 3 dependents. TABLE 3,?Typical compensation of officers (0-5 and 0-6), civil service ern- ployeca (GS-14) and their relative poaltiona, 19411-64 Year 0-3 I 0-6 011-11 1514-47 $7,872 I $8,368 $8, 778 PJ48 7.872 8,308 9,103 1945-50 9,066 1 10,524 0.200 1051 9,096 10.524 10,000 1952.-54 ,. 9.708 11,124 10,000 1955-57 10, 500 I 12,324 10, 750 1958-59 12, 223 14, 8543 I 1, 850 1960-62 12.228 14, MO 12, 745 1963 12,504 15.360 13,700 1961 i 14, 196 17, 124 I-i. 529 1946-47 14113 1949 50 1951 1952-54 1955-57 195.4-59 196(11(2 1963 1961 (1-555 percent of (15-11 81i. 7 8r... 4 91.. 9 91. 0 97. 1 97.7 103. 2 91. 9 4(1.3 97. 7 0-9 as percent of (90-14 100.3 06.7 114-1 106.2 111.2 114.6 125. 4 116. 6 112. 1 117.9 NOTES 1. Military compensation includes base pay, BAQ, BAS, and tax advantage. Median. Tax adt antage computed on basis of I dependent. 2. It will be recognized that changes in pay do not always occur at end of year. Figures shown above -Ire for years during which they were In effect for more than Vali of the year. 3. RR military figures based on 1101) proposal (IL IL 53.06', Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 :123N-RDP661300403R000400280006-0 (The reprint from the February 1963 issues of Army Times, Air Force Times, Navy Times, is as follows:) [Reprinted from Army Times, Navy Times, Air Force Timesi] A TIMES SPECIAL REPORT?STUDY COMPARES MILITARY-CIVIL SERVICE BENEFITS This study was prepared by members of the Times staff under the direction of Associate Editor John J. Ford. Mr. Ford, congressional editor of the Times, directed the research and the statistical com- putations and wrote the final draft of the study. A detailed analysis of the pay and benefits the Government provides its military and civilian forces reveals some startling facts. Some benefits long hailed as marvelous advantages are not what they were cracked up to be. Some cherished "extras" of military life make surprisingly little difference in the total compensa- tion picture. This two-part study will show that: Military take-home pay is less than that of civilian Government workers of comparable rank. It was less even before the last civil service raise. Total take-home compensation is less over a lifetime career. An officer in a responsible job often winds up with less pay than his civilian subordinates. Civilian longevity increases provide greater long-range benefits than military fogies. The average civilian winds up better off in matters of retired pay and survivor protection than do military men, even though they contribute to their retirement. Today, the outstanding man moves up faster in a civilian than in a military career. INTRODUCTION In earlier years it was the custom to raise military pay whenever civil service pay was raised. Invariably, the actions would take place in the same Congress with the military hike usually coming after the civilian raise. In the 1950's, as the civil service force began to express itself more effectively politically, the historic process was altered. Since 1958 the civil service has gotten two pay raises; the military, none. The military did get the first quarters allowance increase in more than 10 years. But la,st year's Congress made part of the civilian raise effective immediately while postponing the quarters' increase 6 months. The administration now wants to postpone the forthcoming military increase to next October 1. Now, the President has asked still further additions to the second half of the civilian pay raise which becomes effective on January 1, 1964. This article is not based on these proposed additions but will base its comparisons on what is already law. What follows is an analysis of the comparative advantages of a military versus a civil service career over the whole range of pay and benefits. It is clear that in some cases this involves relative value judgments and that many factors affecting the value of a benefit cannot be stated in dollars and cents. But it can be clearly shown in every category that the benefits are superior for one group or the other. And our analysis shows?on balance?that the benefits provided to the civil service employee are superior to those provided the military man. There have been recent reports that a comparison of civilian and military pay was considered undesirable?that either Secretary McNamara or the Budget Bureau had vetoed the idea that military pay be based on such a comparison. There are reliable reports that the Military Pay Study Group made such a com- parison but their findings have not been released. There might be budgetary or other reasons for vetoing any official comparison and not knowing the facts in possession of these people we cannot judge the soundness of their reasons. But surely, no one will deny the Government has a moral obligation to provide for its military personnel equally as well as for its civilian staff. And if those setting pay recommendations shunted aside a comparison of mili- tary-civilian rates they forgot the President's orders. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2oo5m321 : CIA-RDP66600403R000400280006-0 In his budget message to Cengress in Tutelary P102, in which lie firs - an- nounced the orders for a study of military compensation, the President sa:d: The adjustments now being considered in civilian compensation require study of the possible need fir further changes in military compensation. I ant directing that a thorough review be made a iii cli will permit an upatodate appraisal of the main elements of military compensation and their relationship to the new proposed levels of civilian compensation." Recently the American Federation of Government Employees Cituncil if De- fense Lodges asked fir an independent. study of the whole problem of in relationship in the Defense Department. The group was not ta king so much about pay as about working relationships. A spokesman for the coun- cil said the idea of such a study was to reduce tension between the two gleams but. the manner of issuing the statement seems calculated to increase tension. A. E. Casgrain, president of the Defense Council of AFGE lodges. said mili- tary men "often have a strong authoritarian approach" to management and have 'little knowledge or understanding of the human relations approach to leader- ship.' The result is the civil servant is often a "resentful, sullen, off-the-record critic of the military and of the work environment." And he accused the mili- tary leaders of frequently trying to save face ky "bulling" er "nulling through." We have 110 wish at all, of course, to encourage a dialog of this nature. We think?we know?that both groups are math' up of loyal, dedicated people. But to it true comparisen could lead to a better understanding on both eides and improve working relationships. Civil service unions have encouraged Aheir members to believe military men have all the advantages in terms of benefits as well as all the authority. By the nature of their positions. union leaders are not likely to take an objective look. but a true picture of comparative benefits might soften the vociferousness of their attacks against military care-erists. The average civil service employee undoubtedly honestly believes that the tax- free housing and subsistence allowances, the noncontributory retirement and other fringe benefits of the military man give him an advantage over the civilian in total compensation. But, as you will see from this study the take-home pay of a military man compared to a civil servant of relatively equal rank and responsibility?insofar as such comparisons can be made?is less than the civilian's. In the tables accompanying this article and in all comparisons made in it, the compensation of military men always includes the housing and subsistence allowances. And allowance is made for the retired pay deduction of civilian employees. Also, as we show in our discussion of comparative retirement benefits. the civilian winds up better off in retired pay than military officers of higher posi- tions even when his contribution is taken Rao account. ln his message on Federal employees' pay on February 20. 1902, President Kennedy told Congress that over the years the printary emphasis in pay legisla- tion has been on bringing the lower salaried employees abreast of changes in the cost of living. The one-time 8.5-I ration between highest led lowest 0Aas- silication Act salaries had shrunk to ti -1 and lower, making it impussible to offer pay increases consistent with the additional responsibilities et graelp-to-grade prianeetion or to utter an apprepriate range of incentives within a partieadar grade. And the President uomplained. "A Federal employee beginning a profess :final or administrative career can look forward to it maximum salary increase of no inure than 41/4 times his entrance salary, whereas his counterpart in private in- dustry can look forward to an increase of hi le 7 times his beginning salari." Thee lltriS Pay Art for military people emphasized putting the big increase at Ihe higher salary levels. But still the career officer in Wei with :10 years' service can look forward to a maximum salary of just about 41/4 times his entrance salary as an 0-1. And as for the "appropriate range of incentives within a particular grade we shall show that the longevity increases for civil service provide greater long-range benefits than those of the military and can he given more fre- quently. .1 note on intangibles lit any discussion of career advantages, it must be remembered that !here are certain intangibles?intangibles such as the pleasure of serving your country in uniform or of serving it in the civilian eerps, the public acceptance and re Teta accorded one's chosen profession and, quite simply. whiet a man wants to du in life. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 3,0A-RDP661300403R000400280006-0 So benefits, in themselves, do not make one career more rewarding than another. If you like roughing it in the boondocks, the feel of weapons, the smell of the sea, the freedom of flight; if you like a life of travel and change, and the accoutrements and paraphernalia of military living, then the service is going to have strong attachment for you. If you have a natural bent for life in the field, no amount of benefits is going to make you happy at a desk. Correspondingly, if you put great emphasis on a stable family life with roots in a single community and dislike the regimentation, the completeness of military life, you would not be happy in it regardless of benefits. Having said this, however, we think it should be kept in mind that intangible considerations should not be used as an excuse for not providing proper benefits. This is true both for a simple moral reasons and from the standpoint of personnel management, since the intangible advantages will not be overriding in career choice. Also, intangible considerations working against a military career are very real, even though you cannot put a cost computation on them. A man's taste for military life does not erase the disadvantages and often leads to intangible disadvantages that are a minus factor in career planning. A man's love of the sea, for instance, brings with it an enforced separation from his family. That man continues his Navy career despite, not because of, this separation. It is a minus factor that should be taken into consideration in figuring compensation and benefits. The point is that the intangible factors are often a two-way street. They sometimes cancel each other out. Intangible disadvantages of a service career may often tip the scale against staying in the service. There are many more intangibles in a military career than in civil service, since a civilian Government career is more like any civilian job, and does not mean so complete a change in the way of life from private industry as a military career does. The big four: Benefit or illusion? There are four things about the military systems which are most cited as giving military personnel a tremendous advantage and which are often used as reasons for not making the military man's basic pay comparable with civilian pay : These are the military retirement system, which is noncontributory; the system of tax-free housing and subsistence allowances, which allegedly results in higher take-home pay; medical care for the man and family at little or no cost; and exchange and commissary privileges. We have paid particular attention to these four in making our analysis to arrive at a true comparison between the military and civilian take-home pay. We also looked particularly at the comparative job security, advancement prospects and at the allegation that the civil service must pay more to retain competent personnel at the higher grade levels, that it is losing good people in wholesale lots to private industry. ANALYSIS REVEALS STARTLING CHANGE IN PAY EQUATION In comparing military and civil service pay, there is the difficulty of making comparisons by grade, since the civilian and armed services grades are not, and are not designed to be, precisely comparable. Take-home pay Historically, the 0-6 (colonel or Navy captain) has been compared, with the GS-15. An 0-5 is compared with a GS-14, and so on down the line. Those comparisons are basically fair to the civil servant. A GS-15 is likely to work for an 0-0; an 0-6 rarely works for a GS-15. A GS-14 often works for an 0-5; an 0-5 rarely, if ever, works for a GS-14. In this matching of job alinement, the civil service employee in grade GS-7 is matched with the 0-1, since GS-7 is the start of the professional ladder in civil service today. Up to grade GS-11, the civil servant normally goes two grades at a time. Grades 05-6, GS-8, and 05-40 are used much less frequently than grades GS-7, GS-9, and GS-11. The difference in responsibility is not as great ? between any two GS grades as between any two officer grades. Thus in the matching generally followed, an 0-2 is roughly comparable to a GS-9, an 0-3 to a GS-11, and an 0-4 to a GS-13. We will have more to say about the promotion process in the civil service classified grades. This rough alinement of position is tacitly recognized by the Department of Defense. In its Table of Military-Civilian Relationships for Prisoner of War Approved For Release 2005/04/21: CIA-RDP66600403R000400280006-0 Approved For Release 2005/0f1(1,21 : CIA-RDP66600403R000400280006-0 Identifivation Purfoses (Defense Directive 100441, dated December 14, lt)l. modified .111114. 2Ii, 19701i, 0_7's and ';.; are equated with the supergrades through GS-1R: 0- 4 through 0-41 are equated with G5-12 Orough GS-15; 0 -1 through 0-3 are (nut-lied with GS-7 through OS-11. The Defense Defiartment normally uses this directive for husiness and social relationships. A (IS'-15, staying overnight at a military has4, for example, will given the ins' of quarters an 0 1; would get. In terms of responsibility, the comparison is more than fair TO the civil s,,rvant. Generally, the responsibility of military officers?particularly in the 0-4 Ltrough 0-1; grades exceeds that of the civilians with whom they have been equated here. An -I's responsibility, we would STIY, is certainly more nearly (kit of a (IS-13 than a GS-12, nIthongh historWally his salary has liven closer to hat of a GS-12 than a 05-13. lint using these rough equations, a quick comparison if the maximum pay for military and civilians shows that the recent civil service raise has effectively moved the civil service up two grades in the equation?or, to put it another way, the military have fallen two grades henind. Thus, pay inversions have been ereated hetWVVII HIP military officers and the civilians they supervise?the sort of inversiohs that cause Si) mull, concern Mien they occur Ill'INV(P11 a clviii nit SlipPrVisttr amd his civilian subordinate. Here is a comparison of selected military grades with civil service grades 7 co UHL PMPI DI RFS PAY V FRP i MILMAPT P'Y mows Pay) M111tapy fay; 1 Le IA 4 Of-10 0-8. 0 8,435 ow 6f-11 10,6E8 0-4 91076 rose-12 ow Jr ow GS-13 Ow 14,f4:4 0-8 21,764 Je---p-opoo$ 17,53S 14 .ow .0w 0-8 14,43," If owl 4.06-18 --AW , ,:474 0-7 _?,, 17,387 w. 00.- 43-)0 lf,0(.4 Owow 0-6 16,167 die so-17 fif . ct.4 411??????????- showing the maximum pay available to the military compared to the maximum the civil service grades can get. The figures for officers are not just basic pay. They include the increased quarters allowance that went into effect Januar,y 1, 1963, and they include sub- sistence allowances. The figures for civilians include the January 1, 19ti4, increases because they are law and because It helps show whitt military officers must get in their pay raise to get them hack in their former position. The straight arrows Show the comparability in pay ht?foue the latest civil service pay raise started (October 1, 19112). The dotted arrows show the com- parability, including the civilians' January 1. 1()(4, raise. We haven't used the new pay scales being proposed by Defense because, firm details on them were not available while this study was being made. It is also too early to tell what Congress will do with the Defeiltit? reconimendations. We hope that a proper understanding of the value of civil service comp-eniation when compared with military conmensation may lead to an equitable military isly hill. The date Defense is now mentioning for tlee new pay bill, it should is noted. is Octoher 1. 1963. just 3 months ahead of tlw second step of the vivilinn raise. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21161A-RDP661300403R000400280006-0 Also, the President is recommending higher increases in those civilian scales, averaging more than 5 percent, and reports are that the President is going to push the proposal strongly. The percentage increase would be about 10.2 per- cent at the GS-15 entrance level. Raises would go as high as 26 percent for the supergrades, since they did not share fully in the raise bill voted last year. We have not used any of these further increases in the pay computations of this article. But it is interesting to note that the beginning pay of a GS-7, under the pay scale that goes into effect January 1, 1964, is $488 a month ($5,795 a year). Even under the increases recommended by the Defense Study Group on Military Com- pensation, as available at the time this article went to press, the beginning compensation for an 0-1?including housing and subsistence allowances?would be only $412 a month. It is now $355 a month. But in comparing military and civilian salary, the charge is still made that the military officer is better off, even if his total compensation is less, because he gets to keep more--lis tax-free allowances means a higher net pay. And the compensation figures above do not include the civil servant's retirement deduction. But detailed analysis shows that even with these factors considered, and even before the recent pay raise, the civil servant came out better in the matter of actual take-home pay. Let's take the 0-5 and the G8-14. Comparing their income and take-home pay before October 1, 1962?this is, before the civil service pay raise started, or before the housing allowance increase for the military?we see the following: The 0-5 has a gross pay of $10,740. This includes the base pay, housing allowance, and subsistence allowance. The base pay is the average for an 0-5 who makes his grade at normal promotion point (16 years) and spends 6 years in grade. The housing allowance was $136.80, and subsistence was - $47.88 a month. We will assume he has two children for tax purposes. And we will assume a standard 10-percent deduction for tax purposes. His income tax?paid just on base pay?is $1,070. His 1962 social security tax was $150. Remaining take-home pay: $9,526. For the G8-14 we also assume two children and the standard 10-percent dedu2- don for tax purposes. His gross pay is $13,000 a year. This again is an average for the grade, coming out to the equivalent of the fourth step. (There were nine steps altogether under the old scale, including the so-called longevity steps. Longevity increases in civil service are based on time in grade and are unrelated to total service.) His retirement deduction (61/2 percent) comes to $846. His income tax is $2,008. Remaining take-home pay is $10,146. Even cranking in a value of several hundred dollars for free medical care and exchange and commissary privileges?the other two members of the alleged Big Four of military compensation?as calculated later in this article, the take-home benefits of the GS-14 are still a bit above the 0-5. Now let's look at the GS-14 when he gets to the pay scale in effect on January 1, 1964. His yearly pay now comes to $14,890. This is a little less than the fourth step of a GS-14. (There are nine steps for the (1844 under the new pay scale.) His G1/2-percent retirement deduction comes to $967. Income tax takes $2,460. Remaining take-home pay is $11,463. It can also be shown that over a full career a civil servant winds up with more take-home money than a military officer. If the reader will refer to tables 1, 2, and 3 he will find an analysis of take- home pay projected over a sample 30-year career. Tables 1 and 2 compare the take-home pay of a military officer and a classified civil servant before the quarters increase that started January 1, 1963, and before the civil service raise that started October 1, 1902.. The table for an officer shows his years in each grade, his gross pay (base pay plus subsistence and quarters allowances), his social security deduction, esti- mated number of children for tax purposes, income tax, and remaining take-home pay per year and for the total years in that grade. From this his total take- home pay over a- 30-year career is computed. Ills average yearly take-home pay is also shown. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/042112: CIA-RDP66600403R000400280006-0 TABLE 01 TAKE-4026 PAY or MILITARY OFFICE' BEYORE JAN, 1, 1463 Grade Yrs. Oros. Pay 84 Tax Child- rem Income Tax Take-Mome Pay Total Pay In Orade 0-1 2 4,260 $83 1 $120 24,057 $ 8,114 0-2 3 6,500 157 A 464 3,410 16,267 0-3 3 7,210 150 $ 372 4,486 33,440 0-4 8 4,620 150 8 606 7,664 47,184 0-8 4 10,740 150 2 1,070 4,420 67,120 0-6 8 13,540 150 0 3,451 _10,4311 87,464 30 Yearly Average $8,310 $249,670 TABLE #2 TAKE-NDME PAT OF FEDERAL EMPLOYEE MORE OCT, 1, 1962 Grads Tra. Grose Pay Retire- markt Child rem /moons TAI, Take-Eomie Pay Total Pay Im Grads 08-7 2 $6,400 $361 1 2512 94,431 8,474 02-9 2 6,600 420 1 708 8,463 10,026 03-11 5 7,950 816 3 835 4,590 12,6*2 08-13 4 9,200 398 3 1,032 7,670 30,280 08-13 6 11,000 718 3 1,436 6,147 44,238 08-14 6 12,600 819 2 1,024 0,657 69,142 08-15 6 14,220 925 0 2,625 , 10,670 64,020 30 Yearly Average 26,349 2250,472 TABLK 03 TAKE-RDME PAY OF FEDERAL EMPLOYEE AFTER JAN, I, 1034 Grade Yrs. Gross- Pay Retire- ment Child-'Income ren Tax Take-Home Pay Total Pay In Grade 02-7 2 $6,650 1432 1 1822 61,496 $0,992 09-9 2 ' 7,350 477 2 871 6,002 12,004 --------- 08-11 5 8,052 589 3 - - -I 27,055 1,052 7,411 - ------- -- -:---- ---- - -- ---- 0-12 --- ---- 8,611 4 10,722 696 9 1,303 34,564 GS-13 5 12,728 824 6 1,798 _ 10,104 50,520 06-14 8 14,890 667 2 2,460 11,463 68,778 06-15 6 17,725 1,152 0 3.573 12,997 77,982 30 Yearly Average $9,783 6291,895 Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21160A-RDP661300403R000400280006-0 The years in grade are what would be logged by an officer following a roughly normal career pattern. The base pay figure used is what he would average out to cover his years in grade with his longevity. For example, if the officer, spends 6 years as an 0-4 and has 10 years longevity when he enters the grade, we show 2 years at the base pay of an 0-4 with 10 years service, 2 years as an 0-4 with 12 years and 2 years as an 0-4 with 14 years. These will be added together and divided by 6 to get the base pay figure for the 0-4 level in the table. To this is added the quarters allowance ($119.70 a month for an 0-4 with dependents) and subsistence allowance ($47.88 a month for all officers) to get his gross pay figure. Income tax, of course, is only computed on base pay. The end column shows the total salary he earned in that grade. The table for the civil servant shows the number of years in each grade, the average annual pay, the deductions for retirement, the number of children for tax purposes (same as for the officer at all points), income tax, remaining an- nual take-home pay, and the total earned in each grade. The table assumes a promotion pattern for a career civil service classified employee ending in grade GS-15 with 30 years' service. For this we have as- sumed a promotion pattern of 2 years in grade 08-7, 2 in GS-9, 5 in GS-11, 4 in GS-12, 5 in GS-13, 6 in GS-14, and 6 in GS-15. The salary figure, as for the military, is the average of what is earned over the number of years in grade taking into account step increases. We haven't figured these steps as high as some recent studies but the salary does not necessarily start at the beginning step for each grade. The law calls for a minimum increase on promotion to a higher grade at least equivalent to a two-step increase within the employee's old grade. Table 3 projects the take-home pay of a civil servant over a full career based on the pay scales to go into effect January 1, 1964. It doesn't include any addi- tions recommended by the President this year. Even so, it shows the recent pay act has moved the civil servant astonishingly far ahead of the military man. Notice should be taken that the social security tax for military officers rose to $174 a year in 1963. CIVILIANS GET MORE PROMOTIONS, LONGEVITY PAY It is necessary now to justify the career progress of the civil service classified employee as projected in these tables. It will be said that the civil servant does not progress along any regular pat- tern as the military officer does, that many never get above the middle grades. This is true. It is also true that those who are not promoted are not forced out. And it is proper to compare those who go up in the civil service with those who stay in the military system. For though 12 years ago it was true thai. the great majority of professional employees never got above the middle grades, it is not true today. And, while many career employees never got above the middle level grades, most frequently the are employees who started down in the clerical grades (below 08-7). Professional employees with higher schooling move up if they have ability. These are the ones we properly compare with officers. Promotion, longevity The employes can come into the civil service anywhere along the scale, de- pending on their experience and training. There are no statutory provisions requiring extended time in grade for the civil service. The minimum time in grade required for promotion is 1 year?for all grades. The military officer averages over 4 years in a grade and he never spends less than 3 years in a senior grade before moving up. There are also no limitations on the numbers in grade in the civil service until one gets above 08-15. In the supergrades, GS-16 through GS-18, there is a numerical limit, but Congress recently excluded scientist and engineer jobs from the limitation, so that restriction is somewhat meaningless. On June 30, 1962, there were 1,058,485 classified employees. There were 505,- 886 in grades 08-7 and above. And there were 23,622 GS-14's and 11,412 GS- 15's. In 1950 there were 2,306 GS-15's for a total force of 701,824 and a force in GS-7 and above of 237,349. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/0441i: CIA-RDP661300403R000400280006-0 The supergrades didn't start in the Clasiitied Act service until 1919. As of last June 30 there were 1,370 GS -16's, 552 GS-17's, and 26-1 GS -1S's: a total of 13,614 in grades GS-15 and above. In 1950 there were 220 GS-16's 52 GS-17's, and 23 (4- 1's. Total in grades GS-15 and above in 1950: 2,601. This adds up to about a one-fourth increase in the total number of eu-ployees since 1950 and about live tittles the number of higher grade employees. The number of supergrades has undoubtedly gone up since last June 30 with the removal of tin' limitations by Congress. Another interesting fact is the swelling in the size of the professional force t GS-7 and above) from one-third the total classified force in 1950 (235,349) to one-half the classified force in 1962 f 505.SW). To look at the question another way. let's examine sonic c-anparable numbers for 0 -6 and OS -15. The Federal service last June 30 had 11,412 OS-15's for n force of 1,058,485. About 1.14 percent. The Army as of last November 30 had 5,000 0-6's for an Army of 956,842-- about 0.52 percent. The Navy had 4,110 0 6's (captains) for a Navy of 659,371?about 0.62 percent. To take one quirk Ci 5 example: The Army had 12.255 (1 5's?alto?it 1.25 percent. The classified service had 23.622 GS-14's?about 2.24 percent. We do not wish to overstate the case. Admittedly, the Army would have more bodies at tlw lower levels, having divisions full of foot soldiers. Ad- mittedly, the civil service classified employees sometimes supervise employees ell other systems--such as wage board employees. And admittedly, the civil service professional groups were underpaid In 1950 and deserved higher pay and, perhaps, more top positions. Ina still, the figures do show they have moved ahead of the military services ;aid confirm that our sample of a civil service career progression is basically fair. We feel it is a fair assumption the bright man can ge up faster in civil service than in military servh.e. The civil servant's promotion is based on merit job availability, and increased responsibility. lie normally competes with a very limited number for promo- tion- -just his own agency and often just his immediate office. In addition to the legal Ihntations, a military officer coirpetes with all the officers of like service and grade throughout the service. He meets a stiffer merit test (through the selection systems). He must pass piri,,,sical and some- times written exams and there is a more marked increase in responsibility when he is promoted. Most officers are "selected out" before being able to complete 30 years. We do not want to get into the relative merit of efficiency and fitness reports. In practice a man needs top markings in both system to keep going up. It might be noted, however, that the civil service reporting system is not aim ays as strict. An employee is marked on three characteristics, he sees his reports and he may institute grievances against those considered unfair. A military officer is rated on many characteristics. lie dues not have much leeway to question his reports. An "average" officer is l'dead" as far ns pro- mo! km is concerned. Another factor that has led to a great swelling in the upper levels of civil service ranks and one never mentioned by the civil service unions is the practice of upgrading without changing jobs. An employee's job description is rewritten : he does the same job but is promoted a grade or two higher. This method has been used to increase pay when raises weren't pruning. as fast as they Joseph Young. Government columnist for the Washington Star. on December IT. 1962. reported the followitr.r : 'The Civil Service C,ornmissinn has told Government departments anti it atm to quit inflating job grades now that Federal pay has been put on a basis comparable with industry. "AL a 114PIII meeting with the executive cfficers of the Vari011,4 departments and agencies, the CSC said there WaS no further justification for givim g em- ployees higher (my grades than they are entitled to. "Warren In?ns, CSC executive director, pointed out that the average grade in the Government classified service is now grade 7 (starting salary 85.540 a Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 :160-RDP661300403R000400280006-0 year). Only 4 years ago the average grade in Government was 6.4. And it wasn't more than 10 or 12 years ago that the average grade was grade 5. "What happened was that agencies, in order to retain and attract the best employees, gave them higher grades than their jobs and ditties actually called for. This was because Federal pay trailed industry so badly that inflated job grades was the only way to attempt to compete with industry in paying higher sal aries. "While the CSC didn't actually encourage agencies to inflate job grades, it didn't do anything drastic to discourage them. "Now, however, the CSC has served notice that it will not tolerate inflated job grades. From now on, employees grades will be set and determined strictly by their job duties and responsibilities, CSC officials said. Incidentally, Con- gress has been critical in recent years of the practice of inflating job grades. "To show how prevalent has been this practice of raising grades above what they normally should be, these figures are cited: "Federal employment rose by 96,000 during the past 4 years. During the same period there has been a 78,000 increase in the number of grades 11 through 15. "Of course, not all this resulted from grade inflation. As the Government intensified its activities in the fields of science and technology, there was need for more scientists, engineers, and so forth with the result that there were more higher-grade jobs available. "Still, the large increases in upper grade jobs resulted in part from inflating the worth of a job by raising its grade. "For example, the Army Department's record in this regard has caused con- siderable eyebrow raising. "Despite the fact that Army's total civilian employment during the past 4 years decreased by 14,000 there was an 8,000 increase in the number of grades 11 to 15. CSC officials suspect that there has been considerable job grade in- flation going on in Army." The figures for the Army are startling but one finds similar experiences in other areas. To take just one more example, the Bureau of Naval Weapons, in its semi-annual statistical report for the period ending June 30, 1962, lists a total of 3,437 full-time civilian personnel?including ungraded employees. A breakdown in the report shows there were 89 promotions from grade GS-1.3 to GS-14 and 29 promotions from GS-14 to GS-15 in the 6-month period. On an annual basis that works out to a 32-percent promotion of GS-13s to GS-14s and a 1.61/2-percent promotion of GS-14s to GS-15s. By contrast, in the Navy about 10 percent of 0-4s are promoted to 0-5 yearly and about 6 percent of 0-5s are promoted to 0-6. The Bureau had 356 GS-14s and 159 GS-15s on June 30. If the 6-months' promotion experience for GS-14s was the same for the first half of the fiscal year that would be 178 new GS-14s (2 times 89). That's a 50-percent increase in GS-14 grades in 1 year. As a result of such upgrading, the Budget Bureau, as another well-known civil service columnist Jerry Klutz of the Washington Post, reported recently, is taking steps to stop the practice. According to Kluttz, the upgrading of jobs has added $1.2 billion to the civil. service payroll budget since 1957. In other words, a sort of hidden pay raise over the last 6 years. It is interesting to note that the total upgrading cost, $1.2 billion, is roughly the same as the price tag put on the pay raise proposed for the military services. A further point which we feel should get more careful study than it has received is the oft-repeated cry that Federal employees are being lost to private industry and that higher salaries are required for them if the Government is to compete with industry for talent, The turnover statistics usually published don't take into account the intra- Government movement. The Bureau of Naval Weapons report listed above includes a breakdown of separations during the period January 1, 1962, to June 30, 1962. Note that this was before the first phase of the recent pay raise went into effect. The report shows 354 separations during the 0-month period?on the surface a fairly big turnover. But the breakdown of the reasons for leaving show that only 36 went to private industry compared to 59 who went to the National Aero- nautics and Space Administration, 60 who transferred to other Government Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/M1 : CIA-RDP66600403R000400280006-0 agencies, and CO who transferred within the Navy. So a total of is. over 30 percent of separations, transferred to other Go :eminent jobs. The other separations included -II women employees who !eft for stwit rea- sons as "maternity," "marriage," "follow husband." and "family responsibility." And the balance was attrition due to livable:, retirements, jobs abolislai I and employees returning to sultool. home, me. The employees are leaving for bet ter jobs but the better jol.s are inostp. else- where in Government. The yearly loss rate to industry for this group was 2.3 pen ent. Ratite.: low. especially since it includes all grade levels. The military loss rate is much higher. 