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110th Congress                                            Rept. 110-269
                        HOUSE OF REPRESENTATIVES
 1st Session                                                     Part 1

======================================================================



 
 BELATED THANK YOU TO THE MERCHANT MARINERS OF WORLD WAR II ACT OF 2007

                                _______
                                

                  July 27, 2007.--Ordered to be printed

                                _______
                                

  Mr. Filner, from the Committee on Veterans' Affairs, submitted the 
                               following

                              R E P O R T

                             together with

                            ADDITIONAL VIEWS

                         [To accompany H.R. 23]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Veterans' Affairs, to whom was referred 
the bill (H.R. 23) to amend title 46, United States Code, to 
provide benefits to certain individuals who served in the 
United States merchant marine (including the Army Transport 
Service and the Naval Transport Service) during World War II, 
having considered the same, report favorably thereon with 
amendments and recommend that the bill as amended do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     3
Background and Discussion........................................     3
Legislative History..............................................     6
Section-by-Section...............................................     7
Explanation of Amendments........................................     8
Committee Consideration..........................................     8
Rollcall Votes...................................................     8
Application of Law to the Legislative Branch.....................     8
Statement of Oversight Findings and Recommendations of the 
  Committee......................................................     8
Statement of General Performance Goals and Objectives............     8
Constitutional Authority Statement...............................     9
Federal Advisory Committee Act...................................     9
Unfunded Mandate Statement.......................................     9
Earmark Identification...........................................     9
Committee Estimate...............................................     9
Budget Authority and Congressional Budget Office Cost Estimate...     9
Changes in Existing Law Made by the Bill, as Reported............    11
Additional Views.................................................    14
  The amendments are as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Belated Thank You to the Merchant 
Mariners of World War II Act of 2007''.

SEC. 2. PAYMENTS TO INDIVIDUALS WHO SERVED DURING WORLD WAR II IN THE 
                    UNITED STATES MERCHANT MARINE.

  (a) Establishment of Compensation Fund.--Subchapter II of chapter 5 
of title 38, United States Code, is amended by adding at the end the 
following new section:

``Sec. 532. Merchant Mariner Equity Compensation Fund

  ``(a) Compensation Fund.--(1) There is in the general fund of the 
Treasury a fund to be known as the `Merchant Mariner Equity 
Compensation Fund' (in this section referred to as the `compensation 
fund').
  ``(2) Subject to the availability of appropriations for such purpose, 
amounts in the fund shall be available to the Secretary without fiscal 
year limitation to make payments to eligible individuals in accordance 
with this section.
  ``(b) Eligible Individuals.--(1) An eligible individual is an 
individual who--
          ``(A) before October 1, 2009, submits to the Secretary an 
        application containing such information and assurances as the 
        Secretary may require;
          ``(B) has not received benefits under the Servicemen's 
        Readjustment Act of 1944 (Public Law 78-346); and
          ``(C) has engaged in qualified service.
  ``(2) For purposes of paragraph (1), a person has engaged in 
qualified service if, between December 7, 1941, and December 31, 1946, 
the person--
          ``(A) was a member of the United States merchant marine 
        (including the Army Transport Service and the Naval Transport 
        Service) serving as a crewmember of a vessel that was--
                  ``(i) operated by the War Shipping Administration or 
                the Office of Defense Transportation (or an agent of 
                the Administration or Office);
                  ``(ii) operated in waters other than inland waters, 
                the Great Lakes, and other lakes, bays, and harbors of 
                the United States;
                  ``(iii) under contract or charter to, or property of, 
                the Government of the United States; and
                  ``(iv) serving the Armed Forces; and
          ``(B) while so serving, was licensed or otherwise documented 
        for service as a crewmember of such a vessel by an officer or 
        employee of the United States authorized to license or document 
        the person for such service.
  ``(c) Amount of Payments.--The Secretary shall make a monthly payment 
out of the compensation fund in the amount of $1,000 to an eligible 
individual. The Secretary shall make such payments to eligible 
individuals in the order in which the Secretary receives the 
applications of the eligible individuals.
  ``(d) Authorization of Appropriations.--(1) There are authorized to 
be appropriated to the compensation fund amounts as follows:
          ``(A) For fiscal year 2008, $120,000,000.
          ``(B) For fiscal year 2009, $108,000,000.
          ``(C) For fiscal year 2010, $97,000,000.
          ``(D) For fiscal year 2011, $85,000,000.
          ``(E) For fiscal year 2012, $75,000,000.
  ``(2) Funds appropriated to carry out this section shall remain 
available until expended.
  ``(e) Reports.--The Secretary shall include, in documents submitted 
to Congress by the Secretary in support of the President's budget for 
each fiscal year, detailed information on the operation of the 
compensation fund, including the number of applicants, the number of 
eligible individuals receiving benefits, the amounts paid out of the 
compensation fund, the administration of the compensation fund, and an 
estimate of the amounts necessary to fully fund the compensation fund 
for that fiscal year and each of the three subsequent fiscal years.
  ``(f) Regulations.--The Secretary shall prescribe regulations to 
carry out this section.''.
  (b) Regulations.--Not later than 180 days after the date of the 
enactment of this Act, the Secretary shall prescribe the regulations 
required under section 532(f) of title 38, United States Code, as added 
by subsection (a).
  (c) Clerical Amendment.--The table of sections at the beginning of 
such chapter is amended by inserting after the item related to section 
531 the following new item:

``532. Merchant Mariner Equity Compensation Fund.''.

