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33-255 PDF 2007

S. HRG. 110–34

THE FISCAL YEAR 2008 BUDGET

FOR VETERANS’ PROGRAMS

HEARING

BEFORE THE

COMMITTEE ON VETERANS’ AFFAIRS 

UNITED STATES SENATE

ONE HUNDRED TENTH CONGRESS

FIRST SESSION

FEBRUARY 13, 2007

Printed for the use of the Committee on Veterans’ Affairs

(

Available via the World Wide Web: http://www.access.gpo.gov/congress/senate 

(II)

COMMITTEE ON VETERANS’ AFFAIRS 

DANIEL K. AKAKA, Hawaii, Chairman 

JOHN D. ROCKEFELLER IV, West Virginia 

PATTY MURRAY, Washington 

BARACK OBAMA, Illinois 

BERNARD SANDERS, (I) Vermont 

SHERROD BROWN, Ohio 

JIM WEBB, Virginia 

JON TESTER, Montana 

LARRY E. CRAIG, Idaho, Ranking Member 

ARLEN SPECTER, Pennsylvania 

RICHARD M. BURR, North Carolina 

JOHNNY ISAKSON, Georgia 

LINDSEY O. GRAHAM, South Carolina 

KAY BAILEY HUTCHISON, Texas 

JOHN ENSIGN, Nevada 

WILLIAM E. BREW, Staff Director 

LUPE WISSEL, Republican Staff Director 

(III)

C O N T E N T S 

FEBRUARY 13, 2007

SENATORS 

Page 

Akaka, Hon. Daniel K., Chairman, U.S. Senator from Hawaii ........................... 1

Craig, Hon. Larry E., Ranking Member, U.S. Senator from Idaho ..................... 3

Charts: 

FY 2008 Discretionary Budget Request ...................................................... 7

Quality, Affordable Health Care .................................................................. 8

Transcript excerpt, Hearing on Veterans Health Care Eligibility Priorities 

(Part I), held on March 20, 1996, Senate Committee on Veterans’ 

Affairs ............................................................................................................ 143

Rockefeller, Hon. John D. IV, U.S. Senator from West Virginia ......................... 9

Murray, Hon. Patty, U.S. Senator from Washington ........................................... 10

Sanders, Hon. Bernard, U.S. Senator from Vermont ........................................... 12

Brown, Hon. Sherrod, U.S. Senator from Ohio ..................................................... 14

Tester, Hon. John, U.S. Senator from Montana .................................................... 16

Webb, Hon. Jim , U.S. Senator from Virginia ....................................................... 17

WITNESSES 

Nicholson, Hon. R. James, Secretary, Department of Veterans Affairs; accompanied by Michael Kussman, M.D., Acting Under Secretary for Health; 

Hon. Daniel L. Cooper, Under Secretary for Benefits; Hon. William F. 

Tuerk, Under Secretary for Memorial Affairs; and Robert J. Henke, Assistant Secretary for Management ........................................................................... 18

Prepared statement .......................................................................................... 22

Response to written questions submitted by: 

Hon. Daniel K. Akaka .................................................................................. 32

Hon. John D. Rockefeller IV ........................................................................ 45

Hon. Patty Murray ........................................................................................ 49

Hon. Larry E. Craig ...................................................................................... 52

Response to written questions submitted by Hon. Jim Webb to Hon. 

Daniel L. Cooper ........................................................................................... 62

Blake, Carl, National Legislative Director, Paralyzed Veterans of America ...... 74

Prepared statement .......................................................................................... 75

Violante, Joseph A., National Legislative Director, Disabled American

Veterans ................................................................................................................ 78

Prepared statement .......................................................................................... 79

Greineder, David G., Deputy National Legislative Director, AMVETS .............. 85

Prepared statement .......................................................................................... 86

Cullinan, Dennis M., Director, National Legislative Service, Veterans of

Foreign Wars of the United States ..................................................................... 89

Prepared statement .......................................................................................... 90

Robertson, Steve, Director, National Legislative Commission, American

Legion .................................................................................................................... 96

Prepared statement .......................................................................................... 98

Rowan, John, National President, Vietnam Veterans of America ....................... 110

Prepared statement .......................................................................................... 111

Working paper, prepared by Linda Bilmes, John F. Kennedy School of 

Government, Harvard University ................................................................ 118

Page

IV

APPENDIX 

The American Federation of Government Employees, AFL–CIO, prepared 

statement .............................................................................................................. 145

The Friends of VA Medical Care and Health Research, prepared statement .... 148

Chart, Inflation Adjusted VA Research Appropriations ................................ 152

FOVA Membership ........................................................................................... 153

The Independent Budget Response to Written Questions Submitted by: 

Hon. Daniel K. Akaka ...................................................................................... 154

Hon. Larry E. Craig ......................................................................................... 157

Letters to Hon. Daniel K. Akaka submitted by: 

Hon. Frank Q. Nebeker (Ret.), Chief Judge, U.S. Court of Appeals for 

Veterans Claims, dated February 12, 2007 ................................................ 158

Hon. Daniel Ivers (Ret.), Chief Judge, U.S. Court of Appeals for Veterans 

Claims, dated February 13, 2007 ................................................................ 159

Rear Admiral Philip J. Coady (Ret.), Chairman, Board of Directors, Lung 

Cancer Alliance, dated March 22, 2007 ...................................................... 160

Attachment, Lung Cancer Screening and Early Disease Management 

Pilot Program ......................................................................................... 161

The Independent Budget for Fiscal Year 2008 ...................................................... 163

(1)

THE FISCAL YEAR 2008 BUDGET FOR 

VETERANS’ PROGRAMS 

TUESDAY, FEBRUARY 13, 2007

U.S. SENATE, COMMITTEE ON VETERANS’ AFFAIRS, Washington, DC. 

The Committee met, pursuant to notice, at 9:30 a.m., in room 

SR–418, Russell Senate Office Building, Hon. Daniel K. Akaka, 

Chairman of the Committee, presiding. 

Present: Senators Akaka, Rockefeller, Murray, Brown, Tester, 

Webb, Sanders, and Craig. 

OPENING STATEMENT OF HON. DANIEL K. AKAKA, CHAIRMAN,

U.S. SENATOR FROM HAWAII 

Chairman AKAKA. This hearing will come to order. Aloha, and 

welcome to all of you who are here. I look forward to our dialogue 

with Secretary Nicholson and other top VA officials, as well as the 

representatives of all our Veterans Service Organizations here with 

us today. 

I also want to say that I am so delighted to be here with my colleague and friend and former Chairman of this Committee. We 

have worked so well together, and I look forward to continuing that 

relationship for the benefit of the veterans of our country. I am so 

happy to be working with him again. 

At the outset, I am pleased that the Administration is requesting 

a straightforward increase for VA, without some of the offsets proposed in prior years. While some see this proposed budget as good, 

others see it as inadequate. I believe that what we need is a much 

better understanding of some of the specifics before our Committee 

goes forward to the Budget Committee with our views and estimates. 

For example, I believe we need to know what the actual increase 

is for veterans’ health care in the proposed budget. It appears to 

me that inflation and automatic cost increases account for nearly 

all of the $1.9 billion increase being requested of Congress. This 

would leave little funding available for expansions or improvements to key programs such as mental health and care for returning servicemembers. I will address this concern in my questions to 

VA. 

I want you to know that I remain committed to my opposition to 

the policy proposals that would impose higher costs on veterans. 

Once again, the Administration is suggesting that we ask veterans to pay more out of their own pockets if they are not disabled 

but still want access to VA care. Let me be clear about these vetVerDate 0ct 09 2002 15:10 May 29, 2007 Jkt 000000 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 H:\RD41451\DOCS\33255.TXT SENVETS PsN: ROWENA
2

erans who would be forced to shoulder these cost increases. Many 

of these veterans cannot, in my view, be characterized as ‘‘higher 

income.’’ These are veterans living in places like my home State of 

Hawaii, where the cost of living is one of the highest in the country, who make as little as $28,000 a year and would be asked to 

pay new fees for their care or their medication. 

I have a number of questions about this year’s enrollment fee 

proposal. Basing the fee upon family income is a different version 

than the Administration has proposed in the past. I am concerned 

about the lower end of the tier structure, those working families 

with a combined income of $50,000 a year, and how this policy 

would affect them. A family with two-veteran wage earners, each 

taking an average number of medications and each paying the enrollment fee, would have to pay nearly $3,000 more in out-of-pocket 

costs if the proposed fees are mandated. I do not believe this is the 

way to reward the working families who have served our country. 

On the benefits side of the ledger, VA must be ready to adjudicate claims in a timely and accurate manner. Should VA receive 

claims in excess of the 800,000 that are estimated for next year, 

I do not believe the Department will have the resources to handle 

the workload. In addition, VA does not have a history of absorbing 

the impact of new court decisions easily, and I am concerned that 

pending court cases may have an adverse effect on VA’s timeliness 

and accuracy. 

We also know that the ongoing situations in Iraq and Afghanistan are increasing VA’s workload and will continue to do so for 

many years to come. The time for VA to hire and train staff to 

meet present and future demand for timely adjudication is now. 

I will continue to monitor VA’s inventory and staffing requirements. Our Nation’s veterans deserve nothing less than having 

their claims rated accurately and in a reasonable amount of time. 

I am committed to working with the Secretary and my colleagues 

on both sides of the aisle to ensure that the Department gets what 

it truly needs to deliver the highest-quality benefits and services to 

those who have served. 

I am also deeply committed to working to have all of our colleagues in Congress recognize the reality that meeting the needs 

of veterans is truly part of the ongoing costs of war. 

Mr. Secretary, I want to share that, prior to this hearing, staff 

asked some questions about the various proposals included in this 

budget. The day after the budget roll-out, basic questions were 

posed, such as: Would there be a cap on total drug copayments imposed on veterans? We did not receive this information. I cannot 

emphasize enough that answers must be provided in a more timely 

way. 

Again, I want to say welcome to all of you here today, and, Mr. 

Secretary, I want to wish you well. As I told you, we look forward 

to working together for a great year and in years to come for our 

veterans. We do this on behalf of the Nation’s veterans in the 

weeks and months ahead, as the Committee works to put together 

the best possible budget for veterans’ programs in the coming fiscal 

year. 

Now, I would like to call on our Ranking Member, Senator Craig, 

for his statement. 

3

STATEMENT OF HON. LARRY E. CRAIG, RANKING MEMBER,

U.S. SENATOR FROM IDAHO 

Senator CRAIG. Well, Mr. Chairman, thank you very much, and 

I think your concluding words are the most important—‘‘the best 

possible budget’’ we can possibly arrive at for our veterans. 

And, again, let me thank you, Mr. Secretary, for appearing before 

the Committee this morning. I know that it has been difficult to 

put a 2008 budget together in the absence of a 2007 budget. I think 

we will have that out for you this week. But where is the level of 

spending? And I think that is a concern. I would say, though, that 

working with all of my colleagues on this Committee and the Appropriations Committee staff, I think—in fact, I believe in an absolute certain way that you will be pleased with the 2007 budget, as 

will millions of veterans who rely on VA’s services, because I think 

this Congress has been responsive. 

Today, you put before us another strong funding recommendation 

for the upcoming fiscal year. Within the context of the total Federal 

budget request for Fiscal Year 2008, veterans are again, in my 

opinion, clear winners. Let me give a visual demonstration of this 

fact. 

On the chart behind me, you will see that when discretionary 

spending increases associated with defense- and homeland securityrelated spending are factored out, there is an $8 billion increase 

left over for all other Federal agencies and programs. Of that $8 

billion, under the President’s plan, about $3 billion will go to VA. 

In effect, this will leave about a 1 percent increase for the rest of 

Government. As I said, the President and the Congress continue to 

make veterans a priority within the overall Federal budget. 

Unfortunately, I have read or heard a number of statements 

from some of my colleagues suggesting that this President has 

demonstrated a lack of commitment to VA funding. This rhetoric 

persists even in the face of a VA budget that has increased 77 percent—let me repeat that—a VA budget that has increased 77 percent under President Bush’s watch. Where was the strident criticism during the late 1990s when, in 2 consecutive years, actual 

cuts in VA medical care were proposed by then-President Clinton? 

Why now are 10 percent average annual increases bemoaned as inadequate, but 2 percent increases during the Clinton years were 

hailed as an essential to control Federal spending and reduce the 

deficit? Frankly, I find that double standard very troubling. 

In the past, I have spoken at length about impending collisions 

between VA spending and the spending of other Federal programs. 

Well, as the chart demonstrates, the collision is upon us, except it 

does not resemble a collision at all. It, rather, resembles the VA in 

an 18-wheeler headed down the Federal road and running over the 

top of other agencies in its process. 

Now, that is an interesting and probably a colorful metaphor. It 

begs the question. Can this pattern be sustained? That is the question that I and my colleagues will grapple with as we debate with 

you, Mr. Secretary and the President, the President’s budget in the 

months ahead. 

One of my favorite sayings is attributed to Benjamin Franklin. 

He said, ‘‘The definition of insanity was doing the same thing over 

and over but expecting different results.’’ Well, it appears that the 

4

Administration has heeded Ben Franklin’s wisdom with the Fiscal 

Year 2008 VA budget in three key areas, and I commend the President for listening to his critics on these issues, and I would hope 

we could shift some courses. This President has shifted courses. 

First, as many already know, it is the sixth year in a row that 

some form of increased cost sharing on veterans with higher incomes and no service-connected disabilities is being proposed. The 

Chairman has just mentioned it. Each year, the proposals were essentially dead upon arrival. We all know that. There was not a 

Congressman or a Senator who wanted to support them. Members 

of the veterans organizations alike argued that Priority 7 and 8 

veterans were not wealthy and that an enrollment premium would 

drive veterans from the system because they simply could not afford to pay it. 

In response, this year the President’s budget proposes a tiered 

premium that only applies when the income of a non-service-connected veteran hits $50,000, double the income floor of previous 

proposals, and above the median income level in the United States. 

The Chairman of the MilConVA Subcommittee of Appropriations 

now, she and I had that discussion a year ago and recommended 

to the Administration that if they came back to us with the same 

proposal, it would go nowhere. They have not. They have substantially adjusted and changed it. 

Second, many complained that the priority proposals forced one 

veteran to pay for the health care of another, and that relying on 

future premium collections to reduce appropriated dollars was a 

risky way to fund a health care system. This year, the President 

proposes exactly the opposite. He recommends that new revenues 

generated by his proposal be deposited directly in the Federal 

Treasury, no tradeoffs, and not used as an offset against appropriated dollars. In other words, the President’s medical care appropriation request is not affected by or dependent upon the Congress’ 

action on his fee proposals. 

And, finally, past budgets by both Republican and Democratic 

Presidents have been criticized for their use of unspecified management efficiencies that were driven primarily by OMB’s directives to 

reduce the need for appropriated dollars. This budget ends that 

practice. 

Let me talk for a moment, Mr. Chairman, about my own view 

of the President’s proposals. I know many Senators have come out 

once again against the President’s premium proposals in this budget. I, on the other hand, am one that finds these premiums to be 

a very reasonable price for access to what is widely now hailed as 

the best health care system in America. I would like to take a 

minute to go back in time to the late 1990s when the VA first 

began the transformation from a hospital system to a health care 

system. And as we know, those approaches are very different. 

From about 1999 on, the VA started to see hundreds of thousands of new enrollees every year. Interestingly enough, an overwhelming proportion of those new enrollees were Medicare-eligible 

vets from World War II and the Korean War. In fact, today over 

45 percent of the 5.5 million users of VA’s health care system are 

Medicare eligible. Many of them signed up for VA care to get access 

primarily to one thing: the drug benefit. 

5

Of course, at that time Medicare Part D was not an option for 

them. Now it is. As enrollment accelerated, long wait times began 

to appear. Using authority given by the Congress to focus limited 

resources on the VA’s highest priority patients, then-Secretary 

Tony Principi closed enrollments to new Priority 8 veterans. As a 

result of all of this, I find myself in a bit of a quandary. The VA 

now provides care to 2.5 million veterans who have access to Medicare and nearly 550,000 who have TRICARE coverage and 215,000 

who have both TRICARE and Medicare. That may be well and 

good, but it probably is not efficient, and it certainly does not appear fair to those Priority 8s now locked out of VA with no insurance coverage at all. 

I often talk of those Priority 8s who, for purposes of this discussion, I call the ‘‘Boise Cascaders.’’ Now, that may sound confusing 

to all of you. These are veterans in their late 40’s and 50’s who 

once worked for Boise Cascade Corporation, home-based in my 

State of Idaho, a forest products company. Unfortunately, the decline in the timber industry in the country shoved them off the 

rolls of a large company’s health care plan. They are now working 

in small businesses—construction, electrical work, local stores, et 

cetera—and they cannot afford health care insurance on their salary, and their employers do not provide it. 

The chart behind me shows what the average cost of an individual health care insurance premium is in this country today, and 

that is $4,242. This is what a Boise Cascader—and there are many 

of them across the Nation as our economy adjusts and changes—

is forced into paying. 

The President’s proposal may be showing us an opportunity to 

offer VA health care at an affordable price to those who cannot 

offer it to themselves at a time of their need. I cannot think of anyone with a family income of at least $50,000—and that is what the 

new proposal is—and without any other health care insurance who 

would not suddenly drop VA health care because all of a sudden 

it cost them $21 per month. Now, that is $21 per month to access 

the number one health care delivery system in the country. By anybody’s guesstimation, Mr. Chairman, that is a flat bargain. 

Perhaps some with other health insurance would choose not to 

pay multiple premiums for multiple plans, and if so, so be it. I 

think it is an opportunity for us to take a segment of America’s 

workforce that is underinsured or uninsured today and to allow 

others who have three options—Medicare, TRICARE, and VA—to 

determine which of those options they would choose to access. 

So in the end, Mr. Chairman, I believe we have a strong budget 

request for VA with thought-provoking proposals. I note with interest that VA’s request for medical care when all sources of revenue 

are included even exceeds the recommendation made by the Independent Budget. And as you know, Mr. Chairman, the last several 

years we have always heard that as a comparative. 

I am sure our VSO panel will have more to say on this point, but 

I have said before that the care of America’s veterans continues to 

be a clear funding priority of this Congress and this President, and 

I think this budget reflects it. And within the VA’s budget, the 

needs of our veterans returning from Iraq and Afghanistan, the 

disabled, the poor, are front and center, where they belong. 

6

Mr. Chairman, I have spoken long enough. You have been very 

patient. I think these are important issues to make. They will go 

on in the debate over the next several months as we work this 

budget out. I look forward to hearing from the rest of my colleagues 

and the witnesses before the Committee today. 

Thank you. 

Chairman AKAKA. Thank you very much, my colleague, for your 

statement. 

[The Fiscal Year 2008 Discretionary Budget Request, and the 

Quality, Affordable Health Care charts follow:]

7


33255.161
8


33255.162
9

Let me call for opening statements on Members of this Committee. I want to welcome the Members of the Committee here, and 

we will begin with Senator Jay Rockefeller. 

STATEMENT OF HON. JOHN D. ROCKEFELLER IV,

U.S. SENATOR FROM WEST VIRGINIA 

Senator ROCKEFELLER. Thank you, Mr. Chairman. I have to go 

do an Aviation markup right after my statement, for which I genuinely apologize. It is a classic case of cross-scheduling, which always hurts somewhere. 

Mr. Secretary, I am very glad that you are here. I wrote a letter 

to Jim Altmeyer the other day and mentioned you. And I am also 

very aware of what Senator Craig has said most clearly, and that 

is that there has been a 77 percent increase since the President 

took office. And I will agree that that sounds dramatic. There is a 

whole variety of ways of taking that and breaking it down and seeing it in other ways. But that is not for the point here. 

I think our Members would care to understand that life is not 

always what is the percentage of increase but, rather, are people 

getting taken care of the way they should be taken care of? And 

if you are looking at a budget, obviously everything is in the realm 

of possible. But it really should be—in terms of veterans, it is different from other budget item. Are they getting the health care 

they actually need and deserve? 

My sense is that this budget does not do that. The Independent 

Budget suggests that VA health care needs an additional $2 billion 

for fully funded care. The VA has seen an enormous increase in 

workloads, and health inflation is real. But we have to focus on the 

challenging needs of our veterans returns from Iraq and Afghanistan, and I would dispute some who would say that they are getting all that they need. 

I visit with them constantly, as I have discussed with Patty Murray on a number of occasions because I think Patty is passionate 

about veterans, and I think she deserves the credit for restoring 

$1.3 billion to our veterans’ health care budget last Congress. But, 

you know, we have got Iraq veterans, we have got Afghanistan veterans, we have got World War II, Korea, and Vietnam veterans. 

They served, all of them, and they all deserve their benefits. 

I worry that the VA continues to propose new fees to either drive 

veterans away from VA health care or make them pay more. One 

of the previous speakers indicated that we added on an extra fee 

in the past. But that was for a new program, for something called 

long-term care, which had never existed in the history of this country before and which was done by Senator Specter and myself and 

Lane Evans in the House before some were even on this Committee. So there was a reason for that fee increase—a new program, entirely new program. Still it is the only long-term care program in this country. 

I think this year’s proposal is even more discouraging about fees 

because the budget suggests that enrollment fees go to the Treasury general revenue. People can try to make that look good or 

somehow as a responsible thing to do. I do not understand that 

type of thinking. 

10

Whenever I can, which is about every other weekend, I spend 3 

to 4 hours in the afternoon usually with returned Afghan and Iraq 

veterans. They are young. Sometimes they go back to the Vietnam 

War, but not usually. Most of them are wounded. I do not see them 

at Walter Reed. I see them in West Virginia. And so I see them 

when they are in the course of their VA rehab and PTSD care 

along with the rest of it. There is no staff. There is no press. There 

are no pencils, no paper. Nothing goes outside the room. And these 

have been very, very powerful, emotional events for me, one after 

another after another. There are a lot of cases that come out of 

that which make me think of our VA budget. 

I think it is really important to be honest about information, not 

just percentage increases but what is actually being done, what do 

people get, what do they not get. I think we also need a better process. I am quite pleased that the joint continuing resolution has a 

$3.6 billion increase for VA health care for the rest of this fiscal 

year. But this increase is 4 months late. As the Secretary knows 

only too well, such delays are hard for VA centers, especially not 

staffing decisions. 

As I indicated—this is about a quarter of what I wanted to say—

I have to do an Aviation markup and, unfortunately, I have to 

Chair it. So I have got to leave, Mr. Chairman, and I apologize for 

that. But I just think we have to be very, very careful when we are 

talking about veterans, number one, that we do not get political. 

Whether President Clinton did or did not do something is not particularly relevant to me, or whether President Bush did or did not 

do something. But the only test that counts here is: Are they getting the services, the medical services they need? The deep degree 

of distress of our veterans is almost impossible to describe the hurt, 

and you do not see it, and you do not get until you have been with 

them for several hours. And then somebody starts going really deep 

in describing his or her hurt, and then other members who are 

there, 12 or 13 gathered around in a circle, they say, ‘‘Stop, stop, 

stop. Don’t go there. That is too painful for me.’’

Now, are we dealing with that? Are we not? Are we dealing with 

it adequately? Are we not? I think that is the only question that 

counts. 

Thank you, Mr. Chairman. 

Chairman AKAKA. Thank you very much, Senator Rockefeller. 

Senator Murray? 

STATEMENT OF HON. PATTY MURRAY,

U.S. SENATOR FROM WASHINGTON 

Senator MURRAY. Thank you very much, Chairman Akaka, Senator Craig. I appreciate your holding this very important hearing 

on the President’s budget proposal for Fiscal Year 2008. I want to 

thank the Veterans Service Organizations who are here as well 

today, who put an awful lot of work into crafting the Independent 

Budget, and I think it is very important we hear what they have 

to say. So I appreciate them being here. 

I want to welcome back Secretary Nicholson again. Mr. Secretary, as I said to you privately before we started, thank you so 

much for the new CBOC in Northwest Washington, the new Vet 

Center in Everett. These are issues we have been working on for 

11

a number of years, and our vets in northwest Washington are really pleased that someone is finally moving the ball forward. And I 

do want to thank you for that publicly. 

Mr. Chairman, with our troops fighting overseas and more veterans being created each and every day, it is critical that we do everything in our power to make sure that the budget we provide 

provides for our veterans. In the past, the VA has been dramatically wrong in its budget projections, and I think we all agree we 

can never let that happen again. 

Mr. Secretary, you and I both agree that the VA’s health care 

system is among the best in the country, once you get in the door, 

and that is what concerns many of us. It is the problem of getting 

in the door that we have to make sure we are addressing. 

I am very concerned that the budget that we are looking at closes 

the VA’s door to thousands of our Nation’s veterans. It does, as has 

been talked about, include new fees and increased copays that will 

discourage veterans from accessing the VA, and it continues to bar 

Priority 8 veterans from enrolling in the VA health care system. 

I am also very concerned that the VA is still underestimating the 

number of veterans from Iraq and Afghanistan that will seek care 

in the VA. In Fiscal Year 2006, the VA underestimated the number 

of patients it would see by 45,000. For the current fiscal year, 2007, 

the VA has been forced to revise its projection up by 100,000 veterans. Now the VA is projecting that it will see 263,000 Iraq and 

Afghanistan vets in 2008, but I am being told by some that the VA 

should actually be preparing to care for more than 300,000 returning veterans. Frankly, I think it is very important that we do not 

underestimate this number. We have seen the past failures in the 

VA to accurately project the numbers, and I think it is important 

that this Committee get it right. 

While this budget increases funding for the VA over previous 

years, as we have heard, it does barely keep pace with inflation 

and other built-in costs, and it falls far short, as we will hear from 

the Independent Budget recommendations. This budget assumes 

cutbacks in veterans’ health care in 2009 and 2010, and I think we 

need to focus on that, Mr. Chairman, because we cannot project out 

the care of some of these veterans in the short term. We have to 

make sure they are covered in the long term, and this budget does 

not do that. 

This budget also assumes a decrease in the number of inpatient 

mental health patients. When all signs everywhere point to an increase in need, when the President has now proposed a surge of 

troops to Iraq, when the men and women in uniform are being deployed for their second and third tours of duty, and when more and 

more of our troops are coming home with PTSD and mental health 

care needs, I do not understand how the VA can assume that they 

will treat fewer patients for inpatient mental health care. 

Mr. Chairman, I think our veterans deserve a better budget than 

has been presented to us. They deserve a budget that is based on 

real numbers and real needs. We all know too well what happens 

when the VA gets shortchanged. It is not bureaucrats in D.C. that 

suffer. It is the men and women who have served us so honorably 

that pay the biggest price, and I hope that, through strong oversight of this Committee and your leadership, we will make sure we 

12

are presenting a budget that does reflect the needs that we have 

in front of us. 

Thank you. 

Chairman AKAKA. Thank you very much, Senator Murray. 

May I call on Senator Bernie Sanders. 

STATEMENT OF HON. BERNARD SANDERS,

U.S. SENATOR FROM VERMONT 

Senator SANDERS. Thank you very much, Mr. Chairman. And, 

Mr. Secretary, welcome. Thank you for being here. 

Let me begin by concurring with many of the remarks made by 

others who have already spoken, and let me just start off by commenting a little bit on my friend Senator Craig’s remarks about the 

very significant increase in the last several years. There are two 

reasons for that. Number one, as we all know, the cost of health 

care is soaring in every area of our lives, so if nothing else were 

happening, the cost of health care is going up. And, number two, 

we are at war, and more and more of our soldiers are coming back 

wounded, and they need care. So I think those factors have got to 

be included when we look at the increased in VA spending. But the 

issue that we should be focusing on, as others have said, is— is the 

amount of money that we are spending adequate to take care of the 

needs of the men and women who are the veterans of this country? 

And I would hope, Mr. Chairman, that there is no disagreement 

on this Committee. I know that we have different political philosophies here, but I would hope that there is no disagreement that 

when a man or woman puts his or her life on the line to defend 

this country, whether it is a war that I support or I do not support, 

that we all agree that when that person comes home, they are entitled to all of the health care they need for the rest of their lives; 

that, in other words, when the Congress votes to send people to 

war, that we understand that the cost of war is not just the tanks 

and the bullets, but that the cost of war is that 90-year-old soldier 

who may have fought 50 years ago and was hurt, and that we are 

not a serious country, a moral country, if we ever turn our backs 

on any of those soldiers. I would hope that there would be agreement on that. 

Sadly, for a number of years—and I think it is without dispute—

the budgets that President Bush has sent us have been totally inadequate, and the evidence is pretty clear, because in Vermont, 

and I think all over this country, there are waiting lists for people 

to get into the VA. There are staffing shortages. There are, very 

clearly, backlogs in terms of the processing of the claims that veterans bring forward. I do not think there is a disagreement to that, 

Mr. Secretary. Maybe you will speak to that in a moment. But 

when a veteran puts in a claim, they should not have to wait 6 

months or a year to get that claim adjudicated. You know as well 

as I do that there are veterans who absolutely believe that one of 

the reasons for that is maybe they will die, and then the VA will 

not have to pay out the claim. I do not want one veteran in the 

United States of America to hold that view. 

Also, I would concur with the Chairman and others to say that 

when people put their lives on the line, we should not be asking 

them to pay substantially more—almost double—for prescription 

13

drug fees. We should not be increasing the fees for people to get 

into the VA, which, in my view, has the designed purpose of pushing people out of the VA health care system altogether. We should 

be welcoming people into what some have referred to as one of the 

great health care systems in the world, not pushing them out. 

We all know—and I want to thank all of the veterans organizations for the excellent work that they have done, and I think the 

Independent Budget that they have given us is a very important 

document. It enables us to go forward in assessing the needs of veterans from the perspective of the veterans themselves. And I appreciate very much what they have done, and this year’s Independent Budget reveals that the Administration’s proposed budget 

is about $4 billion short—$4 billion short. 

Now, Mr. Chairman, those of us in the Congress know that there 

are many competing funding priorities. Four billion dollars is, in 

fact, a lot of money, but let’s see how within the Bush budget that 

$4 billion competes with other needs that the President has 

brought forward. And I want everybody to hear this because this 

is really what this whole debate is about. It is about priorities. It 

is about how strongly we really care about people who put their 

lives on the line compared to others. 

In the President’s budget, he proposes the elimination of the estate tax. This tax cut benefits only—the only beneficiaries of that 

repeal are the wealthiest two-tenths of 1 percent of the American 

people; 99.8 percent of Americans do not benefit one nickel from 

the repeal of the estate tax. Eliminating the estate tax will save 

one family—the Walton family, who owns Wal-Mart, as we all 

know—over $32 billion. Mr. Chairman, one family, the repeal of 

the estate tax will benefit $32 billion. And I would like anybody in 

this room to tell me that as a Nation we cannot come up with another $4 billion to protect the men and women who have put their 

lives on the line defending this country when we can come up with 

$32 billion for one family. One family. This Nation is the wealthiest 

nation in the history of the world. We have the funds to take care 

of our veterans. 

Mr. Chairman, I have to say that one of the most glaring—and 

Senator Craig raised this issue, and maybe we can work together 

on this issue—examples of the abandonment of our veterans is the 

bar on Category 8 veterans. Since 2003, this Administration has 

closed the door to VA enrollment by new Category 8 veterans. Estimates are that over a million veterans have been denied access to 

care as a result. 

Now, these are ‘‘wealthy’’ veterans. Let us be clear. These are not 

the Walton family ‘‘wealthy’’ veterans. These are people who, if 

they are single, earn $28,000 a year. They cannot get into the VA 

anymore. We cannot take care of them, but if you are the Walton 

family, we have got $32 billion to take care of you. 

Mr. Chairman, in my view, we should take a very, very hard look 

at this budget. In my view, we have got to keep faith with the 

22,000 soldiers who have been wounded in Iraq, the tens and tens 

of thousands more who are going to be coming home with severe 

post-traumatic stress disorders and other problems. 

I should tell you, Mr. Chairman, that my office is now working 

on a comprehensive piece of legislation which will include many of 

14

the concerns that the veterans organizations have. We are going to 

bring that forward, and we look forward to support of Members of 

this Committee. The time is now to get our priorities right, and included in that is the need to take care of our veterans. 

Thank you very much, Mr. Chairman. 

Chairman AKAKA. Thank you very much, Senator Sanders. 

Senator Sherrod Brown? 

STATEMENT OF HON. SHERROD BROWN,

U.S. SENATOR FROM OHIO 

Senator BROWN. Thank you very much, Mr. Chairman. 

Secretary Nicholson, thank you, and thank you for your quick responsiveness to many of us on this Committee. I appreciate that 

and your commitment to the Nation’s veterans. I especially echo 

Senator Murray and her thanks of helping particularly with 

CBOCs in Parma, Ohio, and other outpatient clinics and your work 

on the consolidation in Cleveland and what that means especially 

for psychiatric care and especially for homeless veterans. Thank 

you for that. 

One hundred and eight years ago, in a tailor shop in the then 

small town of Columbus, Ohio, the 13 veterans who recently returned from the Spanish-American War met and talked about sharing their memories, talked about their fallen comrades, talked 

about issues facing returning veterans coming home, talked about 

pensions and the fact there were no pensions, no real health care 

for these veterans. In that small tailor shop, out of that meeting 

of those 13 veterans came the VFW. 

The VFW and so many other veterans organizations, from the 

Vietnam Vets to the American Legion to the Disabled American 

Vets and so many organizations, are a big reason that we are here 

today and a big reason that this Nation has done not always adequate, but a decent job over the years of taking care of our veterans. 

As this body so often does not go much beyond being a responsive 

body, whether it is environmental law, whether it is the creation 

of Medicare and Social Security, whether it is civil rights, or 

whether it is veterans issues, clearly these outside organizations, 

like the VFW and the American Legion and others, have played 

such a role in getting this body to do the right thing. And I thank 

all the veterans organizations that have played such a major role 

in that, especially, as Senator Craig said, now that the VA really 

is the best—probably the best health care system in this country. 

But I also concur with Senator Murray in that we simply—the 

VA and the President’s budget are sorely lacking in what we really 

ought to be doing. We know of the problems. We have heard them 

stated over and over. A couple of things I wanted to address, not 

to go over all the issues that my colleagues—Senator Sanders and 

others—talked so well about. 

The VA medical care funding still lags behind clearly what is 

needed to meet the growing number of veterans. The Administration proposal is a scant 0.14 percent, one-seventh of 1 percent, 

more than last year’s when adjusted for inflation and increased patient utilization costs. As Senator Sanders said, we all share outrage in the VA charging Priority 7 and 8 veterans additional health 

15

fees. It is seeking authority, as was discussed, to redirect $310 million in revenues that would be generated from these fees to the Department of the Treasury. Instead of reinvesting those dollars into 

a VA to help Secretary Nicholson and the Under Secretaries and 

the Assistant Secretaries representing the VA today, instead of 

helping them take care of using those funds for less affluent, if you 

will, by Senator Sanders’ definition, to take care of them, it is 

money that goes back into the Treasury that pays, again, for the 

tax cuts that Senator Sanders mentioned. 

Third, veterans should not have the lengthy waits for health care 

and should not be excluded from enrolling for care. The VA health 

care system needs to be fully funded and on time to provide for all 

veterans seeking care. 

Lastly, there was an article in the Miami Herald on Sunday, I 

believe, that had a couple of interesting facts and charts that tell 

me we have a long way to go, especially on outpatient mental 

health care or mental health care generally in the VA. There is a 

chart that shows there are—based from 1995 and a decade later—

I will give these to the Secretary and will ask about them. I, like 

Senator Rockefeller, have to leave for other committees, but will 

come back. 

Ten years ago, there were 565,000 patients treated in the VA 

mental health system. Today, there are 923,000. That is no surprise, especially with this war. But, equally importantly, in 1995, 

outpatient mental health visits per veteran, 15.1, the average veteran receiving outpatient mental health treatment was—they paid 

15.1 visits. Ten years later, in 2006, it was 11 visits per patient. 

I do not understand that. I think probably the VA is doing some 

things to discourage people, the fees, the copays, that kind of thing, 

to discourage people from coming. 

Even more significant, perhaps, is that per patient veteran costs 

have come down even before correcting for inflation. In 1995, the 

VA was spending $3,500 per patient for mental health care. In 

2004—they do not have 2005 or 2006 numbers in this chart—it was 

$2,500. So we are spending $1,000 less even before correcting for 

inflation, $1,000 less. And to compound that, some veterans get 

more visits, obviously, than others, but that is in part based on 

which clinics they are assigned to or they live near. Average number of visits per veteran with PTSD ranged from 22 in the Hudson 

Valley Medical Center to a low of 3.1 in Fargo, North Dakota. That 

is not a function of—I cannot believe that is a function of the illness of the veteran on average. It is more a function of something 

that the VA is doing differently or not doing right. 

So all of those concerns, Mr. Chairman, we need to look at. I 

think that mental health coverage and care for the VA is improving, but not nearly fast enough. I am not convinced we are prepared for the next 50 years of mental health problems so many of 

our veterans face from this awful war. And I think that we need 

assurances and we need real demonstrations from the VA that they 

are both aware of that and are taking steps to deal with it.

16

I thank the Chairman. 

Chairman AKAKA. Thank you very much, Senator Brown. 

We will hear now from Senator Jon Tester. 

STATEMENT OF HON. JON TESTER,

U.S. SENATOR FROM MONTANA 

Senator TESTER. Thank you, Mr. Chairman. I also want to thank 

the Secretary for being here. I very much look forward to what is 

said in this Committee meeting. I will make my remarks very 

short. 

First of all, I want to tell you that everywhere I go, I am told 

that in the veterans’ facilities you have some of the best doctors, 

nurses, and staff that are available. They are doing an incredible 

job. 

On the other hand, I will also tell you that they are being burnt 

out. They are understaffed. And that bothers me, especially when 

you have quality people. So that is an issue. 

We have been talking to the grassroots folks for nearly 2 years. 

I mean, literally that has been what I have done since May of 2005. 

And I can tell you that not all the people I have talked to have 

complaints, but there are enough of them that have complaints 

that make me think that there is a problem. 

My barber, for example, who is a Korean War vet, is very happy 

with the service he gets. He has gotten through the door. 

On the other side of the coin, over the last year and a half to 

2 years, I cannot tell you the number of episodes that I have 

heard—I have not brought it up, although we did have some hearings here a couple of weeks ago with veterans about issues of access and accessibility and the folks that are trying to get through 

the door that cannot, that are being delayed. Several folks told me 

that they think the delays are intentional. They think it is because 

of lack of resources, money, and they think that the VA is trying 

to outlive them. 

Now, I do not know if that is correct or not, but the truth is, if 

it is correct, we should be ashamed. Because as Senator Sanders 

said, I think that this is a cost of war that we cannot overlook, if 

you take a look at how this country was founded and why it was 

founded and what we stand for. And I think we are on the same 

page on that. 

The health care benefits for veterans, from my perspective, is not 

a reward. It is a matter of fulfilling a promise that we have given 

our veterans. And I will tell you that. If I did not think this was 

an issue, if I did not think there was just a whole bunch of folks 

out there that have served this country so very well on the battlefield and in peacetime that deserve the benefits, I would not feel 

so strongly about the fact that this budget needs to be scrutinized, 

and it needs to be scrutinized very strongly. And, quite frankly, I 

do not think it is adequate. 

If you take a look at the 0.14 percent increase and then assume 

the number of veterans—and I am sure you have got spread sheets 

that extrapolate this out—from the Iraqi and Afghanistan war, I 

think we may be put into a position where folks cannot get through 

the door and they cannot get the access, because I agree with Senator Murray, once they get through the door, they are getting good 

17

health care. But the matter of fact is, I do not think that all the 

ones that need to get through the door are. 

So I look forward to your presentation, folks. I appreciate your 

being here, and I appreciate being a part of this Committee. 

Chairman AKAKA. Thank you very much, Senator Tester. 

Senator Jim Webb? 

STATEMENT OF HON. JIM WEBB,

U.S. SENATOR FROM VIRGINIA 

Senator WEBB. Thank you, Mr. Chairman, and I also will attempt to be brief. We run the risk of having had the hearing before 

we have heard the testimony of the people here. 

I want to take notice and ask the Secretary and the veterans 

group members to take notice of the attendance here this morning. 

I think it is a clear indicator of the emphasis that we on this side 

of the table put on veterans’ issues. And I, like a number of the 

new Members on the Committee, actively sought to be on this Committee. We care deeply about veterans’ issues. 

Next month marks the 30th anniversary of when I started working formally on veterans’ issues as a full committee counsel on the 

House side. And I have tremendous regard for the people who have 

dedicated their careers to working in the veterans area. I think 

they are among the most selfless people in Government. You find 

so many people who are doing this absolutely for the right reasons 

and dedicating their professional lives to it. And, also, to many people in the veterans groups themselves who have made themselves 

professionals on issues that go directly to veterans’ health care. 

I entered the room when the Ranking Republican was making a 

comparison, basically defending the current budget process, talking 

about why could people be attacking a 10 percent increase when 

they were defending a 2 percent increase during the Clinton years. 

And I think as my colleague Senator Sanders pointed out, there are 

clear reasons for that. The first, is obviously, we have entered a 

wartime period. There are different needs. There is a different pool 

of veterans coming in. And at the same time, there has been a 

breakdown of medical care in this country nationwide. In the last 

6 years, medical costs in this country have gone up 73 percent, and 

36 percent of that has been right out of people’s pockets. So there 

has been a natural migration into the VA system. 

I was a little puzzled, quite frankly, hearing this comment about 

how 45 percent of the veterans who are coming to the VA are Medicare eligible and have come over basically because of this prescription drug program and that that might be mitigated by Medicare 

D, and perhaps it will. Medicare D is in its own period of transition. But to say that those people coming into the system are doing 

so to the exclusion of people who do not have medical insurance basically begs the question. If both of these classes of people are eligible, why shouldn’t we be treating both of them? Somewhere along 

the line the Government is going to pay, whether it is Medicare, 

TRICARE, or the VA. And the VA system, I am proud to say, as 

someone who has worked on and off in it for 30 years, is a wonderfully fine system. And those who have eligibility ought to be using 

it. 

18

I would like to say to you, Mr. Secretary, you are aware that I 

have strong feelings about the need for those people who have been 

serving since 9/11 to get a GI bill that is worthy of their service. 

That is something I look forward to discussing over the coming 

months. There are a number of other issues that I have some concerns about, but I would be very anxious to get into the testimony, 

Mr. Chairman, and to hear the witnesses. 

Thank you very much. 

Chairman AKAKA. Thank you very much for your statement, Senator Webb. 

All right. We will go into our questions now. Mr. Secretary, before we get to our questions, I want to invite you to make your 

statement or other statements that you have before the Committee. 

Again, we welcome you to the Committee. 

STATEMENT OF HON. R. JAMES NICHOLSON, SECRETARY,

DEPARTMENT OF VETERANS AFFAIRS; ACCOMPANIED BY 

MICHAEL KUSSMAN, M.D., ACTING UNDER SECRETARY FOR 

HEALTH; DANIEL L. COOPER, UNDER SECRETARY FOR

BENEFITS; WILLIAM F. TUERK, UNDER SECRETARY FOR

MEMORIAL AFFAIRS; AND ROBERT J. HENKE, ASSISTANT

SECRETARY FOR MANAGEMENT 

Secretary NICHOLSON. Thank you, Mr. Chairman, Members of 

the Committee. Good morning. I do have a written statement I 

would like to submit for the record. 

Chairman AKAKA. It will be included in the record. 

Secretary NICHOLSON. Thank you, Mr. Chairman. I would also 

like to introduce my colleagues that are with me here at the table. 

I will start at my far left, your right: Under Secretary for Memorial 

Affairs, Bill Tuerk. Next to him is the Under Secretary for Benefits, Admiral Dan Cooper. To my immediate left is the Acting 

Under Secretary for Health, Dr. Michael Kussman. On the far right 

is the Assistant Secretary for Information Technology and the 

Chief Information Officer, Bob Howard. And on my immediate 

right is the Assistant Secretary for Management, and, in effect, the 

Chief Financial Officer of the VA, Bob Henke. 

Let me preface my remarks by saying that I look forward to 

working with the 110th Congress, and particularly our Veterans’ 

Committee, in a bipartisan, bicameral way of support for our Nation’s veterans. I have heard said and I have said that I think taking care of our veterans is, in essence, not a partisan endeavor. It 

is a patriotic endeavor. And I want to offer my congratulations to 

the Committee’s newest Members: Senators Sanders, Brown, Webb, 

and Tester. 

I am here today to discuss the President’s 2008 budget proposal 

for the Department of Veterans Affairs. The President is requesting 

a landmark budget. He is requesting nearly $87 billion to fund our 

Nation’s commitment to America’s veterans. This budget will allow 

us to expand the three core missions of the VA, those being: to provide world-class health care; to provide broad, fair, and timely benefits; and, third, to provide dignified burials in shrine-like settings 

for our Nation’s veterans. 

This budget will also allow us to continue our progress toward 

becoming a national leader in information technology and data 

19

management. I believe that with the right resources in the hands 

of the right people, anything and everything is possible when it 

comes to caring for America’s veterans. 

At the VA, we already have the right dedicated people. With the 

President’s proposed budget, we have the right resources, too. The 

$87 billion requested for the VA represents a 77 percent increase 

in veteran spending since this President took office on January 20, 

2001. Medical care spending is up over 83 percent. 

Mr. Chairman, I will outline the major portions of our proposed 

budget. 

First, Veterans Health Administration. Our total medical care request is $36.6 billion in authority for our health care. VA health 

care is the best anywhere, and that is not just a boast of a proud 

Secretary—I am grateful for the complimentary remarks that have 

been made here by Members of the Committee. I would add that 

medical journals, the national media, and institutions as respected 

as the Harvard Medical School just recently agreed that the VA 

leads the Nation in health care delivery, safety, and technology. 

During 2008, we expect to treat about 5.8 million patients. This 

total is more than 134,000 above the 2007 estimate. Patients in 

Priorities 1 through 6—that is, veterans with service-connected 

conditions, lower incomes, special health care needs, and who have 

had service in Iraq and/or Afghanistan—will comprise 68 percent 

of the total patient population in 2008. They will account for 85 

percent of our health care costs. The number of patients in Priorities 1 to 6 will grow by 3.3 percent from 2007 to 2008. 

In 2008, we expect to treat approximately 263,000 veterans who 

served in Operation Iraqi Freedom and Operation Enduring Freedom. This is an increase of 54,000, or 26 percent, above the number 

of veterans from these two campaigns that we anticipate will come 

to us for health care during this fiscal year, and an increase of 

108,000, or 70 percent, more than the number that we actually 

treated in 2006. 

Access to this health care—With the resources requested for 

medical care in 2008, the Department will be able to continue our 

exceptional performance dealing with access to health care. Ninetysix percent of primary care appointments and 95 percent of specialty care appointments are scheduled within 30 days of the desired date by the relevant veteran. We will minimize the number 

of new enrollees waiting for their first appointment to be scheduled. In the last 8 months, we reduced this number by 94 percent, 

and we will continue to place strong emphasis on this effort. 

Mental health services—The President’s request includes nearly 

$3 billion to continue our effort to improve access to mental health 

services across the country. Mr. Chairman, Members of the Committee, the VA is a respected leader in mental health and PTSD 

research and care. About 80 percent of the funds for mental health 

go to treat seriously mentally ill veterans, including those suffering 

from post-traumatic stress disorder. 

Medical research—The President’s 2008 budget includes $411 

million to support the VA’s unparalleled medical and prosthetic research program. This amount will fund nearly 2,100 high-priority 

research projects to expand knowledge in areas most critical to veterans’ particular health care needs, most notably: research in the 

20

areas of mental illness, $49 million; aging, $42 million; health services delivery improvement, $36 million; cancer research, $35 million; and heart disease research, $31 million. Nearly 60 percent of 

our research budget is devoted to OIF/OEF health care issues. 

Polytrauma care—I have traveled to three of our polytrauma centers, Mr. Chairman, and there is no doubt that these centers of 

compassion and competent care are where miracles are performed 

every day. In response to the need for such specialized medical 

services, the VA has expanded its four traumatic brain injury centers, which are in Minneapolis, Palo Alto, Richmond, and Tampa, 

to a constellation of polytrauma centers encompassing 17 additional polytrauma centers to make them more accessible geographically to provide these additional specialties to treat patients with 

multiple complex injuries. 

Seamless transition—One of the most important features of the 

President’s 2008 budget request is to ensure that servicemembers’ 

transition from active duty military status or mobilized Guard and 

Reserve to civilian life continues to be as smooth and seamless as 

possible. We will not rest until seriously injured or ill servicemen 

or women returning from combat in Iraq or Afghanistan receive the 

treatment that they need in a timely way. 

Veterans Benefits Administration—Let me speak of veterans 

benefits. The VA’s primary focus within the Administration of benefits remains unchanged—delivering timely and accurate benefits 

to veterans and their families. Improving the delivery of compensation and pension benefits has become increasingly challenging during the last few years. The volume of claims applications has grown 

substantially during the last few years and is now the highest that 

it has been in 15 years. We received more than 806,000 individual 

claims in 2006. That does not account for the number of issues per 

claimant. And we expect this high volume of claims to continue as 

we are expecting in the neighborhood of 800,000 claims a year in 

both 2007 and 2008. However, through a combination of management and productivity improvements and our 2008 request to add 

approximately 450 staff, which is in this budget, we will improve 

our performance while maintaining high quality. 

We expect to improve the timeliness of processing claims to 145 

days in 2008. We will make better use of new technologies and 

have more trained people to process and evaluate claims. With this 

budget, we project that we can reduce our claims processing time 

by 18 percent while maintaining quality. 

The National Cemetery Administration—We expect to perform 

nearly 105,000 interments in 2008. We are 8.4 percent higher than 

the number of interments we performed in 2006. This is primarily 

the result of the aging of the World War II and Korean War veterans population and the opening of new cemeteries. 

The President’s 2008 budget request includes $167 million in operations and maintenance funding to activate six new national 

cemeteries and to meet the growing workload at existing cemeteries by increasing staffing and funding for contract maintenance, 

supplies, and equipment. 

Capital programs, which is construction and grants to States—

The VA’s 2008 request before you includes $1.1 billion in new 

budget authority for our capital programs. Our request includes 

21

$727 million for major construction projects, $233 million for minor 

construction, $85 million in grants for State extended care facilities, and $32 million in grants to build State veterans cemeteries. 

The 2008 request for construction funding for our health care programs is $750 million. These resources will be devoted to a continuation of the Capital Asset Realignment for Enhanced Services, 

known as CARES, program. Over the last 5 years, $3.7 billion in total funding has been provided for CARES. Within our request for major construction are resources to continue six medical facility projects already underway. 

Those are in Pittsburgh; Denver; Las Vegas; Orlando; Lee County, 

Florida; and Syracuse. Funds are already included for six new national cemeteries in Bakersfield, California; Birmingham, Alabama; 

Columbia-Greenville, South Carolina; Jacksonville, Florida; Southeastern Pennsylvania; and Sarasota, Florida. 

Information technology—VA’s 2008 budget request for informa- tion technology is $1.8 billion, which includes the first phase of our 

reorganization of IT functions in the Department and which will 

establish a new IT management system in the VA. The major 

transformation of IT will bring our program in line with the best 

practices in the IT industry. Greater centralization will play a significant role in ensuring that we fulfill my promise to make the VA 

the gold standard for data security within the Federal Government. 

Toward that end, our 2008 budget IT request includes almost $70 

million for enhanced cyber security. 

Mr. Chairman, I know the Committee shares with me the concern about VA’s ability to secure all our veterans’ personal information. There have been security incidents that are simply unacceptable, and I have made it a priority to assure our veterans that we 

are addressing their concerns. It is not that these incidents will 

never occur, but when they do, the VA now has a process to properly and promptly respond to them. 

We are encouraging all our employees to report, including selfreporting, thefts or other losses of equipment, whether in the workplace, at home, or on travel, so we can strengthen our information 

security procedures through lessons learned, review personal accountability, and, when appropriate, take disciplinary actions, including terminations. 

Electronic health records—The most critical IT project for our 

medical care program is the continued operation and improvement 

of the Department’s fabled electronic medical records. I have made 

it a point for the past year to praise our electronic health records 

for their ability to survive Hurricanes Rita and Katrina. Electronic 

health records are a Presidential priority, and VA’s electronic 

health records system has been recognized nationally for increasing 

productivity, quality, and patient safety. 

Within this overall initiative, we are requesting $131.9 million 

for ongoing development and implementation of HealtheVet-VistA. 

This is the program to modernize our existing electronic health 

records. It will make use of standards that will enhance the sharing of data within the VA as well as with other Federal agencies 

and public and private sector organizations. 

Mr. Chairman, in closing, I want to take this opportunity to inform you of my plan to create a special advisory committee on OIF/

22

OEF veterans and their families and to mention a new initiative 

to assist returning veterans to connect with their State and territorial veterans departments, including the District of Columbia. 

First, the OIF/OEF panel. Its membership will include veterans, 

spouses, survivors, and parents of combat veterans, and it will report directly to me. Under its charter, the committee will focus on 

ensuring that all men and women with active military service in 

Iraq and Afghanistan are transitioned to the VA in a seamless, informed, hassle-free manner. The committee will pay particular attention to severely disabled veterans and their families. 

Second, in order to help severely injured servicemembers receive 

benefits from their States and territories when they move from 

military hospitals to VA medical facilities in their communities, I 

announced yesterday, with the 50 State VA Directors who were in 

town for a meeting, an expansion of a collaborative outreach program with the States and territories and the District of Columbia. 

It is called the States Benefits Seamless Transition Program. We 

just completed a very successful 4-month pilot with the State of 

Florida, and I have expanded the program to all States and territories. 

This initiative is a promising extension of the VA’s own transition assistance for those leaving the military service, and it is an 

opportunity to partner with the States to make long-term support 

possible for our most deserving veterans throughout the country. 

There are several States, for example, that totally waive ad valorem taxes for residential real estate for those seriously injured veterans. 

Mr. Chairman, over the next few weeks and months, as I travel 

across the country, I also will be meeting with the commanders of 

the several combatant commands to talk to them about how the VA 

and the DOD can better work together to care for our soldiers, sailors, airmen, marines, and coastguardsmen who are returning from 

duty overseas. This Friday, I will meet with Admiral Stavridis, the 

Commander of the Southern Command, to brief him on the VA’s 

programs for OIF/OEF troops. In the coming weeks, I will be meeting with the senior enlisted advisors and the Reserve chiefs. I also 

will be extending an invitation to each service Secretary and service Chief to meet with me so that we can keep our lines of communication open in working better for the benefit of all of our 

transitioning servicemen and women. 

Mr. Chairman, this concludes my remarks. Thank you. 

[The prepared statement of Secretary Nicholson follows:]

PREPARED STATEMENT OF HON. R. JAMES NICHOLSON, SECRETARY,

DEPARTMENT OF VETERANS AFFAIRS

Mr. Chairman and Members of the Committee, good morning. I am pleased to be 

here today to present the President’s 2008 budget proposal for the Department of 

Veterans Affairs (VA). The request totals $86.75 billion—$44.98 billion for entitlement programs and $41.77 billion for discretionary programs. The total request is 

$37.80 billion, or 77 percent, above the funding level in effect when the President 

took office. 

The President’s requested funding level will allow VA to continue to improve the 

delivery of benefits and services to veterans and their families in three primary 

areas that are critical to the achievement of our mission:

• To provide timely, high-quality health care to a growing number of patients who 

count on VA the most—veterans returning from service in Operation Iraqi Freedom 

23

and Operation Enduring Freedom, veterans with service-connected disabilities, 

those with lower incomes, and veterans with special health care needs; 

• To improve the delivery of benefits through the timeliness and accuracy of 

claims processing; and 

• To increase veterans’ access to a burial option in a national or state veterans’ 

cemetery. 

ENSURING A SEAMLESS TRANSITION FROM ACTIVE MILITARY

SERVICE TO CIVILIAN LIFE

The President’s 2008 budget request provides the resources necessary to ensure 

that servicemembers’ transition from active duty military status to civilian life continues to be as smooth and seamless as possible. We will continue to ensure that 

every seriously injured or ill serviceman or woman returning from combat in Operation Iraqi Freedom and Operation Enduring Freedom receives the treatment they 

need in a timely way. 

Last week, I announced plans to create a special Advisory Committee on Operation Iraqi Freedom/Operation Enduring Freedom Veterans and Families. The 

panel, with membership including veterans, spouses, and parents of the latest generation of combat veterans, will report directly to me. Under its charter, the Committee will focus on the concerns of all men and women with active military service 

in Operation Iraqi Freedom or Operation Enduring Freedom, but will pay particular 

attention to severely disabled veterans and their families. 

We will expand our ‘‘Coming Home to Work’’ initiative to help disabled 

servicemembers more easily make the transition from military service to civilian 

life. This is a comprehensive intergovernmental and public-private alliance that will 

provide separating servicemembers from Operation Iraqi Freedom and Operation 

Enduring Freedom with employment opportunities when they return home from 

their military service. This project focuses on making sure servicemembers have access to existing resources through local and regional job markets, regardless of 

where they separate from their military service, where they return, or the career 

or education they pursue. 

