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20–113 PDF 2005

S. HRG. 109–14

NOMINATION OF HON. R. JAMES NICHOLSON

TO BE SECRETARY, DEPARTMENT

OF VETERANS AFFAIRS

HEARING

BEFORE THE

COMMITTEE ON VETERANS’ AFFAIRS

UNITED STATES SENATE

ONE HUNDRED NINTH CONGRESS

FIRST SESSION

JANUARY 24, 2005

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

LARRY E. CRAIG, Idaho, Chairman

ARLEN SPECTER, Pennsylvania

KAY BAILEY HUTCHISON, Texas

LINDSEY O. GRAHAM, South Carolina

RICHARD BURR, North Carolina

JOHN ENSIGN, Nevada

JOHN THUNE, South Dakota

JOHNNY ISAKSON, Georgia

DANIEL K. AKAKA, Hawaii, Ranking Member

JOHN D. ROCKEFELLER IV, West Virginia

JAMES M. JEFFORDS, (I), Vermont

PATTY MURRAY, Washington

BARACK OBAMA, Illinois

KEN SALAZAR, Colorado

LUPE WISSEL, Majority Staff Director

D. NOELANI KALIPI, Minority Staff Director

(III)

CONTENTS

JANUARY 24, 2005

SENATORS

Page

Craig, Hon. Larry E., U.S. Senator from Idaho .................................................... 1

Akaka, Hon. Daniel K., U.S. Senator from Hawaii .............................................. 3

Isakson, Hon. Johnny, U.S. Senator from Georgia ............................................... 4

Obama, Hon. Barak, U.S. Senator from Illinois ................................................... 5

Articles from the Chicago Sun-Times ............................................................. 30

Burr, Hon. Richard, U.S. Senator from North Carolina ....................................... 6

Prepared statement .......................................................................................... 7

Rockefeller IV, Hon. John D., U.S. Senator from West Virginia ......................... 7

Thune, Hon. John, U.S. Senator from South Dakota ........................................... 9

Jeffords, Hon. James M., U.S. Senator from Vermont ......................................... 10

Prepared statement .......................................................................................... 11

Hutchison, Hon. Kay Bailey, U.S. Senator from Texas ........................................ 11

Allard, Hon. Wayne, U.S. Senator from Colorado ................................................. 13

Salazar, Hon. Ken, U.S. Senator from Colorado ................................................... 15

Prepared statement .......................................................................................... 16

WITNESS

Nicholson, Hon. R. James, nominee to be Secretary, Department of Veterans’

Affairs .................................................................................................................... 17

Prepared statement .......................................................................................... 51

Questionaire for Presidential nominee ........................................................... 54

Response to written questions submitted by:

Craig, Hon. Larry E. ................................................................................. 57

Akaka, Hon. Daniel K. .............................................................................. 64

Hutchison, Hon. Kay Bailey ..................................................................... 66

Specter, Hon. Arlen ................................................................................... 69

Rockefeller IV, Hon. John D. .................................................................... 69

Jeffords, Hon. James M. ........................................................................... 72

Salazar, Hon. Ken ..................................................................................... 74

Thune, Hon. John ...................................................................................... 78

APPENDIX

King, James B., Executive Director, AMVETS, prepared statement .................. 81

Clements, R.E., Commander, Department of Colorado Veterans’ Affairs,

letter ...................................................................................................................... 82

Howard, Gerald, Executive Vice President, National Association of Home

Builders, letter ..................................................................................................... 83

Mansell, Al, CRB, President, National Association of Realtors, letter ............... 83

Maziarski, Frank T., President, and Carol M. Craig, President, American

Association of Nurse Anesthetists, letter ........................................................... 84

Molloy, John J. Jr., Chairman, National Vietnam & Gulf War Veterans

Coalition, letter .................................................................................................... 84

Muller, Sgt. Artie, Founder/National Executive Director, Rolling Thunder,

Inc., National Chapter 1, letter ........................................................................... 85

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NOMINATION OF HON. R. JAMES NICHOLSON

TO BE SECRETARY, DEPARTMENT OF

VETERANS AFFAIRS

MONDAY, JANUARY 24, 2005

UNITED STATES SENATE,

COMMITTEE ON VETERANS’ AFFAIRS,

Washington, DC.

The committee met, pursuant to notice, at 10:06 a.m., in Room

SR–418, Russell Senate Office Building, Hon. Larry Craig

presiding.

Present: Senators Craig, Hutchison, Burr, Thune, Isakson,

Akaka, Rockefeller, Jeffords, Obama, and Salazar.

OPENING STATEMENT OF HON. LARRY CRAIG,

U.S. SENATOR FROM IDAHO

Chairman CRAIG. Good morning, ladies and gentlemen. The Committee will come to order. It is my pleasure to call this hearing to

order, the first hearing of the Senate Committee on Veterans Affairs for the 109th Congress and the first hearing of this Committee that I have the honor of chairing.

In a few moments, we will receive testimony from the President’s

nominee to serve as Secretary of Veterans Affairs, Ambassador Jim

Nicholson, and I will offer him the opportunity to introduce the

family members who have accompanied him to the hearing this

morning. But if I may, I would like to offer a few introductory remarks first.

Let me begin by thanking my Republican colleagues for electing

me Chairman of this Committee earlier this month. I pledge to

them—and to all of the Committee Members—that I will work diligently to meet the needs of America’s veterans that we are honored

to serve. I also would pledge to all of you, as I have to our Ranking

Member, Senator Akaka, that I will maintain the Committee’s long

tradition of approaching veterans’ issues in a constructive, problem-solving and bipartisan manner.

This approach has worked very well during the 10 years that I

have had the privilege of serving on this Committee, and that will

continue under my stewardship. I welcome back to the Committee

the returning Members, starting with our Committee’s newly-appointed Ranking Member, Senator Daniel Akaka of Hawaii. I look

forward to working with you, Senator, in putting together and advancing this Committee’s agenda. We have already met to discuss

a lot of issues and we will continue to meet together and work toVerDate 03-FEB-2003 10:29 Jun 14, 2005 Jkt 020113 PO 00000 Frm 00005 Fmt 6601 Sfmt 6601 D:\DOCS\20113.TXT SSC1 PsN: SSC1
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gether for the good of our veterans. We share those same desires

and goals.

I also want to welcome back Members to the Committee with

previous service: Senator Specter, who may not be with us this

morning—I think he is in transit—Senators Hutchison, Graham

and Ensign on the Republican side; Senator Rockefeller who is with

us, and Senators Jeffords and Murray on the Democratic side.

Finally, but most particularly, I want to welcome our new Senators who have been chosen to serve on this Committee: Senator

Burr, who is with us this morning; Senator Isakson, who is also

with us; Senator Thune, who I think will be joining us; and Senator Obama, who is with us. Senator Salazar is sitting down waiting to make introduction this morning. Again, thank you all for

being here. I look forward to working with you.

Now, to return to the business at hand. The President has nominated Ambassador Jim Nicholson to serve as Secretary of Veterans

Affairs. Mr. Ambassador, I thank you for accepting this charge. As

you will soon find out, running VA is one of the tougher jobs in

Washington, one that will perhaps be made more difficult by two

realities that you will face. You will succeed a man who will be a

tough act to follow, and second, it now appears clear that the fiscal

environment that you will inherit will be considerably less friendly

than the relatively flush times the VA has enjoyed over the past

4 years. But I know, Mr. Nicholson, that you are up to the challenge.

When you are confirmed, you will find that this Chairman, and

I hope the Committee’s Members, will be partners with you in

making sure that America’s veterans are continually served in the

necessary and the appropriate fashion that we expect and that I

know you anticipate.

Before I proceed, let me offer to you a brief summary of Ambassador Nicholson’s extraordinary background. Jim Nicholson was

born on an Iowa farm in 1938. He left Iowa in 1957 to attend the

United States Military Academy at West Point. After graduation in

1961, he served 8 years in active service in the Army as a Ranger

and paratrooper. Most notably, he served a tour in Vietnam from

1965–1966, where he earned, among other decorations, the Bronze

Star, the Combat Infantry Badge, the Air Medal and the Vietnamese Cross of Gallantry.

After returning from Vietnam, then-Captain Nicholson served on

active duty for 4 more years until 1970, followed by an additional

21 years as a Reserve officer. He retired from the Army Reserves

in 1991 at the rank of colonel. Mr. Nicholson holds a masters degree in public policy from Columbia University and a J.D. from the

University of Denver.

After practicing law for a relatively brief time in Denver in the

1970s, he launched a successful real estate development career in

Denver. Among other positions, he served as Chairman and President of Renaissance Homes of Colorado. His business career was

also marked by extensive community involvement and charitable

activities.

In 1986, Mr. Nicholson became a committeeman for the Republican National Committee, and in 1993, he was elected RNC’s vicechairman, and in 1997, he was elected for a 4-year term as the

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RNC’s Chairman. It was during that time that I grew to know Jim

a great deal better than I had in the past.

In August of 2001, President Bush appointed Mr. Nicholson U.S.

Ambassador to the Vatican. From that post, he has advocated for

religious reconciliation, religious freedom in China and Russia, and

against the international exploitation and enslavement of defenseless persons, commonly referred to as human trafficking.

If I may comment, that summarizes what I believe to be an extraordinary career. Veterans are fortunate, I think, that you have

answered the President’s call to service, Jim, and I hope that this

Committee can offer quick confirmation.

Now, if I may, let me recognize our Committee Members for any

comments they would like to make, and let me turn, of course, to

our Ranking Committee Member first, Senator Akaka.

Senator.

STATEMENT OF HON. DANIEL K. AKAKA,

U.S. SENATOR FROM HAWAII

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

I am very pleased to be here with you. I look forward to working

with you. We have had a great beginning. We have sat together

and chatted about the future of this Committee, and from that conversation I can tell you that we have some common ideas, and of

course, the common idea is to help our veterans the best we can.

And I am also pleased to be working with Senator Craig, because

we have had a long history of working together in the House as

well as here in the Senate, and we’ve talked about things that

make me feel excited about this Committee and its future.

I am also very pleased to welcome Ambassador James Nicholson

to our hearing today. Mr. Ambassador, I also want to welcome your

wife, Suzanne, and your family and thank them for their contributions to this process as well. And I want to thank you for taking

time to meet with me before today’s hearing.

We have some new Members in the Veterans’ Affairs Committee,

and I am confident that, without question, they will make important contributions as we work together to fulfill our Nation’s commitment to America’s veterans.

Mr. Ambassador, I know I do not need to impress upon you the

importance of the leadership role you will soon assume as VA Secretary. As a graduate of the United States Military Academy, you

have been provided with valuable lessons in leadership that can be

applied to VA. We expect you to hit the ground running with the

many challenges that you will face, and of course, and I want to

emphasize this, we will be here to support you.

On the health care side of VA, I think you will find that we are

always open to new and cost-effective ways to care for our current

veterans and those who are returning from Iraq and Afghanistan.

However, it is a non-starter to cut back on services or cut who is

eligible for VA care. I want you to know that we are proud of the

work that this Committee and other Members have done in the

past and in 1996 to improve eligibility for care.

Health care is now very often provided in different settings that

frequently are not hospitals. Outpatient clinics dot the landscape

and provide for ease of access. We are seeing huge numbers of vetVerDate 03-FEB-2003 10:29 Jun 14, 2005 Jkt 020113 PO 00000 Frm 00007 Fmt 6601 Sfmt 6601 D:\DOCS\20113.TXT SSC1 PsN: SSC1
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erans seeking VA care for the first time. I, for one, believe this is

a good thing. Others rationalize that as we are at war, we must

cut back on VA care. I simply do not understand that logic. We are

at war, and therefore, we must do everything we can to show our

military that VA health care will be there for all veterans who

served.

On the benefits side, we are in crisis. VA has come under fire for

the lack of timeliness of its claims processing. As a result, the Veterans Benefits Administration has turned its attention to decreasing the amount of time it takes to process a claim, to the detriment

of the quality of its decision making. We are looking to you for innovative approaches so that the Veterans Benefits Administration

can absorb changes in law and new business processes without always going into a nose dive. Our veterans deserve no less than

quality workmanship done in a timely manner.

Mr. Ambassador, because you did mention and quote from

George Washington, I want to do so as well and say that, I quote:

‘‘The willingness with which our young people are likely to serve

in any war, no matter how justified, shall be directly proportional

to how they perceive the veterans of earlier wars were treated and

appreciated by their Nation.’’

Mr. Ambassador, our Nation and our veterans are depending on

you. Our servicemembers returning from Iraq and Afghanistan

have earned a seamless transition from the military to civilian life.

You must assure us that the Department of Veterans Affairs will

do its part in this endeavor.

Thank you very much. I welcome you, Mr. Ambassador, your

family, and thank you very much, Mr. Chairman.

Chairman CRAIG. Senator Akaka, thank you very much.

What I would like to do for those Members who have opening

statements is turn to you in the order in which you came into the

Committee room, and then, we will turn to our colleagues who are

here to introduce and endorse the Ambassador. We will administer

the oath of office—or the oath for the Committee to the Ambassador and allow his testimony. We will not get to that office yet.

[Laughter.]

Chairman CRAIG. That is anticipating a much more accelerated

process than we are going to go through today.

[Laughter.]

Chairman CRAIG. Senator Isakson, I believe you were the first to

enter the room. Do you have any opening statement?

STATEMENT OF HON. JOHNNY ISAKSON,

U.S. SENATOR FROM GEORGIA

Senator ISAKSON. Mr. Chairman, I will submit my full statement

for the record. I would like to make two or three quick comments.

One, it is a privilege and an honor to serve on this Committee,

and to serve with you as Chairman and Ranking Member Akaka;

I look very much forward to doing that. I am delighted to be here

at this hearing for Ambassador Nicholson and particularly delighted to be here in the best interests of the veterans of the

United States of America. I know that the opening statement of the

Ambassador is to follow, I have already read it, and I want to acknowledge at the outset my appreciation for his principles and

5

commitments in terms of veterans, their health care, and the honor

of those who make the ultimate sacrifice in our United States military, and I look forward to the hearing and the opening statement

of Ambassador Nicholson.

Thank you, Mr. Chairman.

Chairman CRAIG. Thank you, Senator.

Senator Obama.

OPENING STATEMENT OF HON. BARAK OBAMA,

U.S. SENATOR FROM ILLINOIS

Senator OBAMA. Thank you very much, Mr. Chairman and Ranking Member Akaka. Thank you so much for allowing me to join this

Committee. It is a great honor to be here.

I want to thank, first of all, Ambassador Nicholson, for his service to this country. It is a great honor for you to not only be willing

to serve now in this current position, but also your service as a veteran to the United States. And I am looking forward to working

with you. We have had occasion to meet, and I have no doubt that

you will do an outstanding job.

As you know, I do have a set of particular concerns with regard

to Illinois that I will be raising with you. Senator Akaka mentioned

this quote earlier from George Washington about the importance of

us serving our veterans so that we can continue to ask our Nation’s

young men and women to serve on our behalf. I think the Father

of our Country understood what every veteran in this great country

knows today: that when we send our troops to war, it is our solemn

obligation to care for them upon their return and to do so in a

timely manner and to treat them with the respect and dignity

which they have earned and which they deserve.

Now, a lot of my questioning is going to be focused on the fact

that in Illinois in particular, there seems to be some concern that

we are failing to live up to that obligation. Very specifically, Illinois’ disability pay compensation system appears to be broken.

There was a recent report by the Chicago Sun-Times that found

that Illinois veterans, when compared to the compensation levels

granted to veterans in other States, rank 50th out of 52 States and

territories, and I think, in fact, we have a chart here that I just

want to show very briefly.

Apparently, there is as much as a $5,000 discrepancy between

Puerto Rico and Illinois with respect to compensation levels for disabled veterans. Mr. Ambassador and Members of this Committee,

that is unacceptable by President Washington’s standard, and it

should be unacceptable by our standards as well.

Worse still, many of the veterans who finally receive benefits

only get them after long, stressful battles with the VA. I believe we

can and we must do better. Over the past several days, I have met

with more than 500 veterans throughout Illinois to hear about

what they believe, how they believe they are being treated by the

VA. Though I know that the Department is doing some things very

well, and that was acknowledged by a number of the veterans’

groups, nearly every veteran I talked to was frustrated. Some have

been fighting claims for decades; some have yet to receive compensation they deserve, and worst of all, some feel that the VA

simply is not listening to them or does not care about them.

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So I recognize that some of these issues are going to have to do

with budget concerns. It was already referred to by our Chairman

that you are going to be inheriting a more difficult fiscal situation

than your predecessor. At the same time, I also know that because

we are at a time of war, this is precisely the time when we are

going to have to do better. We know that the situations that contribute to post-traumatic stress disorder are directly proportional to

the type of warfare fought. Urban combat in Iraq, mixed with an

insurgency that is not always identifiable, coupled with a prolonged

deployment create an even greater stress on today’s brave soldiers.

And I will just note in closing that a recent Army study showed

that 1-in-6 soldiers in Iraq reported symptoms of major depression,

and some think that figure could eventually reach 1-in-3, a figure

equal to those veterans who served in Vietnam. With hundreds of

thousands of veterans from Iraq and Afghanistan who are going to

be coming back from the war, some predict that the soldiers requiring mental health treatment could exceed 100,000.

So I look forward very much to working with you, Mr. Ambassador. I look forward to the answers that you’re going to be providing to this Committee. I am looking forward to your actions to

address the disparities that I have already alluded to. Hopefully,

if we learn where we failed our veterans in the past, we can better

serve them in the future.

I thank you for your attention.

Chairman CRAIG. Senator, thank you very much.

Senator Burr, any opening comment?

Senator BURR. Thank you, Mr. Chairman, and I would ask unanimous consent that my full statement be in the record.

Chairman CRAIG. Without objection.

OPENING STATEMENT OF HON. RICHARD BURR,

U.S. SENATOR FROM NORTH CAROLINA

Senator BURR. Mr. Chairman, let me thank you for your gracious

welcome to us. Also, congratulations on your chairmanship and to

the Ranking Member. I look forward to this year.

To the Ambassador, let me say welcome back. I know Rome is

a difficult place to leave, but it is my understanding that from the

top of the Capitol dome, you can see the Vatican. I am told you can

see everything from the top of the Capitol dome.

[Laughter.]

Senator BURR. The Veterans Administration will be a very difficult challenge at a very challenging time. In 1988, Ronald Reagan

said of veterans: ‘‘America’s debt to those who would fight for her

defense does not end the day the uniform comes off. For the security of our Nation, it must not end.’’

In North Carolina, Mr. Ambassador, we now have over 800,000

military veterans. Honoring and working for those individuals is

something that I believe is a duty of a Member of the United

States Senate. We understand the importance of taking care of

those who have served so bravely and willingly to protect the freedoms and the liberties that we have here in this country.

But in the last 16 years since the new department was created,

I do not think that we have perfected the operation of what it does.

My hope, my wish and my belief is that you come with a level of

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commitment not to solve 100 percent, but to solve something every

day. I believe that is the most we can ask of you. I believe that is

the most we should expect, that after your tenure and our tenure

that, in fact, our veterans are better off because of the contributions we have made.

I look forward to your confirmation. I urge my colleagues to be

as quick as the Chairman has tried to be by his acclamation.

And I would yield back.

[Laughter.]

[The prepared statement of Senator Burr follows:]

PREPARED STATEMENT OF SENATOR RICHARD BURR, U.S. SENATOR FROM NORTH CAROLINA

Thank you, Chairman Craig, and congratulations on your new chairmanship and

to Senator Akaka as Ranking Member. I know you will serve our nation’s Veterans

well and I look forward to working with you both.

Let me welcome you, Ambassador Nicholson, back from Rome and to the United

States Senate. I congratulate you on your selection by the President to serve in the

crucial position of Secretary of Veterans Affairs and I appreciate your willingness

to serve in this new capacity.

My Dad, Dr. David Burr, served as a Frogman in the Navy during World War

II, and he sends along his regards as well.

When the legislation that created the Veterans Administration was signed into

law in 1988, President Ronald Reagan said that ‘‘America’s debt to those who would

fight for her defense doesn’t end the day the uniform comes off. For the security of

our nation, it must not end.’’

North Carolina has a growing population of Veterans, approaching 800,000 in recent reports. Honoring and working for these Veterans is something I intend to

work on as Senator from North Carolina.