  Amend the title so as to read:

    A bill to amend title 38, United States Code, to direct the 
Secretary of Veterans Affairs to establish the Merchant Mariner 
Equity Compensation Fund to provide benefits to certain 
individuals who served in the United States merchant marine 
(including the Army Transport Service and the Naval Transport 
Service) during World War II.

                          Purpose and Summary

    H.R. 23 would direct the Secretary of Veterans Affairs to 
pay a monthly benefit of $1,000 to qualifying honorably-
discharged individuals of the United States merchant marine 
(including members of the Army Transport Service and the Naval 
Transport Service) who served between December 7, 1941, and 
December 31, 1946.
    H.R. 23 would:
    1. Establish, out of the general fund of the Treasury, a 
Merchant Mariner Equity Compensation Fund subject to the 
availability of appropriations.
    2. Require the Department of Veterans Affairs (VA) to 
provide a monthly payment in the amount of $1,000 to each 
eligible individual in the order in which an application is 
received before October 1, 2009.
    3. Require the VA to submit an annual report with the 
President's budget for each fiscal year with detailed 
information pertaining to operation of the fund.
    4. Require the VA to prescribe regulations 180 days after 
enactment of the bill.

                       Background and Discussion

    The merchant marine was the nation's first navy and 
assisted the Continental Army in defeating the British during 
the Revolutionary War. Since 1775, the merchant marine has 
served in peace and in every war. After the terrorist attacks 
of September 11, 2001, 29 merchant marine academy students 
operated a fleet of boats in New York Harbor, transporting 
firefighters and other emergency equipment workers, medical 
supplies and food. Today, more than 8,000 mariners serve in the 
Military Sealift Command, most of them working in support of 
Operation Iraqi Freedom. The merchant mariners are also 
recognized at the World War II Memorial. The United States 
Merchant Marine Academy is the only one of our five military 
academies that sends its cadets into war--142 of these cadets 
perished during WWII. Current estimates of the surviving 
merchant mariners of WWII range from 10,000 to 16,000. The 
Committee adopted the 10,000 figure.
    The merchant mariners of World War II were a volunteer, 
civilian military corps that served honorably in combat during 
the war, but were denied veterans' benefits for their service 
until 1988 after a successful court challenge. By most reports, 
the World War II merchant marine suffered the greatest 
casualties of any of the fighting branches--with nearly one-in-
26 dying in battle. By comparison, the death rate for the U.S. 
Marine Corps was one-in-33, in the Army, one-in-48, in the 
Navy, one-in-114, and in the Coast Guard one-in-421. Before the 
Japanese attack on Pearl Harbor, more than 240 mariners had 
already perished.