VA launched an ambitious outreach initiative to ensure separating combat veterans know about the benefits and services available to them. During 2006, VA conducted over 8,500 briefings attended by more than 393,000 separating 

servicemembers and returning reservists and National Guard members. The number of attendees was 20 percent higher in 2006 than it was in 2005 attesting to our 

improved outreach effort. 

Additional pamphlet mailings following separation and briefings conducted at 

town hall meetings are sources of important information for returning National 

Guard members and reservists. VA has made a special effort to work with National 

Guard and Reserve units to reach transitioning servicemembers at demobilization 

sites and has trained recently discharged veterans to serve as National Guard Bureau liaisons in every state to assist their fellow combat veterans. 

Each VA medical center and regional office has a designated point of contact to 

coordinate activities locally and to ensure the health care and benefits needs of returning servicemembers and veterans are fully met. VA has distributed specific 

guidance to field staff to make sure the roles and functions of the points of contact 

and case managers are fully understood and that proper coordination of benefits and 

services occurs at the local level. 

For combat veterans returning from Iraq and Afghanistan, their contact with VA 

often begins with priority scheduling for health care, and for the most seriously 

wounded, VA counselors visit their bedside in military wards before separation to 

assist them with their disability claims and ensure timely compensation payments 

when they leave active duty. 

In an effort to assist wounded military members and their families, VA has placed 

workers at key military hospitals where severely injured servicemembers from Iraq 

and Afghanistan are frequently sent for care. These include benefit counselors who 

help servicemembers obtain VA services as well as social workers who facilitate 

health care coordination and discharge planning as servicemembers transition from 

military to VA health care. Under this program, VA staff provide assistance at 10 

military treatment facilities around the country, including Walter Reed Army Medical Center, the National Naval Medical Center Bethesda, the Naval Medical Center 

San Diego, and Womack Army Medical Center at Ft. Bragg. 

To further meet the need for specialized medical care for patients with service in 

Operation Iraqi Freedom and Operation Enduring Freedom, VA has expanded its 

four polytrauma centers in Minneapolis, Palo Alto, Richmond, and Tampa to encompass additional specialties to treat patients for multiple complex injuries. Our efforts 

24

are being expanded to 21 polytrauma network sites and clinic support teams around 

the country providing state-of-the-art treatment closer to injured veterans’ homes. 

We have made training mandatory for all physicians and other key health care personnel on the most current approaches and treatment protocols for effective care of 

patients afflicted with brain injuries. Furthermore, we established a polytrauma call 

center in February 2006 to assist the families of our most seriously injured combat 

veterans and servicemembers. This call center operates 24 hours a day, 7 days a 

week to answer clinical, administrative, and benefit inquiries from polytrauma patients and family members. 

In addition, VA has significantly expanded its counseling and other medical care 

services for recently discharged veterans suffering from mental health disorders, including post-traumatic stress disorder. We have launched new programs, including 

dozens of new mental health teams based in VA medical facilities focused on early 

identification and management of stress-related disorders, as well as the recruitment of about 100 combat veterans as counselors to provide briefings to 

transitioning servicemembers regarding military-related readjustment needs. 

MEDICAL CARE

We are requesting $36.6 billion for medical care in 2008, a total of more than 83 

percent higher than the funding available at the beginning of the Bush Administration. Our total medical care request is comprised of funding for medical services 

($27.2 billion), medical administration ($3.4 billion), medical facilities ($3.6 billion), 

and resources from medical care collections ($2.4 billion). 

Legislative Proposals 

The President’s 2008 budget request identifies three legislative proposals which 

ask veterans with comparatively greater means and no compensable service-connected disabilities to assume a small share of the cost of their health care. 

The first proposal would assess Priority 7 and 8 veterans with an annual enrollment fee based on their family income:

Family Income Annual Enrollment 

Fee Under $50,000 ..................................................................................................................... None 

$50,000—$74,999 ..................................................................................................................... $250

$75,000—$99,999 ..................................................................................................................... $500

$100,000 and above .................................................................................................................. $750

The second legislative proposal would increase the pharmacy copayment for Pri- ority 7 and 8 veterans from $8 to $15 for a 30-day supply of drugs. And the last 

provision would eliminate the practice of offsetting or reducing VA first-party copayment debts with collection recoveries from third-party health plans. 

While our budget requests in recent years have included legislative proposals 

similar to these, the provisions identified in the President’s 2008 budget are markedly different in that they have no impact on the resources we are requesting for 

VA medical care. Our budget request includes the total funding needed for the Department to continue to provide veterans with timely, high-quality medical services 

that set the national standard of excellence in the health care industry. Unlike previous budgets, these legislative proposals do not reduce our discretionary medical 

care appropriations. Instead, these three provisions, if enacted, would generate an 

estimated $2.3 billion in mandatory receipts to the Treasury from 2008 through 

2012. 

Workload 

During 2008, we expect to treat about 5,819,000 patients. This total is more than 

134,000 (or 2.4 percent) above the 2007 estimate. Patients in Priorities 1–6—veterans with service-connected conditions, lower incomes, special health care needs, 

and service in Iraq or Afghanistan—will comprise 68 percent of the total patient 

population in 2008, but they will account for 85 percent of our health care costs. 

The number of patients in Priorities 1–6 will grow by 3.3 percent from 2007 to 2008. 

We expect to treat about 263,000 veterans in 2008 who served in Operation Iraqi 

Freedom and Operation Enduring Freedom. This is an increase of 54,000 (or 26 percent) above the number of veterans from these two campaigns that we anticipate 

will come to VA for health care in 2007, and 108,000 (or 70 percent) more than the 

number we treated in 2006. 

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Funding Drivers 

Our 2008 request for $36.6 billion in support of our medical care program was 

largely determined by three key cost drivers in the actuarial model we use to project 

veteran enrollment in VA’s health care system as well as the utilization of health 

care services of those enrolled:

• Inflation; 

• Trends in the overall health care industry; and 

• Trends in VA health care.

The impact of the composite rate of inflation of 4.45 percent within the actuarial 

model will increase our resource requirements for acute inpatient and outpatient 

care by nearly $2.1 billion. This includes the effect of additional funds ($690 million) 

needed to meet higher payroll costs as well as the influence of growing costs ($1.4 

billion) for supplies, as measured in part by the Medical Consumer Price Index. 

However, inflationary trends have slowed during the last year. 

There are several trends in the U.S. health care industry that continue to increase 

the cost of providing medical services. These trends expand VA’s cost of doing business regardless of any changes in enrollment, number of patients treated, or program initiatives. The two most significant trends are the rising utilization and intensity of health care services. In general, patients are using medical care services 

more frequently and the intensity of the services they receive continues to grow. For 

example, sophisticated diagnostic tests, such as magnetic resonance imaging (MRI), 

are now more frequently used either in place of, or in addition to, less costly diagnostic tools such as x-rays. As another illustration, advances in cancer screening 

technologies have led to earlier diagnosis and prolonged treatment which may include increased use of costly pharmaceuticals to combat this disease. These types 

of medical services have resulted in improved patient outcomes and higher quality 

health care. However, they have also increased the cost of providing care. 

The cost of providing timely, high-quality health care to our Nation’s veterans is 

also growing as a result of several factors that are unique to VA’s health care system. We expect to see changes in the demographic characteristics of our patient population. Our patients as a group will be older, will seek care for more complex medical conditions, and will be more heavily concentrated in the higher cost priority 

groups. Furthermore, veterans are submitting disability compensation claims for an 

increasing number of medical conditions, which are also increasing in complexity. 

This results in the need for disability compensation medical examinations, the majority of which are conducted by our Veterans Health Administration, that are more 

complex, costly, and time consuming. These projected changes in the case mix of our 

patient population and the growing complexity of our disability claims process will 

result in greater resource needs. 

Quality of Care 

The resources we are requesting for VA’s medical care program will allow us to 

strengthen our position as the Nation’s leader in providing high-quality health care. 

VA has received numerous accolades from external organizations documenting the 

Department’s leadership position in providing world-class health care to veterans. 

For example, our record of success in health care delivery is substantiated by the 

results of the 2006 American Customer Satisfaction Index (ACSI) survey. Conducted 

by the National Quality Research Center at the University of Michigan Business 

School, the ACSI survey found that customer satisfaction with VA’s health care system increased last year and was higher than the private sector for the seventh consecutive year. The data revealed that inpatients at VA medical centers recorded a 

satisfaction level of 84 out of a possible 100 points, or 10 points higher than the 

rating for inpatient care provided by the private-sector health care industry. VA’s 

rating of 82 for outpatient care was 8 points better than the private sector. 

Citing VA’s leadership role in transforming health care in America, Harvard University recognized the Department’s computerized patient records system by awarding VA the prestigious ‘‘Innovations in American Government Award’’ in 2006. Our 

electronic health records have been an important element in making VA health care 

the benchmark for 294 measures of disease prevention and treatment in the U.S. 

The value of this system was clearly demonstrated when every patient medical 

record from the areas devastated by Hurricane Katrina was made available to all 

VA health care providers throughout the Nation within 100 hours of the time the 

storm made landfall. Veterans were able to quickly resume their treatments, refill 

their prescriptions, and get the care they needed because of the electronic health 

records system—a real, functioning health information exchange that has been a 

proven success resulting in improved quality of care. It can serve as a model for the 

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health care industry as the Nation moves forward with the public/private effort to 

develop a National Health Information Network. 

The Department also received an award from the American Council for Technology for our collaboration with the Department of Defense on the Bidirectional 

Health Information Exchange program. This innovation permits the secure, realtime exchange of medical record data between the two departments, thereby avoiding duplicate testing and surgical procedures. It is an important step forward in 

making the transition from active duty to civilian life as smooth and seamless as 

possible. 

In its July 17, 2006, edition, Business Week featured an article about VA health 

care titled ‘‘The Best Medical Care in the U.S.’’ This article outlines many of the 

Department’s accomplishments that have helped us achieve our position as the leading provider of health care in the country, such as higher quality of care than the 

private sector, our nearly perfect rate of prescription accuracy, and the most advanced computerized medical records system in the Nation. Similar high praise for 

VA’s health care system was documented in the September 4, 2006, edition of Time 

Magazine in an article titled ‘‘How VA Hospitals Became the Best.’’ In addition, a 

study conducted by Harvard Medical School concluded that Federal hospitals, including those managed by VA, provide the best care available for some of the most 

common life-threatening illnesses such as congestive heart failure, heart attack, and 

pneumonia. Their research results were published in the December 11, 2006, edition 

of the Annals of Internal Medicine. 

These external acknowledgments of the superior quality of VA health care reinforce the Department’s own findings. We use two primary measures of health care 

quality—clinical practice guidelines index and prevention index. These measures 

focus on the degree to which VA follows nationally recognized guidelines and standards of care that the medical literature has proven to be directly linked to improved 

health outcomes for patients. Our performance on the clinical practice guidelines 

index, which focuses on high-prevalence and high-risk diseases that have a significant impact on veterans’ overall health status, is expected to grow to 85 percent in 

2008, or a 1 percentage point rise over the level we expect to achieve this year. As 

an indicator aimed at primary prevention and early detection recommendations 

dealing with immunizations and screenings, the prevention index will be maintained at our existing high level of performance of 88 percent. 

Access to Care 

With the resources requested for medical care in 2008, the Department will be 

able to continue our exceptional performance dealing with access to health care—

96 percent of primary care appointments will be scheduled within 30 days of patients’ desired date, and 95 percent of specialty care appointments will be scheduled 

within 30 days of patients’ desired date. We will minimize the number of new enrollees waiting for their first appointment to be scheduled. We reduced this number by 

94 percent from May 2006 to January 2007, to a little more than 1,400, and we will 

continue to place strong emphasis on lowering, and then holding, the waiting list 

to as low a level as possible. 

An important component of our overall strategy to improve access and timeliness 

of service is the implementation on a national scale of Advanced Clinic Access, an 

initiative that promotes the efficient flow of patients by predicting and anticipating 

patient needs at the time of their appointment. This involves assuring that specific 

medical equipment is available, arranging for tests that should be completed either 

prior to, or at the time of, the patient’s visit, and ensuring all necessary health information is available. This program optimizes clinical scheduling so that each appointment or inpatient service is most productive. In addition, this reduces unnecessary appointments, allowing for relatively greater workload and increased patientdirected scheduling. 

Funding for Major Health Care Programs and Initiatives 

Our request includes $4.6 billion for extended care services, 90 percent of which 

will be devoted to institutional long-term care and 10 percent to non-institutional 

care. By continuing to enhance veterans’ access to non-institutional long-term care, 

the Department can provide extended care services to veterans in a more clinically 

appropriate setting, closer to where they live, and in the comfort and familiar settings of their homes surrounded by their families. This includes adult day health 

care, home-based primary care, purchased skilled home health care, homemaker/

home health aide services, home respite and hospice care, and community residential care. During 2008, we will increase the number of patients receiving non-institutional long-term care, as measured by the average daily census, to over 44,000. 

27

This represents a 19.1 percent increase above the level we expect to reach in 2007 

and a 50.3 percent rise over the 2006 average daily census. The President’s request includes nearly $3 billion to continue our effort to improve 

access to mental health services across the country. These funds will help ensure 

VA provides standardized and equitable access throughout the Nation to a full continuum of care for veterans with mental health disorders. The resources will support 

both inpatient and outpatient psychiatric treatment programs as well as psychiatric 

residential rehabilitation treatment services. We estimate that about 80 percent of 

the funding for mental health will be for the treatment of seriously mentally ill veterans, including those suffering from post-traumatic stress disorder (PTSD). An example of our firm commitment to provide the best treatment available to help veterans recover from these mental health conditions is our ongoing outreach to veterans of Operation Iraqi Freedom and Operation Enduring Freedom, as well as increased readjustment and PTSD services. 

In 2008, we are requesting $752 million to meet the needs of the 263,000 veterans 

with service in Operation Iraqi Freedom and Operation Enduring Freedom whom 

we expect will come to VA for medical care. Veterans with service in Iraq and Afghanistan continue to account for a rising proportion of our total veteran patient 

population. In 2008, they will comprise 5 percent of all veterans receiving VA health 

care compared to the 2006 figure of 3.1 percent. Veterans deployed to combat zones 

are entitled to 2 years of eligibility for VA health care services following their separation from active duty even if they are not otherwise immediately eligible to enroll 

for our medical services. 

Medical Collections 

The Department expects to receive nearly $2.4 billion from medical collections in 

2008, which is $154 million, or 7.0 percent, above our projected collections for 2007. 

As a result of increased workload and process improvements in 2008, we will collect 

an additional $82 million from third-party insurance payers and an extra $72 million resulting from increased pharmacy workload. 

We have several initiatives underway to strengthen our collections processes:

• The Department has established a private-sector based business model pilot tailored for our revenue operations to increase collections and improve our operational 

performance. The pilot Consolidated Patient Account Center (CPAC) is addressing 

all operational areas contributing to the establishment and management of patient 

accounts and related billing and collections processes. The CPAC currently serves 

revenue operations for medical centers and clinics in one of our Veterans Integrated 

Service Networks, but this program will be expanded to serve other networks. 

• VA continues to work with the Centers for Medicare and Medicaid Services contractors to provide a Medicare-equivalent remittance advice for veterans who are 

covered by Medicare and are using VA health care services. We are working to include additional types of claims that will result in more accurate payments and better accounting for receivables through use of more reliable data for claims adjudication. 

• We are conducting a phased implementation of electronic, real-time outpatient 

pharmacy claims processing to facilitate faster receipt of pharmacy payments from 

insurers. 

• The Department has initiated a campaign that has resulted in an increasing 

number of payers now accepting electronic coordination of benefits claims. This is 

a major advancement toward a fully integrated, interoperable electronic claims process.

MEDICAL RESEARCH

The President’s 2008 budget includes $411 million to support VA’s medical and 

prosthetic research program. This amount will fund nearly 2,100 high-priority research projects to expand knowledge in areas critical to veterans’ health care needs, 

most notably research in the areas of mental illness ($49 million), aging ($42 million), health services delivery improvement ($36 million), cancer ($35 million), and 

heart disease ($31 million). 

VA’s medical research program has a long track record of success in conducting 

research projects that lead to clinically useful interventions that improve the health 

and quality of life for veterans as well as the general population. Recent examples 

of VA research results that are now being applied to clinical care include the discovery that vaccination against varicella-zoster (the same virus that causes chickenpox) decreases the incidence and/or severity of shingles, development of a system 

that decodes brain waves and translates them into computer commands that allow 

quadriplegics to perform simple tasks like turning on lights and opening e-mail 

28

using only their minds, improvements in the treatment of post-traumatic stress disorder that significantly reduce trauma nightmares and other sleep disturbances, 

and discovery of a drug that significantly improves mental abilities and behavior of 

certain schizophrenics. 

In addition to VA appropriations, the Department’s researchers compete for and 

receive funds from other Federal and non-Federal sources. Funding from external 

sources is expected to continue to increase in 2008. Through a combination of VA 

resources and funds from outside sources, the total research budget in 2008 will be 

almost $1.4 billion. 

GENERAL OPERATING EXPENSES

The Department’s 2008 resource request for General Operating Expenses (GOE) is $1.472 billion. This is $617 million, or 72.2 percent, above the funding level in 

place when the President took office. Within this total GOE funding request, $1.198 

billion is for the administration of non-medical benefits by the Veterans Benefits Administration (VBA) and $274 million will be used to support General Administration 

activities. 

Compensation and Pensions Workload and Performance Management 

VA’s primary focus within the administration of non-medical benefits remains unchanged—delivering timely and accurate benefits to veterans and their families. Improving the delivery of compensation and pension benefits has become increasingly 

challenging during the last few years due to a steady and sizable increase in workload. The volume of claims applications has grown substantially during the last few 

years and is now the highest it has been in the last 15 years. The number of claims 

we received was more than 806,000 in 2006. We expect this high volume of claims 

filed to continue, as we are projecting the receipt of about 800,000 claims a year 

in both 2007 and 2008. 

The number of active duty servicemembers as well as reservists and National 

Guard members who have been called to active duty to support Operation Enduring 

Freedom and Operation Iraqi Freedom is one of the key drivers of new claims activity. This has contributed to an increase in the number of new claims, and we expect 

this pattern to persist. An additional reason that the number of compensation and 

pension claims is climbing is the Department’s commitment to increase outreach. 

We have an obligation to extend our reach as far as possible and to spread the word 

to veterans about the benefits and services VA stands ready to provide. 

Disability compensation claims from veterans who have previously filed a claim 

comprise about 55 percent of the disability claims received by the Department each 

year. Many veterans now receiving compensation suffer from chronic and progressive conditions, such as diabetes, mental illness, and cardiovascular disease. As 

these veterans age and their conditions worsen, we experience additional claims for 

increased benefits. 

The growing complexity of the claims being filed also contributes to our workload 

challenges. For example, the number of original compensation cases with eight or 

more disabilities claimed nearly doubled during the last 4 years, reaching more than 

51,000 claims in 2006. Almost one in every four original compensation claims received last year contained eight or more disability issues. In addition, we expect to 

continue to receive a growing number of complex disability claims resulting from 

PTSD, environmental and infectious risks, traumatic brain injuries, complex combat-related injuries, and complications resulting from diabetes. Each claim now 

takes more time and more resources to adjudicate. Additionally, as VA receives and 

adjudicates more claims, this results in a larger number of appeals from veterans 

and survivors, which also increases workload in other parts of the Department, including the Board of Veterans’ Appeals. 

The Veterans Claims Assistance Act of 2000 has significantly increased both the 

length and complexity of claims development. VA’s notification and development duties have grown, adding more steps to the claims process and lengthening the time 

it takes to develop and decide a claim. Also, we are now required to review the 

claims at more points in the adjudication process. 

We will address our ever-growing workload challenges in several ways. First, we 

will continue to improve our productivity as measured by the number of claims processed per staff member, from 98 in 2006 to 101 in 2008. Second, we will continue 

to move work among regional offices in order to maximize our resources and enhance our performance. Third, we will further advance staff training and other efforts to improve the consistency and quality of claims processing across regional offices. And fourth, we will ensure our claims processing staff has easy access to the 

manuals and other reference material they need to process claims as efficiently and 

effectively as possible and further simplify and clarify benefit regulations. 

29

Through a combination of management/productivity improvements and an increase in resources in 2008 to support 457 additional staff above the 2007 level, we 

will improve our performance in the area most critical to veterans—the timeliness 

of processing rating-related compensation and pension claims. We expect to improve 

the timeliness of processing these claims to 145 days in 2008. This level of performance is 15 days better than our projected timeliness for 2007 and a 32-day improvement from the average processing time we achieved last year. In addition, we anticipate that our pending inventory of disability claims will fall to about 330,000 by the 

end of 2008, a reduction of more than 40,000 (or 10.9 percent) from the level we 

project for the end of 2007, and nearly 49,000 (or 12.9 percent) lower than the inventory at the close of 2006. At the same time we are improving timeliness, we will 

also increase the accuracy of our decisions on claims from 88 percent in 2006 to 90 

percent in 2008. 

Education and Vocational Rehabilitation and Employment Performance 

With the resources we are requesting in 2008, key program performance will improve in both the education and vocational rehabilitation and employment programs. The timeliness of processing original education claims will improve by 15 

days during the next 2 years, falling from 40 days in 2006 to 25 days in 2008. During this period, the average time it takes to process supplemental claims will improve from 20 days to just 12 days. These performance improvements will be 

achieved despite an increase in workload. The number of education claims we expect 

to receive will reach about 1,432,000 in 2008, or 4.8 percent higher than last year. 

In addition, the rehabilitation rate for the vocational rehabilitation and employment 

program will climb to 75 percent in 2008, a gain of 2 percentage points over the 

2006 performance level. The number of program participants will rise to about 

94,500 in 2008, or 5.3 percent higher than the number of participants in 2006. Our 2008 request includes $6.3 million for a Contact Management Support Center 

for our education program. These funds will be used during peak enrollment periods 

for contract customer service representatives who will handle all education calls 

placed through our toll-free telephone line. We currently receive about 2.5 million 

phone inquiries per year. This initiative will allow us to significantly improve performance for both the blocked call rate and the abandoned call rate. 

The 2008 resource request for VBA includes about $4.3 million to enhance our 

educational and vocational counseling provided to disabled servicemembers through 

the Disabled Transition Assistance Program. Funds for this initiative will ensure 

that briefings are conducted by experts in the field of vocational rehabilitation, including contracting for these services in localities where VA professional staff are 

not available. The contractors would be trained by VA staff to ensure consistent, 

quality information is provided. Also in support of the vocational rehabilitation and 

employment program, we are seeking $1.5 million as part of an ongoing project to 

retire over 650,000 counseling, evaluation, and rehabilitation folders stored in regional offices throughout the country. All of these folders pertain to cases that have 

been inactive for at least 3 years and retention of these files poses major space problems. 

In addition, our 2008 request includes $2.4 million to continue a major effort to 

centralize finance functions throughout VBA, an initiative that will positively impact operations for all of our benefits programs. The funds to support this effort will 

be used to begin the consolidation and centralization of voucher audit, agent cashier, 

purchase card, and payroll operations currently performed by all regional offices. 

NATIONAL CEMETERY ADMINISTRATION

The President’s 2008 budget request includes $166.8 million in operations and 

maintenance funding for the National Cemetery Administration (NCA). These resources will allow us to meet the growing workload at existing cemeteries by increasing staffing and funding for contract maintenance, supplies, and equipment. 

We expect to perform nearly 105,000 interments in 2008, or 8.4 percent higher than 

the number of interments we performed in 2006. The number of developed acres 

(over 7,800) that must be maintained in 2008 will be 7.3 percent greater than last 

year. 

Our budget request includes $3.7 million to prepare for the activation of interment operations at six new national cemeteries—Bakersfield, California; Birmingham, Alabama; Columbia-Greenville, South Carolina; Jacksonville, Florida; 

southeastern Pennsylvania; and Sarasota County, Florida. Establishment of these 

six new national cemeteries is directed by the National Cemetery Expansion Act of 

2003. 

The 2008 budget has $9.1 million to address gravesite renovations as well as 

headstone and marker realignment. These improvements in the appearance of our 

30

national cemeteries will help us maintain the cemeteries as shrines dedicated to 

preserving our Nation’s history and honoring veterans’ service and sacrifice. 

With the resources requested to support NCA activities, we will expand access to 

our burial program by increasing the percent of veterans served by a burial option 

within 75 miles of their residence to 84.6 percent in 2008, which is 4.4 percentage 

points above our performance level at the close of 2006. In addition, we will continue 

to increase the percent of respondents who rate the quality of service provided by 

national cemeteries as excellent to 98 percent in 2008, or 4 percentage points higher 

than the level of performance we reached last year. 

CAPITAL PROGRAMS (CONSTRUCTION AND GRANTS TO STATES)

VA’s 2008 request includes $1.078 billion in appropriated funding for our capital programs. Our request includes $727.4 million for major construction projects, 

$233.4 million for minor construction, $85 million in grants for the construction of 

state extended care facilities, and $32 million in grants for the construction of state 

veterans cemeteries. 

The 2008 request for construction funding for our health care programs is $750 million—$570 million for major construction and $180 million for minor construction. All of these resources will be devoted to continuation of the Capital Asset Realignment for Enhanced Services (CARES) program, total funding for which comes 

to $3.7 billion over the last 5 years. CARES will renovate and modernize VA’s 

health care infrastructure, provide greater access to high-quality care for more veterans, closer to where they live, and help resolve patient safety issues. Within our 

request for major construction are resources to continue six medical facility projects 

already underway:

• Denver, Colorado ($61.3 million)—parking structure and energy development 

for this replacement hospital. • Las Vegas, Nevada ($341.4 million)—complete construction of the hospital, 

nursing home, and outpatient facilities. • Lee County, Florida ($9.9 million)—design of an outpatient clinic (land acquisition is complete). • Orlando, Florida ($35.0 million)—land acquisition for this replacement hospital. • Pittsburgh, Pennsylvania ($40.0 million)—continue consolidation of a 3-division 

to a 2-division hospital. • Syracuse, New York ($23.8 million)—complete construction of a spinal cord injury center.

Minor construction is an integral component of our overall capital program. In 

support of the medical care and medical research programs, minor construction 

funds permit VA to address space and functional changes to efficiently shift treatment of patients from hospital-based to outpatient care settings; realign critical 

services; improve management of space, including vacant and underutilized space; 

improve facility conditions; and undertake other actions critical to CARES implementation. Our 2008 request for minor construction funds for medical care and research will provide the resources necessary for us to address critical needs in improving access to health care, enhancing patient privacy, strengthening patient safety, enhancing research capability, correcting seismic deficiencies, facilitating realignments, increasing capacity for dental services, and improving treatment in special 

emphasis programs. We are requesting $191.8 million in construction funding to support the Depart- ment’s burial program—$167.4 million for major construction and $24.4 million for 

minor construction. Within the funding we are requesting for major construction are 

resources to establish six new cemeteries mandated by the National Cemetery Expansion Act of 2003. As previously mentioned, these will be in Bakersfield ($19.5 

million), Birmingham ($18.5 million), Columbia-Greenville ($19.2 million), Jacksonville ($22.4 million), Sarasota ($27.8 million), and southeastern Pennsylvania ($29.6 

million). The major construction request in support of our burial program also includes $29.4 million for a gravesite development project at Fort Sam Houston National Cemetery. 

INFORMATION TECHNOLOGY

VA’s 2008 budget request for information technology (IT) is $1.859 billion. This 

budget reflects the first phase of our reorganization of IT functions in the Department which will establish a new IT management structure in VA. The total funding 

for IT in 2008 includes $555 million for more than 5,500 staff who have been moved 

to support operations and maintenance activities. Prior to 2008, the funding and 

staff supporting these IT activities were reflected in other accounts throughout the 

Department. 

31

Later in 2007, we will implement the second phase of our IT reorganization strategy by moving funding and staff devoted to development projects and activities. As 

a result of the second stage of the IT reorganization, the Chief Information Officer 

will be responsible for all operations and maintenance as well as development activities, including oversight of, and accountability for, all IT resources within VA. This 

reorganization will make the most efficient use of our IT resources while improving 

operational effectiveness, providing standardization, and eliminating duplication. 

This major transformation of IT will bring our program under more centralized 

control and will play a significant role in ensuring we fulfill my promise to make 

VA the gold standard for data security within the Federal Government. We have 

taken very aggressive steps during the last several months to ensure the safety of 

veterans’ personal information, including training and educating our employees on 

the critical responsibility they have to protect personal and health information, 

launching an initiative to expeditiously upgrade all VA computers with enhanced 

data security and encryption, entering into an agreement with an outside firm to 

provide free data breach analysis services, initiating any needed background investigations of employees to ensure consistency with their level of authority and responsibilities in the Department, and beginning a campaign at all of our health care 

facilities to replace old veteran identification cards with new cards that reduce veterans’ vulnerability to identify theft. These steps are part of our broader commitment to improve our IT and cyber security policies and procedures. 

Within our total IT request of $1.859 billion, $1.304 billion (70 percent) will be 

for non-payroll costs and $555 million (30 percent) will be for payroll costs. Of the 

non-payroll funding, $461 million will support projects for our medical care and 

medical research programs, $66 million will be devoted to projects for our benefits 

programs, and $446 million will be needed for IT infrastructure projects. The remaining $331 million of our non-payroll IT resources in 2008 will fund centrally 

managed projects, such as VA’s cyber security program, as well as management 

projects that support department-wide initiatives and operations like the replacement of our aging financial management system and the development and implementation of a new human resources management system. 

The most critical IT project for our medical care program is the continued operation and improvement of the Department’s electronic health record system, a Presidential priority which has been recognized nationally for increasing productivity, 

quality, and patient safety. Within this overall initiative, we are requesting $131.9 

million for ongoing development and implementation of HealtheVet-VistA (Veterans 

Health Information Systems and Technology Architecture). This initiative will incorporate new technology, new or reengineered applications, and data standardization 

to improve the sharing of, and access to, health information, which in turn, will improve the status of veterans’ health through more informed clinical care. This system will make use of standards accepted by the Secretary of Health and Human 

Services that will enhance the sharing of data within VA as well as with other Federal agencies and public and private sector organizations. Health data will be stored 

in a veteran-centric format replacing the current facility-centric system. The standardized health information can be easily shared between facilities, making patients’ 

electronic health records available to them and to all those authorized to provide 

care to veterans. 

Until HealtheVet-VistA is operational, we need to maintain the VistA legacy system. This system will remain operational as new applications are developed and implemented. This approach will mitigate transition and migration risks associated 

with the move to the new architecture. Our budget provides $129.4 million in 2008 

for the VistA legacy system. Funding for the legacy system will decline as we advance our development and implementation of HealtheVet-VistA. 

In veterans benefits programs, we are requesting $31.7 million in 2008 to support 

our IT systems that ensure compensation and pension claims are properly processed 

and tracked, and that payments to veterans and eligible family members are made 

on a timely basis. Our 2008 request includes $3.5 million to continue the development of The Education Expert System. This will replace the existing benefit payment system with one that will, when fully deployed, receive application and enrollment information and process that information electronically, reducing the need for 

human intervention. 

VA is requesting $446 million in 2008 for IT infrastructure projects to support our 

health care, benefits, and burial programs through implementation and ongoing 

management of a wide array of technical and administrative support systems. Our 

request for resources in 2008 will support investment in five infrastructure projects 

now centrally managed by the CIO—computing infrastructure and operations 

($181.8 million); network infrastructure and operations ($31.7 million); voice infraVerDate 0ct 09 2002 15:10 May 29, 2007 Jkt 000000 PO 00000 Frm 00035 Fmt 6633 Sfmt 6621 H:\RD41451\DOCS\33255.TXT SENVETS PsN: ROWENA
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structure and operations ($71.9 million); data and video infrastructure and operations ($130.8 million); and regional data centers ($30.0 million). VA’s 2008 request provides $70.1 million for cyber security. This ongoing initiative 

involves the development, deployment, and maintenance of a set of enterprise-wide 

controls to better secure our IT architecture in support of all of the Department’s 

program operations. Our request also includes $35.0 million for the Financial and 

Logistics Integrated Technology Enterprise (FLITE) system. FLITE is being developed to address a long-standing material weakness and will effectively integrate and 

standardize financial and logistics data and processes across all VA offices as well 

as provide management with access to timely and accurate financial, logistics, budget, asset, and related information on VA-wide operations. In addition, we are asking 

for $34.1 million for a new state-of-the-art human resource management system 

that will result in an electronic employee record and the capability to produce critical management information in a fraction of the time it now takes using our antiquated paper-based system. 

SUMMARY

Our 2008 budget request of $86.75 billion will provide the resources necessary for 

VA to:

• Strengthen our position as the Nation’s leader in providing high-quality health 

care to a growing patient population, with an emphasis on those who count on us 

the most—veterans returning from service in Operation Iraqi Freedom and Operation Enduring Freedom, veterans with service-connected disabilities, those with 

lower incomes, and veterans with special health care needs; 

• Improve the delivery of benefits through the timeliness and accuracy of claims 

processing; and 

• Increase veterans’ access to a burial option by opening new national and state 

veterans’ cemeteries.

I look forward to working with the Members of this Committee to continue the 

Department’s tradition of providing timely, high-quality benefits and services to 

those who have helped defend and preserve freedom around the world. 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. DANIEL K. AKAKA TO

HON. R. JAMES NICHOLSON, SECRETARY, DEPARMENT OF VETERANS AFFAIRS

Question 1. VA’s estimates for the number of OEF/OIF veterans that will come 

into the system next year are relatively incremental, at around 54,000. In the past, 

VA has underestimated the number of new veterans seeking VA health care. We 

also know that some conditions, such as PTSD, can take some time to manifest 

themselves in these young servicemembers, and that in these current conflicts, the 

average servicemember will serve more tours than in the past. Can you please explain the projects that VA will see such a low number of OEF/OIF veterans next 

year? In our hearing, you mentioned that you use a very sophisticated model to 

reach your projections can you explain this model? 

Response: The Department of Veterans Affairs (VA) has made every effort to account for the needs of Operation Enduring Freedom/Operation Iraqi Freedom (OEF/

OIF) veterans within the actuarial model. Starting with the identification of OEF/

OIF veterans from a roster provided by the Department of Defense (DOD) the actuarial model develops projections based on the actual enrollment and utilization patterns of OEF/OIF veterans since Fiscal Year (FY) 2002. These projections are based 

on the development of separate enrollment, morbidity, and reliance assumptions for 

OEF/OIF veterans based on their actual enrollment and utilization patterns. However, unknowns, such as the length of the conflict, will impact the services that VA 

will need to provide. Therefore, we have included additional investments for OEF/

OIF in the Fiscal Year 2008 budget to ensure that VA is able to care for all of the 

health care needs of our returning veterans.

Question 2. VA has indicated that the size of the active duty force is the best indicator of new claims activity. DOD data shows that there were nearly 198,000 military separations in 2006. This number does not include demobilized Guard and Reserve. Trends show that 35 percent of these veterans will file a claim over the 

course of their lifetime. For 2006 separation only, that number is over 69,000 for 

just active duty forces. What is VA doing to prepare now for this current and future 

increase in claims activity? 

Response: Special workload reduction initiatives are being undertaken to meet the 

demands of pending and future inventory. These initiatives include an aggressive 

recruitment program to add more decisionmakers; employment of rehired annuVerDate 0ct 09 2002 15:10 May 29, 2007 Jkt 000000 PO 00000 Frm 00036 Fmt 6633 Sfmt 6621 H:\RD41451\DOCS\33255.TXT SENVETS PsN: ROWENA
33

itants; expanded use of overtime; expansion of our claims development centers; 

shifting work among regional offices to maximize resources and enhance performance; improving the training for new and existing employees; and working with 

DOD to identify opportunities to improve information sharing and efficiency of 

claims processing and transition services. The 8,320 direct full time employees 

(FTE) requested in 2008 for the Compensation and Pension (C&P) program are essential if VA is to reduce the pending workload. With a workforce that is sufficiently 

large, correctly balanced, and well trained, the Veterans Benefit Administration 

(VBA) can successfully meet the needs of our veterans.

Question 3. How many veterans does VA estimate will leave the VA health care 

system due to the enrollment fees and increase in the drug copayment, and how 

many veterans will be deterred from seeking services at VA? 

Response: VA estimates that approximately 420,000 Priority 8 veterans will 

choose not to pay the tiered enrollment fee and increased pharmacy copayment in 

Fiscal Year 2009. A majority of these veterans are non-users but approximately 

111,000 veteran patients are impacted by this proposal.

Question 4. Over the past 5 years, VA has made extraordinary progress in developing new solutions to the medical needs of our aging veterans population and the 

growing number of younger veterans with multiple traumatic injuries. Yet, the research request for Fiscal Year 2008 relies on outside funding sources, and would 

amount to a cut of $2 million authorized from Fiscal Year 2007. In a similar trend, 

the budget requests 3,000 research employees, down by almost 200 from 2006. 

Please explain the motivation for these cuts, and the impact they will have on the 

impressive research conducted at VA? 

Response: VA is committed to increasing the impact of its research program by 

ensuring that resources are targeted to the most pressing needs and spent on the 

programs that prove to be most effective at developing new solutions to the medical 

needs of new and aging veterans. 

VA continues to maintain a workable balance among the competing needs for research; to evaluate and fund existing programs at appropriate levels and to fund 

new projects at a comparable rate as has happened previously. Strategies include 

using attrition, transitioning to shorter durations of awards, and conducting competitive reviews of research centers. VA is using performance-based criteria to decide whether to modify, terminate, or expand programs. 

Using these strategies, VA research is increasing its focus on the emerging needs 

of new veterans, especially those returning from OEF/OIF, while maintaining a 

broad research portfolio that addresses the needs of aging veterans, including chronic diseases and mental health. It is important to note that, in many cases, the needs 

of new OEF/OIF veterans relate to those of aging veterans who served in previous 

conflicts. For example, research focused on the combat-related mental health needs 

of OEF/OIF veterans is also applicable to the mental health needs of aging veterans 

who served in previous deployments. Similarly, research designed to improve traumatic amputation and subsequent prosthetics care is also relevant to aging veterans 

with diabetes and vascular disease. Accordingly, increases in funding for OEF/OIF 

related research does not necessarily come at the expense of research focused on the 

aging veteran.

Question 5. How does VA handle OEF/OIF veterans as they enter the VA system 

through their 2-year automatic window of eligibility following separation from service? Are all of them automatically ‘‘enrolled’’ in the VA health care system? And how 

are they prioritized after their enrollment or entry into the system? Do they automatically become 7s and 8s? 

Response: Combat veterans, including OEF/OIF veterans, who apply for enrollment within 2 years of their release from active duty are eligible for placement into 

Priority Group 6 (unless they are eligible for placement in a higher Priority Group 

based on other eligibility factors). 

These combat veterans are eligible for the full medical benefits package. They are 

provided hospital care, medical services, nursing home care, and medications for any 

illness that may be related to their combat service during the 2 years after their 

release from active duty is provided without charge. Treatment for conditions other 

than those clinically determined to be related to their service are subject to copays. 

At the end of their 2-year combat eligibility period, enrolled combat veterans remain enrolled and are placed into Priority Groups based upon their income and/or 

other applicable eligibility factors. Combat veterans who apply more than 2 years 

after separation from active duty are evaluated for enrollment based upon the same 

eligibility factors as any other veteran.

Question 6. The proposed budget would maintain the current ban on enrollment 

of Priority 8 veterans. How much would it cost to bring these veterans back into 

34

the system? Please take into account the third party insurance these veterans will 

bring with them. 

Response: Reopening Priority 8 enrollment in Fiscal Year 2008 is estimated to increase enrollment in Priority 8 by approximately 1.6 million and require an additional $1.7 billion in the budget. VA has significant concerns that this additional 

demand will strain VA’s capacity to provide timely, quality care for all enrolled veterans and will lead to longer waits for care. VA must also consider the impact of 

this policy in future years. In 2017, this policy would increase Priority 8 enrollment 

by an estimated 2.4 million and would require an additional $4.8 billion. Over the 

next 10 years, resumption of Priority 8 enrollment would require an additional 

$33.3 billion.

Question 7. VA’s budget appears not to add $360 million but only $54 million to 

implement mental health initiatives to close gaps in services identified in VA’s Mental Health Strategic Plan. Can you please provide the Committee with a detailed 

breakdown of how the $306 million will be spent in Fiscal Year 2007 and how the 

VA proposed to spend the additional $54 million in Fiscal Year 2008? Response: The plan for spending the $306 million allocated for the mental health 

initiative is included as a spreadsheet. The additional funds for the Mental Health 

Initiative for Fiscal Year 2008 will be fully used to support full year funding for 

those activities initiated in Fiscal Year 2007 and prior years. 

The following table provides additional information.

FY 2007 and FY 2008 Proposed Mental Health Initiative Spend Plan FY 2007 FY 2008 Change 

Continuation of FY 2005 and FY 2006 Recurring Initiated Activities ...... 166,296,744 166,296,744 0

Primary Care/Mental Health Integration .................................................... 38,380,506 55,691,153 17,310,647

Suicide prevention coordinators (156 sites) ............................................. 8,624,890 16,249,780 7,624,890

Psychosocial Rehabilitation (PSR) ............................................................. 15,138,061 23,587,385 8,449,324

Mental Health Intensive Case Management (MHICM): Rural, multiple 

teams, etc. ............................................................................................ 10,185,091 12,345,644 2,160,553

Homeless Program Initiatives .................................................................... 17,556,002 17,342,238 ¥213,764

Substance Use Disorders ........................................................................... 4,624,702 9,096,072 4,471,370

Mental Health staff in Community Based Outpatient Clinics (CBOCs) ... 15,290,157 21,883,139 6,592,982

Operation Enduring Freedom/Operation Iraqi Freedom (OEF/OIF) inreach 3,490,567 5,102,231 1,611,664

Post Traumatic Stress Disorder (PTSD), including Dual Diagnosis and 

Military Sexual Trauma (MST) Resource program ................................ 4,979,157 5,115,401 136,244

Telemental Health ...................................................................................... 7,018,000 3,100,000 ¥3,918,000

EES training ............................................................................................... 600,000 600,000 0

Centers of Excellence ................................................................................. 3,000,000 4,950,000 1,950,000

Gulf Coast market survey .......................................................................... 196,659 0 ¥196,659

Vet Center staff enhancement .................................................................. 3,379,923 10,531,046 7,151,123

TBI Transitional Housing ........................................................................... 2,500,000 5,000,000 2,500,000

Other activities including training in evidence based psychotherapy ..... 4,849,541 3,109,167 ¥1,740,374

Total .................................................................................................. 306,110,000 360,000,000 53,890,000

Question 8. I remain concerned that the funding for new mental health initiatives 

may be inadequate. VA has been implementing the Mental Health Strategic Plan 

since Fiscal Year 2005. Please identify the initiatives in the plan that have not been 

fully implemented and the amounts of funding needed to fully implement each of 

the remaining initiatives. 

Response: The Veterans Health Administration (VHA) mental health strategic 

plan (MHSP) identifies and addresses gaps in services, disseminates evidence-based 

programs, and works toward transformation in the culture of care. While VHA has 

been working toward implementation of the MHSP for approximately 2 years, we 

anticipate that 5 years or more will be required to achieve the enhancements and 

transformations required to fully meet its intended goals. 

In terms of initiatives that have not been fully implemented, VA views the MHSP 

as a living document that must be modified or interpreted differently as the needs 

of eligible veterans change, and as new opportunities for providing care become 

available. For example, VA has learned far more about the needs of veterans from 

the Global War on Terrorism (GWOT) since 2003 and 2004 when the strategic plan 

was developed. We have also learned from research about new opportunities for 

treating veterans with mental illnesses. 

Resources to support mental health services have come in the form of 

supplementing Veteran Integrated Service Network (VISN)-based activities funded 

35

through veteran’s equitable resource allocation (VERA). Enhancements funded 

through the mental health initiative are moving the system rapidly toward implementation of the MHSP. Extending the funding for the initiative with $306 million 

in Fiscal Year 2007 and $360 million in Fiscal Year 2008 will contribute to the 

transformation of the mental health care system and full implementation of the 

MHSP.

Question 9. VA’s ability to provide for the security of our veterans’ personal information is still questionable. I understand this budget contains over $70 million for 

cyber security. Please explain in detail how this money will be used. How will this 

budget prevent future losses of computer equipment and secure personal information of the type that is believed to be on the hard drive at the Birmingham VA Medical Center that was reported lost last month? 

Response: The information technology (IT) cyber security program includes 18 initiatives, as follows:

Initiative FY 2008

Cyber Security Management .................................................................................................................................... $28.7M 

Certification & Accreditation of IT Systems ................................................................................................... 7.5

Identity Safety and Risk Management ........................................................................................................... 6.0

Policy Development and Maintenance ............................................................................................................ 5.7

Training, Awareness and Education ............................................................................................................... 5.4

FISMA Reporting .............................................................................................................................................. 2.3

Security Inspection .......................................................................................................................................... 1.8

Field Security Operations ......................................................................................................................................... $41.4M 

Enterprise Encryption and Data Protection .................................................................................................... 7.0

Maintenance/Support Services ........................................................................................................................ 6.5

Enterprise Framework ...................................................................................................................................... 5.5

Antivirus .......................................................................................................................................................... 5.4

Vulnerability Assessment and Penetration ..................................................................................................... 4.0

Patch Management ......................................................................................................................................... 3.4

Encryption ........................................................................................................................................................ 2.7

Testing ............................................................................................................................................................. 2.2

Intrusion Prevention ........................................................................................................................................ 1.9

E-Authentication .............................................................................................................................................. 1.9

Media Disposal ................................................................................................................................................ 0.5

COOP ............................................................................................................................................................... 0.4

Total ....................................................................................................................................................... $7O.1OM 

To account for equipment and protect information, VA is:

• Requiring all VA laptops have security software updated and unauthorized sensitive information removed through the laptop ‘‘Health Check’’ procedure every 90 

days. 

• Permitting the use of Federal Information Processing Standards (FIPS) 140–2 

certified encrypted universal serial buses (USB) thumb drives for VA employees who 

have justified the need and received approval to store information on a removable 

storage device as outlined in VA Directive 6601, Removable Storage Media. 

• Testing a port security technology to enforce adherence to the directive that will 

restrict the transfer of information to removable storage media and thwart the introduction of malicious code via USB ports. 

• Establishing levels of standardization and maintaining an inventory for Blackberry devices, SmartPhones and other mobile devices (such as personal digital assistants). 

• Implementing Blackberry content protection on devices VA owns, i.e., if a device 

is lost, it is password protected and encrypted. 

• Restricting use of non-government mobile devices within VA, only allowing 

them to be used if VA can monitor their use to verify they are following VA IT security policies. 

• Deploying an encryption solution for SmartPhones and other mobile devices 

similar to that of the Blackberry protection. 

• Securing remote access to e-mail and file shares for employees, contractors, and 

business partners using government furnished equipment through the remote enterprise security compliance update environment (RESCUE), which ensures equipment 

36

is encrypted and has an active host-based firewall, updated antivirus files, and the 

most recent security patches mandated for installation. 

• Prohibiting employees, contractors and business partners from saving information on non-government owned equipment. 

• Testing technology to encrypt network traffic from VistA mail, computerized patient record system and time and attendance applications. 

• Automating the distribution of software, patches and upgrades to servers and 

workstations via the enterprise security framework to ensure policy compliance for 

VA information systems, to produce compliance reports, and to mitigate risks—in 

concert with the VA patch management, intrusion prevention and antivirus initiatives—propagated by viruses, worms, and other malicious code. 

• Distributing data eraser (a software package for overwriting sensitive information contained on hard drives) nationwide to properly sanitize and dispose of equipment. 

• Conducting vulnerability assessments and penetration testing to identify and 

quantify risks. 

• Drafting/implementing policies addressing agency responsibilities to protect 

laptops and other portable data storage and communication devices, such as keeping 

laptops in carry-on luggage, use of privacy screens when accessing agency information outside the office, etc.

Question 10. As discussed in the past, I am concerned that VA cannot always absorb court decisions, anticipated or not, without falling behind. This year, we already know of a court decision that could have a significant effect on the workload 

at VA. What measures are you taking now to ensure that should the Haas decision 

not be overturned, that veterans who are already in the queue, or those who are 

now filing their claims, are not burdened by unnecessary delay? 

Response: The Haas decision could potentially affect many veterans who have 

claims based on herbicide exposure in which the only evidence of exposure is the 

receipt of the Vietnam Service Medal or service on a vessel off the shore of Vietnam, 

i.e., there is no evidence they served on land or the inland waterways of Vietnam. 

In order to be prepared for adjudication of claims that will be influenced by the decision rendered by the U.S. Court of Appeals for the Federal Circuit, VA released instructions in December of 2006 to all regional offices on the correct process for 

tracking and controlling claims with Haas issues. 

The initiatives that have recently been put in place to address increased inventory 

will assist VA in tackling the potential increase in claims that may stem from Haas. 

These initiatives include an aggressive recruitment program to add more decisionmakers, employment of rehired annuitants, increased use of overtime, expansion of 

claims development centers, shifting work among regional offices to maximize resources and enhance performance, and improved training for all employees.

Question 11. How is the Department counting injuries that come about as a result 

of participation in the Global War on Terror? Are combat and non-combat injuries 

categorized differently? 

Response: The Office of Public Health and Environmental Hazards does perform 

a quarterly review of healthcare use by those OEF/OIF veterans who have separated from service and present to VA for care. Since September 2003, DOD Defense 

Manpower Data Center (DMDC) has developed an updated file of ‘‘separated’’ Afghan and Iraqi combat troops who have become eligible for VA health care. This 

roster is used to check the VA’s electronic inpatient and outpatient health records, 

in which the standard International Classification of Disease (ICD)–9 diagnostic 

codes are used to classify health problems, to determine which OEF/OIF veterans 

have accessed VA health care. The data available for this analysis are mainly administrative information and are not based on a review of each patient record or 

a confirmation of each diagnosis. However, every clinical evaluation is captured in 

VHA’s computerized patient record. Consequently, the data used in this analysis are 

excellent for health care planning purposes because the ICD–9 administrative data 

reflects the need for health care resources. 

VA/DOD social work liaisons located at 10 military treatment facilities (MTFs) assist with the transfer of seriously injured servicemembers to the most appropriate 

VA medical facilities closest to their home to meet their medical needs. These VA/

DOD social work liaisons categorize the nature of the injury (battle, non-battle or 

disease) as part of their documentation and referral to the receiving VA medical facility. From August 2003 to February 22, 2007, VA/DOD liaisons received the following referrals:

37

Military Class of Injury Patient 

Count 

Percent of 

Total 

Battle Injury (BI) ................................................................................................................................. 1,215 20.3

Non-Battle Injury (NBI) ....................................................................................................................... 2,303 38.5

Disease ................................................................................................................................................ 1,467 24.6

Unknown .............................................................................................................................................. 990 16.6

Total Uniques ............................................................................................................................. 5,975 100

Data Source: MTF2VA Tracking System. 

Question 12. What is the justification for moving a claim filed as a result of the 

Global War on Terror ahead of an initial claim filed by a Vietnam veteran? 

Response: VA’s initiative to provide priority processing of all OEF/OIF veterans’ 

disability claims will allow all the brave men and women returning from the OEF/

OIF theaters who were not seriously injured in combat, but who nevertheless have 

a disability incurred or aggravated during their military service, to enter the VA 

system and begin receiving disability benefits as soon as possible after separation. 

We believe this is an important step in assisting them with their transition to civilian life. 

VBA has undertaken several improvement initiatives to reduce the pending workload and shorten the waiting time for all veterans. We are hiring more employees 

and devoting additional resources to claims processing. Additional overtime funds 

have been provided to regional offices, and we are recruiting retired claims processors to return to work as rehired annuitants. These experienced claims processors 

will be tasked with processing claims that have been pending the longest. Through 

these initiatives, claims processing for all veterans will be improved.

Question 13. How was the strategic target for average days to mark a grave at 

national cemeteries developed? Now that the National Cemetery Administration is 

performing well-above the strategic target, will the strategic target be adjusted to 

make the goal higher? 

Response: The strategic target for the timeliness (within 60 days of interment) of 

marking graves in national cemeteries was originally set at 90 percent based on a 

review of performance data and of the business processes involved with furnishing 

headstones and markers at national cemeteries. In Fiscal Year 2002, the National 

Cemetery Administration (NCA) collected baseline data showing that 49 percent of 

graves in national cemeteries were marked within 60 days of interment. This level 

of performance was raised by reengineering business processes, such as ordering 

and setting headstones and markers. In Fiscal Year 2004 and 2005, NCA exceeded 

this initial strategic target, marking 94 percent and 95 percent of graves in national 

cemeteries within 60 days of interment, respectively. As a result, NCA has increased 

the strategic target for this measure to 92 percent. 

While NCA’s improved performance in this key strategic measure is due primarily 

to reengineered business processes, favorable weather conditions over the past few 

years, especially during the winter months in the Northeast and Midwest, have also 

positively impacted our performance. External factors beyond NCA’s control, such 

as extreme weather conditions that impact ground conditions, may cause delays in 

the delivery and installation of headstones and markers. Additionally, some families 

may choose to delay the ordering of a headstone or marker for the grave of an individual interred in a national cemetery, which may impact our ability to mark graves 

within 60 days of interment. While national cemetery staff work with families and 

funeral homes to ensure the ordering of headstones and markers in a timely manner, we respect that some families may choose to defer ordering their headstone or 

marker until a later date. With these factors in mind, NCA is currently focused on 

sustaining our high level of performance in this area and continuing to achieve and 

surpass our current strategic target.

Question 14. Please explain the 310 day change in the Appeals Resolution Time 

Strategic Target from last year to this year. 

Response: The Board of Veterans Appeals (Board or BVA) appeals resolution time 

(ART) is the average length of time it takes the Department to process an appeal 

from the date a claimant files a Notice of Disagreement (NOD) until a case is resolved, including resolution at a regional office or by issuance of a final, non-remand, decision by the Board. This Department-wide timeliness measure was adopted in the late 1990s as a major organizational crosscutting effort to demonstrate the 

Board’s and VBA’s commitment to veterans. We recognize that appellants are less 

interested in how long individual stages in the appeals process take as they are 

about the length of the entire process. ART provides appellants, elected officials, DeVerDate 0ct 09 2002 15:10 May 29, 2007 Jkt 000000 PO 00000 Frm 00041 Fmt 6633 Sfmt 6621 H:\RD41451\DOCS\33255.TXT SENVETS PsN: ROWENA
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partmental leadership, VBA and BVA management, and other interested parties a 

much more comprehensive and accurate answer to the question, ‘‘How long does the 

appeal process take?’’ For the reasons that will be discussed below, the strategic target for the ART for Fiscal Year 2007 was revised from the longstanding goal of 365 

days to 675 days to more realistically and accurately reflect the actual length of the 

appeals process. 

The goal established in 1998 was 365 calendar days. However, that goal has never 

been met (see chart below). Moreover, this goal was established before the Veterans 

Claims Assistance Act (VCAA) was enacted in November 2000. Prior to that time, 

VA evaluated claims to determine whether they were ‘‘well grounded.’’ If they were 

not, VA did not assist the claimant in the development of his or her claims. The 

VCAA, among other things, heightened VA’s duty to assist and duty to notify claimants of the type of evidence needed to substantiate their claim. This resulted in 

more steps to the claims process and an increase in the length of time required to 

develop claims. In addition, the U.S. Court of Appeals for Veterans Claims and the 

U.S. Court of Appeals for the Federal Circuit have issued a series of precedent decisions, which required additional action on VA’s part. See Holliday v. Principi, 14 

Vet. App. 280 (2001); Quartuccio v. Principi, 16 Vet. App. 183 (2002); Charles v. Principi, 16 Vet. App. 370 (2002); Pelegrini v. Principi, 18 Vet. App. 112 (2002); 

Mayfield v. Nicholson, 444 F.3d 1328 (Fed. Cir. 2006); Dingess/Hartman v. Nichol- son, 19 Vet. App. 473 (2006); Kent v. Nicholson, 20 Vet. App. 1 (2006).

Fiscal Year Target ART Actual ART Strategic 

Target ART 

1999 ............................................................................................................................. 745 365

2000 ............................................................................................................................. 682 365

2001 ............................................................................................................................. 595 365

2002 ............................................................................................................................. 731 365

2003 ............................................................................................................................. 633 365

2004 ............................................................................................................................. 529 365

2005 ............................................................................................................................. 622 365

2006 ............................................................................................................................. 657 365

2007 ............................................................................................................................. 685 670* 675

2008 ............................................................................................................................. 700 675

*Thru 1/31/07. 

Question 15. The Administration’s request projects an increase in funding for VA 

health care in Fiscal Year 2008, and cuts in funding in subsequent years. This projection parallels last year’s request which suggested cuts in immediate out years as 

well. In the face of steadily increasing patient workload, an aging veteran population, and steady inflation in the cost of medical care, what is the rationale for 

these projections? 

Response: The Administration determines the details of its appropriations request 

1 year at a time. Each year, Office of Management and Budget (OMB) works with 

the agencies to develop the detail estimates for individual programs. OMB’s computer model generates placeholders for, in the case of this year’s budget, Fiscal Year 

2009–2012 by account that hit overall targets for defense, homeland security, international, and other non-security spending, so that OMB can calculate the deficit 

path. These projections do not represent the President’s proposed levels for individual accounts and programs. The Fiscal Year 2009 and subsequent year’s requests 

will be made in future cycles.