We all understand the importance of taking care of those who have served so

bravely and willingly to protect the freedoms that America offers. With troops on

the ground defending those freedoms as we speak, we are reminded to do our best

for our Veterans.

In the past four years, the budget of the Department has increased by just about

50%. Clearly, Congress and the Bush Administration have committed to improving

health care benefits and access, quality of life programs, and pensions for Veterans.

But in the 16 years since the new Department was created, we have certainly not

perfected the operation. We still have inefficiencies and waiting lines to see physicians. We continue to evolve and upgrade, but work remains.

As a member of this Committee, I will commit myself to improving the Department so that the care and services provided to Veterans will improve.

I hope that you will join me in that commitment and I look forward to working

together to improve the Department of Veterans Affairs.

Chairman CRAIG. Thank you, Senator.

Now, let me turn to one of the more senior Members of the Committee and one who I have had the privilege of working with over

the last good number of years on veterans’ issues, certainly an outspoken advocate for veterans. We always appreciate your presence

and service on this Committee, Senator Rockefeller.

OPENING STATEMENT OF HON. JOHN D. ROCKEFELLER IV,

U.S. SENATOR FROM WEST VIRGINIA

Senator ROCKEFELLER. Thank you, Chairman Craig, and I very

much am pleased that you are our Chairman. As I discussed with

the Ambassador, I think you are going to make an excellent Chairman.

What this Committee, I think, needs is kind of the methodical

work, systematically going through issues not just as they pop up

in dramatic fashion, but on a systemic basis. I think that is part

of your makeup and part of your discipline, and I have great reVerDate 03-FEB-2003 10:29 Jun 14, 2005 Jkt 020113 PO 00000 Frm 00011 Fmt 6601 Sfmt 6601 D:\DOCS\20113.TXT SSC1 PsN: SSC1
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spect for your fairness. And I equally honor Senator Akaka, who

has been on this Committee for a long time; is a veteran and a

splendid person.

Ambassador, you have already brought people together. There

are three people who I have never seen before, and they sit across

the table from me, and I must say that I am very pleased to be

working with you three gentlemen. The other lady, I already know

very well and have very high respect for.

Senator Obama, I think it is wonderful that you are on this Committee. I think that you will bring a wonderful vigor to it and intellectual analysis, and Senator Jeffords is just a piece of art, a special person, and he is always good.

A couple of points: it was mentioned earlier that young people

are more likely to go into the service if they feel that their Veterans Administration is going to take good care of them afterwards.

Actually, I do not agree with that statement, and I think that is

one of our problems. It is very hard to get even those who are entering the service to think about more than what it is they are

going to be doing, which is certainly understandable: the training

and the pressure they are going to be under.

But I think there is an enormous instinct in this country to

somehow assume that when veterans come home that they are

going to get the care that Abraham Lincoln promised them. And I

do not think that is the case, and yet, it is also one of the best

health care systems in the world and the only one over which, in

a sense, those of us who represent the American people have full

control, which makes your position particularly important.

We had a very good talk. One of the things I liked about you was

not just your 30 years of service, your Ranger training, a number

of other things we discussed, but I think you are doing this for the

right reasons. You did not have to do this. You did not have to accept this job, because you are at a position and experience and et

cetera where you do not need to. You have served your country in

many ways. But you have chosen to do it, and I respect that. I

think your soul is good, and I think that is an awful good place to

start.

A number of the problems have been raised. I worry, as Senator

Obama does, particularly about what is going to happen with our

returned veterans and the whole post-traumatic stress disorder

syndrome. I even have not given up yet on work to be done on the

Persian Gulf War Syndrome, and that may be, if I get to it, part

of my questioning.

But the work of this Committee, and I have been on it now for

20 years, is extraordinarily important. Because it is a B committee

in the parlance of the Senate, it is not always given the weight that

some of the other committees, the Finance Committee, the Commerce Committee, whatever, might be given.

I think that is a terrible mistake, particularly where we are now

in our Nation’s history and where I think we are going to be for

several generations. We have to resolve as a Committee, Mr. Chairman, and this is one of the reasons why I am so glad that you are

Chairman, we are going to have to resolve as a Committee as well

as a Veterans Administration to sort of put a new intensity into

our work. We cannot expand our numbers. Your numbers are so

9

large that only the Pentagon has more people, and the question is

how do you bring them the top level, the middle level, you know,

how do you close that gap and shape people to your will, which I

think is innate to your character and to your experience and to

what you want to do?

So I welcome you. You flat out have my vote for a lot of reasons,

and I think you are going to do a very good job, and I think it is

our job to work very closely together.

Thank you, Mr. Chairman.

Chairman CRAIG. Senator Rockefeller, thank you for those comments.

This may be a B committee. When we are through with it in the

next few years, we will show the United States Senate that it will

have the intensity of a Super A.

All right; we thank you very much for that.

Now, let me turn to Senator Thune.

OPENING STATEMENT OF HON. JOHN THUNE,

U.S. SENATOR FROM SOUTH DAKOTA

Senator THUNE. Thank you, Mr. Chairman and Senator Akaka.

It is a privilege to be on the Committee and to have the opportunity to work with you and the other Members of this Committee

and also on behalf of America’s veterans. This is important business that we go about as we strive to serve the needs of America’s

veterans, men and women who have served this country and sacrificed for all of us when we were the ones in need of their service.

And it is particularly important now because we are a country at

war, and we will have men and women who will be returning to

civilian life trying to piece their lives together after some of the

most difficult and hazardous tours of duty in recent history. Many

will come back disabled, and we owe all of these veterans our utmost care and devotion.

I also want to note that my State of South Dakota boasts an exceptionally high ratio of veterans to its overall population compared

with other States. Because it is a largely rural State with many remote communities, our veterans face a number of peculiar issues.

One of the problems I will be interested in addressing while on this

Committee is improved access to VA health care facilities. Often,

the nearest VA hospital is hundreds of miles away, and to require

a veteran to drive three or four hours to the nearest VA hospital

for a simple blood test, especially for elderly vets, is simply not fulfilling this country’s obligation, and I look forward to working with

you toward finding a solution to this problem and many more. We

owe that to our veterans.

I also look forward to working with Ambassador Nicholson. I cannot think of a more qualified nominee for this position. You have

got the character of an Iowa farm kid and have paid a lot of dues

in the time since, and I just think it is so important, your commitment and dedication to serving the wellbeing of veterans all across

this country the same way that you were to serving the needs of

the servicemen under your command when you were in uniform.

And the fact is that you have a tremendous record of service to

this country that did not end when you took the uniform off, and

for that, the country is already grateful, and we are looking very

10

much forward to working with you as we again attempt to address

the important challenges and problems that are facing veterans

across this country at a time when we have some unique needs, the

Nation being at war, and, as was noted earlier, the budgetary constraints that we are all under, but I cannot think of a priority that

is higher in terms of what we need to be doing to honor and respect

and serve the needs of America’s veterans.

And so, I am delighted to be a part of this Committee and look

forward to working with you and am anxious to see you quickly

confirmed.

Thank you, Mr. Chairman.

Chairman CRAIG. Senator Thune, thank you.

Now, let me turn to Senator Jeffords from Vermont, where the

snow might be just a little deeper this morning.

[Laughter.]

OPENING STATEMENT OF HON. JAMES M. JEFFORDS,

U.S. SENATOR FROM VERMONT

Senator JEFFORDS. Mr. Chairman, congratulations on assuming

the chairmanship of this Committee.

Chairman CRAIG. Thank you.

Senator JEFFORDS. I am very pleased that you have articulated

your strong support for America’s veterans, and I look forward to

working closely with you and Senator Akaka to see that our veterans get the care and the benefits that they need and deserve.

Mr. Ambassador, you are a graduate of West Point and a distinguished veteran. You know the rigors of combat, and you have seen

the valor of America’s finest. You have now accepted one of the

greatest challenges in American Government, that of fulfilling our

promise to our veterans. As a veteran myself and an enrollee in my

local VA, I know first hand the challenges this system is facing.

Your predecessor, Secretary Principi, did a tremendous job in improving the VA, even in the face of insufficient budgets, but we

can, and we must, do better. It is no longer a matter of choice of

relative priority. Hundreds of thousands of men and women have

gone into war, as required by their commander-in-chief. They have

suffered both visible and invisible wounds. They require immediate

care today, and many will require extensive care for the rest of

their lives.

We cannot equivocate in providing that care, nor is it morally acceptable to provide that care at the expense of veterans of previous

eras. We are not meeting our national obligation if we turn away

any class of veterans. I ask you to join me and join this Committee

in ensuring that our Nation’s veterans receive the care and benefits

that they deserve.

Mr. Chairman, I ask that my entire statement be made a part

of the record.

Chairman CRAIG. Without objection. Thank you, Jim.

[The prepared statement of Senator Jeffords follows:]

11

PREPARED STATEMENT OF HON. JAMES M. JEFFORDS, U.S. SENATOR FROM VERMONT

Thank you, Mr. Chairman.

Let me first say that I appreciate the fact that you have moved swift1y to schedule this hearing on this critical nomination. I am very pleased that you have articulated your strong support for America’s veterans, and I look forward to working very

closely with you and Senator Akaka to see that our veterans get the care and benefits they deserve.

Ambassador Nicholson, I appreciate your being willing to accept this difficult assignment. Your appointment comes at a critical time for our country and for the Department of Veterans Affairs. Under the very strong and able leadership of your

predecessor, Secretary Principi, the VA was able to strengthen its health care system and improve the delivery of veterans’ benefits.

However, the entire VA system has been hampered by the unwillingness of this

Administration to provide the VA with the resources that are necessary to fully

meet the needs of veterans. VA hospitals are forced to forego needed maintenance

and capital improvements in order to prevent a shortchanging of veterans health

care. Benefits that could have been provided in a more timely manner are being delayed because sufficient resources have not been devoted to processing of claims.

Benefits that were widely endorsed by Congress, such as concurrent receipt of full

VA disability and military retirement pay, are not being paid to veterans today because adequate funding has not been included in the Administration’s budget.

And on top of all this comes the Iraq war and the sharp increase in demands on

the VA system from returning servicemen and women.

As a veteran myself, I am determined that this Nation fulfill its obligation to the

men and women it has sent into battle. I am worried that we do not have sufficient

resources to care for all their wounds and replace all their missing limbs. I am even

more concerned that we are not fully prepared to meet the challenge of the unseen

wounds, the psychological wounds that this war is inflicting on both the visibly

wounded and the physically unscathed veteran. While we may have disagreed on

the wisdom of starting this war, I don’t believe there can be any disagreement on

the importance of properly caring for those who are now suffering because of their

military service.

The activation of unprecedented numbers of National Guard and Reserve units is

adding to the challenge facing the VA. Guard Members and Reservists come from

all over America. Upon their return home, they do not have access to military base

networks, where active duty military personnel find support. In many instances, the

VA is their primary source of assistance. VA hospitals and clinics, many in remote

areas, will be faced with new and very urgent challenges, ones they must meet!

Like many of my colleagues, I have been to Walter Reed Army Hospital and have

glimpsed the enormity of the task facing the VA. Because you are a decorated soldier, I am sure you share my passion to do right by our veterans. I hope you also

share my determination to demand that this be a top priority of this Administration.

Mr. Ambassador, let me just say in closing that we in Vermont are very lucky.

Our White River Junction VA medical center and regional office is one of the very

best in the country. Twice the recipient of the prestigious Robert W. Carey Achievement Award, the White River Junction VA was selected for the Trophy Award, the

Carey Award’s highest honor, this fall. As an occasional patient at the White River

Junction VA, I can attest to both the quality of care and the efficiency of their service. This center is truly a model for other VA centers around the country. But even

the White River Junction VA will not be able to maintain this quality of care if adequate funding is not secured in Washington. That must be our job. I am pledged

to this task, and I ask you to join me in this commitment.

Our men and women did not hesitate when our President ordered them into battle. They continue to fulfill their duties with honor and selflessness. It is now our

turn to see that this Nation fulfills its obligation to them. I am fearful that we are

not meeting this challenge. I beg you to help me reverse this course.

Thank you.

Chairman CRAIG. Now, let me turn to Senator Kay Bailey

Hutchison of Texas. Kay.

OPENING STATEMENT OF HON. KAY BAILEY HUTCHISON,

U.S. SENATOR FROM TEXAS

Senator HUTCHISON. Thank you, Mr. Chairman.

12

I do want to add to the Members who have said how pleased they

are that you are going to be Chairman and that you want to make

this an active and working Committee and also, your Ranking

Member, Senator Akaka, who has a wonderful record in the service

as well.

I am very pleased with the nomination of Jim Nicholson, Ambassador Nicholson. I think that the previous Secretary of Veterans

Affairs, Secretary Principi, did a wonderful job of reaching out to

veterans to show how much he cared about the health care and the

services that they are being given. I found him to be a straight

shooter and someone on whom we could always rely to do what he

said he would do, and I have known and worked with Ambassador

Nicholson for many years and have found exactly the same type of

person: a straight shooter who always does what he says he will

do.

I am particularly pleased that the President has appointed someone with such a great record in service. I think your credibility

with the veterans’ community is absolutely unsurpassed and essential, and I think you have done a great service for our country the

last 4 years, I think that you are uniquely qualified to continue in

service in this very important way.

There are so many issues now facing our veterans, and I think

many of them have already been mentioned. I would just add two

more: one is the Gulf War Syndrome that was really undetected for

so many years, because it was felt in many of the high echelons of

government that the Gulf War Syndrome, which affected one in

every seven people who returned from the original Gulf War was

psychosomatic, that it was really stress and had no actual damage

to any body part.

And because of that, I think we lost a lot of time in finding out

what the source of these symptoms were, and I have made it a

cause of mine to assure that we get to the bottom of it through research and then the treatment that will come from the research

that is being done, because now, there has been a causal connection

between brain damage and access or being around chemicals, not

necessarily chemical weapons, but just exposure to chemicals and

brain damage.

Secretary Principi made a commitment of $60 million over 4

years, $15 million per year, to continue this research, and I think

it is very important that we continue, and I hope to ask you in the

question period if you will continue this commitment. Not only will

it help treat the veterans of the Gulf War, but will help us determine future problems that we might face in battle and access and

exposure to chemicals and the type of people who might be able to

get an antidote or some kind of an enzyme that would keep them

from being so afflicted as those we have seen.

The second major thing that I think is particularly timely is the

effect that BRAC will have on veterans’ health care services at

bases. I would hope that you would take an active role in looking

at bases that serve veterans where there is little access around

that base so that if that base were shut down, veterans’ health care

concerns would be elevated, whether you would weigh in on that

to show a factor, at least; it is not that you would not close the

base, but that it would be considered another one of the costs if you

13

are going to have to put a veterans facility in that area to compensate for the loss of active duty and whether or not that is, in

fact, efficient. It may be; it may not, but I would hope that as we

go into this BRAC year that we look at veterans’ health care services that is now being done routinely on active duty bases.

You have a number of issues on the table, but I know you are

up to the job, and I will enthusiastically support your nomination,

and I hope that with the cooperation of the Chairman and the

Ranking Member and all of the Committee Members that we can

move your nomination quickly so that we will not have any time

wasted in beginning the next phase of addressing issues.

The third area that I should mention as I close is the CARES

Commission that was put forward in the last 4 years, the last 2

years, and its impact on veterans’ facilities, and I hope that you

will continue to allow those communities that are affected by the

CARES Commission’s recommendations to have full access to you

and the committees that would be making the final decisions on

how those facilities will be used.

So with that, I am looking forward to working with you through

these very important years, and I know that you will do a wonderful job for our veterans. Thank you.

Thank you, Mr. Chairman.

Chairman CRAIG. Kay, thank you very much.

Now, before we turn to the Ambassador for his oath and also his

testimony, let me turn to our colleagues who are here today to introduce him to the Committee: the senior Senator and the freshman Senator from the great State of Colorado. First of all, Senator

Wayne Allard.

Senator.

STATEMENT OF HON. WAYNE ALLARD,

U.S. SENATOR FROM COLORADO

Senator ALLARD. Thank you, Mr. Chairman.

First of all, I would like to congratulate you on your leadership

as the Chairman of the Veterans’ Affairs Committee and also congratulate Senator Akaka for his position as Ranking Member on

the Committee. I extend my best wishes to the Members of the

Committee.

I am also very pleased today that my colleague, newly-elected

Senator Ken Salazar is joining me at the table in support of Jim

Nicholson to be Secretary of Veterans Affairs. Both of us showing

up reflects the fact that we have bipartisan support from the State

of Colorado, and we have a great deal of respect for what Jim Nicholson has done for the State, what he has done for the country, and

what he will do, we think, on behalf of veterans.

Before I get further on my comments, and it is a distinct pleasure for me to be able to introduce Jim Nicholson to the Veterans’

Affairs Committee today, I just want to relate a personal experience that I am having in the State of Colorado, and that is that

veterans are somewhat reluctant—or they are just simply not signing up—when they come out of service in Iraq and leaving the active military, getting their names on the rolls of the Department

of Veterans Affairs. If they would do that now, that saves problems

that many of us face in our offices 20 or 30 years later trying to

14

get them through the paperwork, because you have already got

them signed on the rolls of the Department.

And in some cases, we run across situations where they do not

have a lot of confidence in the Department of Veterans Affairs. I

have all the confidence in the world that under the leadership of

Jim Nicholson, Ambassador now to the Vatican, that he will help

correct that problem, and I think that he will help restore confidence in the Department of Veterans Affairs.

Now, I have known and worked for years with Jim in the State

of Colorado, and I am proud that President Bush has nominated

him to be the next Secretary of Veterans Affairs. As a West Point

graduate, Army Ranger, highly-decorated combat veteran and almost 4 years of service as the ambassador to the Holy See, Mr.

Nicholson is well-prepared and highly-qualified for the duties as

the head of the VA. He brings forward a strong work ethic, and I

think to be Secretary of Veterans Affairs, you have got to have a

strong work ethic.

Born during the Great Depression as the third child of seven,

Jim Nicholson grew up on a tenant farm in rural Iowa. Both he

and his older brother, Jack, earned appointments to West Point

while struggling as a farming family in the Midwest. Prior to Jim’s

appointment, his brother returned home from school to the summer, and his family could not find enough money to send Jack back

to New York for the start of his new term.

In order to solve this problem, a 15-year-old Jim Nicholson took

it upon himself to find a job building railroads through his home

State of Iowa. By working as long as 19 hours some days, Jim was

able to not only earn enough money to send his brother back to

West Point, but also was eventually able to buy his father a used

car so that he could look for work.

These virtues that Jim displayed as a youth: work ethic, self sacrifice, and determination, are the qualities that will allow him to

excel in the President’s Cabinet. As a West Point graduate and

decorated veteran, this former Army Ranger also has the personal

experience in the armed forces that will serve his new constituency

well. During his service in the Army, Mr. Nicholson fought in the

Vietnam War and was a highly-decorated soldier. He was awarded

the Bronze Star, the Combat Infantry Badge, the Meritorious Service Medal with oak leaf cluster, the Vietnamese Cross for Gallantry

and two Air Medals while spending 8 years on active duty, 22

years in the Army Reserve before retiring as colonel.

Clearly, Jim Nicholson’s qualifications after his Army career are

just as impressive, including his advanced degrees, starting a successful real estate business, numerous community volunteer efforts

throughout Colorado, and finally culminating in his service as an

ambassador to the Holy See.

This is a man who has been asked to serve his country in a new

capacity and who will answer that call with his own sense of duty

and honor, and it is indeed a great pleasure for me to introduce

Jim Nicholson to the Committee, and I also want to thank in a

public way the willingness of his wife Susan to allow him to take

on this job, because it means that he will spend time away from

the family and will mean a greater burden on her, and I think a

special thanks should be extended to her.

15

Thank you, Mr. Chairman.

Chairman CRAIG. Senator, thank you.

Now, let me turn to Senator Salazar. Senator Salazar is also a

Member of this Committee, and we welcome you to the Committee

and look forward to your statement.

Ken.

STATEMENT OF HON. KEN SALAZAR,

U.S. SENATOR FROM COLORADO

Senator SALAZAR. Thank you, Senator and Chairman Craig and

Senator Akaka, Ranking Member, and Members of the Committee.