                          HISTORICAL ANALYSIS

    In 1936, the Merchant Marine Act was enacted (Public Law 
74-835) to rebuild our nation's merchant marine which had 
decreased significantly after World War I. Title I of the 
Merchant Marine Act stated as a ``Declaration of Policy'' that 
the United States ``shall have a merchant marine . . . capable 
of serving as a naval and military auxiliary in time of war or 
national emergency[.]'' Also in 1936, President Roosevelt 
created the U.S. Maritime Commission to oversee the rebuilding 
of this fleet. The U.S. Maritime Service (USMS), the training 
arm established in 1938, built up the number of merchant 
mariners from the pre-war strength of 55,000 to 250,000 men at 
the end of World War II. In addition, President Roosevelt 
established maritime training facilities; the first at 
Sheepshead Bay, New York, and also in 1942, the United States 
Merchant Marine Academy at Kings Point, New York. These 
facilities trained well over 150,000 mariners. In February 
1942, the U.S. War Shipping Administration (WSA), as an 
emergency wartime agency, took control of the purchasing, 
chartering, requisition and operation of commercial shipping 
vessels. Generally, only the day-to-day operations were the 
responsibility of the private shipping lines. As emergency 
construction began to replace wartime losses, the new ships 
were allocated among the private companies. The companies were 
paid fixed fees in addition to the charter rates for their 
ships. The WSA assumed all operating responsibilities and 
insurance liability for war-risk losses.
    With the quick buildup of the Liberty ship cargo fleet, the 
country desperately needed people to man them. The merchant 
marine fleet rapidly grew from a few hundred to thousands of 
ships. A Liberty ship was considered successful if it made one 
voyage with war materiel. These ships were produced with 
amazing speed, most within eight weeks, some in as short as a 
week. They were not meant to be indispensable. Because of their 
bulkiness, they were also very slow and became easy targets for 
enemy air and water attacks. The U.S. plan became to build the 
ships faster than the enemy could sink them.
    The WSA played an active role in the recruitment and 
training of World War II merchant mariners. As the parent 
agency, it organized three subsidiary units to deal with 
manpower issues: the Recruitment and Manning Organization; the 
Training Organization; and the Maritime Labor Relations 
Organizations. Many of the mariners belonged to a union and 
were covered by collective bargaining agreements with the 
private shipping companies. This relationship was completely 
reorganized by the WSA in 1942 and various agreements were 
reached to maintain existing arrangements. While at war, the 
WSA, through the Maritime Labor Relations Organizations, worked 
with both the operators and unions in establishing a uniform 
scale and working conditions aboard WSA ships. Merchant 
mariners of World War II were recruited, trained in gunnery, 
and received health care treatment, life insurance and 
compensation (although indirectly) from the Federal government. 
Throughout the Second World War, all merchant mariners were 
under the auspices and control of the WSA.
    Thirty-seven official government USMS recruiting offices 
were established around the country with many offices located 
next to Navy and Coast Guard offices. Merchant mariners were 
not subject to the draft as long as they did not leave the 
service of any ship for longer than 30 days. According to 
testimony presented during the full Committee hearing on H.R. 
23, held on April 18, 2007, many of these men were steered from 
the uniformed branches and ordered to join the merchant marine 
because, reportedly, they were told by recruiters ``that's 
where our country needs you.'' The merchant marine worked some 
of the most perilous jobs during the war and their ships and 
crews were on the front lines of battle. Compared to the large 
number of men and women serving in World War II, the numbers of 
the merchant marine were small, but their chance of dying 
during service was extremely high, as it took anywhere from 
eight to 15 tons of supplies to support one soldier for one 
year at the front.
    On December 29, 1940, President Roosevelt delivered his 
``Arsenal of Democracy'' speech, indicating that he would 
deploy ships with supplies to help Great Britain. In 1941, 
Germany, in an attempt to isolate supplies to England, deployed 
its U-boats to the Atlantic. The U-boats, singly and in ``wolf 
packs,'' sank or damaged many ships crossing the Atlantic with 
supplies, but also found prime targets in the ships off the 
U.S. Coast from Maine to Florida, where merchant marine ships 
operated without military escort or convoy. Germany was also 
successful in curtailing merchant marine ships bringing 
petroleum and supplies through the Caribbean Sea and the Gulf 
of Mexico. In the first six months of 1942, German U-boats sank 
more than 400 merchant marine ships, more ships than had been 
built. Between 1941 and 1944, enemy forces sank more than 800 
ships. About 600 mariners were prisoners of war and another 
11,000 were injured.
    With regard to pay, the average merchant mariner was paid 
on par with average Navy seaman as confirmed by Navy reports. 
Unlike the other servicemembers, merchant mariners were only 
paid when they were working on a ship. They received no 
vacation, sick or dock pay, and were not paid when their ships 
were torpedoed and sank, when they were on lifeboats, when 
injured, maimed, or when they became POWs. They were also 
subject to income tax and Victory Tax, from which the uniformed 
branches were exempt. Most families received just $5,000 from 
the WSA when the mariner died in combat. Merchant mariners were 
also eligible for bonuses, but evidence indicates that during 
the war these were inconsistent and intermittent. According to 
the Congressional Research Service in a report entitled 
``Veterans Benefits: Merchant Seamen'' dated May 8, 2007, the 
issue of pay comparability is ``extremely difficult'' to sort 
out.

                             AFTER THE WAR

    On June 22, 1944, President Roosevelt signed into public 
law the Servicemen's Readjustment Act of 1944 (Public Law 78-
346). This act, commonly known as the ``GI Bill'' or ``GI Bill 
of Rights'' gave members of the Armed Forces who served at 
least 90 days anywhere geographically between December 7, 1941, 
and December 31, 1946, unemployment benefits, unprecedented 
education assistance, VA health care and counseling, housing 
and small business loans as well. The vast and enduring 
positive socioeconomic effects of this final piece of New Deal 
legislation are widely touted. It is reported by many scholars 
that passage of this bill contributed to the country's ability 
to avoid a post-war depression, to expand the reach of higher 
education, and to build the middle class. When signing the GI 
Bill, President Roosevelt stated ``I trust that Congress will 
soon provide similar opportunities to members of the merchant 
marine who have risked their lives time and time again during 
war for the welfare of their country.''
    Efforts in Congress to extend the benefits of the 1944 GI 
Bill of Rights, primarily through the Merchant Mariner 
Readjustment Act (H.R. 2346, 79th Congress), failed in 
Committee, due mostly to pressure and opposition from the 
uniformed branches and the veteran service organizations. As a 
result, the merchant mariners of World War II and their 
families did not receive any of the benefits of the 1944 GI 
Bill.
    The effort to attain veteran status resurfaced after many 
years of denial by the Civilian Military Service Review Board 
(that determined active duty services for the purposes of 
veterans benefits), when in 1988, three merchant mariners 
including Stanley Willner, who testified during the full 
Committee hearing on April 18, 2007, successfully sued for 
veteran status for the merchant mariners of World War II. 
(Schumacher, Willner et al. v. Secretary of the Air Force 
Edward C. Aldridge, Jr., 665 F. Supp. 41 (D.D.C. 1987). 
Accordingly, on January 19, 1988, in adherence to the 
Schumacher decision, the merchant mariners who served between 
December 7, 1941, and August 15, 1945, attained veteran status. 
At that point, over 40 years later, the education benefits had 
expired and over 125,000 merchant mariners had died.
    The Secretary of the Air Force, who headed the Civilian 
Military Service Review Board, established the cut-off date for 
qualifying service of merchant mariners as August 15, 1945, 
although the official end of the war was December 31, 1946, for 
members of the Armed Forces. This move denied a few thousand 
mariners veteran's benefits. In 1998, President William J. 
Clinton signed into law the ``Veterans Programs Enhancement Act 
of 1998'' (Public Law 105-368) that gave mariners who served 
from August 15, 1945, to December 31, 1946, limited veterans 
benefits. However, these men received certificates, not 
honorable discharges, and their service is not considered 
active duty for the receipt of VA benefits.
    H.R. 23, as amended, sponsored by Chairman Bob Filner, 
seeks to rectify the lost benefits sustained by all of the 
merchant mariners of World War II, who served from December 7, 
1941, through December 31, 1946, by providing a $1,000 monthly 
payment to qualifying living merchant mariners (including 
qualifying individuals of the Army Transport and Naval 
Transportation Service who were civilian sealift personnel), 
subject to the availability of appropriations.