Question 16. The proposed budget shows a transfer of 5,689 Food Service FTE 

from the medical facilities to medical services account. How are these personnel to 

be distributed amongst the medical services activities? What is the justification for 

this change? 

Response: This is a technical correction. Under the medical care three-appropriation structure, which began in 2004, food service operations were designated under 

the medical facilities appropriation. The costs incurred for hospital food service 

workers, provisions, and related supplies are for the direct care of patients. Food 

service costs are directly related to inpatient workload and, therefore, should be captured under the medical services appropriation which is responsible for direct inpatient care. VA requests that beginning in 2008, food service operations be moved to 

the medical services appropriation.

Question 17. The proposed budget includes $1.3 billion allocated for the IT nonpay account. How is this budget line allocated? What portion of this line will be 

39

spent on outside contracts? How many individual contracts do you expect to make 

use of, and with how many individual contractors? How much of this line represents 

contractor payroll? Response: The proposed budget of $1.3 billion is allocated, as follows (dollars in 

thousands):

IT Activities 2008 estimate 

VA IT Infrastructure .............................................................................................................................................. $446,139

Veterans Health Care ........................................................................................................................................... 461,468

Veterans Benefits Delivery ................................................................................................................................... 65,648

Office of Information and Technology ................................................................................................................. 191,034

Office of Management ......................................................................................................................................... 82,572

Human Resources Development ........................................................................................................................... 34,140

Other Staff Offices ............................................................................................................................................... 22,840

Impact of Continuing Resolution P.L. 109–383.

Total ............................................................................................................................................................ $1,303,841

With respect to the remaining contractor-specific questions, the volume and detail 

of data necessary to provide an adequate response will require an extensive 

informationgathering effort. As a result, VA needs significant time to collect this 

data. However, we expect to be able to complete the response by June 30, 2007. 

Question 18. FISMA compliance accounts for $249 million of the IT budget. Please 

explain in detail how these funds will be expended to improve VA’s level of FISMA 

compliance. 

Response: The information technology component of the budget request includes $231.9 million for compliance with the information security requirements of Federal 

Information Security Management Act (FISMA) compliance. The Department-level budget of $70.1 million for cyber security provides an overall framework for development and implementation of the VA information security 

program as required by FISMA. This includes a: • Cyber security management component that provides the Department-wide 

focal point for leadership in information security policies, procedures, and practices; 

and • Regional field operations component that provides oversight for a segment of facility information security officers who are geographically dispersed throughout VA 

as well as develops and maintains certain enterprise-wide security controls and 

measures.

The IT system-level budget, which is $161.8 million spread across the IT portfolio 

for implementation, comprises security initiatives accomplished at the system or facility level to support FISMA compliance (to include implementation of security controls required by the National Institute of Standards and Technology). For Fiscal 

Year 2008, anticipated expenditures are related to re-certification and accreditation 

of approximately 560 VA systems; deployment of the VA personal identify 

verification system to provide standardized government identification and access to 

IT systems for over 350,000 VA employees and contractors; integration of security 

into VistA application development; secure deployment of the VA regional data centers; remediation of facility security weaknesses; temporary employee background 

investigations; field level contingency plan testing; and system security upgrades. 

Question 19. Please provide in detail VA’s outreach efforts to the Guard and Reserve, including specific actions and numbers of servicemembers contacted, as well 

as the number of servicemembers seeking benefits and services. 

Response: VHA has made extensive efforts to ensure that information is available 

to returning troops about VA services and their eligibility. Ultimately it is each veteran’s decision regarding where they will seek health care, but VA wants that decision to be based on ample information about VA and its programs for veterans. 

VBA, with the activation and deployment of large numbers of Reserve/Guard members, has greatly expanded its outreach to this group of veterans as well. The following is a summary of efforts to reach out and educate veterans and their families: 

Transition Assistance Advisors (TAA): The Office of Seamless Transition has 

partnered with the National Guard Bureau to establish 54 TAA, formerly State benefits advisors. A TAA is in every State and territory. The TAAs are National Guard 

Bureau staff that work closely with VA medical centers and Vet Centers in outreach, education, and referral efforts. 

Post Deployment Health Reassessment (PDHRA) Program: VA Medical Centers 

(VAMC) and Vet Centers are heavily involved in DOD PDHRA program for National 

Guard and Reserve members. PDHRA is an outreach, education, identification, and 

40

referral program. Vet Center staff has participated in over 300 PDHRA screening 

events with National Guard and Reserve units. These screenings have resulted in 

over 17,125 servicemembers, as of February 2007, being referred to VA for followup care. In addition to providing this follow-up care, VA staff actively enrolls National Guard and Reserve members in health care. 

Army Wounded Warrior (AW2): Recently VA has agreed to host 22 AW2 staff in 

VAMCs to work with seriously injured soldiers/veterans and their families. AW2 soldiers have 30 percent or higher disability ratings from the Army. Over 20 percent 

of the soldiers/veterans in this program have a post traumatic stress disorder 

(PTSD) disability. An AW2 staff will be located in each VISN (with two assigned 

in VISN 7). Sixteen of the AW2 staff are currently in place with the remaining six 

scheduled to be assigned during 3rd quarter Fiscal Year 2007. The VA/AW2 partnership is a major step in the outreach initiative that will help VAMC and Vet Center 

staff reach out to seriously injured soldiers/veterans and their families. 

Memorandums of Understanding (MOU): The Office of Seamless Transition is actively working with the Army Reserve and the Marine Corps to develop MOUs to 

help promote outreach, education, and transition assistance. 

Vet Center Enhancements: In response to the growing numbers of veterans returning from combat in OEF/OIF, the Vet Centers have hired additional staff and 

opened new centers. In February 2004, 50 GWOT veterans were hired to augment 

the Vet Center existing staff. VA authorized a new 4-person Vet Center in Nashville, Tennessee in November 2004. An additional 50 GWOT veterans were hired in 

April 2005 to further enhance services to veterans returning from combat in Afghanistan and Iraq. VA established two new Vet Centers (Atlanta, Georgia and Phoenix, 

Arizona) in April 2006. Since the beginnings of hostilities in Afghanistan and Iraq, 

the Vet Centers have seen over 165,000 OEF/OIF veterans, of which over 119,000 

were outreach contacts seen primarily at military demobilization and National 

Guard and Reserve sites, usually in group settings. 

Vet Center Expansion: In February 2007 a major expansion of the Vet Center program was announced, with 23 new Vet Centers to be located in Montgomery, AL; 

Fayetteville, AR; Modesto, CA; Grand Junction, CO; Orlando, Fort Myers, and 

Gainesville, FL; Macon, GA; Manhattan, KS; Baton Rouge, LA; Cape Cod, MA; Saginaw and Iron Mountain, MI; Berlin, NH; Las Cruces, NM; Binghamton, Middletown, Nassau County and Watertown, NY; Toledo, OH; Du Bois, PA; Killeen, TX; 

and Everett, WA. 

Returning Veterans Outreach, Education and Clinical (RVOEC) Teams: RVOEC 

teams (funded and monitored through the Office of Mental Health Services) collaborate with readjustment counseling services and with State veterans affairs offices 

to provide information about VA services. A primary goal of the RVOEC program 

is to promote awareness of health issues and health care opportunities and the full 

spectrum of VA benefits. Some VAMCs began these outreach activities before 

RVOEC teams were funded as local initiatives, and they continue these services, 

now using the RVOEC teams as their agents. 

The National Center for PTSD: The Center has a number of informational pamphlets for returning veterans and their families on their Web site (http://

www.ncptsd.va.gov/). The Web site contains the latest fact sheets and literature on 

the war in Iraq. Important links from the site include: The Iraq War Clinician 

Guide, 2nd Edition, and two new guides on Returning from the War Zone: A Guide 

for Military Personnel and A Guide for Families as well as the VA Operation Enduring Freedom and Iraqi Freedom Seamless Transition Web site.

Briefings: VA provides briefings on benefits and health care services specific to 

Reserve/Guard members at demobilization sites and during the military pre-separation process as well as at town hall meetings, family readiness groups, family day 

activities, reunion and welcome home events, and during unit drills near the home 

of returning Guard/Reservists. Return and deactivation of Reserve/Guard units presents significant challenges to VA because rotation is irregular and the 

servicemembers spend short periods at military installations prior to release to their 

Guard or Reserve components. For this reason, VA continues to refine and adapt 

traditional outreach efforts to meet the needs of those who are currently separating 

from service by focusing at the local armories or Reserve centers in the months following deactivation. Benefits briefings such as the transition assistance program 

(TAP) workshops and retirement and separation briefings are available to active 

duty personnel and also available to Reserve/Guard members. 

Following is a summary of briefings held specifically for Reserve/Guard members:

41

Reserve/Guard Briefings 

Fiscal Year Briefings Attendees 

2003 ................................................................................................................................................ 821 46,675

2004 ................................................................................................................................................ 1,399 88,366

2005 ................................................................................................................................................ 1,984 118,658

2006 ................................................................................................................................................ 1,298 93,361

2007* .............................................................................................................................................. 447 23,389

*Through 01/31/07

A Summary of VA Benefits for Guard and Reserve Personnel—IB–164: VA, in cooperation with the Department of Defense (DOD), produced a new brochure outlining benefits and services available to Guard and Reserve personnel. Supplies 

have been mailed to regional offices to support outreach events and personal interviews. The brochure has also been provided to Reserve/Guard units to have available for members. 

Secretary’s Letter: Since May 2005, as part of the Secretary’s Letter Writing Outreach Campaign, over 658,000 letters were mailed to veterans informing them of 

VA’s wide range of health care benefits and assistance to aid in their transition from 

active duty to civilian life. Based on lists routinely provided by DOD, the Secretary 

of Veterans Affairs sends a letter to each returning OEF/OIF veteran, including Reserve/Guard members, who has separated from the active duty. Two pamphlets are 

enclosed with the letter: VA Pamphlet 21–00–1, A Summary of VA Benefits, and 

VA IBlO–164, A Summary of VA Benefits for National Guard and Reserve Personnel. 

Veterans Assistance at Discharge System (VADS): The VADS process generates 

the mailing of a ‘‘Welcome Home Package’’ that includes a letter from the Secretary, 

VA Pamphlet 21–00–1, A Summary of VA Benefits, and VA Form 21–0501, Veterans Benefits Timetable, to all veterans recently separated or retired from active 

duty (including Reserve/Guard members). VADS also sends a 6-month follow up letter with the same enclosures to these veterans. Through this process, information 

letters and materials are also sent about Education and Life Insurance benefits. 

About 181,000 of more than 689,000 GWOT veterans have filed a claim for disability benefits either prior to or following their GWOT deployment (approximately 

26 percent). This includes survivors’ claims for dependency and indemnity compensation (DIC) and death pension. VA has processed nearly 2,000 DIC claims for 

survivors of GWOT servicemembers who died in service. 

Summary counts of C&P benefit activity among veterans deployed overseas in 

support of GWOT have been generated. Through this VA/DOD data match, we are 

at this point only able to identify deployed GWOT veterans who have also filed a 

VA disability claim either prior to or following their GWOT deployment. Many 

GWOT veterans had earlier periods of service, and filed for and received VA disability benefits before being reactivated. VBA’s computer systems do not contain any 

data that would allow us to attribute veterans’ disabilities to a specific period of 

service or deployment.

Question 20. Committee staff have learned that separating servicemembers in the 

Benefits Delivery at Discharge Program are not receiving specialty examinations, 

except for hearing and psychiatric cases, and that VBA Regional Office personnel 

believe that they are precluded by policy to authorize these examinations. Please explain the bases for this policy, with specific regard to whether it is based upon budget implications, and describe your efforts to remedy the problem. 

Response: There is no centralized policy that prohibits rating specialists from ordering specialty or specialist examinations when needed for servicemembers going 

through the Benefits Delivery at Discharge (BDD) process. 

We believe that some confusion may exist over the use of the term ‘‘specialty.’’ 

There are differences between general medical examinations, ‘‘specialty examinations,’’ and ‘‘specialist examinations.’’ A specialist examination is an examination 

conducted by a clinician who specializes in the particular field. Currently, all initial 

psychiatric examinations, and all audiology, dental, and eye examinations are required to be conducted by a specialist. 

A specialty examination is an examination that may be conducted by a licensed 

clinician using specific detailed examination worksheets to elicit the information 

needed with respect to a specific disability. For example, it is not necessary in most 

cases to have a board-certified orthopedic surgeon or sports medicine physician conduct an examination of a knee to determine limitation of motion, stability, and other 

factors required by the rating schedule. Rather these are routine examinations that 

42

occur in clinical practice throughout public and private healthcare settings by general practitioners, physicians’ assistants, and nurse practitioners. 

A general medical examination is one that is ordered in initial claims. It is frequently accompanied by specific specialty worksheets depending on the nature of 

the conditions claimed.

Question 21. We have seen a dramatic increase in the number of young veterans 

requiring long-term care due to combat injuries, such as traumatic brain and spinal 

cord injuries. How does the budget address these additional long-term care demands. 

Response: VA has not seen a dramatic increase in the number of OEF/OIF veterans returning with injuries requiring long term care relative to the total veteran 

population receiving long term care services. However, we have seen that the OEF/

OIF veteran requires increasingly complex long term care. To meet their complex 

care needs, VA has and will continue to provide a spectrum of long term care services for young veterans with combat injuries with the goal of maintaining them at 

their highest functional level and as close to home as possible. The spectrum of services ranges from home and community based care including home telehealth, respite 

services, and adult day health care, to three venues of nursing home care. 

VA has rapidly expanded the capacity of its non-institutional home and community-based services since 1998 while sustaining capacity in nursing home programs. 

The Fiscal Year 2008 President’s Budget Submission proposes funding for a 26 percent expansion in home and community based care services from Fiscal Year 2007 

to Fiscal Year 2008. The increase will allow VA to purchase day health and independent living skills services which are designed to meet the needs of younger veterans and serve as an alternative to institutional care. In addition, sufficient capacity exists in the VA, community nursing home, and State veterans home programs 

to meet the needs of this population when short-term or long-term (greater than 90 

days) nursing home care is indicated.

Question 22. How are education and training programs for all VA employees, specifically those regarding information protection, funded and administered? 

Response: Development of training and awareness programs focused on information protection are centrally funded through the Enterprise Cyber Security Program. 

It provides general security awareness training for employees and specialized, rolebased training for executives, project/program managers, and field chief information 

officers (CIO). Specialized training for Department information security officers 

(ISOs) and other IT professionals is centrally developed in a number of modalities, 

to include:

• Web-based, online modules; • Training videos; • Satellite broadcasts; • Annual information security conference; • Commercially available training, such as, security certification classes; and • Specialized training focused on new security tools and technologies under development or being deployed in the enterprise.

We are currently assessing the option of using an Information System Security 

Line of Business Shared Service Center as a general security awareness training 

provider. This initiative is an E-Government Line of Business, managed by the Department of Homeland Security, intending to make Government-wide IT security 

processes more efficient. 

VA policy requires all staff, including volunteers and contractors, to participate 

in an annual awareness session. It is the responsibility of employees and their supervisors to ensure compliance. Training metrics are collected annually and reported 

to Office of Management and Budget as part of the annual FISMA report. Privacy 

training, which also addresses information protection, is handled in a similar manner, administered through an enterprise privacy program also under the direction 

of the VA CIO. Privacy training is required for all employees annually and is offered 

in a number of modalities, including specialized role-based training courses in addition to general awareness. Privacy officers are provided with specialized training 

during the annual information security conference.

Question 23. I have been impressed by the establishment of risk management and 

incident response teams, as part of the new information protection measures VA has 

implemented. Under which budget line are these teams funded? Are the team members VA employees or contracted employees? 

Response: As part of the Office of Information and Technology (OI&T) realignment, and as recommended by IBM, several existing IT compliance programs have 

been consolidated into the Office of IT Oversight and Compliance. This organization 

is designed to strengthen and enhance VA’s records management, privacy and IT 

43

security programs and practices through a comprehensive program of assessments. 

Assessment teams, comprised of VA employees, will conduct analyses nationwide to 

measure how well VA facilities comply with legislative, Federal Government oversight, and VA policies, procedures and practices. The major objectives of these assessments are to determine the adequacy of internal controls; validate compliance 

with laws, policies and directives; ensure proper safeguards are maintained; and 

recommend corrective actions where necessary. This office is currently funded from 

multiple line items within the OI&T budget, including the cyber security and privacy programs.

Question 24. Please provide a breakdown of the Fiscal Year 2008 request for all 

programs and services for homeless veterans, including comparisons to the levels as 

passed in H.J. Res. 20 for Fiscal Year 2007. 

Response: The estimate for 2007 and 2008 President’s budget request shows an 

increase in funding for Fiscal Year 2007 and Fiscal Year 2008:

Homeless Veterans Programs 

2006 2007 2008

Obligations ($000): 

Homeless Veterans Treatment Costs ...................................................... $1,448,769 $1,514,096 $1,634,086

Programs to Assist Homeless Veterans: 

Health Care for Homeless Vets (HCHV) .................................................. 56,998 59,278 61,649

Homeless Grants & Per Diem Program .................................................. 63,621 92,180 107,180

Homeless Grants & Per Diem Liaisons .................................................. 12,300 12,300

Domiciliary Care for Homeless Veterans ................................................ 63,592 72,702 75,610

Compensated Work Therapy/Transitional Residence (CWT/TR) Program 19,529 20,310 21,123

Department of Housing & Urban Development/VA Supported Housing 

Program (HUD–VASH) & Joint HUD/Health & Human Services/VA 

Supported Housing ............................................................................. 5,297 5,498 5,718

Other ....................................................................................................... 1,248 3,353 3,428

Total ............................................................................................... $210,285 $265,621 $287,008

The ‘‘other’’ category includes a distribution of funds for ‘‘Stand Downs’’; the monitoring and evaluation performed by the North East Program Evaluation Center 

(NEPEC); the administration of the multifamily transitional housing loan guarantee 

program, and excess equipment and clothing distributed at ‘‘Stand Downs’’ and 

other homeless functions. 

VA will continue with activation of 11 new homeless domiciliary residential rehabilitation and treatment programs (DRRTPs). The 11 new DRRTPs will add over 

400 new rehabilitative care beds for homeless veterans. 

VA will also continue the development of transitional housing and supportive 

service centers to fill treatment and housing gaps for homeless veterans in an overall Federal housing continuum. Public Law 107–95 provides VA the authority under 

the homeless providers grant and per diem (GPD) program to assist with operational costs as well as partial capital costs to create and sustain transitional housing and service programs for homeless veterans. Additionally, VA will continue to 

work with grant and per diem recipients to assure high-quality services and improved outcomes for homeless veterans served in these supported housing programs 

and supportive service centers. 

In Fiscal Year 2007 and Fiscal Year 2008, VA intends to continue to work toward 

building on initiatives that were started in 2005 and continued in 2006. This includes continued collaboration with other Federal agencies to address the needs of 

homeless veterans, particularly those who are chronically homeless.

Question 25. With regard to the Grant and Per Diem Program and Special Needs 

Grants, the proposed budget requests $107 million in obligations and 2 FTE. Last 

year, Public Law 109–461 authorized $130 million for the Grant and Per Diem Program, noting that 400,000 veterans will experience homelessness at some point during the course of the year, that only 25 percent of that number receive assistance 

through VA, and that only 150,000 homeless veterans are served by communitybased organizations each year. Please explain why more funding was not requested 

for these programs? 

Response: VA has supported a significant increase in services for homeless veterans. VA’s Fiscal Year 2008 budget requests an increase of nearly 77 million dollars between Fiscal Year 2006 and Fiscal Year 2008 funding levels. VA’s plans have 

been both aggressive and thoughtful. VA has in recent years expanded programs so 

44

that there are community operated programs approved in every state and Puerto 

Rico, and several programs on tribal land. On Thursday February 22, 2007, VA published a series of notices of funding availability (NOFA) in the Federal Register that 

will request proposals from community providers to create 1,000 new transitional 

housing beds under the VA’s Homeless Providers GPD program which represents 

a 10 percent increase of current capacity in the number of beds; a funding opportunity to double our services for special needs programs for homeless women veterans with children, frail elderly, terminally ill and chronically mentally ill; and to 

offer technical assistance to assist community groups be more effective in securing 

additional resources. 

Question 26. Last year, Congress authorized (in P.L. 109–461) appropriation of $7 

million for Fiscal Year 2007 through Fiscal Year 2011 for Special Needs Grants 

(women, frail elderly, terminally ill or chronically mentally ill). What amount has 

been targeted for Special Needs Grants in the Fiscal Year 2008 budget? 

Response: VA has announced a total of $6 million for current special needs and 

an additional $6 million for new special needs programs. The approximate amount 

of $12 million will be available January 2008 thru September 2009 (21-month funding cycle). VA has announced funding to renew and create new special needs grants.

Question 27. Last year, GAO reported that they estimated a 9,600 bed shortfall 

would occur in the number of beds available to veterans seeking to escape homelessness. How does the proposed budget address this projected need? 

Response: VA’s current NOFA published February 22, 2007, will add an additional 1,000 beds. Last year VA awarded funding for an additional 800 beds. In less 

than 6 months VA has added and offered funding to create 1,800 new beds—nearly 

20 percent of beds identified in the 9,600 bed deficit identified in the last community 

assessment of need. VA hopes to offer additional funding under VA’s Homeless Providers GPD program.

Question 28. Does the VA budget reflect any plans to expand the supply of decent 

and affordable housing for elderly and low-income veterans? 

Response: VA does not have any authority to independently expand affordable 

housing for elderly and low-income veterans. VA works closely with the Department 

of Housing and Urban Development (HUD) and other Federal, State, and local entities to promote enhanced housing opportunities for elderly and low income veterans. 

Under the Enhanced Use Lease Program VA has entered into leases with other entities to create affordable transitional and permanent housing opportunities for the 

homeless and elderly. In VA’s Enhanced Use Lease Report dated January 2007, VA 

has awarded 48 enhanced use leases. A total of 15 projects (37 percent) provide direct service to veterans; 9 projects provide homeless and transitional housing services, 4 projects are targeted for senior services, and 2 projects targeted for hospice 

care and triage emergency services. The total estimated value of the enhanced use 

lease agreements for both the homeless and senior services is in excess of 20 million 

with the conservative estimate of 682 affordable housing beds. The number is expected to increase.

Question 29. What has been budgeted for the thousands of vacant lots that could 

be used to stimulate the development of affordable housing for veterans? 

Response: VA does not specifically budget for the development of veterans housing 

on VA property. However, VA does continually identify its unneeded assets (land 

and buildings) and uses its Enhanced-Use Lease (EUL) authority to out-lease targeted properties and/or buildings to non-VA entities, who then provide a wide-range 

of housing opportunities for veterans. Through this approach, VA has been able provide homeless, transitional, and affordable housing for veterans. To date, VA has 

executed 13 EUL projects and has 9 other EUL projects under development, which 

have or will include homeless, transitional or affordable housing. All aforementioned 

VA projects offer housing opportunities to veterans at discounted rates. VA does not 

currently have the authority to build and operate affordable housing facilities on VA 

property outside of the EUL program. 

In addition to the EUL program, properties acquired by VA as the result of foreclosure of guaranteed loans made to veterans, are offered for sale to the general 

public in an effort to recover as much of the Government’s monetary outlay as possible. If there are competing purchase offers from a veteran and non-veteran for the 

same dollar amount, VA gives preference to the veteran’s offer. Also, the Loan Guaranty Program has the authority to sell its foreclosed properties for up to a 50 percent discount to HUD approved homeless providers who agree to use these properties primarily to house homeless veterans. 

45

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. JOHN D. ROCKEFELLER IV 

TO HON. R. JAMES NICHOLSON, SECRETARY, DEPARMENT OF VETERANS AFFAIRS

VA HEALTH CARE ISSUES

Question 1. In West Virginia private roundtables with returning veterans, I hear 

serious problems about the transition from military to civilian life. Would VA consider an ombudsman or a specific office so veterans had a place to seek expeditious 

action on claims that have fallen through the bureaucratic cracks? 

Response: The Department of Veterans Affairs (VA) has taken significant measures to expedite the claims process for all Operations Enduring Freedom and Operation Iraqi Freedom (OEF/OIF) veterans. Each regional office has designated specific veterans service center employees to process OEF/OIF claims and an OEF/OIF 

coordinator to ensure that OEF/OIF claims are expeditiously processed. Any OEF/

OIF veterans experiencing problems should contact their local regional office on our 

nationwide tollfree number 1–800–827–1000. All public contact employees have been 

fully trained in this special OEF/OIF processing initiative and will assure their 

claims receive priority handling. 

Since the onset of the combat operations in Afghanistan and Iraq, VA has provided expedited and case-managed services for all seriously injured OEF/OIF veterans and their families. Last month, the Secretary of Veterans Affairs announced 

a new initiative to provide priority processing of all OEF/OIF veterans’ disability 

claims. This initiative covers all active duty, National Guard, and Reserve veterans 

who were deployed in the OEF/OIF theatres or in support of these combat operations, as identified by the Department of Defense (DOD). 

Each regional office has designated an individual who reports directly to the director of the regional office to work with National Guard and Reserve units to obtain 

service medical records and serve as the primary point of contact with VA medical 

centers and contractors to expedite the scheduling and reports of medical examinations. The Veterans Benefit Administration (VBA) is also working with the Veterans 

Health Administration (VHA) and VA’s contract medical examination provider to develop procedures for expediting VA medical examinations for all OEF/OIF veterans 

who served in or in support of OEF/OIF theatres. 

To assist the regional offices in processing OEF/OIF claims, VA has also designated two development centers and three resource centers as a special ‘‘Tiger 

Team.’’ The two development centers, located in Roanoke and Phoenix, will obtain 

the evidence needed to properly develop the OEF/OIF claims. The three resource 

centers, located in Muskogee, San Diego, and Huntington, will rate OEF/OIF claims 

for regional offices with the heaviest workloads.

Question 2. What action will the VA take during this budget cycle to ensure that 

the full amount of funding appropriated for mental health services is used and appropriately targeted? 

Response: Appropriated funding for mental health services to VHA consists of two 

components. The first component is mental health funding in the amount of $2.50 

billion that will be distributed to the Veterans Integrated Service Networks (VISN) 

in fiscal year (FY) 2007 through the Veterans Equitable Resource Allocation 

(VERA). The second component is mental health enhancement funding, in the 

amount of $306 million, to support the implementation of the Comprehensive Mental Health Strategic Plan. 

To ensure that the funds are used efficiently in fiscal year 2007 and fiscal year 

2008, VHA has adopted a 2-year planning period and staggered the implementation 

of programs during the course of the year to simultaneously prepare for the fiscal 

year 2007 and fiscal year 2008 initiatives. 

Many of last year’s delays were due to difficulties associated with hiring mental 

health professionals. In addition, the delay was related to both program and staff 

development activities that were necessary to ensure that funds, when spent, would 

be used effectively and efficiently to improve care. This year, to encourage 

prioritizing hiring for new positions, VHA has created a performance measure for 

VISN leadership to fill these positions. VHA is closely monitoring recruitment and 

the resulting changes in clinical productivity. If there are delays in hiring, VHA will 

use these funds to augment non-recurring projects to enhance care and advance implementation of the Mental Health Strategic Plan.

Question 3. What plan does VA have to support the Vet Centers and the staff who 

are dealing with an increasing number of veterans and families? 

Response: VA has addressed the need for Vet Center support in anticipation of 

OEF/OIF requirements. 

In response to the growing numbers of veterans returning from combat in OEF/

OIF, the Vet Center program has hired additional staff and opened new Vet CenVerDate 0ct 09 2002 15:10 May 29, 2007 Jkt 000000 PO 00000 Frm 00049 Fmt 6633 Sfmt 6621 H:\RD41451\DOCS\33255.TXT SENVETS PsN: ROWENA
46

ters. In February 2004, 50 Global War on Terror (GWOT) veterans were hired to 

augment existing Vet Center staff. VA authorized a new 4-person Vet Center in 

Nashville, TN in November 2004. An additional 50 GWOT veterans were hired in 

April 2005 to further enhance services to veterans returning from combat in Afghanistan and Iraq. VA established two new Vet Centers (Atlanta, GA and Phoenix, AZ) 

in April 2006. 

In February 2007, a major expansion of the Vet Center program was announced. 

There will be 23 new Vet Centers located in Montgomery, AL; Fayetteville, AR; Modesto, CA; Grand Junction, CO; Orlando, Fort Myers, and Gainesville, FL; Macon, 

GA; Manhattan, KS; Baton Rouge, LA; Cape Cod, MA; Saginaw and Iron Mountain, 

MI; Berlin, NH; Las Cruces, NM; Binghamton, Middletown, Nassau County and 

Watertown, NY; Toledo, OH; Du Bois, PA; Killeen, TX; and Everett, WA. 

Since the inception of the Vet Center bereavement program in fiscal year 2004, 

the families of over 900 military casualties have received bereavement services. Of 

these 900 cases, almost 75 percent of the casualties were from OEF/OIF. Through 

this program, Vet Centers have provided approximately 6,500 visits to families at 

an estimated cost $600,000. The capacity for an increase in current workload was 

factored into the current budget.

Question 4. Does the VA has any plans underway to provide additional training 

and support for staff and veterans on the issue of suicide prevention as suggested 

by S. 479, the Joshua Omvig Veterans Suicide Prevention Act? 

Response: VHA has formulated a comprehensive strategy for suicide prevention 

focusing on the needs of both new veterans from OEF/OIF and those from prior conflicts. 

The specific programs for suicide prevention are based on public health and clinical models, and activities both within the community and in VA facilities.

Structural elements of the program include: 

• Designation of March 1, 2007, as the first annual VA National Suicide Prevention Awareness Day with educational activities for all staff, clinical and non-clinical 

at all VAMCs. 

• Designation of two Centers of Excellence focused on suicide prevention that will 

provide technical assistance to the system as a whole. 

• Designation of the Serious Mental Illness Treatment Research and Evaluation 

Center (SMITREC) to maintain data on suicide rates and risk factors, nationally, 

regionally, and locally, to guide prevention strategies. 

• Funding for Suicide Prevention Coordinators within each VA medical center as 

of April 1, 2007. 

• Creation of a suicide prevention hotline for veterans by the end of this calendar 

year.

Public health oriented components of the program, to be accelerated during the 

coming year, include: 

• Ongoing messages and education for the community about the availability of 

services and the effectiveness of treatment. 

• Continued outreach to returning veterans to support awareness of VA resources 

and identification of mental health concerns. 

• Increasing training for those who are in contact with veterans about the recognition of signs and risk factors for suicide, and process for helping veterans engage in treatment. 

• Strengthening collaborations with other local, regional, and national suicide 

prevention activities.

Clinical components of the program include: 

• Education and training for all VA staff about signs and risk factors of suicide, 

and of opportunities to help veterans in need engage in treatment. 

• Programs organized and directed by the suicide prevention coordinators to identify veterans at high risk for suicide and to ensure that the intensity of their clinical 

monitoring and care are enhanced. 

• Training for all mental health providers on evidence-based interventions shown 

to prevent suicide. 

SECURITY QUESTIONS

Question 5. How is the Department of Veterans Affairs (VA) addressing the protection of Personally Identifiable Information (PII) as described in the Executive Office of the President, OMB Memorandum M–06–16? 

Response: VA is taking the following actions to address the protection of PII:

47

1. Encrypt all data on mobile computers/devices which carry agency data unless 

the data is determined to be non-sensitive, in writing, by your Deputy Secretary or 

an individual he/she may designate in writing; 

By September 15, 2006, the VA encrypted approximately 15,000 laptops. To date, 

the VA has 18,000+ laptops that are encrypted. Simultaneously, the Department developed and implemented procedures to ensure that all laptops have applied updated security policies and removed all sensitive information that was not authorized to be stored on the devices. This procedure will continue to occur throughout 

the Department routinely and is one measure we have undertaken to protect information. 

The VA Secretary recently approved VA Directive 6600, Responsibility of Employees and Others Supporting VA in Protecting Personally Identifiable Information 

(PII) , and VA Directive 6601, Removable Storage Media. VA Directive 6601 mandates that VA will only allow Federal Information Processing Standards (FIPS) 140–

2 certified encrypted universal serial buses (USB) thumb drives to be used within 

the Department. In addition, a port security technology is currently undergoing test 

and evaluation to enforce adherence to the directive. This technology will only allow 

VA authorized removable storage media to be used; it will restrict the transfer of 

information to removable storage media, and will thwart the introduction of malicious code via USB ports. 

The VA is also establishing levels of standardization for Blackberry devices, 

SmartPhones and other mobile devices. Older versions of mobile devices that do not 

support encryption or content protection will be retired and replaced with versions 

of the devices that can support the VA’s IT security policies. The Department has 

Implemented Blackberry content protection on a majority of devices VA owns. IT 

Memorandum 07–01, Standardization of Blackberry Devices SmartPhones and other 

Mobile Devices, also restricts the usage of non-government mobile devices within VA 

and only allows them to be used if the VA can monitor their use to verify that they 

are following VA IT Security policies. The VA is also in the process of deploying 

Trust Digital which will encrypt SmartPhones. 

2. Allow remote access only with two-factor authentication where one of the factors is provided by a device separate from the computer gaining access; 

The Virtual Private Network (VPN) currently uses the active directory (AD) infrastructure for VPN authentication. Once connected to the VA network, access to sensitive data usually requires additional authentication to the internal resource that 

hosts the information. The Network Security Operations Center (NSOC) is in the 

process of writing a white paper regarding an interim implementation of two-factor 

authentication, pending the rollout of VA’s personal identity verification (PIV) 

project. 

3. Use a ‘‘time-out’’ function for remote access and mobile devices requiring user 

reauthentication after 30 minutes inactivity; 

The ‘‘time-out’’ function has been in place since the VPN was implemented in January 2002. Users are disconnected if their VPN session is inactive for 30 minutes. 

If they choose, they may initiate a new VPN connection which requires them to reauthenticate. In order for an inactivity timer to be enforced, there must be no traffic 

generated over the connection. There are many applications that send out ‘‘heartbeats’’ and ‘‘keep-alives’’ or that routinely generate traffic (i.e. Outlook) that prevent 

a VPN session from being inactive. When these types of applications are running 

with VPN, the inactivity timer cannot be enforced. 

4. Log all computer-readable data extracts from databases holding sensitive information and verify each extract including sensitive data has been erased within 90 

days or its use is still required. 

The VA has developed an enterprise level requirements document that was submitted to the vendor community in March 2007 for a request for information (RFI). 

Among the many types of requirements, this document is intended to address business requirements for protecting information, such as the mandate from the Office 

of Management and Budget (OMB) 06–16 ‘‘to log all computer-readable data extracts databases holding sensitive information and to verify each extract including 

sensitive data has been erased within 90 days.’’ In response to the RFI, the vendor 

community will provide technology solutions for VA to research, test, and deploy. 

Technology to address OMB 06–16 will result from the RFI. The Department will 

take immediate action subsequently to begin test and evaluation of the technology.

Question 6. What specific policy, plans, and funding has the VA put in place to 

ensure all of the following OMB M–06–16 requirements are met and that protection 

of all personally identifiable information is secure and cannot be compromised? 

Response: Several Departmental policies have been issued from the Secretary and 

Deputy Secretary: 

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SECVA Directives 

VA IT Directive 06–2, Safeguarding Confidential and Privacy Act-Protected Data 

at Alternative Work Locations, dated June 6, 2006. 

Memorandum for the Assistant Secretary for Information and Technology, Delegation of Authority for Responsibility for Departmental Information Security, dated 

June 28, 2006. 

Open Letter to VA Contractors and Subcontractors, dated August 10, 2006. 

DEPSEC Directives 

VA IT Directive 06–1, Data Security–Assessment and Strengthening of Controls, 

dated May 24, 2006. 

Memorandum to Under Secretaries, Assistant Secretaries, and Other Key Officials—Access Control and Employee Sensitivity Levels, dated July 14, 2006. 

Memorandum to Under Secretaries, Assistant Secretaries, and Other Key Officials—Handling and Storing of VA Data by Contractors and Subcontractors, dated 

August 10, 2006. 

VA IT Directive 06–3, Data Security–Assessment and Strengthening of Controls, 

Review of VA Activities that Involve Non-VA employees, dated August 11, 2006. 

VA IT Directive 06–4, Embossing Machines and Miscellaneous Data Storage Devices, dated September 7, 2006. 

VA IT Directive 06–5, Use of Personal Computing Equipment, dated October 5, 

2006. 

VA IT Directive 06–6, Safeguarding Removable Media, dated September 29, 2006. 

VA IT Directive 6600, Responsibility of Employees and Others Supporting VA in 

Protecting Personally Identifiable Information (PI), dated February 27, 2007. 

VA IT Directive 6601, Removable Storage Media, dated February 27, 2007.

The VA NSOC has architected a new remote access environment that distinguishes VA government furnished equipment (GFE) from non-VA owned other 

equipment (OE). GFE equipment is subjected to a variety of compliance and host 

integrity checks. One of those checks includes ensuring the remote device is 

encrypted prior to allowing full access to the VA network. Non-encrypted devices 

will be restricted to a virtual desktop which does not allow data to be saved on the 

unencrypted device. The NSOC is preparing to begin a 60-day pilot of this solution 

March 12, 2007. This new architecture will include a 30-minute inactivity timeout 

which requires the user to reauthenticate if they wish to reconnect to the VA network. The solution is also capable of supporting two-factor authentication. 

While the Department is in the process of testing, evaluating, procuring and deploying at an enterprise level, the technologies that exist within VA that contribute 

to Information Protection, a long term strategy has been developed and is being executed in parallel. 

The long term strategy began with the development of an enterprise information 

protection requirements document. The existing infrastructure serves as a baseline 

for VA’s information protection program and the intent of the requirements document is to fill in the gaps where information is stored and transmitted, that have 

yet to be addressed because VA does not have the technology. The intent of the RFI 

is to have the vendor community feed information back to VA with recommendations on how VA can fill in the information protection gaps with technical solutions 

to mitigate the likelihood of unauthorized disclosure. 

VA has already procured the software to encrypt laptops, Blackberry devices and 

SmartPhones and will procure FIPS 140–2 certified thumb drives, as needed. The 

secure remote access solution, the port security solution and the secure network 

transmission technology will be funded and procured with fiscal year 2007 money 

if pilot testing proves successful. Funding has been made available to support all 

of VA’s information protection initiatives.

Question 6(a). What is the status of ensuring that all data on portable devices is 

encrypted before leaving the physical premises of the VA? 

Response: When the Department encrypted the laptops in September 2006, a 

laptop health check procedure was implemented throughout the enterprise. The Department developed and implemented procedures to ensure that all laptops have 

been encrypted, all security policies are updated and all unauthorized sensitive information has been removed from the devices. This procedure occurs routinely 

throughout the Department and at a minimum; laptops must be brought into the 

facility every 90 days to undergo the health check. In addition, VA IT Directive 6601 

mandates that all information stored on a removable storage media must be stored 

on a device that employs the National Institute of Standards and Technology (NIST) 

(FIPS) 140–2 certified encryption algorithms.

49

Question 6(b). What is the status of ensuring that all remotely accessed data is 

only available to users who have verified at least 2 factors of authentication, and 

that access is revoked after 30 minutes of inactivity? 

Response: VA has an enterprise-wide VPN solution. The VPN currently uses the 

VA AD infrastructure for VPN authentication which is one-factor authentication. 

There is, however, a separate ‘‘authorization’’ component to the authentication process. A database that contains authorized VPN users is maintained by information 

security officers (ISOs). If a user is not in the database, they will not be authorized 

access to the VA network, even if they possess a valid AD account. Also, once connected to the VA network, access to sensitive data usually requires additional authentication to the internal resource that hosts the information. The NSOC is in the 

process of writing a white paper regarding an interim implementation of two-factor 

authentication, pending the rollout of the PIV project. All One-VA VPN users are 

subject to a 30-minute inactivity timeout.

Question 6(c). Are you successfully enforcing the removal of all remotely stored 

data over 90 days old? 

Response: For data that is stored on laptops, the information should be removed 

during the routine 90 day health check. VA is in the process of deploying Microsoft 

Rights Management Services (RMS) throughout the enterprise. This technology will 

automate the process of ensuring information is removed after 90 days of being 

stored. The implementation of Microsoft RMS will allow VA to protect information 

that has been used and stored remotely. RMS has the ability to set the duration 

for how long documents, files and e-mails can exist and then the document will 

automatically be destroyed after the duration is expired. RMS will be fully implemented throughout the enterprise by July 2007.

Question 6(d). Once all this security is in place, will employees be able to get their 

work done remotely—that is, can they access e-mail, get to files and applications 

on PCs and servers, and communicate with coworkers, regardless of location? 

Response: Each of the technologies that VA is implementing contributes to Information Protection and they integrate so that business operations can continue. Email access remotely for employees, contractors and business partners using GFE 

will be accomplished through the use of the GFE VPN solution. The GFE VPN solution will allow employees to access e-mail and share drives to conduct business. Email for employees, contractors and business partners with OE can be accomplished 

through the use of Outlook Web Access (OWA) and a virtual desktop. The virtual 

desktop will allow OE employees to access the intranet and work with files and documents; however, nothing can be saved on the device. The VA also has a technology 

undergoing test and evaluation to encrypt network traffic. This technology will ensure that the traffic from VistA mail, computerized patient record system (CPRS) 

and time and attendance applications are encrypted. The technology can provide a 

secure encrypted connection, with secure sockets layer (SSL) 3.0/TLS 1.0, from an 

external system to the internal server. This technology, coupled with the use of 

OWA and secure VPN will enable employees to conduct business on external devices 

in a secure manner. 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. PATTY MURRAY

TO HON. R. JAMES NICHOLSON, SECRETARY, DEPARMENT OF VETERANS AFFAIRS

SPOKANE ER: SHORTER HOURS AT VA URGENT CARE IN SPOKANE

Question 1. Mr. Secretary, this is a second problem with the VA’s emergency room 

policy. It is very hard for veterans to figure out if the VA is going to pay for an 

ER visit or if they’re going to get stuck with the bill. Your new director for emergency medicine, Dr. Gary Tyndall, told the Syracuse Post Standard—‘‘I’ve told patients ‘You could have died from this.’ And the veterans will say, ‘I’d rather die than 

leave my family with a bill that would take 5 years to pay.’ ’’

Mr. Secretary, if veterans are not going to the ER because they’re worried about 

sticking their families with massive bills, then it’s clear your policy is broken. I 

think part of the problem is that the rules are very confusing. The VA is the ‘‘payer 

of last resort.’’ And whether or not it pays depends on everything from the miles 

to the hospital, the veteran’s age, whether its service connected, and the time of day. 

Response: VA is aware that the statutes and regulations for emergency care can 

be confusing to veterans and providers. We are taking the following steps to address 

these concerns:

• Providing an emergency care brochure to all local VA facilities, that is also 

available on VA’s Web site. 

50

• Developing handbooks explaining Fee program regulations and policies, which 

will be made available to the general public on the VA Web site. 

• Providing training to all VA Fee program staff so they can better explain the 

requirements for payment of emergency care. VA’s long term goal is to clarify and 

simplify all regulations for the Fee program.

CONFUSING ER PAYMENT MAKES VETERANS HESITANT TO SEEK CARE

Question 2. Mr. Secretary, there is a major concern in the eastern part of my state 

about emergency care for veterans. In Spokane, at least one veteran has died when 

he sought care at a VA hospital that no longer offered urgent care after 4:30 p.m. 

According to the Spokesman Review, two other families have come forward saying 

the same thing happened to their loved ones. Mr. Secretary, that is absolutely unacceptable. When a veteran is having chest pains, he should not have to wonder 

whether the doors to the VA are going to be closed to him or have to worry about 

getting stuck with the bill if he goes to a local hospital. Why did you reduce the 

hours of urgent care at Spokane VA? 

Response: For many years, the Spokane VAMC provided around-the-clock emergency room care for veterans; however, after a long-term review of clinic records, 

it was determined that very few patients actually used the emergency room after 

regular business hours. The review also showed that treatments provided to those 

patients who did come in for after-hours services were mostly for minor, non-urgent 

conditions that could have safely been taken care of the next business day. 

These findings raised concerns regarding physicians keeping their skills current 

with such a low volume of patients presenting for care with the vast majority having minor ailments. In addition, the facility determined that resources dedicated to 

after hours activities should be realigned to daytime services in order to provide better and faster care to our patients. This change also allowed the facility to expand 

their ability to see as many veterans as needed on a daily basis.

Question 2(a). What are you doing to fix this broken and confusing emergency 

room policy? 

Response: VHA recognized the importance of establishing clear emergency room 

policy and established The Emergency Medicine Field Advisory Committee, 

(EMFAC) to actively assess and improve the provision of emergency care in our facilities. As a result of the EMFAC’s efforts, VHA Directive 2006–051, ‘‘Standards for 

Nomenclature and Operations in VHA Facility Emergency Departments,’’ dated September 15, 2006, was published. This directive establishes policy ensuring that 

emergency departments at VHA facilities remaining open 24 hours a day delivering 

high-quality emergency care. It also outlines the minimum standards that are acceptable for emergency departments that provide emergency care to our veteran 

population and the appropriate designations for units providing unscheduled care to 

veterans, i.e., emergency department and the urgent care clinic. National implementation of this policy is underway.

Question 2(b). What are you doing to communicate with local veterans in Spokane 

so they know the VA does not provide urgent care after 4:30 p.m.? 

Response: Prior to the reduction in urgent care hours (June 2006), an aggressive 

communication plan was launched in an effort to educate veterans, not only about 

the change in hours, but about where to seek care in the case of an emergency. The 

plan included a direct mailing to 23,000 patients, advising them of the change in 

hours and encouraging them to go directly to community emergency rooms if emergency care is needed. Less than a dozen veterans responded to the letter, with most 

seeking confirmation that their service connected needs would be paid by the VA. 

Veterans were also informed that, as a result of the change in hours, Spokane’s 

telephone care program was expanded, and treatment for urgent or emergent conditions related to their service-connected condition, or veterans with no other payment 

source who meet certain criteria, may be eligible for payment assistance through a 

VA program. In addition, a brochure detailing urgent care hours, services and instructions regarding what to do in the event of an emergency, was widely distributed to veterans during the time of the change. 

In October 2006, a second letter was sent to the same 23,000 patients, reiterating 

the information contained in the first letter. The second mailing also included a fact 

sheet addressing eligibility questions. In addition, public service announcements 

were distributed to media outlets in Spokane and the surrounding area, detailing 

the change in hours, clarifying the types of services provided at the urgent care 

unit, describing the most common symptoms of a life threatening emergency, and 

urging veterans to go to a community emergency room, regardless of the time of 

day, should they experience a health emergency. The telephone line at the Spokane 

51

facility also directs patients that, in case of emergency, they are to ‘‘hang up and 

dial 911 immediately.’’

WALLA WALLA

Mr. Secretary, turning to Walla Walla, Washington—As you know, in 2003 the 

VA CARES Commission tried to close the facility that 69,000 veterans rely on. I 

worked with the community and the VA, and I appreciate you committing to building a new facility in Walla Walla. The community and I have some questions about 

the care that will be provided in that new facility—particularly mental health, longterm care, and inpatient medical care. 

Mental Healthcare 

Question 3. As you know, mental health care is not available in the surrounding 

community. Can you explain how veterans in Walla Walla will get mental 

healthcare under your proposal? Also, how will they get drug rehabilitation? 

Response: The VAMCs in Walla Walla and Spokane will cooperatively manage inpatient mental health care for the Washington, Oregon and Idaho counties in their 

38 service areas. This will include residential rehabilitation care for substance abuse 

and PTSD provided mostly at the Jonathan M. Wainwright Memorial VAMC in 

Walla Walla and through community contracts in Spokane. Inpatient psychiatry will 

be provided at the Spokane VAMC in Spokane, Washington and through community 

facilities in Lewiston, ID, and Yakima and Tri-Cities, Washington. Expanded outpatient mental health services will continue to be provided at the VAMCs, the existing and planned community based outpatient clinics, and in other locations as determined.

Question 4. Will you continue to provide long-term care at the Walla Walla facility 

as long as it’s needed, and will you commit to working with the state to build a state 

nursing home? 

Response: Long term care will be provided at the Walla Walla facility or the surrounding community as long as it’s needed. In regards to working with the state 

to build a state nursing home, VISN 20’s network director has recently requested 

that Walla Walla’s new director work with the director of the Washington State Department of Veterans Affairs to begin the process of establishing a nursing home. 

Applications for VA grants to assist in the construction of state nursing homes for 

Fiscal Year 2008 must be submitted by August 15, 2007.

Question 4(a). How should vets who need LTC today get it? 

Response: There has been no change in the provision of long term care at the 

Walla Walla facility at this time. 

INPATIENT CARE

Question 5. Can you assure me that veterans in Walla Walla will not lose access 

to inpatient care as this transformation moves forward? 

Response: Veterans with service-connected conditions will continue to receive 

acute inpatient care in community facilities close to their homes. Walla Walla facility staff will ensure that the quality and accessibility of care are maintained.

Question 6. Mr. Secretary, Washington state is working on getting its second VA 

cemetery in the Spokane area. Veterans have long sought a cemetery in Eastern 

Washington, so survivors could avoid the 5-hour drive to the Tahoma National Cemetery near Kent, south of Seattle. Can you or Under Secretary Tuerk update me on 

the status of this cemetery? 

Response: The staff of the VA State Cemetery Grants Program are coordinating 

with the State of Washington Department of Veterans Affairs to establish a State 

veterans cemetery in the Spokane area that will serve approximately 70,000 veterans living in Eastern Washington and Idaho. Prior to VA approving a pre-application for the grant, Washington must approve legislation that will authorize the 

State to apply for Federal assistance. A study conducted by the State identified two 

properties suitable for 39 development as a new cemetery located approximately 15 

to 20 minutes from downtown Spokane. Due to the large number of veterans in the 

area, VA State Cemetery Grants Program staff is working closely with the State of 

Washington Department of Veterans Affairs on the preparation of the award request, which would grant funds to cover 100 percent of the cost of developing and 

equipping a State veterans cemetery. 

VA BUDGET CUTS AND FREEZES SPENDING IN FUTURE YEARS

Question 7. Mr. Secretary, your budget assumes cutbacks in veterans’ healthcare 

in 2009 and 2010 and a freeze after that. Those cuts could hit just when large a 

52

number of troops are returning home and need care. Are these phony numbers—

created to make it seem like the President’s Budget is balanced? 

Response: Out-year estimates in the 2008 budget are based on an OMB formula 

that is tied to government-wide deficit reduction targets for 2009 through 2012. 

Consistent with past practice, VA’s medical care budget for 2009 and beyond will 

be evaluated on an annual basis. I fully anticipate that the President’s budget in 

future years will include sufficient medical care resources to ensure the continued 

delivery of timely, high-quality health care for our Nation’s veterans. 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. LARRY E. CRAIG

TO HON. R. JAMES NICHOLSON, SECRETARY, DEPARMENT OF VETERANS AFFAIRS

COMPENSATION AND PENSION PROGRAM

Question 1. It is clear the Administration has made improving claims processing 

a high priority, by requesting over 450 new Compensation and Pension (C&P) employees. However, VA’s productivity target for FY08—101 claims per direct FTE—

is lower than VA has achieved in prior years and lower than VA expects to achieve 

this year. It is also substantially lower than the FY07 goal of 108—a goal that VA 

described last year as ‘‘realistic’’ given the increasing experience levels of employees 

hired during FY05 and FY06. 

Question 1(a). What factors account for this reduction in target performance? With 

the increasing experience level of previously hired employees, how can VA justify 

lowering its productivity goals? 

Response: Output per FTE is the number of completed rating-related claims per 

C&P direct labor FTE. Table 1 following illustrates the 2004–2006 actual output 

and the 2007–2008 estimated output. VA’s 2008 budget submission adjusted the 

2007 output target to 102.8, and the 2008 output target to 101.

Direct Compensation and Pension Rating Productivity Actual and Estimates 

C&P Direct FTE Completed 

Claims Output per FTE 

2004 ........................................................................................................... 7,498 703,254 94

2005 ........................................................................................................... 7,547 788,298 101

2006 ........................................................................................................... 7,858 774,378 98.5

2007 (projected) ........................................................................................ 7,863 808,316 102.8

2008 (projected) ........................................................................................ 8,320 840,320 101

The primary factors for lowering the rating-related claims output for 2007 and 

2008 are: the large number of new employees added in 2006 and projected to be 

added in 2007 and 2008; continuing loss of our most experienced decisionmakers to 

retirement; increased number and complexity of claimed disabilities; and changes in 

law and process. 

In recent years, there has been a trend for veterans to claim multiple disabilities. 

For 2006, 24 percent of the original compensation claims contained eight or more 

service-connected conditions. The number of claimed conditions increases the number of variables that must be considered and addressed, therefore making the claims 

more complex. VCAA continues to influence the claims process. VCAA has increased 

both the length and complexity of claims development by increasing VA’s notification and development duties to assist. 

Additionally, VBA continues to expand outreach programs for separating 

servicemembers and is devoting resources to priority claims processing for all returning OEF/OIF veterans. VBA’s outreach initiatives result in more claims. 

Beginning in the second quarter of 2006, VSA began an aggressive recruitment 

program that has increased our on-board strength by over 580 employees (in addition to replacing all employees who retired or otherwise left VBA). These new employees require extensive and ongoing training to become effective. VBA provides 

on-the-job and comprehensive centralized national training for all new claims processors. However, the overall training process takes 2 to 3 years for an entry-level 

employee to become fully productive. Approximately 40 percent of our decisionmakers have less than 3 years of experience in their current positions. As these employees develop their skills and gain experience, their output per FTE will increase.

Question 1(b). Given the length of time it takes for new employees to become fully 

productive, when would VA expect to see productivity improvements based on the 

additional 450 FTE? 

53

Response: The productivity assumptions for the additional 450 FTE hires are 

based upon outcomes from recent employment activities and the current training 

process. On average, due to the complexities of claims processing, an entry-level 

claims processor does not become fully productive until they have at least 2 years 

in the position. Based on that assumption, VBA anticipates some productivity improvements from the additional 450 Fiscal Year 2008 hires as early as 6 months 

from the employment commencement—with full production reached after 2 years in 

the position.

Question 2. In 2001, the VA Claims Processing Task Force—Chaired by Admiral 

Daniel Cooper—recommended that VA allocate FTE ‘‘to those Regional Offices that 

have consistently demonstrated high levels of quality and productivity in relation 

to workload and staffing levels.’’ If VA’s budget proposal is approved, how would 

VBA allocate the additional C&P FTE among the regional Offices? Will FTE be allocated only to high-performing offices? 

Response: VBA’s staffing policy considers both the number of claims received at 

a RO and specific performance factors in determining its FTE share for the Fiscal 

Year. FTE is allocated to all offices based on the number of claims received in order 

to ensure that staffing levels are maintained at a sufficient level to allow completion 

of the C&P work received each year. However additional FTE is distributed to ROs 

who demonstrate high levels of quality and productivity. These performance factors 

are reviewed each Fiscal Year and reflect VBA’s strategy to reduce the inventory 

of pending claims and improve decision timeliness, decision accuracy, and appeals 

processing. Therefore, stations that consistently perform better in these critical 

areas will receive additional FTE.

Question 3. In a December 2005 report, the Government Accountability Office 

noted that there are wide variations in performance among the 57 VA regional offices. According to that report, ‘‘VBA and others who have studied claims processing 

have identified various options for changing the basic field structure in order to improve claims processing efficiency, reduce overhead costs, and improve decision accuracy and consistency, including consolidating claims processing into fewer than 57 

regional offices.’’ Would removing the claims processing function from challenged regional offices and shifting that work to high-performing stations improve VBA’s 

overall efficiency? If so, does VA plan to implement any consolidations of this type 

during FY08? 

Response: VBA continues to explore opportunities to improve claims processing efficiency and improve decision accuracy and consistency. The BDD program provides 

servicemembers with briefings on VA benefits, assistance with completing forms, 

and a disability examination before leaving service. The goal of this program is to 

deliver benefits within 60 days following discharge. VBA has consolidated the rating 

aspects of our BDD initiative, which will bring greater consistency of decisions on 

claims filed by newly separated veterans. Additionally, VBA consolidated claims 

based on radiation exposure to the Jackson RO. Claims based on radiation exposure 

require lengthy and complex evidence development prior to adjudication; consolidation of these claims to Jackson will allow quicker development due to specialization 

of the staff and a single line of communication to sources of information, including 

DOD. 

We also established two Development Centers in Phoenix and Roanoke to assist 

ROs in obtaining the required evidence and preparing cases for decision. Pension 

processing realignment began in 2002 with the consolidation of pension maintenance work to Philadelphia, St. Paul, and Milwaukee. Continued consolidation of 

original pension work to these centers is currently under consideration. In October 

2006, VBA’s C&P Field Realignment Task Force presented its recommendations to 

the Under Secretary for Benefits. The Task Force presented three near-term recommendations currently under consideration: (1) consolidation of survivor benefit 

claims processing, (2) restructuring of the oversight and management of fiduciary 

activities, and (3) centralization of telephone activities to call centers. 