1,0nycrity We would like to turn now :0 the quesliou of longevity inereitses and examine how nromotions and longevity affect the growth of pay over it v,hole eartiiir for a military Man and a eiVil servant folloWilig the proinotittli patterns we used a hove. Increases in compensation in the Government come from three sources pay and benefits increases voted by Congress, pay increases that comt? with pronto- ion, and increases given for longevity tin-step increases in civil service,. Just what pay bills will be passed over a career cannot, of coarse, be ana_yzed. lint based at present longevity and promotion patterns we can make Slane colliparisons of how promotions and bi1 ige,. it y provide inonetary reward in eivilian and military- careers. The pay raises due to promotion?that is the amount montIllY Pay is in- I 'reased?in a 30-year carper aillount to $378 0 month for an officer who allows the normal career pattern?ending up it colonel. A civil servant following the promotion pattern mentioned in our earlier table to reach crane GS-15 gels pay increases due to promotion of $404 a month. Even with tlw changes prmiosed by the Pent ug (11 pay study -group the atilt- tory monthly pay increase would he only 8013. So the pay bill as proposed would merely bring the officer up level with civil service in this category. This takes no account of the fact that an officer f.ioing to colonel on normal promo- hilt points has had a lot more responsibility over the length of his career and hi his top grade than a civil servant who rises to GS 13. The figures used here include the rental and subsistence allowance of on ers? t hose factors usually mentioned as giving the military a big advantage. Increases in pay dm, to longevity !IOW Conte to f-5430 over an officer's career. Again, this is the monthly increase projected over the full 30-year career. Civil service pay increases due to longevity come to $.380 a month over a comparable 30-year career. Even with the recommendations of the pay study group, the total monthly increase in 30 years for a military officer ?? mild only be $479. It is also interesting to note the manner of longevity increases. Civil service longevity rates average out to 2.21: pereent It year. Even noting tlw pay study group's tables available at the time this was writ- ten the increase for military officers due to longevity would be 11.9 percent for the first :3 years and only 1.7 percent a year thereafter. For tile last 8 years of an officer's career?again assuming normal promotion pattern and retirement on :41 years as an 0 (he Increase is less thau 1 ief-cent a year. The recent pay tier accentuates the advantage in longevity inereases for a civil servant over a military- Mall. Let's compare our U 3 and our GS-14 again: The 0 5 has three longevity hikes if ho follows the normal pattern?;l ls. 20. and 22 years. After that he goes up or out. His longevity raises are 8380 and come every 2 years. Total range or longevity filereaSeS: *1,740. can only get three. The GS-14 step increases are $450. He can get nine. Ono a year for the first 3 years; one every_ 2 years for the next 41 years, and one every 3 years for tile next 9 years. Total range of longevity increases : The President has signed an Executive order telling the Federal agencies In put into effect the provision or last year's pay law that allows quicker pay jumps for high quality performance. That means an employee can be given an ("(Ira step increase for doing outstanding work. Such extra increases can lie given to one employee no more than once every 12 months. The President has also told Federal agencies to use the authority to hire employees at higher I han starting levels of a grade in order to nowt private lndustry competition. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 : Mi-RDP661300403R000400280006-0 The military have nothing comparable to the provision for extra pay for high quality performance. There is authority in law for responsibility pay but it has never been used. A small percentage of enlisted men can get proficiency pay of $30 or $60 a month. Civil Service now has authority also to withhold regular step increases from employees whose work does not meet an "acceptable level of competence." Civil Service unions are trying to get this provision of law repealed. As we said, the increase in responsibility with each promotion is greater for a military officer than for a Classification Act civil servant. The increased re- sponsibility that comes with seniority within rank is also much more marked. A civil servant's work responsibility may not change for years in a grade?in fact, his longevity steps were designed originally as cost-of-living increases for those who do not get promoted but who give long service in a job. For the serviceman the pattern is far different. With the change in assignment every 2 years or so, there generally comes more responsibility each time, a steady increase as he gains experience and time in grade. IIe has to be capable of taking on ever more responsibility or in time he will be forced out. Earlier studies As we said at the start, precise comparisons between the Civil Service and the military ranks are difficult. Anyone attempting a study such as this is bound to be accused of comparing apples and oranges. But we do believe all of the facts presented here in balance, bear out the con- clusion that the civil servant has many advantages in pay and promotion over military officers, that the sample career progression used in our analysis is basically fair, and that civil service classified employees have moved signifi- cantly ahead of military men in take-home pay. The civil service advantage will still hold in the total picture when one con- siders retirement, survivor protection and other fringe benefits, though the military does have a marked advantage in some areas. In December of 1961 this newspaper broke the story of a study done at that time in the Pentagon on military and civilian take-home pay. It was designed to show that while military people made less they take home more. That study was used by those who decided against a military raise last year. 'FREE' SYSTEM OBSCURES RETIRED PAY RELATIONSHIP A comparison of our analysis with that one shows the figures are very close. For the 0-5 their gross pay figure is $400 higher than ours and their take- home pay $300 higher. We assumed a somewhat different level of longevity for pay purposes. The Defense study did not try to balance out the total benefits over a whole career, as we have here. It simply picked up comparisons at several points in the scale. For civilians, the Defense study tables took the average earnings by grade for all Government agencies as of June 30, 1961. The closeness of our gross pay figures to theirs would indicate we were correct in estimating average salary in grade for our projection of a civilian career. For a GS-15, for example, the Defense study estimated total salary of $14,455 compared to $14,450 in our study. Since theirs was made a year earlier, ours would appears to be conservative. On take-home pay they estimated $10,787 while ours came out $10,971?a dif- ference of slightly under $200. The difference is that the Defense study in- cluded the deductions for medical care, and for life insurance, which we have compared separately. We put the average cost of medical care coverage for the civil servant at $151. Yearly insurance deductions run about $60. The Defense study merely compared take-home pay after standard deductions. It did not go into the comparative value of what those deductions buy, as we will here, or into a discussion of comparative fringe benefits as is done in this study. Also, the Defense analysis did not go into the long-range effect of longevity and promotion policy on pay and on total earnings over a career. Nor did it examine whether the military man might be just as well off?or better?if he contributed to his retirement like the civil servant does. We'll examine this question in the next section. But basically the statistical comparisons were close. And it is intereSting to note that even using the older Defense table the take-home pay of a GS-15 was increased $2,000 a year by the raise that goes into effect next January 1. Will the combination of the new military raise and the new quarters allowance increase add that much to the 0-6's take-home pay? Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 1618 Retirement restrictions The civil servant is under a 2-year ban on selling to the Gm ernment. 'this is an ancient criminal statute, seldom invoked, that applies to all officers of the Government, civilian and military. The military officer, in addition to this, is under a 3-year ban against selling to any agency of the Defense Department, including a rather ill-defined re- striction on "indirect selling" which includes any kind of contract work with the Government or leading to Government contracts. At the recent conference on problems of military retirees sponsored by the Air Force Association and the Department of Labor, a representative of ha.ustry said that the restriction was so uncertain that many firms were refusing to hire retired military officers to avoid trouble with the Government. There has been a lot of talk and discussion and headlines and congressional investigation of the dangers of undue influence by retired military officers. One never hears the same charges about former civilian employees cf the Government, and a preliminary congressional investigation into the influences of scientists and engineers who work as consultants for both the Government and private firms was quietly called off. The retired military officer Is also restricted by the Dual Employment Act which prevents Regular officers from bottling most Federal jobs and by the dual compensation laws which limit the total income of most who do work for the Government to $10,000 a year. Federal employees do not normally work for the Government after retirement. They are not forced into a 2-career life such as the up-or-out theory that governs the military. Leaving aside the question of whether or not the up-or-out pattern is the most desirable way to handle armed service officer personnel, the fact is the military officer is subjected to it. He must be able to move up at regular points, or he Is forced out. Except for the very small percentage who make general or flag officer (less than 1 percent of the entire officer corps), even those who complete a successful career according to the normal pattern, reaching an 0-0 rank, are forced out at 30 years' service, whether they want to leave or not. I: is true that this means a longer period of drawing retired pay than Is generally true for civilians?in Government or out?but it Is done for exigencies of the service ;aid not with the benefit of the individual in mind. In fact, a study of military retirement laws will show that they have always been used primarily as a tool (if personnel administration, vitalization of the Active Force being considered first rather than the benefit of the individual. This basic situation never seems to be taken into account in considering the restrictions on retired military officers working for the Government. Retired civil servants can work for the Government as consultants, and a ?ecent Court of Claims decision upheld their right to work as consultants and continue to draw full retired pay. Regular military officers can work as consultants to the Governmenr.?but their income is subject to the dual compensation limitation. A retiree. civil servant whose retired pay is above $10,000 can work for the Governmen; as a consultant with no limit on his consultant pay. A retired military officer with the same retired pay could not receive any consultant fees from the Government regardless of their comparative years of service. There are other restrictions on the military. They are subject to recall invol- untarily. For some time there has heen confusion as to just. how much they are subject to military laws and as to when, and If, their retired pay can be cut off. Advantage: The civil servant all the way. .11 edieal care The Government provides complete medical and hospital care for the military man and the benefit continues after he retires on a space available basis. Hospital space is no longer being programed for refired personnel and. with the steady. heavy increase in the number on the retired rolls, the time is not far off when space just won't be available. Other methods of providing retired care are being looked into, such as a possible group insurance plan modeled after that available to civil servants. Medical care is also provided to military dependents with only a smad cost when hospitalized. No dental care Is provided for dependents in the lThited States. It is occasionally available overseas. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 jElek-RDP661300403R000400280006-0 Civil servants generally get no free medical care or medical and hospital service in Government facilities. Certain Federal employees get care in Government facilities in certain cases. Civil servants get group health coverage for which they pay about two-thirds the premium cost and the Government pays the remainder. The medical insurance cost varies according to how much insurance the employee wants to buy and how many people he wants to cover. There are more than 30 separate plans available and, naturally, single people pay less than married employees providing coverage for families. The high option includes all the coverage you can get under a given plan. The low option under the Blue Cross-Blue Shield plan is $3.44 every 2 weeks and the high option is $5.82. This is the plan most employees have. (For single employees, by comparison, the costs run $2.11 and $1.30.) For a female employee with a nondependent husband the cost usually runs about $1.30 higher than for regular family coverage. Taking the standard family coverage, which would include the great majority of Federal employees, and taking the high option in all cases, to get service most nearly comparable to what military families get, the Blue Cross-Blue Shield figure is a good average. Thus the cost of medical care runs $151.32 a year. The cost for military dependents for hospitalization runs $1.75 per day in military facilities. In civilian hospitals, $1.75 a day or $25, whichever is greater. A number of items are not paid for by the Government. For example, patients pay extra for private rooms. There are also dollar maximums the Government will pay for certain services and limits to the number of days' hospitalization for some disorders. There are also charges for some nonhospital care. Civil servants who get group hospitalization will probably have some costs in addition to what their policy covers, depending upon their income. And, of course, in many cases they will have medical care costs not covered by their group plan, such as routine doctor visits. So it is fair to assume the civil servant will have medical care costs over and above their insurance premiums equal to what dependents' have to pay. Thus, the dollar value?about $151 a year?of the medical care provided mili- tary personnel and their dependents is about the same as the civil servant pays in health plan fees. Because the civil servant will pay extras beyond his fees if actually sick, the gap between the two groups widens. This is for the most widely-used civil service plan. Even if one took the plan that provides the maximum care?which is not widely used?the premium would be $11.51 every 2 weeks, or $299.26 a year. And this is tax deductible. Advantage: All on the side of the military. PX'8?commiasaries Civil service employees have no exchanges or commissaries except when sta- tioned overseas or at some remote stateside activities. Almost all military personnel have exchange privileges and the great majority have commissary privileges. It allows them to buy groceries and a great variety of other items at somewhat reduced prices. At one time the privilege was a substantial one for the military man. It has been whittled down since World War II due in part to political pressure from local and national retail groups. But it is still a benefit which is of value to a military family. How much of an asset is it in monetary terms? The Defense Military Pay Study Group put a price tag on the benefit in terms of the cost of the Govern- ment of providing it. They found that commissary privileges are worth $46.20 a year per officer and exchanges are worth $27.18 per officer. For enlisted men the figure averaged out to $24.75 and $17.83. This would make the total value of the two worth $73.38 to the average officer, $42.58 to the man. The Pay Study Group arrived at its figures by taking the actual cost to the Government of providing the benefit and dividing it by the total number of men Involved. This figuring from the Government cost angle is, of course, an accept- able way to compute the value of a benefit. But we think the figure is too low, particularly for commissaries. When it is considered that many do not have commissary privileges it is clearly seen that the value is increased for those who do. And since some of those who do not Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/144JBol : CIA-RDP66600403R000400280006-0 are fed by the Government we think it is fair to consider the increased value of commissary privileges to those who have it. A precise figure on the number who use commissaries is not available and therefore an exact computation of the benefit of the privilege cannot be made. lint we think the annual cost savings to a man shopping in commissaries would likely be about double the figure arrived at by the study group that is, $92.40 for an officer. The exchange cost estimates made by the study group would appear to be more nearly correct, since almost everyone has exchange privileges and since what is bought there is not as often basic-need items. Also, exchange prices on most items are closer to the normal commercial costs than commissary prices. But again to be conservative, let's increase the estimated value to the indivi- dual by 50 percent over that estimated by the pay study group. That wettld put I he annual value at $40.77 for the average officer. So --using our liberal calculations?the total annual value of commissary and exchange privileges to the typical officer is about 8133. That's about $2.05 a week. Advantage: A military benefit, but obviously not nearly as important as a lot or people consider it to be. Nide that the total of the much heralded (stnireissary, exeliallge, and medical care privileges would be about $12S0 a year?about $3 a week. fIardly the equiva- lent of a modest pay raise. The Military Pay Study Group's calculation of medic-al Care benefit, again by taking the total annual cost and dividing by the total personnel, came out some- what: higher than ours. They computed the value at $119.30 for the officer and $173.:19 for his dependents. t For enlisted men, $11!}.1g for themselves and $90.60 for dependents.) We rejected this approach because we felt the total medical budget includes a lot of expenditures that are not reflected in service to patients. Ilut it is interesting to note that if one took the study group's projections in medical care and commissary and exchange privileges the total value of the bene- fits would be still only $306.27 ($119.50 $173.39 $46.20 4- $27.18), oily $66 more than our estimate. And that's the equivalent of about $7 a week. 1Voreiceck The civil service worker norma11v works an ti-hour day. a ?In-hour week. Craft and skilled workers --the so-tulled blue collar free-- unmanly get tithe and a half for overtime and "golden Hine" for Sun ay or for a seventh day in a work- week. The general schedule or white-collar civil service employees are paid thin and a half for the first $6115 of their salaries. This is figured on in hourly basis even though, strictly speaking, the classified employee is salaried and not paid by the hour. For employees whose annual salary exceeds 86435 the overtime hour rate of compensation Is an amount equal to one and one-half times :he hourly rate for $6,435. The result is that employees earning more than $6,433 receive the same hourly rate for overtime. li:tuployees yl ruing $15,030 or more do not get any overtime pay. As a praetival matter this means employees up to about GS-8 receive th le and a half for overtime. law provides that the Federal empleyee can be given overtime pay or youtpensatory time off. Frequently. compensatory time is given for extra work. In fairness to the civil servants it should be pointed out Eltit when a Federal employee takes any time off during the day for a personal errand he charges it in most cases to his leave?unlike military men and most private industry em- ployees. It should also be pointed out that sonic higher grade Federal employees take work home or put in overtime without charging the Government for it. Twit points stand out, however. As a normal rule the civil employee is com- mitted to his job for only 40 hours a week with very infrequent demands for long, burdensome hours. And, when he does work overtime, except at the very fop administrative levels, he gets paid for it or gets time tiff later. Most classified ympleyees get more than regular time pay. The military man gets no overtime pay of any kind. He is available fur duty as ordered by his eontmanding officer and he gets a set pay per month, independent of how many hours a day or days a week he works. f Enlisted men skilled in their jobs get pro pay?less than 13 pereent of the tot 01 enlisted force receive it--but this is fur special skill and is totally unneated I. hours or pressen, of work. The enlisted craftsman g.:tting pro :my It leolutnie, a technician?gets less money than a civilian blue-collar worker earns ii :t regular 40-hour week.) Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 1621 The military man gets no additional compensation and rarely gets time off for overtime work; that is, work over 40 hours a week that the average civilian con- siders overtime. What's more the military man works more than 40 hours as a matter of course. A sampling of 00,000 servicemen recently made by the Defense Department's Military Pay Study Group shows that the average workweek for officers and en- listed men is over 50 hours. a week, and workweeks as long as 65 hours are not un- common. Something in the neighborhood of 20 percent of servicemen work 65 hours or more. Pilots in the Army and Air Force average 58 hours a week. Ground Coin- bat soldiers?Army and Marine?average 55-60 h:ours a week. Army and Air Force officers as a whole averaged 53 hours a week, combat pilots in the Air Force in lieutenant grade average over 70 hours a week, Navy and Army enlisted men average 50 and 55 hours a week. In addition, there is the irregularity of military hours?night watches and such?and the fact that a man sometimes is unable to leave his station for long periods?aboard ship, in the field, on long flights, for example. This is not to suggest that compensation systems be changed. By the nature of military life it would be well nigh impossible to start paying time and a half for overtime. And certainly we are not suggesting that civil service overtime be abolished. But it is clear that the military man makes a much larger commit- ment of his time and energies toward his job than the civil servant does and this factor should be taken into account in determining his total compensation. Advantage: Emphatically on the side of civil service. Animal leave Military men get 30 days' leave a year. Civil Service employees get up to 26 days a year. On the surface it looks as if the military man has the advan- tage. But let's look a little closer. The civil servant with less than 3 years' service earns 13 days' leave a year. Those with more than 3 but less than 15 years' service get 20 days a year. Employees with 15 or more years' service get 26 days a year. Employees can count prior military service in determining years of service for leave purposes. Employees can carry up to 30 days' leave from one year into the next. Military men can get accrued leave pay?basic pay and allowances?for up to 60 days' accrued leave only when separated from service. Generally, Federal employees can take leave at their own discretion. Military leave is granted by the commanding officer and normally only 10 percent of an activity is permitted to be on leave at one time. Regularly, civil servants and military officers lose leave, although it appears military men lose leave more often than civilians do. Civilian employees, as noted in the discussion of the workweek, take leave for personal errands, which military people generally do not. But a big difference is that civilian leave is measured in working days. Mili- tary leave is counted in calendar days. A military man with 30 days' leave gets 4 weeks and 2 days off. He needs 36 days of his type leave to equal the civilian employee, whose 26 days means 5 calendar weeks and 1 day vacation. Over a 30-year career the civilian employee gets 675 working days of leave (13 times 3 plus 11 times 20 plus 16 times 26). The serviceman gets 640 work- ing days of leave (five-sevenths of 30 times 30). Advantage: On the side of the civilian employee. Retirement No benefit given military personnel has received as much ballyhoo as the al- legedly glorious military retirement system. Let us hasten to add that neither the military nor the civil service retirement systems are anything to be sneezed at. Both are exceptionally fine systems compared with the millrun of benefits in private industry. But the military is usually considered to have the big advantage over the civil servant in retirement. This impression arises from the simple fact that military retirement is free and the civil servant contributes money toward his. Over the lifetime career projected in table No. 3 in last week's issue, using the January 1, 1964, pay scale, a civil servant will contribute $22,680 toward his retirement. The military man's retirement, starting at 50 percent on 20 years' service, goes to a maximum of 75 percent for 30 or more years' service. It is computed on base pay only. He also gets social security at age 62 to 65, to which he con- tributes up to $174 a year. 85066-63?No. 6 15 Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/041.24 : CIA-RDP66600403R000400280006-0 Civil servants contribute 61,:. percent of their salary toward retirement. While the military man retires on years of service in relation to his grade the civil servant retires on age. The minimum age is 55. He can draw retired pay earlier for disability and for involuntary relPertient such as through force cutbacks. The civil service system was designed to have the employees contribute 50 percent. Actually, the contributions of all civil service retirees pay fcr only about 17 percent of what they can expect to get back. The system is repeatedly liberalized, so that percentage is going down. The civil servant will get in his first 3 years of retirement more than the total of what he has contributed over his career. RETIRED PAY VALI7E OFTEN MISSTATED Alilitary men know how Congress is continually raising eyebrows over the present cost of military retirement (now over $1 billion a year) and future cost trends. Equal eyebrow raising is in order over the bill for civilian retirement. Each year Government agencies pay several hundred million?tht fiseal 1963 figure was $800 million?to supplement the employees' WA percent contributions. But this does not nearly represent the cost to taxpayers or civilian employee retirement. The civil service retirement fund is /I trust fund. Uncle Sam has future obligations to make good deficits in that fund. Actuaries have computed just what benefits already earned will cost that fund. How much? Over and above the present assets of the fund as made up of annual Government appropriations and the workers' contributions the fund today is $30 billion in debt. Thirty billion is equal to the whole Federal budget for a year, excluding De- fense, space, and debt interest. The military man's retirement advantage is that he is able to start drawing retirement as early as after 20 years. But few officers retire voluntarily as early as 20 years?retirement that early is generally because they are forced out and is thus mainly for the convenience of the Government, And unlike the civil service pay system, the military scales offer little incen- tive for a top-grade enlisted man to stay more than 20 years and very little for a offiver unless he is selected for promotion. And .the military man who serves a full 30 years and beyond finds he is not doing as well the civil servant. This is because the civil servant continues to get longevity and can increase his "high ,'*-111s average years on which his retirement is based--after 30 years. Ile can also go up to 80 percent. The top military officers bit their maximum base pay at 26 years, juniors, even earlier. Curiously, it is the highest ranking military officers, the ones who presumably are the cream of the crop, the peak of the pyramid, who do least well by com- parison with civilians on retired pay. Thu get no benefit of service beyond 30 years in computing retired pay. Also, since retired pity is computed Just rm base pay it has a lesser relation to total compensation than civilian retired pay. If a military officer and a civil servant have the same gross pay, the civil servant's retirement can be 80 per- cent of his best 5 years' average gross pay. But the military juan does not get 75 percent of his grms pay. It Is 75 percent of his basic pay?a figure $2,50f. below gross pay in the case of an O-ti. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 : R&RDP661300403R000400280006-0 Graphs Nos. 1 and 2 adjoining give a clear picture of the long-range relation of civil service service and military retired pay. The charts compare an 0-5 with a GS-14 and an 0,6 and 0-8 with a GS-15. They show clearly the civil servant is drawing more retired pay than military men of equal rank and equal years of service. After 21/2-3 years, as stated, the civilian has gotten back all of his contribution. It might be well to tell briefly how civil service retirement is computed. The amount depends primarily upon length of service and the "high 5" average salary. The "high 5" average salary is determined by multiplying the annual basic salary by the actual number of years and fractions the employee served at each pay rate in the highest 5-year period and dividing the total amount by 5. The basic annuity in any case may not exceed 80 percent of the employee's "high 5" average salary. There are three steps to the general formula for computing the basic 'annuity: 1. Take 11/2, percent of the "high 5" average salary and 'multiply 'the result by 5 years of service; 2. Add 1% percent of the "high 5" average salary multiplied by years of serv- ice between 5 and 10; 3. Add 2 percent of the "high 5" average salary multiplied by all service over 10 years. Instead of using the 11/0, 1%, and 2 percent, there may be substituted 1 percent of the "high 5" average salary plus $25 for any or all of these percentages if such a substitution will produce a higher basic annuity. Regardless of length of service the following rules apply in computing basic annuities under the general formula: (1) If the "high 5" average salary is $5,000 or more, the highest basic 'annuity will be obtained by using steps 1 through 3. (2) if the "high 5" average salary is between $3,334 and $4,999, the highest annuity will be obtained by substituting the 1 percent plus $25 in step 1, and then using steps 2 and 3. Examples: A. "High 5" average salary $6,000; 30 years' service: 11/2 percent X $6,000 X 5 years of service $450 1% percent X $6,000 X next 5 years of service 525 2 percent X $6,000 X remaining 20 years of service 2400 Highest basic annuity 3375 B. "High 5" average salary $4,000; 20 years service: 1 percent X $4,000+$25 X'5 years of service 325 14 percent X $4,000X next 5 years of service 350 2 percent X$4,000X remaining 10 years of service 800 Highest basic annuity 1475 Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Civilian Retirement Advantage Graphically Displayed 14,000 11.000 t^ 12,000 ? 11,000 12 Z' 10,000 Z LOW COW 4,000 6,000 4,000 4,000 Graphs by Bette Amick A .:omparlson eLtile astirement Pay at la al and a 6-14 Ale I 02 ? o'''?. n?rriod 21-14 II h *solid soc.irlt .....- Alit ds ....0 ... 0. Pea 11,1 .. .... 0. .4., 431-14. without ',slat ocurIty 0 .4."." 0 14.0.0 narrIod 04.11ftsr ass 62 0 I I 0 I 0'0* 0. .J." 0 0 .....0.- e 12 Or' ...... _.0. II 0-5 asIans s0 at 4 If 10 If ...r..... .... 17 . nal security I beers be teals' lei 24 22 L'S -2 20 7 5! 52 33 04 55 5.0 57 tsar, St 21141112. 0-90008Z0017000t1?01700899dCIU-VI3 : Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 1625 Graph I above plots the comparative retired pays of GS-14's and 0-5's. The civilians' rates are based on the scales effective January 1, 1064; the officers' on present pay. All are assumed to have begun Government service at age 22 and all are assumed to start drawing social security at 62 when possible. (Starting age is not material in determining military retired pay but is material in determin- ing when social security starts.) The bottom straight lines show the military retired pay of an officer who retires as an 0-5 after the number of years' active service shown. Thus one who retires after 22 years gets $5,110 retired pay; one who retires after 30 or more gets the maximum $6,980. The upper straight lines represent the total of retired pay and social security the same officer will get at 62 if he starts social security at that point. The figures 18 through 10 are the number of years remaining between date of retire- ment and date social security starts. An officer who started at 22 and retires after 22 years at age 44 in 18 years, at age 62, will be combined pay and social security of about $6,900. That officer who started at 22 and retired after 30, is 52, gets $7,000 military retired pay. In 10 years, he will get about $8,800 in combined military and social security. The social security figures includes wife's social security?half the husband's. Now for the GS-14's. The lower broken lines show their retired pay for the number of years' service shown. Retirement below 26 years' service is disability retirement. From the 25-year service point it is straight civil service retired pay. Most retirement below age 55 is involuntary. The active pay on which the annuities are figured for each year of service is based on the in-grade step the GS-14 of that service reasonably would have reached. GS-14 active pay runs from $13,615 to $17,215. The 33-year man would have reached the top but the 22-year one would not. The top broken line shows what a married GS-14 of each length of service would receive if he drew social security as well as civil service annuity. As with the 0-5's the numbers show the number of years each must wait after retirement. The social security which the 31-year retiree would get is cal- culated on his starting to get it at age 63, not 62. That which the 32-year man would get is calculated on his taking at age 64. And that which the 33-year man would get is figured on the maximum social security, started at age 65. Reason: there isn't time enough for such long-service men to qualify for social security any earlier. Graph I proves that the GS-14 gets far more retirement pay for any length of service than the 0-5 to whom he is supposed to correspond. And even after the serviceman picks up social security (which most will qualify for) the civilian retirees (most of whom will not get social security) are still generally far better pensioned. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/R4f31 : CIA-RDP66600403R000400280006-0 I.? ? t I 1 ? 1 '? I 1 1. X IG5-15 e'tboOt Social Securi ty Career ?tert? at Age 22 I \ \ I I 1 -4. 1. I L I ? I 1. 0-6? before a5? 62-- !-1-.----- ..? I : I O I . O 65-15 eita ecurIty tarts at \ il X I I. ? I X. X .- ..; , . 1 .5.....'' Z, ;5 -? ".. \ \.1,10 \ n: T. ,.....? .. ...... V1 '?'