                          Legislative History

    On January 4, 2007, Representative Bob Filner of 
California, Chairman of the Committee on Veterans' Affairs, 
introduced H.R. 23, the ``Belated Thank You to the Merchant 
Mariners of World War II Act of 2007.''
    On April 18, 2007, the Committee on Veterans' Affairs 
conducted a legislative hearing on H.R. 23.
    On July 17, 2007, the full Committee met in open markup 
session and approved a number of bills including H.R. 23, as 
amended. The amendment to H.R. 23 was in the nature of a 
substitute. An amendment offered by Representative Steve Buyer 
of Indiana, the Ranking Member, was not agreed to by voice 
vote. The full Committee, by voice vote, ordered H.R. 23, as 
amended, reported favorably to the House of Representatives.

                      Section-by-Section Analysis


Section 1. Short title

    Section 1 would provide the short title of H.R. 23 as the 
``Belated Thank You to the Merchant Mariners of World War II 
Act of 2007.''

Section 2. Payments to individuals who served during World War II in 
        the United States merchant marine

    This section allows for payments to individuals who served 
during World War II in the United States merchant marine.
    This section, by addition of a new section 532, would amend 
subchapter II of chapter 5 of title 38, United States Code, to 
establish a Merchant Mariner Equity Compensation Fund 
(compensation fund) in the general fund of the Treasury.
    This new section would make funds in the compensation fund, 
which are subject to the availability of appropriations, 
available to the Secretary of the VA to distribute payments to 
eligible individuals without fiscal year limitation.
    Subsection (b) of this new section would require eligible 
individuals to submit applications with such information and 
assurances as the VA may require before October 1, 2009, and 
would make ineligible those individuals who received benefits 
under the Servicemen's Readjustment Act of 1944 (P.L. 78-346).
    In addition, subsection (b) would require the Secretary to 
recognize the qualifying service of those who served in the 
United States merchant marine (including the Army Transport 
Service and the Naval Transport Service) during the period of 
December 7, 1941, and December 31, 1946. An individual has 
engaged in qualifying service if between December 7, 1941 and 
December 31, 1946, the eligible individual was a member of the 
United States merchant marine (including the Army Transport 
Service and the Naval Transport Service) serving as a 
crewmember of a vessel that was operated by the War Shipping 
Administration or the Office of Defense Transportation (or an 
agent of the Administration or Office); operated in waters 
other than inland waters, the Great Lakes, and other lakes, 
bays, and harbors of the United States; under contract or 
charter to, or property of, the Government of the United 
States; serving the Armed Forces; and, while so serving, was 
licensed or otherwise documented for service as a crewmember of 
such a vessel by an officer or employee of the United States 
authorized to license or document the person for service.
    New subsection (c) would require the Secretary to make a 
monthly payment of $1,000 out of the compensation fund to 
eligible individuals in the order of receipt of applications.
    New subsection (d) would authorize appropriations in the 
amount of $120 million in FY 2008; $108 million in FY 2009; $97 
million in FY 2010; $85 million in FY 2011; and $75 million in 
FY 2012. This new subsection would also authorize that funds 
appropriated under this new section remain available until 
expended.
    New subsection (e) would require the Secretary to submit a 
report to Congress with the President's budget for each fiscal 
year to contain information about the operation of the 
compensation fund, including the number of applicants, the 
number of eligible individuals receiving benefits, the amounts 
paid out of and administration of the compensation fund and an 
estimate of necessary amounts to fully fund the compensation 
fund for that fiscal year and each of the three subsequent 
fiscal years.
    New subsection (f) would require the Secretary to issue 
regulations 180 days after the date of enactment.

                       Explanation of Amendments

    During the full Committee markup on July 17, 2007, the 
Ranking Member of the Committee, Representative Steve Buyer of 
Indiana, offered an amendment to the Amendment in the Nature of 
a Substitute to H.R. 23, which would have created a fund to 
allow payments for the service of those persons that have been 
determined to have been active duty pursuant to section 1401 of 
the GI Bill Improvement Act of 1977 (38 U.S.C. 106 note). The 
amendment was not agreed to by voice vote.

                        Committee Consideration

    On July 17, 2007, the full Committee ordered H.R. 23, as 
amended, reported favorably to the House of Representatives by 
voice vote.

                             Rollcall Votes

    The Committee held no roll call votes on this bill. A 
motion to order H.R. 23, as amended, reported favorably to the 
House of Representatives was agreed to by voice vote.

              Application of Law to the Legislative Branch

    Section 102(b)(3) of Public Law 104-1 requires a 
description of the application of this bill to the legislative 
branch where the bill relates to the terms and conditions of 
employment or access to public services and accommodations. 
This bill does not relate to employment or access to public 
services and accommodations.