The Realignment Task Force also presented recommendations to develop a comprehensive strategic plan for the longer-term consolidation of additional compensation work. As we explore and develop additional consolidation opportunities in our 

compensation program, we will continue in 2008 to use our resource allocation 

model and brokering strategy to redirect workload and resources from our challenged regional offices to our most productive stations.

Question 4. Given that the level of incoming claims has been increasing over the 

past several years and the ongoing conflicts in Iraq and Afghanistan, what is VA’s 

basis for concluding that incoming claims in FY08 will remain at the same level as 

VA expects to receive in FY07 (800,000 claims)? 

54

Response: In preparing our estimate for Fiscal Year 2008 we considered a number 

of factors. Those include the trend in disability claims over the last 10 years, the 

size of the active duty force, and any known or anticipated factors that would affect 

claims activity. At the time the budget was prepared, increased troop strengths in 

Afghanistan and Iraq were not certain. If the surge in forces in the combat theaters 

is drawing from existing active duty and already planned activation of Guard and 

Reserve forces, we believe we have already accounted for them. We did not predict 

any major changes in benefit entitlement criteria or new programs that would increase claims.

Question 5. During FY07 and FY08, how many Rating Veteran Service Representatives and Veteran Service Representatives will be eligible for retirement and how 

many do you anticipate will retire during those years? 

Response: Through 2008, approximately 900 Veterans Service Representatives 

and Rating Veterans Service Representatives will be eligible to retire. We anticipate 

about 200 retirements each year. 

EDUCATION PROGRAM

Question 1. I appreciate VA’s efforts to find innovative ways to improve productivity, such as the Contract Management Support Center initiative. By having yearround contract customer service representatives handling education calls, how many 

additional FTE would this allow the Education Service to allocate to processing and 

deciding education claims? What impact would this have on the expected level of 

productivity? 

Response: It is estimated that the contract management support center would 

allow the reallocation of 45 FTE to processing education claims. This represents 5.8 

percent of the 772 direct FTE allocated to field stations in Fiscal Year 2008, and 

would be expected to result in a similar percentage increase in output.

Question 2. It is my understanding that many calls are simple inquiries about the 

status of a claim and that VA has been working toward providing that information 

online. What is the status of that effort? Once that information is available online, 

do you anticipate a decline in incoming telephone calls? 

Response: We are currently working on providing status of claim information on 

our GI Bill Web site by allowing individuals to log into the Web automated 

verification of enrollment (WAVE) application and view status of claim information 

from their electronic claims folder. Our plan is to have this additional self-service 

feature available by July 1, 2007. Right now, if they are currently receiving benefits, 

they can view their current award information in WAVE and submit a change of 

address, if required. 

We are also looking to add additional features so that individuals can view other 

benefit information that pertains to their individual benefit record, such as the 

amount of their remaining entitlement, delimiting date and payment information. 

We would anticipate a decline in the number of telephone inquiries that we receive as we add more self-service options on our GI Bill Web site.

Question 3. With the additional FTE requested for the Education Service, plus 

any FTE that would be freed-up by using a contract call center, will staffing be sufficient to handle the expected level of incoming claims in FY08 and to reduce any 

existing backlog? 

Response: With the 14 additional FTE requested for the Education Service, plus 

the 45 FTE that would be freed-up by using a contract call center, staffing will be 

sufficient to handle the expected level of incoming claims in Fiscal Year 2008, to 

reduce pending inventory, and to improve processing timeliness. 

VOCATIONAL REHABILITATION AND EMPLOYMENT PROGRAM

Question 1. The Administration’s FY08 budget proposal includes $4.3 million to 

enhance the Disabled Transition Assistance Program (DTAP).

Question 1(a). How many DTAP briefings has VA proved each year since 2001 and 

how many attendees were at those briefings? 

Response: VA did not separately track DTAP briefings prior to Fiscal Year 2006. 

A breakout of DTAP briefings and participants during Fiscal Year 2006 and Fiscal 

Year 2007 through January as follows: 

FY 2006: 1,462 DTAP briefings attended by 28,941 participants. 

FY 2007 through January 2007: 493 DTAP briefings attended by 9,407 participants.

Question 1(b). With the expanded resources requested for FY08, how many DTAP 

briefings does VA expect to provide and how many attendees could be accommodated? At how many locations will these DTAP briefings be conducted? 

55

Response: DOD projects that approximately 200,000 servicemembers annually will 

separate from active duty or be demobilized. Of those separating, approximately 

35,000 will receive medical separations. 

Currently, DTAP briefings are not mandated or required by all military services 

during the pre-separation counseling process or during medical separation. A review 

of Department of Army data showed that about 45 percent of separating 

servicemembers requested a DTAP briefing during pre-separation counseling. Extrapolating from that data, VA anticipates that about 80,000 servicemembers could 

potentially request a DTAP briefing. If DOD mandates that DTAP briefings be provided for all separating servicemembers who request a briefing, then VA’s goal is 

to provide services to all 80,000. 

VA proposes to use the expanded DTAP resources requested for Fiscal Year 2008 

to meet this goal. The more severely injured hospitalized servicemembers will require one-on-one DTAP. Other servicemembers can receive DTAP briefings in small 

groups that encourage discussion and participation. We estimate that the ideal 

group size would be 8–12 participants. DOD has more than 300 separation sites, 

both within and outside the continental United States. The following groups will be 

used to prioritize expenditure of funds and location of DTAP briefings: 

Priority Group 1: Hospitalized War-Wounded and Severely Disabled—These are 

the most seriously injured servicemembers in jurisdictions with major military 

treatment facilities. One-on-one DTAP will be provided at these locations to the 

servicemembers and their family members. Individual and very small group DTAP 

briefings will also be provided to servicemembers referred to the Military service’s 

physical evaluation board (PEB). 

Priority Group 2: War-Wounded Requiring Rehabilitation—Injured/ill 

servicemembers who are in medical hold or medical holdover status will be provided 

individual and group DTAP briefings. Servicemembers in this group will generally 

be in their home communities and assigned to National Guard/Reserve units, community based health care organizations (CBHCOs), MTFs, or other military separation centers. 

Priority Group 3: Hidden War-Wounded: Readjustment and Coming Home—Injured veterans who have already separated from active duty or demobilized are also 

eligible to attend DTAP briefings. These individuals usually self-identify after sustaining ‘‘hidden wounds’’ during combat operations that were not identified until the 

PDHRA. DTAP briefings will be provided at National Guard/ Reserve units, MTFs, 

military installations, and VA facilities. 

Priority Group 4: Other Injured/Ill Servicemembers—Other servicemembers and 

military retirees self-identified during DOD’s pre-separation counseling process as 

requesting or requiring a DTAP briefing. DTAP briefings will be provided at military duty stations across the country.

Question 2. The Administration’s FY08 budget proposal request 35 additional FTE 

for the Vocational Rehabilitation and Employment Program to serve as contracting 

specialist, to work on the Coming Home to Work initiative, and to work on the Process Consolidation initiative. 

Question 2(a). For the Coming Home to Work initiative, what specific functions 

will these employees perform? How do these functions differ from those performed 

under the direction of the Veterans’ Employment and Training Service, or other 

Federal employment programs? 

Response: Vocational Rehabilitation and Employment (VR&E) provides a variety 

of services to veterans to facilitate their timely return to civilian employment (educational/vocational testing, counseling, volunteer and non-paid work experience, job 

accommodations, adaptive technology, job seeking assistance, job retention skills, 

education, on-the-job training, and all necessary rehabilitative support services). 

The goal is for the veteran to obtain and retain suitable employment consistent with 

their interests, aptitudes, and abilities. The coming home to work (CHTW) initiative 

currently brings these services to servicemembers on medical hold status at eight 

major MTFs. However, the need to provide early VR&E services to VR&E eligible 

servicemembers is growing. Through DOD’s community based health care initiative, 

more and more wounded servicemembers are recovering at their home of record, and 

therefore do not receive all of the outreach efforts available at the MTFs. VA plans 

to implement CHTW at all 57 ROs by September 30, 2008, in order to meet the 

needs of all VR&E eligible servicemembers that will be medically separated from 

the military. Providing VR&E services to servicemembers on medical hold status 

can greatly reduce the length of unemployment many disabled veterans face after 

separation. 

Eight FTE are requested for the CHTW program in the Fiscal Year 2008 budget 

submission. Those FTE will liaison with military case managers and VR&E staff, 

assist servicemembers with the VR&E application process as needed, and case manVerDate 0ct 09 2002 15:10 May 29, 2007 Jkt 000000 PO 00000 Frm 00059 Fmt 6633 Sfmt 6621 H:\RD41451\DOCS\33255.TXT SENVETS PsN: ROWENA
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age OEF/OIF servicemember application processing. Each of the eight FTE will 

cover a geographical region, providing services to servicemembers at MTFs, 

CBHCOs, and VA facilities within their assigned region. Unlike employees of the 

veterans employment training service (VETS) and other Federal initiatives, these 

FTE will focus specifically on VR&E services.

Question 2(b). For the Process Consolidation initiative, what are the major milestones of that project and what are the target completion dates for those milestones? 

Response: Milestones for the VR&E process consolidation initiative are still under 

development. The goal is to consolidate various VR&E functions as determined and 

prioritized by a thorough analysis and a feasibility assessment. Possible functions 

subject to consolidation and centralization include: general eligibility determination 

processing; subsistence allowance award processing; contract administration; purchase card processing; training; and management oversight. The Fiscal Year 2008 

budget submission includes four FTE in support of this effort. 

LOAN GUARANTY PROGRAM

Question 1. If I understand your request, you expect more VA-guaranteed loans 

to be made during the 2007 and 2008 period, and more defaults and foreclosures 

resulting from rising interest rates and maturing loans. Despite the workload increase, you request a reduction in the loan guaranty budget. How will VA maintain 

quality service to veterans in the face of a declining budget and increasing workload? If relying on industry partners is an aspect of the ‘‘do more with less’’ strategy, 

which I applaud, what oversight mechanisms are in place to ensure that taxpayers 

and veterans are being well served? 

Response: VA will be prepared to ensure that taxpayers and veterans are well 

served should the Loan Guaranty program have to deal with a rise in defaults and 

foreclosures. A newly redesigned loan servicing business process and its supporting 

IT application will, among other things, allow VA to maintain high quality service 

to veterans, and improve VA oversight capability of private sector loan servicers. 

Under this new environment, many loan servicing functions are delegated to private 

sector loan servicers, and VA will use IT to directly oversee the work being performed by these servicers on VA’s behalf. 

The redesigned business environment will be managed through the VA loan electronic reporting interface (VALERI) application, which is scheduled for implementation at the end of 2007. Through use of VALERI, VA will gain significant efficiencies 

in servicing loans. VALERI will provide VA the capacity to directly monitor and ensure appropriate performance of servicers as they service VA loans, and will expedite VA’s ability to intervene on veterans’ behalf when necessary.

Question 2. Please provide me with updated statistics on the usage of ARMs and 

hybrid-ARMs. 

Response: Between 1993 and 1996, VA had the authority to guarantee adjustable 

rate mortgages (ARMs). During this period, 139,271 such loans were made. Since 

reauthorization of ARMs in 2004, VA has made 1,695 such loans. Since receiving 

authority to guarantee hybrid adjustable rate mortgages in 2003, VA has guaranteed 81,319 such loans. 

OFFICE OF GENERAL COUNSEL

Question 1. During the past few years, the number of incoming appeals at the 

Court of Appeals for Veterans Claims (CAVC) has increased dramatically. In fact, 

during the first quarter of FY07 the CAVC received over 1,500 new cases—the highest level of incoming cases in CAVC’s history. Of the 15 additional FTE requested 

for the Office of General Counsel, how many will be allocated to assist in handling 

cases pending before the CAVC? 

Response: Dependent upon the Office of General Counsel’s (OGC) approved budget 

and balancing critical hiring needs among all of our offices, OGC expects to apply 

11 of the 15 new FTE to our Veterans Court Litigation Group, referred to internally 

as Professional Staff Group VII (PSG VII). 

OGC has closely tracked the significant rise in new cases before the CAVC. PSG 

VII represents the Secretary before the CAVC. PSG VII experienced a 37 percent 

increase in workload from 2005 to 2006. We project an additional 57 percent increase from 2006 to 2008. Until Fiscal Year 2006, PSG VII had six teams comprised 

of attorneys, paralegals, and support staff. In Fiscal Year 2006, OGC created a seventh team within PSG VII to address the rising caseload before the CAVC. The new 

team includes one GS–15 supervisory attorney, seven attorneys (GS–12/13/14), two 

legal assistants (GS–5/6/7) and one copy clerk (GS–2/3). Since the Fiscal Year 2006 

budget cycle predated the significant rise in caseload before the CAVC, the new 

team had not been identified as a specific initiative in OGC’s Fiscal Year 2006 budgVerDate 0ct 09 2002 15:10 May 29, 2007 Jkt 000000 PO 00000 Frm 00060 Fmt 6633 Sfmt 6621 H:\RD41451\DOCS\33255.TXT SENVETS PsN: ROWENA
57

et. OGC increased PSG VIl’s FTE by 13 from November 2005 to January 2007. 

OGC’s request for 15 additional FTE is, in part, designed to increase our budget 

base to pay for the new PSG VII team established in Fiscal Year 2006 and restore 

much-needed payroll funds to fill critical vacancies in our other offices.

HEALTH/IT

Question 1. What percentage of returned OEF/OIF servicemembers have undergone either VA-administered or DOD administered mental health screenings? Of 

that percentage, how many have been diagnosed with post-traumatic stress disorder 

or other mental health issues? 

Response: While VA understands that DOD policy is to screen all OEF/OIF 

servicemembers upon return from deployment and again 90–180 days post deployment, only DOD has data on the numbers/percentage actually screened. 

It is VA policy to screen all OEF/OIF veterans who come to VA for care. As of 

November 2006, 205,097 (32 percent) of the 631,174 separated OEF/OIF veterans 

eligible for VA services had sought services at VAMCs and clinics. Of 205,097, 

73,175 (35.7 percent) received a provisional diagnosis of a mental disorder, and 

among the 73,175 group, 33,754 (46.1 percent) were given a provisional diagnosis 

of PTSD. 

It should be noted that a provisional diagnosis of PTSD only indicates that the 

veteran has responded positively to three of the four items on the screener for PTSD 

or that there were other indicators suggesting a possible diagnosis. It does not mean 

that the veteran has been definitively diagnosed with PTSD. Additional evaluation, 

which may include testing, is generally required to make a diagnosis of PTSD.

Question 2. Your budget request suggest VA Pharmacy Services will increase 30 

percent from Fiscal Year 2006 to Fiscal Year 2008. Traditionally, VA has been able 

to keep its pharmacy cost increases fairly low. Is VA’s ability to hold down its pharmacy costs waning or is there another explanation for the substantial growth in this 

budget line over a 2-year period? 

Response: This increase in expenditures is a result of several factors. VA projects 

a 9.6 percent increase in use of 30-day prescriptions from Fiscal Year 2006 to Fiscal 

Year 2008 due to a slight increase in enrollment, the aging of the enrollee population, and the increasing importance of prescription drugs in the medical management of diseases. It also reflects the continued increase in the cost of prescription 

drugs due to inflation and the development of more expensive drugs. While VA’s national formulary, pharmacy management practices, and contracting efforts are effective in promoting appropriate use of prescription drugs and containing costs, VA is 

still impacted by changing medical practice and inflationary increases in prescription drug costs. 

VA believes this increase in use of drugs and the use of more expensive drugs 

will continue. Many chronic care conditions require multiple drug regiments for a 

patient to achieve a therapeutic goal.

Question 3. Under current Appropriation law, VA’s Medical Care budget is broken 

down into three components: Medical Services, Medical Administration, and Medical 

Facilities. Health-related Information Technology expenditures are yet another account. Does this structure in any way assist VA in better understanding its budget 

expenditures? Or, is the three account structure mostly a burden with little benefit? 

Please explain your answer with some detail. 

Response: The three main accounts are: Medical Services, Medical Administration, 

and Medical Facilities. The multiple accounts do not more accurately reflect VA’s 

medical care expenditures because the accuracy is achieved by charging expenditures to cost centers which are associated with the multiple appropriation accounts. 

The cost centers are the same ones that existed under the single appropriation 

structure. The four accounts significantly increase the complexity of financial management at each individual medical facility without improving the accuracy of accounting. The multiple accounts create the false perception that only the Medical 

Services account is directly related to patient care which is not correct. For example, 

the salary for physicians and nurses who treat patients are paid from the Medical 

Services account, the salary for security guards who protect patients and staff are 

paid from the Medical Administration account, and the cost of utilities to heat and 

cool the patients are paid from the Medical Facilities account—all are essential to 

the delivery of high quality health care services to our veterans. The Medical Services account is not the only account directly related to patient care. The benefits of 

the multiple account structure do not outweigh the benefits of the previous single 

account structure.

58

Question 4. Your budget suggests that the total number of veterans in need of 

mental health care services who will be treated in an inpatient setting will drop by 

approximately 1,300 veterans and the average daily census for this program will 

drop by 103 veterans. How much of this drop, if any, is related to reductions in service, bed numbers, and employee levels? How much of this drop, if any, is related 

to changing treatment patterns (i.e., less long-term stays on psychiatric wards) and 

new atypical antipsychotics drugs keeping veterans out of inpatient settings? Please 

provide a detailed explanation including—if known—the average age of inpatient 

psychiatric patients as well as the average length of stay controlled for age. 

Response: Similar to all other clinical settings, psychiatric care in VHA has 

evolved over the past decades from a predominantly inpatient based system to one 

that is predominantly clinic based. Since Fiscal Year 2002, the number of average 

operating beds for all VHA psychiatric services has dropped steadily from 7,565 to 

7,250, while the occupancy rate has similarly declined from 72 percent to 60 percent 

through November, Fiscal Year 2007. These beds include general psychiatry, substance abuse, and psychosocial residential rehabilitation treatment program 

(PRRTP) beds, but not domiciliary or nursing home beds. 

Although there is some drop in beds over this time, there is also a drop in occupancy rates. Thus, it would appear that the demand for available beds is diminishing. The occupancy rates demonstrate that inpatient care beds are not filled, and 

that there is capacity in the system as a whole to admit patients in need of hospitalization. 

From another perspective, the number of veterans discharged from VHA psychiatric beds has varied over recent years. It was 56,513 in Fiscal Year 2003; 57,485 

in Fiscal Year 2004; 56,756 in Fiscal Year 2005; and 55,937 in Fiscal Year 2006. 

While there have been overall decreases in the number of hospitalizations since Fiscal Year 2004, the trend since 2003 can best be interpreted by suggesting that the 

use of inpatient services fluctuates from year to year. As noted already, however, 

the current occupancy rates demonstrate that the system can accommodate the 

needs in higher utilization years. 

Thus, looking at the past 4 years, it is not clear if the if use of psychiatric inpatient services has leveled off, or whether there is still evidence of a persisting but 

slowed rate of decline. The presence of substantial numbers of beds that are not occupied on any day argues strongly against the availability of services, the number 

of beds, or the number of employees as being the reason for any decreases in admissions and discharges. Instead, any decreases in use of inpatient psychiatric services 

could be attributed to increases in services such as mental health intensive case 

management, psychosocial rehabilitation, homeless programs, and substance abuse 

treatment services.

While the average age of all veterans hospitalized in VHA psychiatric settings remains in the mid 50s, there is a shift since Fiscal Year 2003 from 43 percent in 

the 45–54 age range to 38 percent, while the 55–64 age group increased from 20 

percent to 29 percent. The number of veterans over age 65 discharged from psychiatric bed sections actually decreased from 10.1 percent to 9.4 percent during that 

period. The under 35-year-old age groups increased marginally from 6.7 percent to 

8.8 percent.


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The average lengths of stay by age for all psychiatric beds reveals that veterans 

stay for shorter periods of time than older veterans.

Question 5. I noticed that the budget for the CHAMPVA program is growing at 

incredible rates. By my count, it has gone up several hundred percent since 2001. 

What is the primary driver of these large increases? 

Response: The civilian health and medical program VA (CHAMPVA) provides payment for medical services for the dependents of veterans rated permanently and totally disabled, or dependents of veterans who succumb to VA rated service connected 

conditions. CHAMPVA is comprised primarily of dependents of World War II, Korean, and Vietnam era veterans. 

The two major drivers causing upward cost pressures include unique users and 

medical cost per unique user. 

Unique Users—Since 2001 the number of CHAMPVA enrollees increased by 158 

percent; concurrently, the number of enrollees using benefits increased by 203 percent. The majority of this enrollment growth occurred with the enactment of Public 

Law 107–14, which extended CHAMPVA benefits effective October 1, 2001, to beneficiaries aged 65 years and greater. 

Medical Cost per Unique User—This cost driver includes usage rates, acuity levels, and medical consumer price index (CPI).

• Usage rates, or the number of enrollees with at least one paid claim per year, 

increased 203 percent since 2001. The percentage of beneficiaries using program 


33255.165 33255.166
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benefits in 2001 was approximately 58 percent; this participation rate increased to 

68 percent in 2006. • The acuity level, based upon the number of annual claims paid per user, increased from 21.5 claims paid per year in 2001 to 30.2 claims paid per year in 2006, 

an increase of 40 percent. The annual cost per user was $2,350 in 2001 and $3,285 

in 2006, an overall increase of 39.8 percent. • The annual increase in the cost of medical services, or the medical CPI, increased 26 percent from 2002 to 2006, an annual rate of change of about 5.0 percent.

Question 6. I am glad to see that the Department is committed to completion of 

construction projects that are already underway, all of which were authorized by 

Congress last year as part of a $3 billion medical construction bill. These are not 

small price tags, and the Committee is committed to ensuring that VA’s capital assets align with care needs for optimal access for veterans and efficiency for taxpayers. 

Question 6(a). What is VA doing to control its construction cost? Are there further 

sharing and lease opportunities that VA could use to leverage its resources? 

Response: The Department, along with other government agencies and private 

sector businesses and individuals, is experiencing a significant growth in the cost 

of construction as a result of the booming construction economy worldwide. The significant demand for contractors, labor and building materials has produced significant increases in pricing. This has been further exacerbated by higher petroleum 

prices on both petroleum based building products and fuel as well as construction 

related impacts of the hurricanes of 2004 and 2005 including Katrina. 

In order to position the Department to best deal with this situation, VA has taken 

several steps. These include developing a more detailed market analysis of individual geographic location to ensure that the best available information is used 

when establishing the escalation rates that will be used in the cost estimate. These 

in consideration to market timing to the extent practical in order to bid the project 

at a time when there is the best opportunity to have the greatest competition by 

the contracting community. VA has also began to employ more extensive 

preplanning before a project is placed in the budget to be sure that all issues relating to scope, building systems and constructability have been identified and their 

costs recognized.

Question 6(b). Are there further sharing and lease opportunities that VA could use 

to leverage its resources? 

Response: On December 4, 2006, the Secretary approved a decision document 

launching a Site Review Initiative. The intent of this initiative is to market and decrease the amount of underused VA property while reinvesting the proceeds into 

programs and activities at the Secretary’s discretion. The Assistant Secretary for 

Management will provide the Secretary with a site assessment by April 2007.

Question 7. Please detail the status of VA’s IT organizational restructuring. Are 

funds for the restructuring fully budgeted for in the Fiscal Year 2008 request? 

Response: On October 19, 2005, the Secretary approved the concept of a Federated 

IT System for the VA and charged the Assistant Secretary for Information and 

Technology with the development of a Federated Model and a follow-on implementation plan. The Federated Model is a framework that defines the VA Federated IT 

System by separating IT into two domains—an Operations and Maintenance Domain that is the responsibility of the Assistant Secretary for Information and Technology (VA’s Chief Information Officer) and an Application Development Domain, 

that is the responsibility of the administrations and staff offices. The Federated 

Model was approved by the Secretary on March 22, 2006. 

VA contracted with IBM to recommend the best business practices and develop 

processes to manage VA IT capabilities and resources. On October 1, 2006 over 

4,200 employees who worked in IT operations and maintenance across VA, nationwide, were centralized under the Office of the Assistant Secretary for Information 

and Technology. 

On October 31, 2006, the Secretary approved the transition of VA IT management 

system from the Federated IT System model to a single IT leadership authority 

under the Assistant Secretary for Information and Technology. With this approval, 

all VA IT employees who worked in the IT Applications Development Domain, approximately 1,200 employees nationwide, were detailed to the Office of the Assistant 

Secretary for Information and Technology in December 2006. 

On February 27, 2007, the Secretary approved a modification to VA IT management system to implement a process-based organization structure for the Office of 

Information and Technology. This restructuring is an important step for driving IT 

standardization, compatibility, interoperability, and fiscal management disciplines 

across VA in support of veterans’ programs and services. 

61

The resulting construct of this more than 2 year effort is a centralization of VA 

IT personnel and financial resources and physical assets including all IT equipment, 

all VA data processing centers nationwide. Any requirements necessary for this restructuring are included in the Fiscal Year 2008 budget request. 

CEMETERIES

Question 1. What is the status of VA’s efforts to fund the needed cemetery repairs 

identified in 2002 in the Study on Improvements to Veterans Cemeteries: Volume 2, 

The National Shrine Commitment. Please incorporate in your answer the expected 

outlay of Nation Shrine Commitment dollars as part of VA’s FY07 appropriations, 

and expected outlay under VA’s FY08 request. 

Response: We are making steady progress completing the repairs needed to ensure that each national cemetery is maintained as a national shrine. 

The Millennium Act Report to Congress (Volume 2, National Shrine Commitment), issued in August 2002, provides a comprehensive assessment of the condition 

of VA’s national cemeteries. This information is used in NCAs planning process to 

assist in prioritizing national shrine projects over a multi-year period. 

The report identified the need for 928 repair projects at an estimated cost of $280 

million to ensure a dignified and respectful setting appropriate for each national 

cemetery. NCA is using the information and data provided in the report to plan and 

accomplish the repairs needed at each cemetery. Through Fiscal Year 2006, NCA 

completed work on 269 projects, and initiated work on additional projects, with an 

estimated cost of $99 million. 

Repairs to address repair/maintenance needs are addressed in a variety of ways. 

Gravesite renovation projects to raise, realign and clean headstones and markers 

and to repair sunken graves are addressed through NCA’s operations and maintenance (O/M) account. Infrastructure improvements to buildings, roads, irrigation 

systems, and historic structures are addressed with capital expenditures through 

the major and minor construction programs. In addition, cemetery staff is used to 

complete some repairs. 

In Fiscal Year 2007, NCA plans to spend $16.6 million specifically for national 

shrine projects—$9.1 million from O/M and $7.5 million from minor construction. 

The 2008 budget includes $11.1 million for national shrine projects—$9.1 million in 

the O/M account and $2 million in the minor construction request. 

In addition to specific national shrine projects, a commitment to enhancing the 

appearance of the national cemeteries underlies all NCA activities. Over 30 percent 

of NCA’s operating budget is used for routine tasks such as mowing, trimming, and 

other maintenance work. These functions are equally critical to providing enduring 

memorials to those we serve. 

Our progress in improving the appearance of our national cemeteries is evidenced 

in our performance results. In Fiscal Year 2006, 97 percent of respondents rated the 

appearance of our national cemeteries as excellent. Our target for Fiscal Year 2007 

and 2008 is 99 percent. 

NCA has also established an organizational assessment and improvement (OAI) 

program to ensure regular and consistent assessment of performance against established standards. Each national cemetery will be evaluated through site visits conducted on a cyclical basis. A total of 47 national cemeteries have been reviewed 

under OAI since the program’s inception in 2004. In addition, NCA has developed 

additional performance metrics that will be used to improve the appearance of its 

national cemeteries. Baseline data was collected in 2004 for three new performance 

measures designed to assess the condition of individual gravesites, including the 

cleanliness and proper alignment of headstones and markers. With this baseline 

data, NCA has identified the gap between current performance and the strategic 

goal for each measure. 

Funds available in Fiscal Year 2007 and included in the 2008 budget request will 

allow us to continue work toward improving the appearance of our national cemeteries. This is a multi-year effort, and VA is committed to ensuring that a dignified 

and respectful setting for each national cemetery is achieved. Future budget requests tied specifically to the shrine commitment will be prioritized within the context of Departmental priorities. For example, critical gravesite expansion projects 

require our immediate focus in order to keep existing cemeteries open and to ensure 

continued service to our nation’s veterans and their families.

62

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. JIM WEBB TO HON. DANIEL

L. COOPER, UNDER SECRETARY FOR BENEFITS, DEPARTMENT OF VETERANS AFFAIRS

Question 1. Provide the current inventory of pending rating-related claims: 

Response: VBA defines the claims processing workload as the number of liability 

claims requiring a rating decision. The chart below shows rating-related workload 

by type of claim.* As of April 7, 2007, 406,660 claims were pending.

*Rating-related workload by type of claim: 

Original Disability Compensation—128,030

Reopened Disability Compensation—233,249

Original DIC and Disability Pension—20,163

Reopened Disability Pension—15,243

Future Exams/Hospitalization Reviews—9,975

Question 2. Utilization of Benefits. I would be curious if you could get us something just in terms of utilization of the VA system, writ large. What are we going 

to estimate in terms of how many people are going to take advantage of one or another benefit in the VA system, whether it is home loans or compensation, pension, 

education benefits? 

Response. VA does not have access to date that would allow us to compile this 

information for the entire veteran population. We are working with DOD to obtain 

inforamtion that will allow us to compile data on benefits usage for veterans of the 

Global War on Terrorism (GWOT). The Information we currently have available is 

provided in the table below. We are continuing to work to expand and refinethis 

data. Because many GWOT veterans had earlier periods of service, the benefits activity identified in the table could have occurred either prior to or subsequent to their 

GWOT deployment (or both).

Total Living GWOT Population—686,306

(Based on DOD separations through November 2006) 

GWOT Veterans (percent) 

Veterans with disability claims decisions—148,891 (data through 12/06 ............. 21.7

Veterans who accessed the VR&E program—12,168 (data through 12/06) ........... 1.7

Veterans awarded TSGLI benefits—1,569 (data through 01/24/07) ....................... 0.2

Veterans who have obtained a VA home loan—154,377 (data through 01/31/07) 22.5

Note: Percentages reflect unique veterans within that business line only. 

We can provide the estimated number of servicemembers, veterans,a nd survivors 

that will receive or use VA benefits in FY 2007 and FY 2008.


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Beneficiaries 2007 Estimate 2008 Estimate 

Veterans Receiving Disability Compensation ......................................................... 2.7 million ............. 2.9 million 

Survivors Receiving DIC ......................................................................................... 330,000 ................. 340,000

Veterans and Survivors Receiving Receiving Pension ........................................... 523,000 ................. 512,000

Veterans who will access the VR&E program ....................................................... 92,000 ................... 94,000

Veterans who will obtain a VA Home Loan ........................................................... 180,000 ................. 180,000

Serviemembers, Veterans, and Survivors Covered by VA Life Insurance .............. 7 million ................ 6.9 million 

Chairman AKAKA. Thank you very much, Mr. Secretary. 

At this time the Chairman calls for a very brief recess that will 

be at least 5 minutes, maybe a little bit more. 

Thank you. 

[Recess.] 

Chairman AKAKA. The Committee will come to order. 

Mr. Secretary, before I start my questions, I want to commend 

you on your final remarks about extending yourself to the families 

of veterans and also your outreach program for the severely injured 

and for your meeting with the combatant commanders. I think this 

will be of great benefit to our veterans. 

Mr. Secretary, I note that it is certainly true that VA has received significant budget increases during this Administration’s 

tenure, as you testified and as others have mentioned. It is also 

true that these increases are a result of both Administration proposals and actions by the Congress, and my simple question to you 

is: Do you agree with that statement? 

Secretary NICHOLSON. I think that both the President and the 

Congress have been very supportive of the VA, yes, sir. 

Chairman AKAKA. Well, thank you. I want you to know that this 

Committee works well together, in a bipartisan manner, to help 

our veterans. 

Mr. Secretary, I would like to expand on what I touched on in 

my opening statement, regarding the actual level of funding requested for health care. As I said, when you take into account the 

$2 billion in what the budget calls ‘‘health care industry trends’’—

increases due to inflation and other factors—there does not seem 

to be any funding left for the top priorities. I am talking about 

mental health improvements and ensuring that the needs of returning war veterans are met. 

My question to you is: How can VA both cover inflation and other 

costs and still make the improvements that we all know are needed? 

Secretary NICHOLSON. Thank you, Mr. Chairman. 

Mr. Chairman, we are requesting a 10.3 percent increase for 

health care in the budget, 2007 to 2008, and believe that with the 

pay increase that would be anticipated in that and inflation, there 

would still be above that a 3.6 percent increase in the Health Administration. That is after adjusting for inflation, after adjusting 

for the pay increase. 

Chairman AKAKA. Dr. Kussman, I note that inpatient care in 

various settings is facing a big cut in this budget. You expect to 

have fewer patients in rehab and psychiatric units as well as in 

residential facilities. I do not believe that these cuts are being driven by good medical practice. I understand clearly that outpatient 

care is the best approach in some cases, but we must, however, 

own up to the fact that this war is resulting in some young vetVerDate 0ct 09 2002 15:10 May 29, 2007 Jkt 000000 PO 00000 Frm 00067 Fmt 6633 Sfmt 6601 H:\RD41451\DOCS\33255.TXT SENVETS PsN: ROWENA
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erans who will need substantial inpatient treatment. Just last 

week, a family wrote to me about their son who died in a VA facility from a drug overdose after spending only 2 weeks in an inpatient unit. 

Can you please explain why VA should be losing beds now? 

Secretary NICHOLSON. Well, you touched on it, Mr. Chairman. 

The paradigm for VA health care in general is for more outpatient 

care. That is, as some of the statistics were cited, a great frequency 

of visits to a facility. But we also are using far more of the technology of our times—telemedicine, telehealth, we are doing teletherapy. So there is an increasing usage of those technology. 

But I could tell you, Mr. Chairman, that we have the capacity 

and that no veteran who is in need of acute mental health care is 

turned away. They are admitted. 

Chairman AKAKA. Mr. Secretary, I would like to ask for specifics 

on the enrollment fee proposal this year. In my statement, I mentioned the new out-of-pocket costs for working families. In creating 

this year’s version of the enrollment fee, what attention was given 

to families with dependents, families with two veteran wage earners, and other similar situations? 

Secretary NICHOLSON. There was a lot of discussion given to 

these policy proposals which have been proposed in some form for 

six years. I have testified now for the third time on this concept, 

and I will tell you that I support it. I support it on a practical 

basis, and I support it on an equitable basis. 

What we are talking about here are veterans who have no service-connected disability, no diminution as a result of their service, 

which is the whole theory behind the VA. If someone has suffered 

physically or mentally as a result of their service, they are to be 

compensated by a grateful country. These people have not had that 

experience, and they have income. 

We have looked at and reflected on the experiences of the previous years, where you all here in the Congress have not been very 

supportive of this. And so we discussed a progressive system where 

people making less than $50,000 would not be asked to pay this 

modest enrollment fee. Again, keep in mind, if you would, sir, and 

Members of the Committee, no one with any service-connected disability pays this under this proposal. 

Second, there is an equity argument because if you are a person 

who served in the military for 30 years or 35 years and take off 

the uniform and go into the TRICARE health care system, you pay 

an enrollment fee, and you pay a copay. We can debate that. I 

think it is fair to say they are modest. But they are more than 

what is being asked here. 

In an environment of somewhat finite resources, if you want to 

assume that the resources are finite, then we have to make priorities, which we do, and try to direct resources toward those who 

need us the most. That is the policy behind this. 

Chairman AKAKA. Let me ask in particular, if there were two 

veterans who were married to each other with a combined income 

of $50,000 a year would each be assessed the fee? 

Secretary NICHOLSON. Yes, they would, Mr. Chairman. If they 

were both patients in our system, yes. 

Chairman AKAKA. Thank you. 

65

Now, I will call on our Ranking Member for his questions. 

Senator CRAIG. Thank you very much, Mr. Chairman. 

Mr. Secretary, I apologize for having to step out to another hearing to give testimony, and I do appreciate your presence and that 

of your staff and associates here today. 

Your budget talks about focusing aggressively on reducing waiting times for current patients, specifically targeting those patients 

who are waiting the longest for care. Certainly, it makes sense to 

all of us that that happens, and we have worked on that progressively over time. 

Can you talk a little about who is now waiting the longest for 

care? Is it a function of individual facilities that struggle to deliver 

timely care? Or is it certain specific services, such as neurology or 

orthopedics? In other words, what are the drivers in the time here? 

What are the drivers in the waiting time involved? 

Secretary NICHOLSON. Thank you, Senator. Let me again repeat 

the good news part of this, which I think is significant, in that 95 

percent of all people who want an appointment of any kind get it 

within 30 days, and 96 percent get an appointment within 60 days. 

There are some of these specialties that do have to wait longer, 

among which are dermatology and ophthalmology. The primary 

reasons for that are our resources in those specialties and our ability to be able to hire and retain doctors in the numbers that we 

need. 

We have been assisted by you in recent legislation where we can 

incentivize them into the VA, and we are doing that. That is helping. But that is the main part of that. 

Senator CRAIG. And all of these categories are non-emergency 

type settings. Is that correct? 

Secretary NICHOLSON. Yes, sir. There is no veteran who is in 

need of, as they say, emergent or emergency care that does not get 

it immediately. If we cannot provide it, he or she is taken to a local 

facility. 

Senator CRAIG. It was interesting that you would mention dermatology. My wife will probably crucify me for bringing her into 

this. She in a routine way scheduled a meeting with her dermatologist about a month ago, and it occurred last week. In the civilian 

landscape, non-emergency type routine access to health care oftentimes takes that long, depending on where you are in the delivery 

system and all of that kind of thing. I find it fascinating that you 

would mention that. 

Ten years ago, Mr. Secretary, every Member of this Committee 

signed a budget letter stating that VA entitlement spending did not 

show spiraling growth patterns. We concluded that VA entitlement 

programs were—and this is the quote from the letter—‘‘not among 

the chief factors in looming Federal deficits.’’ VA entitlement 

spending has since jumped by nearly 100 percent. As our bipartisan letter then put it, ‘‘I am worried that we have entered into 

a pattern of unsustained growth.’’

What are the causes of the growth in VA entitlement spending? 

And is this growth expected to continue at its present rate? 

Secretary NICHOLSON. The causes, Senator Craig, are multiple. 

One of those is very active, aggressive outreach by the VA, and it 

takes several forms. We have now over 140 VA benefit counselors 

66

embedded in military units throughout the world who are there to 

counsel and educate and make aware those people who have a separation from the service coming up. And we have people at all the 

major points of embarkation, people redeploying back from the 

combat zone. 

We have traveling groups of outreach counselors who go out and 

set up displays at Veterans Service Organization events. Two 

weeks ago, I was in San Antonio for the dedication of the Center 

for the Intrepid, and we had a major outreach, a static display with 

staff for the many veterans there to become more aware of what 

they are entitled to. And they are entitled to substantial benefits, 

depending, of course, on their situation. 

Then there is the corresponding fact that more and more of them 

are coming in, as I said, in absolute numbers. In 2006, we had 

806,000 individuals come in and make a claim. 

The other thing that is happening is the demographics of veterans—some of us are older. Fifty percent of our veterans are over 

60, 45 percent of our veterans are over 65, and they begin to have 

more ailments from their experiences or arthritis and different 

things. So that is an individual claim, each of those, individual clinic visits, individual adjudications. And the underlying philosophy 

that is imparted to the VA in this system is to grant a claim if you 

can and deny only if you must. 

And so the system, I think, is quite beneficial and people are 

coming in in ever increasing numbers. 

Senator CRAIG. Thank you. 

Thank you, Mr. Chairman. My time is up. 

Chairman AKAKA. Thank you very much, Senator Craig. 

Senator Murray? 

Senator MURRAY. Thank you, Mr. Chairman. 

I wanted to follow up on the Chairman’s line of questioning on 

the need for inpatient mental health care, because I, too, was really 

disconcerted to see the budget request projecting fewer veterans 

needing inpatient mental health care. I understand the philosophy 

of trying to do more and more outpatient, reach more people that 

way, but it just seems to me, when one in three Iraq war veterans 

are estimated now to be seeking mental health care, many of our 

servicemembers are now on their second or third, some even fourth 

deployments. We are hearing about the intensity on the ground 

and what our men and women are facing and the consequences 

when they return home, and the President now sending up to 

48,000 more troops. It just seems to me that we are going to need 

more inpatient psychiatric services, not less. And I want to hear 

your rationale on that. 

But, you know, you made a comment that struck me because you 

said no veteran has been denied inpatient health care, mental 

health care, yet we heard about a highly publicized case of an Iraq 

war veteran with two Purple Hearts named Jonathan Schulze, who 

tragically took his own life, and the press reports were that he had 

asked for help from the VA twice and was told he was 26th on the 

waiting list. We have heard about cases in Minnesota as well as—

or he was from Minnesota, but also a case in Illinois and in Iowa. 

It just seems to me when you have that many red flags going, 

you cannot just arbitrarily say no one is being denied care. And, 

67

you know, I think we have to say there are red flags out there. We 

need to find out what is going on. 

So I would ask you two questions: We are hearing about these 

cases that say veterans are being denied care when they ask for 

it. And, second, how can you predict a lower demand for inpatient 

psychiatric services in your budget when we know there are going 

to be increasing consequences as the years progress? 

Secretary NICHOLSON. Thank you, Senator Murray. Those are 

several important questions, and I like having the opportunity to 

respond. 

First, our budget for psychiatric inpatient care is actually up. I 

am looking at it. We are asking for $1.6 billion——

Senator MURRAY. Right. Your budget request has increased, but 

you are projecting that fewer veterans will need inpatient health 

care. 

Secretary NICHOLSON. Well, let me give you the capacity figures. 

You know, what we have anticipated our needs to be is what we 

should request from you the money to fill. 

In our capacity for mental health, we are currently being utilized 

at 70 percent, and for polytraumatic care in our polytrauma centers, it is 80 percent. So we have, in the case of mental health in 

general, a 30 percent capacity available; in the case of 

polytraumatic capacity, we have 20 percent available. 

Let me also address—you raised the point——

Senator MURRAY. Are you talking nationwide 20 percent available? Because if those facilities are not where our veterans are, it 

does not make any difference. They are not going to travel 5,000 

miles to get inpatient care. 

Secretary NICHOLSON. We have 154 inpatient facilities around 

the country and almost 1,000 other points of access for veterans to 

come in to be screened, to be referred. 

I want to address the other point that you raised to the extent 

that I can, and I am limited by the privacy regulations because the 

family has not given us a waiver to discuss this. But the case that 

you mentioned from Minnesota, which comes up often, that veteran 

was seen by our facilities in Minnesota 46 times. That is about all 

I can say. 

Senator MURRAY. OK. I understand extenuating circumstances in 

all cases, but it is not an isolated case. We are hearing about cases 

elsewhere. 

But my question to you is: Do you really think that we are going 

to see fewer veterans needing access to inpatient mental health 

care? 

Secretary NICHOLSON. Well, we are projecting that we are going 

to see somewhat fewer of those cases in this time frame. 

Senator MURRAY. Well, my time is up, and I want to ask another 

quick question. But, Mr. Chairman, I think we have to be careful 

not just to project numbers on the hopes of keeping the budget 

down, but really looking at what we are going to need to pay for 

because of inpatient care. And as you have stated and as I referred 

to, we do have, you know, many veterans who are in their second, 

third, possibly fourth tour. We have 48,000 additional troops being 

sent, and we are seeing a third of our veterans seeking mental 

68

health care. So I hope we look very carefully at those numbers as 

we put our budget together. 

But let me ask one other question really quickly in my time. I 

wanted to ask you about shorter hours at our urgent care in Spokane—I am going to submit that for the record—because we have 

a serious concern about that facility closing at 4:30 in the afternoon. We have one if not more cases of veterans who have died because they have shown up shortly after the facility closed, and 

there is a huge problem with how veterans perceive their care if 

they do not go to the VA facility not being paid for. That is an issue 

I want to address with you on another occasion. 

But I also wanted to ask you about these increased user fees and 

copays because, as you know, I oppose that. I believe that anybody 

that we ask to serve us should not be given an additional cost to 

get their health care. That is not what they were told. But I am 

disturbed that in the proposal this year that you asked to put that 

money from fees, should it ever be collected, back into the general 

budget rather than into the VA health care. And it seems to me 

what that simply is saying to our veterans is we are asking you 

to balance the Federal budget now. And I find that even worse 

than the suggestion that they should pay copays, and I wanted to 

ask you why you have changed that policy and why you are suggesting that in this budget. 

Secretary NICHOLSON. Well, the reason for that, Senator Murray, 

is that if you will recall other discussions that we have had about 

this, the revenue that was assumed in the budget was used to 

apply for the needs on the application side of the budget. So having 

an experience where it has not been approved and then having a 

gap, instead of doing that, we did not assume it. This budget, if you 

approve it without those measures, will still have the money that 

we need. 

Senator MURRAY. So basically we can balance the budget if we 

charge our veterans fees. I just find that incom——

Secretary NICHOLSON. No, no. I am not being artful in trying to 

explain it. If you deny it, there will be no gap in this budget where 

you have to find it somewhere else. 

Senator MURRAY. For the VA. 

Secretary NICHOLSON. Right. 

Senator MURRAY. I know my time is up, Mr. Chairman. Thank 

you. 

Chairman AKAKA. Thank you very much, Senator Murray. Let 

me tell you that we have a second round of questions for this panel, 

and then we will have our next panel. 

At this time, Senator Jim Webb. 

Senator WEBB. Thank you, Mr. Chairman. May I ask a procedural request? Our colleague, Senator Tester, had to leave in order 

to preside, and he asked that I ask a question on his behalf. I 

would request that the clock be reset once I have asked the question on his behalf. 

[Laughter.] 

Chairman AKAKA. Senator Webb, granted. 

Senator WEBB. Thank you, Mr. Chairman. 

Mr. Secretary, the question that Senator Tester wanted to get an 

answer to regards the growth in the claims and the indication that 

69

it has now gone from 500,000 to over 800,000. And he had had a 

number of constituent contacts that indicated that a lot of the 

claims that are going forward had been kicked back for more information and this sort of thing. And so his question was, ‘‘What percentage of this claim backlog involves recycled or incomplete 

claims? And if you do not have that today, could we please have 

that?’’

Secretary NICHOLSON. Thank you, Senator Webb. I do not think 

we have that, and we will get that. I can ask Admiral Cooper, the 

Under Secretary for Benefits, if he would like to expand. 

Admiral COOPER. Yes, sir. We have a very specific process established by law as to how to process a claim, and no claims are sent 

back to the individual. We do go to them and tell them specifically 

what we require in order to properly adjudicate their claims. We 

also state precisely what VA will do to properly obtain the information. Once we get all the information in and make the decision, 

then they will occasionally appeal that decision. The appeal process 

is a separate process. Appeals are not counted as part of the approximately 400,000 claims that we have pending today. 

Senator WEBB. So when you say 400,000, you are talking all of 

those are initial claims? 

Admiral COOPER. All of those are initial, but the term ‘‘initial’’ 

requires explanation. They are either original, that is, the person 

has come in for the first time, or they are reopened, which means 

that the person having had a claim adjudicated previously, now 

comes in because his or her condition has deteriorated or the veteran claims service connection for another condition that has not 

been claimed before. 

Senator WEBB. Or new information——

Admiral COOPER. Or they have new information——

Senator WEBB. Could you get us some sort of a breakdown so we 

could understand that? 

Admiral COOPER. Of course. 

Senator WEBB. Thank you. 

Mr. Chairman, if we could now reset the clock, I will do my best 

to ask a few on my own time. 

I was struck by a number here, a percentage here—I am just trying to get my data points as I join the Committee—that says out 

of the 198,000 military separations in 2006, trends show that 35 

percent will file a claim over the course of their lifetime. I am assuming that means some sort of a compensation claim. What I am 

curious about is what percentage are we estimating a vet is going 

to use a benefit, because I recall even from the Vietnam GI bill 

alone it was about a two-thirds participation rate. 

Secretary NICHOLSON. I will review the top line, Senator, and 

then if Admiral Cooper wants to come in. If you think of the veteran population as a whole in the country today, it is about a little 

over 24 million: 7.8 million of them are enrolled in our health care 

system; 5.6 million present themselves every year for medical 

treatment. But that is on the average of 10.1 times, which means 

that we see over 1 million people a week in the health care system. 

On the claims side, about 35 percent of those that we——

Senator WEBB. So we are defining a claim as a claim for compensation? 

70

Secretary NICHOLSON. Yes, sir. 

Senator WEBB. Purely. OK. I just wanted to make that clear. I 

would be curious if you could get us something just in terms of the 

utilization of the VA system, writ large. What are we going to estimate in terms of how many people are going to take advantage of 

one or another benefit in the VA system, whether it is home loans 

or compensation, pension, educational benefits? I would venture 

that number is well in excess of——

Admiral COOPER. I do not have that information now, but let me 

get back to you in writing. 

Senator WEBB. OK. Great. Thank you. 

As I mentioned in my opening statement, I am very desirous of 

ensuring that these people who have been serving since 9/11 get an 

educational benefit that is worthy of the service that they have 

given. I think we are all aware that the Montgomery GI Bill, which 

is a good GI bill, a good peacetime GI bill, has its limitations. I am 

wondering if you would agree that the post-9/11 veterans should receive a better educational reward than that which they are now 

getting. 

Secretary NICHOLSON. Well, you recognize, Senator, that I am 

here as a representative of the Administration, and what you are 

talking about is a major policy implication with significant cost 

ramifications which have not been scored. 

We will, if you ask, analyze that and give you the benefit of our 

judgment in concert with the Administration, whom we represent 

and, as you know, I think, is very supportive of veterans and appreciates the importance of education and what the GI bill has 

meant to veterans and to our country, which I certainly support as 

well. 

Senator WEBB. On a personal level, I assume that I am hearing 

that on a personal level you probably would agree with that, or are 

you comfortable in saying——

Secretary NICHOLSON. I have to qualify my answer, but I will tell 

you, coming from a family that had to get through college—all 

seven of our kids in my family went to college by hook and by 

crook, and I was lucky I got to go to the Military Academy. And 

knowing what education means in this country, I have some concern about our Reserve and National Guard and whether they are 

being equitably benefited because of their service, their active-duty 

service now in this war, I think that is a legitimate thing to be 

looking at. 

Senator WEBB. Did the Administration support the legislation 

that allowed attorney representation in VA claims? I was not here 

when——

Secretary NICHOLSON. It did not. 

Senator WEBB. It did not? 

Secretary NICHOLSON. No, sir. 

Senator WEBB. Do you have any indication of how this new concept has affected the increase or decrease in caseload? 

Secretary NICHOLSON. Well, no. The answer is no, but we are 

working on that. It is now the law, and we are charged with implementing it and coming up with the standards for the attorneys, the 

system, to look out for the interests of the veterans in this case to 

see that they are well and fairly represented and that the comVerDate 0ct 09 2002 15:10 May 29, 2007 Jkt 000000 PO 00000 Frm 00074 Fmt 6633 Sfmt 6601 H:\RD41451\DOCS\33255.TXT SENVETS PsN: ROWENA
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pensation is a fair system. It is not yet in effect, but we are looking 

at it. 

I think part of your question, if I hear it right, is what effect is 

this going to have on waiting times on this system. 

Senator WEBB. Yes. 

Secretary NICHOLSON. And I will tell you that I think it is going 

to have an effect of stretching them out. I mean, I cannot help reflecting I grew up in this little town of 99 people that had one 

country lawyer that used to play pinochle every afternoon at the 

one tavern, and then a young lawyer moved in, and then they were 

both busy. 

[Laughter.] 

Secretary NICHOLSON. So this is going to have an effect on waiting times, I think there is no question. 

Senator WEBB. I would agree with your concern in that area, 

quite frankly. I have watched the quality of the national service officers over the years, people who have become specialists in Title 

38. And it is worrisome if we were to go to a system where a veteran would feel compelled to have to obtain an attorney rather 

than the free services that have been available, unless that attorney were willing to do it on a pro bono basis, as I have on many 

occasions, by the way. That is something that I look forward to look 

at, and I hope there is some kind of a tracking system established 

where we might get into the timing and those sorts of things and 

be able to evaluate. 

Thank you, Mr. Chairman. My time is up. 

Chairman AKAKA. Thank you very much, Senator Webb. We will 

begin a second round here. 

Admiral Cooper, in your personal or professional view, and without regard to the present situation, how long should a veteran or 

dependent have to wait to have their claim decided? 

Admiral COOPER. The goal that we have—and I honestly believe 

we can get there—is 145 days, predicated on all the laws that are 

now in place. As you know, the Veterans Claims Assistance Act of 

2000 did extend processing time by establishing many specific 

things that VA is required to do, all for the benefit of the veteran, 

all for the right reason. But that did extend the process. 

As I look at it and try to analyze how we can best reduce the 

time to the shortest time possible, I find that 145 days—perhaps 

140 days eventually—that is probably, realistically, the best we can 

achieve on average. We will be able to do some claims, very fast 

assuming we get all the information immediately. But, on average, 

I think 145 days is about the best we can do. 

Secretary NICHOLSON. Mr. Chairman, could I just add an important footnote to that. 

Chairman AKAKA. Mr. Secretary. 

Secretary NICHOLSON. For clarity, a claim, when it is finally decided, is paid from the time it was initiated. So during that pendency period, if it is given, it is given retroactive back to the time 

it was filed. 

Chairman AKAKA. Thank you for that explanation. 

Dr. Kussman, in your personal or professional opinion, should 

someone seeking a primary care appointment have to wait 30 days 

to get an appointment? Or in your answer, please give me examVerDate 0ct 09 2002 15:10 May 29, 2007 Jkt 000000 PO 00000 Frm 00075 Fmt 6633 Sfmt 6601 H:\RD41451\DOCS\33255.TXT SENVETS PsN: ROWENA
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ples of other health care systems that use such an extended period 

for a primary care appointment. 

Dr. KUSSMAN. Thank you, Mr. Chairman. As was already mentioned, anybody who has an urgent or emergent issue can be seen 

right away by walking into one of our clinics or one of our emergency rooms. So if anybody really needs to be seen right away—

the issue of the 30 days is for stable, chronic, longitudinal care for 

the patient that we have been seeing regularly in our clinics. 

Chairman AKAKA. Thank you. 

Mr. Secretary, I notice that VA’s estimated number of OEF and 

OIF veterans that will come into the system next year is relatively 

incremental at around 54,000. We know that in the past, VA has 

underestimated the number of new veterans seeking VA health 

care. We also know that some conditions such as PTSD can take 

some time to manifest themselves in these young servicemembers, 

and that in these current conflicts, the average servicemember will 

serve more tours than in the past. 

Can you please explain the projection that VA will see such a low 

number of OEF and OIF veterans next year? 

Secretary NICHOLSON. Well, Mr. Chairman, we use a very sophisticated model. The model, as you will recall—I know you do—for 

the 2005 budget year did not hit it because it was based on 2003 

actual data, and it did not incorporate the effects of the war into 

it. 

Since that time, that model in the overall patient demand that 

we have is almost uncanny in its accuracy—less than half of 1 percent off. So we use that. We use it for 85 percent of our predictive 

capacity. It does not predict certain things like long-term care, dental, and CHAMPA. So we have to apply some judgment into that. 

But we are quite confident in that estimate that we have for 2008, 

which is 263,000. And the funding for it, as you will note, we have 

asked for nearly double that of 2006. 

Chairman AKAKA. Thank you very much, Mr. Secretary. My time 

has expired. 

Senator Craig? 

Senator CRAIG. Mr. Chairman, I will be brief. We have another 

panel, and I would like to hear from them before I have to rush 

out around the noon hour. 

There are questions I will submit for the record for the Secretary 

and his colleagues to answer. 

I would only make this observation, Mr. Secretary. Last year, the 

VA stated that the training of veterans service officers, that once 

trained by the VA, could help expedite claims. And while you are 

an attorney and I am not, I cannot imagine that well-trained attorneys in the law could not help expedite claims also. Or is there 

something about the degree itself that deters them from expediting——

[Laughter.] 

Senator CRAIG [continuing].—while VSOs trained by VA can, in 

fact, expedite claims processes? Now, you must defend your fellow 

attorneys. I understand that. 

Secretary NICHOLSON. I am a recovering attorney, Senator. 

[Laughter.] 

Senator CRAIG. I see. 

73

Secretary NICHOLSON. But I would tend to repeat my story of 

Struble, Iowa, and rest my case. The veterans service officers that 

work on these cases, they are really doing it—they have no financial interest in it. They do not have a clock that is running. It is 

not dependent on their livelihood. I think they have a more detached view, but in most cases a very competent and committed 

view. And attorneys—I mean, attorneys are trained to be thorough. 

If they are not thorough, because they are held to a higher standard, could be held to be negligent, so they do not tend to leave 

many stones unturned, or they are not too much on an expedition. 

And I think common sense for me suggests that it will just take 

longer. 

Senator CRAIG. Well, I thank you for that. I visited with the 

judges down at the court. Thoroughness is part of a problem in why 

claims are rejected at that level, and thoroughness is something 

that is important to carry the process through. That is why I felt 

that the policy of the Civil War era should be put to bed once and 

for all on behalf of our veterans. 