I very much look forward to serving on this Committee. Like all

of you here, this is something that we do by choice, and I made the

choice to sit on this Committee, requested the Committee assignment because of my respect for the veterans of our country. My father passed away several years ago, a proud veteran of World War

II and insisted that he be buried in his uniform from World War

II because he wanted to make a statement about how proud he was

of this country and how proud he was of the freedoms that we

enjoy.

In that same vein, I have had uncles killed in World War II and

many members of my family who have served in many wars and

nephews who are currently in the military, and so, I very much

look forward to contributing to the efforts of this Committee to

make sure that we are honoring our commitments to our Nation’s

veterans and in that regard very much look forward to the activism

that you will bring to this Committee, Mr. Chairman and Mr.

Ranking Member.

Let me also say, I didn’t do my opening statement like the rest

of the Committee Members, but I do have an opening statement,

and if there is no objection, I would just submit that for the record.

Chairman CRAIG. Without objection.

Senator SALAZAR. Thank you, Mr. Chairman.

Let me say that it is an honor for me as a fifth-generation Coloradan today to be able to introduce a very fine and distinguished

member of our State, a favorite son from Colorado, and that is Ambassador Jim Nicholson, to this Committee.

Ambassador Nicholson and I have not always been on the same

team, if you will, on political issues in the State of Colorado or the

Nation, but I will tell you that you get to a point, as we are today

in our Nation, when the elections are now over, that we need to

move forward and get about the country’s business, and certainly

the business of how we take care of our veterans in my State and

around this Nation is one of the most important priorities of our

country.

And so it is with that statement that I am very proud to be able

to introduce Ambassador Nicholson and also to urge my colleagues,

both Republicans and Democrats, to join in voting for his confirmation. I look forward to working with him. We have already started

working together on a host of issues in Colorado, including addressing the issue of a Veterans Affairs Medical Center in Denver. He

has sent clear signals that notwithstanding the challenges that we

face there that we are hopeful that we will be able to resolve the

issues and move forward with the construction of a facility there

16

that this Committee has been involved in making possible over the

last several years.

I have met with Ambassador Nicholson and talked to him about

his life story and about his commitment to our Nation and to our

Nation’s veterans. Ambassador Nicholson has proven with his life

story that nothing can stop him fighting for those things that he

believes in. He was born in Iowa in a tenant house without plumbing. His family sometimes had to go without food. His mother’s

faith and his dedication to family taught him that he could succeed

no matter how difficult the challenge.

I know a little something about growing up on a poor farm with

a big family and trying to get by on a little, and I am confident

that his own life experiences have given him the ability to lead the

second-largest department of our Nation to be the best that it can

be.

Ambassador Nicholson’s early life experience steeled him to succeed as a cadet at West Point and then as an Army Ranger, who

won the multiple decorations that have already been mentioned

today. He took on those assignments as burdens of a young man

who had to fight for everything he and his family got, and he took

them on as a patriot who knew the best that America had to offer.

I know that this hearing will go well and that the nomination

process will go quickly and that our country will give Ambassador

Nicholson another opportunity to serve our great Nation as the

Secretary of Veterans Affairs. The new challenges that he will face

are difficult. The basic question for all of us in this room and in

this country is how does the United States honor its solemn obligations to our country’s heroes in a time of the huge and historic deficits that we face today?

I do not know that any of us know the answer to that question,

but I do know that Ambassador Nicholson has the ability and the

tenacity to make sure that we prioritize the needs of veterans

around our country. And so, it is with that statement that I pledge

my support to Ambassador Nicholson. I urge a positive and quick

vote for his confirmation in the U.S. Senate.

Thank you very much.

[The prepared statement of Senator Salazar follows:]

PREPARED STATEMENT OF HON. KEN SALAZAR,

U.S. SENATOR FROM COLORADO

Good afternoon. Thank you Mr. Chairman. It is a privilege to serve on this Committee with you and with Senator Akaka. I very much look forward to working with

you and all of my colleagues as we strive to honor our obligation to those who so

honorably served this country. I know I will learn a great deal from all of you, as

you share your experiences and leadership on a wide range of issues affecting the

Nation’s veterans. I am confident that my own experience as the son, brother, and

uncle of proud Salazar family veterans will be helpful to this Committee.

And thank you, Ambassador Nicholson, for your long and distinguished service to

our country, and to the great State of Colorado. Your experience as an Army Ranger

in Vietnam and your 22 years of service in the Army Reserves will be very valuable,

I expect, as you consider ways to improve the lives of your fellow veterans. And as

I said in my introduction of you, your experience both as a soldier and a diplomat

will be invaluable as you fight within the President’s Cabinet for the funding our

veterans have earned. It is long past time for us to fully fund the VA, and I pledge

to help you meet that goal.

Let me reiterate my appreciation to this committee for authorizing the creation

of a new VA medical facility in Colorado at the old Fitzsimons Army Medical site.

17

The development of this site presents a unique opportunity for Colorado veterans

to become a part of a world-class medical campus.

The close proximity of the University of Colorado Hospital to the VA’s current

hospital has served both communities well. The relocation of these hospitals to

Fitzsimons will strengthen this relationship, resulting in what I’m sure will be continued cost savings and, most importantly, excellent health care for our veterans.

I am hopeful that after some breakdowns in communication, the hospital is back

on track and that our veterans in Colorado will soon have the world-class facility

they have earned.

Colorado is blessed with values that encourage service to this great Nation, in- cluding in the armed forces. The VA invested more than $900 million in Colorado

in 2003 to serve nearly 433,300 veterans who live in Colorado. 56,904 patients received health care and 57,706 veterans and survivors received disability compensation or pension payments from VA in Colorado. More than 9,401 veterans, reservist,

or survivors used GI Bill payments for their education, there were 68,461 owned

homes with active VA home loan guarantees, and 3,339 veterans were interred in

Ft. Logan and Ft. Lyon national cemeteries.

Those are impressive numbers, but the fact of the matter is that our veterans still

have to wait too long for care, are forced to jump through duplicative and cost-increasing hoops to get the prescription drugs they need, are confronted with hospitals

that are outdated, loan guarantees better suited for real estate markets of two decades ago, and in too many cases are forced to choose between the retirement they

have worked for and the disability pay they have earned.

One more thing that I find very disheartening, Mr. Chairman, is the simple fact

that in any given year, 500,000 veterans face at least one night of homelessness.

Imagine that: half a million men who laid everything on the line for us spend the

night on the street because they cannot afford shelter. In Denver alone there are

nearly 9,000 homeless veterans.

We can do better for our veterans—our national heroes. I anticipate we will hear

a lot over the coming weeks about the impact the historic deficits we currently face

will have on the priorities of our country. That is as it should be—we cannot continue to heap debt on our children and grandchildren at the rate we have done so

for the last 4 years.

I recently signed a letter, circulated by our Ranking Member, Senator Akaka, calling on the President to fully fund the Veterans Administration in his upcoming

budget proposal. I also wonder, Mr. Chairman, if we have not come to the point

where we move to guaranteed funding for the VA. It just is not fair to our veterans

and their families to have to hold their breath each year to see if they will be able

to get the care and support they were promised.

Ambassador Nicholson, after our discussion last week I am hopeful that you will

keep these principles in mind as you begin your assignment. At our meeting, I

shared my priorities with you, and I reiterate my commitment to work with you to

enact each of them. In particular, I look forward to working with you and my colleagues on this Committee to finalize the new VA facility at Fitzsimons.

Again, thank you, Mr. Chairman and Senator Akaka. And thank you, Ambassador

Nicholson.

Chairman CRAIG. Now, we turn to the gentleman that we are

here to take testimony from, and as we do that, Mr. Ambassador,

if you would stand, please; let me administer the oath.

[Witness sworn.]

Chairman CRAIG. Also, at your leisure, please introduce anyone

you would like to introduce, your family, who accompanied you

here today. We look forward to your testimony.

Please proceed.

STATEMENT OF HON. R. JAMES NICHOLSON, NOMINEE TO BE

SECRETARY, DEPARTMENT OF VETERANS AFFAIRS

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

Committee.

I want to thank you for the opportunity to appear before you so

early in the new Congress and for the many other courtesies that

you and your staffs have extended to me. Your words and actions

underscore your commitment to the millions of veterans who look

18

to the Department of Veterans Affairs for the benefits and services

they earned, benefits and services that our Nation has pledged to

gratefully give them.

Let me add my congratulations to you, Senator Craig, and to you,

Senator Akaka, on your election to Chairman and Ranking Member

respectively of this Committee, which oversees the department of

our government with the largest civilian work force and with one

of our highest priorities: to deliver first class, timely medical care

and benefits to our veterans. Your selections speak volumes about

your colleagues’ confidence in your commitment to America’s veterans.

I am joined here today by my wife of 37 years, Suzanne. She has

always been at my side, through thick and thin, and I am very

grateful to her for her support of me in accepting this honor and

this considerable challenge from President Bush to lead this great

Department if confirmed. I am also joined by my son Nick and his

wife, Charlotte, who live in the Washington area. Our other two

children could not be here.

I am also joined by a man who has been mentioned here already

this morning, my older brother, the pacesetter in our family, Brigadier General Jack Nicholson and joined by my kid brother, Patrick

Nicholson, who is here.

Service to our country——

Chairman CRAIG. Jim, let me welcome all of your family to the

Committee. We appreciate your being here.

Mr. NICHOLSON. Service is a long tradition in my family. My father was an enlisted man in the Navy during World War II. My

father-in-law served in both World War II and Korea. I have mentioned my brother, Jack, who served 30 years in the Army and was,

until just very recently, the Under Secretary of the Department of

Veterans Affairs for Memorial Affairs, where he did an outstanding

job. One of my sons is a veteran; four of my nephews are colonels

in the Army and Air Force.

My 30 years of active and Reserve service in the Army, coupled

with my 4 years at West Point, have defined my life. I love the

armed forces of our country, their courage, their integrity, their

sense of duty. That is why I am so honored that President Bush

selected me to build upon his Administration’s great record of care

and compassion for our Nation’s veterans of service in our armed

forces, and if confirmed, it would be a privilege for me to follow the

footsteps of Secretary Principi, a man who has provided outstanding leadership and tireless dedication to the welfare of this

Nation’s veterans.

I feel humbled that America’s veterans, men and women who

served on the front lines for freedom, justice, and peace in democracy’s name might look to me as the faithful steward of their trust

and the leader of VA’s 230,000 employees who work so diligently

around the clock to assure our veterans that we are making good

on the Nation’s debt to her defenders.

Mr. Chairman, as has been said, I do come from the heartland

of this great country, Iowa, from a boyhood life that is so far removed from this historic and stately temple of liberty that we are

in here today that it made Washington seem barely a dream. It

was a hardscrabble life, to be sure, but my family of seven kids was

19

filled by my mother with hope and confidence, and she used to continually say to us, ‘‘if you will work hard, study hard,’’ and she

would always say, ‘‘and pray hard, you can be a success in America.’’ You can have legitimate dreams of a better life, in spite of

sometimes the extreme poverty that we were in, and you can make

those dreams come true, she would say.

As a teenager, I remember watching young men going off to the

Korean War, following in the wake of World War II, yet another

test of freedom’s will to defeat an inhumane and evil tyranny, yet

another answered call by our countrymen to go off to a frozen peninsula that we had never heard of prior to that. They went off because their country asked them to go.

One of the brothers of a pal of mine never returned. One of my

best friends, who was slightly older than I, came back, but he left

a leg over there. He was also my introduction to the VA, as they

worked very hard to try to get his prosthesis to work properly.

Now, again, we are at war, and again, our country is asking our

men and women in uniform, all volunteers now, to go to the sound

of the bugle. Those friends and neighbors who stood tall for freedom 50 years ago are now among our most distinguished veterans,

and today’s heroes will soon join them.

I will, if this Committee so entrusts me, be proud to lead the Department dedicated exclusively to honoring their service and sacrifices, to making good on our country’s promises to them. I have

had the privilege of wearing the uniform of the United States Army

in combat, so I have seen both the horrors of war and the heroes

of America making the greatest sacrifices of military service on behalf of their comrades and our Nation.

One cannot leave a battlefield without having profound respect

for the courage and cool of all who have served there. One cannot

appreciate all the blessings of our freedom without thanking the

men and women who serve in war to bring about peace. Their example of unwavering commitment to their mission, no matter how

dangerous or uncomfortable, will always reverberate with me and

readies me for a mission of service to those veterans.

I will do my utmost to see that they receive all they have earned

and that it is delivered with the dignity that they have also earned.

I do not underestimate the enormity of the responsibilities of Secretary of Veterans Affairs. This Committee knows well that the VA

is the second-largest Cabinet department, operates the Nation’s

largest integrated health care system and is relied upon by millions

of veterans, their dependents and survivors not only for health

care, but for billions of dollars in monetary benefits, life insurance,

education, mortgage insurance and readjustment benefits.

The challenge of leading such an organization is daunting, but I

am prepared to accept it. If the Senate confirms my nomination, I

will commit without hesitation to upholding the following principles: veterans should have access to the best available health care

in the most appropriate clinical settings, delivered in a timely manner by caring, compassionate clinicians, and veterans, their eligible

dependents, and survivors are entitled to prompt, accurate, equitable and understandable decisions on their claims for benefits, and

veterans should be appropriately honored in death for their service

and sacrifices on behalf of a grateful Nation.

20

Mr. Chairman, the manner in which the VA supports the transition of today’s servicemembers into veterans, especially those who

are injured or because they became ill as a result of their service

in combat areas, will define the Department for them. If confirmed,

I will ensure that the VA and DoD continue to work collaboratively

to provide a seamless transition, so that returning servicemembers

are timely provided the benefits and services that will enable them

to reclaim their rightful places as citizens in our society.

I am aware of recently-reported concerns of possible regional

variations in disability compensation awards. Veterans’ entitlements to Federal benefits is the same regardless of where in this

country they may reside, and if confirmed, I will ensure that standardized training and sound quality controls support a uniform approach to claims adjudication. Further to that point, I will, if confirmed, order a prompt study into this whole question of equity and

geographic differences in benefits adjudication. No one that I have

yet met knows exactly why these differences occur exactly the way

they do, but we need to understand this fully and then take remedial action as appropriate.

Mr. Chairman, if the Senate will afford me the opportunity, I

pledge to work with this Committee and individual Members of

both houses for the betterment of veterans and their families. I will

keep you informed. I will listen to your concerns, and I will respect

your oversight responsibilities.

I understand that the success of the Department requires a

strong collaboration with the veterans’ service organizations who

function both as our ears to the ground on matters of service delivery and as our partners in devising solutions to problems as they

arise. If confirmed, I will work closely with the VSOs so that I may

both benefit from their counsel and draw upon their willingness to

serve their comrades.

I am also deeply committed to earning the respect, trust and following of the men and women of the VA who have made service

to veterans their life’s calling. The VA work force represents an

enormous reservoir of dedicated, committed talent that must be put

to its best possible use. I will hold myself and my leadership team

accountable for ensuring and harnessing our employees’ best efforts. It will be my job and my privilege to lead and harness this

awesome force of talented people so that all of us have the same

focus: our veterans.

It is critical that we honor America’s debt to those who have

served us so faithfully. When President Bush announced my nomination, I did quote America’s first commander-in-chief, President

Washington, who said that it is, quote: ‘‘our debt of honor.’’ And

today, with so many American men and women in uniform stationed around the globe, we give them heart when we keep faith

with those who have served before. They do have the right to know

that we will stand by them as well in their time of need. This is

also integral to our Nation’s ability, I believe, to be able to continue

to attract an all-volunteer force ready to defend us anywhere, any

time.

The armed forces of our country are, in my opinion, the model

for what is good and great about America. They are a paragon of

integrity; they do not take; they give. They are disciplined, highly

21

trained, with a love for their country. They are a unique force in

the world, and we need to treat them uniquely well. Our VA, under

Secretary Principi, has made terrific strides in serving our veterans. The VA provides health care to 860,000 more veterans now

than it did in 2001. It has drastically reduced waiting times for

health care appointments and opened nearly 100 new communitybased outpatient clinics so that 87 percent of the veteran population now lives within 30 minutes of a VA medical facility.

As a result of its focus on excellence in health care, the VA is

now the proven benchmark in preventive health care quality and

chronic disease management. Since 2001, the VA has also drastically reduced its inventory of pending claims for disability compensation, reduced average processing time for those claims and at

the same time substantially improved the quality of claims decisions.

Moreover, in 2001, the VA embarked upon the largest expansion

of the national cemetery system since the Civil War. When construction of all the new cemeteries is completed, the VA will have

expanded the national cemetery system by 85 percent, and according to the latest American Consumer Satisfaction Index, the National Cemetery Association earned a rating of 95 out of 100, the

best rating ever earned by a Federal agency. And I want to again

here send a salute to my big brother, because he was the head of

that Administration that got that wonderful affirmation from the

people that have used or benefited from that Administration, many

of them at the most sensitive, sad time of their life.

I will, if confirmed, strive to move the Department to another

level by building upon all that has been put in place and improving

upon those areas that remain a challenge. The VA is a great American institution, created and founded by a country that appreciates

that freedom is not free, and our veterans’ lives and limbs are the

price that is too often paid.

It falls on the Secretary of the VA and the men and women he

or she leads to keep faith with the expectations of all our fallen

citizens in uniform, past, present, and future, expectations that

they will be cared for as needed. This, too, is the mandate of the

grateful people of the United States. I pledge to you if confirmed

by you that I will do all in my power to see that both the veterans

and the citizens of our great Nation are pleased by the service of

their Veterans Administration.

This concludes my remarks, Mr. Chairman.

Chairman CRAIG. Mr. Ambassador, thank you very much.

Let me talk to my colleagues about procedure here. We are certainly going to ask you to engage in all of the questions you want

to ask of the nominee. It is important that we build a record. I

think the nominee knows as well as we do that that record becomes

increasingly valuable as time goes on as it relates to his performance and promises made, and we believe strongly that that is important.

But we also have another reality in front of us. Many of you have

already expressed your open support and willingness to move the

Ambassador’s nomination forward to the Senate floor. We also happen to have a quorum at this moment.

[Laughter.]

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Chairman CRAIG. I am going to turn to my colleague, the Ranking Member, to see if he might want to comment on this before we

address you as to what he and I might choose to do here.

Senator AKAKA. Mr. Chairman, I know some Members will be

leaving soon. As such, after our Committee Members and Ambassador Nicholson make their statements, I would recommend that

we immediately mark up Ambassador Nicholson’s nomination.

We have not seen the Ambassador’s FBI report yet, but I would

ask that the Committee’s approval be contingent upon its approval

of the FBI report and would therefore recommend that we immediately take up this nomination.

Senator HUTCHISON. Mr. Chairman.

Chairman CRAIG. Senator Hutchison.

Senator HUTCHISON. I move that the Committee report the nomination of R. James Nicholson to the Senate with the recommendation that his nomination to serve as Secretary of Veterans Affairs

be confirmed, subject to Mr. Nicholson’s commitment to respond to

requests to appear and testify before any duly constituted committee of the Senate and further allowing Senator Akaka and others who might wish to look at the FBI file the time, obviously, to

do that. But I think we should move the confirmation forward.

Senator ROCKEFELLER. Mr. Chairman.

Chairman CRAIG. Senator Rockefeller.

Senator ROCKEFELLER. I will, in every way, cooperate with the

Chairman and Ranking Member on this, but I think it is important

to make a point here. In the case of Secretary Principi and others,

we have all been involved with the confirmation process with a

number of folks over the years, and there is a psychological difference, and I think sort of a procedural difference, between asking

the questions which are closest to us and not asking the questions

that are closest to us before we vote. There is a particular sort of

emphasis and a poignancy, a moral poignancy in a way, about the

asking of those questions.

I would just note that for the record that I hope this will not become a common practice. I think it is the first example of our

Chairman having to deal with the fact that some Members will be

leaving, and that is another matter that we all need to discuss to

make our Committee rise to the A level that the Chairman and all

of us want. But I certainly will not stand against what the Chairman is suggesting, because I strongly favor the nominee, but I

want to just put that on the record.

Chairman CRAIG. Let me dutifully note exactly what you have

said, Senator, and I do not disagree with that. That is why I would

assume that anyone having questions, and I have several, remain

so that we build an important record for the Committee in moving

with the new Secretary of the Veterans Administration. But I do

not disagree with your overall feeling as to priority of action.

Is there a second to the——

Senator BURR. Second.