  Statement of Oversight Findings and Recommendations of the Committee

    In compliance with clause 3(c)(1) of rule XIII and clause 
(2)(b)(1) of rule X of the Rules of the House of 
Representatives, the Committee's oversight findings and 
recommendations are reflected in the descriptive portions of 
this report.

             Statement of Performance Goals and Objectives

    The reported bill would authorize benefits and programs 
under laws administered by the Secretary of Veterans Affairs. 
The Department of Veterans Affairs' performance goals and 
objectives are established in annual performance plans and are 
subject to the Committee's regular oversight and evaluation by 
the U.S. Government Accountability Office. VA publishes a 
performance and accountability report for each fiscal year.

                   Constitutional Authority Statement

    Under clause 3(d)(1) of rule XIII of the Rules of the House 
of Representatives, the Committee must include a statement 
citing the specific powers granted to Congress to enact the law 
proposed by H.R. 23. Article 1, Section 8 of the Constitution 
of the United States grants Congress the power to enact this 
law.

                     Federal Advisory Committee Act

    The Committee finds that the legislation does not establish 
or authorize the establishment of an advisory committee within 
the definition of 5 U.S.C. App., section 5(b).

                       Unfunded Mandate Statement

    Section 423 of the Congressional Budget and Impoundment 
Control Act (as amended by section 101(a)(2) of the Unfunded 
Mandate Reform Act, Pub. L. 104-4) require a statement whether 
the provisions of the reported bill include unfunded mandates. 
In compliance with this requirement, the Committee has received 
a letter from the Congressional Budget Office that is included 
herein.

                         Earmark Identification

    H.R. 23, as amended, does not contain any congressional 
earmarks, limited tax benefits, or limited tariff as defined in 
clause 9(d), 9(e), or 9(f) of rule XXI of the Rules of the 
House of Representatives.

                           Committee Estimate

    Clause 3(d)(2) of rule XIII of the Rules of the House of 
Representatives requires an estimate and a comparison by the 
Committee of the costs that would be incurred in carrying out 
H.R. 23, as amended. However, clause 3(d)(3)(B) of that rule 
provides that this requirement does not apply when the 
Committee has included in its report a timely submitted cost 
estimate of the bill prepared by the Director of the 
Congressional Budget Office under section 402 of the 
Congressional Budget Act.

     Budget Authority and Congressional Budget Office Cost Estimate

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, July 25, 2007.
Hon. Bob Filner, Chairman,
Committee on Veterans' Affairs,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 23, the Belated 
Thank You to the Merchant Mariners of World War II Act of 2007.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Dwayne M. 
Wright.
            Sincerely,
                                           Peter R. Orszag,
                                                          Director.
    Enclosure.

H.R. 23--Belated thank you to the Merchant Mariners of World War II Act 
        of 2007

    Summary: H.R. 23 would make certain individuals who served 
as merchant mariners for the United States during WorId War II 
eligible for a monthly payment from the Department of Veterans 
Affairs (VA) and would require VA to conduct an annual report 
on the status of the new benefit program. CBO estimates that 
implementing H.R. 23 would cost $120 million in 2008 and $485 
million over the 2008-2012 period, assuming appropriation of 
the authorized amounts. Enacting the bill would not affect 
direct spending or receipts.
    H.R. 23 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would impose no costs on state, local, or tribal 
governments.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 23 is shown in the following table. 
The costs of this legislation fall within budget function 700 
(veterans benefits and services).

----------------------------------------------------------------------------------------------------------------
                                                                    By fiscal year, in millions of dollars--
                                                               -------------------------------------------------
                                                                  2008      2009      2010      2011      2012
----------------------------------------------------------------------------------------------------------------
                                  CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Authorization Level...........................................       120       108        97        85        75
Estimated Outlays.............................................       120       108        97        85        75
----------------------------------------------------------------------------------------------------------------

    Basis of estimate: H.R. 23 would entitle certain 
individuals who served with the U.S. Merchant Marine during 
World War II to a monthly benefit of $1,000, subject to the 
availability of funds for that purpose. To be eligible for the 
benefit, individuals would need to submit an application by 
October 1, 2009, and to demonstrate that they served as a 
merchant marine between December 7, 1941, and December 31,1946, 
on a vessel that was:
           Operated by the War Shipping Administration 
        or the Office of Defense Transportation;
           Operated in waters other than inland waters, 
        the Great Lakes, and other lakes, bays, and harbors of 
        the United States;
           Under contract or charter to, or property of 
        the government of the United States; and
           Serving the Armed Forces.
    H.R. 23 would establish the Merchant Mariner Equity 
Compensation Fund. Amounts in the fund would be used to pay the 
monthly benefit to eligible individuals, on a first-come, 
first-served basis. The bill would specifically authorize the 
appropriation of $120 million in 2008, $108 million in 2009, 
$97 million in 2010, $85 million in 2011, and $75 million in 
2012.
    Based on information from VA on the number of merchant 
mariners that served during the specified period, their average 
age, and mortality rates from the Department of Defense, CBO 
estimates that, in 2008, about 65,000 merchant mariners would 
have the requisite service qualifications and that one-quarter 
of them, or about 16,000, would apply for the benefit. However, 
the authorized amounts under H.R. 23 would provide for a 
maximum of 10,000 merchant mariners to receive the monthly 
benefit in 2008. Therefore, CBO assumes that 10,000 eligible 
merchant mariners would apply for and receive the full 
authorized amount in 2008.
    Using the same mortality rates described above, CBO 
estimates that there will be a sufficient number of surviving 
merchant mariners in each of 2009 through 2012 to exhaust all 
of the funds authorized to be appropriated for that period.
    For this estimate, CBO assumes that H.R. 23 will be enacted 
near the beginning of fiscal year 2008 and that the specified 
amounts will be appropriated near the start of each fiscal 
year.
    In total, CBO estimates that implementing H.R. 23 would 
cost $120 million in 2008 and $485 million over the 2008-2012 
period.
    Intergovernmental and private-sector impact: H.R. 23 
contains no intergovernmental or private-sector mandates as 
defined in URMA and would impose no costs on state, local, or 
tribal governments.
    Estimate prepared by: Federal Costs: Dwayne M. Wright; 
Impact on State, Local, and Tribal Governments: Lisa Ramirez-
Branum; Impact on the Private Sector: Victoria Liu.
    Estimate approved by: Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (new matter is 
printed in italics and existing law in which no change is 
proposed is shown in roman):