? \ 1 11 g g 3 8 ? usilei 3 spurinsu el &Ipemsy ienuky Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 :1M-RDP661300403R000400280006-0 Graph II illustrates the comparative retirement pays of 0-G's, 0-8's, and GS- 15's. This graph is set up like graph I and based on the same assumptions. The following notes differences only. The straight lines show an 0-6's retired pay, without social security (lower line) and with social security (upper line). The dash line for 0-8 begins at 35 years' service. We assume he will serve that long before retirement. At 40 years?when he reaches age 62?his income goes up with the addition of social security. The chart shows clearly that ?the GS-15?dot-dash line?even without social security, not only surpasses the 0-6 in retired pay but gets more than the 0-8-- even an 0-8 with social security. A wavy line is added showing the comparative retired pay of a GS-15 who starts his career at age 30. It shows clearly that even if the civil servant starts his career much later than the military careerist he comes out ahead of both the 0-6 and the 0-Sin retired pay. Several things should be particularly noted. It is generally assumed the civil servant might eventually end up with higher retired pay because he serves longer?that he'll be better off at age 62 because he has served 40 years while the 0-6 can retire on 30. But the chart shows that the GS-15 is better off anywhere along the line after 30 years' service than an 0-6, even if both have equal years of service. If both have served 31 years, for example, the GS-15 at age 53 is drawing over $500 more a year in retired pay than the 0-6. GS-15 pay con- tinues to go up yearly while the 0-6 stays at the same level until social security age. At the point where he normally retires, an 0-8 is drawing just about the same as a GS-15 with 35 years 'service. Though an 0-8's responsibilities are much greater than a GS-15's, if both serve 40 years, the GS-15 is almost $1,000 a year ahead in retired pay even though the GS-15 has been unable to get social security and the 0-8 gets it auto- matically. In the years between his 35th year of service and the time he reaches age 62, the 0-8 can be as much as $2,500 below a GS-15 retiring with between 35 and 40 years' service. The upper dot-dash line for GS--15 shows the total income with social security added to civil service retirement. The wavy line for a GS-15 starting at age 30 is not carried out beyond the 35-year point because at that point he would be 65 and presumably would retire. CIVILIAN HAS MARKED SURVIVOR PROTECTION ADVANTAGE It may be argued that the retired pay of a civil servant and a corresponding military officer are not too far apart when one prorates the civil servant's contri- bution over an extended period. It will be said, for example, that the total retired pay a 08-15 draws over a 10-year period after retirement is not more than what the 0-6 draws in that time phis the GS-15's contribution. But the disparity really becomes marked when one compares the survivor protection each can provide out of his retired pay. The military man provides for his survivors through the Retired Serviceman's Family Protection Act (formerly Contingency Option Act) which is roughly comparable to an insurance policy bought late in life, but a policy without any savings or cash surrender features. The military man pays high for this. The civil servant can provide more survivor protection much less expensively. Let's first look briefly at active duty survivor benefits. The military man has an advantage here. Of course, this survivor benefits program was devised because of the nature of his work. A young service widow with children gets $112 a month plus 12 percent of her husband's base pay (dependency indemnity) plus social security payments for children of up to $254 for two or more children ($10.60 a month maximum for one child). An 0-5's widow can get up to $2,460 a year from dependency indemnity plus $1,144 social security when age 62. The widow also can get social security pay- ments for her children. Combined maximum of indemnity and social security is $5,508. The military man has contributed for social security. Survivors of civil servants get 55 percent of the annuity earned by the wage earner. The maximum allowed for a 05-14 widow is $7,590, but the maximum is increased for children under 21 and in school. The employee has contributed 61/2 percent of his salary. Civil servants can get low-cost group life insurance. It is completely optional. It costs about $60 a year. The military gets a death gratuity furnished by the Government. It is 6 months' pay with a minimum of $800 and a maximum of Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/601 : CIA-RDP66600403R000400280006-0 $3,000. This benefit stops with retiremcnt. The civilian's insurance continues after retirement, at a reduced amount, at no cast to hint. After retirement. the military man loses the dependents indemnity payments. Ills wife gets none of his retirement pay unless he provide:, one through the Retired Serviceman's Family Proteetion Art by taking a reduced annuity. Maximum he can leave is half the retired pay left after paying for annuity. The retired civil servant can leave up ta 7i5 percent of bis annuity to his wife when he dies?"wife" being his spouse the day his retired annuity The reduction in the retiree's annuity will be 21/2 percent of any amount up to $3.000 he specifies as a base for the survivor benefit plus 10 percent of tiny :MP mut aver $3.000 so speriffi.d. The survivor's annuity will be 55 percent of all or whatever portion of the retiree's annuity specifies as a base. A retiree entitled to SE(8) life annuity, for example. designates his wife to receive survivor annuity based on his entire annuity. Ills $4,000 will be reduced by 21/2 percent of the first $3,000 ($90) and by 10 percent of the remain- ing $9)0 ($40), making a total reduction of $130. The retiree receives a $3,870 tumuity, his widow $2,200. Should the retiree elect to have the survivor annuity based ,-aa only $3.000, his annuity will be reduced by 21/2 percent of $3,900 (or $75), and he will receive an annuity of $3.925. Ills widow would receive $1,100 annuity. Employees without a wife?bachelors, widows, widowers, divorcees?cal leave an annuity to anyone who has an insurable interest in the retiree's life The employee must he in good health when lie retires. As chart No. 3 dramatically shows, a civil servant providing an annuity for his survivors equal to the maximum a military officer can provide has a much greater retired pay remaining. Chart No. 3 is on the next page. Following is a table showing the amounts which can be left to the widow and their cost In reduced retirement pay. Over and above these deductions, the military man has been paying social security taxes, the civilian his retirement contributian. On balance, the civil servant has a marked advantage in retironent and sur- vivor protection and can achieve combined benefits equal to that of military officers of considerably higher rank. comparinon of ret ircd. military and civil service surrivor'n benefitn PRESENT MILITARY SURVIVORS' PROGRAM Rank At age 1 Retired Contingen- Pay cy option I Reduced Widow's pay Income Widow's if kr 62 0-3 42 $1Si3 $Z1 $210 $120 $224 0-4 42 315 27 Din 144 248 0-5 48 501 54 450 225 329 0-6 52 739 90 ni9 325 429 0-7 62 1*11 143 738 360 473 NOTE.?Based on leaving half of reduced retired pay to widow. After 62 inconmc includes soda security. CIVIL SERVANT SURVIVORS' PLAN AS OE JANUARY 1964 Oracle high 5 Retired Pay Annuity I Reduced Cost rniy I Widow's dICORIC $12,1581 $590 $37 $.553 $325 08-13 14.000 690 47 (1-13 379 O5-14 17,000 840 62 774 462 936 (15-15 19,000 71 885 .515. OS-15 19,200 1,2243 100 1,120 471 service grades start age 22; retire age 55. Bottom One shows I IS 15 retiring age 62. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/%9CIA-RDP661300403R000400280006-0 t V`A I ;vs I 'OA II. , VI, ... , ? . ? i i 1 , 1 71 T. 73 I. 0 0 tf3 II I .0 0 0 t. 0 ' . A \ ft, I , '0 ... V3 0 0 0 : \ a : 4 aJA d ,!?-?c'o ? 'Po\ \ SIA A Comparison of the Rtducad Retired Py of en 0-8, an 0-0 and an 0-10 Providing Maximum Survivor Annuity with the Reduced Retired Pay of a 1 6S-15 Providing the Stme Annuity) \CO ?SJ \ \ A if ?A ...IA g A? \ \ ? ?-J.I. L g anion ja spuesttou -al Ita4 pailiaa Naftali Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/261 CIA-RDP66600403R000400280006-0 Chart III compares the retired pay of 0 8's, 0-9's, and 0-10's, win. are pro- viding the maxinnun Retired Serviceman's Family Protection Act (contingency option) coverage with the retired pay of GS -1.5's providing an equal amount of annuity for their survivors. It should be kept in mind that this is by no means the most that GS-15's can provide. They can leave a lot more for survivors under the civil Nervi' survivor annuity plan than the military offi- cers can leave under the ItSPPA. But the chart shows the retired pay re- nmining to the GS--15's after leaving an amount equal to the maximum a top ndlitary officer can leave. It shows clearly that 08 -15's providing the same annuity for thcir wives still draw more retired pay than 0 Ks and (1-9's and almost as much as 0-10's! The comparative cost of providing this tantuity is discussed elsewhere in this article. ohvionsly,.the retired pay of a civil service supergrade?GS-10, and OS -1M---then is even higher than that of the top grades of military officers. For the purposes of this chart it is assumed that all careers start u.F. age 22. We have begun the straight 0 8 line and the dotted, curved GS-15 line with retirement on 33 years service. They would rarely retire before that. The upper straight line for the 0-8's shows what total income will be raised to after the officers start drawing social smirity. Year figures in between the lower and upper line show how long they wait before having social security added. For example, an 0 8 retiring on 33 years has to wait sewn years before getting social security payments; retiring on 34 years service he has to wait 6 years, and so on. Note that the 0 -8 retiring on 36 years, to take one example, has to wait 4 years before his income is equal to the reduced retired pay of a GS-15 retiring on the same years of service. Also note that the reduced pay of 0-8's actually goes down after 33 years' service. This is because the retired pay deduction is increased as the officer gets older. It can be seen that an 0-S retiring on 40 years service and starting social security at once, who wants to provide the maximum annuity for his survivors, must take retired pay of $2,000 a year less than a GS-15 providing the same annuity. This fact says a great deal about the value of the RSFPA and about the comparative benefita or civilian and military careers. The lines showing the reduced retired pay of 0-9's and 0-10's are only shown front the 40 years of service point on since it is assumed they would not nor- mally retire earlier. At the 40- to 42-year points in the curve for a GS-15 there are three dotted lines. The top one (A), shows his annuity reduced to provide the maximum sur- vivor benefit that an 0--S can provide. Compare that with lower straight line A. The middle line (11) shows what the GS -15 would get after providing as much for his survivor as an 0-9 could (lower II). (About $1,500 more, yet the (IS-15 is more nearly equal in Job status to tm 0- 6 than to a three- star officer.) Only the full admiral or general can get a little more after providing for his survivors than the GS-15 (compare the two C lines)?and even here if each has served 42 years before retiring, tile retired pay each keeps is nearly the same. MILITARY CAREERS HAVE MANY LIMITS, tscoxvgsrEsrEs Both Civil Service officials and military officers lake a heating on per diem_ If you have to stay at a hotel and buy your own meals while on Govemment business, you will find the $10 a day doesn't go too far. Roth military and civilian employees now get per diem pay of $16 a day. Per diem The law provides that under unusual circumstances up to $30 a day can he allowed. The difference is that civil service is paying the $30 allowed and the Defense Department is not. Regulations to approve such exceptional payments have not been issued, although the law allowing them was passed last June. There are other differences. Civil service per diem is reduced only when Government quarters are used. The Government pays for all transportation expenses. Federal employee per diem overseas depends on the cost and living standards in the country concerned. In some eases it exceeds $10 a day. Military per diem is reduced when quarters are available, when the man is under instruction, or when traveling. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21162111-RDP661300403R000400280006-0 The latter sometimes means less per diem for the military man. For example, if an officer and a civilian einployee in his shop travel across. the country together, spend 3 days attending to business and then travel back, spending most of a day traveling each way, the civilian gets per diem of $16 a day for the full 5 days. The military man gets only the $16 payment for 3 days. His per diem is reduced for the 2 days he was in a travel status. Military per diem overseas also varies, often reduced and sometimes increased. When traveling in his own automobile, the civil servant gets a mileage allowance of 10 cents a mile. The military man gets 6 cents a mile. Actually, the law allows paying servicemen up to 10 cents but Defense has never authorized the higher payments. Military men on PCS orders get 6 cents a mile for themselves and for each dependent up to a maximum of 24 cents a mile. Civilians being transferred permanently get a maximum of 12 cents a mile for themselves and dependents or same rate as commercial transportation, whichever is lower. But they also get per diem on transfer. The military man does not. Advantage: On the side of the civil servant. Related to travel is the fact that civilians have a more liberal trailer-moving allowance. Related to nothing so far covered?but still another civilian bene- fit?is the program of cash awards for suggestions and for sustained superior performance. Career inconveniences As we said earlier, the job of a civil servant is pretty much like a similar job in private industry in terms of work environment and personal restrictions. A military career is a wholly different kind of life and is subject to a variety of restrictions and inconveniences. The most notable inconveniences of military careers lie in the area of family separations. Civil servants rarely are separated from their families. When they are they almost always draw additional pay. Family separations are numerous in the military service and usually not compensated for. (Enlisted men get a modest foreign or sea duty pay.) Navy men in particular are separated for long periods from their families repeatedly throughout their careers. Men in all services experience separations from their families at some time in their careers. In addition to the hardships and inconvenience, this usually results in additional expenses for the family and strained family relationships. A concomitant of this is frequent moves. The civil servant seldom if ever has to move during his career unless he wants to. Occasionally an agency is moved causing some dislocation for employees but they don't have to go and the whole thing is usually accompanied by efforts to find new jobs for employees who don't want to move. The military man moves frequently, every 2 or 3 years or more often, and may go to any part of the country or of the world. The officer or enlisted man usually has little influence on where he will go or on the timing of the move. When a military man is ordered to move, he moves?with or without family. The military man is restricted in the termination of his military career. A civil servant can quit his job any time before retirement?or move back and forth between civil service and private industry over the course of his career. He can also leave his contributions in the civil service retirement fund and draw retirement at age 62. The average length of service for civil service retirees?that is, those drawing retired pay?in 1962 was around 10 years. As a practical matter the military officer is not generally prevented from resigning before retirement. But legally the Regular officer serves at the pleasure of the President, and he can be held in the service when his superior thinks it is necessary. Over the past 2; years, in the case of the Berlin and Cuba emergencies, we have seen cases where officers were prohibited from quitting or retiring for certain periods. This authority can be used again in emergencies from time to time and at least temporarily stop an officer's plans to change careers. In addition, when an officer leaves the service he's out. This is true whether be quits or retires. He can't decide later that he wants to change his mind and go back to a military career without suffering a big loss of place on the promo- tion lists?even if he is taken back. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/0/04 : CIA-RDP66600403R000400280006-0 The civil servant can come back to the Government again at least at the grade he went out and usually gets credit for the additional experience gained on the outside. Enlisted men must serve to the end of the period they enlisted for and can be held beyond that [mint itt emergencies through special authority. Such authority was used during the 1901-62 crises. Another area where the civil servant has n tremendous advantage over the military limn is in the matter of political self-expression. There are many unions for Government civilian employees. Recently they have been given bargaining rights?in some cases exclusive bargaining rights. Military men are not, given the right to join unions. With the exception of some military associations of limited membership there Is nobody to plead the military man's cause for hint. The military man Is protected in his freedom to write to his Congressmen hut such individual letters cannot hope to accom- plish what is done by organized groups with professional lobbyists. (When this study was in its final stage the President signed an Executive order giving UniMIS a voice in annual reviews of civilian pay.) There is another way in which civil service employees have political influence. Living permanently In one area, the Federal employee becomes identified with that area and in places where there is a concentration of Federal employees their influence with the local Congressman is generally considerable. The military man, moving regularly, establishes no such local identity and his individual or group problems do not generally get the attention front local Congressmen or local political leaders that civilian employee problems do. When a Congressman lights to keep a military base in his district it is generally in terms of the income it provides locally anti the jobs it creates for his area. The welfare of the military man is secondary. Advantage: On the side of civil service. A note on housing: Discussion of housing is not included here because the military man's tax-free housing allowance was included in our analysis of his compensation. It should be noted that, when available, Government housing is normally cheaper for the military officer. That is, he is sure he has no lent to pay if he gets Government quarters. But a military man witliout quartets who draws a housing allowance finds his rent and utilities normally exceed his housing money. Only a handful of civil servants get housing in the Unied States. They usually have the same housing privileges as military men overseas and oc- casionally are furnished free quarters in foreign countries. The civilian overseas gets rental allowances, educational allowances, and .cost-of-living differentials in many cases. Mr. RIVERS. Mr. Blandford, could this be condensed or Mr. BENNETT. D011't condense the letter. Mr. IlivEns. I am talking about the report. That is rather-compre- hCIISI We. Mr. BLANnFotio. I don't see how it Call be condensed. Mr. RIVERS. It is a very line. report. BLANDFORD. I think the first page is going to have to be elim- inated unless we are going into the advertising business. Mr. BENNF.TR. Use your own judgment. I would like to have the letter in in full. Mr. ItivErts. Put. in the whole letter, and Mr. Bates and Mr. Bennett want what the statement has to say put_ iii. Mr. BATES. Then I would like to get the figures on the cost-of-living increase and have that as a part of the report. Mr. RIVERS. Mr. Bates also wants as a part of the report the cost of living since the effective date of the last pay increase. Mr. BIANDFORD. The increased cost of living is approximately 5 per- cent ,as I understand it, since 1958. Secretary PAUL. That is right. Approved For Release 2005/04/21 : CIA-RDP66B00403R000400280006-0 Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 163 Mr. BLANDFORD. Here we are in an area of great dispute because cost of living is one thing and rising living standards is something else. You heard testimony from the witnesses that professional pay, for example, has gone up considerably more than the cost of living. We know that the civil service increases have gone up considerably more than the cost of living. Now, you run into the problem of comparability. Somewhere, someplace along the line you have to decide what you are comparing your pay scales with, and if you take the civil service rate, then your comparability indicates that where there was a relatively small spread. between, say, an E-3 and a GS-3, and a GS-14 and a lieutenant colonel, this spread has now increased considerably beyond that. This then also brings you into the so-called fringe benefit area. And fringe benefits are, again, something that are almost impossible to properly identify. They include, -for example, appropriations to the Department of Labor -for unemployment insurance involving $110 million for servicemen who are discharged. Now this is construed as a fringe benefit for the military services. Frankly, I have nothing but sympathy for people who attempt to write a pay scale and then attempt to compare it, for the military, and attempt to compare it with civil service or industry. What we are faced with here is a question of a pay bill that will do something to increase the retention rate of our enlisted personnel and increase the retention rate of our officer personnel. .VVhetlier or not this bill will accomplish its purpose' we will only know after it has been in effect for a number of years. We do know that with every pay increase we have ever provided there has been an increase in retention rates among officers and enlisted personnel immediately following the pay increase, but it slides off very rapidly and one of the reasons prob- ably that it slides off is that the economy overcomes the pay increase so rapidly, including not only industry but civil service, that the military man almost within a short period of a few months considers himself again underpaid. I don't know, frankly, how you compare a private serving in South Vietnam or any place else with industry. I don't know how you com- pare a platoon leader or a pilot of a 104 with an airline pilot, for example. They are two different problems, they have different risks, and of course the pay is fantastically different. Mr. BATES. That is right. But on the other hand if you know what they got in 1958 you can see what the change is. In that sense I think it is a good thing. I would like to have it put in the record. Mr. RIVERS. if we get into comparability we will be here until kingdom come. Mr. BATES. Is there any rule or regulation in the services with respect to moonlighting, Mr. Secretary? Secretary PAUL. Mr. Bates, there are rules and regulations. I am not personally as familiar with them as I should be. I can get them for you. Mr. BATES. I would appreciate it if you would put those in the record. Secretary PAUL. Yes, sir. (The matter referred to follows:) Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/0404: CIA-RDP66600403R000400280006-0 XIV. OUTSIDE EMPLOY MEM OF' A. No DOD civilian personnel and no military personnel on active duty shall engage in private outside employment, with or without compensation, which: 1. interferes with the performance of their Government duties, or 2. may reasonably be expected to bring discredit upon the Government or the agency concerned. B. No enlisted member of the Armed Forces on active duty may be ordered or permitted to leave his post to engage in a civilian pursuit or business, or a performance in civil life, for emolument, hire, or otherwise, if the pursuit, busi- ness, or performance interferes with the customary or regalar employment of local civilians in their art, trade or profession. Mr. HARDY. I think, Mr. Chairman, on the question of moonlighting, I think it is one that we haven't touched on before, and I believe it is an important one, and it may give some indication of the degree to which present pay scales are inadequate, at least in some categories. Mr. ItivEns. Give the committee the up-to-date definition of "moon- lighting." Mr. BLANDFORD. Having a job in the daytime working for the Gov- ernment and then having another job in the evening working for a non-Government organization. The dual employment statutes prohibit individuals from working for the Government for all practical purposes. There were a series of complaints about moonlighting about a year and a half ago and the Department of Defense did conduct a study, I think Mr. Steve Jack- son conducted a study on moonlighting, and the extent to which it was permitted in Washington. I daresay that if you drive into any gasoline station in the Wash- ington area, the odds are that the man who will be serving you gaso- line after 6 o'clock in the evening will be an enlisted man -Nlio is moonlighting. Mr. 11,TinsoN. Or a civil service worker. Mr. BLANDFORD. Yes. Mr. IlAnny. The thing I was going to suggest? Mr. Rum's. I think it is more around the military base. Mr. IlAnoy. Not only that we get the information on the amount of the regulations but also on the extent to which it is a factor in some of these different areas, if you have that information. Mr. BLANDFORD. I haven't any idea of the extent of it and it would vary all over. Mr. Haney. The Department of Defense if it has developed regu- lations to control it, and you have, you must have secured some in- formation on the extent of the practice. Secretary PAUL. Yes, sir; we can furnish some ;information. Mr. 13nAignroan. I think it is permitted where it does not affect the man's ability to do his job. In sum and substance. Secretary l'Aun. That is right. Mr. IIAany. You have a series of regulations on it. I have run into them from time to time. Mr. ErvEns. What have you got that we can concisely put in the record at this point? Secretary PAUL. We can certainly put the regulations in and we can also give whatever statistics along the lines Mr. Hardy hits asked for that we can develop. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21101A-RDP661300403R000400280006-0 Mr. HITDDLESTON. Moonlighting is certainly better than being on welfare. Mr. RIVERS. Mr. Osmers ? Mr. OSIVIERS. Mr. Chairman, because of the rather complex and difficult area of moonlighting, and particularly because of the diffi- culty in identifying it, and I refer, for example, to what Mr. Bland- ford has said about work at a filling station; often men working in a capacity like that, Mr. Chairman, are not placed on the payroll of the business organization. They receive out-of-pocket cash and from the standpoint of the Department of Defense records they are not moonlighting. Or they are cutting lawns or doing work of this kind for which they do not? their social security numbers are not required and withholding tax forms are not used. So that I am afraid, Mr. Chairman, unless you took a little bit more careful look than shoving some figures in the record here you may be doing the subject something of an injustice. I am not trying to prove anything here at all, except that this is a pretty complicated area. If you wanted to get into it, all right. Mr. BENNETT. I don't know why they would not be under social security in a gas station. There is nothing prohibiting them from doing it. They would get another retirement benefit. Mr. Osivrials. That is very true, but as a practical matter, from the standpoint of the serviceman he probably takes $2 or $3 in cash from the proprietor or the manager and gets? Mr. BENNETT. He gets social security. Mr. BLANDFORD. He is already covered by social security under the law since 1956, all service personnel are paying toward social security. Mr. BENNETT. Can't a man if he moonlights get social security in addition to his benefits? Mr. BLANDFORD. Yes, but he already gets social security on top of his military pay. Mr. BENNETT. That is why I said how in the world Mr. BLANDEORD. Mr. Osmers is saying that the station manager 'hires him with the understanding that he won't report it, it is good for the man because it doesn't reflect in his income taxes and good for the operator because it does not reflect in his withholding tax. Mr. BENNETT. I can't believe it is very general. I presume these men running the filling stations know that they can have a suit brought against them and be required to pay this back social security. They are not protected because they don't pay it. Mr. Os-Ai-Ells. I think about all we have demonstrated here this morning is that moonlighting is a very complicated subject upon which we have very, very little information. Mr. RIVERS. Mr. Paul said he would give us what he has. Mr. Timmy. That is all we can do and I think we ought to recog- nize that. Mr. RIVERS. We are not going to let that seriously affect the bill. Mr. OSMERS. No. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/044016: CIA-RDP66600403R000400280006-0 Mr. Claiirma.n, I honestly believe that we should proceed with the consideration. If we want to look at moonlip:hting at some future time, all right. Mr. Hum'.EsTo.N. May I ask a quest ion? Mr. RIVERS. Mr. IhIddieSt011 Mr. III-Din.,EsToN. Mr. Paul, is the cost of this bill as it. came over from the Defense Department, included in the President's budget for fiscal year 1961 Secretary P.,tut,. The projection in the budget for fiscal 1961 is a $t)00 million additional cost. That was based on the assumption of an October 1 effective date.. If the effective date moves up the cost would be increased. We did estimate an additional annual cost of our proposals at. roughly $1.2 billion for a 12-month period. Mr. I furim.EsTox. Depending on what the commit tee does with it, the. cost. of this bill was reflected iii the budget? Secretary PAUL. Yes, sir; yes. Mr. RivEns. You had a budget figure based on October 1? Secretary PAUL. Of $900 million, Mr. Chairman. Mr. RivEas. That answers your question Mr. I funnurs-roN. Yes. Mr. RivEns. Now Mr. Blandford, you said something- to the effect that we would be unable. to proceed if we did not decide on that question. Mr. BLAxnvortn. It is not a question of being unable to proceM. I believe there are two basic issues involved in this pay bill and only two basic issues. I think the rest- is relatively unimportant. Mr. IlivEas. Let me say this before you start out on those. hold that.. This is the way this bill lias struck me and memlers of the committee. A lot of things in this bill, Mr. Paul, Mr. Blandford called it to my attention and the chairman's attention to start with, could be treated in di ffereiut legisl at ion. At best, with even the minimum contained in this bill, it is difficult to explain to the layman on the floor who is un familiar with the tech- nicalities of retirement, longevity, and retirement for pay disability. So this is the reason, (-Aiming to your point now, that, we think that some. of the subjects in this bill cold d be treated in separate legislation. Now, Mr. 13 landlord? Mr. ;AVIN. Max' I ask a quest ion at that, point ? What is the total overall cost of the pay bill ? Mr. BLANopono. $1,242.503,000 Mr. GAvix. What is the total annual pay ? Mr. BLANDFORD. About. $6.7 billion today and it will be increased by approximately $1)1=15 million under ILR. 3006. Arr. CiAvix. This bill Mr. BLANDFOIT.D. Yes. Mr. GAViN.(live u the first figure again. Mr. BiAxoroan. The total is approximately $6.7 billion today for today for military pay and for the armed services. Under thii pro- posal it would lie increased. pay and allowances lvould be increased by approxinnttelv $1.2 billion. 15066-- 63?No. 6? 16 Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 : C1RDP661300403R000400280006-0 Mr. GAVIN. What is the total overall again? MT. BLAND-FORD. $6.7 billion. Secretary PAUL. That is basic pay alone? Mr. BATES. It has to be. Mr. BLANDFORD. That is right. Mr. GUBSER. You are including retired pay as military pay, aren't you? Mr. BLANDFORD. No, retirement pay is separate. Retirement pay is an additional $96,641,000. MT. GUBSER. It would be about $1,340 million Mr. BLANDFORD. No. This is where we are going to get confused on figures. The total cost of the bill as sent over by the Department is $1,212 million, covering uniform allowances, retirement provisions, you name it, whatever is in the bill. If you pass the bill in one solid package, in one fiscal year, assuming we have a force of 2,710,000, it will cost $1,242 million. Now you have to break that down. Mr. GAVIN. All right. Previously then the annual pay would be $6,700 million and this would be an increase of $1,242 million. Mr. BLANDFORD. No, sir. You have to remember, when you talk military pay you have to talk about basic pay, allowances, retirement, you have to talk about uniform allowances you have to talk about clothing allowances, separation pay, terminal leave pay. Mr. firvERs. And subsistence. MT. BLANDFORD. That is included in allowances, but you have a whole variety of appropriations that are involved here. The total cost of this bill Mr. GAVIN. The total cost as it is now without this bill, what is that figure?$6 bill ion? Mr. BLAND-FORD. No. The total cost of all pay and allowances to- day, for everything, today, for fiscal year 1964 is $9,952,100,000. Mr. GAVIN. All right. And this bill here will increase that by $1,242 million. Mr. BLANDFORD. That is right. Mr. GAVIN. $1,242 million. Now, what were you just about to say when we interrupted you? Mr. BLANDFORD. Frankly, I have forgotten what I was about to say. Mr. BATES. At which interruption? Mr. BENNETT. Something about the two most important things. Mr. BLANDFORD. Yes' what I was about to say to the committee is this: It seems that we have here roughly four major items of grave concern to the morale of the armed services and to the retention rate. After all, we are trying to pass a bill that will increase retention. We are having no problem getting bodies, but we are having problems keeping the right kind of bodies. So we have got to separate the question of getting people as opposed to the question of keeping people. Mr. RIVERS. The people you want? MT. BLANDFORD. The people we want. The four major points in this bill, as far as I am concerned, and the Department has some differing views, is basically pay, retirement, subsistence and this pro- Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/84381 : CIA-RDP66600403R000400280006-0 posal that the chairman has set forth, linown as the separation allow- ance. Now, these four proposals are the guts of the committee print. These. four proposals, I might add, if we take certain action in this committee, could increase the cost of this bill by about $271 milion a year. Mr. GAvix. What are they again, basic P. retirement Mr. BLAxopoan. Retirement, subsistence allowances. Mr. GAVIN. Subsistence? Mr. BLANDFORD. And separation allowance. Now those are. what I consider to be the four major issues involved in this situation that we face here today. If we retain sea and oversea pay, i you arrive at this decision you immediately add $133 million to the cost of the bill. Mr. RIVERS. Let's arrive at a decision on that. right now. Mr. BATES. No; less than 30. Mr. BLANDFORD. No, sir. I will get to that. This is where I get into the problem of adding and subtracting. Mr. RivEas. Let's get things behind us as fast as we can. Mr. BLANDFORD. Let's agree on the pay for contract surgeons. There are 67 of them. It has been in the law since the year one. All they are trying to do is give them the pay of captains instead of pay of first lieutenants. The Navy has no authority to use it, the Army has 67 of them. These peopsle are hired in areas where they cannot find uniformed doctors, they draw the pay of a first lieutenant, now they want to let them draw the pay of a captain with over 4 years service. I sug- gest we adopt it. We have done it ever since 1912. Mr. 0S3FERS. I so move. Mr. GAVIN. What is the cost of that? Mr. BLANDFORD. Contract surgeons would cost. $59,000. Mr. RIVERS. $59,000? Without objection, we approve that pcovi- sion. What is the next? Mr. BLANDFORD. The next section is the one the chairman recom- mends we delete from the bill. Mr. RIVERS. On what page is that? Mr. BLANDFORD. Page 4. If you delete this you delete practically all of page 4, all of page 5, all of pages 6, 7, 8, 9, 10, and 11 down to line 18. This is constructive credit. Mr. RivEuts. This is the constructive credit. Mr. BLAND-I-ono. Now this, as the chairman states, has no place in a pay bill. The.re is going to be a recommendation come over here known as the Bolte proposal, which will go into that question. Mr. RIVERS. For months, and Mr. Blandford has been keeping abreast of it, they have had a committee start off under our old friend John Dahlquist, who had a stroke or ,;orne unfortunate paralyzing permanent injury, and they gave the job to Geo. Charlie. Bale and he has done a very tine job on it, as I understand it. I have never seen it.. Of course it would come here, as a legislative proposal, isn't that right ? Mr. lh,xiworuu. Yes, sir. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 :1C3A-RDP661300403R000400280006-0 Mr. Bums. We understand that as a result of the Bolte investiga- tion that sometime, Mr. Paul, we are going to get a proposal as a re- sult of this study. Secretary PAUL. Yes, sir. Mr. RIVERS. Now I imagine it is coming, is that right? Secretary PAUL. It is coming, I hope within a week. Mr. RIVERS. We think that when this comes, things of this character ?ought not to be contained in this pay bill because this is the overall selection, promotion, strictly the personnel area. So Mr. Blandford has brought that to the attention of Mr. Vinson and myself and other members of the committee. Now, Mr. Blandford? Mr. BATES. Is there anything else in this bill that is under the study of the Bolte committee? Mr. BLANDFORD. No, sir; there is no other provision in this bill that I can think of that goes into Bolte. Mr. RWERS. You mean in the Bolte report? MT. BATES. Yes. Mr. I-alloy. And will the question of constructive credits be dis- cussed there? Mr. BLANDFORD. Very definitely. Mr. HARDY. If it is we have no business discussing that. Mr. BLANDFORD. Not only that, but the Bolte recommendation elim- inates constructive credit and this extends constructive credit to a larger number. Now we have to make up our mind one way or the other. Mr. RIVERS. We will have enough trouble on this. Mr. GAITIN. After the pay increase in 1958, Mr. Chairman, was it effective in retaining the personnel in the services? If so, to what extent? Mr. BLANDFORD. Well, we have the charts that indicate that after 1958 the first year, 1959, Dr. Long brought this out the other day, that you showed a rather substantial increase in 1959; then, as Dr. Long pointed out, there was a sudden drop in 1960. Mr. RIVERS. Yes. Mr. BLANDFORD. And no one can really account for these drops, but we did have a retention increase in 1959 as a result of the pay increase of 1958. But then what happens is you come along with a civil service pay increase, unions go on strike, the whole cost of living goes up, every- body gets bigger wages than the military and all the effect of your pay increase is lost. So when you say to yourself that any pay increase that you pass here is going to solve the retention problem, I think in a sense it is just wishful thinking. You are going to help it for a year or two. Mr. RIVERS. This is the way the chart shows it. Mr. BLANDFORD. Yes, sir. Mr. RIVERS. I think you brought that out very well, Dr. Long. I think that is all we can do, show what the effect of the past has been. Mr. BEA NDPORD. That is right. Mr. RIVERS. Delete the constructive credit section. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/q41 : CIA-RDP66600403R000400280006-0 Arr. Kmoorty. Does the eliminat ion of this section have any bearino- on the total cost ? Mr. BLAN prom>. Yes: it has a savinc, of about $1.1,, million. Mr. RivEas. It is very small. Now, Mr. Paul, what do you think of our observation there? If this may be treated as well in other legislation, certainly the Department has no object ion to this, has it ? Mr. PAUL. No, sir. ?Jr. RivLas. Let's follow our counsel's advice and go to page what- 1 1 ? Mr. BLANDroan. Page II. "Retired and retainer pay." Mr. RuyEas. Now if we can conic to a conclusion on t his today? Mr. BLANDFORD. This will be a major accomplishment. Mr. RIVERS. This will be it major accomplishment. Now, let's go to the next point. Mr. linANDroun. Now, the retirement, section, I believe. is probably the most. controversial. Mr. litvEus. Gentlemen, here is what, we have to keep in mind. , The chairman has cautioned me. on this, and he is a wise man. Our counsel has cautioned us that we. must--and Mr. Hardy has ob- served it two or three times and Mr. Bates, we must not jeopardize a retirement system. Everybody is not as persuaded as are we on the great value that these people whom we try to help have been to the .7onntry. They are not as strong for it as we are. ..1.nd taking into consideration differences of opinion and philosophies, we must not jeopardize, some- thing that, is working. We have to be. reasonable men and responsible people. Now, Mr. Blandford, if you will ever finish looking thromdi :hose papers. Mr. BLANDFORD. I am ready to start. discussing it. but. I had a pro- jected cost study on military retirement pay and I have a, few other papers here and I cannot put my hands on it. Mr. Rnmits. Let's discuss the whole thing. Mr. Paul? Secretary PAti,. Will this help? Mr. BLANDFORD. That might help. Mr. RIVERS. If we can arrive, now at what. our philosophy will be for the future, what our position is going to be on that magnificent I reatise that Admiral Denfield gave. us?I have, never seen a finer legal document anywhere., than that, prepareAl by Admiral Denfield and presented by him, and taking this into consideration we have to mako these decisions this morning. Mr. Gavin? Mr. GAVIN. I merely wanted to ask whether or not. thisgoes back to 1958 and those personnel that were denied the increase ? 