Chairman CRAIG. It has been seconded that this Committee move

forward the nomination of Jim Nicholson as Secretary of Veterans

Affairs with the caveat so expressed in the motion as it relates to

questions to be asked and answered. Senator Akaka and I will

23

spend time with the FBI report this morning and background information to assure us that there are no difficulties with that.

Senator JEFFORDS. Mr. Chairman, I do have questions that I do

wish to ask, which may make a difference on my decision how to

vote.

Chairman CRAIG. All right.

Senator JEFFORDS. That is why I raise it now, so I feel that we

perhaps should take the regular order, but I am not going to object.

Chairman CRAIG. All right; does the Committee wish a roll call

vote?

Senator JEFFORDS. Aye.

Senator ROCKEFELLER. I think it would be respectful to the nominee to have that.

Chairman CRAIG. Then the Clerk shall call the roll.

The CLERK. Mr. Specter.

Mrs. Hutchison.

Senator HUTCHISON. Aye.

The CLERK. Mr. Graham.

Mr. Burr.

Senator BURR. Votes aye.

The CLERK. Mr. Ensign.

Mr. Thune.

Senator THUNE. Aye.

The CLERK. Mr. Isakson.

Senator ISAKSON. Aye.

The CLERK. Mr. Akaka.

Senator AKAKA. Aye.

The CLERK. Mr. Rockefeller.

Senator ROCKEFELLER. Aye.

The CLERK. Mr. Jeffords.

Senator JEFFORDS. Present.

The CLERK. Mrs. Murray.

Senator AKAKA. Aye by proxy, Mr. Chairman.

The CLERK. Mr. Obama.

Senator OBAMA. Aye.

The CLERK. Mr. Salazar.

Senator SALAZAR. Aye.

The CLERK. Mr. Chairman.

Chairman CRAIG. Aye.

The CLERK. Eleven ayes, zero nays.

Senator HUTCHISON. Mr. Chairman, I would just like to make a

parliamentary inquiry, and I would like to make a motion if it is

necessary, to allow Senator Jeffords to change his vote if he wishes

following his questioning so that if he decides he would like to

move one way or the other, he be allowed to do that.

Chairman CRAIG. I have no objection as the Chairman to that.

We will proceed with that caveat, that following questioning,

your vote can be changed as you wish.

Senator JEFFORDS. Thank you, Mr. Chairman. I did so because

I believe there are questions which are very pertinent to how I will

vote. I firmly believe that the VA must serve the needs of all veterans. Because of budget shortages, your predecessor was forced to

create a new category of veterans known as Priority 8 veterans.

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While Secretary Principi fought hard for adequate funding for

the VA, the Administration did not see fit to meet this request to

provide the VA with sufficient funds to treat these veterans. All indications are that in order to reduce the budget deficit, the Administration is going to cut funding for the VA or at least freeze the

funding at 2005 levels, which, of course, amounts to a cut in actual

services provided.

If that proves to be the case, are you willing to go to the President and request that additional funds be provided to the VA so

services can be maintained for all veterans, or are you willing to

accept that we may have to write off whole categories of veterans

as now ineligible for VA services? In my opinion, that would be a

gross mistake.

Mr. NICHOLSON. Thank you, Senator. That is an important question, and it, I think, aptly encapsulates, you know, some of the tension that exists in trying to balance resources that are available or

will be available with the needs of our veterans.

I will say I have not seen the 2006 budget. They have not made

that available, so I cannot comment on what that budget has in it.

But I am well aware of one of the important points of your question

as it relates to the so-called Category 8 benefits to veterans, and

I am aware that that has been curtailed. Those are veterans in

that category who, on a means test basis, have the ability where

they are above that de minimis level and thus not at this time entitled to benefits strictly because of the finite amount of resources

available to serve the whole population, and the Veterans Administration has a delineated set of priorities by law.

The first and foremost is to take care of those veterans who have

been disabled because of the service that they have provided to our

country or have incurred a chronic condition. Another priority is

those that have fallen down on their luck and are indigent and are

poor and then those that also have spinal cord injury or diabetes

or kidney disease.

And so, there is a balancing that has to go on. I will say to you

that my commitment in taking on this job if I am given the privilege is to the veterans and their needs, because I feel it, and they

deserve it. And it will be a task for you and your oversight responsibility for me in my leadership of the Department if I am there

to find that balance in a world of not infinite, but finite resources.

Chairman CRAIG. Senator Jeffords, do you——

Senator JEFFORDS. Yes.

Mr. Ambassador, the war has produced many new challenges for

the VA. One of these challenges is meeting the increased need for

mental health services. Initial DoD data shows that 17 percent of

the returnees from Iraq and Afghanistan suffer from post-traumatic stress disorder, PTSD. Studies by the VA now seem to indicate that as many as 25 percent of the returnees who seek VA care

have some form of PTSD.

In fact, this may only be the tip of the iceberg. This presents two

challenges to the VA: first and most immediately, we must provide

additional resources to existing VA health programs all across the

country, so that they can meet this clinical demand. As a greater

number of National Guard and Reserve soldiers serve in combat,

there will be an increasing need for highly-skilled mental health

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professionals in the widely-scattered VA hospitals and clinics all

across the country. We no longer have the luxury of concentrating

mental health services in a few centers around the country thinking we can adequately serve all veterans.

Secondly and no less important, the VA must provide additional

resources to support research in the causes, assessment and treatment of PTSD by the National Center for PTSD. There is much

and do not understand about the effects of stress and trauma on

our servicemembers and the implications on their long-term health.

I believe that significantly increased funding for VA mental health

programs must not only be a priority, but must be viewed as an

absolute necessity. I would appreciate your comments.

Mr. NICHOLSON. First of all, I share your concern about that,

Senator, and I also agree that I think that those men and women

coming back have had a unique combat experience. I mean, there

is, in that urban environment with suicide terrorists, there is no

safe place. So that presents a new, I think, and unprecedented

challenge to us in the whole realm of trauma, and I do not know

what that number is or what that percent is or will end up being,

but that is something that commands our priority attention, and

we need to have early intervention and screening with those people

and begin a counseling regime when we identify that it would be

appropriate for that servicemember.

We need to learn more about it, and I think there is some very

good research going on. I know there is some of it right there in

your State, as we have discussed before, at the Wind River Junction, and there are three other centers throughout the United

States where this research is ongoing. And the Department, I have

also learned, as set up these polytrauma centers for the treatment,

not just the research, but the treatment of these people.

So that really has the attention of the VA and needs it, and I

will pledge to work with you and others on that as a priority.

Senator JEFFORDS. I appreciate that answer. Thank you.

Chairman CRAIG. Senator, thank you very much for that questioning.

We will now proceed with a normal round of 5 minutes per Senator in the order in which you came in, and I also appreciate the

cooperation of my colleagues to adjust the scheduling and facilitate

the situation so that we will not have to return this afternoon for

the actual motion and vote for the disposition of this nominee from

this Committee.

Does the Senator from Vermont wish to keep his vote as is at

this time?

Senator JEFFORDS. Yes, I do.

Chairman CRAIG. Let us now begin with questions, and again,

Jim, we appreciate your cooperation with the Committee, and as I

have stressed earlier, we certainly believe that the record that is

built here today—you have already heard some very important concerns expressed by many of my colleagues—is an important one as

we work with you in the coming years to make sure that the Veterans Administration is responsive not only to current veterans’

needs, but future veterans’ needs.

You have talked about a variety of your priorities. You have obviously, I trust, examined the record of Tony Principi, who leaves us

26

with a marvelous tenure, and so, let me ask you this question: how

do you see your first 100 days at the VA unfolding, and what would

be your immediate priorities?

Mr. NICHOLSON. I will answer the last part of your question first,

Senator Craig, and say that my immediate priorities are perforce,

I think, going to be on those people that are returning from our

combat zones in Iraq and Afghanistan and some of the serious disabling cases that there are there to make sure that we are doing

everything in a timely way to make a seamless transition from

those people from their active duty military status to that, into the

Veterans Administration status.

And I will say that this is not yet perfected as I understand it.

There is still work and emphasis needed for the transference of

their health information and that, you know, we accept them into

our system, our hospitals and our centers. And we do it without

uncertainty on their part and the part of their families.

I met with some wounded members yesterday and family members, and we talked about this, because some of these people—I

met yesterday with a young Army major and her husband, and she

was a Blackhawk pilot in Iraq and incurred an RPG rocket that

blew off her legs. And her copilot was almost injured as seriously,

but yet, she landed her helicopter and saved the crew’s life and

then went unconscious and woke up two weeks later at Walter

Reed and now has this unbelievably positive attitude, but is inquisitive about, you know, what’s next, and what’s available to her. We

have to take care of that first and foremost.

The rest of the 100 days, I think, is to consolidate, address the

problems that are still out there, one of which I know that Senator

Obama is going to bring up which is a concern of mine and organize and build on the great progress that has been made in the last

4 years.

Chairman CRAIG. As my last question in this round, let me offer

you an easy one. All you have to do is say yes to this one. Last

year, at my insistence, the Committee and the Congress approved

legislation transferring title of a parking lot adjacent to the Boise

VA Medical Center from the General Services Administration to

the VA. My goal in pressing for the land transfer was to allow VA

to collocate its regional office, now in rented space a substantial

distance away in the downtown area of Boise, near the VA Medical

Center so that veterans could secure all needed VA services at a

single site.

Do you agree that the colocation of VA facilities at a single site

makes sense, and will you give priority attention to the proposed

colocation of the VA Boise Regional Office at the Boise VA Medical

Center?

Mr. NICHOLSON. Yes, I agree.

[Laughter.]

Mr. NICHOLSON. I think I have to be intellectually honest. Yes,

I believe in the proposition that co-location and efficiency, primarily

for those people that we are serving, the veterans.

Chairman CRAIG. Exactly.

Mr. NICHOLSON. As to that specific situation, I am not aware of

it.

Chairman CRAIG. Sure.

27

Mr. NICHOLSON. But it sounds good, and I’ll be happy to take a

look at it.

Chairman CRAIG. Thank you very much.

Let me turn to my colleague, Senator Isakson.

Senator, questions, and we are now and will stay with the 5-

minute process.

Senator ISAKSON. Thank you, Mr. Chairman.

Ambassador Nicholson, I wanted really to ask one question and

let you kind of expand on it. Late last year, the 48th National

Guard Unit of the State of Georgia was activated. They are being

trained now. In May, they will be deployed in Iraq.

Our country is at a point in time where we have never been more

dependent on our Guard and our reservists, and obviously, on volunteers. And we live in a world where we know, although we hope

it will not happen, that there will be another time and another

place and another occasion where we will call America’s young men

and women in our reserves to fight on our behalf.

So, therefore, the attractiveness of that, continuing to meet our

recruiting requirements and the quality of life when activated for

those Guardsmen and reservists is critical. I would like to hear

your thoughts on that topic in particular and if, in fact, you have

looked into the future of your administration, what you might want

to do to accomplish that in terms of the attractiveness of taking

care of those Guardsmen and reservists.

Mr. NICHOLSON. I tried to make that point in my opening statement, Senator, because I do think there is a causal effect between

how we end up fulfilling the promise that we make and the attitude of people as they look at that as one of their options for a vocation or service to their country, however they see it.

I think it is also very important the way we project it or market

it, and I am sensitive to Senator Rockefeller’s comment about that,

because I think, and I can remember being this way that, you

know, as a young trooper, you feel a certain immortality and that

these things that they talk about, you know, VA old folks homes

or even VA hospitals are vagaries that do not apply to me and in

that way would have a diminished recruiting or marketing appeal

which bespeaks that we need, I think, to really have a strong outreach about those benefits and that concern of our country and, you

know, we are spending and trying very hard to provide a great

service to our veterans, and I think that education about that is a

very important point going forward in this all-volunteer force context.

Senator ISAKSON. Well, I appreciate your commitment, and I appreciate the fact that in your 30 years, 8 were active, and 22 were

Reserve, so you’ve been on both sides of that service to the country,

and I am honored to have voted for your confirmation. I look forward to working with you.

Mr. NICHOLSON. Thank you.

Senator ISAKSON. I yield back.

Chairman CRAIG. Thank you.

Freshman Chairmen are sometimes allowed a little margin of

error, and I erred a moment ago in failing to recognize my colleague and Ranking Member Danny Akaka, so let me turn to him

now for his round of questioning, and I am going to even try to

28

soften that mistake a little bit by handing him the gavel for a moment while I step out, so now, you are in full control, Danny. And

following your questions, would you please recognize Senator

Obama, and I will be back in just a moment? Thank you.

Senator AKAKA. [Presiding]. Thank you very much, Mr. Chairman. It is great working with you.

Mr. Ambassador, you spoke of this earlier. From your experience

with the military, I know you understand the value of seamless

transition. The transition from the Department of Defense to the

Department of Veterans Affairs needs to be, I feel, hassle-free and

as beneficial as possible for servicemembers. I think we have some

work to do in this arena, and I am glad that VA is focusing some

attention on it by opening up a new office. What is your assessment of the transition from active duty to veteran status and is

anything else missing besides the transfer of medical records?

Mr. NICHOLSON. Thank you for that question, Senator Akaka.

We are at war, and we do have people coming back from war,

and we have two different kinds of people. I mean, when they are

at war as warriors and our soldiers defending us are the same. But

when they return, the Guardsmen and the reservists get into sort

of a different queue than the people who are part of the regular

force. And we need to do better. The goal is there, and we will

achieve it, but I cannot sit here and tell you that I think it is perfect or where it should be.

For Guardsmen and Reserve, what we are finding is that some

of them come back from their deployment, and they are not captured for the kinds of debriefings and briefings of what is available

to them, and they are getting sort of scattered. They are obviously

so anxious to get home and get back in their communities with

their families that some of them are falling through the cracks, and

we know that now and are taking steps to intervene early.

For example, I know that the VA put some people on a troop

transport and was able to sail with them and brief them on their

way coming home from Iraq. On the side of the regular force, we

need still to do better on the sharing of information with the Department of Defense, medical information particularly. I think the

goal is there, that both agencies, both departments want to get

there, but we are not there yet, but it is a high priority.

Senator AKAKA. Thank you.

In your answers to my pre-hearing questions, which I certainly

appreciated from you, you indicated that you are, and I am

quoting: ‘‘firmly committed to taking care of our core constituency,’’

which you define as ‘‘those with service-connected disabled conditions, low incomes, and veterans with special health care needs.’’

You went on to say that you will work to ensure that sufficient resources are available to care for these veterans who depend upon

VA for care. Tell me more about the attention that will be paid to

the millions of other veterans who depend upon VA care.

Senator ISAKSON. The priority are those that you have stated for

the Veterans Health Administration and Veterans Benefit Administration. That is not meant to say or to be at the exclusion of so

many other veterans who do not fall into those categories, but that

is, and I think by law, Senator, those priorities are a mandate of

the law.

29

We just have to, I think, get the best value for the dollars that

you all authorize and appropriate to us to serve as large a population of veterans as we can, because there are a lot of needs there.

They are not all the same, but my goal, certainly, if I am made the

Secretary of this Department is to do our utmost and for me to do

my utmost as an advocate for veterans and to see that the maximum number of veterans that we can take care of are taken care

of.

Senator AKAKA. Well, thank you for that. My time has expired.

Chairman CRAIG. Senator Obama.

Senator OBAMA. Thank you very much, Senator Akaka.

The comment that I want to make is that with respect to your

brother. My grandfather is buried in Honolulu. He was a World

War II veteran, and it was an outstanding service. And the division

that your brother was operating does, in fact, do an excellent job,

and I am grateful for that.

Now, I am very appreciative, Ambassador, of the fact that you

took the time to meet with me ahead of this hearing. Part of the

reason that I agreed to gladly vote for your confirmation, despite

not having the opportunity to ask questions formally in the Committee, was the fact that we had met earlier, and you had addressed some of my concerns in your opening statement.

But I do think it is important for purposes of getting it in the

record just to indicate the nature of the concerns that we have. As

I stated, there has been a series of Chicago Sun-Times articles that

I would ask unanimous consent to place into the record that indicate that there are wide regional disparities with respect to disability benefits paid to our disabled veterans. Illinois is doing particularly poorly, ranking 50th, although I would note that Colorado

is not better. It, I think, ranks 44th. And these are not modest discrepancies; as I indicated from the chart earlier, these are discrepancies that go into the thousands of dollars.

Chairman CRAIG. [Presiding]. Without objection.

[The article referred to appears below.]

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Senator OBAMA. I know that when we met, I stated that I recognize this is something that you are just now getting yourself familiar with, but I did want to just for purposes of the record find out

from you, based on what you know so far, have you discerned any

reason as to why Illinois veterans are virtually last in the Nation

in terms of average disability benefits? Can you think of any reason why the disparities in average disability benefits is so wide nationwide?

And finally, I would just ask whether—I know that Secretary

Principi, acting on a request from the Illinois delegation, has ordered the Inspector General to look into this problem. I am wondering whether there are any preliminary findings. My staff tells

me the study may take four months, and I am just wondering

whether there is some mechanism to speed that up.

Mr. NICHOLSON. Thank you for that question and for the time

that we had together in your office, Senator.

This was a problem of first impression for me in my learning

curve, and it is beguiling. The answer to your question about do I

have any preliminary notions about why this is occurring is that

I do not. I have met with the Inspector General to discuss this to

see if he had any preliminary ideas, and he said that he did not

yet either. I have talked to several members of the senior leadership of the VA about this, and there are things that you can conjure about it. I mean, there seems to be some correlations between

median incomes and even housing density, for some reason, and I

do not know why, but that does seem to correlate somewhat. Where

people are living in more spread out and sparse environments,

those benefits seem higher.

So I would only—I do not even have a good basis to speculate.

I know the concern, I share it, and we need to find out why this

is happening and then see what we can and should do about it.

And I look forward to working with you on that, because it is a real

issue.

Senator OBAMA. Mr. Chairman, I think my timer started all over

again, and I would love to have another 5 minutes, but I want to

be fair to the other Members of the Committee.

Chairman CRAIG. I am observant of the time. You do not have

another 5 in this round, but you do have time for another question

if you would like to ask one.

Senator OBAMA. Well, I do have another question.

Chairman CRAIG. Please proceed.

Senator OBAMA. And I may, you know, after this question have

one more.

Chairman CRAIG. Sure.

Senator OBAMA. Although I am happy to wait for a second round,

if that is possible.

Chairman CRAIG. Very fine.

Senator OBAMA. But one of the speculations in the articles and

discussions with veterans that I have had on this issue is that the

raters in Illinois, and there seems to be some correlation with the

Midwest having lower payments than in other parts of the country,

that the raters in some fashion are either trained differently or

incentivized differently in terms of their evaluations of claims. And

39

I recognize you are still trying to figure out what causes this specific disparity.

I would ask a broader question, and that is how standardized are

the ratings procedures that are taking place in these various regional offices, and what kinds of incentives are we creating for raters? Are they being rewarded, which is the suspicion, sadly, of

some of the veterans that they are being rewarded for turning

down claims as opposed to being rewarded for being accurate and

just and hopefully generous in terms of making decisions?

Mr. NICHOLSON. As to the training, that is something that I am

asking myself, is that, you know, how uniform and consistent is the

training, the preparation of these adjudicators? And I think that

there, also, is a fertile area for us to look at to ensure that it is.

I also read the reports of your town hall meeting in Illinois last

week, Senator, and read where there was a statement about incentives for people turning down claimants. I am not aware that that

exists, but that is something I also will find out. This is a high priority for me, if confirmed, to really get our arms around this. That

is, to me, a surprisingly big disparity in our country.

Chairman CRAIG. Thank you, Senator.

Now, let me turn to our colleague, Senator Burr.

Senator BURR. Ambassador, once again, welcome. I think that

every member of this institution probably has the health care of

veterans at the top of their list of concerns. It is of mine, and I

know it is of Senator Jeffords.

It is disturbing to see the long lines. It is disturbing to see the

amount, the length of the waits by individuals that are following

the process that the VA sets up. This is not a case where we do

not have a set of procedures that are in place. The fact is that we

do. In Charlotte, North Carolina today, for a veteran to see a primary care physician, it is a two to three month process. That is unacceptable. It would be in any realm of health care, and I realize

that health care is still evolving, and thank goodness, it is, because

of the advances that take place.