                      TITLE 38, UNITED STATES CODE




           *       *       *       *       *       *       *
PART I--GENERAL PROVISIONS

           *       *       *       *       *       *       *



            CHAPTER 5--AUTHORITY AND DUTIES OF THE SECRETARY


                    SUBCHAPTER I--GENERAL AUTHORITIES

Sec.
501.  Rules and regulations.
     * * * * * * *

                   SUBCHAPTER II--SPECIFIED FUNCTIONS

521.  Assistance to certain rehabilitation activities.
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532.  Merchant Mariner Equity Compensation Fund.

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SUBCHAPTER II--SPECIFIED FUNCTIONS

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Sec. 532. Merchant Mariner Equity Compensation Fund

  (a) Compensation Fund.--(1) There is in the general fund of 
the Treasury a fund to be known as the ``Merchant Mariner 
Equity Compensation Fund'' (in this section referred to as the 
``compensation fund'').
  (2) Subject to the availability of appropriations for such 
purpose, amounts in the fund shall be available to the 
Secretary without fiscal year limitation to make payments to 
eligible individuals in accordance with this section.
  (b) Eligible Individuals.--(1) An eligible individual is an 
individual who--
          (A) before October 1, 2009, submits to the Secretary 
        an application containing such information and 
        assurances as the Secretary may require;
          (B) has not received benefits under the Servicemen's 
        Readjustment Act of 1944 (Public Law 78-346); and
          (C) has engaged in qualified service.
  (2) For purposes of paragraph (1), a person has engaged in 
qualified service if, between December 7, 1941, and December 
31, 1946, the person--
          (A) was a member of the United States merchant marine 
        (including the Army Transport Service and the Naval 
        Transport Service) serving as a crewmember of a vessel 
        that was--
                  (i) operated by the War Shipping 
                Administration or the Office of Defense 
                Transportation (or an agent of the 
                Administration or Office);
                  (ii) operated in waters other than inland 
                waters, the Great Lakes, and other lakes, bays, 
                and harbors of the United States;
                  (iii) under contract or charter to, or 
                property of, the Government of the United 
                States; and
                  (iv) serving the Armed Forces; and
          (B) while so serving, was licensed or otherwise 
        documented for service as a crewmember of such a vessel 
        by an officer or employee of the United States 
        authorized to license or document the person for such 
        service.
  (c) Amount of Payments.--The Secretary shall make a monthly 
payment out of the compensation fund in the amount of $1,000 to 
an eligible individual. The Secretary shall make such payments 
to eligible individuals in the order in which the Secretary 
receives the applications of the eligible individuals.
  (d) Authorization of Appropriations.--(1) There are 
authorized to be appropriated to the compensation fund amounts 
as follows:
          (A) For fiscal year 2008, $120,000,000.
          (B) For fiscal year 2009, $108,000,000.
          (C) For fiscal year 2010, $97,000,000.
          (D) For fiscal year 2011, $85,000,000.
          (E) For fiscal year 2012, $75,000,000.
  (2) Funds appropriated to carry out this section shall remain 
available until expended.
  (e) Reports.--The Secretary shall include, in documents 
submitted to Congress by the Secretary in support of the 
President's budget for each fiscal year, detailed information 
on the operation of the compensation fund, including the number 
of applicants, the number of eligible individuals receiving 
benefits, the amounts paid out of the compensation fund, the 
administration of the compensation fund, and an estimate of the 
amounts necessary to fully fund the compensation fund for that 
fiscal year and each of the three subsequent fiscal years.
  (f) Regulations.--The Secretary shall prescribe regulations 
to carry out this section.