'Arr. IILVEHS. It takes up- 1958. Mr. GunsEn. It does I he same thing to everybody in the future that they did in 1958. Mr. BLANDFORD. Mil); I VX.1)1 /till what this sect ion does and if I am in error in any way, please correct me. because this is vii ah to the GAO. .1s I understand the purpose of this section, and its it is written. xyliat it does is this: t hose persons rot i rod prior to .1 one 1. 195s, who Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/2116311A-RDP661300403R000400280006-0 draw their retirement pay under the Carrier Compensation Act will be permitted to recompute their retirement pay under the pay scales that are in effect today. Mr. GunsEn. Retroactively? MT. BLANDFORD. No Sin Now, this means that those people retired prior to June /, 1958, recompute, or the retirement section will permit them to recompute their pay under existing pay scales. In addition to recomputing, they will receive a 5-percent cost-of- living increase because that is the amount that the cost of living has increased since June 1, 1958. Mr. KILGORE. Five percent above the 1958. Mr. BLANDFORD. Five percent in addition to the recomputation and the 5 percent will be applied to the recomputed retired pay. So this is not a small amount of money we are talking about. Mr. GAVIN. Now you are talking about those that did. not receive this increase prior to 1958? Mr. BLANDFORD. Yes, sir ? that is right. Now, let's understand, that there is another section in this bill that :says, and this is extremely complicated: The so-called 511 people under the Carrier Compensation Act. Mr. RIVERS. This is the 1919 disability? Mr. BLANDFORD. I have to go back to 1949 because it is nondisability :that I am talking about at the moment. :MF. RIVERS. Get those two squared away. 171r. BLANDFORD. In 1949 we established a new system of disability -retirement. We also established a new method of recomputing retire- ment for those previously retired who had retired with service that was other than actual service performed, constructive credit, for example. We had a provision in the law that if an individual retired with a so-called tombstone promotion he was entitled to the maximum pay ,of his grade when he retired. We took this out in 1947 in the Officer Personnel Act, but we still had many people who retired -prior to that. We had a provision going back to 1939, some of you are extremely familiar with it, known as paragraph 4 of section 15 of the Pay Readjustment Act under which a person who retired who had served in any capacity in World War I who retired as an officer, and that has been construed to mean only a regular officer, woulel draw 75 percent retirement pay because of his World War I service. This meant that a man would draw 75 percent of his pay even though he may have served only 12 or 14 years of service. There is a long history as to why that was enacted and who it was intended to benefit. Mr. BATES. That was like the short 16. Mr. BLANDFORD. Yes, except this was a lot more costly and we have been plagued with that ever since. That is beside the point. What I am building up to is in 1949 we changed two things, the disability retirement system and method of computing retirement pay for those who had jawbone credit, if you want to put it on that basis. Now the 411 group, which is the disability retirement section, said to all of those retired prior to October 1, 1949: "You may recompute Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/0N4 : CIA-RDP66600403R000400280006-0 your retirement pay under one- of two methods. You can keep what you have," Now what did they have? They had 75 percent of the pay of the grade in which retired regardless of their degree of disability. A paraplegic got 75 percent, and somebody with two broken lingers and a cracked knuckle got 75 percent. Secretary PAru.. Tax free. Mr. BLANDroun. Yes. Now why did we do this? Because we had a study in 1948 as some of you will rein4mber that revealed there were tremendous abuses of the disability 7etire- ment system during World War IL "You retire me and _I will retire you tomorrow" sort of thing. Mr. BATES. Did the committee recommend this? Mr. BLANnFottn. Yes, they recommended this, this was one of our recommendations and also the recommendation of the Hook commit- tee. So we said to these. people., "If you are truly disabled come, in and recompute and we. will assess a degree of disability at the time you were retired, and apply existing Veterans' Administration standards." Now many people did this and these people are paid under the Career Compensation Act. But there are about 35,000 officers, if I ant not mistaken. who did not. elect, to be paid under the Career Com- pensation Act because their degree of disability or their length of service did not give them as much retirement pay under the Oareer Compensation Act. as they got under the 75 percent. of the 19,12 Pay Readjustment Act as amended. They laid a 5-year period in which to make this election?and they elect ea to keep what the.y had. Mr. RivEas. Because they got. more at that time? Mr. BLAxDrono. Because they gut more at that time and of course it was tax free, every penny of it. MT. RIVERS. That was a- big item. Mr. BLANDFORD. Yes, sir. Now as to this 411 group you are hearing from now, because there is no provision in this bill except a 5-percent cost-of-living increase.. What they say is let us recompute under the new pay scales or at least recompute under existing pay scales, even though we apply our length of service or our degree of disability because we made a bad guess when we made our final election. Mr. ITUDDLFATON. We heard from them_ in 1958, too. Mr. BLAIN:MORD. Yes., sir. Now we do nothing other than give these people a 5-peroent cot-of- living increase. The theory behind this is that these people have had un election, a tax-free benefit over a period of time, and they elected to keep what they had and they have been given cost-of-living in- creases ever since. Next there is the 511 people, who are permitted to recompute be- cause the (7omptroller Gtneral ruled that the language in 51- did not give t bent an elect ion, and it said, they were to. receive whichever pa v was greater, au it was no elect ion in the sect ion. The Coinp- troller General said obviously there was no elect ion and the language, "whichever is greater," was intended to he a cow inning applicktion.. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 : Al4537RDP661300403R000400280006-0 Now in 1958 the Senate amended our pay bill and said that no one could recompute, including the 511 people. Am I correct so far on this, Colonel Bona de ? Colonel BENADE. Yes. Mr. 131,Am:worm Now this one group is taken care of in the retire- ment section because the Comptroller General said that they could continue to recompute except when the Congress said they could not. Now, we allow this group to recompute on the theory that the Con- gress, if the Comptroller General can speak for us, intended that this be a continuing application. So this group, the 511 group, can recompute up to the present pay scales. But the 411 group cannot. Now bear in mind that in the 111 group you have this problem: These people had a 5-year period in which to make this election. They are now saying all we want to do is come in and apply our years of service or our degree of disability against the existing pay scales, because we elected at the time only because it gave us more money. You are giving the 511 people who had no election the right to continue to apply their retirement pay against whatever the exist- ing pay scales are today, so why not us? Now there is some merit in their position I have no idea perhaps the Department does, of what the cost would be if we allowed the 411 people to recompute under existing pay scales. Colonel, do you have any estimate? Colonel BENADE. I am sorry Secretary Rum. If we allowed the 411 people to recompute how much would it add to the cost of the bill, the pre-1949 people? Colonel BENADE. I don't have a figure. Mr. GAVIN. Would you explain to us the 411 group and the 511 group? Mr. 13LANDPORD. The 411 is disability and 511 is length of service. Mr. RrvEns. One made the election, the other did not. Mr. BLANDFORD. The 411 was given an election, the 511 was not. Mr. RivErts. Call it the election group and the nonelection group. Mr. BLANDrouo. I would like for the testimony at this pointy? Mr. RIVERS. Disability for one, and nondisability for the other. Mr. BLANDFORD. Yes, sir. I would like Mr. Paul and Colonel Be- nade and Mr. Gorham to explain why the bill as sent over by the Department permits the 511 group to recompute but does not permit the 411 to recompute. Mr. RIVERS. I wish you would because that question will come up,. Secretary PAUL. May I ask Colonel Benade to deal with that question? Mr. RivEus. Colonel, would you do that? Colonel BENADE. Yes, sir. Mr. RrvEns. If you don't have accurate figures, give us what you can in the record. Colonel BENADE. First I would like to clarify the reason why, the bill is the way it is. The Defense Department had in mind continuing the provisions of existing law. Mr. Blandford has indicated, people retired prior to, Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 20054%4/21 : CIA-RDP66600403R000400280006-0 October 1, 1959, were divided into two categories. The first category is that of pet-sons who were retired for physic-al disability. In 1949 Congress said to that group, in cheat, "You may keep your present rate of retired pay or you may elect to come under the new system, but if you come under the new system you must also accept the limitations that go with it." To give a specific example, if a member had been retired for phy-iical disability prior to 1949 and the degree of his disability was 30 percent, he would get 30 percent of the new rate of pay and not 75 percent, such as he was drawing- under the old rate. Generally an individual with less than a GO percent, disability, was better off remaining under the old laws. Congress, however, provided differently for those. me-mbers retired for length of ...vice. Mr. tIVER8. But in the same act. Colonel BEN-ADE. Yes, sir. The act has also be-en interpreted by the Court of Claims. Mr. GAVIN. By the what? Colonel BENADE. By the Court of Claims. The legislative history of section 511 of the 1949 act, which dealt with members retired or reasons other than physical disability, in other words, length of service, bears out clearly that there was no in- tention on the part of the Congress to distinguish between members retired for length of service prior to October 1 and those retired for length of service after October 1. There was no reason to. Recomputation was an integral part of the retirement system and the member who had served 30 years, we will say, before October 1, 1949, was to be accorded the same treatment as a man who retired with 30 years of service after October 1. That has been the law right along, and it was (he law in 1958. In 1958 the pay bill said, in effect, there will not be recomputa lion :for anyone, and everyone will get a cost-of-living increase. This, of course, affected the sect on 511 p-roup as ii did everyone else. What the defense bill does is restore the situation as it existed before June 1958. It would authorize the section 511 group to recompute, just_ as they would have been allowed to recompute if it had not been for the ft eeze in 1958. And that is all it does. It keeps the sit uation just as it was prior to 1958. Mr. (1.kvix. Is there anything in here about being retroactive? Colonel BENADE. No, sir. Mr. GAVIN. Is there any thought 'being given to it ? "olonel BENADE. To making it rel roact i VC ? Mr. GAVIN. Yes. 'olonel BExADE. We considered it. but the decision was against it. 'III the first place, the Con.rress has been against retro.tetive features of (his kind in this sort of provision. Mr. GAVIN. Then if this bill passes, they will all be comouted OD the, same basis, same standard? Colonel BENADF,. Yes, sir. Mr. GAvix. Now (his 5 percent you talk about. Colonel BENAnr.. Yes, sir. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 :1q1A-RDP661300403R000400280006-0 Mr. GAVIN. Is that for those before 1958? Colonel BENADE. The group retired prior to 1949 for physical dis- ability, that is the first category, would receive a 5-percent increase. Mr. GAviN. Just the disability? Colonel BENADE. Yes, Sir. Mr. RIVERS. Everybody gets that? Mr. BLANDFORD. Everybody gets this up to the effective date of this act. Colonel BENADE. Members retired for physical disability prior to 1949, the section 411 group, would receive a 5-percent increase in their retired pay. Mr. OKI/nuts. Under this bill? Colonel BENADE. Under this bill; yes, sir. May I also say one thing more: In 1955, the Department of Defense in the 1955 pay bill submitted to this committee a recommendation which would have reopened the option for the physical disability retired group, the section 411 group. It was rejected by this committee. And it was explained very carefully on the floor of the House by Mr. Kilday at that time as to why the committee rejected it. We had that very much in mind in preparing this bill. Mr. IImtny. That was in 1949? Colonel BENADE. In 1955. Mr. HARDY. 1955. Colonel BENADE. Yes, sir. Mr. HARDY. So what you have done is to continue the policy as you understood the congressional policy, understood it previously? Colonel BENADE. That is correct, sir. Mr. HARDY. All right; now in arriving at that decision did you give any consideration to the equities which might be involved with respect to the 411's? Colonel BENADE. Yes, sir; we did. Mr. HARDY. Then you did not consider that continuing it in this way did any violence to equity as far as they are concerned? Colonel BENADE. No, sir. There are approximately 33,000 members who are presently drawinc, retired pay under laws in effect prior to October 1; that includes both officers and enlisted personnel. Having very much in mind the problem that we are now dismissing, we conducted a records survey last summer of this group. We found that there are perhaps 6,000 who could benefit by coming under the Career Compensation Act. In other words, more than 27,000 are still, receiving more than they could receive under the present bill. Mr. HARDY. Let's talk about the equity of this with respect to these 6,000. Colonel BENADE. All right, sir. Mr. HARDY. Now, if I can satisfy myself on the question of equity that is the only thing I am concerned with in this particular item. Colonel BENADE. Yes, sir. Mr. HARDY. Now insofar as these 6,000 are concerned, if you under- took to provide equity with the other retirees, would you not have to consider the advantage which they have had during the past? Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Colonel BENADE. Yes, sir. Mr. 11 ATIDY. Did you do that and what is your answer with respect to the 6,000 ? Colonel BENADE. That is one of the reasons why we have not pro- posed disturbing existing law. It is true that this 6,000 might. bene- fit; I wish to make clear. Mr. Hardy, we are not certain that thev would. The only way to be certain of I hat is to make an individual record search and analysis. We aro going purely on the percentage of disability reflected n the records. But in each case you would have to caletCate the tax ad- vantage, know I lie inan's personal sit Etat ion and so on. Mr. Ri vials. Tax ad vant age is it very important. one. Colonel BENADE. The point is a very proper one. They have been receiving more. in retired pay than members retired after October 1, 1949, with the same degree of disability. Mr. lItyrus. That is exactly right. Colonel BENADE. We had that very match in mind. This is always a troublesome area. We went into it. very carefully. Having in mind that this committee had previously rejected a proposal to reopen the option we felt Mr. GAVIN. You are talking about 1949. How about these after 1958? Mr. Br.ANDFORD. This is a. di fferent proposition. 11r. ( ; A vi x. How about the 0,000 after lfriS ? Mr. G rasuit. May I ask a question ? Mr. lliyErts. Just it second. Don't let's get off the track. Mr. GAvIN. I asked a question. Mr. BLANDronD. They are all right. Mr. limats. Mr. Hardy has the floor. Mr. HARDY. If I could button up my thinking on this : Then your determination is that there would only be 6,000 people that could possibly benefit under recomputation; that is. in the 411 group? Colonel BENADE. Yes, sir. Mr. liAnDy. And front the standpoint, of equity, that they at e not entitled to recomputa t ion or to any advantage. now? ( 'olonel BENADr. I think that is a fair statement. Mr. I TAVD1". That being the case, I am satisfied. I have no further qualms about the matter. Mr. BATES. Then the ones retired after 19-19 got less than this? Mr. BLANDFORD. For years. Colonel BENADE. That has been the case for years. Mr. Gurisr.a. Isn't it true that the life expectancy of this 6,000 would probably be considerably less than the period of time in which they have had this additional benefit that the others did not have? Colonel BENADE. Yes, sir. Mr. BLANDFoito. That would probably be true. Mr. RIVERS. This would be continued on an individual survey. Mr. Os:writs. I wanted to ask?and possibly be is going to cover t?t he effect on the 511's of this bill. Colonel BENADr.. The section 511 group would be treated under this bill exactly as they have. been previously treated in the law. Mr. RIVERS. We just bring them up to 1958? Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/214pIA-RDP661300403R000400280006-0 Colonel BENA.nt. That is right. Mr. RIVERS. Where are we now? Mr. BLANDFORD. At this point I would like to explain to you who would benefit and who would not under this percentage increase and recomputing their pay under existing pay scales. Mr. Bates brought up the question the other day and I would like to put this in the record .and indicate to you what we are faced with here. For some reason or other there are many people who think that recomputation means that everybody will get more pay. This is not ,correct. In 1958 we gave a 6-percent cost-of-living increase. It so happens; and you heard Mr. Lovei of the disabled officers talking about this, that there are many people who received more of an increase in re- t:irement pay because of the cost-of-living increase than they would get if they recomputed. As a matter of fact, if you made them recom- pute they would take a pay cut. Mr. RrvERs. That is right. Mr. BLANDFORD. Now, the figures reveal 50,781 officers will benefit by recomputation at an average of about $482 per officer, but 11,558-- now these figures have varied somewhat but these are the figures that were submitted to the Senate last year?will not benefit by recom- putation, because the 6-percent increase that they received was greater than the amount they would have received if they recomputed and the answer .is simple: We didn't increase the obligated serviceman at all in 1958 and you have an awful lot of short service people who are affected by this provision. Among enlisted personnel, 108,000 will benefit by recomputation and :37,390 will not. Now, I think you ought to also know that on recomputation. the Taverage enlisted man gets an increase of approximately $110 a year .as opposed to $482 for the officers. Now, an 0-10, under a recomputa- tion; that is, a Chief of Staff, would receive $4,586 more; a general, $2,957; a lieutenant general, $2,359; a major general, $1,928; a brigs- (her general, $1,445; a colonel; $1,070; a lieutenant colonel, $561; -a major, $187; a captain, $133; and a first lieutenant, $49. These :are averages. The maximum amount that an enlisted man would receive under -recomputation is $130 and the E-6, $31. These are per year, not per 'month. Mr. RIVERS. Well, at that point the general and the lieutenant ,general would get more because in 1958 we paid them in their rank, whereas before that you didn't go any higher. Mr. BLANDFoun. That is right. I think it is a mistake to use the $4,000 figure. Mr. RIVERS. A four-star general got the same salary as a two-star 1.ceneral. Mr. BLANDFORD. You are exactly right, Mr. Chairman. We ought to talk about the major general, for example, who would get $2,359, and then, on top of that,5 percent of his total retired pay under this bill. Now, these people, to be honest, the people who are going to be allowed to recompute, are going to pick up a tremendous increase, the senior officers will pick up a very substantial amount of increase in their present retirement pay, and I think you should also know Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/01M: CIA-RDP66600403R000400280006-0 that recomput at ion for this group Nv 11 add $30 million to the cost of the bill. And then the 5-percent increase will add $56 million more to he cost nil he bill. Mr. lhany. That is annually. r. BLANDFORD. ThiS ii the 5 percent applied t o everybody. Colonel 13EN-Anr.. As recommended by tile I hrfense I Pepart men( . Ain BrA N-Dr um. Annually yes, sir. annually. Mr. II t-DDLE?ru.N. IAt ti see if I get this straight. Everybody except the 411's who were ret ired for any reason up to the effective date of this act, under whatever law t her ref ired, would be ent it led to have their pay recomputed if they want to under the pay :ivales of the 1958 act and, in addition, will obtain percent ? Mr.I3LAN-oroan. 'Flint is right. Mr. lt ivims. That is a good St a lenient . Mr. lit.A.Niworin. Yes, sir, t hat is correct. Mr. ()SMUTS. Mr. Chairman, because of the, apparent, disparity be- t, ween the annual inereast. for some as compared to others, I 1% onder if you would relate the increase. for some of the officers there to per- centages of what they now receive. For example, if a major general receiyies a $2,200 annual increase, what is his present total retirmnent. on an average basis? Mr. BLAxorono. A major general, according to the fierures I have here, on recommit ation, will get a 20-percent increase in his retire- ment pay, and then, of course, on top of that there will be another 5 percent, because of the cost-of-living increase since 195S. Mr. OsArEns. In other words, he would get 31 pereent more than he now receives. I [my would that apply to an enlisted man, pereentagew i so ? Mr. RivEits. Why not take. the highest ? Mr. Iit,A-Norottn. Nine percent for the platoon sergeant, that h 1 percent for the si air sergeant. There is no sense in trying to kid ourselves about this. The mail that you get. from the master sergeant, he is a rare bird, but. the mail you get from a colonel and a brigadier general von can undertand. 'fliers aro real dollars involved here for a colonel and a general on re- computation. On the other hand, put yourselves in their poition. They find that if they had retired on July 1. 1958, they would be draw- ing $2,500 a, year more than if they retired on May 1, 195S. And their argument is that we -fought in the same wars. They say, I hap- pened to come in the service ahead of Johnny Smith, or something of that nature, and I am retired 1 month ahead of a new pay bil and for the rest of my life I am penalized it), the tune. of $2...5oo a Year. It is a strong argument. They become downright emot ional about it. Mr. EMIRS. They do. Mr. Oslap.us. 'Would you say, if T niay? would you say that thi:. pro- posal. across the board, is fair? Mr. litANnrono. Mr. ?sitters, I think this is as fair a way as possible in solve tins anti still reinain solvent. b-eause I am ,iroi.mr to give yon he projected cost of ret ireinent. Now. I m look When we do iis we ought fo hen r in mind f hat we are. in a si'wq.. depart tug from trail (ion. We axe, in a sense, changim, the. rules. but Congress is not bout d by these rides, because you ean argue that I hese people have never con- ributed toward their retirement. Mr. Kilday used the argument, as Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/211001A-RDP661300403R000400280006-0 this subcommittee will well remember, that this is not correct, that these people have contributed toward their retirement because they have received less pay than they would if they were contributing toward their retirement. But bear in mind that retirement is a tontine, benefit in this respect; that you have hundreds of people who serve for short periods of time on active duty and if they draw less pay, then what you could consider to be their contribution toward retire- ment, they don't benefit from. They are drawing less pay so that we can, thereafter, pay those who stay on for 20 years or more, retirement pay. This is one of the nebulous arguments that you get into on retirement. In my opinion, this section, the way it is written, which guarantees the purchasing power of the retirement dollar is the safest way of handling this and is the fairest way of handling this, even though you have to recognize that you are changing a system and, as Admiral Settle said, in the paper that Mr. Hardy gave me, one thing you are not doing here, while you are guaranteeing the purchasing power of the retired dollar, you are not guaranteeing to the retired man that his living standard will increase as the national living standard in- creases, whereas the man on active duty, while he is serving on active duty will, if future pay increases are provided, be able to improve his standard of living. But we have a very serious problem before us here and the problem is cost. Now, Mr. Gorham said, in 1970 there will be 25 people on the retired list for every 100 people on active duty. Now, let's look at the projected cost, because Mr. Stratton asked this question. In 1970, under existing law, the costs of retire- ment would be $1,868,000 a year. Under the bill, H.R. 3006, and this is without any further pay increases, retirement costs will be $2,063 million a year in 1970. Now, this just tells a part of the story. If you project retirement costs out to 1984, and this is not unreasonable to project them 20 years, without any further pay increases except that which is contained in the Department proposal, retirement costs for the military will be $3,500 million a year. Now, the question came up as to how does this compare with civil - service retirement? I have a projection here in front of me which indicates that in 1972 the total cost of military retirement will be $2,123 million, the total cost of Civil Service and Federal Employees Compensation Act, which is their disability retirement system, will be $2,562 million. There is no -sense in our trying to conceal the fact that the costs of retirement for the civil service people, the civil service annuitants are going up and they are going to go up considerably. Mr. HARny. That surprises me that they are so close together on that projection. I come to the conclusion that there must be something .left out of that figure. Mr. BLANDFORD. I don't have as yet the number of people who are involved in this and I find every time I get into this question of trying to compare civil service with military retirement that I get into so .many intangibles that I don't know really where I am. Mr. OSMERS. Mr. Chairman I wonder if Colonel Blandford bap- -pens to have the total cost in ?1984 of the civil service. Mr. BLANDFORD. NO, Sir, I do not. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04A2Jt CIA-RDP66600403R000400280006-0 Mr. OsmEas. It is nor an important figure, I didn't want it- because of anything before us. Mr. Timmy. These figures reflect the projected outlay in that par- ticular year, was that 1970? Mr. BLANDFORD. I presume. these are projected outlays, projected disbursements. Mr. Main% That is what I am talking about. Mr. lirANDroan. That is my understanding. Mr. Many-. It doesn't reflect the actuarial commitment at all. Mr. BLANDFORD. I think the Ford study indicated, if you are talking in terms of what your cost ret irement is right now, if you had to have a fund established like an insurance company to pay all your annui- tants that the fund is some. $30 billion behind at this moment. Mr. Ihany. Could we understand what these figures mean with respect t o civil service? Does that. mean the actual out-of-pocket Government expenditures on civil service retirement? Mr. SaatArrax. For that particular year. Mr. HARDY. For that year? And that is in addition to expenditures from the fund created by the employees themselves? Mr. BLANDFORD. Well, now--- - Colonel liENADE. May I clarify that ? Mr. BLANDF"ORD. Yes, because I can't answer t hat. Colonel BE,N. iiDE. In terms of numbers involved-- - Mr. II writs. Speak up. please. Colonel liENAnn. There are more people on the civil service retired rolls than there are on the military retired rolls. Mr. I Irimr.x.swx. You mean in 1.972? Colonel liExAnn. There are right now. There might very well be in 1972, also, because. the annual_ civil service retirements are sonic- where between tW,000 and 60,000. That is also about the present rate of retirements in the mint ary service and the numbers expected to be retiring annually between now and 1972. TI. costs more in terms of disbursements today for civil service retirees than for military. and it probably will up through 1972. The third point raised by Mr. Third y is what does this represent: This amount includes the contribution made by the civil service employee. which is presently 61/, percent of salary. But. I would point out, that when a. civil service employee makes a cunt ribut ion of 61,.!, percent, and if he did that, throughout. his career, and if there were no inter,rening pay increases, the amount contributed would be about 47 percent of the annuity he would receive. Rut in practice, it may not work that way. The employee may not contribute that. much. Although he may have contributed percent from the. time he came in. the effect of intervening pay in- creases is such that tilt imately the total of his contribution to his retire- ment. pay is substantially less than 47 percent. Mr. Timmy. les, but unless von can tie down these disbursements to a point where you can separate the contributions made by the employees from the total, you haven't got a comparison, because with respect to the military it is a total governmental cost. Colonel BENADE. That. is correct, Mr. Hardy. Spec king with regard to the present population and having in mind that the system was Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 iAliet-RDP661300403R000400280006-0 initiated in the 1920's and was initiated at a much lower rate of con- tribution, I would estimate that of the annual amount now being disbursed to them, contributions represent about 15 to 17 percent. The balance represents appropriations, money over and above the contribution made by the individual. Mr. HARDY. So that the hope for 50-50 costs doesn't really mean anything? Colonel BENADE. Not always, sir. I would also point out that the employee contributes 61/2 percent and the employing agency matches that with 61/2 percent. But this falls short of the amount actually required, with the result that there is an annual deficiency each year of some 0.83 percent, so that the Government's contribution is, in fact, around 8.33 percent. Mr. RIVERS. Eight to Colonel BENADE. I am sorry, 7.33 percent. Mr. RIVERS. Seven and a third. Colonel BENADE. To about 61/2 percent., that is correct, sir, that is the present ratio of contribution on the part, of the member and. the Government. Mr. HARDY. Just to finish my points in this thing right quickly, then the annual input of retirees is about the same in the military as in civil service? Colonel BENADE. The way it is running right now, yes, sir. Mr. HARDY. The annual rate? Colonel BENADE. Yes, sir, that is right. Mr. HARDY. And the cost to the Federal Government is what per- cent? I don't know how you do it, though, if you haven't separated out the contributions. Colonel BENADE. You cannot generalize. Mr. HARDY. They are very close together, as I remember the figures that were given. Mr. BLANDFORD. Just at that point in time. Colonel BENADE. I agree with you completely. There is no easy answer to it. In other words, in theory, the employees' contribution should come out to about half of the annuity. But in practice it does not work that way. Mr. HARDY. The only thing I was trying to see if we can do and maybe we can, is to see whether on an individual basis the Federal Government is paying substantially more for military retirement than for civil service retirement. Colonel BENADE. It all depends, Mr. Hardy. There are so many considerations involved. Under the military system an individual gets nothing unless he stays for at least 20 years, or unless he is retired for physical dis- ability. In the civil service?and it is a rather common practice outside of Government?the individual after 5 years has a vested right to retire- ment. He can let his money stay in the civil service system and draw retirement benefits at age 62, or he can withdraw his money with interest. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/014121 : CIA-RDP66600403R000400280006-0 Mr. Munn% The only thin!, I was t rying to do, Colonel--I under- stand these differences, but the only thing I was Irving to do was to see whether or not we could develop a comparison that would be help- ful to us on the floor. Maybe we can't. M GUISSER. Would you yield. ? Mr. 11.Annv. It is going to conic up sure. I was hoping we. would have some sort of an answer. Mr. RivEns. We will have sonic kind-- Mr. lit.Aximuto. We will t ry to come up wit Ii a general answer. Mr. (.1 unsEit. Mr. Chairman, may I ask a question right, on that point ? Mr. R ivEas. Yes. Mr. GLAISER. Is there an average amount that ,VUU could arri ve at, where you have an average. for civil service, retirement. recipients and military ret irenient recipients ? ( 'olonel Iirx.?nE. Are you referring to rate of retired pay ? Mr. GunsEa. An average amount received on a monthly bass. don't think it is necessarily a meaningful figure. Mr. &Asuman). Yes. All you have to do would be to take the amount of disbursements and divide by the number of annuitants. Mr. Cr LAINE11. I las anyone ever done that.? Mr. Iii,ANDrouo. It doesn't mean anything. ('olonel liENADE. WV con Id do it. V. 'Lunn-. It, would be misleading, actually, because you have a _number of people with service of 5 years or more. Mr. RmAts. Mr. Blandford, you and the colonel get together and see if we can't get, a satisfactory example. BLANDroan. I. ani I rving right now to come up with some? what I am doing, among other things, I have been down to the Civil Service Committee this morning trying to see how far they exceeded? how much the Post. Office and Civil Service employees received in pay increases last year, how much that exceeded the administration hill I hat was-sent. over. Now I just. say this with malice aforethought, that. the Congress didn't hesitate to spend $300 or $400 million in 1 year and $300 or $400 million the following year more than what the administration has proposed for the Post Office and Civil Service employees and now all of a sudden everybody gets excited about the fact that. we might. spend a couple of hundred million dollars more than has been subm4ted here. Mr. RIVERS. I want to say that. the Congress last year paid very little heed to what, the administration sent over on the postal increases. Isn't that true? Secretary PAL-u. Yes, sir, they raised it by a considerable. amount. Mr. Munn% There is one thing one comparison that I think might be meaningful, if you have it, or if it wouldn't be too hard to get., and that would be a comparison between the average retirement on an individual basis for military people with civil service annuitants who have had 20 years or more of service. Colonel BENADE. Yes. Arr. BLANnrotr). We will try to get I hat. That might be a mean- ingful figure. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 1653 Mr. GUBSER. That is really what I should have been ,fishing for in my question. Mr. RIVERS. Mr. Bennett, you have a qtesti R on? Mr. BENNETT. I think I have another line that might be meaning- ful at this point. That is, if we did accept this thing of going back to recompute?I am going to ask Mr. Gorham this questioni if I may? if we go back to recompute some of these people n the 1958 status, how do ? we justify not doing that for the people in the future? In other words, I want to have the arguments here that make a difference between those people in the 1958 status and those who may be coming in the future with regard to computing their pay on the Yank of the person under whom they serve. Mr. GORHAM. I believe there are two prime reasons. Mr. RIVERS. Let's hear this, and then we are going to adjourn. Mr. GORHAM. There are two primary reasons for distinguishing the pre-1958 group and the new pre-1958 group, if you will, the one who will be retiring prior to the effective date of this bill. The first is that prior to 1958 there wasn't even a hint that this system ? which had been in existence for over a hundred years was going to be changed. There was essentially a no-warning situation in 1958. There was no reason for any man to defer his date of retirement for he had every reason to expect that after the bill came into effect his retired pay would be recomputed on the new pay scales. This is not true of those in the active duty force subsequent to June 1958. They have had 5 years under a system which was not recompu- tation. The second difference is that in 1958 we had a major restructuring, a decompression, of the pay system. We increased the pay rates of senior officers much more than those of junior officers. The reason for this change wasn't that the. junior- and middle-grade officers were being paid too much money. The reason was rather recognition that we were not providing our senior officers with suffi- cient compensation. In effect, then, we were telling those who retired prior to 1958 that this overdue recognition of insufficient pay, was go- ing to be perpetuated by not permitting the people retired prior to 1958 to recompute based on the new rates of pay. Mr. WiLsoN. Mr. Chairman. Mr. RivErts. I want to say this. We are headed to a solution of this and I believe tomorrow morning, Mr. Blandford, we can come to a conclusion. MT. BLANDFORD. Yes. May I remind everybody we meet in 304 tomorrow. Mr. WILSON. I have some doubts on this. What we are doing on this retirement thing Mr. BATES. Raise them tomorrow. Mr. WILSON. Can I make them tomorrow ? MT. RIVERS. Yes. Mr. GUBSER. You may not finish tomorrow, though. Mr. BATES. No hurry. Secretary PAUL. Mr. Chairman, I have committed myself to appear before Mr. Hebert's subcommittee tomorrow morning on the junior 85066 63 No: 6 17 Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 1654 ROTC. If it can be worked out within the committee, I would be glad to go anywhere you want me to. Mr. RIVERS. This is Off the record. (Discussion off the record.) Mr. BLANDFORD. Mr. Gorham will be here also. Mr. RIVERS. Wait. This is one of the vital areas in this bill. Secretary PAUL. Yes, sir. Mr. RIVERS. Because it has a lot to do with what we are trying to do. I believe we ought to find a way to resolve this important ques- tio_n Mr. Blandford. I am hopeful that we might be able to. Mr. BLANDFORD. Of course, what we hoped to do, Mr. Rivers, was to meet this afternoon, finish with Mr. Paul, and then let Mr. Paul be available to Mr. HObert tomorrow morning. Unfortunately you cannot meet this afternoon. Mr. RIVERS. We have two or three other meetings this afternoon, I found out. Mr. BLANDFORD. I didn't know this. I set it up for this afternoon with the idea of finishing with Mr. Paul this afternoon. Perhaps we could do this at this point, if we could stay another 5 or 10 minutes ? so that Mr. Wilson could explore with Mr. Paul his views on retirement, and then we could have Mr. Gorham and Colonel Benade. Then when Secretary Paul finishes with ROTC he might come over for half an hour. Mr. STRATTON. I have some questions I would like to ask, too, before we adjourn. Mr. RIVERS. We will let everybody ask them. Mr. WinsoN. My explanation is going to be more with Blandford anyway. So I would say ? Mr. RIVERS. If you can win an argument with, Mr. Blandford, I will give you all the time you want and I will turn him over to you from now on. Now, Mr. Stratton. Mr. STRATTON. Mr. Chairman Mr. RIVERS. Who would your questions be directed to? Mr. STRATTON. I want to direct them either to Mr. Blandford or to the Secretary. Would it be fair to say, Mr. Secretary, that the reason why we are concerned about this retirement problem in the military is that, by and large, our retirement policies have reached the point where people retire a lot earlier in the military service than they do in the civil service, and that therefore the length of time that they are receiving retired pay is much greater, therefore the total expenditure to the Government is greater? Secretary Pur. That is certainly a large part of the problem and a large reason for the enormous cost of it, Mr. Stratton. Of course, in the officer ranks retirement is usually after a longer period of time. I believe the average is closer to 30 yours than 20. In the enlisted area it is more nearly 20. That certainly is a major factor. I don't think any of us should feel that we have found the all-time solution to the retirement problem. Mr. STRATTON. Well, I am just trying to solve in my own mind Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 :16M-RDP66B00403R000400280006-0 this basic question of what the justification is for going back, as the charm) has been made, on our original commitment to those in the military service. It would seem to me what you are proposing Imre, if I understand this correctly, is?I don't think anybody said it in exactly these words, but I think we ought to get it out?that we cannot hope to pay the active duty personnel the kind of income that they ought to get, make them comparable to people on the outside, if we also have to worry about the impact of these salary scales on the growing numbers of people in the retired pool. Now is that correct? Secretary PAUL. I think that is a correct statement. Our No. 1 task must be to manage the active duty force. For the reasons you have stated, this places an inhibition on that. Mr. STRATTON. Now I would like to try to explore the degree of this inhibition. In the first place your proposal, you are not suggesting that people be retired at a different rate of pay from what they receive on active duty? That is, you are not suggesting it be recomputed on the pay scales in 1948. This retirement pay is going to be computed on the pay scale that exists at the time that they retire; that is correct, is it not? Secretary PAUL. Yes, sir. Mr. STRATTON. Therefore the only reason it seems to me for de- parting from the kind of thing that Admiral Denfeld was talking about here the other day, is that you believe that the person in the military service who gets retired pay is going to be living so long that there will be a substantial differential between the changes in pay that would take place during that period of time for the active personnel, in an effort to try to keep their salaries comparable with civilian pursuits, and the wage scale that he retired on originally, plus the 5-percent differential. Now isn't that correct? Secretary PAUL. I think that is substantially correct. I would just like to add this: The degree to which we might wish to change the active duty scales differs quite substantially from year to year. Take, for example, the difference between the 1958 adjust- ments and the ones we are proposing now. We are now proposing greater pay raises in certain grades, significantly different from the pay raises that were passed by the Congress in 1958. What we are trying to do with the retired person is to stabilize and maintain his purchasing power. There are certain situations under Mr. STRATTON. But that relatively is a small consideration, isn't it? I mean the difference between whether you are trying to attract more lieutenants and captains now than the majors and colonels and so on. Isn't that in financial terms relatively small? Mr. GoRnAm. I would call it substantial, not small. For exam- ple, compare the pay raises you proposed for captains compared with the pay raise proposed for brigadier generals. I believe captains are getting an 18-percent increase. Is that right? That means that per- sons retired in the grade- of captain under recomputation would get an 18-percent increase. Persons retired in the brigadier general grade would get a 5-percent increase. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 200544421 : CIA-RDP66600403R000400280006-0 .1 think that is a substantial difference in changes in retirement pay. Mr. SlitArrox. That may well be. I ant trying to get in my own mind the amount of money that this really represents., because it seems in toe that this is basically the ar!runient. we have got to save .qmie money in here or else we won't be able to adjust our pay 'a ie in the. future. I ant trying to find out exactly how much this is likely to represent. Mr. 111,A:c1)1'-mut $87 million f Or I year. Secret a ry PAUL. :?;TS million. BLANoyoun. I have T. I tun tok that if we apply he Ilt.N1 scales to those now retired tind up to the effective daft. including the pre-195s, it would eost million. Mr. STuArrox. Well, it is not so much the saving per in this par- ticular year t hat you are concerned with. s it I mean that would seem to be a relatively small savitg, but it is over I I wc yea rs. Mr. BtAxorom). Vi ell. you have to project your cost. and that is what you are talking about, Mr. Stratton. and this is one of the big problems on military retirement. That even this $30 million, it is going to cost. us for recomputat ion, can be converted to e-..ent ual cost liii he Government of approximately S-Iftu million. In other Ivords, if you kid to establish a fund to gmfrautee just the recomputat ion ofI he pre-105S group. you would need a rout al $100 mil- lion or more to guarantee them the inciTaSCd rl'i irelllt-111 pay just on recomputat ion up to the vow, dal t. of his act. Secretary We estimate bet weer 400 and Gm) mill:on as living the. lifetime cost of tlw $30 million increase we are prof osing. this year for t hose people. Mr. lit,ANoman. Now if you take $7s or S..",s0 mitihhiout, w hateve- the digerence is., as opposed to the 30. that is 50 itml that is going to take you tip close if) a billion dollars just on this recomputat on alone if Volt project it into the future. It is utterly fantastic. What is going to happen, the Randall Committee is. and as sure as I ant sitting here, there are proposals going to come over here which are going to definitely affect retirement. Retirement is about I lie last vestige of a privilege that military people have that has really no counterpart other than in the FBI, any place. else in the country. In other words. this privilege of going out on 20 years. Mr. Rr),-Eas. The military and FBI are the only two groups that I know. Mr. Sra.v-rrox. I don't want to say I :tin sacred, I just read a book, called "Seven Days in May." in which they had a military revolt, because the military did not think they were getting paid enough. I think we have to worry about this, A.1-!'. Chairman. Mr. Rivr.as. We are worrying about this, Mr. STRATrox. That is off the record. Mr. RivEns. I think the Secretary tines have flon't we. have another little proposal that the Department has agreed to. raising the basic, pay in this bill? Mr. -11LANDFora). We have not gotten to that point yet, Mr. Chair- man. That is another point for discussion tomorrow. Mr. RTVERS. YeS. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 :1e-RDP661300403R000400280006-0 Mr. BLANDFORD. Which is going to take its back into the basic pay scales, but again until you decide what to do with retirement you cannot do much with basic pay scales, because everything you do with retirement affects future costs. Mr. Rivims. I think this is all we can if we can work out a way whereby we can?if we do need the Secretary, maybe get him tomorrow without disrupting Mr. Wbert's committee., (Discussion off the record.) Mr. BLANDronn. Ten o'clock tomorrow morning. Mr. RIVERS. Mr. Secretary, what we are going to do, we are going to have to work together on. this. We are going to keep you well in- formed as to how we are going and work with you on it as we have been doing, because I think we are getting along very well and I cer- tainly want to compliment you on your demeanor and your cooperation. Your cooperation has been excellent. We appreciate it very Bauch. Secretary PAUL. Thank you very much. Mr. RIVERS. Thank you very much. Let us recess until 10 o'clock tomorrow and we will meet tomorrow down here in room 301. ( Whereupon, at 12 :1.5 p.m., the committee adjourned, to reconvene at 10 a.m., Wednesday, March 6, 1963.) HOUSE OF REPRESENTATIVES, COMMITTEE ON ARMED SERVICES SUBCOMMITTEE No. 1, W asking ton, D .0Wednesday, March 6,1963. The subcommittee met, pursuant to adjournment, at 10 a.m., in room 304, Cannon Office Building, Washington, D.C., lion. L. Mendel Rivers (chairman of the subcommittee) presiding. Mr. RIVERS. Let the subcommittee come to order. We will continue our executive session on H.R. 3006 for the purpose of considering the bill section by section. Now, Mr. Blandford. Mr. BLANDFORD. Mr. Chairman, I would like to raise some technical points on the retirement section for the guidance of the GAO in the future. I would like to question Colonel lona& Mr. MATERs. We will continue our consideration of retired and re- tamer pay. Mr. BLANDFORD. Yes, sir; it starts on page 11. Mr. RIVERS. Where is Colonel Benade Mr. BLANDFORD. There is no doubt in your mind, Colonel, that the pay recomputation provided here as well as the 5-percent increase, as well as future cost-of-living increases, will be applicable to those re- tired under title 3 of Public taw 810? Colonel BENADE. No, sir; there is not. Mr. BLANDFORD. On the cumulative increase in the cost of living, when it goes to 3 percent or more, is it the intent of the Department of Defense, and is it the intent of this bill if it is enacted into law, that if the cost of living goes up 2.9 percent one year and drops:back five- tenths of 1 percent in the next year, and the following year goes up, say, 1 percent, that when the cumulative effect of the increase and the Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 I 658 decrease and the increase goes up to 3 percent or niece, it would bring about an increase in retirement pay? Colonel BENADE. That is correct. Mr. BIANDrortn. There is no doubt then that this is cumulative in its application ? Colonel 1.3ExAnE. That is correct. Mr. El VERS. Now this takes care of what, a calendar year? Mr. BLANniolio. it will be considered on the first of ea,!It January, as to the effect during the previous calendar year. Colonel IIEN.kor.. II is the average for the calendar year. Mr. BLAxDroRD. Now we have sonic minor problems liere in con- nection with some individual cases. Fo]. example, we have a situation where an officer was formerly the chief of his service. Then he re- verted back, he didn't revert back in grade, as such, because he retained four stars. say, but took another job which was not the ,21ilef of his service. Wo also have the case of an officer who was the chief of his service. who was then ordered back to act ive duty in his highest grade but not in his highest pay grade. Because lie served at a previous time as the chief of his service is it the intent ion of this bill that these individ- uals will receive, on recomput at on, the pay of the highest grade and I lie highest office they occupied while serving in that grin Ic? Colonel BEN.knE. it is so intended, Mr. Blandford. If necessary. we would like to try to clarify, working with the committee later, to insure that. result. But certainly, it is the intent of this nroposed legislation that for- mer hie Is of Service, assuming enactment of t his proposal by the Congress, would recompute on the special rate of pay provided for Chiefs of Staff, Chief of Naval Opera( ions, and Commandant o the Marine Corps. Mr. BLANDFORD. To translate this into an actual situation, then what von are saving is that. it is your intent, and the bill w as intended to be drafted so that these .former .Chiefs of Service wolld be able, who were. ret ired prior to ,Tune I.195S, would be able to compute their retirement pay under the SIS75 per month basic pay figure? Colonel BENADE. That is correct. BLANDFORD. No doubt of that in your mind? Colonel BENADE. No, sir. Mr. BATES. Mr. Chairman, how about other promotions that people obtained, spot promotions because of ability, and promotions other than that of Chief of Staff? Mr. RI-VERS. Chief of bureau and so fort ii? Mr. BATEs. Yes. how about them ? What is the dillerence bet ween individuals who ini&it have been Chiefs or Staff and others who night have held permanent positions but, ret ired in lower rank Mr. BEANTwortn. I don't believe, we have a problem in hat an'a It my knowledge. The only problent we 'lave is that there is an 0-10 grade and then there is a special par for the Chief of Staff. They don't go above the ()- 10 grade. 0 -10 is the highest grade we _have in the pay scales. But there is a special pay for the ClUef of Staff This is what. creates the problem. We do not have a compa?able problem in any other grade. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 1659 Mr. BATES. I am talking moneywise. Mr. BLANDFORD. I am talking about. money, also. In other words, the present pay of an 0-10, and this is the point that I make, is $1,700 a month. Now on a straight Mr. BATES. That is everything? MT. BLANDFORD. Basic pay, $1,700 a month. Now on a straight recomputation, without being clear as to our intent, I am of the opinion that this bill, as written might bring about a result whereby these former Chiefs would only be able to recompute their retirement pay under the $1,700 basic pay scale rather than the $1,875 per month basic pay scale. Now since these people did serve as chiefs of their service, and since we are permitting recomputation in the highest grade satisfactorily served, I questioned the Defense witness with the intention of bring- ing out the point as to whether they intended this to apply to the highest pay grade that they received, or the highest pay of the office that they occupied, even though at a later date they continued to serve in their grade, but not in the highest pay attached to that grade while they were the chief of the service. Mr. RIVERS. So you are sure then, in response to Mr. Bates' inquiry, the only place where there would be any doubt, before having obtained assurance from the Department, was the chiefs of the service? Mr. BLANDFORD. I would say that the only other possible situation, and I can only visualize this; as an example, would be the Judge Advocate General of the Navy. I believe the law says that while serv- ing as a Judge Advocate in the Navy he will draw the maximum pay of the upper half. Colonel BENADE. That is correct. Mr. BLANDFORD. This is a statutory provision but it has not been construed as an entitlement to retirement with maximum pay. In other words, I don't believe that the law over contemplated that a former Judge Advocate General could draw 75 percent retired pay based upon 20 years of service merely because he drew the maximum pay of the Judge Advocate General while serving in that office. No one ever contemplated that to my knowledge. Is that correct? Colonel BENADE. That is correct. Mr. RBTERs. President Eisenhower made his personal physician the Surgeon General of the Army with three stars and all the rest of them have two. I don't know whether he had reverted. Colonel I3ENADE. General Heaton is still on active duty. When Gen- eral Heaton retires his retired pay would be computed on the basic pay of the 0-0 pay grade; that is, of a 1 ietitenant general. There is no problem in this respect. Mr. RIVERS. I see. Mr. BLANDFORD. Mr. Chairman, there is another problem which we must settle. These are little things but these are the things that cause difficulties unless they are spelled out and we understand our intent. Mr. RIVERS. And when you want a decision, you get the intent of the Congress. Mr. BLANDFORD. The intent of the committee and the intent of Con- gress to show that this matter was considered. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 1660 Now there is another problem. You know that. in past Congresses. we have passed laws which provided that certain generals who served iLI positions of extreme importance during World War II are entitled Iii full pay and allowances even though they are retired in one sense of lie word in that they are no longer active in the Armed Forces, bu! considered to be on act iv('. duly. There are Admiral Nimitz, General Bradley, General NlacArt low, General Arnold, Admirals Halsey. King, and Leahy, General Eisenhowe General VantleroTift, Admiral Sprum ice. There NVE'll` cell Sill laws flint gave Illese people full pay and allowances. Mr. Ms-Ells. They never yet ired. Mr. BLAxorouti. Well. they could. They had the privilege of retir- ing-hut still continue to draW full pay and allowances. Now, the 195S pay law stated that these people would eon! inue to draw the pay and allowances they were then receiving itnd would not In' Nit Ii led 10 any increase. mioht add that that has been construed so that. Admiral Nimitz, lltie all PX:11111u1V, did not receive an increa.,e ill his quarters allowance last. year when we increased Illy quarters allowances because we froze these people who performed such dist inguished service to the Nation daring World War 11. we froze I hose people at t heir pay and allow- ances I luoti they xvere get Ii hg on 3,1a V 31. I tr,S. Now, frankly. I do not know what this hill does to them, because I do not know what sections ti and 7 of the 1958 Pay Act does. I do not know, and I confess iny ignorance, but I think there are others who are as equally ignorant on this subject, 1 do not know whether Sections t; and 7 of the 195S Pay Art would continue to apply to these people, which froze them. Or whether they would qualify for the full pay and allowances provided in this bill. I just don't know. I would like some enlightenment. Mr. GAVIN.. How are you going to find it mu! Mr. BLANnrotto. I have a witness I am about to ask right now. Mr. CAVINS. I think it is quite an injustice that they are not paid at the 1958 rale. There is quite a manlier of those. Mr. Iii.axorono. About six of them I believe, live or six. We are I alking about a different category. We are talking about special peo- ple. We are talking about .Admiral Nimitz, we are talking about ;-eneral MacArthur, ahont tieneral Bradley, we are talking about Mr. litylats. Eisenhower. Mr. lir.ANnroan. General Eisenhower made his election. Ittvras. Ile retired. Mr. linAxoroan. No: we rest ored his gratit., hut I believe he is draw- ing the $25,000 as a former President. .11r. ltivEas. Colonel, what can von tell us about that.? Colonel BENADE. We are speaking ahout six admirals and general officers and they are divided into I wo rat egori es. The first category is General of the Army MacArthur, General of the Army Omar N. Bradley and Fleet Admiral Nimitz. rnder special laws which Congress passed in 1916 with respect to MacArthur, Bradley, and Nimitz, it. WitS provided that, they would receive I hereafter the pay and allowances of a major general phis a S5,000 money allowance per annum. The pay of those three officers today is :+;1,711.95 a mon t Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 11. _06 Approved For Release 2005/04/21 : GIA-RDP66B00403R000400280006-0 The other three officers are Admiral Spruance, General Vandergrift? and General Spaatz. They are receiving the pay and allowances of a four-star general based on the 1955 pay scale, and their monthly re- tired pay is $1,678.61 a month. On an annual basis there is only a $400 difference between the retired pay of Admiral Spruance, General Vandergrift, and General Spaatz compared to General MacArthur, General Bradley, and Fleet Ad- miral Nimitz. The question that Mr. Blandford raises is a very real one. I be- lieve that if it is the desire of the Congress to increase the present rates of pay of these officers, a specific provision to that effect should be put into the bill. Mr. RIVERS. Otherwise they will not be included. Colonel BENADE. I would think that they might not be, Mr. Rivers, Even if they are, if language is put into the bill, it would do no harm and would certainly make clear the desire of the Congress. If, on the other hand, it is intended that these flag and general officers continue to receive the same rate of pay they are now receiving, then I also believe that some specific reference should be made in the legislation. Mr. BLANDFORD. Colonel, aren't we making a mistake calling this retired pay? Colonel BENADE. In the case of the five-star people, Generals Mac- Arthur and Bradley and Fleet Admiral Nimitz, it would be, because they are not retired, they are considered to be on duty at all times, Mr. WILSON. How about General Eisenhower, is he included in that? Colonel BENADE. No, sir. General Eisenhower, as I recall Mr. BLANDFORD. lie is on active duty and he has had his rank re- stored to him, lie receives the $25,000 that we give to former Presi- dents. Mr. RIVERS. But he has the emoluments. Mr. BLANDFORD. He has aides. Mr. RIVERS. He is entitled to commissaries and hospitalization. Mr. GUBSER. If there is a bed available. Mr. WILSON. I would think he would be included in this group and have a choice as he has had in the past. ME. BLANDFORD. This is an extremely complex problem, and I be- lieve, if I am not mistaken, I may be wrong but I believe the Senate put sections 6 and 7 in this bill. Mr. HARDY. Let's see what we are talking about, because actually it seem.s to me it would be rather important for us to know whether the language now in the bill affects those two sections or not. Mr. BLANDFORD. Section 7, and this is the one we are really talking about at this point, says "Notwithstanding any other provision of law"?this is the 1958 Pay Act? "Notwithstanding any provision of law, each officer entitled to pay and allowances under any of the following provisions of law shall continue to receive the pay and allowances to which he was entitled on the day before the effective date of this Act." The Act of March 23, 1946, which was referred to, "the Act of June 26, 1948," which I think was Admiral Spruance and General Vanderurift, and "the Act of September 18, 1950; which was a private law for GeneralBradley. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/0119i4 : CIA-RDP66600403R000400280006-0 Now, in other words, we froze these people who are affected by these. three laws to the pay and allowances they were receiving on May 31, 1958. They did not receive an increase in 1958 because they were drawing full pay and allowances, not retired pay but full ply and allowances. Now, of course, if we provide them with full pay and allowances in this bill, the increase will be quite substantial per individual, be- cause they will go from the old pay of, I think it was $1,500 a month up to $1,975 it month. They also will be entitled Colonel BEXADE. $1,875. Mr. Bi,Axoroan. Yes, excuse mile, Then they will also be entitled to $201 tis a quarters allowance. as opposed to the $171 they are now receiving. Mr. lilyElls. The Congress has already recognized these men as something extra special, so we needn't worry about this. Theee men are extraordinarily regarded by the Congress already. So if we decide to do it, it. won't be- Mr. HARDY. I think we. need to know what we are doing. Mr. Mynas. Right. Mr. TIMMY. Also. I think one of the things we had Letter keep in mind, if General Eisenhower is drawing--has elected to draw his Presidential retirement rather than his military pay, however it was set up, whether it was retirement or active duty pay, and if we get this thing out of kilter, then we are going to have to give him a reelection. Mr. BExxorr. It :-.,eeitus to me this whole thing is being made a lot more out of than we ought. to, because I think everybody here would like to give them the 5 percent.. Why don't, we draw up a provision including General Eisenhower giving them 5 percent ? Mr. BLANDFORD. It is a lot more I han 5 percent. Mr. BENNE1T. It is a lot more than 5 percent we are giving retirees. Mr. BLANDFORD. Yes, sir. Mr. BExxErr. I am not talking about the 1-1 percent, I am talking about the 5 percent. Mr. BLANDFOIW. What we are talking about is if we let the people draw full pay and allowances you could see that they would draw approximately $29,000 a year. Isn't that correct? Colonel BEN-ADE. Yes, sir. BLANDFORD. They are now drawing, I would guess, around $.9.,2,000. I am not sure of my exact figures because of the. personal money allowance. Colonel BExADE. The pay and allowances presently being received by MacArthur, Bradley, and Nimitz, is $20,543.30 a year. Mr. liENNETf. They are all getting a certain amount of money at the present time. We are planning on giving retirees a certain per- centage cost. of living. Why not, just apply that cost-of-living rise to what. they are now getting? That is as simple as pie. Mr. BATEs. If that is what you want. Mr. BLANDrotat. If that. is what I lie SUbC0111111hilee prOpOSeS. Mr. Ricrns. I have always construed these people. to be on active duty, not ret i red. They are separate mid distinct Mr. BExxErr. This does not put them in the category of retired. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 : aMRDP661300403R000400280006-0 Mr. BATES. It puts them in the category of those people. They are not retired, they are separate and distinct. Mr. BLANDFORD. To narrow the issue down, what Mr. Bennett pro- poses is a 5-percent increase in their active duty pay. What Mr. Bates proposes is that they be given the full pay and allowances of officers of their grade under the pay scales that went into effect in 1958. The difference is a thousand dollars a year, roughly, as opposed to $10,000 a year. You are dealing with about $9,000 difference for these people. Mr. BATES. Before the last act, what has been the historical situa- tion? I always thought they always got the active duty pay. Mr. BLANDFORD. We passed special laws for these people and my opinion is that some would then immediately be able to recompute?if we don't put anything in the bill, you could construe this to mean that they will draw the pay and allowances that we put into effect now. Mr. RIVERS. That is right. Mr. BLANDFORD. In other words, they could even go up to $31,000. Mr. BATES. I thought that always was the case. Mr. BLANDFORD. It was. Then along came section 7, and this is where I asked for guidance. Colonel I3ENADE. I am not quite sure that that would follow. In the case of the five-star officers, Congress provided specifically that their pay and allowances would be that of a major general, and a money allowance of 85,000 a year. I am not sure that in the absence of any language in the bill they would automatically be recomputed on the rate provided for a former Chief of Staff. I think what would happen is that their basic pay would be com- puted on the basic pay of a major general on the rates provided in the 1958 Pay Act. Mr. BLANDFORD. That is quite possible. That would then give them, a major general, they would go from $19,186.56 to $20,377.20 a year, plus -$4,000 special money allowance, if I am not mistaken. They do get a special money allowance of $4,000. Colonel. BENADE. $5,000. Mr. BLANDFORD. Then they would go from what Colonel Benade has told you is approximately $20,500 to $25,500 under Colonel Be- nade's interpretation. Mr. HARDY. I should think that would be a pretty substantial raise. Mr. IIUDDLESTON. I don't see how we can possibly pay anybody more than we pay the former Presidents. Mr. BENNETT. Has there been any kick about the way they have been paid in the past? Mr. BLANDFORD. There was some objection in the Senate in 1958. Mr. BENNETT. I am. talking about from the men. They haven't raised a point about it? Mr. RIVERS. They were very picayunish, I think, in not giving Admiral Nimitz the increase in quarters allowance. Mr. BLANDFORD. May I make a suggestion, Mr. Chairman? I have raised the question because there are two categories of officers involved. Mr. RIVERS. Before you raise it, let me ask this question : Did we not (rive these people a special tax consideration also? BLANDFORD. Only on the personal money allowance. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04a1 : CIA-RDP66600403R000400280006-0 I would like to suggest as a rompromise bet weett the posit ion stated by Me. Bt?nnett and the position stated by Mr. Bates, that the posi- tion suggested by Mr. Hardy or perhaps it was Mr. I luddleston, might be the answer to this. that what we do is give these people the -full pity and allowances that are now Ut effect for a major general on aetive duty, plus continue the personal money allowance that was given to them by the special acts of Congress. In effect, we are splitting the difference. Instead of going ap to $30,000 or st ayinp. at S?20.000, they Vill go to $25,(FOD a ytar, approxi- ntately. Mr. Rivinis. Let them recompute under the two-st at genera. Mr. 111,ANDFoitn. Not recompute. We would have TO 11111- a. special provision in here to let them apply their pay, and we enti work this out Mr. Iliaints. It would be computed on the two-star rank. Mr. BI?kNoriato. Yes, under existing pay scales. Mr. HARDY. So that we don't create an a wkward sort of situation, let us understand : Under present law. as it now stands, there isn't anybody else who would retire, reach ret irement age and continue tech- nically on active duty because there is no special legislation provided? Mr. MA NI-WORD. Not unless we pass it. Mr. HAany. So if a Chief of Staff retired now, what would his retirement he? He would retire on a retirement rat e Mr. BLANDroito. 75 percent of $1,75 a month. Mr. RIVERS. Tie gets a four-star rate now. Mr. Hata?-. But he has a higher active duty pay, but his retirement would still put him below, considerably below the retirement-- Mr. Ilt?vsoroun. Yes. Mr. Timmy (continuing). That these special people are receiving. We want to leave them in a special category. Mr. Il'avEas. That is exactly right. Mr. HARDY. But I don't think we ought to go head over heels. Mr. Rims. If you leave it as it has been historically, what would the figures be ? Mr. MANDFORD. I think Colonel Benade summarized this. His- torically ii would take it to $25,000. :qr. I Imam% On the basis of a major general? Mr. MANDFORD. Yes. You see, a major general does not get a money allowanee Mr. II:linty. That is only because. he is considered to be on active duty. Mr. BLANDFoan. Yes. but he is considered to be on active duty as a live-star, drawing the pay of he two-star with the personal money a !Iowa nce of live-star. Mr. RIVERS. Because in those days you had DO four-star pay or three-star. Mr. 13r,:\ NnFoRn. That is exactly right. Mr. GAVIN. Outside of this group here, he next group of g(-neral officers, are they going to he upped to the 1058 rates? MI. I IL,ANrwouin. -Yes. Mr. GAVIN. That have been frozen before and are not pnrticipating Mr. BLANDFORD. YPS, sir, everybody who is paid retiremen: pay Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21d61IA-RDP661300403R000400280006-0 under the 'Career Compensation Act will recompute under existing pay scales. Mr. RIVERS. For the length of service and not disability ? Mr. BLANDFORD. No, eyed.] the disability people will recompute-, be- cause they were retired under the Career Compensation Act. The only people who will not recompute are the 411 people who have.. already gotten a break for many years. Mr. WILSON. Are we going to get into the discussion of the pro- posed change from the traditional concept of computing retired pay? Mr. RIVERS. The whole business. You can be in on any part you want. Mr. WiLsoN. I don't mean in the debate, I mean right now. Mr. RIVERS. We have got to get these details first. Colonel BENADE. Mr. Chairman, may I raise one more point that I think might not be too clear? I think we have to be careful to remember that we have been talk- ing about Generals of the Army MacArthur, Bradley, and Fleet Ad- miral Nimitz. I think it would be helpful to clarify the intent on Admiral Spruance, General Vandergrift, and General Spaatz, because their pay is based on the pay and allowances of a four-star general on the 1955 scale. Mr. BLANDFORD. Give us the totals and perhaps we can come up with an answer. Colonel BENADE. The monthly retired pay of the last three officers, Spruance, Vandergrift, and Spaatz, today is $1,678 a month. On an annual basis, that is $20,143.36. There is precisely a $400 a year dif- ference at present in the retired pay of the last three officers I have named compared to General MacArthur, General Bradley, and Admiral Nimitz. Mr. HARDY. This includes all their money allowance, too? Colonel BENADE. Yes, sir. Mr. RIVERS. This is for the chiefs of the services? Colonel BENADE. Each of these officers, sir?Spruance, Vander- grift, and Spaatz?were provided for under special acts of Con- gress. The rate of retired pay that they are receiving does not relate to the pay of a chief of service. It is fixed by the special act of Congress. Mr. BLANDFORD. Do they draw retired pay and a personal money allowance; is that the idea? Colonel BENADE. Yes, Mr. Blandford. They draw the pay and allowances of the 0-10 on the 1955 scale. The only thing that puts General MacArthur, General Bradley, and Fleet Admiral Nimitz slightly above Spruance, Vandergrift, and Spaatz is the larger money allowance provided. Mr. BLANDFORD. Supposing we let these people recompute their retirement pay, not active duty pay, their retirement pay, under the 1958 pay scales of a four-star, not the chief of service but a four-star, and then kept their allowances as they are now, where would that put them? Colonel BENADE. Well, that would mean that their basic pay would increase from $1,276.40 a month to the basic scale of the four-star, $1,700 a month. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/R: CIA-RDP66600403R000400280006-0 Mr. WILSON. Tins is the basic scale ? Colonel BENADE. That would be approximately $1?24 a month more, or in terms or annual, it would increase their retired p 1 by !,lightlY in excess of $5,000. Mr. 13tANnFortn. We would be in a strange sit naticn if we gave these people a bigger increase than we gave to the oth?rs. Mr. WILSON-. On the other hand, you would be in a strange situa- tion if you didn't allow them to recompute; if you allowed others to recom put e. Mr. BLAND-roan. Yes. The $1,067 was based upon what ? What was that 5 percent of ? Colonel BENADE. It is not 75 percent of anything, Mr. Blandford. Mr. BLANDFORD. You said it was retired pay. Colonel BENADE. The special law said that they watld receive the pay and allowances of a four-star general. Mr. I-TARDY. The.y are not getting retired pay, then? Colonel BlixADE. The 1 pa.y scale for the 0 lo was $1.,270 month. They receive drat full amount. They do not receive thrce- quarters of $1.27t; ; they receive the full basic pay. 'I bey revive a subsistence allowance of $17.ss. a quarters allowanee of $171. and vi nionev allowance of :;::2,..2Oo a year, vitirli in terms of per month. is $183.13. These items added t Duet her give a monthly pa.: of $1.67.,. Mr. TZ iyEas. And only $1.200 is t axable ? Colonel BENAnE. The basic pay is taxable, Mr. ThrEns. What about what is left of tire $2,200? Colonel BEx.?DE. That is not taxable. The $2.200 is a personal money allowance. Mr. WILSON. Are they drawn-17 existing active dur?.