My question specifically to you and if you cannot answer it, if

you would jot it down to check into as you take over is: are the

funds following the migration of veterans? In the South, we have

seen a growth in the veteran population. Are, in fact, the dollars

that are devoted to veterans’ health care following those individuals from region to region if they relocate? Do we have the correct

amount of dollars? I am sure we all know the answer to that is we

do not, and we will continue to be challenged as it relates to health

care dollars.

And how can the Department of Veterans Affairs more quickly

and efficiently adjust the VA funding formula to get funds where

they are most needed and where they can do the most good?

Mr. NICHOLSON. Senator, let me start by answering your question in a general way: I think the VA has done a very commendable

job in recent years in transitioning from a hospital-based medical

care system to an outreach, to a community-based outreach clinical

system. There have been several hundred new clinics brought on

line to try to get closer to where veterans are.

There is this whole comprehensive CARES process that has been

evolved, which is, you know, the Capital Asset Review for EnVerDate 03-FEB-2003 10:29 Jun 14, 2005 Jkt 020113 PO 00000 Frm 00043 Fmt 6601 Sfmt 6601 D:\DOCS\20113.TXT SSC1 PsN: SSC1
40

hanced Services, and it takes into account the demographic shifts

of our country, where when most of the hospitals were built, they

were built where the people then lived after World War II, and

that is the vintage of the hospitals; they average over 50 years old.

That has changed, and people now are moving south, and they

are moving west and southwest, and that CARES process took a

look at that to see what responses ought to be needed for the delivery of care where the veterans are. That is ongoing. I think that

is something that, you know, will have my obvious priority management attention.

But we are still in need of more primary care clinics so that we

can cut these waits and get out there where the veterans are and

be convenient to veterans. We have the same goal, of course, for

the cemetery system, so that people do not—so that this system is

accessible.

Is there enough money to do this? I cannot address that with you

this morning specifically, but that certainly is a goal of the agency

is to continue to push those community-based clinics out there to

be available, to cut waiting times, and then, you know, be there if

they need referrals for more specialized medical care into a bigger,

secondary, tertiary facility.

Senator BURR. Let me say publicly that Secretary Principi did a

wonderful job during his leadership at the Veterans Administration. My concern is that possibly, those dollars do not shift as

quickly as the population does, and certainly, within this institution, we know how hard it is to move dollars, but secondly that

there may be a culture that accepts two to three months as acceptable, and I hope you will very quickly try to change that cultural

problem if, in fact, it exists within the Veterans Administration.

I thank you for your testimony today. Congratulations on the

vote, and Mr. Chairman, I yield back.

Chairman CRAIG. Senator Burr, thank you very much.

Senator Rockefeller and Senator Hutchison, Mr. Ambassador,

have had to leave us. They apologize through me to you. It does

not in any way reflect their intensity or their interest in your tenure and in the activity of the Veterans Administration. We will

submit their questions for you so that you can respond to them in

writing, so they will become a part of the record. You will have

those to deal with, I would hope, in an expedited fashion.

Now, let me turn to our colleague from Colorado, Senator

Salazar. Ken.

Senator SALAZAR. Thank you, Senator Craig.

Ambassador Nicholson, this question is a simple yes or no. Over

the weekend, Secretary Principi actually spent all of Friday night

getting to Denver for a very early morning meeting to try to move

forward with what I believe is going to be a state-of-the-art medical

facility for veterans that will help us take care of veterans and also

research the issues around medical care for veterans. Will you be

as supportive as Secretary Principi has been of that project as we

move forward?

Mr. NICHOLSON. Yes.

Senator SALAZAR. That is all I need.

Mr. NICHOLSON. Possibly more.

Senator SALAZAR. Good.

41

Mr. NICHOLSON. If that is possible.

Senator SALAZAR. Secondly, in Colorado as well as across the

country, I think one of the major problems that we all face is the

backlog in terms of claims processing. I think 4 years ago, according to my information, there were approximately 400,000 claims

that were awaiting processing for disability compensation. Today,

that number has grown to 470,000. I do not know the reason why

that number has grown, but do you have any thoughts on it, and

is it something you could look into for this Committee?

Mr. NICHOLSON. Yes, sir, it is an important question. In looking

at that as I have done, actually, got those—the number of those

claimants to dip through a real mobilized effort, but what has now

happened is that they have gone back up, and one of the reasons

for that is it takes a certain amount of time to process and adjudicate a claim.

What is now happening is that they are finding that a claimant

has an average, now, of eight different parts to his or her claim.

So the claims have gotten much more complex and perforce takes

much more time. And that is probably a reality, which means that

we are going to have to figure out how to adjust to that

resourcewise, adjudicators, in ways that we will have to deal with

so that we can once again try to cut that backlog way down.

Senator SALAZAR. That is something that you will work on?

Mr. NICHOLSON. Yes, I will. I am well aware of that problem. I

have had a lot of discussions in the time that I have, you know,

been working with the Department to get up to speed, and they

share that commitment. You have my commitment that we will

work hard on that.

Senator SALAZAR. Ambassador, a question on prescription drugs.

A veteran who now has a prescription filled out by a private doctor

cannot use the VA prescription drug benefit unless, as I understand it, he goes to a VA physician and gets the prescription reviewed and then authorized. The Department of Justice, as I understand, last year, in the last several years issued an opinion to

the Secretary of Veterans Affairs saying that he did have the authority to go ahead and waive that and to allow the prescription

drug benefit to be used whenever you have a private physician that

has already issued the prescription.

Is that something that you are aware of, and is it something you

would be willing to work on to try to implement with this authority

that the Department of Justice now has found that you have as

Secretary or will have as Secretary soon?

Mr. NICHOLSON. Yes, Senator, it is. I am aware of that problem,

that issue, and I am also aware that the Secretary has waived that

at least once, maybe twice. Where the waiting was so long, he exercised that discretion that he had. And what the factual basis for

that was, I could not comment on, but I know the principle, and

I share the concern about it.

I mean, there are a lot of important policy implications around

that, because, you know, doctors who are professionals that we

have in the VA, and I think we have some of the very best in the

world, like to not just have somebody come, you know, and get the

prescription, so to speak, but to have them in their medical portfolio, so that they know exactly what their condition is and can

42

treat them comprehensively. And that is part of the balance

against just having them, you know, just come to your pharmacy

and get a prescription. And I plan to look into that carefully.

Senator SALAZAR. Thank you, Ambassador.

Mr. Chairman, I have several other questions, but for the sake

of the Committee’s time and Ambassador Nicholson’s time, what I

would like to do is to have those questions submitted to the record,

and then, Ambassador Nicholson, if you would respond to us in

writing on down the road soon, I would appreciate it.

Mr. NICHOLSON. I would be happy to.

Chairman CRAIG. Senator, thank you very much. There are a

number of Senators who are going to do, and have done, just that,

and all of the questions that you will ask of the nominee will be

submitted to him. We will ask for a prompt return so that the

nominee’s answers can become part of the record. That is a valuable part of that.

Let me turn to Senator Jeffords. Do you have any further questions, Jim?

Senator JEFFORDS. I have about two.

Chairman CRAIG. Please proceed.

Senator JEFFORDS. Ambassador Nicholson, the VA has received

significant recognition for its outcome——

Chairman CRAIG. Jim, is your mike on? Thank you.

Senator JEFFORDS. The VA has received wide acclamation for

both its ability to monitor outcomes and for its performance. Compared to the private sector and Medicare at the same time, private

sector and Medicare co-pays are increasing, and prescription drug

coverage remains generally poor.

Many veterans can choose between VA and non-VA care. This is

particularly true in Medicare-eligible veterans. Current budgeting

for VA health care costs is based primarily on past use, but is the

VA considering the possibility that VA usage may increase from a

less-likely sector, the veterans who have recently relied solely on

Medicare? Will you give special attention to this factor in drawing

up your budget recommendations in the future?

Mr. NICHOLSON. Yes, Senator, we will. We must try to make the

best projections that we can to develop our budgets and thus request the resources that we think are going to be needed. There

has been a large increase in requests for VA Medical care, as you

well know, since 2001. It has gone up by a huge delta. And again,

I think the agency’s response to that has been very laudatory. And

as far as I know, and there is a lot that I need to know more about

this, that we could expect that increase to continue, and we have

to be prepared for that.

Senator JEFFORDS. As you know, the VA has been experiencing

difficulty hiring certain types of jobs, ranging from the most specialized physicians all the way to cleaning and housekeeping staff.

Part of this difficulty comes from some unintended consequences of

locality pay. Locality pay is intended to ensure that VA workers

are paid a wage that represents roughly an equal standard of living

in different parts of the country.

However, locality pay has created real problems for the VA in

certain areas. For instance, experienced nurses at the VA Hospital

in White River Junction, Vermont are paid 20 percent less than

43

nurses just 8 miles away across the river in Hanover, New Hampshire. Are you willing to examine the effects of the Federal locality

pay structure in the VA and consider increasing VA pay where necessary to prevent shortchanging of employees?

Mr. NICHOLSON. Yes, Senator, I am very willing to look into that.

I have not; that has not come to my attention yet in my preparation for this job. I was unaware of what you just stated. But I certainly will look into it and see what I think should be done about

it, because retention and recruitment are very big issues.

I was reading a report yesterday, the Veterans Administration

has 47,000 people in its professional nursing services, which is registered nurses and practical nurses and nurse assistants, and we

have, as we all know, a nursing shortage in this country, and we

need to be at our best to recruit and retain nurses and all other

people on this team.

Senator JEFFORDS. With that excellent answer, I will retreat.

Chairman CRAIG. Senator, thank you very much.

Now, let me turn to Senator Akaka.

Senator AKAKA. Thank you, Mr. Chairman.

Mr. Ambassador, as a follow up to my previous question on

seamless transition, I would like you to commit to working with me

and any other Members who are interested towards making sure

that our new veterans are able to receive the care and the services

they need and are made aware of the services and benefits available to them.

You mentioned in our prior chat that you will be improving the

system by which servicemembers are made aware of services and

benefits available to them.

I want to make a statement prior to moving on to my next question. I urge you to look strongly at the makeup of the VA health

care system. Nearly 2.5 million middle-income veterans are coming

to VA for care. They pay co-payments, and nearly 90 percent bring

their health insurance coverage with them. The cost of treating

these veterans is the lowest of all patients seen by VA, and I believe we can care for our core constituency and still meet the health

care needs of other veterans who have earned VA care.

I want to comment to Senator Salazar that you will be pleased

to know that today, with Senator Reid, I will be introducing legislation to allow veterans to bring their outside prescriptions to VA. If

you are interested, please talk to me later.

Mr. Ambassador, VA’s drug purchasing and negotiations have

yielded incredible savings for the Federal Government and also for

veterans. For example, VA uses the Federal supply schedule to buy

Zoloft, a medication for depression, at nearly half the price of retail

outlets, and I assume you will not be inclined to reduce the vitality

of negotiations. Given the incredible success of the VA drug purchasing program, do you believe that the Federal Government

should do more in other areas?

Mr. NICHOLSON. First of all, I would say, Senator, that I believe

in the old management theorem of, you know, if it ain’t broke, don’t

fix it, and the VA’s drug purchase program certainly is not broke.

So I would just like to salute those who have gone before me, if I

am able to follow, and what they have done, because it is extraordinary.

44

The question of whether that could be replicated in the rest of

the Federal Government is a good question, and I, at this moment,

I do not feel qualified to give you a good answer. I would be very

happy to pursue it, work with you, stay in touch to see what I end

up thinking about that, but I do not think I can give you a good

answer.

Senator AKAKA. Thank you. Certainly, we will be willing to work

with you on that.

Mr. Ambassador, VA’s specialized services are one of the jewels

of the VA health care system. Yet, for years, we have received complaints that VA managers are foregoing their responsibility to

maintain a high level of specialized services. For example, maintaining the level of psychiatric care has remained a problem.

In general, I am looking for a commitment that specialized services, especially mental health care, will be different under your administration. What assurances can you give that this will be so?

Mr. NICHOLSON. The assurance that I can give you right now,

Senator Akaka, is that I will take a look at that right away, because I am not aware of that problem that you have described. I

know the VA is working with, I think, 107 different academic medical institutions to benefit from the cross-training that both medical

students, residents, get from that, and I am unaware that the specialized care is suffering. I thought that it, in fact, was benefiting

from that academic collaboration that is going on. But it is something that I will certainly look at.

Senator AKAKA. Thank you, Mr. Chairman. My time has expired.

Chairman CRAIG. Thank you.

Mr. Ambassador, Senator Akaka talked about two areas that are

of concern to me. I had the privilege the week-before-last of going

to the Veterans Hospital in Spokane, Washington, a facility that

both Senator Murray and I share equally, and it services both

north Idaho, parts of Montana and the State of Washington. And

there, I saw this prescription drug process in action. And what I

found very unique is that while people oftentimes arrive there to

get their prescriptions filled, they are sent out from a center in

California, and they are at the veteran’s doorstep in 24 hours; tremendously automated; very, very effective and cost-saving, and I

agree that that part of the Veterans Administration appears at this

moment to be tremendously efficient.

There is something about seamlessness that concerns me,

though, and it is a new phenomenon that we are engaged in in this

country that is something that I will address as Chairman and

something that I think concerns a good many of us. Idaho is a perfect example of a lot of States today who are deploying their Guard

and their Reserves in unprecedented numbers into active duty. The

State of Idaho, at one point, 2 million people, and I think Senator

Thune referenced that in his questioning as a percentage of total

population, has about 2,500 in service now as Guard and Reserves

that have just been deployed to Iraq; the Army National Guard’s

116th Cavalry Brigade Combat Team.

Here is my concern: veterans’ programs were designed for the

most part to facilitate the transition of active duty troops out of

service and back into civilian life and not to facilitate the movement of Reserves and Guard personnel into and out of active duty

45

versus Reserve roles. Do you think veterans’ programs need to be

reassessed in light of an increasing movement of Reserves and

Guard personnel into and out of—and sometimes back into—active

duty roles? Do VA programs reflect the perhaps-dated view that

persons are either in or out of service, and once they have finished

with active duty, they are finished for good? Do we need to rethink

programs to account for the needs of Guard and Reserve personnel

who are asked to shift into and out of, and sometimes back into

and then oftentimes out of, active duty?

It is increasingly the case in the current situation we are now

in and one that I know the Defense Department is attempting to

address in a variety of ways, and it is something that I believe that

we may want to review pretty thoroughly. Your reaction?

Mr. NICHOLSON. I think it is a very important subject area, and

I agree with you. I think that probably because of custom, I mean,

it is quite unusual what is going on now with the deployment into

war zones for, you know, long periods of time for Guard and reservists.

Chairman CRAIG. This Guard unit will be expected to be there

for at least 18 months.

Mr. NICHOLSON. So, you know, we are looking at really kind of

a de novo situation over the last several decades at least in our

country, and we do need to adjust the systems to make sure that

these people who have gone there and have served are treated exactly the same. And that is underway, I will tell you. I mean, there

is that shared commitment both at DoD and at VA.

What needs to still be perfected is the system, so that people do

not get away from it, because many of these young people cannot

wait to get home and get back to their jobs and their families, and

they do not know about, or they do not think about VA and the

screening and the education that should precede that, and that is

underway and very important. And the program, the benefits, I

think, are good. You know, they are working very hard giving the

families Tri-Care while they are away, making sure that the families know what they are entitled to, and then, the VA gives any

veteran returning from one of those calls to duty 2 years of its services.

It is there; what is needed is to make sure that everybody knows

it and makes use of it.

Chairman CRAIG. We will follow up with you to make sure that

we work forward on that and that that process is completed so that

that knowledge is available, and services are accessible.

Let me turn to my colleague, Senator Thune, questions of the

ambassador.

Senator THUNE. Thank you, Mr. Chairman, and again, I appreciate your testimony and your dedication to this important mission.

I know that there have been some questions asked in my absence

about some of the issues I was concerned with, one with respect to

the CARES Commission, and I also know that there really are not

any of these problems that probably cannot be fixed with more

money, and that is the challenge that we face up here and that you

will face in the job as well is most of the issues, in many cases,

at least, the issues that are brought to me by the veteran community in my State of South Dakota are funding issues. And that

46

clearly is one of the issues that we are going to have to grapple

with, but I am also interested in working with you on ways that

we can make our dollars go further and ways that we can become

more efficient.

But I also have a specific interest, having said that and talked

about some of the challenges and problems that you face that

sometimes can only be solved by money; as I referred to earlier, in

access in rural areas, in your testimony, and I believe this to be

true, that with the community-based outpatient clinics, which have

been extremely successful in rural areas like South Dakota, you

said that 87 percent of veterans now have access to a VA facility

that is within 30 minutes.

And in South Dakota, they have to be driving awfully fast, I

think, to be able to get there in 30 minutes in a lot of places, but

I know there are places not unlike South Dakota, other regions of

the country that are very rural, very remote, and where veterans

still have to drive sometimes hundreds of miles to get to a facility.

And there are some things that have been proposed to address

that. In some cases, veterans who have need for a simple test that

could be performed in a local clinic in their own community, and

I guess I am wondering if that is something that you would consider establishing, and that is improved access to a local clinic.

Congressman Osborne, a former colleague of mine on the House

side, introduced a bill that would have earmarked 5 percent of VA

funding to contract with rural civilian health facilities to provide

services locally, and I understand that the VA has opposed that

sort of mandatory approach, but I guess I am wondering if there

is a less restrictive solution that you might support that would

allow veterans to have access to some of these facilities, which are,

in many cases, considerably closer and more convenient than the

distances they have to travel in rural areas?

Mr. NICHOLSON. The answer is yes, Senator Thune. I believe I

am correct in saying that some of that is now happening, that

there are cases where they are engaging, on a contract basis, local

doctors to take care of veterans who are too distant from a VA facility or a VA clinic or who cannot adequately be serviced with telemedicine, which is really, now, coming into its own, and the VA,

I think, again, is on the forefront in the innovations of the use of

that.

And I have been learning examples of where they monitor people’s blood sugar and their heart rate and their temperature electronically remotely every day, and we have equipped people, we

have allowed them to stay in their homes, and instead of institutionalizing them in a long-term care facility, they stay at home;

there is a camera on both ends, and people talk to each other, and

that has got great potential to mitigate part of that. And I will look

into the use of local contractors more, but I think some of that is

happening.

Senator THUNE. I appreciate that, and I do want to pick up on

one thing that you mentioned, because I really believe that, and I

have seen the examples of this in the State of South Dakota, where

telemedicine is doing some wonderful things, and I hope that is

something that can be further employed with the VA. I worked as

a Member of the House on some changes in the Medicare program

47

that will make it more possible for facilities in rural areas to be

able to have access to many of the benefits of technology: teleradiology, a lot of diagnostic type things can be done from a distance

now. And with the technology that exists and is available, we certainly want to employ that, and particularly if it is a way that we

can achieve cost-savings, and I would suspect that there are a

number of ways where, if veterans had access to some of the technology that is available in health care today and could be served

in that fashion, we might be able to achieve some cost-savings as

well.

So I appreciate your interest in working with us on that. As I

said earlier, I am delighted that you are going to be in the position.

I think you are going to be a wonderful person with tremendous

experience and compassion for the veteran community, and we look

forward to working with you.

Thank you, Mr. Chairman.

Chairman CRAIG. Thank you, Senator.

Senator Obama, further questions?

Senator OBAMA. Thank you, Mr. Chairman.

Ambassador, I just want to revisit a couple of issues that we discussed earlier. The first, I guess, is I was not clear with respect to

the investigation that you intend to be engaged in that the Inspector General has already started on this disabilities disparity, when,

exactly, we can start getting some sort of report, and I was wondering if you had some date that when I go back to Illinois and talk

to veterans, I can say as of this time, I think we will at least have

the initial assessment in terms of what is going on.

Mr. NICHOLSON. I wish I could give you that, Senator Obama,

but I cannot. I asked that same question myself of the Inspector

General.

Senator OBAMA. Okay.

Mr. NICHOLSON. And he said he could not, would not project that.

They are working on it with intensity, and we, if I am confirmed

and take over the VA, are going to review where his work is and

then see what, you know, if we should be doing something independently of this, put a team together to look at this.

I discussed this a great deal with our very able head of the Veterans Benefits Administration, Admiral Cooper. He shares the concern over this and sort of the puzzlement about why this is happening to that degree, but we don’t know. I can just tell you that

we will stay in close touch, and we will be working on it.