Having said that, Mr. Chairman, I thank you all of you for being 

here today and look forward to working with you in the coming 

year. 

Chairman AKAKA. Thank you very much, Senator Craig, for your 

remarks. 

Mr. Secretary, before we switch panels, I want to let you know 

that we will be sending post-hearing questions over to you beginning this afternoon, and others may follow in the next few days. 

And questions from Members will be submitted for the record for 

your response. 

Mr. Secretary, I have two requests. First, please send replies to 

individual questions as soon as they are ready—you do not have to 

wait until the packages are completed. Second, I would greatly appreciate your prompt attention to the questions as well. Having 

VA’s answers will be extremely helpful as we move forward with 

our work on the VA budget, and that is the reason for my request. 

Last year, we did not receive our responses until summer, and 

that is simply too late. We want to work together with you on the 

budget. 

Mr. Secretary, I want to thank you and your staff for your responses. We have heard good things in your statements and look 

forward to working with you to even make it better as we move 

along here in the budget process. 

So thank you again, and we wish you well. 

Secretary NICHOLSON. Thank you, Mr. Chairman. 

Chairman AKAKA. At this time I would like to call up the second 

panel. 

We have in our next panel Carl Blake, National Legislative Director, Paralyzed Veterans of America; Joseph Violante, National 

Legislative Director, Disabled American Veterans; David 

Greineder, Deputy National Legislative Director, AMVETS; and 

Dennis M. Cullinan, Director, National Legislative Service, Veterans of Foreign Wars. We also have Steve Robertson, Director, 

National Legislative Commission, American Legion; and John 

Rowan, National President, Vietnam Veterans of America. 

74

We welcome all of you to this Committee hearing, and we would 

like you to begin your testimony in the order that I called your 

names. First will be Carl Blake. 

STATEMENT OF CARL BLAKE, NATIONAL LEGISLATIVE 

DIRECTOR, PARALYZED VETERANS OF AMERICA 

Mr. BLAKE. Thank you, Mr. Chairman. 

Mr. Chairman, Senator Craig, on behalf of the four co-authors of 

the Independent Budget, I would like to thank you for the opportunity to present our views today regarding the veterans’ health 

care budget for Fiscal Year 2008. Before I begin, I would just like 

to mention that in the spirit of openness and cooperation, the 

IBVSOs invited all of the Committee staff members as well as all 

of the legislative assistants for the Members of the Committee to 

attend a briefing the week before the President’s budget was released to discuss the recommendations of the Independent Budget 

in advance and to go into some detail about how we develop our 

budget recommendations, realizing that we have nothing really to 

hide and ultimately our only interest is to ensure that veterans 

have the best quality health care and benefits available to them. 

It is unfortunate, even as we testify today, that the appropriations bill has still not been completed for the Department of Veterans Affairs, as well as other Federal agencies. Despite the positive outlook in H.J. Res. 20, the VA has been placed in a critical 

situation where it is forced to cannibalize other accounts in order 

to continue to provide health care services to veterans. This is jeopardizing not only the health care system, but the actual health care 

of veterans. 

For Fiscal Year 2008, the Administration has requested $34.2 

billion for veterans health care, a $1.9 billion increase over the levels established in H.J. Res. 20. Although we recognize this is another step forward, it still falls short of the recommendations of the 

IB. For Fiscal Year 2008, the IB recommends approximately $36.3 

billion, an increase of $4 billion over the Fiscal Year 2007 appropriation level, yet to be enacted, and approximately $2.1 billion 

over the Administration’s request. 

For Fiscal Year 2008, the IB recommends approximately $29 billion for medical services. Our medical services recommendation includes $26.3 billion for current services, $1.4 billion for the increase 

in patient workload, $105 million for additional FTEs, and approximately $1.1 billion for policy initiatives. For medical administration, the IB recommends approximately $3.4 billion, and, finally, 

for medical facilities the IB recommends approximately $4 billion. 

This recommendation also includes an additional $250 million 

above the Fiscal Year 2008 baseline in order to begin addressing 

the non-recurring maintenance needs of the VA. Although the IB 

health care recommendation does not include additional money to 

provide for the health care needs of Category 8 veterans being denied enrollment into the system, we believe that adequate resources should be provided to overturn this policy. The VA estimates that more than 1.5 million Category 8 veterans will have 

been denied enrollment in the VA health care system by Fiscal 

Year 2008. Assuming a utilization rate of 20 percent in order to reVerDate 0ct 09 2002 15:10 May 29, 2007 Jkt 000000 PO 00000 Frm 00078 Fmt 6633 Sfmt 6601 H:\RD41451\DOCS\33255.TXT SENVETS PsN: ROWENA
75

open the system, the IB estimates that VA will require approximately $366 million in discretionary funding. 

Although not proposed to have a direct impact on veterans’ 

health care, we are deeply disappointed that the Administration 

has chosen to once again recommend an increase in prescription 

drug copayments and an indexed enrollment fee. Although the VA 

does not overtly explain the impact of these proposals, similar proposals in the past have estimated that nearly 200,000 veterans will 

leave the system, and more than 1 million veterans will choose not 

to enroll. 

It is astounding that the Administration would continue to recommend policies that would push veterans away from the best 

health care system in America. Congress has soundly rejected these 

proposals in the past, and we call on you to do so once again. 

For medical and prosthetic research, the Independent Budget is recommending $480 million. This represents a $66 million increase 

over the Fiscal Year 2007 level established in H.J. Res. 20 and is 

$69 million over the Administration’s request for Fiscal Year 2008. 

We are very concerned that the medical and prosthetic research account continues to face a virtual flat line in its funding level. Research is a vital part of veterans’ health care and an essential mission for our national health care system. 

In closing, to address the problem of adequate resources provided 

in a timely manner, the Independent Budget has once again proposed funding for veterans’ health care be removed from the discretionary budget process and be made mandatory. The budget and 

appropriations process over the last number of years, and particularly this year, demonstrates conclusively how the VA labors under 

the uncertainty of not only knowing how much money it is going 

to get, but when it is going to get it. 

In the end, it is easy to forget that the people who are ultimately 

affected by the wrangling over the budget during this process are 

the men and women who have served and sacrificed so much in defense of this country. 

Mr. Chairman, Senator Craig, I would like to thank you again 

for the opportunity to testify, and I would be happy to answer any 

questions that you might have. 

[The prepared statement of Mr. Blake follows:]

PREPARED STATEMENT OF CARL BLAKE, NATIONAL LEGISLATIVE DIRECTOR, PARALYZED VETERANS OF AMERICA

Mr. Chairman and Members of the Committee, as one of the four co-authors of 

The Independent Budget, Paralyzed Veterans of America (PVA) is pleased to 

present the views of The Independent Budget regarding the funding requirements 

for the Department of Veterans Affairs (VA) health care system for Fiscal Year 

2008. 

PVA, along with AMVETS, Disabled American Veterans, and the Veterans of Foreign Wars, is proud to come before you this year marking the beginning of the third 

decade of The Independent Budget, a comprehensive budget and policy document 

that represents the true funding needs of the Department of Veterans Affairs. The 

Independent Budget uses commonly accepted estimates of inflation, health care 

costs and health care demand to reach its recommended levels. This year, the document is endorsed by 53 Veterans Service Organizations, and medical and health 

care advocacy groups. 

Last year proved to be a unique year for reasons very different from 2005. The 

VA faced a tremendous budgetary shortfall during Fiscal Year 2005 that was subsequently addressed through supplemental appropriations and additional funds added 

to the Fiscal Year 2006 appropriations. For Fiscal Year 2007, the Administration 

76

submitted a budget request that nearly matched the recommendations of The Independent Budget. These actions simply validated the recommendations of The Independent Budget once again. 

Unfortunately, even as we testify today, Congress has yet to complete the appropriations bill more than one-third of the way through the current fiscal year. Despite the positive outlook for funding as outlined in H.J. Res. 20, the Fiscal Year 

2007 Continuing Resolution, the VA has been placed in a critical situation where 

it is forced to ration care and place freezes on hiring of much needed medical staff. 

Waiting times have also continued to increase. Furthermore, the VA has had to cannibalize other accounts in order to continue to provide medical services, jeopardizing 

not only the VA health care system but the actual health care of veterans. It is unconscionable that Congress has allowed partisan politics and political wrangling to 

trump the needs of the men and women who have served and continue to serve in 

harm’s way. 

For Fiscal Year 2008, the Administration has requested $34.2 billion for veterans’ 

health care, a $1.9 billion increase over the levels established in H.J. Res. 20, the 

continuing resolution for Fiscal Year 2007. Although we recognize this as another 

step forward, it still falls well short of the recommendations of The Independent 

Budget. For Fiscal Year 2008, The Independent Budget recommends approximately 

$36.3 billion, an increase of $4.0 billion over the Fiscal Year 2007 appropriation 

level yet to be enacted and approximately $2.1 billion over the Administration’s request. 

The medical care appropriation includes three separate accounts—Medical Services, Medical Administration, and Medical Facilities—that comprise the total VA 

health-care funding level. For Fiscal Year 2008, The Independent Budget recommends approximately $29.0 billion for Medical Services. Our Medical Services 

recommendation includes the following recommendations:

(Dollars in Thousands) 

Current Services Estimate .......................................................................................................... $26,302,464

Increase in Patient Workload ..................................................................................................... 1,446,636

Increase in Full-time Employees ................................................................................................ 105,120

Policy Initiatives ......................................................................................................................... 1,125,000

Total fiscal year 2008 Medical Services ........................................................................... $28,979,220

In order to develop our current services estimate, we used the Obligations by Object in the President’s Budget to set the framework for our recommendation. We believe this method allows us to apply more accurate inflation rates to specific accounts within the overall account. Our inflation rates are based on 5-year averages 

of different inflation categories from the Consumer Price Index-All Urban Consumers (CPI–U) published by the Bureau of Labor Statistics every month. 

Our increase in patient workload is based on a 5.5 percent increase in workload. 

This projected increase reflects the historical trend in the workload increase over 

the last 5 years. The policy initiatives include $500 million for improvement of mental health services, $325 million for funding the fourth mission (an amount that 

nearly matches current VA expenditures for emergency preparedness and homeland 

security as outlined in the 2007 Mid-Session Review), and $300 million to support 

centralized prosthetics funding. 

For Medical Administration, The Independent Budget recommends approximately 

$3.4 billion. Finally, for Medical Facilities, The Independent Budget recommends 

approximately $4.0 billion. This recommendation includes an additional $250 million above the Fiscal Year 2008 baseline in order to begin to address the non-recurring maintenance needs of the VA. 

Although The Independent Budget health-care recommendation does not include 

additional money to provide for the health-care needs of Category 8 veterans now 

being denied enrollment into the system, we believe that adequate resources should 

be provided to overturn this policy decision. VA estimates that more than 1.5 million 

Category 8 veterans will have been denied enrollment in the VA health-care system 

by Fiscal Year 2008. Assuming a utilization rate of 20 percent, in order to reopen 

the system to these deserving veterans, The Independent Budget estimates that VA 

will require approximately $366 million. The Independent Budget Veterans Service 

Organizations (IBVSO) believe the system should be reopened to these veterans and 

77

that this money should be appropriated in addition to our Medical Care recommendation. 

Although not proposed to have a direct impact on veterans’ health care, we are 

deeply disappointed that the Administration chose to once again recommend an increase in prescription drug copayments from $8 to $15 and an indexed enrollment 

fee based on veterans’ incomes. These proposals will simply add additional financial 

strain to many veterans, including PVA members and other veterans with catastrophic disabilities. Although the VA does not overtly explain the impact of these 

proposals, similar proposals in the past have estimated that nearly 200,000 veterans 

will leave the system and more than 1,000,000 veterans will choose not to enroll. 

It is astounding that this Administration would continue to recommend policies that 

would push veterans away from the best health care system in the world. Congress 

has soundly rejected these proposals in the past and we call on you to do so once 

again. 

For Medical and Prosthetic Research, The Independent Budget is recommending $480 million. This represents a $66 million increase over the Fiscal Year 2007 appropriated level established in the continuing resolution and $69 million over the 

Administration’s request for Fiscal Year 2008. We are very concerned that the Medical and Prosthetic Research account continues to face a virtual flatline in its funding level. Research is a vital part of veterans’ health care, and an essential mission 

for our national health care system. VA research has been grossly underfunded in 

comparison to the growth rate of other Federal research initiatives. We call on Congress to finally correct this oversight. 

The Independent Budget recommendation also recognizes a significant difference in our recommended amount of $1.34 billion for Information Technology versus the 

Administration’s recommended level of $1.90 billion. However, when compared to 

the account structure that The Independent Budget utilizes, the Administration’s 

recommendation amounts to approximately $1.30 billion. The Administration’s request also includes approximately $555 million in transfers from all three accounts 

in Medical Care as well as the Veterans Benefits Administration and the National 

Cemetery Administration. Unfortunately, these transfers are only partially defined 

in the Administration’s budget justification documents. Given the fact that the veterans’ service organizations have been largely excluded from the discussion of how 

the Information Technology reorganization would take place and the fact that little 

or no explanation was provided in last year’s budget submission, our Information 

Technology recommendation reflects what information was available to us and the 

funding levels that Congress deemed appropriate from last year. We certainly could 

not have foreseen the VA’s plan to shift additional personnel and related operations 

expenses. 

Finally, we remain concerned that the Major and Minor Construction accounts 

continue to be underfunded. Although the Administration’s request includes a fair 

increase in Major Construction from the expected appropriations level of $399 million to $727 million, it still does not go far enough to address the significant infrastructure needs of the VA. Furthermore, the actual portion of the Major Construction account that will be devoted to Veterans Health Administration infrastructure 

is only approximately $560 million. We also believe that the Minor Construction request of approximately $233 million does little to help the VA offset the rising tide 

of necessary infrastructure upgrades. Without the necessary funding to address 

minor construction needs, these projects will become major construction problems in 

short order. For Fiscal Year 2008, The Independent Budget recommends approximately $1.6 billion for Major Construction and $541 million for Minor Construction. 

In closing, to address the problem of adequate resources provided in a timely 

manner, The Independent Budget has proposed that funding for veterans’ health 

care be removed from the discretionary budget process and made mandatory. The 

budget and appropriations process over the last number of years demonstrates conclusively how the VA labors under the uncertainty of not only how much money it 

is going to get, but, equally important, when it is going to get it. No Secretary of 

Veterans Affairs, no VA hospital director, and no doctor running an outpatient clinic 

knows how to plan and even provide care on a daily basis without the knowledge 

that the dollars needed to operate those programs are going to be available when 

they need them. 

Making veterans health care funding mandatory would not create a new entitlement, rather, it would change the manner of health care funding, removing the VA 

from the vagaries of the appropriations process. Until this proposal becomes law, 

however, Congress and the Administration must ensure that VA is fully funded 

through the current process. We look forward to working with this Committee in 

order to begin the process of moving a bill through the House, and the Senate, as 

soon as possible. 

78

In the end, it is easy to forget, that the people who are ultimately affected by 

wrangling over the budget are the men and women who have served and sacrificed 

so much for this Nation. We hope that you will consider these men and women 

when you develop your budget views and estimates, and we ask that you join us 

in adopting the recommendations of The Independent Budget. 

This concludes my testimony. I will be happy to answer any questions you may 

have.

Chairman AKAKA. Thank you very much, Mr. Blake. 

I want our witnesses to know that your full statements will be 

included in the record. 

Mr. Violante? 

STATEMENT OF JOSEPH A. VIOLANTE, NATIONAL 

LEGISLATIVE DIRECTOR, DISABLED AMERICAN VETERANS 

Mr. VIOLANTE. Thank you, Mr. Chairman, Members of the Committee. I am pleased to appear before you on behalf of Disabled 

American Veterans to summarize our recommendations for Fiscal 

Year 2008. As mentioned in my written statement, my testimony 

focuses primarily on the Department of Veterans Affairs benefit 

programs. 

To improve administration of VA’s benefit programs, the IB recommends Congress provide the Veterans Benefits Administration 

with total funding of $1.9 billion in Fiscal Year 2008. Included in 

our funding recommendations are new resources needed for additional VBA staffing, training programs, and information technologies to correspond with a more effective and efficient benefit 

delivery system. Mr. Chairman, a core mission of the VA is to provide timely financial disability compensation, dependency and indemnity compensation, and disability pension benefits to veterans 

and their family members and survivors. VA disability benefits are 

critical to veterans and their families. We believe meeting the 

needs of disabled veterans should always be a top priority of the 

Federal Government. 

Mr. Chairman, the backlog is unquestionably growing. Rather 

than making headway and overcoming the chronic claims backlog 

and subsequent protracted delays in disposition of claims, VA actually has lost ground on the problem. 

We believe that adequate staffing levels are essential to any 

meaningful strategy to get claims processing and backlogs under 

control. The IB recommends 10,675 employees for Compensation 

and Pension. 

Mr. Chairman, in addition to boosting its staffing, we believe 

VBA must continue to upgrade its information technology infrastructure and revise its training tools to stay abreast of modern 

business practices to maintain efficiency and to meet increasing 

workload demands. The IB, therefore, recommends that Congress 

provide $115.4 million for VBA initiatives in Fiscal Year 2008. 

To meet its ongoing workload demands and to implement the important initiatives that the VA Vocational Rehabilitation and Employment Task Force recommended, VR&E needs increased staffing. The task force recommended creation and training of 200 new 

staff position for this purpose. With its increased reliance on contract services, VR&E also needs approximately 50 additional FTEE 

for management and oversight of contract counselors and employment service providers. 

79

VA has been striving to provide more timely and efficient service 

to its claimants for education benefits. VBA must increase staffing 

in its Educational Service to 1,033 employees. 

The benefit programs are effective for their intended purposes 

only to the extent that VBA can deliver benefits to entitled veterans and dependents in a timely fashion. Congress must make adjustments to benefit programs from time to time to address increases in the cost of living and other needed improvements. We 

invite your attention to our written statement and the Independent 

Budget itself for details on those issues. 

Mr. Chairman, my final concern today is a serious one to the 

DAV, and also some of our sister organizations. The DAV believes 

that each veteran who is awarded compensation is entitled to the 

full payment and that no disabled veteran should be forced to obtain a private attorney to secure an accurate and humane disability 

rating from VA. Last year, Congress passed Public Law 109–461, 

which opened the claims process to attorneys. 

We at DAV do not believe private attorneys will ease resolution 

of veterans’ claims—and I think the Secretary agreed with that—

reduce the claims backlog, nor get these claims resolved on an expeditious basis—the historical intent of Congress. We have been 

advised by professionals in VBA that adding attorneys to the 

claims process will only complicate, lengthen, and make resolution 

of veterans’ disability claims more difficult. How such a contentious 

new direction will actually help sick disabled veterans is beyond 

our ability to comprehend. 

Mr. Chairman, thank you for inviting DAV and the other member organizations of the Independent Budget to testify before the 

Senate today. I would be happy to answer any questions your 

Members may have. 

[The prepared statement of Mr. Violante follows:]

PREPARED STATEMENT OF JOSEPH A. VIOLANTE, NATIONAL LEGISLATIVE DIRECTOR, 

DISABLED AMERICAN VETERANS

Mr. Chairman and Members of the Committee: 

I am pleased to have this opportunity to appear before you on behalf of the Disabled American Veterans (DAV), one of four national veterans organizations that 

create the annual Independent Budget (IB) for veterans programs, to summarize our 

recommendations for Fiscal Year (FY) 2008. 

As you know Mr. Chairman, the IB is a budget and policy document that sets 

forth the collective views of DAV, AMVETS, Paralyzed Veterans of America (PVA), 

and Veterans of Foreign Wars of the United States (VFW). Each organization accepts principal responsibility for production of a major component of our Independent Budget, but it is a budget and policy document on which we all agree. Reflecting that division of responsibility, my testimony focuses primarily on the variety 

of Department of Veterans Affairs’ (VA) benefits programs available to veterans. 

In preparing this 21st Independent Budget, the four partners draw upon our extensive experience with veterans’ programs, our firsthand knowledge of the needs 

of America’s veterans, and the information gained from continuous monitoring of 

workloads and demands upon, as well as the performance of, the veterans benefits 

and services system. As a consequence, this Committee has acted favorably on many 

of our recommendations to improve services to veterans and their families. We ask 

that you give our recommendations full and serious consideration again this year. 

THE VETERANS BENEFITS ADMINISTRATION IS STILL UNDERSTAFFED

AND OVERWHELMED

To improve administration of VA’s benefits programs, the IB recommends Congress provide the Veterans Benefits Administration (VBA) $752 million in additional 

funding in Fiscal Year 2008 compared to the existing Fiscal Year 2007 funding level 

80

(assumed at the time of submission of this statement to be that level approved for 

VBA by the other Body in H. J. Res. 20, the Continuing Resolution for Fiscal Year 

2007, now pending consideration by the Senate). These additional funds, which 

would raise total funding for VBA to $1.9 billion in Fiscal Year 2008, will provide 

the means to support a workable long-term strategy for improvement in claims processing and more adequate staffing for the discretionary programs under the jurisdiction of VBA. Included in our funding recommendation are new resources needed for 

additional VBA staff, training programs and information technologies to correspond 

with a more effective and efficient benefits delivery system. In total, if Congress accepts our recommendations for necessary funding increases to the General Operating Funds account, these new funds would bring new capabilities to VBA to better 

serve disabled veterans. 

Mr. Chairman, a core mission of VA is to provide financial disability compensation, dependency and indemnity compensation, and disability pension benefits to 

veterans and their dependent family members and survivors. These payments are 

intended by law to relieve economic effects of disability (and death) upon veterans, 

and to compensate their families for loss. For those payments to effectively fulfill 

their intended purposes, VA should deliver them promptly and based on sound adjudications. The ability of disabled veterans to feed, clothe, and provide shelter for 

themselves and their families often depends on VA benefits. Also, the need for financial support among disabled veterans can be urgent. While awaiting action by 

VA on their pending claims, they and their families must suffer hardships; protracted delays can lead to privation and even bankruptcy and homelessness. Some 

veterans have died while their claims for VA disability compensation or pension 

were unresolved for years at VA. In sum, VA disability benefits are critical to veterans and their families, Mr. Chairman. We believe meeting the needs of disabled 

veterans should always be a top priority of the Federal Government. 

DIVERSION FROM THE REAL PROBLEM

Recently VA has adopted a tactic of diverting public attention away from the 

growing claims backlog it holds by demonstrating great speed and efficiency in adjudicating the claims of soldiers and Marines who were severely wounded in the current conflicts in Iraq and Afghanistan. While VA is crowing that it is breaking all 

records in awarding these new veterans their rightful benefits, hundreds of thousands of claims from older veterans of prior conflicts and military service during 

earlier periods lie dormant, awaiting a vague future resolution. While we applaud 

VA’s efforts to help new veterans, VA continues to fail older veterans every day that 

the backlog grows. 

Mr. Chairman, the backlog is unquestionably growing. Rather than making headway and overcoming the chronic claims backlog and consequent protracted delays 

in disposition of its claims, VA actually has lost ground on that problem. In fact, 

looking retrospectively over the past 6 years, the backlog of claims has moved from 

the December 2000 total of 363,412, to the January 13, 2007 level of 606,239, a 

more than 80 percent increase during a period when three VA Secretaries of both 

political parties have stated publicly on multiple occasions that reducing this backlog was their highest management priority. We also note that during this same period as these promises were being made in public, VBA staffing has essentially remained flat at about 9,000 full-time employee equivalents (FTEE). As late as 1 week 

ago, representatives of our organizations heard senior VA officials brief us on the 

President’s Fiscal Year 2008 budget, with what we could only call ‘‘hopeful thinking’’ 

that the backlog will be brought under control, but without disclosing any particular 

plan to fulfill that hope. It will not occur with the level of resources requested by 

the Administration. 

We believe that adequate staffing is essential to any meaningful strategy to get 

claims processing and backlogs under control. The IB recommends 10,675 FTEE for 

Compensation and Pension Service (C&P). During Fiscal Year 2004 and Fiscal Year 

2005, the total number of compensation, pension, and burial claims received in C&P 

Service increased by 9 percent, from 735,275 at the beginning of Fiscal Year 2003 

to 801,960 at the end of Fiscal Year 2005. This represents an average annual 

growth rate in claims of 4.5 percent. During this same period, the number of pending claims requiring rating decisions increased by more than 33 percent. As the VA 

Under Secretary for Benefits has stated, ‘‘[c]laims that require a disability rating 

determination are the primary workload component because they are the most difficult, time consuming, and resource intensive.’’ With an aging veteran population 

and escalating U.S. military operations in Iraq and Afghanistan, we have no reason 

to believe that growth rate will decline. With a 9 percent increase over the Fiscal 

Year 2005 number of claims in 2006, VA should be expecting 874,136 claims in C&P 

81

Service in Fiscal Year 2007. Moreover, legislation requiring VA to invite veterans 

in six States to request review of past claims decisions and to require VA to conduct 

outreach to invite new claims from other veterans in these States will add substantially to the growing workload. Much of this new workload carried over into Fiscal 

Year 2007. Also, the Secretary’s recent announcement of a special VA outreach effort to ensure non-service connected disability pensioners become aware of their potential eligibility for Aid and Attendance and Housebound benefits is sure to add 

even more claims to the existing backlog. While we appreciate such outreach efforts, 

as well as efforts to correct past injustices that may have occurred in particular 

States, VBA has a co-equal responsibility to ensure it maintains a system capable 

of managing workload growth. We have not seen that system at work. 

In its budget submission for Fiscal Year 2007, VBA projected production based on 

an output of 109 claims per direct program FTEE. We have long argued that VA’s 

production requirements do not allow for thorough development and careful consideration of disability claims, resulting in compromised decisions, higher error and appeal rates, and even more overload on the system. In addition to recommending 

staffing levels more commensurate with the workload, we have maintained that VA 

should invest more in training adjudicators and that it should hold them accountable for higher standards of accuracy. In response to survey questions from VA’s Office of Inspector General, nearly half of the VBA adjudicators responding admitted 

that many claims are decided without adequate record development. They saw an 

incongruity between their objectives of making legally correct and factually substantiated decisions, with management objectives of maximizing output to meet production standards and reduce backlogs. Nearly half reported that it is generally, or very 

difficult, to meet production standards without compromising quality. Fifty-seven 

percent reported difficulty meeting production standards as they attempt to assure 

they have sufficient evidence for rating each case and thoroughly reviewing the evidence. Most attributed VA’s inability to make timely and high quality decisions to 

insufficient staff. Also they indicated that adjudicator training had not been a high 

priority in VBA. 

To allow for more time to be invested in training, we believe it prudent to recommend staffing levels based on an output of 100 cases per year for each direct program FTEE. With an estimated 930,000 incoming claims in Fiscal Year 2007, that 

effort would require 9,300 direct program FTEE in Fiscal Year 2008. With support 

FTEE added, this would require C&P to be authorized 10,675 total FTEE for Fiscal 

Year 2008. 

Instead of requesting the additional funds and personnel needed to accomplish 

better results over the past 5 years, the Administration sought, and Congress provided, fewer VBA resources. Recent budgets have requested actual reductions in 

full-time employees—the workforce that processes claims. Any reductions in VBA 

staffing would be clearly at odds with the realities of VBA’s growing workload and 

its own well-established adjudication procedures. Adjudication of veterans’ claims is 

a labor-intensive and ‘‘hands on’’ system of personal decisionmaking, with lifelong 

consequences for disabled veterans. These management and political decisions to cut 

funding and reduce staffs have contributed to a diminished VA’s quality of claims 

processing and to VA’s loss of ground against its backlog. During Congressional 

hearings, VA is routinely forced to defend VBA budgets that it knows to be inadequate to the task at hand. The priorities and goals of the immediate stagnation 

are at odds with the need for a long-term strategy to fulfill VBA’s mission and confirm the Nation’s moral obligation to disabled veterans. 

Historically, many underlying causes have acted in concert to bring on this seemingly intractable problem. These include poor management, misdirected goals, lack 

of focus or the wrong focus on cosmetic fixes, poor planning and execution, and outright denial of the existence of the problem—rather than the development and execution of real strategic measures. These dynamics have been thoroughly detailed in 

several studies and reviews of the continuing problem, but they persist without remedy. While the problem has been exacerbated by lack of action, the IBVSOs believe 

most of the causes can be directly or indirectly traced to availability of resources. 

The problem was primarily triggered and is now perpetuated by chronic and insufficient resources. 

UNMET NEEDS IN INFORMATION TECHNOLOGY

Mr. Chairman, in addition to boosting its staffing, we believe VBA must continue 

to upgrade its information technology infrastructure and revise its training tools to 

stay abreast of modern business practices, to maintain efficiency, and to meet increasing workload demands. In recent years, however, Congress has actually reduced funding for such VBA initiatives. With restored investments in its initiatives, 

82

VBA could complement staffing increases for higher workloads with a support infrastructure designed to increase operational effectiveness. VBA could resume an adequate pace in its development and deployment of information technology solutions, 

as well as upgrade and enhance training systems, to improve operations and service 

delivery. Some of these initiatives for priority funding are: 

Replacement of the antiquated and inadequate Benefits Delivery Network (BDN) with 

VETSNET for C&P, The Education Expert System (TEES) for Education Service, and Corporate WINRS (CWINRS) for VR&E 

VETSNET serves to integrate several subsystems into one nationwide information 

system for claims development and adjudication and payment administration. TEES 

serves to provide for electronic transmission of applications and enrollment documentation along with automated expert processing. CWINRS is a case management 

and information system allowing for more efficient award processing and sharing of 

information nationwide. 

Continued development and enhancement of data-centric benefits integration with 

‘‘Virtual VA’’ and modification of The Imaging Management System (TIMS), 

which serve to replace paper-based records with electronic files for acquiring, 

storing, and processing claims data 

Virtual VA supports pension maintenance activities at three Pension Maintenance 

Centers. Further enhancement would allow for the entire claims and award process 

to be accomplished electronically. 

TIMS is the Education Service’s system for electronic education claims files, storage of imaged documents, and workflow management. This initiative is to modify 

and enhance TIMS to make it fully interactive to allow for fully automated claims 

and award processing by Education Service and VR&E nationwide. 

Upgrading and enhancement of training systems 

VA’s Training and Performance Support Systems (TPSS) is a multimedia, multimethod training tool that applies Instructional Systems Development (ISD) methodology to train and support employee performance of job tasks. These TPSS applications require technical updating to incorporate changes in laws, regulations, procedures, and benefit programs. In addition to regular software upgrades, a help desk 

for users is needed to make TPSS work effectively. 

VBA initiated its ‘‘Skills Certification’’ instrument in 2004. This tool aids VBA in 

assessing the knowledge base of Veterans Service Representatives. VBA intends to 

develop additional skills certification modules to test Rating Veterans Service Representatives, Decision Review Officers, Field Examiners, Pension Maintenance Center employees, and Education Veterans Claims Examiners. 

Accelerated implementation of Virtual Information Centers (VICs) 

By providing veterans regionalized telephone contact access from multiple offices 

within specified geographic locations, VA achieves greater efficiency and improved 

customer service. Accelerated deployment of VICs will more timely accomplish this 

beneficial effect.

Congress has reduced funding for VBA initiatives every year since 2001, from $82 million in Fiscal Year 2001 to $23 million in Fiscal Year 2006. The IB calls for restoration of funding for this purpose to the 2001 level, with a 5 percent adjustment 

for each year to cover inflation and increased demands upon the system. The IB 

therefore recommends that Congress provide $115.4 million for VBA initiatives in 

Fiscal Year 2008. 

The record should show we made many of these same recommendations last year, 

but unfortunately they did not attract supportive appropriations. The lack of funding for these existing VBA priorities manifests in reinforcing the existing backlogs 

and failing to serve disabled veterans. 

To meet its ongoing workload demands and to implement the important new initiatives the VA Vocational Rehabilitation and Employment Task Force recommended, VR&E needs increased staffing. As a part of its strategy to enhance accountability and efficiency, the Task Force recommended creation and training of 

200 new staff positions for this purpose. Other new initiatives recommended by the 

Task Force also require an investment of personnel resources. With its increased reliance on contract services, VR&E also needs approximately 50 additional FTE for 

management and oversight of contract counselors and employment service providers. 

VA has been striving to provide more timely and efficient service to its claimants 

for education benefits. Though the workload (number of applications and recurring 

certifications, etc.) increased by 11 percent during Fiscal Year 2004 and Fiscal Year 

2005, direct program FTEE were reduced from 708 at the end of Fiscal Year 2003 

83

to 675 at the end of Fiscal Year 2005. Based on experience during Fiscal Year 2004 

and Fiscal Year 2005, it is very conservatively estimated that the workload will increase by 5.5 percent in Fiscal Year 2008. VA must increase staffing to meet the 

existing and added workload, or service to veterans seeking educational benefits will 

decline. Based on the number of direct program FTEE at the end of Fiscal Year 

2003 in relation to the workload at that time, VBA must increase direct program 

staffing in its Education Service in Fiscal Year 2008 to 873 FTEE, 149 more direct 

program FTEE than authorized for Fiscal Year 2006. With the addition of the 160 

support FTEE as currently authorized, Education Service should be provided 1,033 

total FTEE for Fiscal Year 2008. 

The benefit programs are effective for their intended purposes only to the extent 

VBA can deliver benefits to entitled veterans and dependents in a timely fashion. 

However, in addition to ensuring that VBA has the resources necessary to accomplish its mission in that manner, Congress must also make adjustments to the programs from time to time to address increases in the cost of living and needed improvements. We invite your attention to the IB itself for the details of those issues, 

but the following summarizes a number of recommendations to adjust rates and improve the benefit programs administered by VBA:

• Cost-of-living adjustments for compensation, specially adapted housing grants, 

and automobile grants, with provisions for automatic annual increases in the housing and automobile grants based on increases in the cost of living. • A presumption of service connection for hearing loss and tinnitus for combat 

veterans and veterans who had military duties involving high levels of noise exposure who suffer from tinnitus or hearing loss of a type typically related to noise exposure or acoustic trauma. • Removal of the provision that makes persons who first entered service before 

June 30, 1985, ineligible for the Montgomery GI Bill, along with other improvements to the program. • No increase in, and eventual repeal of, funding fees for VA home loan guaranty. • Increase in the maximum coverage and adjustment of the premium rates for 

Service-Disabled Veterans’ Life Insurance. • Increase in the maximum coverage available on policies of Veterans’ Mortgage 

Life Insurance. • Legislation to restore protections for veterans’ benefits against awards to third 

parties in divorce actions. • Legislation to increase Dependency and Indemnity Compensation for certain 

survivors of veterans, and to no longer offset DIC with Survivor Benefit Plan payments

We hope the Committee will review these recommendations and give them consideration for inclusion in your legislative plans for 2007 and will support their funding 

in the eventual Congressional Budget Resolution for Veterans Benefits and Services 

for Fiscal Year 2008. 

THE FEDERAL APPEALS COURT FOR VETERANS CLAIMS

Another important component of our system of veterans’ benefits is the right to 

appeal VA’s benefits decisions to an independent court. The IB includes recommendations to improve the processes of judicial review in veterans’ benefits matters. Again, we invite the Committee’s attention to the IB for the details of these 

recommendations. In addition, the IB recommends that Congress enact legislation 

to authorize and fund construction of a courthouse and justice center for the United 

States Court of Appeals for Veterans Claims. 

A RELATED AND URGENT CONCERN: ASSURED FUNDING FOR VA MEDICAL CARE

A continuing major concern of this Independent Budget is gaining and keeping 

adequate funding for veterans medical care. Because the Administration typically 

seeks funding substantially below the amount necessary to maintain health care 

services for veterans and because discretionary appropriations have continually fallen short of what is needed, the IB supports legislation to fund VA medical care 

under a mandatory account or an assured formula to obviate the political wrangling 

we have observed every year for the past twelve fiscal years, and now including this 

year as well. Pending his return to duties in the Senate, Senator Tim Johnson of 

South Dakota has committed to the veterans service organization community his 

pledge to again introduce a bill this year that would resolve VA health care’s chronic 

funding shortages. Mr. Chairman, as soon as practicable, we urge you to schedule 

a legislative hearing on this bill, and we ask for an opportunity to testify on its merits. 

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THE IMPORTANCE OF NATIONAL GUARD AND RESERVE

Benefits Mr. Chairman, the decade-long trend of the Nation’s increasing reliance 

on National Guard, Air National Guard, and the Reserve forces of the Army, Navy 

and Marine Corps, Air Force and Coast Guard, for national security and disaster 

call-ups at home, and for peacekeeping and combat deployments overseas, bears no 

sign of abatement. Our reliance on Guard and Reserve forces has grown since the 

pre-Persian Gulf War era, and this trend continues even though both Reserve and 

active duty force levels remain far below their cold war peak. 

Since September 11, 2001, over 410,000 individuals who serve in National Guard 

and Reserve forces have been mobilized for a variety of military, police and security 

actions. Increasing demands on these serving members impose significant and repeated family separations and create additional uncertainties and interruptions in 

their civilian career opportunities. Furthermore, Guard and Reserve recruiting, retention, morale and readiness are already at considerable risk. The Nation cannot 

afford to promote the perception that we undervalue the great sacrifices and level 

of commitment being demanded from the Guard and Reserve community. 

Various incentive, service and benefit programs designed a half century ago for 

a far different Guard and Reserve philosophy and mission are no longer adequate 

to address demands on today’s Guard and Reserve forces. Accordingly, we believe 

steps must be taken by Congress to upgrade National Guard and Reserve benefits 

and support programs to a level commensurate with the sacrifices being made by 

these patriotic volunteers. Such enhancements should provide Guard and Reserve 

personnel a level of benefits comparable to their active duty counterparts and provide one means to ease the tremendous stresses now being imposed on Guard and 

Reserve members and their families, and to bring the relevance of these benefits 

into 21st century application. With concern about the current missions of the Guard 

and Reserve forces, Congress must take necessary action to upgrade and modernize 

Guard and Reserve benefits, to include more comprehensive health care, equivalent 

Montgomery G.I. Bill educational benefits, and full eligibility for the VA Home Loan 

guaranty program. 

Mr. Chairman, the members of the serving Guard and Reserve forces are now 

‘‘veterans’’ for purposes of the benefits and services authorized under Title 38, 

United States Code. However, the Code was fashioned over the past 65 years primarily to address the needs of the ‘‘citizen soldier,’’ an individual who either enlisted 

in war or was conscripted, served the minimum enlistment or period required, then 

returned to civilian life as a veteran. The current generation of Guard and Reserve 

members present very different needs as a consequence of their service, and the 

kind and variety of service we demand of them as a Nation. We ask the Senate to 

closely examine the needs of Guard and Reserve members now serving and to consider measures to provide them with effective benefits and services of a grateful government. 

ATTORNEYS IN VA CLAIMS

Mr. Chairman, my final concern today is a serious one of DAV and also of some 

of our sister organizations, but in deference to some that take an alternate view, 

it is not a major issue in the Independent Budget. As directed by law, VA has a 

duty to assist veterans in developing and presenting their claims for disability. Congress established the Federal Court discussed above to hear disputes that arise after 

VA adjudicates those claims, and veterans possess the right by law to appeal their 

disagreements with decisions and to redress their grievances to a unique Board of 

Veterans Appeals. That self-checking, unique, system exists because national veterans organizations, including the IBVSOs, have insisted historically that veterans’ 

war injuries and other service-related health problems be dealt with in a humane 

manner, and without friction or rancor to the greatest extent practicable. Despite 

the problems we encounter in VBA decisionmaking and operations as related above, 

we believe that design works, although not as well as intended. The question before 

the Senate is resources to empower those mechanisms to work better and additional 

oversight to ensure it works as intended. 

The DAV believes that each veteran who is awarded compensation is entitled to 

full payment, and that no disabled veteran should be forced to obtain a private attorney to secure an accurate and humane disability rating from VA. Nevertheless, 

against the advice of the DAV and others, last year in Public Law 109–461 Congress 

authorized private attorneys and agents to engage for pay in veterans’ disability 

claims representation duties, opening the way for significantly altering the foundations of the disability claims adjudication system—a system that has been in place 

since the founding of the Nation. We at DAV continue to believe this was an unwise 

action and ask for its repeal. 

85

Mr. Chairman, on adoption of a motion by Representative Stevenson Archer of 

Maryland, on December 22, 1813, the House of Representatives established the 

predecessor to its current Committee on Veterans Affairs, for the following stated 

purpose: ‘‘to take into consideration all such petitions, and matters, or things, touching military pensions, and, also claims and demands originating in the Revolutionary War, or arising therefrom, as shall be presented, or shall or may come in 

question, and be referred to them by the House; and to report their opinion thereupon together with such propositions for relief therein, as to them shall seem expedient.’’ [Emphasis added.] What this history demonstrates, Mr. Chairman, is that 

almost 200 years ago Congress, then playing a primitive executive role, intended to 

provide disabled Revolutionary veterans their rightful relief—and with expediency. 

While throughout our history that goal has never flagged, your 21st century injection of private attorneys into that non-adversarial process may serve to change it 

now. 

We at DAV do not believe private attorneys will ease resolution of veterans’ 

claims, reduce the claims backlog, nor get these claims resolved on an expedient 

basis—the historical intent of Congress. We have been advised by professionals in 

VBA that your adding attorneys to the claims system will only complicate, lengthen 

and make more fractious the resolution of veterans’ disability claims. As an organization that furnishes 260 National Service Officers to aid veterans with their claims, 

we believe our own work at DAV will be compromised and made much more expensive once private lawyers enter in. How such an inevitably contentious new direction 

will actually help sick and disabled veterans receive their just compensation, pension and survivor benefits, we cannot foretell, but we know it will not be easy. We 

ask the Committee to take legislative action to repeal this measure at the earliest 

date possible. 

Mr. Chairman, thank you for inviting DAV and other member organizations of the 

Independent Budget to testify before the Senate today. I will be happy to answer 

any of your or other Members’ questions concerning these issues.

Chairman AKAKA. Thank you very much, Mr. Violante. 

Mr. Greineder? 

STATEMENT OF DAVID G. GREINEDER, DEPUTY NATIONAL 

LEGISLATIVE DIRECTOR, AMVETS 

Mr. GREINEDER. Thank you. Mr. Chairman, Mr. Craig, Members 

of the Committee, thank you for inviting AMVETS to this important hearing on VA’s budget request for Fiscal Year 2008. As a coauthor of the Independent Budget, AMVETS is pleased to give you 

our best estimates on the resources necessary to carry out the responsibilities of the National Cemetery Administration. 

The Administration requests approximately $167 million in discretionary funding for operations and maintenance of the NCA, 

$167.4 million for major construction, $24.4 million for minor construction, as well as $32 million for the State Cemetery Grants program. The members of the Independent Budget recommend Congress provide $218.3 million for the operational requirements of 

NCA, a figure that includes our National Shrine Initiative. In total, 

our funding recommendation represents a $51.5 million increase 

over the Administration’s request. 

The national cemetery system continues to be seriously challenged. Adequate resources and developed acreage must keep pace 

with the increasing workload. The NCA expects to perform nearly 

105,000 interments in 2008, an 8.4 percent increase since 2006. By 

2009, annual interments are expected to reach 117,000. 

Congress also needs to address the need for gravesite renovation 

and upkeep. Though there has been noteworthy progress made over 

the years, the NCA is still struggling to remove decades of blemishes and scars from military burial grounds across the country. 

Congress has approved funding in recent years aimed to restore the 

86

appearance of national cemeteries, but, frankly, more needs to be 

done. Therefore, we recommend Congress establish a 5-year, $250 

million National Shrine Initiative to restore and improve the condition and character of NCA cemeteries. We recommend $50 million 

in Fiscal Year 2008 to begin this important initiative. By enacting 

a 5-year program with dedicated funds and an ambitious schedule, 

the national cemetery system can fully serve all veterans and their 

families with the utmost dignity, respect, and compassion. 

For funding the State Cemetery Grants Program, the Independent Budget recommends $37 million for Fiscal Year 2008. The 

State Cemetery Grants Program is an important component of the 

NCA. It has greatly assisted States to increase burial services to 

veterans, especially those living in less densely populated areas not 

currently served by a national veterans cemetery. 

Many States have difficulty meeting the ‘‘170,000 veterans within 75 miles’’ requirement from national cemeteries, which is why 

the State grant program is so important. Since 1978, the VA has 

more than doubled the acreage available and accommodated more 

than a 100 percent increase in their burials through these grants. 

The Independent Budget also strongly recommends that Congress review a series of burial benefits that have eroded in value 

over the years. While these benefits were never intended to cover 

the full cost of burial, they now pay for just 6 percent of what they 

covered in 1973. Our recommended increase is modest and will restore the allowance to its original proportion of burial expense, 

about 22 percent, and will tell veterans that their sacrifice is given 

the appreciation that is so well deserved. 

The NCA honors veterans with a final resting place that commemorates their service to this Nation. More than 2.7 million soldiers who died in every war and conflict are honored by burial in 

a national cemetery. Our national cemeteries are more than a final 

resting place. They are hallowed ground to those who died in our 

defense and a memorial to those who served. 

Mr. Chairman, this concludes my statement. Thank you again. 

[The prepared statement of Mr. Greineder follows:]

PREPARED STATEMENT OF DAVID G. GREINEDER,

DEPUTY NATIONAL LEGISLATIVE DIRECTOR, AMVETS 

Chairman Akaka, Ranking Member Craig, and Members of the Committee: 

AMVETS is honored to join our fellow Veterans Service Organizations and partners at this important hearing on the Department of Veterans Affairs budget request for Fiscal Year 2008. My name is David G. Greineder, Deputy National Legislative Director of AMVETS, and I am pleased to provide you with our best estimates 

on the resources necessary to carry out a responsible budget for VA. 

AMVETS testifies before you as a co-author of The Independent Budget. This is 

the 21st year AMVETS, the Disabled American Veterans, the Paralyzed Veterans 

of America, and the Veterans of Foreign Wars have pooled their resources together 

to produce a unique document, one that has stood the test of time. 

The IB, as it has come to be called, is our blueprint for building the kind of programs veterans deserve. Indeed, we are proud that over 60 veteran, military, and 

medical service organizations endorse these recommendations. In whole, these recommendations provide decisionmakers with a rational, rigorous, and sound review 

of the budget required to support authorized programs for our Nation’s veterans. 

In developing this document, we believe in certain guiding principles. Veterans 

should not have to wait for benefits to which they are entitled. Veterans must be 

ensured access to high-quality medical care. Specialized care must remain the focus 

of VA. Veterans must be guaranteed timely access to the full continuum of health 

87

care services, including long-term care. And, veterans must be assured burial in a 

state or national cemetery in every state. 

Today, I will specifically address the National Cemetery Administration (NCA); 

however, I would like to briefly comment on the Administration’s budget request 

coming out of the Office of Management and Budget (OMB) just 3 days ago. 

Everyone knows that the VA healthcare system is the best in the country, and 

responsible for great advances in medical science. VHA is uniquely qualified to care 

for veterans’ needs because of its highly specialized experience in treating serviceconnected ailments. The delivery care system can provide a wide array of specialized 

services to veterans like those with spinal cord injuries and blindness. This type of 

care is very expensive and would be almost impossible for veterans to obtain outside 

of VA. 

Because veterans depend so much on VA and its services, AMVETS believes it 

is absolutely critical that the VA healthcare system be fully funded. It is important 

our Nation keep its promise to care for the veterans who made so many sacrifices 

to ensure the freedom of so many. With the expected increase in the number of veterans, a need to increase VA health care spending should be an immediate priority 

this year. We must remain insistent about funding the needs of the system, and the 

recruitment and retention of vital health care professionals, especially registered 

nurses. Chronic under funding has led to rationing of care through reduced services, 

lengthy delays in appointments, higher copayments and, in too many cases, sick and 

disabled veterans being turned away from treatment. 

Looking at the Administration’s budget released last Monday, The Independent 

Budget recommends Congress provide $36.3 billion to fund VA medical care for Fiscal Year 2008. We ask you to recognize that the VA healthcare system can only 

bring quality health care if it receives adequate and timely funding. 

The best way to ensure VA has access to adequate and timely resources is 

through mandatory, or assured, funding. I would like to clearly state that AMVETS 

along with its Independent Budget partners strongly supports shifting VA 

healthcare funding from discretionary funding to mandatory. We recommend this 

action because the current discretionary system is not working. Moving to mandatory funding would give certainty to healthcare services. VA facilities would not 

have to deal with the uncertainty of discretionary funding, which has been inconsistent and inadequate for far too long. Most importantly, mandatory funding would 

provide a comprehensive and permanent solution to the current funding problem. 

THE NATIONAL CEMETERY ADMINISTRATION

The Independent Budget acknowledges the dedicated and committed NCA staff 

who continue to provide the highest quality of service to veterans and their families 

despite funding shortfalls, aging equipment, and increasing workload. The devoted 

staff provides aid and comfort to hurting veterans’ families in a very difficult time, 

and we thank them for their consolation. 

The NCA currently maintains more than 2.7 million gravesites at 124 national 

cemeteries in 39 states and Puerto Rico. At the end of 2007, 66 cemeteries will be 

open to all interments; 16 will accept only cremated remains and family members 

of those already interred; and 43 will only perform interments of family members 

in the same gravesite as a previously deceased family member. 

VA estimates that about 27 million veterans are alive today. They include veterans from World War I, World War II, the Korean War, the Vietnam War, the Gulf 

War, the conflicts in Afghanistan and Iraq, and the Global War on Terrorism, as 

well as peacetime veterans. With the anticipated opening of the new national cemeteries, annual interments are projected to increase from approximately 102,000 in 

2006 to 117,000 in 2009. It is expected that one in every six of these veterans will 

request burial in a national cemetery. 

The NCA is responsible for five primary missions: 

(1) To inter, upon request, the remains of eligible veterans and family members 

and to permanently maintain gravesites; 

(2) To mark graves of eligible persons in national, state, or private cemeteries 

upon appropriate application; 

(3) To administer the state grant program in the establishment, expansion, or improvement of state veterans cemeteries; 

(4) To award a Presidential certificate and furnish a United States flag to deceased veterans; and 

(5) to maintain national cemeteries as national shrines sacred to the honor and 

memory of those interred or memorialized. 

88

NCA Budget Request 

The Administration requests $166.8 million for the NCA for Fiscal Year 2008. The 

members of The Independent Budget recommend that Congress provide $218.3 million and 30 FTE for the operational requirements of NCA, the National Shrine Initiative, and the backlog of repairs. We recommend your support for a budget consistent with NCA’s growing demands and in concert with the respect due every man 

and woman who wears the uniform of the United States Armed Forces. 

The national cemetery system continues to be seriously challenged. Though there 

has been progress made over the years, the NCA is still struggling to remove decades of blemishes and scars from military burial grounds across the country. Visitors to many national cemeteries are likely to encounter sunken graves, misaligned 

and dirty grave markers, deteriorating roads, spotty turf and other patches of decay 

that have been accumulating for decades. If the NCA is to continue its commitment 

to ensure national cemeteries remain dignified and respectful settings that honor 

deceased veterans and give evidence of the Nation’s gratitude for their military service, there must be a comprehensive effort to greatly improve the condition, function, 

and appearance of all our national cemeteries. 

In accordance with ‘‘An Independent Study on Improvements to Veterans Cemeteries,’’ which was submitted to Congress in 2002, The Independent Budget again 

recommends Congress establish a 5-year, $250 million ‘‘National Shrine Initiative’’ 

to restore and improve the condition and character of NCA cemeteries as part of 

the FY 2008 operations budget. 

It should be noted that the NCA has done an outstanding job thus far in improving the appearance of our national cemeteries, but we have a long way to go to get 

us where we need to be. By enacting a 5-year program with dedicated funds and 

an ambitious schedule, the national cemetery system can fully serve all veterans 

and their families with the utmost dignity, respect, and compassion. 

THE STATE CEMETERY GRANTS PROGRAM

The State Cemetery Grants Program (SCGP) complements the NCA mission to establish gravesites for veterans in those areas where the NCA cannot fully respond 

to the burial needs of veterans. Several incentives are in place to assist states in 

this effort. For example, the NCA can provide up to 100 percent of the development 

cost for an approved cemetery project, including design, construction, and administration. In addition, new equipment, such as mowers and backhoes, can be provided 

for new cemeteries. Since 1978, the Department of Veterans Affairs has more than 

doubled acreage available and accommodated more than a 100 percent increase in 

burials through this program. 

To help provide reasonable access to burial options for veterans and their eligible 

family members, The Independent Budget recommends $37 million for the SCGP for 

Fiscal Year 2008. The availability of this funding will help states establish, expand, 

and improve state-owned veterans’ cemeteries. 

Many states have difficulties meeting the requirements needed to build a national 

cemetery in their respective state. The large land areas and spread out population 

in these areas make it difficult to meet the ‘‘170,000 veterans within 75 miles’’ national veterans cemetery requirement. Recognizing these challenges, VA has implemented several incentives to assist states in establishing a veterans cemetery. For 

example, the NCA can provide up to 100 percent of the development cost for an approved cemetery project, including design, construction, and administration. 

Burial Benefits 

There has been serious erosion in the value of the burial allowance benefits over 

the years. While these benefits were never intended to cover the full costs of burial, 

they now pay for only a small fraction of what they covered in 1973, when the Federal Government first started paying burial benefits for our veterans. 

In 2001, the plot allowance was increased for the first time in more than 28 years, 

to $300 from $150, which covers approximately 6 percent of funeral costs. The Independent Budget recommends increasing the plot allowance from $300 to $745, an 

amount proportionally equal to the benefit paid in 1973. 

In the 108th Congress, the burial allowance for service-connected deaths was increased from $500 to $2,000. Prior to this adjustment, the allowance had been untouched since 1988. The Independent Budget recommends increasing the serviceconnected burial benefit from $2,000 to $4,100, bringing it back up to its original 

proportionate level of burial costs. 

The non-service-connected burial allowance was last adjusted in 1978, and also 

covers just 6 percent of funeral costs. The Independent Budget recommends increasing the non-service-connected burial benefit from $300 to $1,270. 

89

The NCA honors veterans with a final resting place that commemorates their 

service to this Nation. More than 2.7 million soldiers who died in every war and 

conflict are honored by burial in a VA national cemetery. Each Memorial Day and 

Veterans Day we honor the last full measure of devotion they gave for this country. 

Our national cemeteries are more than the final resting place of honor for our veterans, they are hallowed ground to those who died in our defense, and a memorial 

to those who survived. 

Mr. Chairman, this concludes my testimony. I thank you again for the privilege 

to present our views, and I would be pleased to answer any questions you might 

have.

Chairman AKAKA. Thank you very much, Mr. Greineder. 

And now Mr. Cullinan. 

STATEMENT OF DENNIS M. CULLINAN, DIRECTOR, NATIONAL 

LEGISLATIVE SERVICE, VETERANS OF FOREIGN WARS OF 

THE UNITED STATES 

Mr. CULLINAN. Thank you very much, Chairman Akaka, Senator 

Craig, distinguished Members of the Committee. It is certainly a 

pleasure to be here today on behalf of the men and women of the 

Veterans of Foreign Wars and the constituent members of the Independent Budget to discuss our recommendations on construction. 

The Department of Veterans Affairs construction budget for the 

past few years has been dominated by the CARES process. 

Throughout CARES, the IBVSOs were greatly concerned with the 

underfunding of the construction budget. Congress and the Administration did devote many resources to VA’s infrastructure, preferring to wait for final results of CARES—sorry—I meant to say, did 

not devote any resources to VA’s infrastructure. 

In passing Independent Budgets, we warned against this, pointing out that there were a number of legitimate construction needs 

identified by local managers of VA facilities. A number of facilities 

were authorized, but funding was never appropriated with the ongoing CARES being used as the primary excuse. Within this context, and while generally appreciative of a good budget recommendation by the Administration, we must point out that the 

Fiscal Year 2008 budget for the construction portion is far from 

adequate. 

Chairman Akaka, you have our written statement. I will just 

now highlight some of our major concerns in this context. 

In putting our construction recommendations together, we have 

our own in-house expertise, but we far from rely upon that alone. 

We also consult people outside of the VSO community. We look at 

things like the Pricewaterhouse study. The Presidential Task Force 

on VA has been a terrific source of information with respect to coming up with our calculations, our percentile adjustments on VA construction. 

When we are looking at the shape of VA facilities, we look at 

VA’s own Facility Condition Assessment document as best we can 

lay our hands on it to come up with projections on that. 

We can tell you that Pricewaterhouse among others have pointed 

out that VA does not recapitalize its physical plant quickly enough. 

The Presidential Task Force, for example, recommends a recapitalization rate of 5 to 8 percent. I believe that at this time VA only 

recapitalizes—keeps up its infrastructure at a rate of about half of 

a percent, which would mean an average VA facility would have to 

last about 155 years. 

90

For the medical portion of the construction budget, the IB recommends a 4 percent recapitalization rate. Well, that is about $1.4 

billion. To emphasize this, we point to the fact that in 2004, thenSecretary Principi said before the House Veterans’ Affairs Committee that major construction for VA under CARES would have to 

be at $1 billion a year for 5 years to keep up. In 2004, the VA got 

about $750 million for this purpose, and in subsequent years it was 

only about $.5 billion a year. So it is far below what was needed. 