- pay ? Colonel BENADE. No, sir. On the 1955 pay scale. Mr. Winsoy. T see. Colonel BEN-AnE. In 1955 the basic pay of a four-si or officer was $1,276.40 a month. Today the basic pay of a four-sr ir t hiker h $1,700 a month. Mr. Wri,so-N. In the four-star category, what if we brougit them Ill) into the retired status of existing pay scales and then added those allowances, would this change it dear out of the ball pail; ? Colonel BEN-Anr.. Tt would !Jive them more. The in :hat pertained to Generals MacArthur, Bradley, and Admiral Nintitz said that they would receive the pay of a two-star general plus the $5,000 money allowance. But the law pertaining to Spruance, Vaadergrft and Spitatz gave them the basic pay of a four-st am. Mr. Wn.sox. Maybe it is just time to eliminate the money allow- ance, because if they got the other prerogatives in addition to he full retirement of a four-star based on existing pay, it would set them above any other existing retirement pay and would no reduco them. if T have computed properly in my mind, give them a dight increase and vet would eliminate the special category of just Ha money allow- ance. Mr. Bo:I.:Rs. They wouldn't want that because tire is a taI situa- tion. What would a two-star now--if we gave t hem the. t wo-star under the IIMS and then give them all these emoluments, how much would that be? Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/216:6FIA-RDP661300403R000400280006-0 MT. BLANDFORD. There would be $2,800 difference. Mr. WILSON. Compute it, compute what they would get in addi- tion to what the four-star admirals or officers that you mentioned would get. Now they are going to get 75 percent of the Colonel BENADE. No, sir, it is not 75 percent. Mr. RIVERS. What is the full pay of a two-star now? Colonel BENADE. The rate of a two-star officer right now, sir, is MT. BLANDFORD. $1,350. Colonel BENADE. That is right, $1,350. Mr. WILSON. This is what four-star retirees are getting? Colonel BENADE. No, sir, none of them are getting that particular amount. . . Mr. WILSON. What are they getting.? How is it based? MT. I3LANDFORD. They are gating the 1955 pay scale. That was an interesting situation, because we did not create a three- star grade in 1955, if you. will remember. We gave them $100 a month extra if they were lieutenant generals, and $200 a month -extra, if they wore four-stars, and tins got us into real problems when it came to computing this on retirement pay. So in 1958 when we said that you couldn't recompute we did permit those people previously retired to count their $100 and their $200 in computing their retirement pay., Mr. WILSON. But in order to remove the complications and .this is an opportunity for us to do so---let's bring them up to date as. you would any other officer of this rank, which will give them a substantial increase, and then in addition let's give the 'Tfive-star officers other emoluments that will again put them ahead of the four-star former chiefs, and this would give each one an increase, and you eliminate all this monkey business about $100 or $200. Mr. GAVIN. 'Why don't Mr. Blandford and the colonel get together and reach some decision and make a recommendation to the com- mittee? We all have different ideas. Coordinate the ideas and bring in something that we can understand. Mr. HARDY. Let me throw this one out, Mr. Chairman. If we are agreed with respect to the five-stars that we should con- tinue them as their special laws provide on the active duty pay of a major general, and if I understan.d correctly, at present the only dif- ference between their pay and the pay of these other three officers is $400, which is due to a money allowance, and the basic pay essen- tially at the present time?they must be awfully close together. Colonel BENADE. There is quite a difference in the rate of basic pay but it is compensated for by the larger money allowance. Mr. HARDY. Why wouldn't we be well advised to put them all on this major general basis, which is the basis on which the special law was passed for the five-stars, and make some difference in the money allowance for these three as compared to the others? Mr. RIVERS. Now we are on the right track. They will still have these generals of the army preferential to the others. Mr. BLANDFORD. You will have $2,800 a year between the four- stars and five-stars if we do what Mr. Hardy suggests, if that is satisfactory. Mr. BATES. How much of an increase are they getting now? Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 1668 Mr. BLANDroan. This will be an inerease to them, if we work it, out this way, the five-stars would get. roughly $24,000 and t le other four- stars would get about $21,000. Colonel 11E,NADE. I think that is very close. Mr. WILsox. Before we vote on it, rather than saying "about," I think Mr. ; a vin is right. Mr. II.kany. I buy that, I think we ought to settle on the principle. Mr. WinsoN. Let's see the. figures before we settle. Mr. liniNnFoao. The figures are $25,000, because the cnly difference is the personal money allowance, the difference betwem $5,000 and $2,200, t hat is the difference, $2,800. Mr. RE% Elts. All right. Tomorrow morning you in .d the. colonel bring in the specific and accurate figures and we will pass on them then. Mr. Wirsox. I would appreciate his projecting Ha suggestion I made about bringing them all up to the 1955 act. and bringing them up to a modern computation, and bearing in mind that the, five-stars would be entitled to more than the four -stars and the four-stars that we spoke. of, and I he. three, would be entitled to more than a regular retired four-star. Mr. IIAaoy. I think we would be in an awfully awkar I position Mr. WILSON. Maybe we would. Mr. 'TARDY. Wait a minute. If we start adjusting five-star generals retired, who are in effect retired, to an active duty pay oft he five-star rate. Mr. GuesEn. Can't we relate this all to three-star? What would happen to this expense allowance difference that applies between these two groups of admirals and generals that you mentioned? Mr. BLANDFORD. $2,200 DS opposed to $5,000. Mr. Gunsmi. You would still have a differential. Mr. RIVERS. About $2,800, Mr. Gummi. What is this expense? This is recognition of their active duty status? Mr. BLANDroun. No, the personal money allowance is provided to the five stars on the theory that they have to entertain a great deal. Mr. GUBSER. It is a recognition of their active duty status? Mr. BLANDFORD. Yes. Mr. GunsEa. Also in retired pay? Mr. BLANDFORD. No, they have the privilege of retiring if they wish to retire. Mr. Rivras. What is the next question? Mr. BLANDFORD. AS far LIS I RIB concerned we. have settled what we mean on the question of computing retirement, on the cost-of-living increases, on the question of whether it. is cumulative and how it will be applied. Mr. Wir,soic. May I ask a question on that? I am sorry, I missed part of the session yesterday. Maybe you did cover it to your satis- faction. But I would like to ask a question based on the chairman's eirplana- tion of how these proposed changes in the Depart ment':_ bill would be, what would happen to, let's take, a colonel with over 3C years of serv- Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 :93.-RDP661300403R000400280006-0 ice who retired prior to 1958 under existing law. He would be brought up to the now existing pay scale-- Mr. RIVERS. Of 1958, and give him 5 percent. Mr. WILSON. And give him 5 percent? Mr. RIVERS. That is right. Mr. WILSON. Then what happens Mr. RVERS. To him in the future? Mr. WILSON. Walt a In.-mute. What happens to a colonel with 30 years of service who retires next spring? Mr. BLANDFORD. IIe. will draw 75 percent of $1,085 a month as op- posed to $985, so the difference is $75 a month. Mr. WILSON. So the colonel automatically?we are setting two classes of colonels? Mr. BLANDFORD. Certainly. Mr. WILSON. I just want it clearly understood. Mr. BLANDFORD. No question. Mr. WILSON. Because this is the problem area that we have been living with. Mr. BLANDFORD. No question about it. Mr. RIVERS. Let me say this to you: The only difference is now we give them notice in 1958 we didn't. Mr. WitsoN. "*"e have given them plenty of notice, and this is going to make the problem even worse, I think. Let's project into the next pay scale and we give again the colonels 9-percent pay increase, you are giving them almost a 10-percent pay increase. You give them again a 9-percent pay increase and a colonel retires the next year, under that increase, within that 4-year period you are going to have three colonels with over 30 years of service who are re- tired' with three three different money amounts, and really a sub- stantial difference between them of $35, $40 a month. MT. BLANDFORD. Same thing you have in General Motors, Congress, civil service retirement, and every system in the country. Mr. WILSON-. I just wonder if the military is ready yet to accept this new system. I think we are taking half a bite instead of all the bite Mr. BLANDFORD. There is no question that you are departing from a concept. You are departing from a concept for many reasons, but the basic reason is that unless we do take action here, we are going to jeopardize the retirement system in the future and in my opinion, and perhaps no one else shares this opinion, so long as we have this retirement question in front of us, without solving it, we are going to keep the basic pay scales down. I think the committee has got to make up its mind whether it is going to worry about the active duty forces of the future or whether we are going to be concerned about the retired forces of the past. It is as simple as that. Granted, this is a, morale problem. I don't think there is any question about it, that you are creating a morale problem. Mr. RivEus. I don't agree we are making a precedent now. We made the precedent back in 1958, that is where we abruptly broke off. Mr. BLANDFORD. That is right. 85066-53?No. 6-18 Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/W1 : CIA-RDP66600403R000400280006-0 Er. Wn.sos. We couldn't live with it, because we are clinging Mr. NAN-Imam. Elforts are being made to correct t hat si nation Mr. WiLsoN. The efforts are g.oing to compound the sit nation. Mi. BLAN-oroan. But you have somet hing different tha has never been attempted before, this is the compelling part- ;thou:. it, to me. Vor the first time in our lives we say to these retired people We guarantee you a cost -of-living increase.- We guarantee t le pun lets- hug power or the dotiar. Now it (.01thi be, you could have this strange anomaly you could run into a situation, if Congress becomes very, very budget. conscious, it would be quite possible that a man who retired last vcar, and be- cause the cost of living goes up, would get an increase it Ilk retire- ment pay and a man who retires next year would draw less ret ired pay than the man who retied last year becao.:e he gets a coil -of-living increase, and there is no guarantee in Ins bill that the Congress 2 years front now will increase the pay of the man who ret res years from now. II. Ii ting.Es-mx. Or if future pay raises are. geared to the com tif - riving. then I he ret it-yes would draw the sante. Iii.xxnronD. 'flat is correct. But the. point is, and this is zig-ain a policy quest loll the su jcommittee has to decide_: We can always pass a pay lull that says we .;imply give you an increase in the cost of living. This is one approm h. TI is is a "We will keep you where you are concept . On the other hand, as the testimony has revealed here. rofessional groups have gone up 21 percent in their rakehome pay. wl ile die cost of living has gone up only I wive lit. What has happened is that the standard of living has g( lie up. So von write pay scales, as we are doing here, not only to met t a cos.:-Of- living increase, but also because the supply and demand to tuires that you raise. the take-home pay to meet the rising standard of living. Now there is a difference het wren the man during his working ears who attempts to bring home enough money to enjoy the better things and the man who retires and says "OK, his is what I am guaranteed, II will live at this standard and I am guaranteed I will be able to n,ain- Lain the standard of living I had on the day I retired." This is the difference bet ween applying the retired pay to whatever the pay scales may be in the future and guaranteeing the purchasing power of the dollar. There is no question that the philosophy 'here gets us ]nto a eorn- pletely different situation than a cost-of-living concept-. What J. tun saving is, that if you are not careful on this retirement question you may freeze all fut tire increases in basic pay to simple co cing increases and then we won't get the quality that we want, because ti man is not going to stick to an occupation where he is imply guaran- teed an increase in the cost of living. Mr. AViLsox. My point. is, I think we have made a co rtract with people who are ill the service today as to the type of retirement they could expert in the future. I would not be opposed to saying in the future that we are going to set this down for anybody whc comes into flip service, this is going to be the procedure under which retirement pay is computed. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 :1W-RDP66B00403R000400280006-0 MT. BLANDFORD. True. Mr. Wirsox. This is like trying to force integration rather than allowing a more gradual solution to the problem. Mr. HARDY. I think you should talk to the Chief Justice about that. Mr. WILSON. I don't want Russ to be known as the "Warren of the Armed Services Committee." This is the whole thing Mr. BLANDFORD. I didn't get that?"Warren of the Armed Serv- ices"? Mr. WiLsoN. That is all right. You are too young a man. Mr. BLANDFORD. Too young to die. Mr. WILSON. I think there must be, and I am trying to figure out how we might Mr. RIVERS. Are you at the point where you want to make a motion? Mr. WILSON. No, but I would like to get to the point where I could make a motion. I would like to know first of all?in order for us to know clearly, with our eyes irmen, what we are getting into in this matter?has any computation -3een made of what the cost would be, say at a period 5 years hence, or 10 years hence, over the proposed re- tirement cost? I mean specific figures where you projected them out. I know you have Mr. BLANDFORD. You mean how much is Congress going to increase pay? If you can tell me that I can project it. Mr. WiLsoN. You have to project it. How much less would it cost the Government in the long run. Mr. STRATTON. You had the figure yesterday, didn't you? Mr. BLANDFORD. Yes, on the present pay scales. Mr. STRATTON. IS that for 1 year? Mr. RIVERS. Mr. Wilson has the floor. Mr. BLANDFORD. I can take it up, Mr. Wilson, to 1972. Mr. WILSON. All right. What is the difference between the cost- of-living concept and the-- Mr. BLANDFORD. I don't know how much the cost of living is going to go up. Mr. WILSON. Then how can you say it is going to save us a lot of money? Mr. BLANDFORD. I know this, if we apply, and this is easy enough arithmetic; if we apply the proposed pay scales to those now retired that we would have to add $80 million to this bill. I know also that the $30 million recomputation that we have in this bill projected out into the lifetime of the people now retired will cost between $450 and $600 million. I know that if I double the $30 million to $60 million that that projects out to $900 million. So I would say, I am guessing, but I could say that the projected cost of what you are talking about for the group now retired would be over a billion dollars. Mr. WILSON. But the projected cost of just retirement pay plus a cost of living will be Mr. BLANDFORD. I don't know what the cost of living will be. I am projecting these pay scales. Mr. GORIIAIVI. Mr. Chairman, may I see if I can add some light to this? We did do some calculations, comparing the cost-of-living ap- proach with recomputation. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/RA121 : CIA-RDP66600403R000400280006-0 As Mr. Blandford said, you have to make assumption: about how active duty pay scales move, and each one of these computations, of course, were based on an aumpt ion about active (Jut, pay scale changes. Mr. WILSON. That is right, it is conjecture, but what is :Int" conjec- ture? Mr. Goairuir. I haven't got the ninnbers at hand. The cost differ- ence, between a cost-of-living concept and recomput at to I was com- puted in the course of our st udies. Mr. Rivrats. What exactly do you want e I think Mr. Wilson wants to know?see if 1 understand what you want. I think _lc wants to know what it would cost us if we put everybody, give everybody this election and bring them tilt- (hose who have retired?and bring them up to this pay scale, this pay scale. Is this right? Mr. Wihsox. No, no. I want to know the difference )etween the proposed change in philosophy of paying retired penile over the existing method of comput ing it on active duty pay for thi future. Mr. ItivEas. That is right, one is 1958 and one is this. Mr. Gokimm. I think I understand Mr. Wilson's quests n. We do I ave such a computation. Mr. Wihsox. Because the point I want to make-- Mr. IlivEas. I think we can .Lret that, one is 1958 anC one is the present. Mr. GAVIN. Will the gentleman yield ? Mr. Wihsox. No, just a moment first. I think Russ made a good point that retired costs are going to be way high and they are going to jeopardize the military and so forth, but they are gain.; to be way high anyway unless we just make a completely drastic el_ tinge in the method of comput tug retirement pay. Now if we are ready to face up to making a completely drastic change, then I think we ought to know it, because otherwise the dif- ference between the two systems isn't going to be as substantial as you have indicated. lii other words, it is going to be in the billion category but it is going to be in the billion category anyway just because of the numbers that. are (ming into the retired area. Mr. BlAxnroan. May I answer that? I can give you a very con- crete figure, a figure supplied to me. That is if we. applyt'le, proposed pay scales to those now retired, the ones we are allowing tc recompute, it will cost us $88 million more. Is that correct'? Mr. GoanAm. That is correct. Mr. STuAvro.N. That is for 1 year? Mr. 13h:11c1n'-ono. For fiscal 1961. Mr. GORHAM. Sixty-four. Mr. WILSON. Why then did General Eisenhower indicate in his budget in order to bring them back up to the pay, 3 years ago. add $lo million to the budget? Mr. GoanAm. I think it was an error. Mr. Bh.vxoroan. Tie must have meant 110 million. Mr. Wnsox. There have been that ninny more people ret red? Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 :101A-RDP661300403R000400280006-0 Mr. BLANDFORD. Yes. You see, you are adding 50,000 a year to the retired list. The figure was 30 million? Mr. WILSON. If it was 30 million before, why is it Mr. BLANDFORD. As a matter of fact, it was 32 million Mr. WILSON. Why is it 60 million now? Mr. BLANDFORD. It is not 60. Mr. GORHAM. It 15 not 60. Mr. BLANDFORD. Let me try to go through this again. I quite agree with you that this is the heart of the bill, and perhaps I haven't made myself clear. Now if we allow people to recompute, this cost 30 million. Now on top of this 30 million we give everybody and his brother a 5-percent increase. This is 55 million more. Mr. WILSON. But that doesn't. have anything to do with bringing those Mr. BLANDFORD. This is an indication of your cost of living. Yes, it does, because actually the benefit that these people are gettin, they are winning a battle, they are getting a recomputation which is worth to a retired admiral a couple of thousand dollars, and on top of that 5 percent. Mr. WILSON. They would get the 5 percent anyway? Mr. BLANDFORD. Yes. Let's assume we have a 5-percent increase in the cost of living every year from here on out. You can see that the-- Mr. BATES. We would all quit. Mr. BLANDFORD. It is going to cost you $55 million on the present retired list. So if you add 50,000 each year to the retired list, this is 'one-seventh, if it costs you $55 million for the 300,000 people now retired, and if you add a 5-percent cost of living every year for the next umpteen years and you increase it by 50,000 on the retired list every year for umpteen years as we are doing, you can see what happens to your 55 million on a straight 5 percent, it is 55 million and then 61, 68, compounding, this is additions to your retirement costs, and in a period of 10 years, if my calculations are anywhere reasonably correct, you are well over $700 million in a 10-year period. Is that roughly correct? Mr. WILSON. Don't. forget this, when we passed the 1958 act we gave those who retired prior to 1958 a 5-percent increase. Mr. BLANDFORD. 11,000 people on recomputation under this bill, won't recompute because the 6 percent we gave them is more than the recomputation. Mr. GAVIN. Under this bill, they will recompute? Mr. BLANDFonn. They would be crazy if they do, because they will get less retired pay. Mr. WILSON., Despite that and the relatively few people as you mentioned, the Eisenhower administration and Kennedy administra- tion both recognized they couldn't live with it, they came in and said don't do this, put these people aside, bring them up to the regular. What we are doing in this act. I want it clearly understood, what we are, doing is we are. setting up the pigeons again so that as soon as someone starts retiring in the, next pay bracket, that has gotten a 10-percent pay increase under this thing, we are creating this disparity that is going to result. in all sorts of name-calling and so forth. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/041241 : CIA-RDP66600403R000400280006-0 I would like- to throw this out. as a suggestion, the, only possible r,Irlution that we might see to this thing would be, and i:, is a drastic solution and it would be just as unpopular as what we aro doing right now, but at least it would solve the thin!,,, would he to it 11 everybody that as of. l963 weave setting a basic retirement rate, at .d then for a colonel with over 30 years of service. he can see v. hat it is n the figure, and then Congress-, in the future, will raise al re iremert pay on a percent agewise eost of living and that everybody vkho retires in the future vill go back to the 1l63 rate phis the cost-of-Ii Mg increases uretirrilig over tie years. If it is fair for the retired people now it will he fair for the retired people :ro years from now. Alr. Bk.\ Ninlarn. Let's apply it to industry and civil sorvice. Let's say we are running- into a period ahead of u.s. where the cost-of-Living index has guile up :ind up. and ruzi top of that we haut professional increases of -21 percent. various iii creases -- Congress ma: increase its own pay--- witat .vmi are in effect saying is we should fret ze the -Amid- ard of living of all people on act k e duty as of the date they enter on active duty. "When you enter as second lieutenant, remember, your date was 30 yeal'S ago when you oame on active duly." Mr. Wu.sox. Plus. Aft% BEANDEono. Plus any cost of living. Mr. WiEsoN. If the cost-of-living things are fnr., t ten he can't complain. Mr. BoANDriaro No. In the meantime you sav to th s man, -The very fact hat we tried to raise the living standards doein't apply to .%-ori. because you are in a different cat( gory. yoil are a captive citizen, as a result we apply the pay scales of .10 years when you came oil active duty.' Now If you i'an !rut anybody to come on fletive (lat.\ where they dont get an increase in the standard of 11.611(r, you mi.zht get them I doubt it. Colonel PrExAnr.. Alav I add soniethimr. if I may Mr. EivEas. Let me ask you: Did you hear Mr. Blamlford in n- sponse to Ali% Wilson ? ( t il oimel BENADE. Yes. Air. 1 vEas. Is that a reasonable response ( 'oloneHirNADE. Yes, sir, it is. Mr. -WiEsox. I want it understood that I am not in rodueing an amendment, I am just Mr. llivEas. We are all thinking out loud. Colonel BEN-ADE. Yon are pointing out it is an al:ernative. wanted to (Indium that the alternative has occurred to natty people. aunt ?ve studied it exhaustively. I would point out in addition to the points Mr. Blanc ford niade- '- and I certainly concur in their validity?that there a also other I roblems with that. The standard of living to which Mr. Blandford refer red has been increasing at about 3 percent a year. The cost of living- ha.; been increasing at it rate of about 1 percent it year. Now in the future, we would hope by virtue of the nil mini .r?oview of military compensation that the Secretary of Defense has directed be done. that. future increases in the active duty ,!on pensat ton of Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 : COMDP661300403R000400280006-0 service members would be more frequent, and presumably much smaller in size and fiscal impact. We would also expect that active duty pay would increase at a slightly faster rate than retired pay. If retired members were placed on a separate pay scale, it would sever the relationship that now exists between the rate of active duty pay that a man is receiving while he is on active duty and his retired pay. It would drop him to a scale which denies him the gains he earned while he was on active duty. That was one of the main things that made us shy away from this alternative. Mr. WILSON. My purpose in suggesting this is to prove at least to my mind that this concept of adding the cost-of-living increase is not the solution to the problem, because it means a drastic change in your retirement provisions. Colonel BENADE. May I point out that the difference between the cost-of-living concept in this bill and your possibility is that the rate of retired pay of an individual continues to be geared to the rate of active duty pay he was receiving when he retired. Mr. GUBSER. Colonel, has there been a correlation between the rate of active duty pay and the increased productivity? Has that been related? Colonel BENADE. NO, Sir, 1 must Mr. GUBSER. Hasn't the active duty pay lagged considerably? Colonel BENADE. It has lagged considerably. Mr. GUBSER. Then your point is Colonel BENADE. We can't correct all the problems of the past. The Secretary of Defense has made very clear that he feels this has been one of the great problems in past adjustments of military pay. He proposes that in the future military compensation can be treated in the same way as the Civil Service, that is, by an all/Ina review of compen- sation. After determining that adjustments might be needed, he would go to the President with recommendations. MP. STRATTON. Mr. Chairman. Mr. RIVERS. Have you finished? Mr. WILSON. Yes. Mr. RIVERS. Have you finished? Mr. GUBSER. No, I haven't, I haven't started. Mr. RIVERS. Let me get over to this side. Mr. STRATTON. Colonel, if I understand your objective correctly, the objective of the Department would be to try to increase the active duty pay in keeping with the increased productivity? Colonel BENADE. Generally, yes, sir. Mr. STRATTON. Is this correct that the objective of the Department is to try to provide an increase in active duty pay that would be commensurate with the increase in productivity that occurs while the individual is on active duty? Colonel BENADE. Generally, yes, sir. Mr. STRATTON. Then when he is no longer on active duty and there- fore no longer contributing to the increase in productivity, he no longer can expect to get an increase based on productivity which other people are creating? Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/641?1 : CIA-RDP66600403R000400280006-0 Colonel BExAm. That is correct, sir. Mr. STa.vrroN. But if he goes Out and works for General Motors or General Electric! and increases their productivity, It( may get a factor based on the pay that lie gets from them Hitt will provide increased product ivity, is that trite! _Mr. STRATrox. Now may I ask Mr. Blandford : Isn't this, weren't. you saying here just a moment ago that all private pentdon systems operate on this basis, that once you have retired you don't get, any increase in pay ? Mr. BI.AxDo ran. If ii is a con tributory system. Som companie-; have a cost-of-living provision. I think the best analyse is wit Ii the civil service ret irement fund, and I spent a good deal of time p?ster- day going into that fund. But basically what civil service does, and this theory is on the same theory as civil service, except they operate on a 5-year average and all that sort of thing, but what they try to do is give people r )St-of-living increases in the annuities they are now receiving. One of the reasons is that the civil service fund is well oversub- scribed ; they have liberalized it, not based upon contributi ins, but that. is another problem. Mr. Stra.vrroN. Do you know of any private retirement arrange- ment that does what we have in the past been doing in the military ? Mr. BLAND-roam I don't know of any organization in the country that applies the. existing pay scales of its employees to those retired. would think that a company, any company that iced it, would be close to bankruptcy. Mr. Straverox. Isn't it t rue that most private retirement plans don't even include the cost-of-living factor? Mr. BrdixoFoan. I would say most of them do not. Cm Plainly none of the insurance companies, where there is an insurance zompany in- volved, and most of these are tied in with insurance annuities, they obviously don't have any cost-of-living increase. T believe there are some contracts, I believe in the last General Mo- tors contract, there was a provision for an increase in the anruities that people were receiving under the General Motors pension fund, -but T would say you are correct, even these are rare. Mr. -Wir.sox. Civil service, retirees depend entirely on Government action, don't they? BLANDFORD. Yes, sir. Mr. Wit.sox. For increases? Mn. BrANDeolin. And this, of course, raises the mate testing point that they are :i43ri billion in the bole for that very reason. The theory behind civil service retirement, as Colonel Benade said .vesterday, the Government agency contributes per( eta, and tile individual contributes 61.,?, pereent. That conies to 13. Bat actually the cost_ is about 13.8 percent.. Now the employees so far, since 11w system has ls?on in effect. have contributed about :;1() billion, the Government ha: contributed a little better than $S billion. Then the interest on 111.- bonds they have invested in is about $3 billion. But, if you look at their present liability. if you laid to pay off the, present value of I 1w annuities, not future entrants but people now workin, for the Government, they would neel alma $35 Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/2116RA-RDP66600403R000400280006-0 lion more to pay off this fund. They have got about $21 billion in the fund now. Each year they pay out so much. T just got the civil service report in here this morning. however,. trying to compare this, as we tried to do yesterday, I. find that there are so many imponderables to compare with it, that it is almost im- possible to come up with an intelligent comparison. But the Government. does give an aimuitant?for example, 1 be- lieve what they normally say is that we vil1 give you a .5-percent or 3-percent increase in your annuity, or $250 a year, whichever is greater. Now in many eases the $250 a year is considerably greater than the cost of living. Well, even those two factors hit the fund, because the contribution of the individual was never based upon the increased cost of living, so the Government makes up the difference. This is where your deficit keeps occurring, this is the reason why every year Congress has to appropriate money to the civil service retirement fund to kee.p liquid so far as the payments of this year are, con- cerned. But to me this problem. that we are faced with here is the only rea- sonable and fair solution to a problem that is going to become. ex- ceedingly grave in the years ahead. Mr. STRATTON. Let me ask another question here, if I may, either to Mr. Blandford or to the colonel. I would like to pose a hypothetical situation very much as Mr. Wilson did. There has been a lot of talk about, our going back on our c.ommitment with regard to basing retired pay on active duty pay. If we are concerned about, saving money, we could compute retired pay on a different percentage of active duty pay, could we not? And is there any commitment that retired pay has got to be 75 percent of active duty pay? Couldn't we reduce it to, say, 65 percent, or 55 percent without any charge of having broken faith Mr. BLANDFORD. Mr. Stratton, to start with, I think ever since the gold clause case before the Supreme Court, and this subcommittee, i.f you remember in the Rue ger case, went, into this question at great length of when a person has a contract with the Government. Actually, nobody serving on active duty ha.s a contract with the Gov- ernment.. You can take about an implied contract, and you can talk about good faith. You remember when they issued gold certificates back in the twen- ties and then the Government said, "We will not pay them off in gold," and some man said, "This says you will pay me in gold," and the Supreme Court said, "You, can't. bind the Government." Now you do have a Court of Claims. T think in the period between 1.958 and 1963, that if a. retired. individual thought that he had a con- tract with the Government, that case would have been tried and it would have gone to the Supreme Court. Well, it. is interesting to me that nobody has taken a case to the Court of Claims on. the theory that he had a contract with the. Government. Mr. Smerrox. What I am asking is has there been in the past his- tory more flexibility with. regard to the percentage on which you compute it than there has been with regard to this principle that Admiral Denfeld elaborated upon here before us the other day. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/014/2, : CIA-RDP66600403R000400280006-0 IIENAnt:. I think the reason or the 2 1 per-en- rather than smite possible lower percentage is the fact that first of II, it is Only applied to basic pay, as you know. Military retired pay as a perepnt age of !Yross pay. that is as a percentage of basic pay plus allowance for quarters, plus the allow- ance for subsist ence is sulist ant ia I v less. 111 fail. Mr. St ration, depending- on I he grade converied? the per- centage 1)1 11.1 irenwnt pay Nonpareil to gross pay is as w as 3,5 per- cent for some ...I-al les. Mr. ST1lATI-1,N. All I tct Say Ill!r IS I hal I f von had wanted to save money you eould conceivably have come ill with a rediction in the percent age 111(1 not have opened yourself to t his clutrp-e. Colonel IIENAnK. No. sir: it would not have been the s Mr. STRATrox. I am not saying it is the solution, I ant just SaViryr the big argument raised against this is that \IA' are breaking faith. I am suggesting if you had wanted to avoid that argument you could haVe COMP in With it 1/101)0.4411 that, Ill'ObablV W0111(1 not have been as satisfactory but- which would have eliminated ill,. basic arp-u- 'tient . Mr. liATEs. .1 ust doing it another way. MT. IlAtinv. Ion could have done that by increasing the ztllow tutees and making- adjustments for taxes and you would ha,-e c:itne u with the same t ;ikehome pay for t he individual. Mr. litvrtts. That is vhat they are interested in. Colonel HENAN,- One point I would like to add. 'Flit percent is also fixed with the t homdit in mind that the military s ret troment system is flue only one that forces a mat out at an age win it his ['tinily responsihilit its may still be very high. For example, the man in his late fort ies or early lift es who mav have ehildren in college. If we were to lower the percent of retirement income for the indi- vidual and at_ the same time force him off active. duty, his reduced standard of living could affect the retention feature of 11.c retirement system so that we would be creating a larger problem. Mr. STRATI-0N. I am not suggesting that we do this, any more than NIT. Wilson is arguing that you adopt his proposal. Colonel BF:NM-W. I appreciate that. I. tun just saving this has been considered and this is the reason why We fell it was not the thing to do. MT. El vrus. Mr. Gubser, did you want to be recognized? Mr. (ltnsr,a. U sure do. Mr. Ittviats. You are recognized. Mr. Gt-nsER. Mr. Chairman, I. just_ feel constrained to Eay this, that I think (hat we are saying in effect lucre, that we are rec3gnizing the financial impact of the increased numbers who will tethe in the not too distant future. We are recogizin a financialg si ntuation which, in effect, amount ; to assuming the cost of paying for past wars and the present, cold war, because that is why we are going to have so many r eoplo retire. Now this principle of recoMpiil at loll IS, ill Illy opinion. an implied agreement. certainly a strong understanding that we have had with everybody in the service now or has recently been in it. It is a cost of paying for recent wars and the present cola, war. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/211:69A-RDP661300403R000400280006-0 Now, the national debt., a great percentage of the national debt is the cost. of paying for past wars and paying for the cold war. We are going to raise the debt limit again within, the. next week or so, simply because this economy has to absorb a $56 billion defense budget. Now, a great part of the budget for each year is interest on the national debt and I think it would be just as immoral to say to bond- holders of the U.S. Government that you are going to repudiate the payment of interest on a debt which was contracted to pay for past wars and the present cold war as it is to go back on the word that we have given to these people in the military. Now I feel that anyone who is in the service now and who has committed himself to a career in .the service has a right to expect that the traditional. agreement shall continue and if we wish to get a new policy in effect, the thing to do is to place it in effect for those who are going to come into the service in the future. Now I adittit that won't solve our financial problem, but we seem to be able to absorb the national debt which is a lot more, and the interest on the national debt which is a lot more and which is paying for the cost of past wars and we still go into brandnew programs and extend the scope of activity of the Federal Government. -Why must we go against a traditional solemn agreement that we have already entered into ? Mr. Rums. Do you want an answer? Do you want me to answer you? Mr. Grimm.. This is a new thought. Go ahead. Mr. RIVERS. The only answer I have is that it is the facts of life. Mr. GUMMI. The national. debt is a fact of life but we are not going to repudiate it.. Mr. RIVERS. It, is a question of a whole loaf or half a loaf. Mr. GT:1[18ER. Then you might just as well say it will destroy the Federal Government, because we have a national debt that we have to pay. It is the same principle. Mr. HARoy. What are you going to do with this $108 billion budget that we have this year? If you want to do that, on the floor, you are going to have a lot of trouble cutting the budget in a lot of other areas. Mr. GunsER. This is another thought that has not coma up yet and I think I would like to ask th.e colonel this question: To my way of thinking we have a greater obligation to the man who retires at the end of 30 years' service than we do to the man who has only invested 20 years of his life and certainly the problem that is coming or that we have now and that is going to be accentuated in the future is caused because of early retirement. Is there a possibility or could we give some thought to allowing the 30-year retiree to. continue to recompute as he has in the past and then applying the provisions of this proposal to the 20-year retiree or someone less than 30? What would be the financial impact of that sort of a situation? Colonel BENADE. I could not say offhand, sir, what the financial impact would be. Obviously it would represent some lesser cost than total recomputation and some additional cost over the system that is being proposed. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/4 : CIA-RDP66600403R000400280006-0 AVIiile we have not done detailed st tidies on this p: rticular pus- sibility. the thought that some penalty should be at .ached to an individual who retires volunt aril); prior to :ID years Las been con- sidered. It came up in t he 19.'6 pay :rit ill the Stinat One of I he problems, sir, is t hat technically a voluntary ret irement is anybody who asks to be released, even 1 day helot e the man, hit my ret irement. What_ often happens is that smile members in I he military service who may have perhaps 14, I:), it; years of service. aiilot afford to leave at that point. On the other hand, t hey know that they are. not going to really get anywhere, so to speak. Many of these will serve the 'zit-Year minimum requirement and then ask for voluirtary retirement. So this is one catepor;,- to consider. Another group is the physical disability group. I assume, sir. that even though they might serve less than 30 years ti, ?3.- would not be discriminated trintinst. .Another problem has to do with those passed over f( r promot Now, they are required to stay on duty a certain leLgth of t into. Smite, once they have been passed over the first tittle. hitve a feeling hey are not going to make it the second I ime either. They may seek to find other employment. Technically they are all voluntary ret i cements. It is very difficult to reach a meeting of the minds as to who should be penalized and Wilt) shmild not be. That has been the problem so far. Mr. Guissiot. Let me say one t hing here. Colonel 13ExADE. 'Yes, sir. Mr. Graisun. I am sure you did not mean to say atm applying a cost-of-living increase for retirees in the future would te a_ nalty. !olonel BEN-ADE. No, sir I did not mean that. Mr. ( frusr.a. Colonel Benade, you are advocating thi t those with less than 30 years. regardless of the reason, and will except disability. go on the cost-of-living increase as proposN1 here? Colonel liENADE. That is right. Mr. tf toista. l'ou say that is not a penalt y you say t tat- is a good system'? Colonel BENADE. No, sir. I .et me clarify what 1 meant by "penalty." If von ret ire at 30 years of service, 21 percent t imes years of service gives 75 percent of basic pay. The proposal is sometimes made that for each month tl at you ret ire voluntarily prior to 30 years. you would take a pen thy of one- twelfth of 1 percent. This is equivalent to 1 percent a iear. Or, of course, you could use any other percentage 'Flint would mean less ret ired pay than on the straigh application of percent. That- is what I meant by a "penalty.' sir. Mr. I3t..kNorouo. May I add one other point to this. Mi. Gub-ior This committee. in its wisdom years ago pfissed wino is knnwn Is he "N ars,- hump" legislat ion. In tliat legislat ion we lore id peoi de out before they finished their 26 or 30 years of service. Tin re is another int erest tug provision NvIlich this commit! ye put in t he la w and -nat. is, all people who were involuntarily ref ired -under that 1 tw would be considered to have retired voluntarily. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 1 ,411 A-RDP661300403R000400280006-0 This would put you in a very strange situation to say to that man: The law forced you to retire involuntary, but you were retired volun- tarily, and you cannot draw an increase in retired pay because you were separated voluntarily under the law." Mr. GUBSER. One last question. C0101101 BENADE. Yes, sir. Mr. Gummi. If it is not a major project, I wonder if you can sup- ply me with the project differences in cost between a system as pro- posed in this bill for all persons retired and a system wherein only those with 30 years of service or more were allowed to recompute. Colonel BENADE. Yes, sir; I can. Mr. GUBSER. If that is a major project, I would not Colonel BENADE. No, it will not be. We will have to make certain assumptions. Mr. BLANDFORD. May I make a statement off the record before we go into a decision on this important subject? Mr. RIVERS. All right. (Discussion off the record.) Mr. BLANDFORD. This is on the record. This is important at this point. Right now the pay scales run $985 million if I remember my figure i - correctly. That s just for the pay, itself. Mr. BATES. $900 million. Mr. BLANDFORD. On a full-year basis it is $980 million. Mr. GAVIN. $980 million. Mr. BLANDFORD. Yes, sir. Depending On what you do with sub- sistence allowances, the proposal submitted by the Department -involved $120 million to give the. officers a. $77-a-month subsistence allownace, or a $29 increase. Now, there were other cost factors in here but the biggest saving was the saving of $133 million on the elimination of sea pay. Mr. GAVIN. Elimination of what? Mr. BLANDFORD. Sea and foreign duty pay?that was a big factor. 'Then there is a duty involving unusual hardship. If we agree to knock that out that is a $30 million saving. Let me go through this, this way: The basic pay scales as written would cost $980 million more. The subsistence allowance would cost .$120 million more. Then there are some other cost factors in here for 'uniform allowances, terminal leave payments, also there is. social security, because the Government has to contribute a part of that, reenlistment bonuses, a flock of other cost factors involved here, because when you change basic pay you change many other types of benefits. ? This came out to $1,090 million for full year of operation for the . active duty force. Now on top of that was the retired cost. The retirement cost came to $86 million for those already retired and $9 million more for those who will retire during fiscal year 1964, because they had to give you the full fiscal year cost. So your retirement feature alone was $96 million. This came up to $1.2 billion. Mr. WiLsoN. That is just the increase in retirement. What is your basic retirement cost? Mr. BLANDFORD. $1.08 billion, basic retirement. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/0M4 : CIA-RDP66600403R000400280006-0 Colonel BExAnE. In excess of Si billion. Mr. GANA ti. Actually, that is what we have got to present- to the Members of the House. Mr. BLANDFORD. TIIIS is going to depend on what you decide to do with subsistence for the officers, with sea pay, which we have not dis- cussed yet, and what you decide to do with respect to this proposed separation allowance. Mr. GAVIN'. Assume you take those out.. Mr. BLANDFORI.I. All right. Assume you knock the officers down from $29 to a $3 increase in subsistence and assume you keep sea and foreign duty pay, if you assume we don't give them hardship pay, your bill as I see i, will come out to I billion?well, it will be about $260 n MOM than the Department proposal which came to $1.2-12 billion. So you eould conw up with a bill that would come to *1.5 billion. Now permit me to say something. that may be overlooked. This is beyond doubt the largest single pay bill that Las even been submitted to the (.ongress. Tlw yr capita increase in the bill as sent over by the I )epart ment is $109 per man. We spent weeks in I95s on the Cordiner report and hie per mph a increase in there w1ts,...,;1,?_i2 per 110111. What I ant saving is I hat we are dealing with a very substantial amount of money here. We are dealing with $1. 1,-10 billion which is just about three times I he size a any pay bill that has e,-er been sent t o the Congress. Now of course a good portion of this increase in ccst is bocause we are increasing the obligated service man, the E-- I. I -2, and E--:I for the first line since I n2. and also the 0--1 and 0- 2. We did not do that before because I hose people were assumec. to be serving an obligated period of service and we felt they were drawinp- enoit!rli as it was. The pay panel felt t hat we hut kept these people frozen at the I pay scales long enough, that it was I ime to increase the pay -)1' the (A di gated service. M r. GAVIN. I a 0-1'N' wit lit hat. Mr. IILANDrottn. This ttecounts for a good deal of the money. Mr. Timmy. Could I raise a question or two? Mr. ItivEits. Yes. mr. I hinn-. I don't know, we have done a lot of discussin!, at d this is iii extremely important thing. It -s unw we are guii g to hive to make a decision on soon or we are going to In on this bill until next Christ was. I have a feeling (lint if we undertook to permit recontputat ion for I he people xvIto ret ired under time 1!!;;;-; act, that we were oily going half way and then bring the .") percent cost of living increas thing in on top of that. On the other hand, I have reached the posit ion. Mr. (lutirman, uI beim convinced thia if we don't follow t his proceduro we are not going to get a bill. I think that- there is merit to the contention that milit_ry personnel have had a right to eNpvct an inerease in retirement commensurate with basic pay. hoit It kink we have gotten to a point Mare_ we are not !ming to get anything- if we insist on coming, out with that tfpe of approach. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/041/ASCIA-RDP661300403R000400280006-0 Now, I don't know. don't want to suggest that we ignore any- body's thoughts or that we disregard any requests for information? and I have made about as many requests for information as anybody else, I reckon?but I do think that in the interest of trying to get through. with this thing that we had better make some adjustments in our own thinking and I for one am ready to accept this thing, not because I like it, but because I don't see any other course to pursue. Because I am not willing to go on the floor and argue for it bill that is going to be in excess $11/2 bill ion. Frankly, I think we are going to have a terrible time with that. Mr. BATES. I have more of a problem. I think we will get a bill. I don't think there is any question about getting a bill, and if we have to do some compromising, we can do it later. We have looked at the aircraft, missiles, and ships bill and I am not satisfied with that either. That is what disturbs me, when we get all these other pieces of legislation thrown at us up here. With the financial condition of this Nation, with the things we know we should have in. that authorization bill, and not doing it, but then we come up with every crazy kind of a program that can be conceived by people downtown, I just don't know where we are going to wind up the way we are going. It bothers me and it bothers me also to have to change this from the historical method. It bothers me when the civilians conic up here and the Congress bends, but these people don't come up and they have no pressure groups and we don't accord to them what we give to others. I don't like that either. Mr. GAVIN. Well, I think we should go out and make the best possible fight that we can. make to get the bill passed. Mr. Rms. We are in tough shape. I go along with what Porter says. Mr. Timmy. You know we have to recognize this, at least we are doing something for the people who retired under the 1958 act. We are giving them an element of justice which they had not expected they were going to get. Mr. RIVERS. We have this, though; we have the history of what has happened in the other body. They have failed to take up a bill on this. Mr. WILSON. I want to 0-et a bill just as much as anyone in this com- mittee wants to get a bill''but I am not ready to vote today, as Mr. Blandford indicates we should or you indicate we should, when we have asked for some statistics and .figures here to base a reasonable decision on. As a matter of fact, I would think this committee should move along. section after section without making a definite vote on section by sec- tion as we go, because I believe it is going to have to take an around- the-table discussion, just between the members of this committee, to re- solve some of the problems that we have got here. Mr. HARDY. Let me get into that one because I think this is a funda- ;mental thing. . Sooner Or later we are going to have to do that, section by section. "Anything you do now is tentative. Approved For Release 2005/04/21: CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/211-!tIA-RDP661300403R000400280006-0 What we are trying to do now, at least normally what we have done, is to do t he best we can on this go around, get a draft of a committee print as we have developed it and then go through the thing again and take our final action. I think we have to do that. I hope what we do here will Le as nearly Iinal as possible. But we are not getting very far now. We are stuck on this one. thing and we cannot go to anything else until we at least get a tentative agreement on it. Mr. WiLsoN. Then just register me as opposed to this provision of the bill. Mr. ( I unsr.n. I would like to ask--you are Mr. Paul's assistant? M r. ionnAm. Yes, sir. Mr. G uestm (continuing). This question. I fully understand that the question of medical care and hospitaliza- tion probably belongs in a different bill and not in a pay bill, I accept hat. 'Though certainly we have brought the question of fringe bene- fits into I he pay scale discussion Gil many, ninny occasions, and cer- t aunty hospitalization is a fringe benefit. Now I realize. that the Defense Department as of the eat ly part of t his month has initial ed a st udy by which they are going mu! toroughly explore the question. of providing medical benefits for retired persons. Are von at liberty to say whether or not the fact that :his st uclv mis been instituted is a recognit ion that there is a responsibility to tel ired persons on the part of the Government ? Mr. Goan.km. I (loft think there is any quest ion about that, Mr. Gubser. Mr. th-nsEa. I am not asking for a prediction, because you don't know what the study is going to reveal, but would you pre ittly an- ticipate that there is going to be something provided for retired personnel in the future, insofar as medical care is concerned? Mr. GORHAM. Yes. Mr. GuesEa. In other words, we are not going to be put in the position of raising their retired pay in this bill and then taking it away by taking away fringe benefits? Mr. GORHAM. Absolutely not. Mr. GuliSEIL AU right.. Mr. EivEas. Wait a. minute now. We. have. used (he. entire morning in a thinking-out-lottd discussion which is what. we want and this is the crux of the bill. Now it has been suggested that the committee, itself, get together and talk in our own presence. We can do that tomorrow or we can do that this afternoon. (Discussion off the record.) litvEns. I don't know how long we will be on the floo7. If the committee wants. we can meet afterward. Mr. IIATEs. Mr. Chairman, if there is a problem on the floor I would suggest we move to count which is just oft the floor down- stairs there. Mr. B tyras. I don't want to run otr. I with to waif until the How-, is finished. Mr. (i N. In view of the fact it is questionable about t,-hat happen ott the floor, why not meet tomorrow morning? In the mean- little.. the colonel and Mr. Blandford can gel .logctlier and see if they Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 : 16s5CIA-RDP661300403R000400280006-0 can coordinate this matter and have something to present for our consideration in the morning. Mr. GUBSER. Maybe this information we wanted will be available. Mr. BLANDFORD. You are asking for some recomputations and I assume some of these figures are available. I understand what you want is a projected cost-of-living increase versus a projected applica- tion of existing pay scales. So we have to assume what the existing pay scales will be in the future Mr. GORHAM. If I can interrupt you, I have located the paper which has the comparison on it. Mr. HARDY. Maybe we can get them now. Mr. RIVERS. Is this the thing that Mr. Wilson asked for? ME. GORHAM. It is not the precise formulation which he cited but it is a comparison between a cost-of-living increase and a .recomputa- tion applied to retired pay. It makes this comparison for the fiscal years 1964 through 1970. It assumes the cost of living would go up 1 percent a year during this time period and that the active duty pay scales, basic pay scales, would go up 3 percent a year. On the basis of this comparison the difference in disbursements between recomputation and cost-of-living adjustment over this 7-year period would be $771 million. Mr. BATES. Through 1970? Mr. GORHAM. Yes. Mr. WILSON. May I ask on that very point about this, bearing in mind that we have?at least it bothers my conscience?people who are going to be retired in the few years ahead have all their military career been under the impression, because of tradition, that they were going to retire and as they retired, their retirement pay would continue to be hooked to the active duty pay. Let's consider that we accept that it will cost over the next 6- or 7-year period the amount you say, and then we write into the bill the understanding that those who retire prior to 1970 will, compute their pay based on the current active duty pay and those who retire after 1970 will compute based on their active duty pay at their re- tirement plus a cost of living based on a formula. Now this would be a reasonable?in other words, for the next 6 years we would say those who are getting into the retirement area are going to?their contract is going to be lived up to, but we are serving notice on those who will retire after 1970 that because of the retirement problem and so forth, you have got to face the fact that as you retire. after 1970 your pay is going to be based on your current pay plus a reasonable cost of living as the cost of living goes up. Mr. RIVERS. Do you have all that? Mr. BATES. I don't know how you can tie this down. I know this, regardless of what we write in this bill, if I find the civilians in subsequent bills are going to go far beyond what the military are going to do, I am not going to ''stay with this bill, if I am still around here, I am going to leave it, because I think what is fair for one is fair for the other. If the civilian groups are going to go way beyond the military groups, just because they don't have the same support, I will Object. titXXE'rir. What Mr. Wilson suggests sounds good to me. It 85066-63?No. 6 19 Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/014:121 : CIA-RDP66600403R000400280006-0 is not too much. Mr. BLANDFORD. YOU will have to reduce the basic pay scales in order to do this by some $70 or $80 million to stay somewhere within he ball park on the money that is involved here. Mr. RiyElls. Mr. Wilson, if you want to get some figures based on (lie proposed amendment, we can get these figures and give Mr. Bland- ford time to provide. them for you. Mr. ll'o.soN. I think it ?vould Ix wort hwhile looking at. Mr. BLANDFORD. May I suggest that if we are going to do as you have indicated, you are not being fair to the man who has 14 or 15 years of service who is planning to stay for 30, because you are going to make him make a decision in the next 6 years. Von are really not being fair to the kid in West Point who has the idea of making a career of the service. So you have to j. roject this-- Mr. WILSON. We are not being fair to the generations as yet un- born, but you have to draw a line SOITICW here. Me. HiA NDEORD. I don't. see any reition why 0 years is any differ- ent?I hey have been on notice 5 years. Now von want to give them six. Mr. Wusox. I disagree with you. They have not I wen on notice for 5 years. Mr. litrEas. I I. they are not on notice now after 105S they will never be on notice. Mr. WILSON. We have said in effect, by President Eisen lower putting it in the budget and the House haying: passed it, iv i ryone has been under the impression that Congress recognized that it was a mistake, so don't say they have been on notice. Mr. HARDY. But only the house recognized it. Mr. (;1:11Stat. They admitted it was i m i4ake by allowing, them to recomput e. Mr. RivEns. Mr. Blandford. are ther. any other spit ions of Ibis bill we can consider witliont arriving iii a decision on this? Mr. BnAxnroan. Well, if we disregard cost: yes. If cost is not. an element, here, we can discuss the other features of (lii lin Mr. BENNETT. Sea pay, for instance. RivEns. I think we had better do that. Let's just let (kV com- mittee recess mit il 10 o'clock tomorrow morning because it. is obvious we are not !rotting anywhere today. (Whereupon, at, 11 :58 a.m., the subcommittee adjourned, to recon- vene at 10 a.m., Thursday. March 7, 1963.) 'HOUSE OF REPRESENTATIVES, COM311 ITEL ON -Ammo SERVICES, S ?licommrrrr,r, No. 1. Washhigton? DIY., Thumb, y, March 7. 190. The subcommittee met, pursuant to adjournment., at, 10 a.m., in room 304, Cannon Office Building, Hon. L. Mendel Rivers I chairman of the subcommittee.) presiding. Mr. RIVERS. Let's take up submarine pay first and then back to re- tainer pay. That will take us to about page 15 or 16, I believe. Mr. BLANDFORD. Page 16 in the committee print, Mr. Chairman. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 1687 Mr. RIVERS. Turn to that section dealing with nuclear-powered submarines. MT. BLANDFORD. Yes, sir, page 16. Mr. Chairman, this is the section which would provide submarine pay Mr. RIVERS. Admiral Smedberg, you can come up closer if you want to. Admiral SMEDBERG. Thank you, sir. I found a chair that fitted my legs. Mr. RIVERS. Fine. I might say I haven't seen any chair that you couldn't adequately occupy. Admiral SMEDBERG. Thank you, sir. Mr. Mynas. And that is on the record. Mr. BLANDFORD. This section is intended to cover submariners who leave conventional submarines and go to nuclear-powered submarines. The Navy?and I would like this for the record?the Navy has had. considerable difficulty in obtaining recruits for the nuclear submarine program, particularly from those who are qualified in conventional submarines. I would like to ask Admiral Smedberg if I am correct in that statement. Admiral SMEDBERG. That is correct, sir. Mr. BLANDFORD. The language that was proposed in the committee print is too restrictive. I have in front of me suggested language that might do the job better, because the language in the original bill was too broad, while the language in the committee print was too restric- ti ve. I would like to suggest, and I wish the Navy would listen carefully to this so they will know whether this is the correct lan- guage, to substitute in lieu of the language now in the committee print the following: * * as determined by the Secretary concerned, on a submarine (including, in the case of nuclear-powered submarines, periods of training and rehabilitation after assignment thereto) or, in the case of personnel qualified in submarines, as a prospective crewmember of a submarine being constructed, and during periods of instructions to prepare for assignment to a submarine of advanced design or increased responsibility on a submarine. Mr. Rivrits. That just makes it clearer, doesn't it? Mr. Timmy. You haven't done very much to the original language except insert on line 20; on page 16, which I am looking at, inserting something about persons trained. Mr. RIVERS. It takes in the period during the construction when he is assigned to it. Mr. BLANDFORD. It is actually the addition of the words "or in the case of 'personnel qualified in submarines." That is the key 'to it, Mr. HARDY. That is the only thing that you have added, isn't it, to the original language? Mr. BLANDFORD. That is right, that is the key to it. Mr. MITERS. Does that sound all right? Admiral SMEDBERG. Yes, sir. Mr. RIVERS. Does that sound all right to you, Mr. Secretary? Secretary PAUL. Yes, sir. Mr. HARDY. You don't need then this italicized addition before "following transfer from a nonnuclear submarine," because you sub- stitute "in case of persons qualified"? Approved For Release 2005/04/21 : CIA-RDP66B00403R000400280006-0 Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 1688 Mr. BLANDFoon. That is exactly right. Mr. Goiiiiitr. Tha t. is right. ,Secretary Mr. Chairman, I said it is all right w .th us. IA halter the .'..'C.avy feels they have a special problem remaining? I am really not competent to say. If Adniral Smedberg has any- remarks on that, ,I would be pleased to defer to him on this. Mr. IiivEos. Did you say this makes it better for \ ott in your prob- lems with this nuclear program you have? Admiral Saminumo. Yes, sir. The only thought I was tn Mg to put together in my mind was whether this takes care of the man who goes from a nuclear submarine to a nuclear submarine under con- struction. Now if it takes care of that, it is perfectly all right.. Our problem today is this: the man who has been in submarhes for years is in there because he likes submarines. Everybody doesn't like submarines. We want him to volunteer to go into the nuclear pro- grant. Ile would like to, but he has to lose pay for I year right now while he is going through . the process, either attached to a submarine under construction or under instruct ton. Mr. Ilminy. -Wouldn't t his language I hat we have just inserted take care of that ! Admiral SmEnomio. The language you have inserted I believe takes care of everything except possibly, and I ant not quite certain, t lie man who goes from a nuclear submarine to a nuclear submarine under co t ist met ion. nr. II Aonv. Head that language again. Mr. BLANDroon (reading) : or in the case of personnel qualified in submarines, as a prospective erewmember Of a submarine being constructed, and during periods of instruc- tions to prepare for assignment to a submarine of advanced design or a losition of increased responsibility on a submarine. Mr. Invros. 'flint looks like it will taiie it in. Mr. BnAmwoon. I think it ought to be made clear that the purpose of changing the. section as proposed by the Navy is that it could otherwise be construed to include a recruit out of Bainbridge. Admiral SmEtairato. We didn't want that. Mr. linANDr000. So we are trying to eliminate it. Admiral SmEnnErto. That is right. Mr. GAVIN. Repeat. t hat again. Mr. linANnFonn. The only change in t he section is to eliminate any possibility that a recruit right out of the recruit depot would draw submarine pay when he was sent to the nuelear submarine 4.11001, which I think is in Idaho. It didn't make 11111(.11 sense to pav a re- cruit fresh out of Bainbridge submarine pay before he had ever seen I ie inside of a submarine. Admiral SIAFEDBERG. That is right. Mr. OS:4TER.S. In the very first part of the amendment which Colonel Bland ford read, it might be possible. for someone who wanted to make a strained interpretation, that it would not include--I don't !lave a copy of the language in front of me--it would not include a man in the category that Admiral Smedberg described, going from one nuclear submarine into another nuclear submarine. 'lint could be changed I think by adding the words, after the word "submarine- in the first part of the amendment. "of any type.'' Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/211MA-RDP661300403R000400280006-0 Colonel Blandford, I hate to have him read it for the 17th time but if he would read just once again the first part of that amendment. SMEDBERG. I think it is all right but I am not sure. Mr. OSMERS. I think that is what is confusing, Admiral Sm.edberg. Admiral SMEDBERG. Yes. Mr. BEAM-WORD. I Will read the existing law: "For the purpose of this subsection 'hazardous duty' means duty on board a submarine, in- cluding in the case of nuclear-powered submarines periods of training and rehabilitation after assignment thereto, as determined by the See- retrtry concerned, and including submarines under construction from the time builder's drills begin." Now the language would be changed to read: "As determined by the Secretary concerned, on a submarine, including in the case of nuclear- powered submarines, periods of training and rehabilitation after as- signment thereto." Let me stop and say parenthetically that was to take care of double- crew situation on Polaris submarines. Mr. RIVERS. That is right. Mr. BLANDFORD. Then add the language, "or in the case of person- nel qualified in submarines as a prospective crewmember of a sub- marme"?nucleftr, conventional, unconventional, any type?"being constructed, and during periods of instruction" et cetera, et cetera "on the submarine." Admiral SMEDBERG. That is all right. Mr. RIVERS. I think that will take care of it. Admiral SMEDBERG. Yes, sir. Mr. OSMERS. I think when you present this bill to the House it prob- ably would be proper for you to put a sentence or two in your state- ment so it is absolutely clear we refer to men going from one sub- marine to another but not to a raw recruit going into training. Mr. BLANDFORD. Yes, sir, the whole purpose of the change was to prevent that interpretation. Mr. RIVERS. I don't think it would be susceptible to two interpreta- tions. Mr. BLANDFORD. Do T understand this section is all right as amended? Mr. RIVERS. Yes, without objection that section will be accepted as amended. Mr. BLANDFORD. Now we come to incentive pay for duty inside a high- or low-pressure chamber, page 17, new section 6. This is a change in the law in which we eliminate the word "observer" and we add duty in "low-pressure chamber." Mr. Itivims. As well as the high-pressure chamber. Mr. BLANDFORD. Yes, because they are doing a great deal of ex- perimentation. in both areas. Mr. RIVERS. Without objection that section is approved. Mr. BLANDFORD. All right, sir. Mr. MITERS. That takes us to page 17. We have passed over the other for the time being. Mr. Timmy. Line 7. Mr. BLAND-porn). Page 17, line 7 of the subcommittee print. Mr. RIVERS. All right, go ahead. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/VP: CIA-RDP66600403R000400280006-0 Mr. BLANnrono. This is the multiple payment provision, multiple so that a man can draw more than one incentive pay, he could draw two incentive pays. Mr. RivEns. We explored that. Mr. BENNETT% 1 favor approving this but I do think it has to have very careful regulations so it is not abused. It certainly mil be abused. Is there any protection against this being subject to abuse? Secretary PAc?. Yes, sir. What we have in mind here involves a limited number of personnel. I think one of the clearest examples of this kind of duty would be the Navy se-a-air-land teams, or seal teams, where a man has to be proficient- in parachute jumping, diving and underwater demolition. His duty is a combination of all those things. Ile is undergoing at least two of the hazards for which we presently specify he is eligible for only one hazard pay. Mr. BENNETT. This is not proficiency pay, this is not to he pro- ficient, it is to be danger pay, this is a hazard pay. Secretary PAt7L, Yes, sir. Mr. BENNErr. So the fact- that lie is qualified to do it isn't: the en- orlon, the fact that he is actually performing is I he criterion. Secretary PAUL. Right, sir. Mr. BENNETT. The reason 1 have concern about this, I presame in order to make tins a practical thing you have to determine that a man does one of these things a certain period of t ime during the month, if he does that minimum he gets zeroed in for the whole month opera- tion, I assume. It is not done on an hourly basis, it has to be done, I assume, on a, monthly basis. Secretary PAuE. That is correct,. Ile would be subject to the same regulations as a person who is now drawing the single hnzardous duty pay. in other words, he would Lave to be performing tlu,t duty for a period of time. Mr. BENNETT. Take the illustration you have SO we understani what you are going to have. Here you have a man that does both these things you just mentioned. how many actual days in a month would he have to be doing either one of these two things ? You would have to do both of them, but \\ilia is the minimum he could do in a month to draw the pay -for both? Colonel I iENADE. If I may answer that question. Mr. Bennett. Right now each of the various incentive hazardous duty pays are controlled by bot Ii Executive orders and individual regulations of the n dejiart inent S. Each of 1 hese regulations requires the performance of a certain mini- mum animmt a this hazardous duty in a given period of t true. Ili the case of parachute jumping it requires a specified ?umber of jumps during that period. 711-r. BENNErr. now many Colonel BEN'ADE. Generally. it requires a minimum of one or more jumps (luring any three consecut iye calendar months. Mr. BEN -Err. thus jump a nionth lie would get the pay ? Colonel 1 l',NADE. Yes, sir. Mr. BEN NETT. Now what is the minimum for the demolitio? man? Colonel BEN ADE. They Mils! act tinily engage in demol it ion duty du r- inur any given month to qualify for incentive pay for that wont h. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21161A-RDP661300403R000400280006-0 Mr. BENNETT. I feel we are being a little on the generous side with regard to this. I don't think we are generous enough in some other fields. Because I think when we established the jump. pay, for in- stance, we had in mind that a man was going to get this pay partly because he might be jumping a little bit more than that. I kind of doubt that the people doing both of these things are going to be exactly in that position. In other words, if they are going to jump only one time in the month. Mr. RIVERS. That is the minimum. Colonel BENADE. Yes, Sir. Mr. BENNETT. Yes; one jump out of 30 days. And you are going to have demolitions, say, for only 5 hours in a month, this gets a little on the generous side. You may not have any better way of doing it, but I would feel happier if there was a degree of conservatism applied to it. I don't know how you could do it. Colonel BENADE. I can appreciate your concern. I do want to assure that in this case the desires of the individual are not a consideration at all. It is the military mission, and the members that we envision receiving this not more than two payments are those members who are assigned to units where the actual performance of the mission of the unit requires the concurrent performance of these duties. And in all cases they will not only meet the minimum requirement but I am sure will exceed it in actual practice. Mr. BENNETT. In other words, you feel it can be kept in check ? Colonel BENADE. Very definitely, Mr. Bennett. Very definitely. Mr. BENNETT. That is all I want to know. Mr. RIVERS. Without objection we will go to the next section. Mr KILGORE. I want to make the comment on this?hazardous duty operation that what the additional cost amounts to will probably be saved in longevity pay. Mr. RIVERS. I think you might have something there. Mr. OSMERS. Mr. Chairman Mr. BATES. I would be glad to yield. Mr. RIVERS. Mr. Bates, do you yield ? Mr. OsiunRs. If the gentleman will yield to me. I was wondering if the committee might consider offering hazard pay to Members of Congress in even numbered years. Mr. RIVERS. Go ahead, Mr. Bates. Mr. BATES. Just this one situation, let's take a look at this situation: I think you have got to presume that one of these is more dangerous than another. Colonel BENADE. Yes, sir. Mr. BATES. Now let's take the situation where a man is qualified for both things, but let's say that he performs the less dangerous one more frequently and the more dangerous one less frequently. Now let's take another individual who just performs the most dangerous one all the time. Now under your proposal the fellow 'that has the two skills will get more pay even though the danger to which he is exposed is less than the fellow who does the more dangerous thing more often. Now, it gets sort of paradoxical doesn't it ? Colonel BENADE. Not really, Mr. Bates. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/VP CIA-RDP66600403R000400280006-0 Mr. BATES. Except it is desired to have a limn NVirll two skills. Colonel BExAnn. That is really the key of it, Mr. Bates. Before you could have the exposure to the hazard von have to have the incividual apply, take the training and undertake the hazards of both of the occupat ions. So the first key is the fart I hat this payment of not more than two incentive hazardous duty pays operates as an incentive_ for qualified people to volunteer for and to be I rtined in more than tlw one in- cent ive dut y hazard. Then, second, he can only quail fy for tile double payment i he f willy performs both of t he hazards. Mr. li_vrEs. I understand. Colonel liExrdw.. Now ('Veil InclaV. Mr, BaieS, it t an work too. and does, that although you have the same rate of incentive liwi;ardoits duty- pay of $:-)5 a 1110111 11, we will say. for the enlisted member., one man actually, by virt lie of his dui ie. be exposing himself 1111011 lore in terms of hours Of exposure, like in demolit ions, in the course f a day period than someone else whose dut ies only require hint to per- form a minimum amount of t his hazardous duty. So you real y have that situation right now. Mr. BATEs. 