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                            ADDITIONAL VIEWS

    I have reservations regarding this legislation. I believe 
that H.R. 23 sets a poor precedent by awarding a $1,000 monthly 
payment to World War II Merchant Mariners. The authorization 
described in the bill has no requirement for the Merchant 
Mariner to have a disability or suffer from financial hardship. 
Currently, the only veterans authorized to receive a service 
pension are Medal of Honor recipients.
    Whether or not to grant an unprecedented new service 
pension to World War II Merchant Mariners is not a question of 
bravery or contributions to victory over the Axis in 1945. 
Those questions have long been settled to the resounding credit 
of the mariners who braved unspeakable dangers to transport 
cargo that kept the Atlantic Alliance alive and fighting.
    It should be noted that the casualty rate often cited for 
mariners in the war has been disputed. This disparity was 
addressed in a 1992 hearing on H.R. 44 (hearing report pages 
142-144). The Civilian Military Service Review Board analysis 
of the Merchant Marine casualty statistics states that, 
``Statistical analysis by merchant mariner organizations did 
not use the same method as U.S. Armed Forces.''
    The Merchant Mariners serving during World War II were 
given veteran status under a system established by Congress in 
the G.I. Bill Improvement Act of 1977, Public Law 95-202. This 
process determined if civilian groups of World War II, like 
Merchant Mariners, should receive veteran status based on their 
service during the war. As of 1992, all World War II Merchant 
Mariners received full veteran status under this system who 
served from the beginning of the war through victory in Japan 
day. This means that all of these World War II Merchant 
Mariners are veterans and qualify for all VA benefits and 
services including healthcare and old age pension.
    An objective and carefully researched report on the 
contributions of Merchant Mariners during World War II and 
post-war benefits for which they were eligible can be found in 
the Congressional Research Service Report for Congress, 
Veterans Benefits: Merchant Seamen, May 8, 2007 (Order Code: 
RL33992: http://www.congress.gov/erp/rl/pdf/RL33992.pdf), by 
Christine Scott and Douglas Reid Weimer.
    Thirty other groups that provided military-related service 
to the U.S. in World War II have received veteran status in the 
same manner as the Merchant Mariners. However, this bill 
ignores their service to the nation; it focuses only on the 
service provided by Merchant Mariners who served during that 
same period. These groups include the Women's Air Force Service 
Pilots, the Women's Army Auxiliary Corps, the famed Flying 
Tigers and many others who gained their status decades after 
their service. They served loyally, selflessly, and 
courageously. Their service contributed directly to victory in 
1945. Yet this bill does nothing for them.
    During the full Committee markup of H.R. 23, I offered an 
amendment that would include these groups, which was defeated 
by voice vote. I attach a list of the other veteran groups that 
received veteran status under the Servicemen's Readjustment Act 
of 1944 (P.L. 78-346) [Attachment A].
    I also find the funding mechanism for this bill to be of 
concern. When this bill was introduced in previous Congresses, 
it was determined that because the benefit was an entitlement, 
it was subject to PAYGO offset requirements. However, the 
current bill uses a compensation fund to turn this entitlement 
into discretionary spending. This side-steps budget rules and 
places an unnecessary burden on the Appropriations Committees.
    There is no current appropriations measure that would fund 
this benefit. The Committee on Veterans' Affairs, which is 
unable to identify the necessary PAYGO offsets to fund this 
benefit, is simply passing the buck to the Appropriations 
Committee. I do not believe this is a fiscally sound way to 
legislate. Further, if insufficient funds were to be 
appropriated, only some Merchant Mariners would receive the 
benefit, while others would not.
    The Military Officers Association of America (MOAA), in 
opposing this bill said, ``If these measures were approved, the 
annuity payable for even a single month of Merchant Marine 
service in World War II would significantly exceed those 
payable to thousands of World War II combat veterans who served 
far longer and suffered significant combat disabilities . . .'' 
MOAA also wrote, ``A World War II military veteran who served 
20 years and retired in 1955 at the grade of E-5 [sergeant] is 
entitled to a military retired pay check of only $900 today.''
    I believe this legislation, though well-meaning, does not 
make the best use of taxpayer dollars, and I fear that it will 
have unintended consequences for future Congresses.