With respect to major construction for medical care, this year the 

President’s budget only asks for about $5.11 million for medical 

care, and it is far below what we are asking for, as I just mentioned the amount of $1.4 billion, which is actually a rather modest 

request. 

Lastly, we would point to the fact that the 2007 capital plan, 

that would only fund 8 of the partially funded projects out of the 

top list of 20. Furthermore, in the 2008 capital plan, again, the 

President’s budget recommendation is only $511 million. This 

would only fund 6 projects of the 12 partially funded that, as I just 

mentioned, are receiving some funding. Six others are not funded 

at all. And in that Capital Asset Plan, with respect to scored 

projects, those projects which have some sort of priority of attention, none of 27 is funded. So, in short, there is no funding for new 

projects in the 2008 budget. We find that to be highly problematic. 

I will touch briefly on minor construction. The Capital Plan illuminates some 300 projects. The IB calls for $450 million to address 

these—again, a modest request. We point to the fact that the Administration’s budget for this purpose would only be about $180 

million, again, for VHA. 

Another point here, in the initial planning document of CARES, 

it was there indicated that VA should have $2 billion under minor 

construction alone. Again, it is clear that we are falling behind in 

this capacity. 

Mr. Blake earlier talked about non-recurring maintenance. 

Again, this is a very serious concern. Industry standard, this 

should occur at about a rate of 2 to 4 percent per year or $800 million to $1.6 billion. The VA’s own Capital Asset Management Plan 

indicates $800 million to $1.6 billion a year in keeping with that 

calculation. Again, the Administration’s budget only calls for about 

$573 million, falling far short. 

There are other things I would like to touch on, Mr. Chairman, 

but I see the red light blinking. Thank you very much. 

[The prepared statement of Mr. Cullinan follows:]

STATEMENT OF DENNIS M. CULLINAN, DIRECTOR, NATIONAL LEGISLATIVE SERVICE, 

VETERANS OF FOREIGN WARS OF THE UNITED STATES

On behalf of the 2.4 million men and women of the Veterans of Foreign Wars of 

the United States (VFW), this Nation’s largest combat veterans’ organization, I 

would like to thank you for the opportunity to testify today on the Fiscal Year 2008 

budget for the Department of Veterans Affairs (VA). 

The VA construction budget has, for the past few years, been dominated by the 

Capital Asset Realignment for Enhanced Services (CARES) process. 

CARES is a system-wide, data-driven assessment of VA’s capital infrastructure. 

It aimed to identify the needs of veterans to aid in the planning of future and realignment of current VA facilities to most efficiently meet those needs. It was not 

just a one-time evaluation but also the creation of a process and framework to continue to determine veterans’ future requirements. 

91

Throughout the entire CARES process, The Independent Budget Veterans Service 

Organizations (IBVSOs) were highly supportive, as long as VA emphasized the 

‘‘ES’’—enhanced services—portion of the acronym.

• 2001—CARES pilot study in Network 12 (Chicago, Illinois; Wisconsin; and 

Upper Michigan) completed. 

• 2002—Phase II of CARES began in all other networks of VA individually, to be 

compiled in the Draft National CARES Plan. 

• 2003—August: Draft National CARES Plan submitted to CARES Commission 

to review and gather public input. 

• 2004—February: VA Secretary receives CARES Commission recommendations. 

• 2004—May: VA Secretary announces his decision on CARES, but calls for additional ‘‘CARES Business Plan Studies’’ at 18 sites throughout the country.

These CARES Business Plan Studies are available on VA’s CARES Web site, 

www.va.gov/cares. As of December 2006, only ten of these studies have been completed, despite VA’s stated June 2006 deadline. The IBVSOs look forward to the 

final results so that implementation of these important plans can go forward. 

The IBVSOs believe that all decisions on CARES should be consistent with the 

CARES Decision document and its established priorities, or with the findings of the 

CARES Review Commission that largely confirmed those priorities. Proposed 

changes or deviation from the plan should undergo the same rigorous data validation as the original projects. 

CARES was intended to be an apolitical, data-driven process that looked out for 

the best interest of veterans throughout the entire system. We are certainly pleased 

that the Secretary and Members of Congress are interested in the future of VA capital facilities, but we urge all involved to maintain consistency with the apolitical 

process that, as agreed to by all parties—stakeholders included—would provide the 

best way to determine future VA infrastructure needs to sufficiently care for all veterans. This was the hallmark of the CARES plan. 

Throughout the CARES process, the IBVSOs were greatly concerned with the 

underfunding of the construction budget. Congress and the Administration did not 

devote many resources to VA’s infrastructure, preferring to wait for the final results 

of CARES. In past Independent Budgets we warned against this, pointing out that 

there were a number of legitimate construction needs identified by the local manager of VA facilities. A number of facilities were authorized, including House passage of the ‘‘Veterans Hospital Emergency Repair Act,’’ but funding was never appropriated, with the ongoing CARES review being used as the primary excuse. 

At the time, the IBVSOs argued that a de facto moratorium on construction was 

unnecessary because of our conviction that a number of these projects needed to go 

forward and that they would be fully justified in any future plans produced through 

CARES. Despite this reasonable argument, funding never came, and VA lost 

progress on hundreds of millions of dollars that otherwise would have been invested 

to meet the system’s critical infrastructure needs. 

The IBVSOs continue to believe that this deferral of all major VA construction 

projects was poor policy. In the five-plus years the process took, construction and 

maintenance improvements lagged far beyond what the system truly needed. With 

CARES nearly complete, funding has not yet been proposed by the Administration 

nor approved by Congress to address the very large project backlog that has grown. 

We note this year that both Veterans’ Committees have considered legislation 

that would authorize resumption of VA major medical facility construction projects, 

but with the breakdown of the appropriations process, these projects died with the 

end of the 109th Congress. 

In July 2004, VA Secretary Anthony Principi testified before the Health Subcommittee of the House Committee on Veterans’ Affairs. In his testimony, he noted 

that CARES ‘‘reflects a need for additional investments of approximately $1 billion 

per year for the next 5 years to modernize VA’s medical infrastructure and enhance 

veterans’ access to care.’’ Since that statement, however, the amount actually appropriated by Congress for VA major medical facility construction has fallen far short 

of that goal; in Fiscal Year 2007, the Administration recommended a paltry $399 

million for major construction. 

After that 5-year de facto moratorium and without additional funding coming 

forth, VA facilities have an even greater need than they did at the start of the 

CARES process. Accordingly, we urge the Administration and the Congress to live 

up to the Secretary’s words by making a steady investment in VA’s capital infrastructure to bring the system up to date with the needs of 21st century veterans. 

For major construction, the IBVSOs recommend $1.602 billion in funding. This includes funding for the projects on VA’s priority list, advanced planning, and for conVerDate 0ct 09 2002 15:10 May 29, 2007 Jkt 000000 PO 00000 Frm 00095 Fmt 6633 Sfmt 6621 H:\RD41451\DOCS\33255.TXT SENVETS PsN: ROWENA
92

struction costs for a number of new national cemeteries in accordance with the NCA 

strategic plan.

Category Funding (dollars in 

thousands) 

CARES ............................................................................................................................................................... 1,400,000

Master Planning ............................................................................................................................................... 20,000

Advanced Planning .......................................................................................................................................... 45,000

Asbestos ........................................................................................................................................................... 5,000

Claims Analyses ............................................................................................................................................... 3,000

Judgment Fund ................................................................................................................................................. 2,000

Hazardous Waste .............................................................................................................................................. 2,000

National Cemetery Administration ................................................................................................................... 95,000

Staff Offices ..................................................................................................................................................... 5,000

Historic Preservation ........................................................................................................................................ 25,000

Total ........................................................................................................................................................ $1,602,000

For minor construction, the IBVSOs recommend a total of $541 million, the bulk 

of which will go toward the more than 100 minor construction projects identified by 

VA in its 5–year capital plan in Fiscal Year 2008.

Category Funding (dollars in 

thousands) 

CARES/Non-CARES ........................................................................................................................................... 450,000

National Cemetery Administration ................................................................................................................... 40,000

Veterans Benefits Administration .................................................................................................................... 35,000

Staff ................................................................................................................................................................. 6,000

Advanced Planning .......................................................................................................................................... 10,000

Total ........................................................................................................................................................ $541,000

Department of Veterans Affairs (VA) does not have adequate provisions to protect 

against deterioration and declining capital asset value. 

The last decade of underfunded construction budgets has led to a reduction in the 

recapitalization of VA’s facilities. Recapitalization is necessary to protect the value 

of VA’s capital assets by renewing the physical infrastructure to ensure safe and 

fully functional facilities. Failure to adequately invest in the system will result in 

its deterioration, creating even greater costs down the road. 

As in past years, we continue to cite the Final Report of the President’s Task 

Force to Improve Health Care Delivery for our Nation’s veterans (PTF). The PTF 

noted that in the period from 1996–2001, VA’s recapitalization rate was 0.64 percent, which corresponds to an assumed building life of 155 years. When maintenance and restoration are factored into VA’s major construction budget, VA annually invests less than 2 percent of plant replacement value in the system. The PTF 

observed that a minimum of 5 to 8 percent per year is necessary to maintain a 

healthy infrastructure and that failure to adequately fund could lead to unsafe, dysfunctional settings. 

Congress and the Administration must ensure that there are adequate funds for 

major and minor construction so that VA can properly reinvest in its capital assets 

to protect their value and ensure that health care can be provided in safe and functional facilities long into the future. 

The deterioration of many Department of Veterans Affairs (VA) properties requires 

increased spending on nonrecurring maintenance. 

A Pricewaterhouse study looked at VA facilities management and recommended 

that VA spend at least 2 to 4 percent of its plant replacement value on upkeep. Nonrecurring maintenance (NRM) consists of small projects that are essential to the 

proper maintenance and to the preservation of the life span of VA’s facilities. ExamVerDate 0ct 09 2002 15:10 May 29, 2007 Jkt 000000 PO 00000 Frm 00096 Fmt 6633 Sfmt 6621 H:\RD41451\DOCS\33255.TXT SENVETS PsN: ROWENA
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ples of these projects include maintenance to roofs, replacement of windows, and upgrades to the mechanical or electrical systems. 

Each year, VA grades each medical center, creating a facility condition assessment (FCA). These FCAs give a letter grade to various systems at each facility and 

assign a cost estimate associated with repairs or replacement. The latest FCAs have 

identified $4.9 billion worth of necessary repairs in projects with a letter grade of 

‘‘D’’ or ‘‘F.’’ F’s must be taken care of immediately, and D’s are in need of serious 

repairs or represent pieces of equipment reaching the end of their usable life. Most 

of these projects would be reparable using NRM funds. 

Another concern with NRM is with how it is allocated. NRM is under the Medical 

Care account and is distributed to various VISNs through the Veterans Equitable 

Resource Allocation (VERA) process. While this does move the money toward the 

areas with the highest demand for health care, it tends to move money away from 

facilities with the oldest capital structures, which generally need the most maintenance. It also could increase the tendency of some facilities to use maintenance 

money to address shortfalls in medical care funding. 

VA should spend $1.6 billion on NRM to make up for the lack of proper funding 

in previous years and to keep VA on the right track with maintenance for the future. 

VA must also resist the temptation to dip into NRM funding for health-care 

needs, as this could lead to far greater expenses down the road. 

Veterans and staff continue to occupy buildings known to be at extremely high risk 

because of seismic deficiencies. 

The Independent Budget Veterans Service Organizations (IBVSOs) continue to be 

concerned with the seismic safety of the Department of Veterans Affairs (VA) facilities. The July 2006 Seismic Design Requirements report noted the existence of 73 

critical VA facilities that, based on FEMA definitions, are at a ‘‘moderately high’’ 

or greater risk of seismic incident. Twenty-four of these have been deemed ‘‘very 

high’’ risk, the highest standard. 

To address the safety of veterans and employees, VA includes seismic corrections 

in its annual list of projects to Congress. In conjunction with the Capital Asset Realignment for Enhanced Services process, progress is being made on eight of these 

facilities. More is needed, and, accordingly, funding will need to increase. 

For efficiency, most seismic correction projects should also include patient care enhancements as part of their total scope. Seismic correction typically includes lengthy 

and widespread disruption to hospital operations; it would be prudent to make medical care improvements at the same time to minimize disruptions in the future. 

While this approach is the most practical for the delivery of health care and services 

as well as for cost-effectiveness, it also results in higher upfront project costs, which 

would require an increase in the construction budget. 

Congress must appropriate adequate construction funding to correct these critical 

seismic deficiencies. 

VA should schedule facility improvement projects concurrently with seismic corrections. 

Each Department of Veterans Affairs (VA) medical center needs to develop a detailed 

master plan. 

This year’s construction budget should include at least $20 million to fund architectural master plans. Without these plans, the Capital Asset Realignment for Enhanced Services (CARES) medical benefits will be jeopardized by hasty and shortsighted construction planning. 

The Independent Budget Veterans Service Organizations believe that each VA 

medical center should develop a facility master plan to serve as a clear roadmap 

to where the facility is going in the future. It should be an inclusive document that 

includes multiple projects for the future in a cohesive strategy. 

In many cases, VA plans construction in a reactive manner. Projects are funded 

first and then fitted onto the site. Each project is planned individually and not necessarily with respect to other ongoing projects or ones planned for the future. It is 

essential that each medical center has a plan that looks at the big picture to efficiently utilize space and funding. If all projects are not simultaneously planned, for 

example, the first project may be built in the best site for the second project. Master 

plans would prevent short-sighted construction that restricts, rather than expands, 

future options. 

Every new project in the master plan is a step in achieving the long-range CARES 

objectives. These plans must be developed so that all future projects can be 

prioritized, coordinated and phased. They are essential to efficiently use resources, 

but also to minimize disruption to VA patients and employees. Medical priorities, 

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for example, must be adjusted for construction sequencing. If infrastructure changes 

must precede new construction, master plans will identify this so that schedules and 

budgets can be adjusted. Careful phasing is essential to avoid disrupting the delivery of medical care, and the correct planning of such will ensure that cost estimates 

of this phased-construction approach will be more accurate. 

There may be cases, too, where master planning will challenge the original 

CARES decisions, whether due to changing demand, unidentified need, or other 

cause. If CARES, for example, calls for the use of renovated space for a relocated 

program and a more comprehensive examination as part of a master plan later indicates that the site is impractical, different options should be considered. Master 

plans will help to correct and update invalid planning assumptions. 

VA must be mindful that some CARES plans involve projects constructed at more 

than one medical center. Master plans, as a result, most coordinate the priorities 

of both medical centers. Construction of a new SCI facility, for example, might be 

a high priority for the ‘‘gaining’’ facility, but a lower priority for the ‘‘donor’’ facility. 

It may be best to fund and plan the two actions together, even though they are split 

between two different facilities. 

Another essential role of master planning is its use to account for three critical 

programs that VA left out of the initial CARES process: long-term care, severe mental illness, and domiciliary care. Because these were omitted, there is a strong need 

for a comprehensive plan, and a full facility master plan will help serve as a blueprint for each facility’s needs in these essential areas. 

VA must ensure that each medical center develops and continues to work on longrange master plans to validate strategic planning decisions, prepare accurate budgets, and implement efficient construction that minimizes wasted expenses and disruptions to patient care. 

Congress must appropriate $20 million to allow each VA medical facility to develop architectural master plans to serve as roadmaps for the future. 

Each facility master plan should address long-term care, including plans for those 

with severe mental illness, and domiciliary care programs, which were omitted from 

the CARES process. 

VA must develop a format for these master plans so that there is standardization 

throughout the system, even though planning work will be performed by local contractors in each Veterans Integrated Service Network. 

The Department of Veterans Affairs (VA) must develop a strategic plan for the infrastructure needs of these important programs. 

The initial Capital Asset Realignment for Enhanced Services (CARES) plan did 

not take long-term care or the mental health considerations of veterans into account 

when making recommendations. We were pleased that the CARES Review Commission recognized the need for proper accounting of these critical components of care 

in VA’s future infrastructure planning. However, we continue to await VA’s development of a long-term care strategic plan to meet the needs of aging veterans. The 

Commission recommended that VA ‘‘develop a strategic plan for long-term care that 

includes policies and strategies for the delivery of care in domiciliary, residential 

treatment facilities and nursing homes, and for older seriously mentally ill veterans.’’

Moreover, the Commission recommended that the plan include strategies for 

maximizing the use of state veterans’ homes, locating domiciliary units as close to 

patient populations as feasible and identifying freestanding nursing homes as an acceptable care model. In absence of that plan, VA will be unable to determine its future capital investment strategy for long-term care. 

VA must take a proactive approach to ensure that the infrastructure and support networks needed by veterans will be there for them in the future. 

We also concur with the CARES Commission’s recommendations that VA take action to ensure consistent availability of mental health services across the system to 

include mental health care at community-based clinics along with the appropriate 

infrastructure to match demand for these specialized services. This is important in 

light of the growing demand for these types of services, especially among those returning from overseas in the wars in Iraq and Afghanistan. 

VA must develop a long-term care strategic plan to account for the needs of aging 

veterans now and into the future. This should include care options for older veterans with serious mental illnesses. 

VA must also develop plans to provide for the infrastructure needs associated 

with mental health care services, especially with the unprecedented current need for 

these services, and the likely tremendous long-term need of our returning 

servicemembers. 

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The Department of Veterans Affairs (VA) must not use empty space inappropriately. 

Studies have suggested that the VA medical system has extensive amounts of 

empty space that can be reused for medical services. It has also been suggested that 

unused space at one medical center may help address a deficiency that exists at another location. Although the space inventories are accurate, the assumption regarding the feasibility of using this space is not. 

Medical facility planning is complex. It requires intricate design relationships for 

function, but also because of the demanding requirements of certain types of medical equipment. Because of this, medical facility space is rarely interchangeable, and 

if it is, it is usually at a prohibitive cost. Unoccupied rooms on the eighth floor, for 

example, cannot be used to offset a deficiency of space in the second floor surgery 

ward. Medical space has a very critical need for inter- and intradepartmental 

adjacencies that must be maintained for efficient and hygienic patient care. 

When a department expands or moves, these demands create a domino effect of 

everything around it, and these secondary impacts greatly increase construction expense and they can disrupt patient care. 

Some features of a medical facility are permanent. Floor-to-floor heights, column 

spacing, light, and structural floor loading cannot be altered. Different aspects of 

medical care have different requirements based upon these permanent characteristics. Laboratory or clinical spacing cannot be interchanged with ward space because 

of the needs of different column spacing and perimeter configuration. Patient wards 

require access to natural light and column grids that are compatible with room-style 

layouts. Labs should have long structural bays and function best without windows. 

When renovating empty space, if the area is not suited to its planned purpose, it 

will create unnecessary expenses and be much less efficient. 

Renovating old space rather than constructing new space creates only a marginal 

cost savings. Renovations of a specific space typically cost 85 percent of what a similar, new space would. When you factor in the aforementioned domino or secondary 

costs, the renovation can end up costing more and produce a less satisfactory result. 

Renovations are sometimes appropriate to achieve those critical functional 

adjacencies, but it is rarely economical. 

Many older VA medical centers that were rapidly built in the 1940s and 1950s 

to treat a growing veteran population are simply unable to be renovated for more 

modern needs. Most of these Bradley-style buildings were designed before the widespread use of air conditioning and the floor-to-floor heights are very low. Accordingly, it’s impossible to retrofit them for modern mechanical systems. They also 

have long, narrow wings radiating from a small central core, which is an inefficient 

way of laying out rooms for modern use. This central core, too, has only a few small 

elevator shafts, complicating the vertical distribution of modern services. 

Another important problem with this unused space is its location. Much of it is 

not located in a prime location; otherwise it would have been previously renovated 

or demolished for new construction. This space is typically located in outlying buildings or on upper floor levels and is unsuitable for modern use. 

VA should develop a plan for addressing its excess space in non-historic properties 

that are not suitable for medical or support functions due to their permanent characteristics or locations. 

The Department of Veterans Affairs (VA) must continue to develop and revise facility 

design guides for spinal cord injury/spinal cord disorders. 

With the largest health-care system in the U.S., VA has an advantage in its ability do develop, evaluate, and refine the design and operation of its many facilities. 

Every new clinic’s design can benefit from lessons learned from the construction and 

operation of previous clinics. VA also has the unique opportunity to learn from medical staff, engineers, and from its users—veterans and their families—as to what 

their needs are, allowing them to generate improvements to future designs. 

As part of this, VA provides design guides for certain types of facilities that provide care to veterans. These guides are rough tools used by the designer, clinician, 

staff, and management during the design process. These design guides, which are 

viewable on the Facilities Management Web page, cover a variety of types of care. 

These design guides, due to modernization of equipment and lessons learned at 

other facilities, should be revised regularly. Some of the design guides have not been 

updated in over a decade, despite the massive transition of the VA health-care system from an inpatient-based system. The Independent Budget Veterans Service Organizations (IBVSOs) understand that VA intends to regularly update these guides, 

and we would urge that increased funding be allocated to the Advanced Planning 

Fund to revise and update these essential guides. 

As in past years, the IBVSOs would note the need for guides for long-term care 

at spinal cord injury/dysfunction (SCI/D) centers. It is important that these guides 

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be separate from the guides that call for acute care as the needs of the two are dramatically different. 

These facilities must be less institutional in their character with a more homelike 

environment. Rooms and communal space should be designed to accommodate patients who will be living at these facilities for a long time. They must include simple 

ideas that would improve the daily life of these patients. Corridor length should be 

limited. They should include wide areas with windows to create tranquil places or 

areas to gather. Centers should have courtyard areas where the climate is temperate and indoor solariums where it is not. We believe that a complete guideline 

for these facilities would also include a discussion of design philosophies that emphasize the quality of life of these patients, and not just the specific criteria for each 

space. Because the type of care these patients need is unique, it is essential that 

this type of design guidance is available to contracted architects. 

VA must revise and update their design guides on a regular basis. 

VA should develop a long-term care design guide for SCI/D centers to accommodate the special needs of these unique patients. 

The Department of Veterans Affairs’ extensive inventory of historic structures must 

be protected and preserved. 

VA has an extensive inventory of historic structures, which highlight America’s 

long tradition of providing care to veterans. These buildings and facilities enhance 

our understanding of the lives of those who have worn the uniform, and who helped 

to develop this great Nation. Of the approximately 2,000 historic structures, many 

are neglected and deteriorate year after year because of a lack of funding. These 

structures should be stabilized, protected, and preserved because of their importance. 

Most of these facilities are not suitable for modern patient care, and, as a result, 

a preservation strategy was not included in the Capital Asset Realignment for Enhanced Services process. As a first step in addressing its responsibility to preserve 

and protect these buildings, VA must develop a comprehensive program for these 

historic properties. 

VA must make an inventory of these properties, classifying their physical condition and their potential for adaptive reuse. Medical centers, local governments, nonprofit organizations or private sector businesses could potentially find a use for 

these important structures that would preserve them into the future. 

The Independent Budget Veterans Service Organizations recommend that VA establish partnerships with other Federal departments, such as the Department of the 

Interior, and with private organizations, such as the National Trust for Historic 

Preservation. Their expertise would be helpful in creating this new program. 

As part of its adaptive reuse program, VA must ensure that facilities that are 

leased or sold are maintained properly for preservation’s sake. VA’s legal responsibilities could, for example, be addressed through easements on property elements, 

such as building exteriors or grounds. We would point to the partnership between 

the Department of the Army and the National Trust for Historic Preservation as 

an example of how VA could successfully manage its historic properties. 

P.L. 108–422, the Veterans Health Programs Improvement Act, authorized historic preservation as one of the uses of a new capital assets fund that receives funding from the sale or lease of VA property. We applaud its passage, and encourage 

its use. 

VA must begin a comprehensive program to preserve and protect its inventory of 

historic properties. 

We thank you for allowing us to testify today, and we would be happy to answer 

any questions that you or the Committee may have.

Chairman AKAKA. Thank you. Thank you very much for your testimony. 

Mr. Robertson? 

STATEMENT OF STEVE ROBERTSON, DIRECTOR, NATIONAL 

LEGISLATIVE COMMISSION, AMERICAN LEGION 

Mr. ROBERTSON. Thank you, Mr. Chairman, for the invitation. I 

would like to submit also for the record my official opening remarks, and instead I would like to talk more to the issues that 

were addressed at the initial panel. 

The comment about change, I have been here 19 years working 

in the legislative arena, and in that 19 years, there has been a lot 

97

of change. When I first came here, the biggest complaint I got from 

legionnaires around the country was the quality of care in the VA 

system. Now, people are trying to get into the system, and that is 

their biggest complaint. The quality of care is superb, and it is well 

documented. But a lot of the changes we have made have been 

good changes. Senator Craig, the only thing that I have not seen 

change is the way we go about funding the system, and that is 

driving me insane. I will give you an example: third-party collections. 

You know, when eligibility reform was passed in 1996, it was a 

good idea. It opened the system and made it easier to get the quality of care, the right place, the right type of care. It moved to an 

outpatient system where we were being proactive rather than reactive to treating patients, and we looked at ways to fund this. And 

at the time of eligibility reform, we really thought we were going 

to get Medicare reimbursements. We thought we would be reimbursed by all the insurance companies that participated. We even 

thought that the veterans that did not have insurance would be 

able to pay some toward the health care that they got. 

But, unfortunately, what we wound up with was a third-party 

collection goal that is very rarely achieved and is deducted from the 

appropriations. So, I mean, yes, we made a good change, but it 

turned around biting us. When you have a shortage in third-party 

collections, that is a real shortage. 

The issue of this enrollment fee—and I hear terms being 

switched around, calling it a ‘‘premium’’ or ‘‘enrollment’’ fee—what 

it is, is a user fee. You are paying to be able to use the system. 

And, unfortunately, there are service-connected veterans that are 

in Priority Groups 7 and 8, and at the rollout, I asked a specific 

question: ‘‘Would the 0 percent service-connected non-compensable 

be required to pay the enrollment fee?’’ And the answer was yes. 

And I would encourage the Committee to write that question and 

get it in black and white from the Secretary so we have it documented for the record. 

Medicare-eligible people that pay Part A, Part B, and Part D 

would also have to pay the Government once again to access the 

system that many of them were in the Greatest Generation that 

saved the country. And you are going to require them to pay this 

extra fee to the Government. 

Then you have got other people that have other insurance, 

TRICARE, TRICARE for Life, FEHBP. If they want to come to the 

VA, ‘‘the best health care system in the country,’’ you are going to 

tack on whatever amount of money that they are going to have to 

pay as an additional user fee for a system that they are entitled 

to have. 

You also have veterans that file a claim, a disability claim, and 

they are waiting on that claim to be decided. They may also be Priority Group 8s or 7s, and you are, again, asking them to pay while 

you are waiting for their claim to be finalized. 

Then you have recently separated veterans that did not serve in 

OEF/OIF. They may not even be able to enroll because they did not 

go overseas. 

The one thing I learned about the military is once you raise your 

hand and say, ‘‘I will serve this country,’’ from that point on you 

98

do not have another decision in the military except when you are 

ready to leave. So where you get assigned is not your choice. It is 

the Government’s choice. But yet these veterans, even though their 

honorable military service may have occurred in a missile field in 

North Dakota, they are being denied access to a system that they 

should have access to. 

The increased number of claims, Senator Craig, that you asked 

about, that is kind of a self-induced thing because now we have 

said that the only way you can enroll in the system is if you are 

service-connected or economically indigent. So it is an incentive for 

people to file a claim so that they can qualify to go to the system 

that was there for them from the very beginning. 

There is also a lot of people who are facing up to disabilities that 

they previously had ignored. They were doing the John Wayne 

thing, you know: ‘‘I fought the war. I won. I will go home now.’’ But 

now whatever medical condition is manifested to where they need 

to have access to the system. 

There are also court decisions that drive claims to be reprocessed 

through that had originally been denied, but because of medical research, whatever, those claims now are valid. So they were denied 

initial access, and that is why they are refiling their claim, because 

it is the right thing to do. 

Mr. Chairman, I got to tell you, you have got a tough act to follow in Senator Craig. In my 19 years, I don’t remember a Chairman holding as many hearings as Senator Craig held as Chairman. 

So you have got a tough act to follow. But you have got the staff 

and the people around you to make it work. 

Senator CRAIG. I am here to help him. There will be more. 

[Laughter.] 

Mr. ROBERTSON. Thank you, Mr. Chairman. That concludes my 

remarks. 

[The prepared statement of Mr. Robertson follows:]

PREPARED STATEMENT OF STEVE ROBERTSON, DIRECTOR,

NATIONAL LEGISLATIVE COMMISSION, AMERICAN LEGION

Mr. Chairman and Members of the Committee: 

I thank you for this opportunity to present the views of its 2.7 million members 

on the President’s Fiscal Year 2008 budget request. 

The President’s Fiscal Year 2008 budget request is designed to allow VA to address its three highest priorities: 

• Provide timely, high-quality health care to veterans who need VA the most—

those with service-connected disabilities, lower incomes, special health care needs, 

and service in Operation Iraqi Freedom and Operation Enduring Freedom. 

• Address the significant increase in claims for compensation and pension. 

• Ensure the burial needs of veterans and their eligible family members are met, 

and maintain veterans’ cemeteries as national shrines. 

The American Legion will continue to work with the Secretary, Congress and the 

entire veterans’ community to ensure that VA is indeed capable of providing the 

highest quality health care services ‘‘. . . for him who shall have borne the battle 

and for his widow and his orphan.’’ In 1996, Eligibility Reform was enacted to reopen the VA health care system to all eligible veterans within existing appropriations. Therefore, the challenge faced is to make sure no veteran in need of health 

care is ever turned away from a VA medical care facility as a result of budgetary 

shortfalls. 

There is no question that all service-connected disabled veterans and economically 

disadvantaged veterans must receive timely access to quality health care; however, 

their comrades-in-arms should also receive their earned benefit—enrollment in the 

VA health care delivery system. Rather than supporting legislative proposals designed to drive veterans from the world’s best health care delivery system, The 

99

American Legion will continue to advocate new revenue streams to allow any veteran to receive VA health care. 

Equally as important, The American Legion remains steadfastly in support of 

achieving timely adjudication of VA disability claims and pensions. As a nation at 

war, the expectation of an increase in the number of new disability claims is apparent. The newest generation of wartime veterans rightly deserve timely adjudication 

of their claims. Again, the Secretary, Congress and the veterans’ community must 

work toward meaningful solutions to the ever-increasing backlog of veterans’ disability claims. Increased funding and additional staffing is a solid first step toward 

change. 

The American Legion fully supports the goals of the National Cemetery Administration. The addition of new national cemeteries and state veterans’ cemeteries is 

critical in meeting the growing need. 

With that in mind, The American Legion offers the following budgetary recommendations for selected discretionary programs within the Department of Veterans Affairs for Fiscal Year 2008:

Program FY06 Funding President’s Request Legion’s Request 

Medical Care .................................................................................. $30.8 billion 36.6 billion 38.4 billion 

Medical Services ............................................................................ 22.1 billion 27.2 billion 29 billion 

Medical Administration .................................................................. 3.4 billion 3.4 billion 3.4 billion 

Medical Facilities ........................................................................... 3.3 billion 3.6 billion 3.6 billion 

Medical Care Collections ............................................................... (2 billion) (2.4 billion) 2.4 billion*

Medical and Prosthetics Research ................................................ 412 million 411 million 472 million 

Construction: 

Major .............................................................................................. 1.6 billion 727 million 1.3 billion 

Minor .............................................................................................. 233 million 233 million 279 million 

State Extended Care Facilities Grant Program ............................. 85 million 85 million 250 million 

State Veterans’ Cemetery Grants Program .................................... 32 million 32 million 42 million 

National Cemetery Administration ................................................. 149 million 166 million 178 million 

General Administration .................................................................. 294 million 274 million 300 million 

Information Technology .................................................................. 1.2 billion 1.9 billion 1.9 billion 

*Third-party reimbursements should supplement rather than offset discretionary funding. 

MEDICAL CARE

The Department of Veterans Affairs’ standing as the Nation’s leader in providing 

safe, high-quality health care in the health care industry (both public and private) 

is well documented. Now VA is also recognized internationally as the benchmark for 

health care services: 

• December 2004, RAND investigators found that VA outperforms all other sectors of the U.S. health care industry across a spectrum of 294 measures of quality 

in disease prevention and treatment; 

• In an article published in the Washington Monthly (Jan./Feb. 2005) ‘‘The Best 

Care Anywhere’’ featured the VA health care system; 

• In the prestigious Journal of the American Medical Association (May 18, 2005) 

noted that VA’s health care system has ‘‘. . . quickly emerged as a bright star in 

the constellation of safety practice, with system-wide implementation of safe practices, training programs and the establishment of four patient-safety research centers.’’; 

• The U.S. News and World Report (July 18, 2005) issue included a special report 

on the best hospitals in the country titled ‘‘Military Might—Today’s VA Hospitals 

Are Models of Top-Notch Care’’ highlighting the transformation of VA health care; 

• The Washington Post (Aug. 22, 2005) ran a front-page article titled ‘‘Revamped 

Veterans’ Health Care Now a Model’’ spotlights VA health care accomplishments; 

• In 2006, VA received the highly coveted and prestigious ‘‘Innovations in American Government’’ Award from Harvard’s Kennedy School of Government for its advanced electronic health records and performance measurement system; and 

• Recently, in January 2007, the medical journal Neurology wrote: ‘‘The VA has 

achieved remarkable improvements in patient care and health outcomes, and is a 

cost-effective and efficient organization.’’

Although VA is considered a national resource, the Secretary of Veterans Affairs 

continues to prohibit the enrollment of any new Priority Group 8 veterans, even if 

they are Medicare-eligible or have private insurance coverage. This prohibition is 

100

not based on their honorable military service, but rather on limited resources provided to the VA medical care system. For 2 years following receiving an honorable 

discharge, veterans from Operations Enduring Freedom and Iraqi Freedom are able 

to receive health care through VA, but many of their fellow veterans and those of 

other armed conflicts may very well be denied enrollment due to limited existing 

appropriations. This is truly a national tragedy. 

As the Global War on Terrorism continues, fiscal resources for VA will continue 

to be stretched to their limits and veterans will continue to go to their elected officials requesting additional money to sustain a viable VA capable of caring for all 

veterans, not just the most severely wounded or economically disadvantaged. VA is 

often the first experience veterans have with the Federal Government after leaving 

the military. This Nation’s veterans have never let this country down; Congress and 

VA should do its best to not let veterans down. 

The President’s budget request for Fiscal Year 2008 calls for Medical Care funding to be $36.6 billion, which is about $1.8 billion less than The American Legion’s 

recommendation of $38.4 billion. The major difference is the President’s budget requests continues to offset the discretionary appropriations by its Medical Care Collection Fund’s goal ($2.4 billion), whereas The American Legion considers this collection as a supplement since it is for the treatment of nonservice-connected medical 

conditions. 

Medical Services 

The President’s budget request assumes the enrollment of new Priority Group 8 

veterans will remain suspended. The American Legion strongly recommends reconsidering this ‘‘lockout’’ of eligible veterans, especially for those veterans who are 

Medicare-eligible, military retirees enrolled in TRICARE or TRICARE for Life, or 

have private health care coverage. Successful seamless transition from military 

service should not be penalized, but rather encouraged. This prohibition sends the 

wrong message to recently separated veterans. No eligible veteran should be ‘‘locked 

out’’ of the VA health care delivery system. 

The VA health care system enjoys a glowing reputation as the best health care 

delivery system in the country, so why ‘‘lock out’’ any eligible veteran, especially 

those that have the means to reimburse VA for services received? New revenue 

streams from third-party reimbursements and copayments can supplement the ‘‘existing appropriations,’’ but sound fiscal management initiatives are required to enhance third-party collections of reasonable charges. 

In Fiscal Year 2008, VA expects to treat 5.8 million patients (an increase of 2.4 

percent). According to the President’s budget request, VA will treat over 125,000 

more Priority 1–6 veterans in 2008 representing a 3.3 percent increase over the 

number of these priority veterans treated in 2007. Priority 7 and 8 veterans are projected to decrease by over 15,000 or 1.1 percent from 2007 to 2008. However, VA 

will provide medical care to non-veterans; this population is expected to increase by 

over 24,000 patients or 4.8 percent over this same time period. In 2008, VA anticipates treating 263,000 Operation Iraqi Freedom (OIF) and Operation Enduring 

Freedom (OEF) veterans, an increase of 54,000 patients, or 25.8 percent, over the 

2007 level. 

The American Legion supports the President’s mental health initiative to provide 

$360 million to deliver mental health and substance abuse care to eligible veterans 

in need of treatment of seriously mental illness, to include post-traumatic stress disorder. 

The American Legion remains opposed to the concept of charging an enrollment 

fee for an earned benefit. Although the President’s new proposal is a tiered approach targeted at Priority Groups 7 and 8 veterans currently enrolled, the proposal 

does not provide improved health care coverage, but rather creates a fiscal burden 

for the 1.4 million Priority Groups 7 and 8 patients. This initiative clearly projects 

further reductions in the number of Priority Groups 7 and 8 veterans leaving the 

system for other health care alternatives. This proposed vehicle for gleaning of veterans would apply to both service-connected disabled veterans as well as nonserviceconnected disabled veterans in Priority Groups 7 and 8. 

The American Legion also remains opposed to the President’s proposed increase 

in VA pharmacy copays from the current $8 to $15 for enrolled Priority Groups 7 

and 8 veterans. This proposal would nearly double current pharmacy costs to this 

select group of veterans. 

The American Legion recommends $29 billion for Medical Services, $1.8 billion 

more than the President’s budget request of $27.2 billion. 

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Medical Administration 

The President’s budget request of $3.4 billion is a slight increase in Fiscal Year 

2006 funding level. VA plans to transfer 3,721 full-time equivalents from Medical 

Administration to Information Technology in Fiscal Year 2008. The American Legion applauds the President recommending this level of funding. 

Medical Facilities 

The President’s budget request of $3.6 billion is about $234 million more than the 

Fiscal Year 2006 funding level. The American Legion agrees with this recommendation to maintain VA existing infrastructure of 4,900 buildings and over 15,700 acres. 

In Fiscal Year 2008, VA will transfer 5,689 full-time equivalents from Medical Facilities to Medical Services. It has been determined that the costs incurred for hospital food service workers, provisions and related supplies are for the direct care of 

patients which Medical Services is responsible for providing. 

Medical Care Collection Fund (MCCF) 

The Balanced Budget Act of 1997, Public Law 105–33, established the VA Medical 

Care Collections Fund (MCCF), requiring that amounts collected or recovered from 

third-party payers after June 30, 1997 be deposited into this fund. The MCCF is 

a depository for collections from third-party insurance, outpatient prescription copayments and other medical charges and user fees. The funds collected may only 

be used for providing VA medical care and services and for VA expenses for identification, billing, auditing and collection of amounts owed the Federal Government. 

The American Legion supported legislation to allow VA to bill, collect, and reinvest 

third-party reimbursements and copayments; however, The American Legion adamantly opposes the scoring of MCCF as an offset to the annual discretionary appropriations since the majority of the collected funds come from the treatment of nonservice-connected medical conditions. Historically, these collection goals far exceed 

VA’s ability to collect accounts receivable. In Fiscal Year 2006, VA collected nearly $2 billion, a significant increase over the $540 million collected in Fiscal Year 2001. VA’s ability to capture these funds is critical to its ability to provide quality and timely care to veterans. Miscalculations of 

VA required funding levels results in real budgetary shortfall. Seeking annual emergency supplemental is not the most cost-effective means of funding the Nation’s 

model health care delivery system. 

Government Accountability Office (GAO) reports have described continuing problems in VHA’s ability to capture insurance data in a timely and correct manner and 

raised concerns about VHA’s ability to maximize its third-party collections. At three 

medical centers visited, GAO found an inability to verify insurance, accepting partial payment as full, inconsistent compliance with collections follow-up, insufficient 

documentation by VA physicians, insufficient automation and a shortage of qualified 

billing coders were key deficiencies contributing to the shortfalls. VA should implement all available remedies to maximize its collections of accounts receivable. 

The American Legion opposes offsetting annual VA discretionary funding by the 

arbitrarily set MCCF goal, especially since VA is prohibited from collecting any 

third-party reimbursements from the Nation’s largest federally mandated, health insurer—Medicare. 

Medicare Reimbursement 

As do most American workers, veterans pay into the Medicare system without 

choice throughout their working lives, including active-duty. A portion of each 

earned dollar is allocated to the Medicare Trust Fund and although veterans must 

pay into the Medicare system, VA is prohibited from collecting any Medicare reimbursements for the treatment of allowable, nonservice-connected medical conditions. 

This prohibition constitutes a multi-billion dollar annual subsidy to the Medicare 

Trust Fund. The American Legion does not agree with this policy and supports 

Medicare reimbursement for VHA for the treatment of allowable, nonservice-connected medical conditions of allowable enrolled Medicare-eligible veterans. 

As a minimum, VA should receive credit for saving the Centers for Medicare and 

Medicaid Services billions of dollars in annual mandatory appropriations. 

MEDICAL AND PROTHESTICS RESEARCH

The American Legion believes that VA’s focus in research should remain on understanding and improving treatment for conditions that are unique to veterans. 

The Global War on Terrorism is predicted to last at least two more decades. 

Servicemembers are surviving catastrophically disabling blast injuries in Iraq, Afghanistan and elsewhere due to the superior armor they are wearing in the combat 

theater and the timely access to quality triage. The unique injuries sustained by the 

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new generation of veterans clearly demands particular attention. There have been 

reported problems of VA not having the state-of-the-art prostheses, like DOD, and 

that the fitting of the prostheses for women has presented a problems due to their 

smaller stature. 

In addition, The American Legion supports adequate funding for other VA research activities, including basic biomedical research as well as bench-to-bedside 

projects. Congress and the Administration should encourage acceleration in the development and initiation of needed research on conditions that significantly affect 

veterans—such as prostate cancer, addictive disorders, trauma and wound healing, 

post-traumatic stress disorder, rehabilitation, and others jointly with DOD, the National Institutes of Health (NIH), other Federal agencies, and academic institutions. 

The American Legion recommends $472 million for Medical and Prosthetics Research in Fiscal Year 2008, $61 million more than the President’s budget request 

of $411 million. 

CONSTRUCTION

Major Construction 

Over the past several years, Congress has kept a tight hold on the purse strings 

that control the funding needs for the construction program within VA. The hold 

out, presumably, is the development of a coherent national plan that will define the 

infrastructure VA will need in the decades to come. VA has developed that plan and 

it is CARES. The CARES process identified more than 100 major construction 

projects in 37 states, the District of Columbia, and Puerto Rico. Construction 

projects are categorized as major if the estimated cost is over $7 million. Now that 

VA has a plan to deliver health care through the year 2022, it is up to Congress 

to provide adequate funds. The CARES plan calls for, among other things, the construction of new hospitals in Orlando and Las Vegas and replacement facilities in 

Louisville and Denver for a total cost estimate of well over $1 billion alone for these 

four facilities. VA has not had this type of progressive construction agenda in decades. Major construction money can be significant and proper utilization of funds 

must be well planned out. The American Legion is pleased to see six medical facility 

projects (Pittsburgh, Denver, Orlando, Las Vegas, Syracuse, and Lee County, FL) 

included in this budget request. 

In addition to the cost of the proposed new facilities are the many construction 

issues that are virtually ‘‘put on hold’’ for the past several years due to inadequate 

funding and the moratorium placed on construction spending by the CARES process. 

One of the most glaring shortfalls is the neglect of the buildings sorely in need of 

seismic correction. This is an issue of safety. Hurricane Katrina taught a very real 

lesson on the unacceptable consequences of procrastination. The delivery of health 

care in unsafe buildings cannot be tolerated and funds must be allocated to not only 

construct the new facilities, but also to pay for much-needed upgrades at existing 

facilities. Gambling with the lives of veterans, their families and VA employees is 

absolutely unacceptable. 

The American Legion believes that VA has effectively shepherded the CARES 

process to its current state by developing the blueprint for the future delivery of VA 

health care—it is now time for Congress to do the same and adequately fund the 

implementation of this comprehensive and crucial undertaking. 

The American Legion recommends $1.3 billion for Major Construction in Fiscal 

Year 2008, $573 million more than the President’s budget request of $727 million 

to fund more pending ‘‘life-safety’’ projects. 

Minor Construction 

VA’s minor construction program has suffered significant neglect over the past 

several years as well. The requirement to maintain the infrastructure of VA’s buildings is no small task. Because the buildings are old, renovations, relocations and 

expansions are quite common. When combined with the added cost of the CARES 

program recommendations, it is easy to see that a major increase over the previous 

funding level is crucial and well overdue. 

The American Legion recommends $279 million for Minor Construction in Fiscal 

Year 2008, $46 million more than the President’s budget request of $233 million to 

address more CARES proposal minor construction projects. 

CAPITAL ASSET REALIGNMENT FOR ENHANCED SERVICES (CARES)

In March 1999, GAO published a report on VA’s need to improve capital asset 

planning and budgeting. GAO estimated that over the next few years, VA could 

spend one of every four of its health care dollars operating, maintaining, and imVerDate 0ct 09 2002 15:10 May 29, 2007 Jkt 000000 PO 00000 Frm 00106 Fmt 6633 Sfmt 6621 H:\RD41451\DOCS\33255.TXT SENVETS PsN: ROWENA
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proving capital assets at its national major delivery locations, including 4,700 buildings and 18,000 acres of land nationwide. 

Recommendations stemming from the report included the development of assetrestructuring plans for all markets to guide future investment decisionmaking, 

among other initiatives. VA’s answer to GAO and Congress was the initiation and 

development of the Capital Asset Realignment for Enhanced Services (CARES) program. 

The CARES initiative is a blueprint for the future of VHA—a fluid, work in 

progress, in constant need of reassessment. In May 2004, the long awaited final 

CARES decision was released. The decision directed VHA to conduct 18 feasibility 

studies at those health care delivery sites where final decisions could not be made 

due to inaccurate and incomplete information. VHA contracted 

PricewaterhouseCoopers (PwC) to develop a broad range of viable options and, in 

turn, develop business plans based on a limited number of selected options. To help 

develop those options and to ensure stakeholder input, then-VA Secretary Principi 

constituted the Local Advisory Panels (LAPs), which are made up of local stakeholders. The final decision on which business plan option will be implemented for 

each site lies with the Secretary of Veterans Affairs. 

The American Legion is dismayed over the slow progress in the LAP process and 

the CARES initiative overall. Both Stage I and Stage II of the process include two 

scheduled LAP meetings at each of the sites being studied with the whole process 

concluding on or about February 2006. 

It wasn’t until April 2006, after nearly a 7-month hiatus, that Secretary Nicholson 

announced the continuation of the services at Big Spring, Texas, and like all the 

other sites, has only been through Stage I. Seven months of silence is no way to 

reassure the veterans’ community that the process is alive and well. The American 

Legion continues to express concern over the apparent short-circuiting of the LAPs 

and the silencing of the stakeholders. The American Legion intends to hold accountable those who are entrusted to provide the best health care services to the most 

deserving population—the Nation’s veterans. 

Upon conclusion of the initial CARES process, then-Secretary Principi called for 

a ‘‘billion dollars a year for the next 7 years’’ to implement CARES. The American 

Legion continues to support that recommendation and encourages VA and Congress 

to ‘‘move out’’ with focused intent. 

STATE EXTENDED CARE FACILITY GRANTS PROGRAM

Since 1984, nearly all planning for VA inpatient nursing home care has revolved 

around State Veterans’ Homes and contracts with public and private nursing homes. 

The reason for this is obvious; VA paid a per diem of $59.48 for each veteran it 

placed in State Veterans’ Homes, compared to the $354 VA pays to maintain a veteran for 1 day in its own nursing home care units. 

Under the provisions of title 38, United States Code, VA is authorized to make 

payments to states to assist in the construction and maintenance of State Veterans’ 

Homes. Today, there are 109 State Veterans’ Homes in 47 states with over 23,000 

beds providing nursing home, hospital, and domiciliary care. Grants for Construction of State Extended Care Facilities provide funding for 65 percent of the total 

cost of building new veterans homes. Recognizing the growing long-term health care 

needs of older veterans, it is essential that the State Veterans’ Home Program be 

maintained as a viable and important alternative health care provider to the VA 

system. The American Legion opposes any attempts to place moratoria on new State 

Veterans’ Home construction grants. State authorizing legislation has been enacted 

and state funds have been committed. The West Los Angeles State Veterans’ Home, 

alone, is a $125 million project. Delaying this and other projects could result in cost 

overruns from increasing building materials costs and may result in states deciding 

to cancel these much needed facilities.

The American Legion supports: 

• Increasing the amount of authorized per diem payments to 50 percent for nursing home and domiciliary care provided to veterans in State Veterans’ Homes; 

• The provision of prescription drugs and over-the-counter medications to State 

Veterans’ Homes Aid and Attendance patients along with the payment of authorized 

per diem to State Veterans’ Homes; and 

• Allowing for full reimbursement of nursing home care to 70 percent service-connected veterans or higher, if the veteran resides in a State Veterans’ Home. 

The American Legion recommends $250 million for the State Extended Care Facility Construction Grants Program in Fiscal Year 2008, $165 million more than the 

President’s budget request. This additional funding will address more pending lifesafety projects and new construction projects. 

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STATE CEMETERY GRANTS PROGRAM

The State Veterans’ Cemetery Grant Program is not intended to replace National 

Cemeteries, but to complement them. Grants for state-owned and operated cemeteries can be used to establish, expand and improve on existing cemeteries. States 

are planning to open 24 new state veterans’ cemeteries between 2007 and 2012. 

There are 60 operational cemeteries and two more under construction. Since NCA 

concentrates its construction resources on large metropolitan areas, it is unlikely 

that new national cemeteries will be constructed in all states. Therefore, individual 

states are encouraged to pursue applications for the State Cemetery Grants Program. Fiscal commitment from the state is essential to keep the operation of the 

cemetery on track. NCA estimates it takes about $300,000 a year to operate a state 

cemetery. The American Legion recommends $42 million for the State Cemetery Grants Pro- gram in Fiscal Year 2008, $10 million more than the President’s budget request. 

NATIONAL CEMETERY ADMINISTRATION

The mission of the National Cemetery Administration is to honor veterans with 

final resting places in national shrines and with lasting tributes that commemorate 

their service to this Nation. The National Cemetery Administration’s vision is to 

serve all veterans and their families with the utmost dignity, respect, and compassion. Every national cemetery should be a place that inspires visitors to understand 

and appreciate the service and sacrifice of this Nation’s veterans. 

National Cemetery Expansion 

The American Legion supported P.L. 108–109, the National Cemetery Expansion 

Act of 2003, authorizing VA to establish new national cemeteries to serve veterans 

in the areas of: Bakersfield, Calif.; Birmingham, Ala.; Jacksonville, Fla.; Sarasota 

County, Fla.; southeastern Pennsylvania; and Columbia-Greenville, S.C. All six 

areas have veterans’ populations exceeding 170,000, which is the threshold VA has 

established for new national cemeteries. By 2009, all six new national cemeteries 

should be open to serve veterans in these areas. 

There are approximately 24 million veterans alive today. Nearly 688,000 veteran 

deaths are estimated to occur in 2008. The total number of graves maintained by 

VA is expected to increase from 2.8 million in 2006 to just over 3.2 million by 2012. 

The VA expects that at least 12 percent of these veterans will request burial in a 

national cemetery. Considering the growing costs of burial services and the excellent 

quality of service the NCA is providing, The American Legion foresees that this percentage will be much greater. By 2012, four more national cemeteries are expected 

to exhaust their supply of available, unassigned gravesites. 

Congress must provide sufficient major construction appropriations to permit 

NCA to accomplish its stated goal of ensuring that burial in a national or state cemetery is a realistic option by locating cemeteries within 75 miles of 90 percent of 

eligible veterans. 

National Shrine Commitment 

Maintaining cemeteries as National Shrines is one of NCA’s top priorities. This 

commitment involves raising, realigning and cleaning headstones and markers to 

renovate gravesites. The work that has been done so far has been outstanding; however, adequate funding is key to maintaining this very important commitment. The 

American Legion supports NCA’s goal of completing the National Shrine Commitment within 5 years. This commitment includes the establishment of standards of 

appearance for national cemeteries that are equal to the standards of the finest 

cemeteries in the world. Operations, maintenance and renovation funding must be 

increased to reflect the true requirements of the NCA to fulfill this commitment. 

The American Legion recommends $178 million for the National Cemetery Administration in Fiscal Year 2008, $12 million more than the President’s budget request. 

INFORMATION TECHNOLOGY

The data theft that occurred in May of last year serves as a monumental wake 

up call to the Nation. VA can no longer ignore IT security. The recovery of the 

laptop is indeed cause for optimism; however, we must not discount the possibility 

that every name on that list could still be subject to possible identity theft. The complete overhaul of VA IT is only in its beginning stages. Meanwhile, there are still 

unresolved security breaches within VA including the most recent theft of a laptop 

from a VA contractor. How many computers need to be stolen before veterans get 

some real assurances from the Federal Government that their information is not 

only safe, but that safeguards will be in place to help protect them against identity 

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theft? The American Legion once again calls on VA and the Administration to keep 

its promise to veterans and provide free credit monitoring for 1 year. The American 

Legion is hopeful that the steps VA takes to strengthen its IT security will renew 

the confidence and trust of veterans who depend on VA for the benefits they have 

earned. 

Funding for the IT overhaul should not be paid for with money from other VA 

programs. This would in essence make veterans pay for VA’s gross negligence in the 

matter. The American Legion hopes that Congress will not attempt to fix this problem on the backs of America’s veterans and from scarce fiscal resources provided 

to the VA health care delivery. 

VA has shown it can be a leader in the areas of care and service. Its accomplishments, from providing high quality medical care to leading the world in the development of electronic records, are indicators that VA can also be the Nation’s leader 

in IT security. 

The American Legion believes that there should be a complete review of IT security governmentwide. VA isn’t the only agency within the government that needs 

to overhaul its IT security protocol. The American Legion would urge Congress to 

exercise its oversight authority and review each Federal agency to ensure that the 

personal information of all Americans is secure. 

The American Legion agrees with the President’s budget request for $1.9 billion 

for Information Technology in Fiscal Year 2008. 

VA’S LONG-TERM CARE MISSION

Historically, VA’s Long-Term Care (LTC) has been the subject of discussion and 

legislation for nearly two decades. In a landmark July 1984 study, Caring for the 

Older Veteran, it was predicted that a wave of elderly veterans had the potential 

to overwhelm VA’s long-term care capacity. Further, the recommendations of the 

Federal Advisory Committee on the Future of Long-Term Care in its 1998 report 

VA Long-Term Care at the Crossroads, made recommendations that serve as the 

foundation for VA’s national strategy to revitalize and reengineer long-term care 

services. It is now 2006 and that wave of veterans has arrived. 

Additionally, Public Law 106–117, the Millennium Act, enacted in November 

1999, required VA to continue to ensure 1998 levels of extended care services (defined as VA nursing home care, VA domiciliary, VA home-based primary care, and 

VA adult day health care) in its facilities. Yet, VA has continually failed to maintain 

the 1998 bed levels mandated by law. 

VA’s inability to adequately address the long-term care problem facing the agency 

was most notable during the CARES process. The planning for the long-term care 

mission, one of the major services VA provides to veterans, was not even addressed 

in the CARES initiative. That CARES initiative is touted as the most comprehensive analysis of VA’s health care infrastructure that has ever been conducted. 

Incredibly, despite 20 years of forewarning, the CARES Commission report to the 

VA Secretary states that VA has yet to develop a long-term care strategic plan with 

well-articulated policies that address the issues of access and integrated planning 

for the long-term care of seriously mentally ill veterans. The Commission also reported that VA had not yet developed a consistent rationale for the placement of 

long-term care units. It was not for the lack of prior studies that VA has never had 

a coordinated long-term care strategy. The Secretary’s CARES decision agreed with 

the Commission and directed VHA to develop a strategic plan, taking into consideration all of the complexities involved in providing such care across the VA system. 

The American Legion supports the publishing and implementation of a long-term 

care strategic plan that addresses the rising long-term care needs of America’s veterans. We are, however, disappointed that it has now been over 2 years since the 

CARES decision and no plan has been published. 

It is vital that VA meet the long-term care requirements of the Millennium 

Health Care Act and we urge this Committee to support adequate funding for VA 

to meet the long-term care needs of America’s Veterans. The American Legion supports the President’s $4.6 billion funding recommendation for Fiscal Year 2008. 

HOMELESS VETERANS

VA has estimated that there are at least 250,000 homeless veterans in America 

and approximately 500,000 experience homelessness in a given year. Most homeless 

veterans are single men; however, the number of single women with children has 

drastically increased within the last few years. Homeless female veterans tend to 

be younger, are more likely to be married, and are less likely to be employed. They 

are also more likely to suffer from serious psychiatric illness. 

106

Approximately 40 percent of homeless veterans suffer from mental illness and 80 

percent have alcohol or other drug abuse problems. It cannot go unnoticed that the 

increase in homeless veterans coincides with the underfunding of VA health care, 

which resulted in the downsizing of inpatient mental health capabilities in VA hospitals across the country. Since 1996, VA has closed 64 percent of its psychiatric 

beds and 90 percent of its substance abuse beds. It is no surprise that many of these 

displaced patients end up in jail, or on the streets. The American Legion applauds 

VA’s recent plan to restore a good portion of this capacity. The American Legion believes there should be a focus on the prevention of homelessness, not just measures 

to respond to it. Preventing it is the most important step to ending it. 