Senator OBAMA. Let me say this: I have no doubt that you are

concerned about it, and I think that there are going to be other

people that are concerned about this. My concern is that you have

got a full plate coming into this thing. I mean, the issues that were

just raised, I thought the Chairman raised an excellent point about

Guardsmen and Reservists and how you have to rethink the role

there, because as I travel throughout the State of Illinois, we get

the same thing, that the lines are now blurred between active duty

and our citizen-soldiers. The point that Senator Thune raised about

travel times, you know, believe it or not, in Illinois, we have got

some folks who have to drive a lot, too, and are experiencing the

same issues.

48

So you are going to have a lot of things coming at you, and I

guess my concern is that without some timetable, this can get lost.

And I should note that even in the Sun-Times article, for example,

you have got quotes from senior analysts in headquarters here in

Washington that say things like the folks who do the adjudication

in Chicago are pretty tough; folks there really look at everything

with a jaundiced eye, and they are rather stringent in their application.

So, I mean, there are people in your offices that have opinions

about why this is occurring, and if the Inspector General cannot

give us a date certain, then, I guess I would be interested in whether there was some team that could be put together, you know, so

that I can provide some certainty to the folks back home.

Mr. NICHOLSON. I understand exactly what you want and why,

and I am sympathetic to it. I can only say that we will get on it,

and I will make a decision about whether I think there is some

independent group that should come together to look at it or wait

for the IG, and as soon as I can give you some projection of time,

I will do so, Senator.

Senator OBAMA. Okay. Fair enough. Not to belabor the point, because I only have a minute left on this round: one issue that does

seem to be coming up is the fact that there may be a shortage of

personnel in these offices. You know, it appears at least that just

to give an example, during the past 2 years, the number of claims

filed for service connection and the numbers of issues per case have

increased; you have already noted that.

My understanding, at least, is that the Administration has proposed decreasing the number of employees available to adjudicate

claims. As of December 31, 2004, there were 48 fewer adjudication

employees in the VA regional offices than there were on September

30, 2004. So given what we expect to be a significant influx of

claims being made, partly as a consequence of great medical care

in the field, one of the results of that is more disabled veterans

making claims. I am wondering whether, in fact, we are reducing

or even just maintaining, keeping constant, the number of people

evaluating claims and what you intend to do to make sure that

these numbers are sufficient to meet the demand.

Mr. NICHOLSON. The time that it is taking for these claims to be

filed and adjudicated bothers me. It seems to take a long time, and

so, I have a goal to see if we can shorten it. As to the number of

adjudicators, I think that they did go down, but the agency was

then able to transfer, I think, some fiscal 2004 money into this

budget cycle so that we are now hiring some more adjudicators,

and the net result of that should be we should have more. And I

am not speaking specifically to your case there, you know, in Chicago, Illinois——

Senator OBAMA. No problem.

Mr. NICHOLSON.——but across the system.

Chairman CRAIG. Senator, thank you.

Senator Jeffords, further questions?

Senator JEFFORDS. Mr. Chairman, I ask unanimous consent that

I may change my vote from nothing to yea.

Chairman CRAIG. I appreciate that. The Committee does, and it

will so dutifully be noted without objection.

49

Thank you.

Senator AKAKA. Mr. Chairman.

Chairman CRAIG. Senator Akaka, further questions?

Senator AKAKA. This is my final question, and I would ask that

my other questions be placed in the record.

Mr. Ambassador, each year, the Administration sends its budget

proposal to Congress with the expectation that Congress will improve upon it. We have had some success in doing just that, but

I believe we can do better for our veterans. I would like to start

the process more rationally. What are your thoughts on the current

budget process for VA health care? Do you agree there is room for

improvement?

Mr. NICHOLSON. I am going to respond to that based on my general awareness, Senator, of the budget process and say that yes, I

think we collectively could improve on the process by seeing if we

could get budgets done and not have to use continuing resolutions

so that we could get more certainty into the Executive agencies, the

departments of the Government, so they know where they are, and

they can project their work load, know what their capacity is going

to be. So that categorically, I would say yes.

As to the specifics of the Veterans Administration and its budget

formulation, I do not feel qualified to give you an answer on that

at this point. I have not had that experience yet.

Senator AKAKA. Yes, well, another question, and it may fall into

the same category: I was going to ask you whether you have had

a chance to become familiar with the proposals to fully fund VA

health care by shifting at least some of the funding to a mandatory

account. If you have an idea about that, will you please express it?

Mr. NICHOLSON. I have had an opportunity to have a discussion

with people about that, and what I believe at this point is that

given the mission of the VA and that where you get these exigent

conditions, like we have with a war, and the load that comes from

that and the intense and expensive care that comes from having

to do right by those people that are injured and disabled, diseased

as a result of that that having the flexibility that the VA now has

in the health care area is a plus for them.

It allows them to meet some of these specific demands, and thus,

the present system which supports that seems good to me categorically.

Senator AKAKA. Well, I thank you, Ambassador, for your responses. I want to wish you well in your administration.

Mr. NICHOLSON. Thank you.

Senator AKAKA. And Mr. Chairman, I submit the rest of my

questions for the record.

Chairman CRAIG. Thank you, Senator, for doing that.

I will also submit the balance of my questions for the record.

Do any of our colleagues have further questions?

Senator THUNE.

Senator THUNE. Mr. Chairman, I also would do that. I have some

questions I would like to have answered for the record.

Chairman CRAIG. All right. Without objection.

Senator Obama.

Senator OBAMA. Mr. Chairman, I do have a number of questions

I would like to submit.

50

Chairman CRAIG. Good.

Senator OBAMA. And I will follow suit, but there are just three

points I think that can be dispatched within 5 minutes that I

would like to complete here in the hearing if that is all right.

Chairman CRAIG. Please proceed.

Senator OBAMA. One issue that has come up fairly frequently,

Ambassador, is the issue of back pay for disabilities. I mean, it

seems to be a particular problem where you have a veteran who

goes in, gets evaluated, the initial evaluation says 10 percent disability. He continues to pursue his claim. Perhaps two or three

years later, there is an evaluation that, in fact, he was deserving

of 70 or 80 percent. And one of the questions I guess I have is

that—and I am not sure whether you know the answer to this—

where there is an adjustment of that sort? Is that veteran then entitled to back pay or retroactive benefits given the second opinion

that was rendered?

Mr. NICHOLSON. I am not sure I know the answer either, Senator. Is your question that when they looked at the veteran the second time, and they found him to be 70 percent that they also found

that he should have been adjudicated 70 percent when it was 10?

Senator OBAMA. Right; this would not be a situation where there

would have been a deterioration of his condition, but rather, simply, it turns out that there was a different assessment that was

made.

Mr. NICHOLSON. I do not know the answer. That is a good question, and it also leads to what his appeal rights might be about

that.

Senator OBAMA. Right.

Mr. NICHOLSON. I will look into that and learn from the answer

and provide it to you.

Senator OBAMA. Okay; the second question I have really has to

do with the whole issue of mental health and post-traumatic stress

disorder that has already been discussed. Right now, are there

plans to expand the resources available for those purposes, and if

so at what point, would this Committee sort of get a sense of how

that is being structured?

Mr. NICHOLSON. There are plans to expand that in anticipation

of the needs of returnees from Operation Iraqi Freedom and Operation Enduring Freedom. I would think that—I guess the first time

probably, I mean, we can always talk about it soon, but the 2006

budget also will encompass that.

Senator OBAMA. Should reflect some of those.

Mr. NICHOLSON. Yes, and should have what the agency has in

their——

Senator OBAMA. Okay; and just the final point that I would

make, and this circles back to this broader concern that I have expressed about disparities, regional disparities.

If it turns out that there does appear to be a problem with the

raters and how they are trained and the lack of standardization,

I guess part of what I would very much be interested in would be

to see some sort of third-party reviewer to come in and assess these

claims and to think about how we create the same system across

the board. I mean, I am new to this Committee, but one thing that

I am absolutely certain of and that is that if a veteran has lost a

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leg and lives in Illinois, they should get the same disability as a

veteran who lost his leg and lives in Puerto Rico. I mean, that

seems to me an unassailable statement.

And so, one of the commitments that I am going to have is if it

turns out that the raters need some sort of additional training, it

may also be necessary that we have some sort of third-party reviewers or somebody from the Washington office that starts overseeing some of this work until it gets smoothed out.

Mr. NICHOLSON. I think that is a very insightful question, Senator. I will tell you that the VA does send people around to do an

independent review of adjudications, and I have looked into that

with respect to Illinois, and for some reason, they seem to have

been found to have been pretty accurate and pretty consistent.

Senator OBAMA. I am just curious: is it consistent internally in

the sense that they are uniformly stingy with all of the—I mean,

I do not mean to be sarcastic, but I guess——

Mr. NICHOLSON. That is not the meaning of the way I used it.

This person had this set of conditions, and they were adjudicated

thusly and that was being done consistently in the findings of—because it is sort of an ombudsman function that the VA does do, just

to run a check on how these people are doing. So that has not shed

any light yet, but as I said in my opening statement about this,

there are two parts: we have got to get to the bottom of it and then

figure out what to do about it. And you have my commitment on

both of those.

Senator OBAMA. Right. Okay. I appreciate your commitment.

Mr. Chairman, I appreciate you devoting this time to an issue

that is very important to my folks.

And finally, I want to thank you, Ambassador. I know that before

this hearing, you had made a commitment that once we had some

answers, you would be willing to come to Illinois to discuss them

directly with veterans. I appreciate that commitment, and I wish

you all the best of luck in your service.

Mr. NICHOLSON. Thank you.

Chairman CRAIG. Well, Senator Obama, let me thank you, and

obviously, this is an issue of great importance to you. It is an issue

of great importance to this Committee. As this issue matures, and

we are able to assess facts, it sounds like the ideal kind of issue

that would deserve some oversight of this Committee, and I pledge

to you we will do that in cooperation, also, with the Secretary to

make sure that happens.

Senator OBAMA. Thank you, Mr. Chairman.

[The prepared statement of Mr. Nicholson follows:]

PREPARED STATEMENT OF R. JAMES ‘‘JIM’’ NICHOLSON, NOMINEE FOR SECRETARY,

DEPARTMENT OF VETERANS AFFAIRS

Good morning, Mr. Chairman, and Members of the Committee.

I want to thank you for the opportunity to appear before you so early in the new

Congress, and for the many other courtesies you and your staffs have extended me.

Your words and actions underscore your commitment to the millions of veterans

who look to the Department of Veterans Affairs for the benefits and services they

earned—benefits and services that our Nation is pledged to gratefully give them.

Let me congratulate you, Senator Craig, and Senator Akaka on your, election to

Chairman and Ranking Member, respectively, of this Committee, which oversees the

department of our government with the largest civilian workforce, and with one of

our highest priorities, to deliver first class, timely medical care and benefits for our

52

veterans; Your selections speak volumes about your colleagues’ confidence in your

commitment to America’s veterans.

I am joined here today by my wife of 37 years, Suzanne. She has always been

at my side through thick and thin and I am very grateful to her for her support

to accept this honor and challenge from President Bush to lead this great Department, if confirmed. I am also joined by my son, Nick and his wife Charlotte who

live here in the DC area. Our other two children could not be here.

Service to our country is a long tradition in my family. My father was an enlisted

man in the Navy during WWII. My father-in-law served in both WWII and Korea.

My brother, Brigadier General Jack Nicholson, served 30 years in the Army and

was, until now, the Under Secretary of the VA for Memorial Affairs, where he did

an outstanding job. One of my sons is a veteran; four of my nephews are Colonels

in the Army and Air Force. My 30 years of active and Reserve service in the Army,

coupled with my four years at West Point, have defined my life. I love the Armed

Forces of our country–their courage, their integrity, their sense of duty.

That is why I am so honored that President Bush selected me to build upon his

Administration’s great record of care and compassion for our Nation’s veterans of

our Armed Forces. And, if confirmed, it would be a privilege for me to follow in the

footsteps of Secretary Principi, a man who has provided outstanding leadership and

tireless dedication to the welfare of this Nation’s veterans.

I feel humbled that America’s veterans—men and women who served on the front

lines for freedom, justice, and peace in democracy’s name—might look to me as the

faithful steward of their trust, and the leader of VA’s 230,000 employees who work

so diligently, around the clock, to assure our veterans that we are making good on

the Nation’s debt to her defenders.

Mr. Chairman, I come from the heartland of this great Nation—Iowa—from a boyhood life so far removed from this historic and stately temple of liberty that Washington was barely a dream. It was a hardscrabble life, to be sure, but my family

of seven kids was filled by my mom with hope and confidence. She used to say to

us, ‘‘if you will work hard, study hard and pray hard, you can be a success in America, you can have legitimate dreams of a better life and make them come true.’’

As a teenager, I remember watching young men go of to the Korean War, following in the wake of World War II—yet another test of freedom’s will to defeat an

inhumane and evil tyranny. Yet another answered call by our countrymen to go of

to a frozen peninsula that we had never heard of, because their country asked them

to go. One of the brothers of a pal of mine never returned. One of my best friends

slightly older than I left his leg over there. He also was my first introduction to the

VA as they wanted to get his prosthesis right. Now, again, we are at war, and again

our country is asking our men and women in uniform, all volunteers, to go to the

sound of the bugle.

Those friends and neighbors who stood tall for freedom 50 years ago are now

among our most distinguished veterans, and today’s heroes will soon join them. I

will, if this Committee so entrusts me, be proud to lead the Department dedicated

exclusively to honoring their service and sacrifices, to making good on our country’s

promises to them.

I have had the privilege of wearing the uniform of the United States Army in combat, so I have seen both the horrors of war and the heroes of America making the

greatest sacrifices of military service on behalf of their comrades and our Nation.

One cannot leave a battlefield without having profound respect for the courage

and cool of all who have served there. One cannot appreciate all the blessings of

our freedom without thanking the men and women who serve in war to bring about

peace. Their example of unwavering commitment to their mission, no matter how

dangerous and uncomfortable, will always reverberate with me and readies me for

a mission of service to veterans. I will do my utmost to see that they receive all

they have earned, delivered with the dignity they also deserve.

I do not underestimate the enormity of the responsibilities of Secretary of Veterans Affairs. This Committee knows well that VA is the second largest Cabinet department, operates the Nation’s largest integrated health-care system, and is relied

upon by millions of veterans, their dependents, and survivors, not only for health

care, but for billions of dollars in monetary benefits, life insurance, education, mortgage insurance and readjustment benefits. The challenge of leading such an organization is daunting, but I am prepared to accept it.

If the Senate confirms my nomination, I will, without hesitation, commit to upholding the following principles:

• Veterans should have access to the best-available health care, in the ‘‘most appropriate clinical settings, delivered in a timely manner by caring, compassionate

clinicians. And,

53

• Veterans, their eligible dependents and survivors are entitled to prompt, accurate, equitable and understandable decisions on their claims for benefits. And, • Veterans should be appropriately honored in death for their service and sacrifices on behalf of a grateful Nation.

Mr. Chairman, the manner in which VA supports the transition of today’s

servicemembers into veterans, especially those who are injured or become ill as a

result of their service in combat areas, will define the Department for them. If confirmed, I will ensure that VA and DoD continue to work collaboratively to provide

a seamless transition so that returning servicemembers are timely provided the benefits and services that will enable them to reclaim their rightful places as citizens

in our society.

I am aware of recently reported concerns of possible regional variations in disability-compensation awards. Veterans’ entitlement to Federal benefits is the same

regardless of where in this country they may reside, and if confirmed, I will ensure

that standardized training and sound quality controls support a uniform approach

to claims adjudication. Further, to that point, I will, if confirmed, order a prompt

study into this whole question of equity and geographic differences in benefits adjudication. No one that I have yet met knows exactly why these differences occur the

way they do, and we need to understand this fully and then take remedial action,

as appropriate.

Mr. Chairman, if the Senate will afford me the opportunity, I pledge to work with

this Committee and individual Members of both houses for the betterment of veterans and their families. I will keep you informed, I will listen to your concerns,

and I will respect your oversight responsibilities.

I understand that the success of the Department requires a strong collaboration

with the veterans’ service organizations, who function both as our ears to the

ground on matters of service delivery and as our partners in devising solutions to

problems as they arise. If confirmed, I will work closely with the VSOs so that I

may both benefit from their counsel and draw upon their willingness to serve their

comrades.

I am also deeply committed to earning the respect, trust, and following of the men

and women of VA who have made service to veterans their life’s calling. The VA

workforce represents an enormous reservoir of dedicated, committed talent that

must be put to its best possible use. I will hold myself and my leadership team accountable for ensuring and harnessing our employees’ best efforts. It will be my job

and my privilege to lead and harness this awesome force of talented people so that

all of us have the same focus—our veterans.

It is critical that we honor America’s debt to those who have served us so faithfully. When President Bush announced my nomination, I quoted America’s first

Commander in Chief, George Washington, that ‘‘[I]t is a debt of honor.’’

And today, with so many American men and women in uniform stationed around

the globe, we give them heart when we keep faith with those who have served before them. They have the right to know we will stand by them as well in their time

of need. This is also integral to our Nation’s ability to be able to continue to attract

an all-volunteer force willing to defend us anywhere, anytime.

The armed forces of our country are, in my opinion, the model for what is good

and great about America. They are a paragon of integrity; they don’t take, they give;

they are disciplined, highly trained with a love for their country. They are a unique

force in the world and we need to treat them uniquely well.

Our VA, under Secretary Principi, has made terrific strides in serving our veterans. VA provides health care to 860,000 more veterans than it did in 2001, has

drastically reduced waiting times for health-care appointments, and opened nearly

a hundred new community-based outpatient clinics so that 87 percent of the veteran

population now lives within 30 minutes of a VA medical facility. As a result of its

focus on excellence in health care, VA is now the proven benchmark in preventive

health-care quality and chronic disease management.

Since 2001, VA has also dramatically reduced its inventory of pending claims for

disability compensation, reduced average processing time of those claims, and, at

the same time, substantially improved the quality of claims decisions. Moreover, in

2001, VA embarked upon the largest expansion of the National Cemetery system

since the Civil War. When construction of all the new cemeteries is completed, VA

will have expanded the National Cemetery system by 85 percent. And, according to

the latest American Customers Satisfaction Index, the National Cemetery Administration earned a rating of 98 out of 100—the best rating ever earned by a federal

agency.

I will, if confirmed, strive to move the Department to another level by building

on all that has been put in place and improving upon those areas that remain a

challenge. The VA is a great American institution created and founded by a country

54

that appreciates that freedom isn’t free, and our veterans’ lives and limbs are the

price that is too often paid.

It falls on the Secretary of the VA, and the men and women he leads, to keep

faith with the expectations of all our fallen citizens in uniform—past, present and

future—expectations that they will be cared for, as needed. This too is the mandate

of the grateful people of the U.S. I pledge to you, if confirmed by you, that I will

do all in my power to see that both the veterans and the citizens of our great Nation

are pleased by the service of their VA.

This concludes my remarks, Mr. Chairman.

QUESTIONAIRE FOR PRESIDENTIAL NOMINEE

1. Name: Robert James Nicholson

2. Address: PSC 59, Box 66 APO AE 09624

3. Position to which nominated: Secretary of Department of Veterans Affairs

4. Date of nomination: 1/05/05

5. Date of Birth: February 4, 1938

6. Place of Birth: Struble, Iowa

7. Marital Status: Married

8. Full name of spouse: Suzanne Marie Nicholson

9. Names and ages of children: Robert Jr., 35; Nicholas, 34; Katherine, 27

10. Education: Institution, dates attended, degrees received, dates of degrees; U.S.

Military Academy, 1957–61, BS 1961; Columbia University, 1966–69, MA 1969; University of Denver College of Law, 1970–72, JD 1972.

11. Honors and Awards: Imagio Dei Award, Archdiocese of Denver; Nostra Aetate

Award, The Center for Christian-Jewish Understanding at Sacred Heart University;

Honorary Doctorate in Civil Law, University of Dallas; Honorary Doctorate of Public

Service, John Cabot University; Honorary Doctorate of Public Service, Regis University; Horatio Alger Award Recipient; Man of the Year, Colorado Mortgage Lenders

Association; Investiture as Knight, Sovereign Military Order of Malta; Home Builder of the Year, Homebuilders Association of Metropolitan Denver; Distinguished Citizen of the Year, Colorado Association of Homebuilders; Distinguished Citizen

Award, Parker, Colorado; Who’s Who in American Politics; Pope John Paul II

knighted Ambassador Nicholson with the Grand Cross of the Order of Pius IX for

his services as the representative of the United States of America to the Holy See;

Bronze Star Medal; The Combat Infantry Badge; Meritorious Service Medal with

Oak Leaf Cluster; The Air Medal with Oak Leaf Cluster; The Vietnamese Cross for

Gallantry; Army Commendation Medal with Oak Leaf Cluster.

