H.R. 23, The "Belated Thank You To The Merchant Mariners Of World War II Act Of 2007"

PURPOSE AND SUMMARY

HR. 23 was introduced on January 6, 2009, by Representative Bob Filner of California, Chairman of the Committee on Veterans’ vaffairs. HR. 23, as amended, would establish the Merchant Mar- iner Equity Compensation Fund to provide benefits, subject to the availability of appropriations, 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. HR. 23, as amended, 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 Trans- port Service) who served between December 7, 1941, and December 31, 1946.

BACKGROUND AND NEED FOR LEGISLATION

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 com- parison, the death rate for the US. 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 US. Maritime Commission to oversee the rebuilding of this fleet. The US. 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 US. 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 today 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 in- surance liability for war-risk losses.

With the quick buildup of the Liberty ship cargo fleet, the coun- try 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 US. 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 var- ious 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 com- pensation (although indirectly) from the Federal government. Throughout World War II, 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 HR. 23, in the 110th Congress, 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 any- where 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 US. 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 life boats, 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 Seaman” 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 any- where 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 Con- gress 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 (HR. 2346, 79th Congress), failed in Committee, due mostly to pressure and opposition from the uniformed branches and the vet- erans service organizations. As a result, the merchant mariners of World War II 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 held during the 110th Congress on April 18, 2007, successfully sued for veteran status for the merchant mariners of World War II.1 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 offi- cial 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 purposes of receipt of VA benefits.

HR. 23 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, subject to the availability of appropriations, 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.

HEARINGS

No hearings were held on HR. 23 in the 111th Congress. A hear- ing was held in the 110th Congress pursuant to reporting similar legislation to the House of Representatives where that measure was agreed to on July 30, 2007, by voice vote. 1Schumacher, Willner et al. v. Secretary of the Air Force Edward C. Aldridge, Jr., 665 F. Supp. 41 (D.D.C. 1987).

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Passed House amended (07/30/2007)

(This measure has not been amended since it was reported to the House on July 27, 2007. The summary of that version is repeated here.)

Summary: H.R.23 — 110th Congress (2007-2008)

Belated Thank You to the Merchant Mariners of World War II Act of 2007 - Establishes in the Treasury the Merchant Mariner Equity Compensation Fund for payments by the Secretary of Veterans Affairs of a monthly benefit of $1,000 to each individual who, between December 7, 1941, and December 31, 1946, was a documented member of the U.S. merchant marine (including the Army Transport Service and the Naval Transport Service) serving as a crewmember of a vessel that was operated in U.S. waters by the War Shipping Administration or the Office of Defense Transportation and under contract to, or the property of, the United States. Requires such individuals to: (1) apply for such benefit before October 1, 2009; and (2) not have received benefits under the Servicemen's Readjustment Act of 1944.

CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

H.R. 23 would make certain individuals who served as merchant mariners for the United States during World 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 20012

CHANGES IN SPENDING SUBJECT TO APPROPRIATION Authorization Level 120 108 97 85 75 Estimated Outlays 120 108 97 85 75 July 25, 2007 H.R. 23 Belated Thank You to the Merchant Mariners of World War II Act of 2007 As ordered reported by the House Committee on Veterans’ Affairs on July 17, 2007

SUMMARY 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