The American Legion has a vision to assist in ending homelessness among veterans by ensuring services are available to respond to veterans and their families 

in need before they experience homelessness. Toward that objective, The American 

Legion in partnership with the National Coalition for Homeless Veterans created a 

Homeless Veterans Task Force. The mission of the Task Force is to develop and implement solutions to end homelessness among veterans through collaborating with 

government agencies, homeless providers and other Veterans Service Organizations. 

In the last 2 years, 16 homeless veterans workshops were conducted during The 

American Legion National Leadership Conferences, National Convention and MidWinter Conferences. Currently, there are 51 Homeless Veterans Chairpersons within The American Legion who act as liaison to Federal, state and community homeless agencies and monitor fundraising, volunteerism, advocacy and homeless prevention activities within participating American Legion Departments. 

The current Administration has vowed to end the scourge of homelessness within 

10 years. The clock is running on this commitment, yet words far exceed deeds. 

While less than 9 percent of the Nation’s population are veterans, 34 percent of the 

Nation’s homeless are veterans and of those 75 percent are wartime veterans. 

Homelessness in America is a travesty, and veterans’ homelessness is disgraceful. 

Left unattended and forgotten, these men and women, who once proudly wore the 

uniforms of this Nation’s Armed Forces and defended her shores, are now wandering her streets in desperate need of medical and psychiatric attention and financial support. While there have been great strides in ending homelessness among 

America’s veterans, there is much more that needs to be done. We must not forget 

them. The American Legion supports funding that will lead to the goal of ending 

homelessness in the next 10 years. 

Homeless Providers Grant and Per Diem Program Reauthorization 

In 1992, VA was given authority to establish the Homeless Providers Grant and 

Per Diem Program under the Homeless Veterans Comprehensive Service Programs 

Act of 1992, P.L. 102–590. The Grant and Per Diem Program is offered annually 

(as funding permits) by the VA to fund community agencies providing service to 

homeless veterans. 

The American Legion strongly supports changing the Grant and Per Diem Program to be funded on a 5-year period instead of annually and a funding level increased to the $200 million level annually. 

VETERANS BENEFITS ADMINISTRATION (VBA)

The VA has a statutory responsibility to ensure the welfare of the Nation’s veterans, their families, and survivors. Providing quality decisions in a timely manner 

has been, and will continue to be, one of the VA’s most difficult challenges. 

Workload and Claims Backlog 

There are approximately 3.5 million veterans and beneficiaries currently receiving 

VA compensation and pension benefits. In 2006, VA added almost 250,000 new 

beneficiaries to the compensation and pension rolls. VA anticipates receiving about 

800,000 claims a year in 2007 and 2008. The current staffing levels do not enable 

VA to reduce the pending claims inventory and provide timely service to veterans; 

therefore, the President is requesting an increase of 457 full-time equivalents compensation and pension personnel. The productivity of the additional staff will increase throughout 2008 and in subsequent years as these new employees receive 

training and gain experience. VA believes the additional staffing will enable VBA 

to improve claims processing timeliness, reduce appeals workload, improve appeals 

processing timeliness, and enhance services to veterans returning from the Global 

War on Terrorism. 

The increasing complexity of VA claims adjudication continues to be a major challenge for VA rating specialists. Since judicial review of veterans’ claims was enacted 

in 1988, the remand rate of those cases appealed to the United States Court of Appeals for Veterans Claims (CAVC) has, historically, been about 50 percent. In a seVerDate 0ct 09 2002 15:10 May 29, 2007 Jkt 000000 PO 00000 Frm 00110 Fmt 6633 Sfmt 6621 H:\RD41451\DOCS\33255.TXT SENVETS PsN: ROWENA
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ries of precedent-setting decisions by the CAVC and the United States Court of Appeals for the Federal Circuit, a number of longstanding VA policies and regulations 

have been invalidated because they were not consistent with statute. These court 

decisions immediately added thousands of cases to regional office workloads, since 

they require the review and reworking of tens of thousands of completed and pending claims. 

As of August 19, 2006, there were more than 389,000 rating cases pending in the 

VBA system. Of these, 92,047 (23.6 percent) have been pending for more than 180 

days. According to the VA, the appeals rate has also increased from a historical rate 

of about 7 percent of all rating decisions being appealed to a current rate that fluctuates from 11 to 14 percent. This equates to more than 152,000 appeals currently 

pending at VA regional offices, with more than 132,000 requiring some type of further adjudicative action. 

Staffing 

Whether complex or simple, VA regional offices are expected to consistently develop and adjudicate veterans’ and survivors’ claims in a fair, legally proper, and 

timely manner. The adequacy of regional office staffing has as much to do with the 

actual number of personnel as it does with the level of training and competency of 

the adjudication staff. VBA has lost much of its institutional knowledge base over 

the past 4 years, due to the retirement of many of its 30-plus year employees. As 

a result, staffing at most regional offices is made up largely of trainees with less 

than 5 years of experience. Over this same period, as regional office workload demands escalated, these trainees have been put into production units as soon as they 

completed their initial training. 

Concern over adequate staffing in VBA to handle its demanding workload was addressed by VA’s Office of the Inspector General (IG) in a report released in May 

2005 (Report No. 05–00765–137, dated May 19, 2005). The IG specifically recommended, ‘‘in view of growing demand, the need for quality and timely decisions, 

and the ongoing training requirements, reevaluate human resources and ensure 

that the VBA field organization is adequately staffed and equipped to meet mission 

requirements.’’ The Under Secretary for Benefits has conceded that the number of 

personnel has decreased over the last few years. And the congressionally mandated 

Veterans’ Disability Benefits Commission is also closely looking at the adequacy of 

current staffing levels. 

It is an extreme disservice to veterans, not to mention unrealistic, to expect VA 

to continue to process an ever increasing workload, while maintaining quality and 

timeliness, with less staff. Our current wartime situation provides an excellent opportunity for VA to actively seek out returning veterans from Operations Enduring 

Freedom and Iraqi Freedom, especially those with service-connected disabilities, for 

employment opportunities within VBA. To ensure VA and VBA are meeting their 

responsibilities, The American Legion strongly urges Congress to scrutinize VBA’s 

budget requests more closely. Given current and projected future workload demands, regional offices clearly will need more rather than fewer personnel and The 

American Legion is ready to support additional staffing. However, VBA must be required to provide better justification for the resources it says are needed to carry 

out its mission and, in particular, how it intends to improve the level of adjudicator 

training, job competency, and quality assurance. 

GI BILL EDUCATION BENEFITS

Over 96 percent of recruits currently sign up for the MGIB and pay $1,200 out 

of their first year’s pay to guarantee eligibility. However, only one-half of these military personnel use any of the current Montgomery GI Bill benefits. We believe this 

is directly related to the fact that current GI Bill benefits have not kept pace with 

the increasing cost of education. Costs for attending the average 4-year public institution as a commuter student during the 1999–2000 academic year was nearly 

$9,000. On October 1, 2005, the basic monthly rate of reimbursement under MGIB 

was raised to $1,034 per month for a successful 4-year enlistment and $840 for an 

individual whose initial active-duty obligation was less than 3 years. The current 

educational assistance allowance for persons training full-time under the MGIB Selected Reserve is $297 per month. 

The Servicemen’s Readjustment Act of 1944, P.L. 78–346, the original GI Bill, provided millions of members of the Armed Forces an opportunity to seek higher education. Many of these individuals may not have been afforded this opportunity without the generous provisions of that Act. Consequently, these former servicemembers 

made a substantial contribution not only to their own careers, but also to the economic well being of the country. Of the 15.6 million veterans eligible, 7.8 million 

took advantage of the educational and training provisions of the original GI Bill. BeVerDate 0ct 09 2002 15:10 May 29, 2007 Jkt 000000 PO 00000 Frm 00111 Fmt 6633 Sfmt 6621 H:\RD41451\DOCS\33255.TXT SENVETS PsN: ROWENA
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tween 1944 and 1956, when the original GI Bill ended, the total educational cost 

of the World War II bill was $14.5 billion. The Department of Labor estimates that 

the government actually made a profit because veterans who had graduated from 

college generally earned higher salaries and, therefore, paid more taxes. 

Today, a similar concept applies. The educational benefits provided to members 

of the Armed Forces must be sufficiently generous to have an impact. The individuals who use MGIB educational benefits are not only improving their career potential, but also making a greater contribution to their community, state, and Nation. 

The American Legion recommends the 110th Congress make the following improvements to the current MGIB:

• The dollar amount of the entitlement should be indexed to the average cost of 

a college education including tuition, fees, textbooks, and other supplies for a commuter student at an accredited university, college, or trade school for which they 

qualify; 

• The educational cost index should be reviewed and adjusted annually; 

• A monthly tax-free subsistence allowance indexed for inflation must be part of 

the educational assistance package; 

• Enrollment in the MGIB shall be automatic upon enlistment; however, benefits 

will not be awarded unless eligibility criteria have been met; 

• The current military payroll deduction ($1,200) requirement for enrollment in 

MGIB must be terminated; 

• If a veteran enrolled in the MGIB acquired educational loans prior to enlisting 

in the Armed Forces, MGIB benefits may be used to repay those loans; 

• If a veteran enrolled in MGIB becomes eligible for training and rehabilitation 

under Chapter 31, of title 38, United States Code, the veteran shall not receive less 

educational benefits than otherwise eligible to receive under MGIB; 

• Separating servicemembers and veterans seeking a license, credential, or to 

start their own business must be able to use MGIB educational benefits to pay for 

the cost of taking any written or practical test or other measuring device; 

• Eligible veterans shall have an unlimited number of years after discharge to 

utilize MGIB educational benefits; 

• Eligible veterans should have the right to transfer their earned benefits to their 

spouse and dependents; and 

• Eligible members of the Select Reserves, who qualify for MGIB educational benefits shall receive not more than half of the tuition assistance and subsistence allowance payable under the MGIB and have up to 5 years after their date of separation 

to use MGIB educational benefits. 

VOCATIONAL REHABILITATION AND EMPLOYMENT SERVICE (VR&E)

The mission of the VR&E program is to help qualified, service-disabled veterans 

achieve independence in daily living and, to the maximum extent feasible, obtain 

and maintain suitable employment. The American Legion fully supports these goals. 

As a nation at war, there continues to be an increasing need for VR&E services to 

assist Operations Iraqi Freedom and Enduring Freedom veterans in reintegrating 

into independent living, achieving the highest possible quality of life, and securing 

meaningful employment. To meet America’s obligation to these specific veterans, VA 

leadership must focus on marked improvements in case management, vocational 

counseling, and—most importantly—job placement. 

The successful rehabilitation of our severely disabled veterans is determined by 

the coordinated efforts of every Federal agency (DOD, VA, DOL, OPM, HUD etc.) 

involved in the seamless transition from the battlefield to the civilian workplace. 

Timely access to quality health care services, favorable physical rehabilitation, vocational training, and job placement play a critical role in the ‘‘seamless transition’’ 

of each and every veteran, as well as his or her family. 

Administration of VR&E and its programs is a responsibility of the Veterans Benefits Administration (VBA). Providing effective employment programs through 

VR&E must become a priority. Until recently, VR&E’s primary focus has been providing veterans with skills training, rather than providing assistance in obtaining 

meaningful employment. Clearly, any employability plan that doesn’t achieve the ultimate objective—a job—is falling short of actually helping those veterans seeking 

assistance in transitioning into the civilian workforce. 

Vocational counseling also plays a vital role in identifying barriers to employment 

and matching veterans’ transferable job skills with those career opportunities available for fully qualified candidates. Becoming fully qualified becomes the next logical 

objective toward successful transition. 

Veterans Preference in Federal hiring plays an important role in guiding veterans 

to career possibilities within the Federal Government and must be preserved. There 

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are scores of employment opportunities within the Federal Government that educated, well-trained, and motivated veterans can fill—given a fair and equitable 

chance to compete. Working together, all Federal agencies should identify those vocational fields, especially those with high turnover rates, suitable for VR&E applicants. Career fields like information technology, claims adjudications, debt collection, etc., offer employment opportunities and challenges for career-oriented applicants that also create career opportunities outside the Federal Government. 

GAO has also cited exceptionally high workloads for a limited number of staff 

members at VR&E offices. This increased workload hinders the staff’s ability to effectively assist individual veterans with identifying employment opportunities. In 

April 2005, the average caseload of a typical VR&E counselor approached 160 veterans. The American Legion is pleased that an additional number of 150 full-time 

equivalents will be hired and we applaud the President’s budget request for $159.5 

million in Fiscal Year 2008. It is vital that Congress approve this request to adequately address the expected increase of veterans needing assistance. 

HOME LOAN GUARANTY PROGRAM

VA’s Home Loan Guaranty program has been in effect since 1944 and has afforded nearly 17 million veterans the opportunity to purchase homes. The Home 

Loan programs offer veterans a centralized, affordable and accessible method of purchasing homes in return for their service to this Nation. The program has been so 

successful over the past years that not only has the program paid for itself but has 

also shown a profit in recent years. The American Legion believes that it is unfair 

for veterans to pay high funding fees of 2 to 3 percent, which can add approximate 

$3,000 to $11,000 for a first-time buyer. The VA funding fee was initially enacted 

to defray the costs of the VA guaranteed home loan program. The current funding 

fee paid to VA to defray the cost of the home loan has had a negative effect on many 

veterans who choose not to participate in this highly beneficial program. Therefore, 

The American Legion strongly recommends that the VA funding fee on home loans 

be reduced or eliminated for all veterans whether active duty, reservist, or National 

Guard. 

Specially Adapted Housing 

The American Legion believes that with the increasing numbers of disabled veterans returning from Iraq and Afghanistan, the need for specially adapted housing 

is paramount. Therefore, The American Legion strongly recommends that the current $50,000 grant for specially adapted housing be increased to $55,000 and special 

home adaptations be increased from $10,000 to $12,300. Specially adapted housing 

grants are available for the installation of wheelchair ramps, chair lifts, modifications to kitchens and bathrooms and other adaptations to homes for veterans who 

cannot move about without the use of wheelchairs, canes or braces or who are blind 

and suffer the loss or loss of use of one lower extremity. Special home adaptation 

grants are available for veterans who are legally blind or have lost the use of both 

hands. 

SUMMARY

Mr. Chairman and Members of the Committee, The American Legion appreciates 

the strong relationship we have developed with this Committee. With increasing 

military commitments worldwide, it is important that we work together to ensure 

that the services and programs offered through VA are available to the new generation of American servicemembers who will soon return home. You have the power 

to ensure that their sacrifices are indeed honored with the thanks of a grateful Nation. 

The American Legion is fully committed to working with each of you to ensure 

that America’s veterans receive the entitlements they have earned. Whether it is 

improved accessibility to health care, timely adjudication of disability claims, improved educational benefits or employment services, each and every aspect of these 

programs touches veterans from every generation. Together we can ensure that 

these programs remain productive, viable options for the men and women who have 

chosen to answer the Nation’s call to arms. 

Thank you for allowing me the opportunity to appear before you today.

Chairman AKAKA. Thank you very much for your testimony, Mr. 

Robertson. 

Mr. Rowan? 

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STATEMENT OF JOHN ROWAN, NATIONAL PRESIDENT, 

VIETNAM VETERANS OF AMERICA 

Mr. ROWAN. Good afternoon. Chairman Akaka and Senator Craig 

and Senator Brown, thank you for allowing the Veterans Service 

Organizations to testify this morning on the VA budget, giving us 

access at the beginning of this process. 

While we tend to agree with the IB folks about a lot of their 

numbers, we believe that they are still a little low. We actually 

think that we need another $6.9 billion rather than $4 billion, and 

we have a chart that we have broken out much of that dollars and 

cents, which we have put in as part of our testimony. One of the 

biggest chunks is almost $2 million and change to cover these socalled management deficiencies, which were really staff deficiencies, that the VISNs made do with what they could and basically cut staff to fit the budget that they got. 

I would also ask the Senate if they could allow us to put into the 

record as part of our testimony the study by Ms. Linda Bilmes from 

Harvard Kennedy School of Government on ‘‘Soldiers Returning 

from Iraq and Afghanistan: The Long-Term Costs of Providing Veterans Medical Care and Disability Benefits,’’ a study that she had 

done, which is pretty enlightening. 

Chairman AKAKA. That study will be included in the record. 

Mr. ROWAN. Thank you, sir. 

As I said, we believe that there is a whole host of reasons why 

we think this needs more money into this budget that has been 

proposed, not the least of which is what we think is an undercount 

in both numbers of new veterans coming into the system and old 

veterans coming into the system, many for the first time. As I testified last year before this Committee, we believe that Vietnam veterans in particular are coming down with many Agent Orange-related illnesses that they are entitled to get compensation and 

health care for that are now manifesting themselves today—the 

whole diabetic problem, the whole problem with prostate cancer, 

lung cancer, all kinds of other conditions, which in and of themselves must drive up the need for medical care by veterans in the 

VA system. And, unfortunately, it is very expensive care and often 

multidisciplinary care, as was pointed out earlier in the Secretary’s 

testimony. 

When we file a claim today, a veteran often is not filing a single 

claim. They are filing multiple claims with multiple issues, either 

secondary conditions attached to the original condition or multiple 

different conditions. And so the 800,000 claims we talk about being 

submitted is really God knows how many actual issues of health 

care. And what the impact is on the VA health care system has got 

to be substantial. 

So, again, we would like to see a breakdown also of how many 

people who have been put aside that are no longer eligible for the 

system and really who they are, this whole dollar-and-cents thing 

is throwing around it. I doubt very much if there is any $200,000 

income family or income veteran running to get to the VA in reality. It has got to be a very small number. And Senator Craig 

mentioned earlier how the significant percentage of the veterans in 

the system that are eligible for Medicare only seems to me another 

reason why we ought to get the Medicare money back into the VA 

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system. I would venture to say that many of those people are also 

service-connected disabled veterans who are entitled to health care 

no matter what. So it will be really interesting to see a more indepth analysis of all of that. 

There were some other issues raised. Senator Murray raised the 

whole issue about inpatient PTSD programs. There are VISNs in 

this country that do not have inpatient programs in their VISN, 

and so we see a lot of time veterans traveling far distances to get 

inpatient care. Having come from New York, I know that Batavia 

has an excellent inpatient care program that I know of from dealing with the people in their alumni association who take care of 

them after they have gone through the program, dealing with veterans from all across this country who come to that facility because 

it is well known and does a very good job. And they have just 

opened a new women’s facility, which is going to be real interesting 

to see what happens with that, with, unfortunately, the significant 

number of women now in the system. 

As we wind down, I would also echo what Steve said about the 

zeros. The zero percenters, one must remember, may have been 100 

percenters at one time, and the classic example of that is the prostate cancer person. You get a Vietnam vet who has got prostate 

cancer gets 100 percent while they are diagnosed with prostate 

cancer. If they are lucky enough to go through a treatment that 

takes care of their cancer, they are dropped down to zero. But as 

everybody will tell you, they need to come back regularly for significant care and review to make sure that their cancer does not 

come back somewhere else. 

Thank you. 

[The prepared statement of Mr. Rowan follows:]

PREPARED STATEMENT OF JOHN ROWAN, NATIONAL PRESIDENT,

VIETNAM VETERANS OF AMERICA

Chairman Akaka, Ranking Member Craig and distinguished Members of the Committee, on behalf of all of our officers, Board of Directors, and members, I thank 

you for giving Vietnam Veterans of America (VVA) the opportunity to testify today 

regarding the President’s Fiscal Year 2008 budget request for the Department of 

Veterans Affairs. I am pleased to welcome so many new and returning Members 

onto the Committee this year. VVA looks forward to working with all of you to address the needs of the unique system created to serve our Nation’s veterans. 

Mr. Chairman, several years ago, Vietnam Veterans of America developed a White 

Paper in support of the need for assured funding for the veterans health care system, which I know you have read and shared with others. I also know you have 

been a long-time supporter of legislation to achieve assured funding. You have always understood the need for such a mechanism to correct the problems in the current system of funding. As we have this discussion in regard to the FY 2008 budget 

for VA, the readily apparent need for this legislation has never been more pressing. 

We look forward to working with you to ensure its enactment. 

VVA does wish to recognize that this year’s request from the President for the 

VA Budget, while lacking in many other respects, is relatively free of ‘‘budget gimmicks’’ that have so plagued discussions in the past. VVA believes that this is due 

to the strong efforts of Secretary Nicholson in doing battle to strip out the favorite 

‘‘gimcrackery’’ of that permanent staff over at the Office of Management and Budget 

(OMB). VVA commends the Secretary of Veterans Affairs in this regard for seeking 

to have an honestly presented budget proposal. 

VETERANS HEALTH ADMINISTRATION

VVA is recommending an increase of $6.9 billion to the expected Fiscal Year 2007 

appropriation for the medical care business line. We recognize that the budget recommendation VVA is making this year is extraordinary, but with troops in the field, 

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years of underfunding of health care organizational capacity, renovation of an archaic and dilapidated infrastructure, updating capital equipment, and several cohorts of war veterans reaching ages of peak health care utilization, these are extraordinary times. It’s past time to meet these needs. 

In contrast to what is clearly needed, we believe the Administration’s Fiscal Year 

2008 request for $2 billion more than the expected 2007 appropriation in the continuing resolution is inadequate. Unfortunately, we still are unsure of the bottom 

line for Fiscal Year 2007. While we certainly appreciate that the Congress is planning to restore funding for veterans health care in the continuing resolution (and 

it is essential that it does so to ensure the Department’s ability to meet ongoing obligations), the fact that VA is still uncertain about the amount of funding it will receive a third of the way through the fiscal year does, virtually in and of itself, make 

the case for assured funding. 

The $2 billion increase the Administration has requested for medical care may almost keep pace with inflation, but it will not allow VA to enhance its health care 

or mental health care services for returning veterans, restore diminished staff in 

key disciplines like clinicians needed to care for Hepatitis C, restore needed longterm care programs for aging veterans, or allow working-class veterans to return 

to their health care system. VVA’s recommendation does accommodate these goals, 

in addition to restoring eligibility to veterans exposed to Agent Orange for the care 

of their related conditions. 

I need not tell you about the many successes of the Department of Veterans Affairs in recent years. The Veterans Service Organizations are often seen as critics 

of the Department, but while it’s true that we sometimes take exception to its policy 

decisions we are, in fact, also its most stalwart champions. Over the last decade the 

Veterans Health Administration (VHA) at VA has taken steps to become a higher 

quality, more accessible health care system. It has demonstrated great efficiency by 

almost doubling the number of veterans it treats while holding per capita costs relatively constant. It has developed hundreds of Community Based Outreach Clinics 

(CBOCs). VHA has received many prestigious awards for excellence and innovation. 

While VVA remains extremely concerned about recent breaches that compromised 

veterans’ personal data, VVA appreciates the fact that VA has put together a computerized system of medical records that sets the standard for modern health care 

delivery. These achievements are to be celebrated. 

Yet, these advances have not come without a cost. For years, the veterans’ health 

care system has been falling behind in meeting the health care needs of some veterans. At the beginning of 2003, the former Secretary of Veterans Affairs made the 

decision to bar so-called Priority 8 veterans from enrolling. In most cases, these veterans are not the well-to-do—they are working-class veterans or veterans living on 

fixed incomes as little as $28,000 a year. It’s not uncommon to hear about such veterans choosing between getting their prescription drug orders filled and paying their 

utility bills. The decision to bar these veterans is still standing, and it is still troubling to thoughtful Americans. 

In addition to the current bar on health care enrollment, in recent years VA has 

sent Congress a budget that requires more cost-sharing from veterans, and eliminates options for their care—particularly long-term care. We appreciate that VA’s 

proposal this year has not presumed enactment of some of the cost-sharing legislative proposals Congress has opposed in the past. This may allow Congress more leeway to augment its request in concrete ways rather than merely filling deficits left 

by the Administration presuming that revenues and savings from these unpopular 

initiatives will be realized. 

Congress is to be commended for turning back many legislative requests for enrollment fees and outpatient cost increases, which would have jeopardized hundreds 

of thousands of veterans’ access to health care. Hard-fought Congressional add-ons, 

such as the $3.6 billion for Fiscal Year 2007 currently being debated as part of the 

continuing resolution, have kept the system afloat. The budget recommended by 

VVA in addition to the enactment of some assured funding mechanism will enable 

a robust health care system to meet the needs of all eligible veterans—now and in 

the future. 

MEDICAL SERVICES

For medical services for Fiscal Year 2008, VVA recommends $34.5 billion, including collections. This is approximately $5 billion more than the Administration’s request. VVA is making its budget recommendations based on re-opening access to the 

millions of veterans disenfranchised by the Department’s policy decision of early 

2003 that was supposed to be ‘‘temporary.’’ The former ranking member of the 

House Veterans’ Affairs Committee, Lane Evans, discovered that a quarter-million 

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Priority 8 veterans had applied for care in Fiscal Year 2005. Similar numbers of veterans have likely applied in each of the years since their enrollment was barred. 

Our budget allows 1.5 million new Priority 7 and 8 veterans to enroll for care in 

their health care system. While this may sound like too great a lift for the system, 

use rates for Priority 7 and 8 veterans are much lower than for other priority 

groups. Based on our estimates, it may yield only an 8 percent increase in demand 

at a cost of about $1.5 billion to the system for additional personnel, supplies and 

facilities. 

The budget axe has fallen hard on long-term care programs in VA. About a decade 

ago, there was a major policy shift throughout the health care industry, including 

with VA, which encouraged programs to deliver as much care as possible outside 

of beds. In many cases this has been a productive policy. Veterans value the convenience of using nearby community clinics for primary care needs, for example. 

However, the change took a great toll on the neuro-psychiatric and long-term care 

programs that housed and cared for thousands of veterans, often keeping them institutionalized for years. Instead of developing the significant community and outpatient infrastructures that would have been necessary to adequately replace the 

care for these most vulnerable veterans, the resources were largely diverted to other 

purposes. 

Where have these vets gone? The fiscally challenged Medicaid program supports 

many of those who need long-term care, adding an additional burden to the states. 

State homes play an important role in remaining the only VA-sponsored setting that 

provides ongoing, rather than rehabilitative or restorative, long-term care. VA’s 

mental health programs—some of the finest in the Nation—as well as significant 

advances in pharmaceutical therapies continue to serve and allow many veterans 

to recover. However, what are in fact increasing waiting times for mental health 

programs and the lack of treatment options often contribute to incarceration and 

homelessness for the most vulnerable of these veterans. Sadly, we hear increasing 

numbers of stories of veterans of Iraq and Afghanistan whose inability to deal with 

readjustment post-deployment have lead them to the streets or even suicide. 

Mr. Chairman, Vietnam Veterans of America’s founding principle is: ‘‘Never again 

will one generation of veterans abandon another.’’ This is why we are imploring this 

Committee to ensure that VA has the imperative and the resources to bolster the 

mental health programs that should be readily available to serve our young veterans from Iraq and Afghanistan. Experts from within the Department of Defense 

estimate that as many as 17 percent of those who serve in Iraq will have issues 

requiring them to seek post-deployment mental health services and recent studies 

have shown that four out of five of the veterans who may need post-deployment care 

are not properly referred to such care. There is good reason to believe that even the 

rates forecast by DOD may be too low. 

VA has not made enough progress in preparing for the needs of troops returning 

from Iraq and Afghanistan—particularly in the area of mental health care. Its own 

internal champions—the Committee on Care of the Seriously Mentally Ill and the 

Advisory Committee on Post-Traumatic Stress Disorder, for example—have expressed doubts about VA’s mental health care capacity to serve these newest vets. 

As recently as last March, VHA’s Undersecretary for Health Policy Coordination 

told one commission that mental health services were not available everywhere, and 

that waiting times often rendered some services ‘‘virtually inaccessible.’’ The doubts 

about capacity to serve new veterans have reverberated in reports done by the Government Accountability Office (GAO). In addition, one recent working paper by 

Linda Bilmes of the John F. Kennedy School of Government at Harvard University 

estimates that in a ‘‘moderate’’ scenario in 2008 VA will require $1.8 billion to treat 

the veterans returning from Iraq and Afghanistan—much of this funding would be 

used to augment mental health care to properly serve these veterans. VA has projected that approximately 260,000 Global War on Terrorism (GWOT) veterans will 

use the VA health care system in FY 2008. VVA and others believe that well more 

than 300,000 ‘‘new’’ veterans will use the VHA system in FY 2008. 

A further reason that VA has underestimated the need for medical services is that 

they continue to use the same formula that they use for CARES, which is a civilianbased model. Mr. Chairman, VVA has testified many times that the VHA must be 

a ‘‘veterans’ health care system’’ and not a general health care system that happens 

to see veterans if the VHA is to properly and adequately address the needs of veterans, particularly veterans who are sick or injured in military service. The model 

VA uses was designed for middle-class people who can afford HMOs or other such 

programs. It projects only one to three ‘‘presentations’’ (things wrong with) patients 

as opposed to the five to seven that is the average at VHA for veterans. Obviously, 

one using the VA model will continually underestimate overall resources needed to 

care for the veterans who come to the system by using this civilian formula. FurVerDate 0ct 09 2002 15:10 May 29, 2007 Jkt 000000 PO 00000 Frm 00117 Fmt 6633 Sfmt 6621 H:\RD41451\DOCS\33255.TXT SENVETS PsN: ROWENA
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ther, VHA has been consistent in underestimating the number of GWOT returnees 

who will seek services from the system in each of the last 4 years. VVA has corrected these errors in our projections. 

In addition to the funds VVA is recommending elsewhere, we specifically recommend an increase of an additional billion dollars to assist VA in meeting the 

long-term care and mental health care needs of all veterans. These funds should be 

used to develop or augment with permanent staff at VA Vet Centers (Readjustment 

Counseling Service, or RCS), as well as PTSD teams and substance use disorder 

programs at VA Medical Centers and CBOCs, which will be sought after as more 

troops (including demobilized National Guard members and Reservists) return from 

ongoing deployments. In addition, VA should be augmenting its nursing home beds 

and community resources for long-term care, particularly at the State veterans’ 

homes. 

To assist in developing these programs and augmenting all areas of veterans’ 

care, VVA recommends funding to accommodate the staff-to-patient ratio VA had in 

place before VA had dismantled so much of its neuro-psychiatric and long-term care 

infrastructure. This would allow VA to better ensure timely access to care and services. Studies have shown that inadequate staffing—particularly of nurses involved 

in direct care—is correlated with poorer health care outcomes in all medical disciplines. To allow the staffing ratios that prevailed in 1998 for its current user population, VA would have to add more than 20,000 direct-care employees—MDs and 

nurses—at a cost of about $2.2 billion. 

The $2.2 billion funding for the staff shortfalls identified by VVA closely corresponds to the funding from unspecified ‘‘management efficiencies’’ VA has had to 

shoulder throughout this Administration. It is important to realize that the effect 

of leaving these funding deficiencies unfulfilled is cumulative. That is, each year VA 

is forced to live with a greater hole in its budget. GAO has joined VSOs and Congress in questioning the extent to which VA has been able to identify and realize 

the so-called savings created by such proposed efficiencies. VA officials have advised 

GAO that the efficiencies identified in at least two recent budget proposals—FY 

2003 and FY 2004—were developed to allow VA to meet its budget guidance rather 

than by detailed plans for achieving such savings (GAO–06–359R). In other words, 

the savings were justified only by the need to meet the Administration’s ‘‘bottom 

line.’’ I hope Congress agrees that this is no way to fund our veterans’ health care 

system. 

Finally, VVA believes Congress did a grave injustice to Vietnam-era veterans. For 

decades, veterans exposed to Agent Orange and other herbicides containing dioxin 

had been granted health care for conditions that were presumed to be due to this 

exposure. This special eligibility expired at the end of 2005 and, despite our request, 

Congress did not reauthorize it. Had Congress simply reauthorized existing authority, VA would have realized no new costs. Now we have heard that the Congressional Budget Office estimates that it will cost more than $300 million to restore 

this eligibility. Why this eligibility was allowed to expire seems more a matter of 

dollars than sense to VVA, given the ever-mounting body of research that clearly 

points to conditions such as diabetes being linked to dioxin exposure. However, the 

pressing issue now is to reinstate veterans with these conditions for the higher priority access to services that they deserve. 

MEDICAL FACILITIES

For medical facilities for Fiscal Year 2008, VVA recommends $5.1 billion. This is 

approximately $1.5 billion more than the Administration’s request for Fiscal Year 

2008. Maintenance of the health care system’s infrastructure and equipment purchases are often overlooked as Congress and the Administration attempt to correct 

more glaring problems with patient care. In FY 2006, in just one example, within 

its medical facilities account VA anticipated spending $145 million on equipment, 

yet only spent about $81 million. (The rest of the funds went just to meet costs to 

keep the facilities open and operating.) However, these projects can only be neglected for so long before they compromise patient care, and employee safety in addition to risking the loss of outside accreditation. The remainder of the funding was 

apparently shifted to other more immediate priority areas (i.e., keeping facilities operating in the short run). 

VA undertook an intensive process known as CARES (Capital Asset Realignment 

to Enhance Services) to ‘‘right-size’’ its infrastructure, culminating in a May 2004 

policy decision that identified approximately $6 billion in construction projects. 

While for the reasons noted above the VA has consistently underestimated future 

needs by using a fatally flawed formula, thus far Congress and the Administration 

have only committed $3.7 billion of this all too conservative needed funding. 

115

We believe the CARES estimate to be extremely conservative given that the models projecting health care utilization for most services were based on use patterns 

in generally healthy managed care populations rather than veterans and that the 

patient population base did not include readmitting Priority 8 veterans, or significant casualties from the current deployments. Notwithstanding our concerns about 

the methods used in CARES, very few of the projects VA agrees are needed have 

been funded since this time. Non-recurring maintenance and capital equipment 

budgets have also been grievously neglected as administrators have sought to shore 

up their operating funds. 

In a system in which so much of the infrastructure would be deemed obsolete by 

the private sector (in a 1999 report GAO found that more than 60 percent of its 

buildings were more than 25 years old), this has and may again lead to serious trouble. We are recommending that Congress provide an additional $1.5 billion to the 

medical facilities account to allow them to begin to address the system’s current 

needs. We also believe that Congress should fully fund the major and minor construction accounts to allow for the remaining CARES proposals to be properly addressed by funding these accounts with a minimum of remaining $2.3 billion. 

MEDICAL AND PROSTHETIC

Research For medical and prosthetic research for Fiscal Year 2008, VVA recommends $460 million. This is approximately $50 million more than the Administration’s request for Fiscal Year 2008. VA research has a long and distinguished 

portfolio as an integral part of the veterans’ health care system. Its funding serves 

as a means to attract top medical schools into valued affiliations and allows VA to 

attract distinguished academics to its direct-care and teaching missions. 

VA’s research program is distinct from that of the National Institutes of Health 

because it was created to respond to the unique medical needs of veterans. In this 

regard, it should seek to fund veterans’ pressing needs for breakthroughs in addressing environmental hazard exposures, post-deployment mental health, traumatic brain injury, long-term care service delivery, and prosthetics to meet the multiple needs of the latest generation of combat-wounded veterans. 

Further, VVA brings to your attention that VA Medical and Prosthetic Research 

is not currently funding a single study on Agent Orange or other herbicides used 

in Vietnam, despite the fact that more than 300,000 veterans are now service-connected disabled as a direct result of such exposure in that war. VVA submits that 

this is unacceptable. 

Mr. Chairman, finally I urge this Committee to at long last urge your colleagues 

on the Appropriations Committee to use the power of the purse to compel VA to 

obey the law (Public Law 106–419) and conduct the long-delayed National Vietnam 

Veterans Longitudinal Study. VVA ask that you specifically request report language 

in the Appropriations bill for Military Construction, Veterans Affairs, and Related 

Agencies that compels VA to advise the Appropriators and the Authorizers as to 

how VA plans to complete this study properly within 2 years, as a comprehensive 

mortality and morbidity study. 

ASSURED FUNDING FOR VETERANS’ HEALTH CARE

Once this Congress provides a budget that shores up VA medical services and facilities, it will need to assure that VA continues to be funded at a level that allows 

it to provide high-quality health care services to the veterans that need them. That 

is where enactment of assured funding will come in. Once enacted, an assured funding mechanism will ensure that, at a minimum, annual appropriations cover the 

cost of inflation and growth in the number of veterans using VA health care. It will 

allow VA administrators some predictability in both how much funding it will receive and when it will be received, resulting in higher quality and ultimately more 

cost-effective care for our veterans. 

VETERANS BENEFITS ADMINISTRATION

The Veterans Benefits Administration (VBA) is in even more acute need of additional resources and enhanced accountability measures now than it was a year ago. 

VVA recommends an additional 400 over and above the roughly 470 new staff members that are requested in the President’s proposed budget for all of VBA. 

COMPENSATION & PENSION

VVA recommends adding one hundred staff members above the level requested 

by the President for the Compensation & Pension Service (C&P) specifically to be 

trained as adjudicators. Further, VVA strongly recommends adding an additional 

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$60 million specifically earmarked for additional training for all of those who touch 

a veteran’s claim, institution of a competency-based examination that is reviewed 

by an outside body that shall be used in a verification process for all of the VA personnel, veteran service organization personnel, attorneys, county and state employees, and any others who might presume to at any point touch a veteran’s claim. 

VOCATIONAL REHABILITATION

VVA recommends that you seek to add an additional 300 specially trained vocational rehabilitation specialists to work with returning servicemembers who are disabled to ensure their placement into jobs or training that will directly lead to meaningful employment at a living wage. It is clear that the system funded through the 

Department of Labor simply is failing these fine young men and women when they 

need assistance most in rebuilding their lives. 

VVA has always held that the ability to obtain and sustain meaningful employment at a living wage is the absolute central event of the readjustment process. 

Adding additional resources and much greater accountability to the VA Vocational 

Rehabilitation process is absolutely essential if we as a Nation are to meet our obligation to these Americans who have served their country so well, and have already 

sacrificed so much. 

ACCOUNTABILITY AT VA

So much of what VVA and the Congress on both sides of the aisle find wrong or 

disturbing at the VA revolves around the general and all-pervasive issue of little 

or no accountability, or imprecise fixing of authority commensurate with accountability mechanisms that are meaningful (and vice versa) in all parts of the VA. 

Within the past year, VA has finally made significant progress in meeting the 

minimum goal of at least 3 percent of all contracts and 3 percent of all subcontracts 

being let to service-disabled veteran business owners. Secretary Nicholson and Deputy Secretary Mansfield are to be commended on setting the pace for the Federal 

Government. It is instructive in this discussion, however, that the action directed 

by the Secretary to put achievement or substantial real progress toward meeting or 

exceeding the 3 percent minimum into the performance evaluation of each Director 

of the 21 Veterans Integrated Service Networks (VISNs) was a key element enabling 

VA to be the first large agency to reach the goal mandated by law. Some 85 percent 

of all VA procurement is through VHA, primarily through the VISNs is the key factor in this achievement. 

All people (particularly people with a great deal of responsibility who work long 

hours) care about what they feel they have to care about. Putting it in the performance evaluations means that those managers who ignore a requirement do not get 

an outstanding or superior rating, and hence no bonus. VVA, and now the VA in 

at least this one instance, has always found that it is amazing how reasonable almost all people can be when you have their full attention. 

There is no excuse for the dissembling and lack of accountability in so much of 

what happens at the VA. It can be cleaned up and done right the first time, it there 

is the political will to hold people accountable for doing their job properly. 

Lastly, there is no excuse for the continuation of the practice of VHA to ‘‘lose’’ tens 

of millions (sometimes hundreds of millions) of taxpayer dollars that are appropriated to VHA for specific purposes, whether that purpose be to restore organizational capacity to deliver mental health services, particularly for PTSD and other 

combat trauma wounds, or to conduct outreach to GWOT veterans as well as demobilized National Guard and Reserve returnees from war zone deployments. There 

is a consistent pattern of VA, particularly VHA, to either really not know what happened to large sums of money given to them for specific reasons, or they are not 

telling the truth to the Congress and the public. In either case, it is unacceptable 

and cannot be tolerated any longer. 

In the proposed budget submittal, VVA struggled with accounting for the dollars 

footnoted in the President’s submittal as ‘‘Adjusted for IT.’’ We could not find an 

accurate accounting. When we asked, it turns out that no one that we have spoken 

to, including VA officials, can fully explain at least $200 million-plus of this ‘‘adjustment’’ either. And this is before they get their hands on the dollars. VVA urges this 

Committee and your colleagues on Appropriations to make this the year that this 

sloppy nonsense and dissembling is stopped once and for all. Accountability will only 

come about when Congress absolutely demands that these folks be fully accountable 

for performance, and for accounting for each and every taxpayer dollar. 

Thank you again, Mr. Chairman. We look forward to working with you and this 

distinguished Committee to obtain an excellent budget for VA in FY 2008, and to 

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ensure the next generation of veterans’ well-being by enacting assured funding. I 

will be happy to answer any questions you and your colleagues may have.

[The working paper prepared by Linda Bilmes of the John F. Kennedy School of 

Government, Harvard University, follows:]

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Chairman AKAKA. Thank you very much, Mr. Rowan. 

My questions are for all of our witnesses. What are your views 

on VA’s capacity to provide needed rehabilitation, case management, and community reintegration services for veterans with traumatic brain injuries and to help their families as caregivers? How 

can VA improve services to veterans with traumatic brain injuries 

and their families to help them recover and lead full, productive 

lives? 

I’d like to call on Mr. Blake first. 

Mr. BLAKE. Well, Senator Akaka, what I would say first is, I believe the VA is doing a great job already of doing their best to address the needs of particularly the veterans with traumatic brain 

injury. I think that has probably established itself, along with 

PTSD, as being at the forefront of conditions being experienced by 

the OIF/OEF veterans. 

Being a user of the VA Medical Center in Richmond, I see what 

they do there, and I think that it is yeoman’s work what they do 

there. They do a lot with a lot less than any other system outside 

of the VA would probably be able to handle. 

I would say that right now the best thing that could be done for 

the VA would be to complete appropriations work for their current 

year because all we are doing is putting them in a bind where even 

the most important services, which I would consider TBI and a lot 

of the specialized services to be, are also being strapped to the limits because they cannot hire new staff; they have even had to cut 

staff in a lot of cases because it is just not there. And for us to continue to expect the VA to provide these much needed services 

under the situation it is in is just unacceptable. 

Chairman AKAKA. Mr. Violante? 

Mr. VIOLANTE. Thank you, Mr. Chairman. I am not sure VA has 

the capacity. I mean, this seems to be the disability from this war, 

and, unfortunately, the range of severity is almost negligible in 

some individuals to totally severe in others. And I think VA needs 

to focus a lot more resources, number one, on identifying individuals that have been exposed to IEDs, whether that be minor exposure or whatever, because we are going to see a lot more of these 

individuals probably coming forward with disabilities in the future. 

So I think VA definitely needs more resources focused on this area. 

Chairman AKAKA. Mr. Greineder? 

Mr. GREINEDER. Thank you, Mr. Chairman. I would agree with 

my colleagues here at the table. I think VA has done a tremendous 

job on TBI issues and mental health issues. And I would say that, 

you know, to get VA the timely funding so they can cover their 

staff shortages and cover their needs in that area, as well as the 

funding area. 

Chairman AKAKA. Mr. Cullinan? 

Mr. CULLINAN. Thank you, Mr. Chairman. I would agree that VA 

to this point is doing a terrific job with respect to dealing with 

these issues. I certainly have to associate myself with Mr. Blake’s 

remarks, though, that it is very important to get them the money 

on time. They simply cannot keep on doing this without getting 

enough money on time. 

The other thing, things like TBI and certain force injuries are 

uncharted medical and scientific ground, so the area of research 

140

really has to be looked at. We have to identify those individuals, 

and we have to be able to find out what the things are that are 

going to beset these individuals as well, and how they can be addressed. So the research is key. 

Chairman AKAKA. Mr. Robertson? 

Mr. ROBERTSON. Yes, sir. It is very interesting, I was talking to 

a psychiatrist about this very subject, and he was telling me that 

most of the TBI injuries, the family members are the ones that are 

seeing the difference in their conduct and their behavior, and it is 

the families that are referring them into the hospitals. 

I am thinking that maybe we have to do a lot more outreach of 

educating the family members and spouses, whether it is a video 

to show them what signs they should be looking for or the kinds 

of conducts or symptoms traditionally associated with this kind of 

injury. 

The other thing is the separation physicals. I think it is just absolutely critical that when they separate these kids that have been 

in theater, they ask them specifically: Were you around IEDs? 

Were you involved in an automobile accident where your Humvee 

rolled over? Anything that could be documented to show that there 

was a head injury, because most of these, as you well know, there 

are no marks left behind. It is kind of like being shot with a bullet 

made of ice that melts and the evidence is gone, but the results are 

still pretty traumatic. 

Chairman AKAKA. Mr. Rowan? 

Mr. ROWAN. Yes, sir. I would concur with my colleagues, particularly Steve’s point. I had dinner with some people from Walter 

Reed recently, and one of the people there was a young lady who 

had gotten banged up in Afghanistan. And she got sent back to 

Germany and everything seemed fine, except she then had a massive stroke that put her in a wheelchair. So that point really comes 

home about following up with them. 

Also, we do a terrible job in families. I mean, one of the problems 

the VA has is we have never figured out what to do with families 

in any issues—PTSD, physical injury, whatever. And, I mean, I can 

only say thank God for Fisher Houses in dealing with the folks 

that are sitting in these places. And, I do not know, maybe we need 

to work on an appeal in the private sector to develop more Fisher 

Houses next to the VAs as well as next to Walter Reed and Brooks 

Army Medical Center and other places like that. But we need to 

do something. 

Chairman AKAKA. Well, I thank you very much for your responses. Before I call on Senator Craig, I just want to tell you that 

we both want to have joint sessions with VSOs here in Congress. 

And I want you to know that it is going to come back, and we look 

forward to that. 

Senator Craig? 

Senator CRAIG. Mr. Chairman, thank you very much. One question and then one comment. 

First and foremost, let me tell you that the Independent Budget 

serves a very valuable role in our assessment of and evaluation of 

the Administration and the VA’s budget, and its presentation and 

your involvement in it is not taken lightly. 

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The President’s request for medical care exceeds the Independent 

Budget recommendations when $2.3 billion in expected collections 

are factored in. Your organizations, however, do not factor in the 

expected collections and instead seek full funding from appropriated dollars alone. You do not all have to answer that, but, Carl, 

possibly you and others could explain why you don’t factor in the 

expected dollars now that we have a very real track record in the 

budget as to what those collections are. 

Mr. BLAKE. Well, Senator Craig, this point was also addressed 

when we had our meetings with your staff, and I think it is a good 

point, and it is one of those things where the historical trends in 

the past have borne out that the VA was really incapable of meeting its collections estimates. And I would be lying if I did not say 

that it is something that the further down the line we go, the more 

we will have to kind of re-evaluate it as the VA proves whether it 

is able to actually do it. 

The problem still remains. Although they may collect, let’s just 

say, for instance, 90 percent of their collection estimates this year, 

there is no guarantee that next year they will not turn right 

around once again and collect 40 percent or 35 percent. So there 

is too much risk, I believe, in laying too much on funding the VA 

health care system in estimates where there is far too much variation in how much collections VA is actually going to recognize. 

Senator CRAIG. OK. 

Mr. ROBERTSON. Since the American Legion is not part of the IB, 

I will not have an answer from the Legion’s perspective. We have 

always seen this as treatment for people other than the service 

connected, the ones where Title 38 says ‘‘the Secretary shall provide . . .’’ That usually covers Priority Groups 1 through 6. And 

then it says, ‘‘The Secretary may provide . . .’’ and that is the 

7s and 8s. 

So we have always had the mindset that when the discretionary 

appropriation is made, it is really made for the 1s through the 6s, 

and that the 7s and 8s, when eligibility reform was established, 

every veteran that registered that was a 7 and 8 had to agree to 

allow third-party collections and copayments. So they agreed to 

bring money into the system. Where the breakdown has taken 

place is, number one, the vast majority of our enrollees that are 7s 

and 8s are Medicare eligible, and VA is prohibited by law from billing Medicare. That is one. 

The other one is that if you have an insurance company that 

says, ‘‘If you go outside the PPO of our network of doctors, then it 

is on you.’’ And in that situation, when we send the bill to them, 

they send it back and say, ‘‘I am sorry. They went outside the network. We do not have to pay you anything.’’ So I was very pleased 

to see that VA has worked with Medicare in developing a reasonable charge formula, I guess, that is consistent with what Medicare 

uses when they start sending these bills out to more insurance 

companies. So, hopefully, more insurance companies will start looking at that and say, ‘‘Yes, that is an acceptable charge,’’ and go 

ahead and pay it. 

But throughout the history of the third-party collections, they 

have never, ever, ever met their goal. And when you are short of 

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money and that is part of your discretionary appropriations, that 

means it impacts directly at the health care facility. 

Senator CRAIG. Well, thank you all, and the reason I say that, 

we cannot ignore the obvious, and the obvious is the record. The 

VA brought in $1.7 billion in collections in 2004, $1.89 billion in 

2005, $2 billion in 2006, and is on the pace to collect $2.2 billion 

this year. 

I think it is reasonably safe to assume they are going to meet that target of $2.3 billion, and what I find us doing is ignoring one 

mighty big slush fund—a $2.3 billion slush fund sitting out in VA. 

Now, I hope you are not blinded by your pursuit of a totally funded entitlement program by ignoring the opportunity of reasonable 

revenue. 

Mr. ROBERTSON. May I please respond? 

Senator CRAIG. Well, no. 

[Laughter.] 

Senator CRAIG. Let me make one other observation, Steve. 

Mr. ROBERTSON. I will write you a letter. 

Senator CRAIG. Please do. Now, I am serious about this. 

Mr. ROBERTSON. I am, too. 

Senator CRAIG. It is worthy of an open discussion as to what we 

are all about here because of the obvious increased demands for 

veterans’ appropriate and necessary funding. Also, you know, I am 

allowed to change my mind on occasion, but when I do, it usually 

makes headlines. I, therefore, appreciate your ability to change 

your minds. But let me put into the record, Mr. Chairman, testimony from the DAV in 1996, which means somebody changed their 

mind, and it says here—and this is the representative of the DAV 

at that time saying to the then-Chairman: ‘‘But everybody else who 

comes to the system’’—and we are talking about the new priorities—‘‘Mr. Chairman, is going to have to pay their own way as 

they would in any other system, through either copayments, 

deductibles, or private insurance. So if there is an assumption on 

the cost of this bill being predicated upon all these new veterans 

coming into the system and not paying for their care, then it is a 

faulty assumption and one that drives the cost up.’’ That was 1996. 

Frankly, almost every veterans organization has changed their 

mind. 

Now, having said that, I think what is also important, the DAV 

goes on to say, ‘‘In the Independent Budget DAV proposes, along 

with AMVETS, PVA, and VFW, that the Secretary have the discretion to treat these parties at their own expense. We do not request 

that they be entitled to VA medical care. We believe it would be 

in the best interest of the veterans and the VA to allow these parties to use VA care at their own expense.’’ That was then. This is 

now. And in that stretch of time, we have seen a phenomenal 

growth in this budget, and appropriately so. None of us deny that. 

We have explained this before. You have explained it before. I 

am not criticizing. But I do believe, Mr. Chairman, it is important 

to let the record show there has been a significant shift in attitude 

about funding and funding priorities at a time when money is no 

less difficult to come by as it relates to providing our veterans with 

appropriate service. That is why, Steve, I wanted to go on and complete this. I am running fast to catch up with myself to get to anVerDate 0ct 09 2002 15:10 May 29, 2007 Jkt 000000 PO 00000 Frm 00146 Fmt 6633 Sfmt 6601 H:\RD41451\DOCS\33255.TXT SENVETS PsN: ROWENA
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other meeting, and, gentlemen, I would never deny you access to 

the record to express why you have changed and why you see it as 

necessary to change the position that was held then by your organizations and what is held today. 

Thank you, Mr. Chairman. 

[Hearing transcript excerpt follows:]

HEARING TRANSCRIPT EXCERPT, VETERANS HEALTH CARE ELIGIBILITY PRIORITIES

(PART I), HELD ON MARCH 20, 1996, SENATE COMMITTEE ON VETERANS’ AFFAIRS

Chairman SIMPSON. Which veterans should receive free medical care from the 

Federal Government and what services should they receive? 

Mr. GORMAN (DAV). I think the premise today that you would build a system on 

really was the premise it was built on when it was first enacted, and that is to take 

care of the wartime disabled veteran . . . we believe as an organization of serviceconnected veterans that that’s who the system should treat primarily.

Mr. VITIKACS (The American Legion). I certainly would concur that service disabled veterans are the primary constituents of the VA medical care system. I think 

that if we were newly creating a VA system today, we would also support the current eligibility where veterans unable to defray the cost of their own health care 

would be given consideration.

Mr. CURRIEO (VFW). I believe anyone who in the service of their country was injured or disabled in any way that needs medical treatment once they leave that 

military service, if they were injured and disabled in the line of duty, which doesn’t 

necessarily mean combat, it could be training accidents, should be entitled to some 

type of health care once they leave the service without any expense to themselves. 

Mr. MANSFIELD (PVA). I think, in response to some of the questions, what PVA 

is looking for is we think that service-connected veterans, catastrophically disabled 

veterans, veterans with limited income are those that ought to be the focus of VA providing health care. Other veterans with funding streams to be retained by the VA 

are what we’re talking about in additional care.

Chairman SIMPSON. If you say expanded and improved VA health benefits won’t 

open the floodgates, then are you saying to us that veterans will not seek free care? 

If so, why not? 

Mr. GORMAN (DAV). Although all these veterans may be eligible for care, and they 

are all eligible for care now, our proposal does not in any way stipulate or even 

imply that their care would not be paid for by somebody. The service-connected veteran and the Category A veteran as defined in the bill would continue to be provided care with appropriated dollars, as it should be. . . . But everybody else who 

comes to the system, Mr. Chairman, is going to have to pay their own way, as they 

would in any other system, through either copayments, deductibles, or private insurance. So if there’s an assumption on the cost of this bill being predicated upon all 

these new veterans coming into the system and not paying for their care, then it is 

a faulty assumption and one that drives the cost up.

Mr. VITIKACS (The American Legion). The American Legion has never, and will 

never, advocate the VA be a charity system. . . . In addition to VA achieving greater efficiencies and reducing redundancies within the VIS networks and to right-size 

the system through mission changes, we believe that the way to arrive at budget neutrality is through developing new revenue sources into the system. . . . Senator ROCKEFELLER (post-hearing Question For the Record). To what extent do 

you think it is important that access to VA care be provided to (a) Higher income 

veterans with no service-connected disabilities? (b) Dependents of veterans? 

Mr. GORMAN (DAV). In the Independent Budget, DAV proposes, along with 

AMVETS, PVA, and VFW, that the Secretary have the discretion to treat these parties at their own expense. We do not request that they be entitled to VA medical care. 

We believe it would be in the best interest of veterans and VA to allow these parties 

to use VA care at their own expense.

Mr. VITIKACS (The American Legion). The American Legion believes that higher 

income nonservice-connected veterans and certain dependents of eligible veterans 

should be permitted access to the VA health care system by paying premiums, copayments and deductibles. These additional revenue streams would help to ensure 

the long-term viability of the VA health care system. . . The normal appropriations 

process would ensure funding for Category A veterans and the conversion of VA to 

a market-based, managed care system would attract other paying customers.

Chairman AKAKA. Thank you very much. Your words and your 

statement is now part of the record, Senator Craig. 

144

We will submit the rest of the questions that Committee Members have to you for the record. 

I want to thank you all for your responses. We look forward to 

working with you on veterans’ issues this year. The hearing on the 

Fiscal Year 2008 Budget for Veterans’ Programs is now adjourned. 

[Whereupon, at 12:30 p.m., the Committee was adjourned.] 

(145)

A P P E N D I X 

PREPARED STATEMENT OF THE AMERICAN FEDERATION

OF GOVERNMENT EMPLOYEES, AFL–CIO 

INTRODUCTION

The American Federation of Government Employees, AFL–CIO, which represents 

more than 600,000 Federal employees who serve the American people across the Nation and around the world, including roughly 150,000 employees in the Department 

of Veterans Affairs (VA), is honored to submit a statement regarding the VA’s Fiscal 

Year (FY) 2008 budget. 

AFGE commends Chairman Akaka for his leadership in securing adequate funding for veterans in the face of VA’s unpredictable budget process. It is time to give 

veterans more predictability through an assured funding process. As Chairman 

Akaka so eloquently stated last month, ‘‘VA must not be seen simply as another department or agency coming hat in hand to seek funding.’’ The evidence of a broken 

funding process is overwhelming: a $3 billion shortfall 2 years ago, hiring freezes, 

hospitals operating in the red, and 400,000 pending benefit claims last year, while 

this year, the VA is operating on its twelfth continuing resolution in thirteen years. 