12. Memberships: 2002–Present: Member, Knights of the Constantinian Military

Order of St. George; 2001–Present, Member. Sovereign Military Order of Malta;

1978–2001, Chairman of the Board and President, Nicholson Enterprises, Inc.;

1991–2001, Chairman of the Board and President, Rowley Downs Land Company;

1991–2001, Chairman of the Board and President, The North Woodlands Company;

1991–2001, Managing Partner, N–4 Associates Limited Partnership; 1991–2001,

Chairman of the Board and President, Renaissance Homes of Douglas County, Inc.;

1995–1999, Chairman and President, Renaissance Homes of Colorado, Inc.; 1995–

1999, Chairman and President, Renaissance Homes North, Inc.; 1995–1999, Chairman and President, Renaissance Homes of Saddlebrook, Inc.; 1994–2001, Managing

Partner, Parker Properties Joint Venture; 1986–2001, Director, St. Mary’s Land and

Exploration Company (Board of Directors); 1998–2001, Director, ITN Energy (Board

of Directors); 1998–2001, Director, Community Corrections Corporation (Board of

Directors); 1986–2001, Partner, Casa Del Sol Partnership; 1996–2001, Limited

Member, Airport-Colfax, LLC; 1996–2001, Limited Member, GNMC Golf Office;

1988–2001, Limited Member, Tubac Investors, LLC; 1973–2003, Member, Colorado

Bar Association; 1985–2001, Trustee, Nicholson Enterprises, Inc. Foundation; 1996–

2001, Development Manager, Matrix Financial Services, Coyote Creek Development,

Ft. Lupton, CO; 1989–2001, Managing Partner, 20 Mile Associates; 1994–1999,

Managing Partner, Meridian Land Company; 1996–1997, Managing Partner, Phillips Ranch Properties; 1976–1978, Partner, Calkins, Kramer, Grimishaw and

Harring Law Firm, Denver, CO; 1980–1996, Director, National Association of Homebuilders for Metropolitan Denver; 1981–1985, Director, Colorado Association of

Homebuilders; 1995–1997, Director, Blue Cross/Blue Shield of Colorado, Inc.; 1976–

1999, Director, Lerch, Bates & Associates, Inc.; 1990–1995, President, NTB Real Estate; 1997–2001, Chairman, Republican National Committee; 1997–1998, Chairman,

Republican Task Force on Education (U.S. Senate, House, Governors and RNC);

1997–2001, Vice Chairman, International Democratic Union; 1993–1997, Vice Chairman, Republican National Committee; 1986–2001, Republican National CommitteeVerDate 03-FEB-2003 10:29 Jun 14, 2005 Jkt 020113 PO 00000 Frm 00058 Fmt 6601 Sfmt 6621 D:\DOCS\20113.TXT SSC1 PsN: SSC1
55

man for Colorado; 1993–1997, Chairman, Republican National Committee Rules

Committee; 1998, 1992 and 1996, Delegate, Republican National Convention; 2000,

Chairman, Republican National Convention; 1996, Chairman, RNC Special Task

Force on Presidential Primary Reform; 1986–1990, Chairman, Chairman’s Circle for

the Colorado Republican Party; 1987–1990, Director, The Center for Democracy;

1987–1991, Chairman, Elephant’s Club for the Colorado Republican Party; 1996,

Member, Committee on Arrangements, Republican National Convention; 1996,

Member, Host Committee Relations, Republican National Convention; 1987–1992,

Member, Republican National Committee Budget Committee; 1996, Colorado CoChair, Gramm for President; 1996, Surrogate Speaker, Dole for President; 1996,

Surrogate Speaker and Fundraiser, Allard for U.S. Senate; 1992, Chairman, Business Leaders for Considine for U.S. Senate; 1988, Andrews for Governor Campaign;

1980, Strickland for Governor Campaign; 1984, Kramer for U.S. Senate Campaign;

1984, Winn for Governor Campaign; 1976, Vanderhoef for Governor Campaign;

1999–Present, Served as fundraiser, advisor, campaign coordinator and grassroots

organizer for scores of legislative, county commissioner, mayoral and city council

races in Colorado for 25 years.

Director, Daniels’ Fund (Board of Directors); Member and Director, Horatio Alger

Association (Board of Directors); Admitted to practice, U.S. Court of Appeals for the

Armed Forces; Admitted to practice, U.S. Supreme Court; Colonel, U.S. Army Reserve (Retired); Trustee, U.S. Military Academy Association of Graduates; Commissioner, Defense Advisory Committee on Women in the Services (DACOWITS); Commissioner, Colorado Air Quality Control Commission; Chairman of the Board, Volunteers of America, Colorado; Chairman, Listen Foundation Annual Campaign;

Trustee, Kent Denver School; Member, President’s Commission on White House Fellows, Western Selection Panel; Trustee, Colorado Youth Citizenship Foundation;

Member, Platte River Greenway Foundation; Member, Governor’s Unified Housing

Task Force; President, West Point Society of Denver; Presidential Appointee, Board

of Directors, New Community Development Corporation (U.S. Department of Housing and Urban Development); Member, Denver Bar Association; Trustee, Denver

Chamber of Commerce, Institute for Better Government; Director, Colorado Association for Housing and Building; Selectee, Leadership Denver; Director, Artreach

Board of Directors; Member, Mayor’s Manpower Area Plan Council Member; Who’s

Who in American Politics.

13. Employment record: 6/1956 to 8/1956, U.S. Department of Agriculture, Laborer, LeMars, Iowa; 7/1956 to 2/1970, United States Army, Cadet and Officer, West

Point, New York; Ft. Lewis, Washington; Ft. Benning, Georgia; Ft. Bragg, North

Carolina; Republic of Vietnam; 2/1970 to 9/1971, Lerch, Bates and Associates, Administrative Assistant, Denver, Colorado; 9/1971 to 12/1972, Office of the Mayor,

Administrative Assistant, Denver, Colorado; 1973 to 1975, Calkins, Kramer,

Grimshaw and Harring, Lawyer, Denver, Colorado; 1/1975 to 1/1976, Colorado Association for Housing and Building, Lawyer, Denver, Colorado; 1/1976 to 4/1978,

Calkins, Kramer, Grimshaw and Harring, Lawyer, Denver, Colorado; 12/1999 to 8/

2001, ITN Energy, Director, Littleton, Colorado; 4/1991 to 8/2001, Rowley Downs

Land Company, Chairman/President Denver, Colorado; 12/1995 to 5/1999, Renaissance Homes of Colorado, Chairman/President, Littleton, Colorado; 4/1970 to 9/1999,

U.S. Army Reserve, Colonel, St. Louis, Missouri; 9/1998 to 8/2001, Community Corrections Corporation, Director, Roseland, New Jersey; 6/1986 to 8/2001, St. Mary

Land and Exploration Company, Director, Denver, Colorado; 1/1997 to 1/2001, Republican National Committee, Chairman; 4/1978 to 8/2001, Nicholson Enterprises,

Inc, Chairman/President, Denver, Colorado; 8/2001 to Present, U.S. Department of

State, Ambassador to the Holy See (Vatican) Rome, Italy.

14. Military Service: 40Sth Military Intelligence Detachment-Strategic; 1957–

1961, Cadet, U.S. Military Academy, West Point, NY; 1961–1962, 2/Lt., Fort

Benning, GA, Student Officer; 1962–1964, 1/Lt., 4th Infantry Division, Fort Lewis,

Washington (Platoon Leader Company Commander); 1964–1965, 1/Lt., Ft. Holabird,

MD/Ft. Bragg, NC, Student Officer In Preparation for Vietnam Army Language

School, Monterrey, CA; 1965–1966, Cpt., Republic of Vietnam, Senior Advisor to the

402nd Infantry Scout Bn (ARUN); 1966, Cpt., Ft. Holabird, MD, Student Officer;

1966–1970, Cpt./Major, U.S. Military Academy, Staff and Faculty, Admissions Officer and Operations Officer; 1970–1991, Maj/Ltc/Colonel, U.S. Army Reserves, Denver, CO (HQ at St. Louis, MI), USMA Liaison Officer; 1991, Retired from U.S. Army

Reserves as Colonel, Honorable Discharge.

15. Government record: All Listed Above.

16. Published writings: Book: ‘‘The United States and the Holy See-The Long

Road,’’ published by Trenta Giorni Societa Cooperative, 2003; Article: ‘‘Biotech Food

for the Hungry,’’ International Herald Tribune, October, 2004; Misc: Various articles

and letters to the editor during 1997–2001 as Chairman of the RNC.

56

17. Political affiliations: (a) List all memberships and offices held In and financial

contributions and services rendered to any political party or election committee during the last 10 years.

Chairman, Republican National Committee; Vice Chairman, Republican National

Committee; Republican National Committeeman, Colorado; Chairman, Republican

National Convention; 2000, Chairman, RNC Rules Committee.

Contributions

Value

Republican National Committee ..................................................................................................... $15,000 10/25/99

Value in Electing Women PAC ........................................................................................................ 250 10/01/97

Ronald Gene Schmidt for Governor ................................................................................................ 250 9/23/98

Republican National Committee ..................................................................................................... 15,000 7/31/97

Republican National Committee ..................................................................................................... 500 11/17/98

Republican National Committee ..................................................................................................... 500 11/17/98

Colorado Republican Party ............................................................................................................. 1,000 11/19/96

Wayne Allard for Senate ................................................................................................................. 720 11/05/96

Colorado Republican Party ............................................................................................................. 1,000 3/21/96

Colorado Republican Party ............................................................................................................. 750 5/16/96

Colorado Republican Party ............................................................................................................. 1,000 11/19/96

Republican National Committee ..................................................................................................... 15,000 1998

Tom Cole for Congress ................................................................................................................... 500 2004

Peter Coors for Senate .................................................................................................................... 1,000 2004

Bush-Cheney Committee ................................................................................................................. 4,000 2004

(b) List all elective public offices for which you have been a candidate and the

month and year of each election involved in: Republican Committeeman for Colorado, elected March 1986, re-elected June 1988, June 1992, June 1996; Republican

National Committee, Vice Chairman, elected January, 1993; Republican National

Committee Chairman, elected January, 1997, re-elected January 1999.

18. Future Employment relationships: (a) State whether you will sever all connections with your present employer, business, firm, association, or organization if you

are confirmed by the Senate.

(b) State whether you have any plans after completing Government service to resume employment, affiliation, or practice with your previous employer, business

firm, association, or organization. No.

(c) What commitments, if any, have been made to you for employment after you

leave Federal service? None.

(d) (If appointed for a term of specified duration) Do you intend to serve the full

term for which you have been appointed? Yes.

(e) (If appointed for an indefinite period) do you intend to serve until the next

Presidential election? Yes.

19. Potential conflicts of interest: (a) Describe any financial arrangements, deferred compensation agreements, or other continuing financial, business, or professional dealings which you have with business associates, clients, or customers who

will be affected by policies which you will influence in the position to which you

have been nominated. None to my knowledge.

(b) List any investments, obligations, liabilities, or other financial relationships

which constitute potential conflicts of interest with the position to which you have

been nominated. None to my knowledge.

(c) Describe any business relationship, dealing, or financial transaction which you

have had during the last 5 years, whether for yourself, on behalf of a client, or acting as an agent, that constitutes a potential conflict of interest with the position to

which you have been nominated. None to my knowledge.

(d) Describe any lobbying activity during the past 10 years in which you have engaged for the purpose of directly or indirectly influencing the passage defeat or

modification of any Federal legislation or for the purpose of affecting the administration and execution of Federal law or policy. None, other than in a general way

in support of the Republican Party agenda as the Chairman of the RNC.

(e) Explain how you will resolve any potential conflict of interest that may be disclosed by your responses to the above items. (Please provide a copy of any trust or

other agreements involved.)

20. Testifying before the Congress: (a) Do you agree to appear and testify before

any duly constituted committee of the Congress upon the request of such committee?

Yes.

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(b) Do you agree to provide such information as is requested by such a committee?

Yes.

RESPONSE TO POST-HEARING QUESTIONS

QUESTIONS FOR THE RECORD, SENATOR LARRY E. CRAIG, CHAIRMAN, COMMITTEE ON

VETERANS’ AFFAIRS; NOMINATION HEARING OF R. JAMES NICHOLSON TO BE SECRETARY OF VETERANS AFFAIRS

Question 1: I have been given a very brief overview of your military service.

Please provide me with some details of that service, particularly your combat experience in Vietnam. How has that service equipped you to assume the post of Secretary

of Veterans Affairs?

Response: Service to our country is a long tradition in my family. My father was

an enlisted man in the Navy during WWII. My father-in-law served in both WWII

and Korea. My brother, Brigadier General Jack Nicholson, served 30 years in the

Army and was, until now, the Under Secretary of the VA for Memorial Affairs,

where he did an outstanding job. One of my sons is a veteran; four of my nephews

are Colonels in the Army and Air Force. My 30 years of active and Reserve service

in the Army, coupled with my 4 years at West Point, have defined my life. I love

the Armed Forces of our country—their courage, their integrity, their sense of duty.

I have had the privilege of wearing the uniform of the United States Army in combat, so I have seen both the horrors of war and the heroes of America making the

greatest sacrifices of military service on behalf of their comrades and our Nation.

One cannot leave a battlefield without having profound respect for the courage

and cool of all who have served there. One cannot appreciate all the blessings of

our freedom without thanking the men and women who serve in war to bring about

peace. Their example of unwavering commitment to their mission, no matter how

dangerous and uncomfortable, will always reverberate with me and readies me for

a mission of service to veterans. I will do my utmost to see that they receive all

they have earned, delivered with the dignity they also deserve.

Question 2: Have you had an opportunity to assess Tony Principi’s tenure as Secretary? Do you yet see how your tenure will differ from his in style or substance?

Are there elements of his leadership you will seek to emulate?

Response: I assess Secretary Principi’s tenure as Secretary to have been one of

a superb performance. I believe that my tenure should build upon his. To use a

Navy metaphor, he began a sea change at the VA and I see a major part of my

responsibility to see that this continues and that the VA is brought into the twentyfirst century to serve twenty-first century veterans. This implies that we must upgrade both physical stock of the VA (the average age of a VA hospital is over 50

years), and we must ensure that the quality of medicine given to our veterans is

on the cutting edge and both medical care and benefits are given in a more timely

way and that we are being consistent. So yes, there are many elements of Secretary

Principi’s leadership that I would plan to emulate, the principal one of which would

be hands-on transparent and accessible management and with a continuing emphasis to serve our veterans with compassion, competency and dignity.

Question 3: I hope very much that this Committee will be able to work cooperatively with you and the VA to solve problems that America’s veterans face. To do

that, we will need you to appear personally before this Committee to express the

Administration’s position on issues that concern veterans. Can we count on you to

make personal appearances at Committee hearings when asked?

Response: Yes, you can count on me to make personal appearances at committee

hearings when asked.

Question 4: Access to health care for veterans who reside in rural areas of Idaho

is particularly difficult, and it is a problem that calls for creative and innovative

approaches. I recently learned that Steele Memorial Hospital in Lemhi County,

Idaho has donated space that can be used by veterans to secure ‘‘telemedicine’’ services from the Boise VA Medical Center. Such arrangements, it seems to me, improve

the care provided to rural veterans at no cost to VA.

A. Do you agree that VA and Congress must work together to improve access to

VA services for veterans who reside in rural areas? If so, will you place a high priority on improving access to VA services for veterans who reside in rural areas?

B. Will you monitor the progress—and hopefully, the success—of the Lemhi County program and provided periodic updates to me?

Response: A. I agree that VA and Congress should continue to work together to

improve access to VA services. Growing up in rural Iowa has given me an appreciaVerDate 03-FEB-2003 10:29 Jun 14, 2005 Jkt 020113 PO 00000 Frm 00061 Fmt 6601 Sfmt 6621 D:\DOCS\20113.TXT SSC1 PsN: SSC1
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tion for veterans who reside in rural areas. I will put a high priority on exploring

approaches to improve access to VA services in a cost-effective manner.

To assist in addressing the issue of improved access to health care services, VA

will continue to look at establishing additional Community Based Outpatient Clinics

(CBOCs). Since CBOCs are scheduled to be opened in Fiscal Year (FY) 2005.

Response B. The Boise VA Medical Center (VAMC) has worked with Steele Memorial Hospital in Salmon, Idaho to install two telehealth devices that will give VA

the capability to provide both primary care and mental health care services to veterans in this area (a Viterion 500, and a video phone). The Viterion 500 provides

the capability of doing physiological monitoring remotely. The video phone will enable a mental health provider to interact directly with a patient. The Boise VAMC

has already established services for two VA patients at the Steele Memorial site and

they plan to add additional veterans. In addition, VA has placed monitors in the

private residences of two other veterans in the Salmon area who are not able to easily access the Steele Memorial Hospital site.

The Boise VAMC will provide periodic updates about this program to VA Central

Office officials. In addition, they would be pleased to provide your office with quarterly progress reports on the implementation of telehealth services in the Salmon

area and other parts of rural Idaho. These reports will highlight the locations of

telehealth sites, the number of veterans served and the type of services offered.

Question 5: Secretary Principi undertook an extensive review of VAs hospital infrastructure–a review that is called the Capital Asset Realignment for Enhanced

Services, or ‘‘CARES’’, initiative. The Secretary proposed that three VA Medical

Centers be closed (in Pittsburgh, Cleveland, and Gulfport, Mississippi ), that VA

build hospitals in two cities that have no VA medical centers (Las Vegas and Orlando), and that decisions concerning the fates of 15 other VA Medical Centers be

deferred pending further study.

A. Have you yet had the opportunity to consider these decisions? Do you think

you ought to reconsider then, and get your own assessment of VAs future medical

infrastructure needs? Or do you think you ought to trust in the validity and soundness of these decisions and simply implement them?

Response: A. I have been briefed regarding former Secretary Principi’s decisions

on CARES as well as the comprehensive process that lead up to his decisions. At

this time, I intend to move forward on CARES implementation. I will be briefed on

a regular basis regarding the additional studies that are currently underway and

regarding implementation of all CARES initiatives through VHA’s Strategic Planning Process.

The CARES process was the most comprehensive assessment of VA capital infrastructure and the demand for VA health care ever achieved. The evaluation and review provided by the CARES commission insured that the process was independent

and objective. Their well-reasoned report provides a road map for moving VA forward in planning for, investing in, and locating our capital facilities. I believe that

the CARES report presents a carefully studied and strategically sound path for the

Department, and I will use it as a blueprint for VAs future.

B. One of the major criticisms of the CARES initiative was its failure to address

VAs needs for long-term care facilities. Secretary Principi advised this Committee

that a long-term care review would take place later. Do you intend to carry out Secretary Principi’s commitment to assess VAs needs for long-term care facilities?

Where does that review now stand?

Response: B. I fully support the continuation of VA’s assessment regarding Long

Term Care (LTC). VHA has recently completed new runs on LTC workload projects

by market and priority category. Strategic Planning Guidance will be going out to

the VISNs and facilities in the next month requesting operational plans to include

Strategic Initiatives. Each VISN will prioritize its strategic initiatives by year and

within the year along with cost projects for inclusion in the VISN and National

Strategic Plan. Implementation of all CARES initiatives, including LTC initiatives,

is dependent on future funding.

Question 6: During the past few budget cycles, the Administration has proposed,

at various times, that so called ‘‘low-priority’’ VA patients pay an annual deductible

(of $1,500), an annual enrollment fee (of $250), and that prescription drug co-payments be increased (from $7 per prescription per month to $15). These proposals

were greeted with some skepticism on the Hill.

A. What is your position on proposals to increase the costs borne by ‘‘low priority’’

veterans seeking care at VA? Do you think some cost-sharing approaches make

more sense than others? Do you think that this is a fair way of raising the level

of funding available to VA?

B. Do you believe that it makes sense for VA to impose fees on some classes of

veterans and not on others? Does it make sense for VA to try to tamp down demand

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for care by ‘‘low-priority’’ patients so that it can devote more of its resources to the

care of the service disabled and the poor?