                RECOGNIZED GROUPS UNDER PUBLIC LAW 95-202

    1. 8 Mar 79--Women's Air Force Service Pilots (WWII).
    2. 22 Jan 81--Civilian Employees, Pacific Naval Air Bases, 
Who Actively Participated in the Defense of Wake Island during 
WWII.
    3. 17 Jul 81--Male Civilian Ferry Pilots (WWII).
    4. 7 Apr 82--Wake Island defenders from Guam (WWII).
    5. 27 Dec 82--Civilian Personnel Assigned to the Secret 
Intelligence Element of the OSS (WWII).
    6. 10 May 83--Guam Combat Patrol (WWII).
    7. 7 Feb 84--Quartermaster Corps Keswick Crew on Corregidor 
(WWII).
    8. 7 Feb 84--U.S. Civilian Volunteers Who Actively 
Participated in the Defense of Bataan (WWII).
    9. 18 Oct 85--U.S. Merchant Seamen Who Served on Blockships 
in Support of Operation Mulberry (WWII).
    10. 19 Jan 88--American Merchant Marine in Oceangoing 
Service during the Period of Armed Conflict, December 7, 1941,x 
to August 15, 1945 (WWII).
    11. 2 Aug 88--Civilian U.S. Navy IFF Technicians Who Served 
in the Combat Areas of the Pacific during World War II 
(December 7, 1941, to August 15, 1945) (WWII).
    12. 30 Aug 90--U.S. Civilians of the American Field Service 
(AFS) Who Served Overseas Under U.S. Armies and U.S. Army 
Groups in World War II During the Period December 7, 1941, 
through May 8, 1945 (WWII).
    13. 5 Oct 90--U.S. Civilian Flight Crew and Aviation Ground 
Support Employees of American Airlines Who Served Overseas as a 
result of American Airlines' Contract with Air Transport 
Command during the Period December 14, 1941, through August 14, 
1945 (WWII).
    14. 8 Apr 91--Civilian Crewmen of the United States Coast 
and Geodetic Survey vessels who performed their service in 
areas of immediate military hazard while conducting cooperative 
operations with and for the United States Armed Forces within a 
time frame of December 7, 1941, to August 15, 1945 (WWII).
    15. 3 May 91--Honorably Discharged Members of the American 
Volunteer Group (Flying Tigers) Who Served During the Period 
December 7, 1941, to July 18, 1942 (WWII).
    16. 12 May 92--U.S. Civilian Flight Crew and Aviation 
Ground Support Employees of United Air Lines (UAL), Who Served 
Overseas as a Result of UAL's Contract With the Air Transport 
Command During the Period December 14, 1941, through August 14, 
1945 (WWII).
    17. 12 May 92--U.S. Civilian Flight Crew and Aviation 
Ground Support Employees of Transcontinental and Western Air 
(TWA), Inc., Who Served Overseas as a Result of TWA's Contract 
with the Air Transport Command during the Period December 14, 
1941, through August 14, 1945 (WWII).
    18. 14 May 92--American Field Service (AFS) who served 
honorably on flights with the 3d Combat Cargo Squadron, Army 
Air Forces, December 7, 1941, through August 14, 1945 (Addendum 
to August 30, 1990 AFS (WWII) SAF decision) (WWII).
    19. 14 May 92--Addendum which adds three ships 
(Oceanographer, Hydrographer, and Pathfinder) to the April 8, 
1991, USCGS SAF decision (WWII).
    20. 29 Jun 92--U.S. Civilian Flight Crew and Aviation 
Ground Support Employees of Consolidated Vultee Aircraft 
Corporation (Convair Division), Who Served Overseas as a Result 
of a Contract with the Air Transport Command during the Period 
(WWII) U.S. Civilian Flight Crew and Aviation Ground Support 
during the Period December 7, 1941, through August 14, 1945 
(WWII).
    21. 29 Jun 92--Honorably Discharged Members of the American 
Volunteer Guard, Eritrea Service Command during the Period June 
21, 1942 to March 31, 1943 (WWII).
    22. 29 Jun 92--Addendum for ``oceangoing'' merchant marine 
(includes U.S. Army Corps Engineers, U.S. Army Coast Artillery 
Corps, or U.S. Army Air Force) (WWII).
    23. 17 Jul 92--U.S. Civilian Flight Crew and Aviation 
Ground Support Employees of Pan American World Airways and its 
subsidiaries and affiliates, Who Served Overseas as a Result of 
Pan American's Contract with the Air Transport Command and 
Naval Air Transport Service during the Period December 14, 1941 
through August 14, 1945 (WWII).
    24. 4 Nov 92--U.S. Civilian Flight Crew and Aviation Ground 
Support Employees of Eastern Air Lines-Military Transport 
Division (EAL-MTD), Who Served Overseas as a Result of EAL-
MTD's Contract With the Air Transport Command During the Period 
December 14, 1941, through August 14, 1945 (WWII).
    25. 13 Dec 93--U.S. Civilian Flight Crew and Aviation 
Ground Support Employees of Northwest Airlines, Who Served 
Overseas as a Result of Northwest Airline's Contract with the 
Air Transport Command during the Period December 14, 1941, 
through August 14, 1945 (WWII).
    26. 13 Dec 93--U.S. Civilian Female Employees of the U.S. 
Army Nurse Corps While Serving in the Defense of Bataan and 
Corregidor During the Period January 2, 1942, to June 12, 1945 
(WWII).
    27. 2 Jun 97--U.S. Civilian Flight Crew and Aviation Ground 
Support Employees of Braniff Airways, who served overseas in 
the North Atlantic or under the jurisdiction of the North 
Atlantic Wing as a result of a contract with Air Transport 
Command during the period February 26, 1942, to August 14, 1945 
(WWII).
    28. 2 Jun 97--U.S. Civilian Flight Crew and Aviation Ground 
Support Employees of Northeast Airlines Atlantic Division, who 
served overseas in the result Northeast Airlines' contract with 
the Air Transport Command during the Period December 7, 1941, 
to August 14, 1945 (WWII).
    29. 27 Aug 99--Operational Analysis Group of the Office of 
Scientific Research and Development, who served overseas from 
December 7, 1941, through August 15, 1945.
    30. 30 Sep 99--Three scout/guides assisting U.S. Marines in 
offensive operations in Northern Mariana Islands from June 19, 
1944, through September 2, 1945.
    31. 30 Sep 99--Approximately 50 Chamorro and Carolinian 
policemen, who received military training and under the command 
of the 6th Provisional Military Police Battalion, to accompany 
U.S. Marines in combat patrol activity from August 19, 1945, to 
September 2, 1945.
    32. 21 Feb 03--Reconsideration of ``Pursers'' as part of 
the Flight Crews of U.S. Civilian Flight Crew and Aviation 
Ground Support Employees of Transcontinental and Western Air 
(TWA), Inc., Who Served Overseas as a Result of TWA's Contract 
with the Air Transport Command during the Period December 14, 
1941, through August 14, 1945.
                                                       Steve Buyer.