AFGE members see first hand both the costs of war and the costs of a discretionary VA funding formula. Chronic underfunding and financial uncertainty cause 

tremendous wear and tear on VA services and the employees who provide them. Our 

members who work in the Veterans Health Administration (VHA) and Veterans 

Benefits Administration (VBA) express growing anxiety, sometimes bordering on 

desperation over the lack of resources, staffing and training they need to do their 

jobs. Many VBA employees who process the claims of service-connected veterans 

were themselves once on the receiving end of the claims process. Many social workers in VHA providing PTSD treatment bring their own valuable veteran’s perspective to their jobs. The large numbers of veterans in low wage VA jobs who launder 

hospital bed linens and clear the snow on hospital grounds take particular pride in 

meeting the needs of fellow veterans. In short, AFGE speaks for employees and veterans in calling for a strong and predictable VA budget because we too believe that 

shortchanging veterans is unacceptable. 

NEED FOR MORE OVERSIGHT

Adequate funding goes hand in hand with adequate oversight. Congress and the 

public must be able to determine whether these precious dollars are being spent cost 

effectively and in the best interests of veterans. Unfortunately, there is far too little 

transparency in VA spending at the present time. As the Government Accountability 

Office (GAO) has found, the VA does a poor job of budget forecasting, relying on incorrect assumptions. In the first quarter of Fiscal Year 2006, VHA treated nearly 

34,000 more returning OIF and OEF veterans than it had predicted it would treat 

for the entire year. The VA does not adequately track how many health care dollars 

are spent on illegal cost comparison studies, according to another GAO study. Finally, last year, GAO found that millions of dollars budgeted for mental health strategic initiatives had not been spent. 

Stronger reporting requirements for VA spending are badly needed. It appears 

that the VA has suffered no consequences for filing several years of incomplete reports on contracting out that are required by Federal law (38 U.S.C. § 305). It also 

appears that the quarterly reports required by the Fiscal Year 2006 VA appropriations law have not provided much of a vehicle for oversight. For example, those 

quarterly reports should help track the movement of funds between the three medical care categories. Yet, AFGE members continue to report ‘‘borrowing’’ between 

medical accounts. Along the same lines, the proposed budget does not adequately 

explain why 5,689 food service jobs suddenly fit better in Medical Services than 

Medical Facilities. 

146

AFGE also urges the Committee to conduct oversight of other problem spending 

areas. First, it is very difficult to determine how much VHA spends on direct patient 

care FTEs as compared to supervisory and administrative FTEs. We are especially 

concerned about the enormous growth in VISN budgets. One of the original goals 

of the VISN reorganization was to reduce the need for management positions, and 

each VISN was expected to have 8 to 10 FTEs. Yet currently, total VISN employment is nearly three times that amount (638 FTEs). Seven of the 23 VISNs have 

30 or more employees. AFGE also encourages more oversight of VHA dollars spent 

on bonuses. 

THE PRESIDENT’S FISCAL YEAR 2008 BUDGET PROPOSAL

As proud and longtime supporters of the Independent Budget (IB), AFGE’s overall 

concern with the President’s budget proposal is that the proposed funding levels for 

VHA and VBA fall short of the IB’s recommendations, which forecasts veterans’ 

needs using sound, systematic methodology. We also concur with the IB’s recommendation to restore eligibility to Category 8 veterans. AFGE rejects doubling of 

copays, new user fees or any other policies that shift costs to moderate income veterans and shrink deficits by pushing veterans away. 

Despite the Administration’s contentions, this proposed budget is not gimmickfree. Even though drug copays and user fees are not part of this year’s medical care 

budget, the Administration acknowledges that these dollars could affect its 2009 appropriations request. Another familiar gimmick is to follow a strong first year budget with a decrease in funding over the next 4 years; according to the Center for 

Budget and Policy Priorities, veterans’ health care would undergo large cuts between 2008 and 2012. 

Fee Basis Care 

One of the most harmful byproducts of underfunding is excessive reliance on contract care. Federal law and good policy dictate that fee basis care should be provided 

to veterans in limited circumstances. AFGE is concerned that the proposed Fiscal 

Year 2008 budget continues a dangerous trend toward increased reliance on fee 

basis care, in lieu of hiring more VA medical professionals and timely construction 

of new hospitals and clinics. The number of outpatient medical fee basis visits estimated for Fiscal Year 2008 represents a 27 percent increase in 3 years. Veterans 

deserve a better explanation of VA’s growing reliance on fee basis care, in the face 

of constant accolades in the medical community about the quality of VA health care. 

AFGE also has concerns about the potential of VA’s newest fee basis initiative, 

Project HERO, to waste scarce medical dollars by increased use of contract care. 

Long Term Care 

The Administration has once again failed to propose adequate funding for institutional long term care. There are insufficient resources in the community to shift 

large numbers of aging and disabled veterans to noninstitutional care. Some veterans must remain in institutional care and need beds that are currently in short 

supply. In addition, AFGE questions estimates in the proposed budget that predict 

declines in operating levels for rehabilitative, psychiatric, nursing home and domiciliary care. 

VBA 

The proposed priority system for processing OIF and OEF claims leaves many unanswered questions. Admiral Cooper’s assurance at the budget briefing that this 

new system will ‘‘hopefully’’ not impact other veterans already facing long delays in 

claims processing is not enough. VBA needs to hire enough staff to process all benefit claims in a timely manner. Specific legislation should be required to impose any 

priority system in VBA. 

The proposed budget does not contain adequate justification for its request for dollars to conduct new contracting out pilot projects for medical exams to determine 

service-connected disabilities and income matching. AFGE strongly encourages this 

Committee to inquire as to whether it is in veterans’ interests to contract out this 

work, and whether doing so violates competition requirements in the OMB A–76 

Circular and 2006 Transportation-Treasury Appropriations law. 

The proposed increase in staff for the processing of disability claims is a step in 

the right direction. However, the proposed decrease in staff for the Pension Maintenance Centers is definitely a step in the wrong direction. Currently, the Pension 

Maintenance Centers have too few authorizers to review cases, while adjudicators 

are pressured to give claims a limited review to meet production standards. If VBA 

proceeds with plans to shift the processing of original pension claims from the Regional Offices to the Pension Maintenance Centers, additional staff will be needed. 

147

REPORTS FROM THE FRONT LINES

The following examples illustrate how underfunding and financial uncertainly adversely impact the delivery of health care to veterans: 

Nurses 

• Pay: Despite widely recognized problems with recruitment and retention, RNs 

in every VISN report problems with the locality pay process established by 2000 

nurse legislation. Managers often refuse to provide locality pay increases even after 

conducting surveys, claiming lack of funds. The result is a worsening of the current 

nurse recruitment and retention problem and fewer nurses at veterans’ bedsides. 

• Contract Nurses: Turning to contract nurses as a stopgap solution wastes scarce 

dollars and impacts quality. AFGE commends Chairman Akaka and Senator 

Salazar for requesting a GAO study of the growing VA practice of using contract 

nurses to address nursing shortages resulting from budget-driven hiring freezes. 

• Floating: Another frequently used stopgap solution that hurts patient care is requiring nurses to rotate between two or more short-staffed clinics. 

• Mandatory Overtime: Despite provisions in 2004 legislation to reduce mandatory nurse overtime, hospitals continue to rely on mandatory overtime to address 

staffing shortages. 

• Patient Safety Equipment: AFGE urges this Committee to ensure that all VA 

medical facilities have the funds to purchase patient lifting equipment that reduce 

nurse back injuries and patient tears. 

Physicians and Dentists 

In every VISN, physicians and dentists report difficulty getting adequate market 

pay increases and performance pay awards, despite clear language in 2004 physicians pay legislation. Facility directors have contended that they lack the funds to 

increase pay and give awards, even before they convened any panels to set market 

pay or conducted evaluations of individual physician performance. Management also 

cries ‘‘budget’’ in refusing to reimburse physicians for continuing medical education, 

again despite clear language in Title 38 entitling full-time physicians to up to 

$1,000 per year. 

On call physicians are routinely scheduled for weekend rounds and are not provided any compensation time for weekend work. Primary care panel sizes are at 

maximum levels regardless of the complexity of various cases. Physicians with 

heavy workloads must also cover large patient loads of other doctors on leave as 

there are no additional physicians available. 

The results of these ill-advised policies are widespread shortages of specialty physicians throughout the VA, and shorthanded primary care clinics with enormous patient caseloads. 

Delays in Diagnostic Testing 

Short staffing causes significant delays in medical testing. According to recent report from a VISN 20 facility, veterans there face significant delays in obtaining 

sleep studies because the sleep clinic lacks adequate staff to review the results. As 

a result, it takes 5 to 6 months to get reports read (over double the wait time a 

year ago). The facility is also experiencing extensive delays in getting the results 

of bone density studies because the Imaging Department has only one part-time employee to read the scans. 

Mental Health 

Due to a chronic shortage of psychiatrists in many facilities, new veterans entering the VA health care system must wait several months to see a psychiatrist. 

While there has been an increase in hiring of new social workers, the level is still 

below that of 10 years ago. Heavier caseloads prevent social workers from spending 

more time with patients and providing other support such as visiting patients at 

homeless shelters. 

CONCLUSION

AFGE greatly appreciates the opportunity to submit our views and recommendations to the Senate Committee on Veterans Affairs. We look forward to working with 

Chairman Akaka and Ranking Member Craig to ensure that the VA budget adequately meets the needs of our veterans in Fiscal Year 2008 and beyond. We believe 

assured funding and increased oversight are essential to meeting that goal. 

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PREPARED STATEMENT OF THE FRIENDS OF VA MEDICAL CARE

AND HEALTH RESEARCH

On behalf of the Friends of VA Medical Care and Health Research (FOVA), thank 

you for your continued support of the Department of Veterans Affairs (VA) Medical 

and Prosthetic Research Program. FOVA is a coalition of over 80 national academic, 

medical and scientific societies; voluntary health and patient advocacy groups; and 

Veterans Service Organizations committed to ensuring high-quality health care for 

our Nation’s veterans. The FOVA organizations greatly appreciate this opportunity 

to submit testimony on the President’s proposed Fiscal Year (FY) 2008 budget for 

the VA research program. For Fiscal Year 2008, FOVA recommends an appropriation of $480 million for VA Medical and Prosthetic Research and an additional $45 

million for research facilities upgrades to be appropriated through the VA Minor 

Construction account. 

FOVA recognizes the significant budgetary pressures this committee bears and 

thanks both the House and Senate Committees on Veterans Affairs for their Fiscal 

Year 2007 views and estimates with regard to the VA Medical and Prosthetic Research program. The committees’ recommended increases in VA research funding of 

between $28 million and $51.5 million over the President’s Fiscal Year 2007 budget 

request for the VA research program affirm your ongoing support for improving the 

health of our Nation’s veterans. FOVA also thanks Senators Akaka and Craig for 

their strong leadership of this committee and for leading efforts in the Senate to 

encourage the Senate Committee on Appropriations to appropriately fund the VA 

research program. FOVA looks forward to working with you to develop views and 

estimates for Fiscal Year 2008 that reflect this same commitment to medical research for the benefit of veterans and, ultimately, all Americans. 

VA MEDICAL AND PROSTHETIC RESEARCH IS NECESSARY FOR SUPERIOR

VETERANS HEALTH CARE

Recent stagnate funding has jeopardized the national leadership status of the VA 

research program. Significant growth in the annual VA research appropriation is 

necessary to continue to achieve breakthroughs in health care for the current population of veterans and to develop new means for addressing the health care needs 

of the Nation’s new veterans. 

For Fiscal Year 2008, the Bush Administration has yet again recommended a 

budget that cuts funding for the VA research program. When biomedical inflation 

is considered—the Biomedical Research and Development Price Index for Fiscal 

Year 2008 is projected at 3.7 percent—the research program will be cut even more 

significantly than the $1 million in current dollars. Just to keep pace with the previous year’s spending, an additional $15 million, for a total of $427 million, is required. 

FOVA’s $480 million recommendation for VA research funding represents an inflation adjustment for the program against the Fiscal Year 2003 baseline. Unfortunately, this recommendation does not even address the additional funding needed 

to address emerging needs for more research on posttraumatic stress disorder 

(PTSD), long-term treatment and rehabilitation of veterans with polytraumatic blast 

injuries, and genomic medicine. 

The VA Medical and Prosthetic Research program has been one of the Nation’s 

premier research endeavors. The program has a strong history of success as illustrated by the following examples of VA accomplishments:

• Developed effective therapies for tuberculosis. 

• Invented the implantable cardiac pacemaker, helping many patients prevent potentially life-threatening complications from irregular heartbeats.

• Performed the first successful liver transplants. 

• Developed the nicotine patch. 

• Found that an implantable insulin pump offers better blood sugar control, 

weight control, and quality of life for adult-onset diabetes than multiple daily injections. 

• Identified a gene associated with a major risk for schizophrenia. 

• Launched the first treatment trials for Gulf War Veterans’ Illnesses, focusing 

on antibiotics and exercise. 

• Began the first clinical trial under the Tri-National Research Initiative to determine the optimal antiretroviral therapy for HN infection. 

• Launched the largest-ever clinical trial of psychotherapy to treat PTSD. 

• Demonstrated the effectiveness of a new vaccine for shingles, a painful skin and 

nerve infection that affects older adults. 

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• Discovered—via a 15-year study of 5,000 individuals—that secondhand smoke 

exposure increases the risk of developing glucose intolerance, the precursor to diabetes.

VA strives for improvements in treatments for conditions with a prevalence 

among veterans greater than in the general population, including: diabetes, substance abuse, mental illnesses, heart diseases, and prostate cancer. The VA research 

program also focuses its efforts on service connected conditions, including spinal 

cord injury, paralysis, amputation, and sensory disorders. 

VA is equally obliged to develop better responses to the grievous conditions suffered by veterans of Operation Iraqi Freedom (OIF) and Operation Enduring Freedom (OEF), such as extensive bums, multiple amputations, compression injuries, 

and mental stress disorders. Additional increases are also necessary for continued 

support of new initiatives in neurotraumas, including head and cervical spine injuries; wound and pressure sore care; pre- and post-deployment health issues with a 

particular focus on post-traumatic stress disorder; and the development of improved 

prosthetics and strategies for rehabilitation from polytraumatic injuries. These returning OIF and OEF veterans have high expectations for returning to their active 

lifestyles and combat. 

The seamless mental and physical reintegration of these soldiers is a challenge, 

but the VA Medical and Prosthetic Research Program can and will address these 

needs. However, without appropriate funding, VA will be ill-equipped to address the 

needs of the returning veteran population while also researching treatments for diseases that affect veterans throughout the course of their lives and for which they 

will seek treatment from VA medical facilities. 

To address these long-term needs, VA has a distinct opportunity to recreate its 

health care system and provide progressive and cutting edge care for veterans 

through genomic medicine. Innovations in genomic medicine will allow the VA to 

track genetic susceptibility for disease and develop preventative measures; predict 

response to medication; and modify drugs and treatment to match an individual’s 

unique genetic structure. VA is the obvious choice to undertake substantial research 

in genomic medicine as the largest integrated health care system in the world with 

an advanced and industry-leading electronic health record and a dedicated population for sustained research, ethical review, and standard processing. 

While advances in genomic medicine show promise in aiding the discovery of new, 

personalized treatments for diseases prevalent among many veterans seeking treatment at VA hospitals, there is also evidence that genomic medicine will greatly help 

in the treatment and rehabilitation of returning OIF/OEF veterans. For instance, 

research can target the human genome for insight into individual capacity for the 

healing of wounds. Additional studies have considered the differences between genes 

that aid in healing and genes that cause inflammation and its sideeffects. Advancements in this field can drastically influence the treatment of injured soldiers and 

may play a large role in the long-term treatment of surgical patients and amputees. 

The VA genomic medicine project will require sustained increases in funding for 

the VA research program over the next decade, at least. A VA pilot program for 

banking genetic information that involves 20,000 individuals and 30,000 specimens 

(with the capacity to hold 100,000 specimens) provides estimates that approximately 

$1,000 will be necessary to conduct genetic analyses of each specimen. The potential 

advances that can be achieved with regard to PTSD and veteran-related diseases 

rely on an expansion of tissue banking as the crucial information generating step 

that will inform future ongoing research and the development of new treatments. 

VA RESEARCH FACILITIES MUST BE UPDATED TO MEET

SCIENTIFIC OPPORTUNITIES

State-of-the-art research requires state-of-the-art technology, equipment, and facilities in addition to highly qualified and committed scientists. Modem research 

cannot be conducted in facilities that more closely resemble high school science labs 

than university-class spaces. Modern facilities also help VA recruit and retain the 

best and brightest clinician scientists. In recent years, funding for the VA Minor 

Construction Program has failed to provide the resources needed to maintain, upgrade, and replace aging research facilities. Many VA facilities have run out of adequate research space, and ventilation, electrical supply, and plumbing appear frequently on lists of needed upgrades along with space reconfiguration. Under the current system, research must compete with other facility needs for basic infrastructure 

and physical plant improvements which are funded through the minor construction 

appropriation. 

FOVA appreciates the inclusion within the House-passed Military Quality of Life 

and Veterans’ Affairs and Related Agencies Fiscal Year 2007 appropriations bill of 

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an additional $12 million to address research facility infrastructure deficiencies. The 

House Committee on Appropriations also gave attention to this problem in the 

House Report accompanying the Fiscal Year 2006 appropriations bill (P.L. 109–114), 

which expressed concern that equipment and facilities to support the research program may be lacking and that some mechanism is necessary to ensure VA’s research facilities remain competitive. The report noted that more resources may be 

required to ensure that research facilities are properly maintained to support VA’s 

research mission. To assess VA’s research facility needs, Congress directed VA to 

conduct a comprehensive review of its research facilities and report to Congress on 

the deficiencies found, along with suggestions for correction. Unfortunately, in its 

Fiscal Year 2008 budget submission, VA stated that this review, already underway 

for the past year, will take an additional 3 years to complete. 

Meanwhile, in May, 2004, Secretary of Veterans Affairs Anthony J. Principi approved the Capital Asset Realignment for Enhanced Services (CARES) Commission 

report that called for implementation of the VA Undersecretary of Health’s Draft 

National CARES Plan. The CARES Plan recommended at least $87 million to renovate existing research space. FOVA believes this estimate should be sufficient justification for an increase in the minor construction program to begin a significant 

modernization program. However, based on pre-2004 assessments of VA research facilities, FOVA believes a complete assessment of research infrastructure needs will 

likely require a facilities improvement investment of more than $300 million across 

the 75 VA medical centers that conduct significant amounts of VA funded research. 

The urgency of VA funding for facilities is more heightened now than ever given 

the difficulties facing many affiliated non-profit research corporations, which have 

historically contributed to the modernization of VA research facilities. 

FOVA believes Congress should establish and appropriate a funding stream specifically for research facilities using the VA assessment resulting from the Fiscal 

Year 2006 report language. In the meantime, to ensure that funding is adequate to 

meet both immediate and long-term needs, FOVA recommends an annual appropriation of $45 million in the minor construction budget dedicated to research facilities 

improvements. This appropriation is a critical interim step to ensure VA can continue to conduct state-of-the-art research. 

THE INTEGRITY OF VA’S INTRAMURAL, PEER-REVIEW SYSTEM

MUST BE PRESERVED

As a perquisite for membership, all FOVA organizations agree not to pursue earmarks or designated amounts for specific areas of research in the annual appropriation for the VA research program. The coalition urges you to take a similar stance 

in regard to Fiscal Year 2008 funding for VA research for the following reasons:

• The VA research program is exclusively intramural. Only VA employees holding 

at least a five-eighths salaried appointment are eligible to receive VA research 

awards originating from the VA research appropriation. Compromising this principle by designating funds to institutions or investigators outside of the VA undermines an extremely effective tool for recruiting and retaining the highly qualified 

clinician-investigators who provide quality care to veterans, focus their research on 

conditions prevalent in the veteran population, and educate future clinicians to care 

for veterans . 

• VA has well-established and highly refined policies and procedures for peer review and national management of the entire VA research portfolio. Peer review of 

proposals ensures that VA’s limited resources support the most meritorious research. Additionally, centralized VA administration provides coordination of VA’s 

national research priorities, aids in moving new discoveries into clinical practice, 

and instills confidence in overall oversight of VA research, including human subject 

protections, while preventing costly duplication of effort and infrastructure. Earmarks have the potential to circumvent or undercut the scientific integrity of this 

process, thereby funding less than meritorious research. 

• VA research encompasses a wide range of types of research. Designating 

amounts for specific areas of research minimizes VA’s ability to fund ongoing programs in other areas and forces VA to delay or even cancel plans for new initiatives. 

Biomedical research inflation alone, estimated at 3.8 percent for Fiscal Year 2005, 

3.5 percent for Fiscal Year 2006, and 3.7 percent for Fiscal Year 2007, has reduced 

the purchasing power of the R&D appropriation by $44.9 million over just 3 years. 

In the absence of commensurate increases, VA is unable to sustain important research on diabetes, hepatitis C, heart diseases, stroke and substance abuse, or address emerging needs for more research on post traumatic stress disorder and longterm treatment and rehabilitation of polytraumatic blast injuries. While Congress 

151

certainly should provide direction to assist VA in setting its research priorities, earmarked funding exacerbates ongoing resource allocation shortages. 

VA MEDICAL AND PROSTHETIC RESEARCH WILL THRIVE

WITH YOUR SUPPORT

With its modest research funding, the VA Medical and Prosthetic Research Program has yielded the important scientific discoveries outlined above, competed successfully for over $1 billion annually in funding from other governmental research 

programs as well as the private sector, produced multiple Nobel Laureates and recipients of other major research recognitions, and added over 2,900 papers annually 

to the scientific literature. However, VA’s modest funding has also required that scientific awards be capped at $125,000 annually, a level significantly lower than the 

average award amount for the National Institutes of Health, for example. The 

$125,000 cap is also lower than the cap on funding from earlier in this decade, a 

tradeoff VA leadership has had to make to continue funding the same number of 

grants it has historically supported. Modest funding has also limited the capacity 

of the VA career development program and forced VA to cut funding to important 

program areas including aging, degenerative diseases of bones and joints, infectious 

diseases, and kidney disorders. 

Congresses’ strong past support for the VA research program has been encouraging. FOVA believes the crises and opportunities facing VA research necessitate a 

significant boost in Federal funding for the program. With such funding, VA can 

maintain its leadership role in developing resources to address the immediate 

health care needs of veterans emerging from OIF/OEF as well as the long-term 

needs of these veterans and those who served the country in the 20th century. 

Again, FOVA appreciates the opportunity to present our views to the Committee. 

While research challenges facing our Nation’s veterans are significant, if given the 

resources, we are confident the expertise and commitment of the physician-scientists 

working in the VA system will meet the challenge. 

[The Inflation Adjusted VA Research Appropriations chart follows:]

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FOVA MEMBERSHIP

Administrators of Internal Medicine 

Alliance for Academic Internal Medicine 

Alliance for Aging Research 

American Academy of Child and Adolescent Psychiatry 

American Academy of Neurology 

American Academy of Orthopaedic Surgeons 

American Association for the Study of Liver Diseases 

American Association of Anatomists 

American Association of Colleges of Nursing 

American Association of Colleges of Osteopathic Medicine 

American Association of Colleges of Pharmacy 

American Association of Spinal Cord Injury Nurses 

American Association of Spinal Cord Injury Psychologists and Social Workers 

American College of Chest Physicians 

American College of Clinical Pharmacology 

American College of Physicians 

American College of Rheumatology 

American Dental Education Association 

American Federation for Medical Research 

American Gastroenterological Association 

American Geriatrics Society 

American Heart Association 

American Hospital Association 

American Lung Association 

American Military Retirees Association 

American Occupational Therapy Association 

American Optometric Association 

American Osteopathic Association 

American Paraplegia Society 

American Physiological Society 

American Podiatric Medical Association 

American Psychiatric Association 

American Psychological Association 

American Society for Bone and Mineral Research 

American Society for Pharmacology and Experimental Therapeutics 

American Society of Hematology 

American Society of Nephrology 

American Thoracic Society 

Association for Assessment and Accreditation of Laboratory 

Animal Care International 

Association for Research in Vision and Ophthalmology 

Association of Academic Health Centers 

Association of American Medical Colleges 

Association of Professors of Medicine 

Association of Program Directors in Internal Medicine 

Association of Schools and Colleges of Optometry 

Association of Specialty Professors 

Association of VA Chiefs of Medicine 

Association of VA Nurse Anesthetists 

Blinded Veterans Association 

Blue Star Mothers of America 

Clerkship Directors in Internal Medicine 

Coalition for Health Services Research 

Digestive Disease National Coalition 

Federation of American Societies for Experimental Biology 

Gerontological Society of America 

Gold Star Wives 

Hepatitis Foundation International 

International Foundation for Functional Gastroenterological Disorders 

Juvenile Diabetes Research Foundation International 

Legion of Valor of the USA, Inc. 

Medical Device Manufacturers Association 

Medicine-Pediatrics Program Directors Association 

Military Officers Association of America 

National Alliance on Mental Illness 

National Association for the Advancement of Orthotics and Prosthetics 

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National Association for Uniformed Services 

National Association of VA Dermatologists 

National Association of VA Physicians and Dentists 

National Association of Veterans’ Research and Education Foundations 

National Mental Health Association 

Nurses Organization of Veterans Affairs 

Osteogenesis Imperfecta Foundation 

Paralyzed Veterans of America 

Paralyzed Veterans of America Spinal Cord Research Foundation 

Partnership Foundation for Optometric Education 

Society for Investigative Dermatology 

Society for Neuroscience 

Society for Women’s Health Research 

Society of General Internal Medicine 

Spinal Cord Research Foundation 

The Endocrine Society 

United Spinal Association 

Veterans Affairs Physician Assistant Association 

Veterans of the Vietnam War and the Veterans Coalition 

Vietnam Veterans of America 

THE INDEPENDENT BUDGET RESPONSE TO WRITTEN QUESTIONS

SUBMITTED BY HON. DANIEL K. AKAKA, CHAIRMAN, U.S. SENATOR FROM HAWAII

Question 1. I would like your comments on VA’s proposed enrollment fee and increase in the prescription drug copayment for Priority 7 and 8 veterans-both of 

which the Administration has repeatedly proposed. What are the implications of 

these policies? How many veterans do you estimate would be drive out of the system? 

Answer. Although the Administration’s proposal will not have direct impact on 

veterans’ health care funding, we are deeply disappointed that the Administration 

chose to once again recommend an increase in prescription drug copayments from 

$8 to $15 and an indexed enrollment fee based on veterans’ incomes. These proposals will simply add additional financial strain to many veterans, including veterans with catastrophic disabilities. Although the VA does not overtly explain the 

impact of these proposals, similar proposals in the past have estimated that nearly 

200,000 veterans will leave the system and more than 1,000,000 veterans will 

choose not to enroll. 

It is astounding that this Administration would continue to recommend policies 

that would push veterans away from the best health care system in the world. The 

Independent Budget contends that veterans should not have to pay an additional 

price to utilize the VA health care system, when that price was already paid 

through their service. Furthermore, it is not appropriate to compare the VA system 

and these new proposed fees to the TRICARE system and the fees that enrolled retirees pay. TRICARE serves as an insurance program both for the retiree and his 

or her family. A veteran’s family has only limited access to the VA health care system. We appreciate the fact that Congress has soundly rejected these proposals in 

the past and we hope that you will do so once again.

Question 2. How long should a veteran or dependent have to wait to have his or 

her claim decided? 

Answer. While the IB does not make recommendations regarding a specific 

amount of time considered reasonable for a veteran to await a claims decision, we 

appreciate Chairman Akaka’s question and effort to establish a benchmark for the 

Department of Veterans Affairs (VA) to strive for in claims processing times. The 

IB does not normally make such recommendations because we believe the VA 

should continually strive to increase efficiency, though its primary focus should be 

on producing accurate decisions that must not be appealed. Not withstanding this 

position, the IB would be pleased with the progress made if VA were able to attain 

the goals it has already established for itself. In 2001, the Secretary of Veterans Affairs’ Claims Processing Task Force goal was to reduce the waiting period by fifty 

percent. According to the VA Web site, the average processing time then was 202 

days, so the goal was to reduce it to 101 days. The Veterans’ Claims Assistance Act 

of 2000 and other factors have impacted that goal and the VA’s new goal is to reduce claims processsing time to 145 days. Clearly, disabled veterans should have to 

wait as little as possible to receive benefits to which they are entitled, but a 145-

day waiting period would certainly be preferable to the length of time that is curVerDate 0ct 09 2002 15:10 May 29, 2007 Jkt 000000 PO 00000 Frm 00158 Fmt 6601 Sfmt 6621 H:\RD41451\DOCS\33255.TXT SENVETS PsN: ROWENA
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rently required. Again, while efficiency is important, the FY 2008 IB emphasizes 

that VA’s main focus should be on quality rather than quantity.

Question 3. As you know, improved cooperation between VA and DOD to achieve 

a seamless transition between the two Departments for separating servicemembers 

is one of my top priorities. I was glad to see The Independent Budget’s recommendation that VA and DOD ensure that servicemembers have a seamless transition from 

military to civilian life. Please share your thoughts on what the Departments can 

do to improve on their performance and reach this goal. 

Answer. The Independent Budget Veterans Service Organizations (IBVSO) believe 

that regardless of who is responsible for addressing weaknesses in the process, 

seamless transition is a responsibility that both agencies must bear equally. Time 

and again, progress has been stymied by a combination of a lack of leadership priority and oversight, bureaucratic inertia, and technological backwardness. It is disconcerting comparing the current state of the seamless transition process to the potential extraordinary accomplishments of which the DOD and VA are capable. We 

recommend greater vigilance from Congress in its oversight responsibilities on 

issues hampering the seamless transition of servicemembers, possibly through an 

informal workgroup for point specific issues regarding strategic goals in the Joint 

Strategic Plan approved by the VA–DOD Joint Executive Committee. Additionally, 

we recommend joint committee hearings with the Senate Committee on Armed 

Services for greater transparency and oversight of the VA–DOD Joint Executive 

Council activities including the implementation of the Joint Strategic Plan. 

Issues regarding fundamental components of the process remain to which we address recommendations including the development of electronic medical records that 

are interoperable and bidirectional, allowing for two-way electronic exchange of computable health information; occupational and environmental exposure data; and, an 

electronic Discharge Document (DD) 214. At a minimum, this would allow VA to expedite the process and give the servicemember faster access to health care and benefits. In addition, implementing a mandatory single separation physical as a prerequisite of promptly completing the military separation process would address 

many issues in the transitioning of benefits and services for servicemembers entering civilian life. Although the physical examinations of demobilizing reservists have 

improved in recent years, there are still a number of soldiers who ‘‘opt out’’ of the 

physical examinations, even when encouraged by medical personnel to obtain them. 

Finally, we recommend additional funding for the Army Wounded Warrior Program 

and Marine for Life programs to allow for appropriate expansion of these programs 

to address the needs of more seriously disabled soldiers and Marines. With a high 

number of severely injured servicemembers returning from Iraq and Afghanistan, 

it is essential that Congress and the Administration support and enhance these successful programs.

Question 4. Given that VBA continues to fall behind in workload pending versus 

workload completed, what are some immediate steps that can be taken to give some 

relief to veterans who are waiting to have their claims adjudicated? 

Answer. The IB appreciates the Chairman’s innovative perspective with regard to 

providing benefits to disabled veterans as quickly as possible. Clearly, doing so 

would require some degree of certainty that such veterans will be eligible for service-connected benefits. Otherwise, such a grant would merely create an overpayment 

and indebtedness to the Government for veterans whose claim is denied. The VA 

already utilizes authority to grant immediate benefits via ‘‘memorandum ratings’’ to 

veterans, such as those severely injured in combat, who will unquestionably be entitled to at least twenty percent service connected disability compensation. The 

memorandum rating is a temporary rating that is for the purpose of establishing 

entitlement to Vocational Rehabilitation and Employment (VR&E). With entitlement to VR&E established, disabled veterans can begin their lengthy transition into 

the civilian job market and lifestyle. 

Perhaps this process could be used as a template to deliver additional benefits to 

disabled veterans awaiting their final rating decisions. Most importantly, VA should 

have sufficient resources to enable it to make timely claims decisions. This would 

take into consideration the irreducible amount of time required for responses to requests for information, including turnaround time for mailing; the minimum number of days in queue to maintain minimum inventory necessary for having work on 

hand, maintaining even production; and, reasonable task times.

Question 5. The Department of Veterans Affairs Personnel Enhancement Act of 

2004 was intended to reform the pay and performance system used by VA for hiring 

and retaining its physicians and dentists. Now that we are in the first full year of 

implementation, can you give us a sense of how well VA has implemented this legisVerDate 0ct 09 2002 15:10 May 29, 2007 Jkt 000000 PO 00000 Frm 00159 Fmt 6601 Sfmt 6621 H:\RD41451\DOCS\33255.TXT SENVETS PsN: ROWENA
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lation and if it is truly assisting VA in recruiting and retaining the best and brightest physicians? 

Answer. We do not detect any notable change in VA’s pace or methods for recruiting physician staff that we can attribute to enactment of Public Law 108–445. We 

are confident that VA managers of health care want to obtain the ‘‘best and brightest’’ in physicians and all staff who care for veterans, but we cannot verify that result with any objective data that can be linked to passage of the Act. We are concerned about whether VA’s stated support for its passage, provided by the Under 

Secretary for Health at a hearing before your House counterpart on October 23, 

2003, has been fulfilled. The Under Secretary testified as follows:

‘‘Also, a national shortage of many physician specialties critical to our health care 

mission further affects our ability to fill key vacancies. In these shortage specialties, 

VA total compensation lags behind private or academic sectors by as much as 67 

percent. If we are to maintain our tertiary care capability and our capacity to offer 

a full range of health care services to veterans, including those now serving in far 

away parts of the world, we must be able to offer competitive salaries. For several 

specialties, we are losing staff faster than we can hire them. In some critical specialties, our turnover rate exceeds 25 percent a year. Many facilities are not actively 

recruiting, as Mr. Rodriguez pointed out, to fill some key vacancies because they 

simply cannot find viable candidates at current VA salary rates. It is estimated that 

there are over 900 such positions nationwide for physician specialties. Non-competitive pay and benefits are also reflected in dramatic increases in our scarce specialty, 

fee basis, and contractual expenditures. These expenditures, which are necessitated 

when we cannot hire physicians, have risen from $180 million a year in 1995 to over 

$850 million a year last year. Additionally, we increasingly must hire non-U.S. citizens under the VA’s J–1 visa waiver authority, and international medical graduates 

now constitute almost 30 percent of our entire VA physician workforce. The problems with the current system are clear. Special pay rates are fixed in statute so that 

over time, their values are eroded by inflation, and VA pay falls behind the market. 

We now pay the maximum authorized amounts for some scarce specialists, and have 

no discretion under existing statute to pay more to retain these mission critical employees.’’

The premise in Congressional passage of the bill was that these numbers (of vacancies in specialty physicians, and the costs for contracting for scarce medical specialists) would both fall. The overall indication was that the Veterans Health Administration would position itself—using this authority—to make itself a more attractive employment opportunity for specialists, and that specialists would respond. 

One of the requirements of the Act is that VA submits a report to the Committee 

18 months post enactment, reporting its effects on recruitment and retention. We 

hope VA will address at least some of these questions in providing that report to 

the Committee. 

In monitoring implementation of this legislation, we were disturbed at VA’s exclusionary approach to developing compensation panels, setting parameters for market 

pay and establishment of performance pay incentives. We have learned that VA 

would not allow outside consultation with labor organizations representing VA physicians on any of these matters, despite the stated intention of your Committee that 

VA physicians be consulted in establishing these policies. Also, funding shortages 

in VA facilities essentially negated the promise of significant performance pay being 

made available to fulfill the purposes of the Act. In a number of networks, local 

management was given the option of setting arbitrary caps on performance pay that 

were imposed universally and preventing any significant rewards for outstanding 

performance, while VA physicians working within the performance plans were penalized if they failed to meet those expected levels of productivity. We understand 

that the American Federation of Government Employees was refused in its effort 

under the Freedom of Information Act to obtain statistical information from VA 

dealing with the establishment of compensation panels, the policies governing that 

work, and of salary ranges those panels set, even though it is difficult for us to understand the claimed ‘‘sensitive’’ nature of this information. 

For all these reasons, The Independent Budget Veterans Service Organizations 

are concerned about the status of VA physician pay as a consequence of enactment 

of Public Law 108–445, and we hope the Committee will use its oversight authority 

to closely monitor VA actions. 

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THE INDEPENDENT BUDGET RESPONSE TO WRITTEN QUESTIONS SUBMITTED

BY HON. LARRY E. CRAIG, RANKING MEMBER, U.S. SENATOR FROM IDAHO

Question 1. The IB’s recommendation of 9,300 direct FTE for the C&P service appears to be based on an assumption that VA will receive over 870,000 claims in Fiscal Year 2008 plus an additional 56,000 claims based on the six state outreach that 

occurred in 2006. VA, on the other hand, has estimated that it will receive 800,000 

total claims in Fiscal Year 2008 and is not projecting any additional work in Fiscal 

Year 2008 based on the six state outreach, which ultimately generated only 8,000 

additional claims. 

Using the IB’s math of 100 claims per FTE, if VA’s projection of 800,000 claims 

is accurate, wouldn’t the 8,300 direct FTE requested by the Administration be more 

than adequate? 

Response. Yes, if VA’s projection that it will receive 800,000 claims is accurate, 

8,300 FTE would be adequate based on the IB recommendation of 100 claims per 

FTE. However, the IB is confident that its projection of more than 870,000 future 

claims receipts is more precise. The disability claims workload from returning war 

veterans and veterans of previous periods has steadily increased since 2000. During 

both Fiscal Year 2005 and Fiscal Year 2006, the total number of compensation, pension, and burial claims increased by an average annual rate of 4.5 percent. During 

this same period, the number of pending claims increased by a total of more than 

33 percent. With an aging veterans population and ongoing hostilities in Iraq and 

Afghanistan, it is reasonable to expect a continuation of inclined rates. Assuming 

the annual percentage rate of growth remains the same as in preceding years, VA 

can expect 874,136 claims for C&P in Fiscal Year 2007. However, the VA perspective is that a slight decrease in the number of claims receipts will occur during 2007 

and 2008. This prediction is somewhat troubling, considering that the VA funding 

shortfall that occurred in 2005 was attributed to error in estimating the number of 

future claims receipts.

Question 2. You recommend a 63 percent increase for the Veterans Benefits Administration, an increase of $737 million. I see that you propose $115 million for 

information technology initiatives, but it would appear that what remains is far too 

high to account for the extra staffing you propose (assuming an average cost of 

$85,000 for one FTE according to VA’s budget documents) and for general inflationary increases. 

Please explain how you arrived at your recommended increase for VBA. 

Response. The Independent Budget recommendations for the Veterans Benefits 

Administration for Fiscal Year 2008 are significantly higher than the previous year 

primarily because our baseline from which we began our calculations was significantly higher than what appears to be the appropriated level in H.J. Res. 20. We 

do not believe that the current services level (appropriated level) adequately addressed the true needs and problems facing VBA. In fact, we believe that this level 

was wholly inadequate. The Fiscal Year 2007 appropriated level only allows the VA 

to barely keep its head above water. It does nothing to actually allow the VBA to 

reduce the backlog that it is dealing with. Not only that, the backlog is actually 

growing. It makes no sense to say that the Fiscal Year 2007 appropriated level is 

sufficient as a baseline to determine what will be needed to address the claims 

workload next year. The Independent Budget’s Fiscal Year 2008 recommendations 

reflect what we believe it will take for the VBA to meet the needs of current and 

future veterans and actually start making progress on the claims backlog, and not 

just get by, as has been the case for many years. That accounts for the largest difference in our recommendations. The Independent Budget believes that the current 

baseline does not provide the VBA with a reasonable starting point to address the 

rapidly growing claims backlog. 

From that starting point, the bulk of the increase in our recommendation comes 

from an increase in the compensation and pension (C&P) line item. Based on our 

calculations, inflationary increases total approximately $105 million over the Fiscal 

Year 2007 projected appropriation. Our compensation and pension recommendation 

also includes nearly $143 million for additional FTEE. This is derived from our estimated C&P average salary and benefits of approximately $100,000 for an additional 

1,375 new FTEE. Finally, as you mention, our C&P increase includes the $115 million for the information technology initiatives. This accounts for our total increase 

in C&P over what we believe the available amounts will be from the appropriations 

bill. 

The remaining increase in VBA is through inflationary increases to the primary 

accounts and modest increases in FTEE for Vocational Rehabilitation and Education.

158

Question 3. The Independent Budget proposes a $500 million initiative to expand 

mental health services, with a specific emphasis on PTSD care. 

Please discuss briefly with us what you see as VA’s shortcomings in mental health 

treatment and what you see the $500 million increase in services doing to fill the 

gaps your organizations have identified. 

Response. As reported in the Fiscal Year 2008 Independent Budget, we are generally pleased with the direction VA has taken and the progress it has made with 

respect to implementing the National Mental Health Strategic Plan (MHSP). However, we assert that gaps remain in mental health services that still need to be addressed. The additional funding that we recommended is not intended to be earmarked for specific mental health programs, but instead is meant to boost the VA’s 

efforts to adapt to the emerging and often unique needs of the newest generation 

of combat service personnel while continuing to address the chronic and acute needs 

of older veterans. We view this funding as necessary above the projected current 

services amounts that the VA will devote to the mental health care needs of these 

men and women. 

Some additional insight on this issue from the perspective of The Independent 

Budget is necessary. In November 2006, the Government Accountability Office 

(GAO) issued a report on resources allocated for VA’s MHSP initiatives. The GAO 

found that VA did not allocate all of the funding it planned in Fiscal Year 2005 for 

new mental health initiatives to address identified gaps in mental health services. 

Additionally, the GAO reported that the VA Central Office did not inform Veterans 

Integrated Service Network (VISN) and medical center officials that certain funds 

were to be used for these specific mental health initiatives, and therefore it is likely 

some funds went for other health care priorities. It is unacceptable that funding priorities that were clearly outlined were not properly managed, particularly at the 

VISN and lower levels. 

Furthermore, VA has intensified its outreach efforts to Operation Enduring Freedom/Operation Iraqi Freedom (OEF/OIF) veterans and reports that the relatively 

high rates of health care utilization among this group reflect the fact that these veterans have ready access to VA health care, which is available without charge for 

2 years following separation from service for problems related to their wartime service. With increased outreach, internal mental health screening efforts now underway 

and expanded access to health care for OEF/OIF veterans, we are concerned that 

VA continues to underestimate the numbers of these veterans who will be seen for 

various mental health problems in VA facilities. This in itself could result in a 

shortfall in funding necessary to meet the demand. Additionally, VA has not yet developed an appropriate screening tool or treatment plan for veterans with mild traumatic brain injury (TBI). VA mental health providers believe they are ill-prepared 

to properly access, diagnosis and treat these types of patients in a multi-disciplinary 

manner, and that a strategic TBI plan should be developed and implemented immediately. 

Finally, although VA has improved access to mental health services at its 800-

plus community-based outpatient clinics (CBOCs), such services are still not readily 

available at all sites. Neither has VA yet achieved its goal of integrating mental 

health staff in all its primary care clinics. Also, we remain concerned about the capacity in specialized post-traumatic stress disorder (PTSD) programs and the decline in availability of VA substance-use disorder programs of all kinds, including 

the virtual elimination of inpatient detoxification and residential treatment beds. 

Although additional funding has been dedicated to improving capacity in some 

programs, VA mental health providers continue to express concerns about inadequate resources to support, and consequent rationed access to, the specialized services they provide. 

FEBRUARY 12, 2007. 

Hon. DANIEL K. AKAKA, 

Chairman, U.S. Senate Committee on Veterans’ Affairs, 

Russell Senate Office Building, 

Washington, DC. 

Dear MR. CHAIRMAN: You have been advised of an opinion by Mr. Joseph A. 

Violante that opposition to the right legal representation in VA claims process exists. See: page 9 of his statement of February 13, 2007, to the Committee. I write 

to state the reason that opposition exists, how it is factually wrong and how Mr. 

Violante’s statement is rife with an internal inconsistency. Once that is understood, 

I submit the wisdom of permitting, not ‘‘forc[ing],’’ as he repeatedly argues, veterans 

to obtain a private attorney will be quite apparent. 

159

Opposition to the right to obtain legal counsel in the claims process is, I submit, 

based on a desire to maintain the status quo where DAV and a few other VSOs have 

a virtual monopoly on representation of veterans until the final BVA decision. To 

be sure, there is and has been a large cadre of lay representatives who for years 

have done good work on behalf of veterans. That has changed. Coupled with the inability of lay veteran service officers to cope with the increase in the volume of 

claims, the claims process has become very complex, indeed as complex as personal 

injury tort litigation. It may be argued, with some validity, that the advent of judicial review was, to some extent responsible. The fact remains the benefits system 

is complex, over burdened and understaffed including lay veteran service officers. 

As I said in my letter of last year to the then Chairman of this Committee, there 

is more than enough room for VSO and attorney representation in the claims process. Mr. Violante laments, and probably correctly, ‘‘that VA’s production requirements 

do not allow for thorough development and careful consideration of disability claims, 

resulting in compromise decisions and, higher appeal rates and even more overload 

on the system.’’ Id. at p. 9. He also notes that the Inspector General’s survey of the 

VBA adjudicators revealed that ‘‘nearly half of the VBA adjudicators admitted that 

many claims are decided without adequate record development.’’ Id. My years on the 

Court convince me that he is correct. How then can it be validly argued as he does, 

that ‘‘adding attorneys to the claims system will only complicate, lengthen and make 

more fractious the resolution of veterans disability claims’’? He simply asserts he 

has ‘‘been advised by professionals in the VBA’’ as to this conclusion. It is a highly 

dubious conclusion, and a self serving and convenient viewpoint. The professional 

obligations of lawyers, which is an enforceable duty, is to ensure an adequate record 

is compiled and presented, a thorough analysis of statutory and regulatory rights 

and duties is formulated and argued to the adjudicator which will bring the claim 

to issue for decision. That duty is the antithesis of fractioness. I add that since the 

Court’s creation a national bar of competent attorneys has arisen. It is governed by 

disciplinary mechanisms which are lacking in the VSO scheme. 

I close with this observation: In our society today, everyone but veterans with 

claims is free to have lawyer representation, and they are wise to seek it given our 

system of rights and duties. Even a convicted felon is entitled to counsel, as is a 

Social Security claimant. Why should veterans be deprived of the right everyone else 

has? Veterans are no longer deemed wards of the state requiring protection from 

historically perceived predators possessed only of self interest. They should be entitled to representation of their choice. 

I implore this Committee to leave the right to select representation at the NOD 

stage as was enacted in the last Congress as a first step to permitting that choice 

to extend to the initial claims level. 

Sincerely, 

FRANK Q. NEBEKER, 

Chief Judge (Retired). 

FEBRUARY 13, 2007. 

Hon. DANIEL K. AKAKA, 

Chairman, Senate Committee on Veteran’s Affairs, 

Russell Senate Office Building, 

Washington, DC. 

Dear MR. CHAIRMAN: Written testimony has been submitted by the Disabled 

American Veterans (DAV) for February 13 hearing on the FY 2008 budget. In that 

written testimony, the DAV representative addresses, at pp. 9–10 the issue of attorneys in VA claims. 

Last year, in Public Law 109–461, Congress specifically provided that veterans 

would be permitted the option to retain counsel for representation in the claims 

process at the departmental level. In the testimony submitted for the February 13 

hearing, the DAV advocates repeal of that provision of Public Law 109–461. 

As General Counsel of the Veterans’ Administration (1985–1990), Acting General 

Counsel of the Department of Veterans Affairs (1990), and as a judge on the U.S. 

Court of Appeals for Veterans Claims (1990–2005; Chief Judge 2004–2005), I have 

been heavily engaged in the ongoing debate regarding judicial review. During that 

period, I have witnessed many changes in the veterans’ claims system and I have 

developed a full appreciation of the needs of veterans and the strengths and weaknesses of the veterans’ claims system. I am also a Vietnam veteran with 5 years 

active duty and retired after almost 25 years of active reserve duty in the U.S. 

Army. 

160

In advocating repeal, the DAV states its belief that, ‘‘no disabled veteran should 

be forced to retain a private attorney.’’ That statement is without basis in the context of Congress’ purpose in permitting veterans, if they so choose, to retain attorney representation at the departmental level. The DAV goes on to state, without 

identifiable support, that, ‘‘your adding attorneys to the claims system will only 

complicate, lengthen and make more fractious the resolution of veterans’ disability 

claims.’’ This is an argument that was made in the late 1980s in opposition to the 

Veterans Judicial Review Act which created the Court of Veterans Appeals, now the 

United States Court of Appeals for Veterans Claims. That argument, at that time, 

became a non-negotiable political position on the part of the VA and a number of 

veterans’ organizations. It is no longer a valid position, as evidenced by the actions 

of the last Congress and by the fact that the provision in Public Law 109–461 had 

substantial support from veterans’ groups. 

The Honorable Frank Q. Nebeker, the first Chief Judge of the U.S. Court of Appeals for Veterans Claims, in a letter to you regarding this subject, points out the 

weak and misleading nature of the DAV testimony and also points out that, although veterans have had the benefit of judicial review for more than 16 years, 

until the last Congress, ‘‘everyone but veterans with claims is free to have lawyer 

representation.’’ I repeat his question to you: ‘‘Why should veterans be deprived of 

the right everyone else has?’’

I strongly urge you and the Members of the Committee to resist any attempt to 

repeal the provisions of Public Law 109–461 granting veterans the option to retain 

an attorney to represent them at the VA level. 

Sincerely, 

DONALD L. IVERS, 

Chief Judge (Retired), 

U.S. Court of Appeals for Veterans Claims. 

LUNG CANCER ALLIANCE,

Washington, DC, March 22, 2007. 

Hon. DANIEL K. AKAKA, 

Chair, U.S. Senate Committee on Veterans’ Affairs, 

Senate Russell Building, 

Washington, DC. 

DEAR MR. CHAIRMAN: As Chairman of the Board of Directors of Lung Cancer Alliance I would like to express our strong support for The Independent Budget and 

would appreciate this letter being included in the Committee’s hearing record on the 

FY08 budget for the Veterans’ Administration. 

In particular we would like to bring to your Committee’s attention the recommendation in The Independent Budget for a $3 million Lung Cancer Early Detection and Disease Management Research Pilot program, a copy of which is attached 

to this letter for inclusion in the hearing record. 

As a longtime VSO and lung cancer patient, I am concerned with the plight of 

all Veterans at risk for this disease. Lung cancer kills more Americans than the 

next five cancers combined. Repeated studies have shown that Veterans, for a host 

of reasons, die of lung cancer at a greater rate than their fellow Americans who did 

not serve. I believe that the Department of Veterans Affairs will be facing a wave 

of service connected lung cancer victims as Vietnam Veterans enter their sixties 

when the disease most commonly presents. 

This is a stealth cancer that usually takes decades to develop. By the time symptoms do become apparent, the disease is already at late stage. Currently, only 16 

percent of cases are diagnosed at an early stage when the cancer is curable. For 

the taxpayer and the VA, the benefits to screening are economic as well as humanitarian: it costs half as much to treat someone in Stage One as it does to treat a 

late stage lung cancer patient. The alternatives are clear: pay now and save lives, 

or pay double for dying patients. 

The relatively small investment of $3 million in a pilot early detection research 

program gives Congress and the Department an extraordinary opportunity to get 

ahead of the problem, saving dollars and lives in the process. No one contests the 

fact that CT scanning can detect lung cancer at its earliest stage. 

Several long term, large population trials have demonstrated that the current 85 

percent mortality rate can be reversed through early detection and treatment. While 

more studies and trials are underway, it is imperative that at a minimum a pilot 

research program be simultaneously carried out among a high risk Veteran population. 

161

I urge the Committee to include this pilot research program in the FY08 budget 

authorization and appropriations for the Department of Veterans Affairs. 

Respectfully, 

PHILIP J. COADY, 

Rear Admiral, USN (Retired), 

Chairman of the Board, Lung Cancer Alliance. 

LUNG CANCER SCREENING AND EARLY DISEASE

MANAGEMENT PILOT PROGRAM

More than 50 percent of new lung cancer cases are diagnosed in former smokers, 

including many who had quit 20 or 30 years ago. Another 15 percent of new lung 

cancer cases occur in people who have never smoked, with possible causes including 

radon, asbestos, Agent Orange and other herbicides, beryllium, nuclear emissions, 

diesel fumes, and other toxins. 

Over the next six years, one million Americans will die from lung cancer, most 

within months of diagnosis. It is the leading cause of cancer death, responsible for 

nearly 30 percent of all cancer mortality, more than breast, prostate, colon, liver, 

melanoma, and kidney cancers combined. 

Since Congress passed the National Cancer Act in 1971, the five-year survival 

rates for breast, prostate, and colon cancers have risen to 88 percent, 99 percent, 

and 65 percent respectively, primarily because of major funding investments in research and early detection for those cancers. Lung cancer’s five-year survival rate 

is still at 15 percent, reflective of the persistent underfunding of research and early 

detection. Lung cancer now kills three times as many men as prostate cancer and 

nearly twice as many women as breast cancer. 

• Impact on Military and Veteran Populations 

The Department of Defense (DOD) routinely distributed free cigarettes and included cigarette packages in K-rations until 1976. The 1997 Harris report to the Department of Veterans Affairs (VA) documented the higher prevalence of smoking 

and exposure to carcinogenic materials among the military and estimated costs to 

VA and TRICARE in the billions of dollars per year. For example, the percentage 

of Vietnam veterans who ever smoked is more than 70 percent, double the civilian 

‘‘ever smoked’’ rate of 35 percent. Asbestos in submarines, Agent Orange, Gulf War 

battlefield emissions, and other toxins are additional factors that have led to a 25 

percent higher incidence and mortality rate for lung cancer among veteran populations. 

A 2004 report by the Board on Health Promotion and Disease Prevention (HPDP) 

of the Institute of Medicine (IOM), ‘‘Veterans and Agent Orange: Length of Presumptive Period for Association Between Exposure and Respiratory Cancer (2004),’’ 

concluded that the presumptive period for lung cancer is 50 years or more. Another 

report issued in 2005 by the HPDP, ‘‘The Gulf War and Health: Volume 3, Fuels, 

Combustion Products and Propellants (2005),’’ concluded that there is sufficient evidence for an association between battlefield combustion products and lung cancer. 

Lung cancer is an indolent cancer that takes decades to develop, and in most 

cases no symptoms present until the cancer is already at late stage. Thus, while the 

disease may initiate under circumstances encountered during service under the 

DOD, the disease burden will fall most heaavily on VA, and to a lesser extent on 

TRlCARE. Because of the predominance of late stage diagnoses, more than 60 percent of lung cancer patients die within the first year, and late stage treatment is 

more than twice as costly as early stage. 

• Justification 

On October 26, 2006, the New England Journal of Medicine published the results 

of a l3-year study on CT screening of 31,500 asymptomatic people by a consortium 

of 40 centers in 26 states and 6 foreign countries. Lung cancer was diagnosed in 

484 participants, 85 percent at stage 1 (versus 16 percent nationally) and the estimated 10-year survival rate for those treated promptly is 92 percent (versus a 15 

percent 5-year survival rate nationally). 

The benefits of this early detection and disease management protocol should be 

extended to veterans, especially those whose active duty service has placed them at 

higher risk for lung cancer. 

• Legislative History 

Senate Report 108–087 on the Department of Defense Appropriations Bill, 2004 

contains the following language: 

162

‘‘Lung Cancer Screening—The Committee’ urges the Secretary of Defense, in consultation with the Secretary of Veterans Affairs, to begin a multi-institutional lung 

cancer screening program with centralized imaging review incorporating state-ofthe-art image processing and integration of computer assisted diagnostic tools.’’

Senate Report 109–286, Military Construction and Veterans Affairs and Related 

Agencies Appropriations Bill, 2007 contains the following language: 

‘‘Lung Cancer Screening—The Committee encourages the Secretary of Veterans 

Affairs to institute a pilot program for lung cancer screening, early diagnosis and 

treatment among high-risk veteran populations to be coordinated and partnered 

with the International Early Lung Cancer Action Program and its member institutions and with the designated sites of the National Cancer Institute’s Lung Cancer 

Specialized Programs of Research Excellence. The Department shall report back to 

the Committee on Appropriations within 90 days of enactment of this act, on a proposal for this program.’’

• Department of Energy (DOE) and Lung Cancer 

Over the past eight years the DOE Office of Environment, Safety and Health has 

supported a medical screening program for DOE defense nuclear workers who were 

exposed to toxic and radioactive substances. The Worker Health Protection Program 

was originally authorized under Section 3162 of the 1993 Defense Authorization Act 

and has been funded through DOE appropriations. Currently more than 7,000 workers at seven different munitions plant sites are being screened free of charge annually for lung cancer. In FY 06, funding was increased to $14 milllon to cover an expansion of sites and the number of participants. 

RECOMMENDATIONS

VA should request and Congress should appropriate at least $3 million to conduct 

a pilot screening program for veterans at high risk of developing lung cancer. 

VA should partner with the International Early Lung Cancer Action Program to 

provide early screening of veterans at risk.

[The Independent Budget for Fiscal Year 2008 follows:]

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Æ


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