1Vell, we don't want to perpet nate- - Colonel BENADE. Aggravate it ? I agree. That is why I say- I think the key to this is these individuals who would be voitur eering for this, really don't know how nitwit of I his double dangly they can Mr. BATES. Of course. von call nu ionalize these iii logs any w ay you want to. Colonel BENADE. VeS., Sir. May I say one thing more: If the amounts were larger t hap they are for hazardous duty pay, I -think your point would be a very good point. As it is, because the amount is an it month we don't feel that to gain an extra $55 a month an individual who doesn't have I he motivation and the real drive would put in for this. The difference isn't that much, in other words. Mr. BATES. 1 won't argue the point. Mr. Silt:kg-lox. I wanted to go back, if I could, to the submarine pay. I apologize for coming in late. I assume that tlw section as ap- proved as it appears here ? Arr. linkmwoun. No, it Ivas not. Arr. Jimmy. It was amended. It It as amended to conform to he object ion that _Admiral Smedberg raised the other day. IVe had quite a discussion on it, T don't know whether you want Mr. Sri/xi-Fox. 'nu. poilli that I w:ts concerned about was t he dele- ion of t he prospect ivy crewmember of a submarine being constructed. Mr. Ihaor. That_ has been provided 'ftr. Sru.vrrox. That is retained lit..kxnronn. AVe changed it by saying- "a person quail ied iii submarines.- That was the key to it. We had le that lii guage Mr. SraArrox. y(111 1109111 a person qualified in submarines w to is a pmst wit iVe crewmember then gets the pay Mr. BIANDrotto. or a 11VW S1111111al'ilt0 1110ltn? CO1141110 i(n). This has been traditional. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 iRek-RDP661300403R000400280006-0 Mr. STRATTON. That is what I was concerned about. Mr. lbany. That was taken care of by amendment. Mr. STRATTON. Thank you. Mr. Hinny. Without objection we will approve the multiple incen- tive pay. Go ahead. Mr. BLANDFORD. The next, Mr. Chairman, is the "Repeal of au- thority for special pay for sea and foreign duty." Mr. BATES. What page? Mr. BLANDFORD. Page 17. The subcommittee prints deletes the entire section, and the effect of deleting it is to retain the system of special pay for paying sea and foreign duty. This, of course, adds $133 million to the cost of the bill. Mr. BENNETT. I move we delete the suggestion of the original bill. Mr. HARDY. Is there objection? Mr. BATES. Seventeen? Mr. HARDY. So that we will continue to pay for sea duty as it is DOW. Without objection we will strike that section. Mr. BLANDFORD. "Sea and foreign duty pay," page 17. Mr. BATES. Does anybody have anything more to say? A total of $133 million ought to get a little bit more in the record on it. Mr. IIAany. Of course, we have a good deal on it in the previous record in the hearings. But if Mr. Paul wants to agree with the committee in this, I think it would be fine. Mr. BATES. I think counsel indicated on yesterday when this item came up we would discuss it further. Mr. OSMERS. Let's give him a fair chance to agree with the committee. Secretary PAUL. Mr. Chairman, I do appreciate a chance to make a general observation, which is applicable not only to this but other items the committee will consider later on. We have proposed a bill here, after 10 months of rather intensive work, that we feel is a fair bill. We recognize that the passing of laws on pay for military forces is the prerogative and the responsi- bility of the Congress. We are prepared to make suggestions but, on the other hand, we have proposed a bill which is by and large the most costly increase that has ever been made in military pay. It is well deserved, and we feel that in the combination of the things we have requested, which is going to involve an annual increased cost of $1.2 billion, we have pro- posed a fair bill. Now we did eliminate sea and foreign duty pay. This involves the difficulty of taking away a certain pay to which enlisted members have become accustomed. I believe sea pay in more or less its present form has been in effect since 1942. If I may just give you our feeling about the various elements in- volved in sea and foreign duty pay, we would consider that sea pay, as such, has considerably more justification than foreign duty pay. Now, as far as I can see, the sea duty pay is the element with which am especially concerned. There are, I think most of us would recognize, some types of oversea duty that from a financial standpoint are better than duty at Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/2311: CIA-RDP66600403R000400280006-0 home, and if that. lends itself to re?.rulation, I would not be unreceptive io a provision which would permit regulation of foreign dur-v pay in accordance with the conditions at particular st at ions. Mr. RIVERS. I I h ink Mr. Hardy said exactly what I was ,roing to ,av? 'Flint is the way I feel. Now, Mr. Blandford, you mentioned that you would bc Lble to work out Sonic k ind of Mr. I ILAN-pr(Jm). Well, Mr. Chairman, as you indicated? M r. RIVERS. You recognize we are adamant on sea pay ? Secretary Yes, sir, it I as been nut& quite dear. Mr. RIVERS. We aren't changing that, Now we will try to work out something with you on the foreign duty pay. Mi', BATES. There is more justification to get increased pay i 1New York titan there is many places overseas. Mr. it mats. Tliat is right. Mr. From the point of view of the cost of the fzutilies involved. Mr. BLANDFORD. May I suggest as a modification, \vhich I think would make some sense, that no foreign duty pay would be paid o any person who had his dependents with him. Now to me this at least is an indication that, when t man voes to an oversea base and he can take his dependents w it h him, it is a ittle hard to justify giving him foreign duty pay. Mr. Bx-rt:s. I low about t lie cost, Do you have to pay him Mr. BLANDroan. Anybody who qualifies to have his dept. idents overseas would qualify for a stat ion allowance in those areas. Secretary PAUL. Station allowance ill some areas, yes, sir. Mr. BATES. Auld that is predicated upon local costs? Secretary PA LA,. Yes, sir, Mr. IlEx.NE're. Wily don't we see if tley can bring back some regulations like that? 'Arr. nhANDFoRD. This would be an amendment. which would be simple to propose right here. Mr. MITERS. Let's hear it, Mr. IILAxnronn. That is in section (b). I haven't written it. but I can make it up as I go along. I am now reading section 305(b) of Public Law 87-649 : Appropriations of the Department of Defense cony not he paid as foreign duty pay under subsection (a) of this section to a member of a uniformed service who is a resident of Alaska. Hawaii, Puerto Rico, the Virgin Islands or a posses,sion unless that member is serving in an area outside Alaska. Hawaii, ilw Virgin Islands or a possession of which he is a resident, as the case may be. I think you could add to that : "and subject- to such regulations as the Secretary may prescribe., no appropriations of the Department of Defense may be paid as foreign duty pay to any member of the uniformed services who is accompanied 'by his dependents." Mr. RIVERS. Because you get your station allowance. Mr. BLANDIWID. Yes, sir. Mr. BATES. Now wait. Now why do you exclude the individual that is living at. a. camp? Mr. BLANDEORD. Well. your overseas-- Mr. BATEs. Ile may not even be married. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 i!fk-RDP661300403R000400280006-0 BLANDFORD. That of course is a problem, but the man who is authorized to have his dependents with him if he has his dependents with him, I think should not draw -foreign duty pay, if you want to modify it. Now what you are really faced with on Mr. LONG. I think you are sayn4,Y you are not going to pay for foreign duty. Mr. BATES. Yes, anybody, at a certain station Mr. BLANDFORD. An E-1 or E-2 who is in Wiesbaden, a delightful place, is still nevertheless a youngster overseas, he doesn't get a chance to go home and leave until he has finished his tour of foreign duty. Now we have given these people foreign duty pay. If you wanted to make an exception, and you could make all foreign duty pay subject to regulations as far as that is concerned, but I am thinking of a situation, for example, in Okinawa, where you have all enlisted personnel drawing oversea pay, and yet you have some enlisted per- sonnel over there occupying Government housing and they are also drawing sea pay. I think there is a difference between a man who is overseas away from home without his family and a man overseas with his family. That is the only thing I am proposing. Mr. BENNETT. That is a modest approach, and I think it is prob- ably better than just leaving it like it is. Mr. RIVERS, Mr. Bates, have you finished? Mr. BATES. I think that creates a lot of problems. Mr. BLANDFORD. I think you could make it subject to such regu- lations as the Secretary may prescribe and let them worry about the problem. Mr. BATES. I think that is right. But if we put in the bill the fact that it wouldn't apply to married people with their families over there, I think it is just complications. I think it is either justified or not. Mr. BLANDFORD. That takes us right back to the question as to whether you should pay foreign duty pay. Certainly an enlisted man in South Vietnam is in a different situation than an enlisted man in Wiesbaden. On the other hand, not all of the assignments in Germany are garden spots. This is the problem you get into. Mr. RivEas. 'Finder such regulations as the Secretary may pre- scibe," would that cover it? Mr. BLANDFORD. Yes. This is a broad vesting of authority, but I think if the subcommittee will express for the hearings their indi- cation of what they have in mind ought to go in these regulations, then we could say 'except as may be limited by such.regulations as the Secretary may prescribed." Now the only thing I say is, I think the Department ought to receive some guidance from this subcommittee as to who should get this and who should not get it. Mr. BENNETT. May I make my little speech? My feeling about it is I feel like whether they are married or not married, whether dependents or no dependents are there, that the Department ought to be allowed to select prestige or advantageous spots like Paris, or maybe even all of Europe, the Department ought to be able to make regulations to eliminate oversea pay. That is what I feel. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04a1; : CIA-RDP66600403R000400280006-0 11r. 14vtais'Air. Stratton. Mr. _BATEs. Selected spots. Mr. s-ru.veri>N. I would like to inakc wit comment. My feet aren't in concrete On this point, but I am inclitwd to think t hat we g.?.t into trouble when we try to discriminate part icular at,',.....innents, anti I think WO are apt to overlook i lie fat that while for Mend yrs of Congress it may hp a big treat to get to Europe hat for many of these lads who may even he serving in places like Paris, -Wiesbaden, and the rest, it is no great treat to them. Tlwy would rather kV. 110[110 Ut NVW YOrli or Mimsachuset is. It is difficult to convince them that I hey are having the I inw of their lives. this opport unity to tracel. I think we have got a basic opposiTion 011 the part of Americans to spending any time abroad, and I think one of tlw re4lsons why we have this in law is as an incentive to carry out some of our wor!dwide obligat ions. I hesitate to eliminate it. Mr. GAvis. Will the gentleman yield? Mr. STu.vrroN. I 3e glad to. Mr. GAvtx. Leaving it to the discret ion ol' the Secretary, he can determine what particular assbrinnent or spot this individual is going to. In fact. I have had many requests to return bzwk to Germany, I'm' They have done their tour of duty and they are aux Otis to go hack. I think if the Secretary is empowered and authorized at his dis- cretion, he can determine the particular spot that tlw serviceman is assigned to as to whether it is of such a nature I hat he is emit .r led to foreign duty pay. Mr. Ilivatus. (10 ahead, Mr.S?lt rat (on. Mr. STRATrox. I have no further comment. 11.(11egeit;litIg.s4 t 1141),ISIntlaf:1 (..tertlimism:1 ft eln wh. i!iiikli?s?tret ihm.az (Tool (es III) with some suggest ions. Mr. I lAin?-. I think that might he it good idea. It ivEas. We are going to meet this a fternon until we lin i -311 this Mr. HARDY. I agree in the suggestion that Mr. Bland ford in that yon should keep in mind, that under the regulations now, tours of duty vary according to whether you have your dependents with you. Mr. IiivEtts. I will tell you something else. We have to realize you have to leave some discretion to the Depart nano . We cai 't. lust prescribe the activities. If you don't leave some discretion to them how can they rem this thing. the Army is 1:ere and General Hewitt is here, perhaps we might get on the rvcm-d the views of the Army, who prob- ably will be t he main losers in this proposition. with any restrict ions. Mr. RivEns. Dr. Long, did you want to say something lirst ? Mr. LoNro. I think not. Mr. I 3LANDroun. General Hewitt. is r.ght here. Mr. "RIVERS. What do you think about the sit tuition ? General IIEwrrr. I think we ought to have this foreign duty pay. If you are going to have sea duty pay I think there should he foreign duty pay, because. the man in Korea-, I think has it just as hard as an individual on sea duty and I don't think you can differentiate between Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 1691A-RDP661300403R000400280006-0 them. We are thinking about the man over in Korea, who gets that foreign Mr. BENNETT. Nobody suggested Korea, we are talking about Paris. General IIEwirr. There aren't very many in Paris. Mr. BENNETT. Then the regulations wouldn't apply to them. Mr. RIVERS. Wait a second. This doesn't stop foreign duty pay. General HEWITT. No, sir. Mr. Ramis. It would give authority to the Secretary to prescribe. He would prescribe the regulations, rather than a blank check. Is this right, Mr. Paul? Mr. GAVIN. The Secretary at his discretion could determine the particular assignment the serviceman has, whether or not he should or should not be entitled. Mr. RIVERS. Mr. Blandford, is that what we have done? Mr. BLANDFORD. Well, Mr. Chairman, I think General Hewitt has put his finger on what the problem is going to be. There is going to be a destroyer sitting out at Pusan and everybody is going to come ashore drawing sea pay, and meet with enlisted men from the U.S. Army in Pusan, and there is going to be an awful lot of irritation because one of them is drawing sea pay and the other is not drawing the equivalent. Mr. BENNETT. Has anybody thought that Korea would be involved in this? Mr. BLANDFORD. We don't know what the regulations of the Sec- retary are going to be. Mr. BENNETT. Say that in the law. Mr. BLANDFORD. That is the reason I say, when you say "subject to such regulations as the Secretary may prescribe," this is a blank check. Mr. BENNETT. I would limit him to Europe. Mr. BLANDFORD. I can also give you indications of assignments in Europe Mr. BENNETT. They are always in hopping distance of these lovely places that they have never been able to get to, I have never been able to. Mr. STRATTON. This points up the difficulty of trying to distinguish between separate places. There are bound to be some abuses, but you have different ships. I mean somebody might be on an old "tin can" and somebody might be tied up alongside at, the Navy yard the way Admiral King was during World War But I don't think that?I think what we lose in trying to discrimi- nate between various types of assignments is minor. Mr. BATES. I go back to my original suggestion, that we pass over it temporarily and let the staff try to work something out. Mr. RIVERS. Suppose you do that. Mr. BLANDFORD. I would like to work out something, but I Mr. GAVIN. The general has given us Korea. You wouldn't com. pare Korea with Wiesbaden or Heidelberg. General IIEwrrr. No, sir. Mr. GAVIN. Then what would you do under those circumstances? If it is left to the discretion of the Secretary to determine where the man is assigned, he can determine whether he is entitled to foreign duty pay. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/0412 : CIA-RDP66600403R000400280006-0 But you bring up Korea, you might bring up Formosa or Guam or Okinawa or some other place. But when you get to comparing them with Coblenz and Heidelberg and Wiesbaden and the Berchtesgaden area down in southern Bavaria, there is a great deal of difference be- tween those assignments and Korea. General lInwrrr. Yes, sir; and there are also places in Germany I hat are a lot different from Wiesbaden. Mr. GAVIN. There certainly are. General IIEwrrr. There are it lot of people right up on the lino there in Germany. Mr. GaviN. Yes, but that could be determined, too; if they are in hazardous spots they ought to be entitled to it, if it is left to the dis- cret ion of the Secretary to determine. Mr. Mynas. Mr. Blandford, do you think you could get something for us to consider? Mr. BLANDFORD. No, sir; I have about eight different positions and I am not really sure which one the subcommittee proposes here. Mr. STisyrrox. Let's just leave it in. Mr. BENNETT. Just leave it like it is tiler'. Mr. BLANDFORD. I think perhaps the best thing to do, if 1 may make a suggestion, is to leave it the way the conunittee print has it at the moment and just delete the proposed repeal. This is something that could be worked out, if necessary. This is a subject that could be worked out, if we come up on the floor of the House, that by this time everybody is in agreement on. We could offer it as an amendment. I think this is the sort of thing that all the uniformed services ought to comment on. Mr. HAimy. Maybe Mr. Paul can come up with something. I think most of us would agree that in these unusually nice billets foreign duty pay is probably not justified. I don't know whether you call distinguish or not-, but maybe Mr. Paul can come up with t a suggestion. M r. 14,..k-Nnro1i1). I think to expedite. the action we ought, to proceed with . the understanding that it is (jujte possible that within the next month or t wo, the uniformed services; may be able to get together on this, and by that time the bill would be in the Senate or on the floor of the House. There is no reason why we couldn't consider it at that point. Mr. Osmtits. Mr. Chairman, on this very point, as the discussion has proceeded I have become less and less opt imistic about our ability to write law or even to have the appropriate Secretaries make these de- terminations for the simple reason Hist a vast majority of people oil foreign duty are. not serving in the Parises and Wiesbadens and that yon will get a great loss of morale throughout your entire sem ices if you start to make distinct Ions but Ween different. parts of Germany, and I thitik you are imposing upon the Secretaries concerned, pos- sibly administrative responsibilities that. .have no practical solution. Mr. GAVIN. Would the gentleman yield ? r. Osmisits. Certainly. Mr. GAvIN. And a Ser vicemnami ina.y be in some part icularly i ice lo- cation and he suddenly is transferred Into a hazardous spot. amid he has to go through the chanels to get his records recorded and restored. We ougl it. to make it either one way or I he other. As far as I am Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 apj4-RDP661300403R000400280006-0 concerned, I think foreign duty pay ought to be granted so that we won't have these difficulties that will be constantly arising in many, many cases, I presume. So I want to be recorded that it would be better to pay them all foreign duty pay than make exceptions that are going to affect the morale of the troops wherever they may be. Mr. GUBSER. Mr. Chairman Mr. GAVIN. Or those at sea. Mr. STRATTON. The gentleman agrees with me. This is the only solution. Mr. BENNETT. We have a motion before us which I made. Mr. RIVERS. Mr. Gubbser. Mr. GUBSER. Would this be not too complicated an answer, that we perhaps cut back a little bit on oversea pay and keep it uniform but provide for an additional hardship pay at the discretion of the Secretary? Mr. BLANDFORD. That is coming in the next section. Mr. RivERs. We have the hardship pay next. Mr. GUBSER. Up the hardship and leave this as it is. Mr. BENNETT. Of course, that is what the Department wanted to do. This is a sort of compromise. Mr. BLANDFORD. When you get to hardship, that is what the sepa- ration allowance is for. I think there is something in what Mr. Gubser says to this effect, that perhaps instead of reducing overseas and foreign duty pay that you might want to consider changing it so that overseas and foreign duty pay might be paid to people in remote areas. I frankly find it difficult to believe that a man serving on a moun- taintop in Idaho, 55 miles from town, is in any better position than a man serving 22 miles out of Wiesbaden. Mr. GOMM. What would Dutch Harbor, Alaska, be? Mr. BLANDFORD. I don't know. Alaska is included for people ex- cept those who come from Alaska. Mr. BENNETT. Hawaii? Mr. BLANDFORD. It is foreign duty pay except for Hawaiians. Mr. BENNETT. I spent a year in Hawaii and I think it is a lovely assignment. Mr. OSMERS. I did 6 months there, and I agree with you. Mr. RIVERS. Dr. Long? Mr. LONG. 1 wonder if Mr. Paul can give us some idea of how much money would be involved if we denied foreign duty pay to those per- sons situated in places like some parts of Germany and so forth, where it isn't felt there is particular hardship or extra expense? Secretary PAUL. Dr. Long Mr. LONG. Is this a considerable saving if we do it? Secretary PAUL. I have to go at the answer this way. Of the $131 million that would be required for the continuance of it, a little over $40 million is now in the sea pay category, so that the remainder, in other words, roughly two-thirds, perhaps a little more, is in foreign duty pay. Mr. RIVERS. Between $80 and $90 million. Secretary PAUL. Yes, sir, approximately $90 in foreign duty pay. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/0/21 : CIA-RDP66600403R000400280006-0 Now we haven't cost NI it out, because our propu-al had hemi knock t he whole thing out. Mr. GAvrx. What? Secretary P.m,. I bid been to knock the entire thing out. Mr. GAvix. Why would you want to do that at that point, I 'tight ask you, knock it all out ? Secretary P.m,. Mr. Gavin. we had proposed as an alteritat i ye to mi vhiich (Ile commitee will be oonsidering as we go through the bill, a hardsh ip, an unusual hardship- - GAvix. Yes. but we are very generous with all the countries of the world. I think I noticed the other day in the paper where we are allocating to countries of the Far East several hundred million dollars. Sc) even though this may souud rather large- --$133 did you say, or $134 million? Secretary PAUL. Yes, sir. Mr. ClAvix. 1 don't know but what it is satisfactory to pay our own boys who are serving their country, in view of the fact that we are very generous to all the countries of the world. Mr. LONG. Mr. Chairman, I wonder if T could get an answer to the question which I asked from Mr. Paul ? Mr. GAVIN. Yes. Secretary PAT-1.. As I say, within the $90 million we could proTbably !rive you only a rough estimate at this time. But we have, for exam- ple, over 400,000 members in Europe. So I would think that if this were administered as Mr. Bennett suggested, possibly to elin)inate Europe, that would save probably half that amount. But I don't have the exact figure. Mr. LONG. Twenty or thirty million dollars, something like that. Mr. IIminv. If Dr. Long will yield, I have a particular concern with why we continue Hawaii in foreigm pay. That is a State, and Alaska would fall in the same category except for the remote areas. think perhaps we should?personally I would say we ought I 0 eliminate both Alaska and Hawaii from foreign duty pay as such, and perhaps include something that would permit payment of some sort of a pay in these remote areas. Secretary PAut.. We have approximately 41Mo in Hawaii now, Mr. Hardy. Mr. HAany. I declare, I don't see any justification at all for calling hat foreign duty now. We went through all of the pangs of child- birth to get them ill as States, and now that they are States tla y are st ill foreign duty. Mr. STRATI-0-s. I would agree with Mr. Hardy on that. How would we get it out? Mr. BLANDFOMI. If you deleted Alaska or Hawaii from the statute then of course you would not draw foreign duty pay while yen are in Alaska. I think Hawaii obviously stands by itself, but I think as Mr. Hardy pointed out, at least from the brie visit I made there, it is a tough duty station, in many of those areas, and I think you would Ito making a serious mistake tastrike Alaska. Mr. TfAanv. If you struck Alaska you would have to provide fm. pay for remote duty slat ions, because goodness knows anybody up in Point Barrow is cert a inly entitled to foreign duty. Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/210:1CIA-RDP661300403R000400280006-0 Mr. BENNETT. It is obvious we can't make any progress on this. So I move we approve the deletion of this section. Mr. RIVERS. You have heard the motion-- Mr. GAVIN. Wait a minute. What is the section? Read the section. Mr. BLANDFORD. The section, Mr. Gavin, simply deletes foreign duty and sea pay as it now is in the law. This is the proposal of the Department of Defense. The committee print deletes this provision from the bill, and the effect is to keep foreign and sea pay as it is today. Mr. RIVERS. The sense of this is to have it as Mr. Blandford has it in the committee print. Mr. NANDI-um Yes, sir; to continue the foreign duty and sea pay. Mr. HARDY. I subscribe to that, except I would like language drawn to eliminate Hawaii. Mr. BLANDFORD. You can offer the amendment Mr. 'TARDY. I would just like whatever it takes to eliminate Hawaii. Mr. LONG. I am wondering whether it would be possible to eliminate the reference to foreign duty and simply say "remote duty pay to be determined by the Secretary as an administrative matter, of what is remote duty," and that would cover the question of whether somebody was serving in some remote place in the United States. Secretary PAUL. May I comment on this? Mr. LONG. Yes. Secretary PA-ta,. I think there is a danger in just referring to it as remote duty. As Mr. Kilgore or Mr. Bates said, it costs a good deal to live in some of these metropolitan areas. There can be a, good deal of hardship involved there as well. For that reason, in the special pay that we had proposed, we used the words "unusual hardship." I can think of Ankara, Turkey, where it is pretty tough duty. Mr. RIVERS. I guarantee that, it is rough. Secretary PAUL. Yet you can't call it remote. Mr. LONG. I was thinking of some term such as that, but something other than "foreign," because I gather it has lost all meaning as to whether it is expensive or unpleasant duty. You need some words better than "foreign duty." Why can't we leave that, out and let the Secretary determine what is remote or hardship duty? Secretary PAUL. That would raise the Mr. GAVIN. There would be so many questions on so many different individuals that they never would get their work completed trying to determine who is entitled. Mr. LONG. You mean it would cost more to administrate it. Mr. BATES. Is there anything that could be worked out on this, Mr. Paul, if we gave you a little time to do it? Twenty years ago I was in on some of these decisions on sea pay and they sure were rough Mr. GAVIN. There is an amendment Mr. BATES. Trying to draw the lines you run into terrible problems. Mr. RIVERS. I think that is the reason Mr. Paul wanted to eliminate it, because you can't draw regulations to cover every individual case. I think to bring it to a point? Mr. BATES. Would you attempt to answer the question, if he may, Mr. Chairman? Secretary PAUL. Well, the basis for our proposal for unusual hard- ship pay was to isolate certain areas, such as some of the ones that 85060-63?No. 6--20 Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/2109CIA-RDP661300403R000400280006-0 have been mentioned here as unusual hardship posts. We believe that, with the help also of regulations already established by other departments of Government, that we could arrive at a list. of places that could be regarded as involving unusual hardship. Mr. GAviN. But you would have to almost set up a new department to go through the several million that are involved in the setup and never would get your work finished. It. either has to be one or the other in my estimation. Mr. Chairman, a motion has been offered and I think we ought to vote on it. Mr. RivEas. Mr. Bates has the floor. Mr. BArEs. You have no other suggestions? Secretary PAUL. I feel we could develop a differentiation between degrees of hardship. We have proposed two degrees. Perhaps three degrees would be more appropriate. Mr. BATES. I wonder if there is anything practical you can come up with. I think you can draw the line, but is it a practical and a wise tiling? Mr. lily.Ens. I think for a budget of $54 billion if we equivocate on a little Mr. G A VTN. I 34. Mr. IltvEns. The impact on morale has been testified to by the Chief of Personnel of the Army, who are the greatest beneficiaries of this, if you want to call it that, I think it would be splittit g hairs right down the middle, and as far as I am concerned I am ready to vote on it. You have heard the motion of the gentleman Mr. GAVIN. I want to concur in what the chairman has stated. Mr. Rivras. You have heard the motion of the gentleman from Florida, Mr. Bennett. Those in favor-- Mr. GAVIN. The motion is? Mr. BLANDroan. To strike it-- Mr. GAVIN. To leave it. just as it is now. Mr. BLANnroan. To accept the committee, print which deli tea the .;ect ion wilich repeals sea and foreign duty pay. Mr. GAVIN. Would what? Mr. I La N DFf To delete the section in the bill? Mr. Ell-Las. Just. what you have been talking about. Mr. BL. NI/FORD ( il!r) . Which would repeal sea and foreign (tilt y pay. Mr. II.kanv. I am completely armeeable with that. I would subse- quently want an amendment which would eliminate II awaii. Mr. lilt vras. TIIOSC in favor say "Yes." opposed, "NO." The ayes have it. The section will remain as it. is in the .2ommittee print. Now, Mr. Hardy, you are recognized. Mr. II.kany. I would merely otter an tinendment to eliminate Hawaii from foreign duty pay. Afr. iLA NDIAIIII). May I phrase the, language for you'? Mr. I fAttov. If you would, please. Mr. lit,Amn.soan. Mr. Hardy proposes that section 305 of Public Law 87-049, subsections (a) and (hi be amended by deleting the word -Hawaii." r. fliviims. Everybody understands that Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/2/03CIA-RDP661300403R000400280006-0 Mr. STRATTON. Mr. Chairman, I would like to offer an amendment to the amendment. It seems to me if we are going to make this on the basis of the United States' you can't eliminate _Alaska. We have remote places in the continental United States, and Hawaii is not all Honolulu for that matter. I think if we are going to delete Hawaii we have got to delete Alaska, and therefore I would offer an amend- ment to amend Mr. Hardy's amendment by adding the word "Alaska." Mr. HAanv. Let me make this observation in connection with that. I would be opposed to that unless and until we devise some procedure to take care of remote situations in Alaska, because Alaska is not comparable to any other State in the Union. If you have ever been to Point Barrow, you know what I mean. MT. STRATTON. My only point, Mr. Chairman, is that this area is being deleted on the ground that it is now a State. Mr. HARDY. No, not solely that ground. Mr. RtvEas. That is not the reason. Mr. STRATTON. We have lush parts of the United States and other parts not so lush. Mr. HAifoy. That would be correct Mr. RIVERS. The parliamentary situation. The first vote would be on the amendment to the amendment by the gentleman from New York. Mr. GAVIN. Before we vote on it, Mr. Chairman I wonder if Mr. Paul would express his opinion on whether or not Alaska should be considered. Mr. RIVERS. Do you want to express your opinion on Mr. Stratton's opinion? MT. BENNETT. You don't have to. Secretary PAUL. I would prefer not. Mr. HARDY. The question, Mr. Chairman. Mr. RIVERS. Now the question is the amendment of Mr. Stratton to the effect that we strike Hawaii and Alaska. Mr. BATES. This is on the Hardy amendment as amended by the Stratton amendment'? Mr. HARDY. No; it is on the Stratton amendment. Mr. GAVIN. This is Alaska. Mr. STRATTON. Do you want to add Alaska? Mr. BLANDFORD. May I rephrase the parliamentary situation, Mr. Rivers? Mr. RIVERS. Rephrase it. Mr. BLANDFORD. The parliamentary situation is this: Mr. Hardy has proposed an amendment to section 305 of Public Law 87-619 that subsection (a) and (b) be amended by deleting the words "or Hawaii". Mr. Stratton has offered an amendment to the amendment which would delete the words "or in Alaska or Hawaii". Mr. RIVERS. That is right. Now, the question is on the Stratton amendment. As many as favor the Stratton amendment will say "Aye." Opposed, "No." It appears to the Chair that the noes have it. Now, the question recurs on the amendment by the gentleman from Virginia, Mr. Hardy. As many as favor the Hardy amendment, will say "Aye." Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 1704 The opposed, "No." It appears to the Chair that the ayes have it. Mr. IfiANDronn. Hawaii is out.. Mr. Itivras. Now, let's go back. Now. Mr, Utiliser, you are recognized for an amendment to section to the retired am; retainer pay section to be found On page n. AVe want to get, this question settled before we can proceed to lite ot her section. The gentleman from California. Al r. Utiliser, is recognized. Mr. tit:est.:a. I spoke on this all clay yesterday. I don't see a:ay point in making a further plea now. The issue is ehsar cut. I i bunk it is wrong. I want a vote on it, let's vote it. up or down. Mr. ItivEtts. I want to say to the gentleman that we appreciate his fairness. I thought that. the Chair yesterda.y gave him as inueli time as he possibly could to discuss this. As I saki yesterday we realize the -facts of life, we can't. change all the things wrong with the universe. Read his amendment, Mr. thandford. You wrote it, didn't you ? Mr. ELAN-DM:RD. Yes, sir. Mn. Gubser has two amendments, the first amendment is on. page 11 of the committee print, strike out all of section 4 which is the retire- ment recomputatton provision. One word of explanation. U this section is deleted from the bill and no other language: is put in it, then retired pay would be recomputed on whatever the basic pay scales are that go into effect. in the future. Mr. I YVES. Is that all of them? Mr. likANDroitn. This would let everybody recompute who today, without the language in the 1958 act, would have been permitted to recompute. Tlw 411 people could not recompute because they ire not paid under the Career Compensation Act and the 51 I people under he. Court, of (maims decision would because the only thing that pre- vented them front doing it: was the action we took in 195. Mr. (vi c. In other words, t hey can all recoil tpitt tow ? Mr. lir.ANDRato. No, sir. Mr. Bates have given the. one exception. that. is the people. who are not paid under the Career Compensation .ket would not be able to recompute, regardless of the language you adopt. Section 4 is applicable only to those people paid und.:9 the - Career Compensation Act with the exception of the people who rou- t inue to recompute under section 511 of the Career Compensation Mr. nivEns. This will add how much to the bill ? MI'. 111,A NIWOltn. This will add $80 million to the bill. Mr. Thymts, As many as favor the motion Mr. BATES. That is section 4. Mr. BLANDFORD. It was section 5. Mr. li.vrEs. Yes. What is the significance of striking out all of line 19 and part of 20? Mr. firAxopotto. You don't Melia line 10, do you? Mr. 13.vms. Yes. Mr. lit.AN-oroan. I beg your pardon. Mr. lix-rEs. That was provided in section 1402 of title United St at es Code, what does that refer t Mr. lir.ANnroao. 'MO is a very interesting provision of law ?vhicli would require some minor ninth foot ion on our part. If we left. that Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 Approved For Release 2005/04/21 : CIA-RDP66600403R000400280006-0 1705 language in there without modifying it, you would have the situation that after an individual retired, he could be called hack to active duty for 1 day and because he served on active duty for 1 day could recom- putate under the new pay scales. Mr. BATES. Is that the only Mr. BLANDFORD. That is the only change I have made in it. Mr. RIVERS. I think everybody understands it. Mr. BATES. I want to niche sure. I think we understand the gen- eral situation. Mr. BLANDFORD. We haven't even gotten into section 140'2, because it is a technical provision. Mr. BATES. I want to make certain what we are doing. Mr. Riviais. Excuse me, I didn't mean to cut you off. Mr. BLANDFORD. You are absolutely right, I haven't mentioned it., because when you read the section of law it appears patent. You see in 1958 we put a provision in the law that people would have to come back and serve on active duty for at least a year and tombstone people would have to have 2 years in order to qualify for the 1958 pay scales. Section 1402 standing by itself, and I think Colonel Benade would agree with me, could be construed so as to permit a person denied the right to compute under the new pay scales, coulki come back on active duty for 1 da.y and then qualify for the new pay scale. Mr. BArEs. Is there anything else in that? Mr. BLANDFORD. This is a big section but that is one feature of it that Colonel Benade and the drafters put in. Then, of course, this raises the. whole question of?I approached it from the viewpoint that we. ought to delete it at this stage of the game and then discuss later if you wanted to, what amount of active duty woul.d be required in. order to permit a person who is already retired who comes back on active duty, how much time he would have to serve in order to be rereti red in order to qualify. Mr. RIVERS. We had better leave these collateral issues off. Mr. Ilt?\ istopoRD. Yes, sir,