The points raised in your editorial of Nov. 26 (''Benefits for veterans - in need'') deserves a reply and further amplification.
For one thing, the Veterans Administration budget of more than $24 billion is not the second highest of any federal agency. It is the fourth, following Health and Human Services, the Department of Defense, and payment on the national debt. But in recent years it has dropped to a little more than 3 percent of the total federal budget from more than 5 percent a few years ago.
The entitlements listed in the editorial are quite correct and were enacted by several Congresses over the years to fill needs that existed when they were adopted, continue to be required, and will be far into the future.
The value of the vast VA medical system cannot be estimated unless one could contemplate the tremendous drain on the nation's economy that would occur if these 171 facilities did not exist.
As for the needs of the Vietnam veterans, your editorial cited the ''whole question about the effects of Agent Orange.'' You may rest assured that if it had not been for the clout of the ''veterans' lobby'' no progress would have been made at all on Agent Orange. The Veterans of Foreign Wars took the lead several years ago in demanding that something be done to resolve this question and has continued to demand action. Most recently, the VFW has urged support for proposed legislation in Congress that would put the burden of proof that certain disabilities have been caused by exposure to Agent Orange squarely on the government, not the veteran.
The VFW was highly critical of former VA Administrator Robert Nimmo. On two occasions, the organization demanded that President Reagan reprimand him for comments attributed to him that were critical of veterans' entitlements and in some cases of veterans themselves and an insensitivity toward Vietnam veterans.
Your apparently approving reference to Mr. Nimmo's ''contention that millions of taxpayer dollars are being wasted on disability compensation programs'' calls for a response. Some 2 million American veterans are receiving compensation for service-connected disabilities. Compensation is awarded on the assumption that a veteran would be able to earn, for example, 10 percent more than he is if it were not for his service-connected disability. Ten percent is the minimum and amounts to $62 a month. Very often, a veteran on this lowest rating should receive more because of the nature of his disability, but he failed to have this award upgraded through the VA appellate procedure. All service-connected disabled veterans receive priority for treatment at VA hospitals. Incidentally, the VFW each year wins for veterans more than $500 million in retroactive claims.
The suggestion of merging veterans' programs with other federal programs is the very thing that the VFW and the entire ''veterans' lobby'' are opposed to.
Your editorial was correct in citing the veterans' lobby as being among the ones with the most clout in Congress. To insure that this will continue, the VFW established a nonpartisan political action committee, the only veterans' organization to do so, three years ago. In 1980 it scored 89 percent, and in the 1982 federal elections its record was 91 percent. We intend to stay in there fighting for veterans' rights and entitlements and to prevent them from being eroded in any way.