Response: A. Imposing cost sharing provisions, within reason, on veterans who

have a lower priority for care should help to focus resources towards the care of

those veterans who need us most.

Through eligibility reform legislation, Congress requires the VA Secretary to decide annually whether VA has adequate resources to provide timely, high quality

care for all enrolled veterans. Each year, VA reviews actuarial projections of the demand for VA health care in light of available budgetary resources and develops policies accordingly.

Response: B. VA has proposed cost-sharing policies for Priority 7 and 8 enrollees

as a means of balancing veteran demand for VA health care and the finite resources

available, and ensuring that VA has the capacity to serve those veterans who need

us most—veterans with service-connected medical conditions, special needs, and low

incomes. VA is committed to serving these veterans who depend upon VA for their

health care and represent our core constituency.

Thus, VA expects that those veterans now enrolled in priority groups 7 and 8 who

frequently use VA health care services will likely pay the enrollment fee in order

to continue to receive those services. However, many other veterans in priority

groups 7 and 8 do not currently use the system, or use it very infrequently. Those

veterans will likely not pay the enrollment fee, but rather will leave the VA system

and use other health care options available to them.

In some cases, the savings and additional collections associated with cost sharing

proposals could help avoid more drastic enrollment decisions such as disenrollment

of current users.

Question 7: Do you believe that Operation Iraqi Freedom troops will more likely

be afflicted with Post-Traumatic Stress Disorder than their predecessors in prior

wars? Does this ‘‘no rear echelon’’ theory make sense to you? Does your combat experience in Vietnam give you any insight on this theory of extraordinary stress from

Iraq combat?

Response: War related psychiatric disorders among veterans of our Nation’s wars

for the past 60+ years have resulted in disorder rates from 10–20% of troops (all

services) with higher rates associated with increased combat exposure and injury.

The mental health problems of veterans of the Vietnam war have been studied with

the latest psychological tools and scientific approaches and revealed that while 30%

of male Vietnam theater veterans met diagnostic criteria for PTSD at some point

in their lives, only 15% met those criteria when they were assessed at a point some

10 years after the war was over. Almost everyone exposed to the horrors of war

comes away from the experience with some emotional distress, but our data suggests that 70–85% of combatants may be expected to have no long term sequelae

from the war. Features of combat associated with stress related disorders include:

frequency of exposure to threat, including injuries sustained; number of actual combat experiences, and repeated tours of duty in the war zone. To the extent that

these are features of the war in Iraq, one may expect a rate of emotional problems

including, but not limited to PTSD (e.g. depression, substance use disorders) at least

comparable to those in Vietnam. Given current efforts at early identification of emotional stress in theatre and post-deployment, by DoD and VA clinicians it may be

possible to lower the incidence of long term problems by a concentrated effort at

early detection and care.

The ‘‘no rear echelon’’ theory is reasonable given the nature of the current war

in Iraq. The insurgency is a form of guerilla warfare in which attacks can occur at

any place and time. Established bases and supply convoys are subject to rocket,

mortar and Improvised Explosive Devices (IED) attack as well as more traditional

forms of combat such as combat patrols fighting in Fallujah. These experiences have

been confirmed by our troops and by the military healthcare providers who have

been in theatre and made presentations to VA staff.

It is reasonable to compare aspects of the war in Vietnam to the current experience in Iraq. Urban combat, as in Fallujah, for example, was experienced in Vietnam in Hue and other cities during the Tet Offensive. Jungle warfare has similar

stresses to urban warfare including the enemy being hidden from sight either by

jungle or buildings. Guerilla warfare, in which one cannot tell friend from foe; when

the enemy attacks from amidst innocent civilians; when mines and IEDs are used

to attack without warning and with the enemy at distance so they cannot be

counterattacked, are all extremely anxiety provoking. Modern body armor, and

evolving combat doctrine and training of our troops, and the superb in theater medical support received by troops in combat, can strengthen our troops against these

stresses.

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Question 8: Some years back, VA reorganized its health care bureaucracy into 22

‘‘Veterans Integrated Service Networks’’ to decentralize decision-making and to encourage innovation by managers involved in the actual care of patients. More recently, authority for critical decisions—for example, VAs recent review of its medical

care infrastructure needs—appears to be migrating back to VA headquarters.

A. As a matter of management philosophy, do you tend to delegate decision-making authority? Or do you believe that—at least in Government—authority has to be

centralized in easily-identified senior officials who are accountable to the President

and to the oversight of Congress?

Response A. There is always a tension between centralization and decentralization. A system that is too centralized is grossly ineffective and inefficient. On the

other hand, a system that is too decentralized loses the integration and cohesiveness

that defines it as a ‘‘system.’’ VA operates a large, integrated health care system

that functions both efficiently and effectively. Improvements in quality, access, veteran satisfaction, and efficiency are measurable and have been widely recognized.

Health care policy is established centrally in Washington and is expected to be executed uniformly throughout all 21 Veterans Integrated Service Networks (VISNs).

I will expect the VISNs to address the unique challenges of their respective environments, and I will hold management at all levels accountable for implementing national policy consistently. I intend to work with VHAs national and Network leadership to assure that we address the local, regional, and national needs of veterans

effectively. I believe in performance measurement, and I will be very aware of performance at all levels of the organization.

Question 9: As you are undoubtedly aware, the veteran population is aging rapidly—recent statistics show that nearly 60% of the veteran population is over age

55. This trend suggests to me that VA will face increasing demand for long-term

care services. Yet VA is only required to provide in-patient-based long-term care—

that is, nursing home care—to the most severely disabled of the ‘‘service-connected’’

veteran population.

A. Do you think VA can meet the demand of aging baby-boomers for long-term

nursing home care? Do you think VA ought to try to meet the need? Do you have

any sense of how much it would cost VA to take on this mission?

Response A. VA can meet the Long Term Care needs of all veterans for whom

we are required to provide such care. VA policy is to provide for the institutional

needs of veterans in priorities 1–3, and those with special needs. By reserving nursing home care for those situations in which a veteran can no longer safely be maintained at home, and by providing long-term care in the least restrictive setting that

is compatible with a veteran’s medical condition and personal circumstances, we can

create a medical and extended care benefits package that is available to veterans

who need them most. Non-institutional care is a basic part of the benefits package

for all enrolled veterans. VAs policy is to increase our capacity to provide non-institutional home and community-based care by 18% annually, in order to be able to

meet the full need of enrolled veterans by 2011. A detailed cost estimate, however,

is unavailable at this time.

B. Do you think the current policy of mandating that long-term care be provided

only to those with the most severe of service-connected disabilities strikes the proper balance of assuring that available resources are directed to those having the best

claim to VA-provided care?

Response B.: Yes. The current law assures that the most severely disabled serviceconnected veterans will be cared for if they need nursing home care, while preserving flexibility for VA to provide care for less severely disabled veterans, the indigent and those with special needs as resources permit.

C. Where do outpatient-based long-term care services fit into the equation? Does

the requirement that VA provide such services to even low-priority veterans divert

resources away from the neediest veterans—those who need in-patient care—to deal

with service-connected conditions?

Response C.: VA believes that long-term care should be provided in the least restrictive setting that is compatible with the veteran’s medical condition and personal

circumstances, and whenever possible in non-institutional home- and communitybased settings. Supporting veterans in their local communities maintains their established ties with spouse, family, friends and their spiritual community. These contacts help provide the vital social, emotional, and spiritual elements that complement the physical components of care that VA traditionally provides in its hospitals and clinics. The availability of a spectrum of home- and community-based

services often prevents unnecessary—and costly—institutionalization of veterans. It

is as essential that these services be available to enrolled veterans, including lower

priority veterans, as it is that acute care services be available to them. The cost of

non-institutional home- and community-based services is very modest in comparison

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to nursing home costs, and has relatively little impact on the availability of in-patient services for the neediest veterans. A far greater impediment to the most efficient allocation of resources is the requirement of the Millennium Act (Public Law

106–117) that VA maintain an average daily census of 13,391 in its own Nursing

Home Care Units. The President’s budget for fiscal year 2006 proposes repeal of

that provision.

Question 10: One of the challenges you will confront as Secretary is the backlog

of compensation and pension claims awaiting VA adjudication. When Secretary

Principi appeared before this Committee for his confirmation hearing in 2001, he

committed to reduce the backlog and improve the accuracy of decisions rendered.

A. Is this mission accomplished? Is there still more work to do to speed claims

processing and improve quality? Have you thought of a strategy you will employ to

finish the job?

Response A.: Improvement of benefits claims processing has been an important

goal of the President. Obviously, much progress has been made both in reducing the

backlog and timeliness—and especially in the reduction of claims that had been

pending from our oldest veterans who had been waiting more than a year for decisions on their claims. I am aware that quality levels have also significantly improved.

The changes made included making the regional offices—and the claims processing procedures and supporting IT applications—more consistent and efficient and

improving the training and oversight of the programs. These major changes have

resulted in improvements in production, timeliness, and quality.

While there has been significant success, there is much to be done. VBA has seen

large increases in incoming claims and appeals, both from the returning

servicemembers and from older veterans who had not previously submitted claims.

We will continue to emphasize the improvements necessary to give our veterans the

benefits they deserve and which the Congress has so generously made available.

Question 11: The budget for the current fiscal year is relatively tight compared

to recent years and I expect the one which the Administration will propose for fiscal

year 2006 will be tighter still. These realities have caused VA to prioritize eligibility

for purposes of healthcare eligibility.

A. Do you think VA ought to adopt similar systems of prioritizing the processing

of claims for benefits? For example, should claims filed by veterans who have just

returned from a combat deployment go to the head of the line?

Should applications for benefits submitted by older veterans go first? Or, should

VA simply adopt a ‘‘first-in, first-out’’ approach to prioritizing claims?

Response A. I have learned that VBA is giving top priority to the benefit claims

of all returning war veterans who are seriously injured, and certainly providing the

best possible service to these returning heroes must remain our highest priority.

VBA has also advised me that claims from terminally ill veterans, homeless veterans, veterans with severe financial hardship and former prisoners of war also receive priority attention. I believe that priority processing for these claimants is also

most appropriate.

Our goal must be to provide quality, timely, and compassionate service to all

claimants. Reaching our goal will depend upon a well-trained staff who properly develop the claims submitted and then act on those claims as soon as they are ready

to rate. I do not believe that VBA should adopt a strict first-in, first-out process.

B. Three years ago, VA established a ‘‘Tiger Team’’ to speed the processing of

older claims submitted by World War II veterans. Should similar specialized teams

handle other high priority claims, e.g., claims filed by servicemembers returning

from Iraq?

Response B. The Under Secretary for Benefits has made me aware of the success

of some of the specialized processing initiatives that VBA has undertaken in recent

years, including the Tiger Team, the Pension Maintenance Centers, and the centralized processing of in-service death claims. VBA is now centralizing the rating aspects of the Benefits Delivery at Discharge program to two regional offices, Salt

Lake and Winston Salem. These initiatives have demonstrated that specialized processing can provide better and more efficient service to veterans. I will look for additional opportunities to improve the delivery of benefits and services through specialization.

Question 12: VA spending from its compensation and pension account has grown

by approximately 50 percent in the past 5 years.

A. Do you have any sense of what is driving these increases?

Response A. A number of factors have been identified to me as contributing to

the increase in expenditures over the last 5 years. Those are listed below.

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• There has been a 6% increase in the total number of beneficiaries receiving benefits from the VA from EOY1999 through EOY2004, an increase of 196,000 beneficiaries.

• Diabetes Mellitus and Prostate Cancer were added as presumptive conditions

related to herbicide exposure, resulting in many new beneficiaries and increased

ratings. Because of the nature of the two conditions, the disability evaluations for

these conditions tend to increase fairly rapidly. In June 2001, just prior to adding

diabetes as a presumptive condition, VA was paying about 38,000 veterans for this

condition. By December 2004, VA was paying 199,000 such claims. Likewise, in

June 2001, VA was paying approximately 18,000 prostate cancer claims. By December 2004, VA was paying almost 30,000 claims.

• VAs efforts to reduce the backlog of claims increased the number and amount

of retroactive benefits paid.

• Vietnam Era veterans filed claims at rates higher than World War II and Korean War veterans, and veterans of the Gulf Era have higher application rates than

Vietnam Era veterans. This may be due, in, part, to VA’s expanded outreach programs and the Benefits Delivery at Discharge initiative.

Question 13: As long as I have been a Member of the Veterans Affairs Committee,

the problems confronting the compensation and pension system have been the same:

the backlog of claims and appeals is too high; it takes too long for VA to process

claims; and the accuracy of decisions made on applications for benefits is not as

good as it ought to be. The Congress and VA have taken various approaches to solving these problems–more staff has been hired, computer systems have been bought,

and VAs organizational structures have been repeatedly ‘‘re-engineered’’. Yet problems persist.

A. Do you believe it is time for Congress and the Administration to take a closer

look at the disability claims system to see if there are structural flaws within the

claims process that are outside VA’s control? Why do these problems seem to be resistant to management reforms and money infusions?

Response A. I would welcome working with you regarding issues that, while well

intentioned, sometimes have adverse effects and merely clog the system. I would

point out that the Congress has already authorized in the National Defense Authorization Act for 2003, a Veterans Disability Benefits Commission to look at the whole

range of disability compensation benefits available to veterans from VA.

Question 14: On February 3, I will convene a hearing to examine the adequacy

of the benefits provided to the surviving spouses and children of those who die in

or as a result of service. From what I have seen so far, survivors must navigate

through a confusing maze of services provided by at least three different Federal

agencies to secure benefits. Making matters even more confusing, cash benefits provided by some agencies are offset from those provided by others—in plain English,

cash payments are allowed from two agencies, for example VA and DoD, but not

simultaneously. Will you commit to work with other Department Secretaries to end

this confusion?

Response: I wholeheartedly agree that we should strive to make the benefits

claims processes for surviving spouses and children of servicemembers and veterans

as simple and straightforward as possible. I will be pleased to work with other Administration officials and with the Congress to ensure coordination of both survivors’

benefits and survivors’ benefits claims processes.

Question 15: Do you have any conflicts of interest which you have not fully disclosed to the Committee? Do you know of any other matter which, if known to the

Committee, might affect the Committee’s recommendation to the Senate with respect to your nomination?

Response: No, I do not have any conflicts of interest that have not fully been disclosed to the Committee or any matters that might affect the Committee’s recommendation.

Question 16: Have you fully and accurately provided financial and other information requested by the Committee, and do you now affirm that the information provided is complete, accurate, and provided in a form not designed to evade or deceive?

Response: Yes.

Question 17: Do you agree to supply the Committee such non-privileged information, materials, and documents as may be requested by the Committee in its oversight and legislative capacities for so long as you shall serve in the position for

which you now seek confirmation?

Response: Yes.

Question 18: An organization named the Lung Cancer Alliance has requested, by

the attached White Paper, that I pose to you a question relating to a potential estabVerDate 03-FEB-2003 10:29 Jun 14, 2005 Jkt 020113 PO 00000 Frm 00066 Fmt 6601 Sfmt 6621 D:\DOCS\20113.TXT SSC1 PsN: SSC1
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lishment of a pilot program for the screening, early detection and management of

lung cancer. Would you please review that attached White Paper and comment?

Response: Routine screening for lung cancer is not recommended at this time, as

there is currently no evidence of effectiveness. The Federal Government has two

large trials underway by the National Cancer Institute, so there doesn’t appear to

be a need for a duplicative study by VA and DoD. There is no evidence that the

lung cancers that veterans get by virtue of their smoking, exposure to combustion

products, or any other exposures would behave differently from lung cancers that

non-veterans get. Therefore, there is no compelling reason to duplicate in the veteran or military population the studies already underway in the general population.

Given that cigarette smoking is, by far, the most important risk factor for lung

cancer, the most effective method of preventing lung cancer deaths is by keeping

people from smoking in the first place and helping those who do smoke to quit. The

Veterans Health Administration has a large-scale, effective program in place to assist those who smoke and are interested in quitting. A clinical practice guideline on

tobacco use cessation, developed jointly by the VHA and the Department of Defense,

has recently been updated and is available at www.oQP.med.va.Qov/cPQITUC3/

tucbase.htm.

Lung cancer is a significant public health concern, with an estimated burden of

172,570 new cases in 2005 (13% of all cancer diagnoses). It is the leading cause of

cancer-related deaths (29% of all cancer deaths), estimated in 163,510 fatalities for

both men and women in 2005. Both incidence rates (new cases) and mortality rates

(deaths) in men have been declining for more than a decade, but they have only recently started to decline for women. Since 1987, more women have died each year

of lung cancer than from breast cancer. Cigarette smoking is by far the most important risk factor for lung cancer, implicated in 90% of lung cancers in men and 78%

in women. Cigar and pipe smoking, environmental tobacco smoke exposure, and exposure to other environmental agents, especially asbestos and radon, are also risk

factors for lung cancer.

Early detection of lung cancer through screening has not been shown to be effective in reducing deaths from lung cancer. Screening for lung cancer is not presently

recommended by any major medical professional organization. A recent review of

the evidence about lung cancer screening done by the U.S. Preventive Services Task

Force, an independent panel of experts in primary care and prevention that systematically reviews the evidence of effectiveness and develops recommendations for clinical preventive services, concluded that ‘‘the evidence is insufficient to recommend

for or against screening asymptomatic persons for lung cancer with either low dose

computerized tomography, chest x-ray, sputum cytology, or a combination of these

tests’’ (Annals of Internal Medicine. 2004; 140:738–9).

The National Cancer Institute (NCI), part of the National Institutes of Health,

has two large studies underway to determine if screening for lung cancer is effective. Both are randomized controlled trials, the best type of study design for measuring the effectiveness of screening tests. The first of these, the Prostate, Lung,

Colorectal, and Ovarian Cancer Screening Trial (PLCO), enrolled over 148,000 men

and women participants between the ages of 55 and 74. Enrollment took place from

1992 to 2001 at ten centers around the country. Lung cancer screening was done

by chest x-ray upon entry and annually for 3 years for smokers and for 2 years for

never-smokers for those in the intervention group. Participants in the control group

received routine health care from their physicians. All participants will be followed

for up to 16 years. Results of the PLCO study are not expected for several years.

The second NCI-funded screening study is the National Lung Screening Trial

(NLST), launched in 2002. This study is comparing two ways of detecting lung cancer: spiral computed tomography (CT) and standard chest x-ray, and aims to show

if one test is better at reducing deaths from lung cancer than the other. Over 53,000

current or former smokers aged 55 to 74 years have been enrolled in the trial at

more than 30 study sites across the country. Participants have been randomly assigned to receive either chest x-ray or spiral CT every year for 3 years and all will

be followed by yearly surveys until 2009. Results of the NLST will not be available

until then.

Both studies will provide evidence about the benefits, if any, of screening for lung

cancer. They will also provide information about harms of screening. All screening

tests have the potential for both benefits and harms. One common harm is falsepositive tests results—the finding of an abnormality that appears to be a cancer

that, upon further testing, turns out to be benign. In lung cancer screening, suspicious areas on chest x-ray or spiral CT often require invasive tests (lung biopsies

done either through the chest wall with a needle or through open chest surgery) to

determine if they are malignant or benign. Some screening tests may find many

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areas that appear to be suspicious, but turn out to be benign, thus subjecting patients to the risks of the invasive tests for no benefit.

Another potential harm is called ‘‘over-diagnosis’’—the finding of a condition that

would not have become clinically significant had it not been detected by screening.

Autopsy studies show that some people die with lung cancer, rather than from it.

If improved screening tests find many small lung cancers that would not be likely

to progress to the point of causing clinical disease and death, then the detection and

subsequent treatment of these cancers might lead to more harm than good. The randomized trials underway for lung cancer screening (PLCO and NLST) will help to

determine the extent to which these harms may occur, if screening were recommended and applied to large numbers of persons.

QUESTIONS FOR THE RECORD FROM SENATOR DANIEL K. AKAKA,

RANKING MEMBER, COMMITTEE ON VETERANS’ AFFAIRS; NOMINATION HEARING OF

R. JAMES NICHOLSON TO BE SECRETARY OF VETERANS AFFAIRS

Question 1: As you well know, Congress gave the Secretary the responsibility for

deciding which veterans can enroll for VA health care. Using that authority, a decision was made in January of 2003 to refuse enrollment to so-called ‘‘middle-income

veterans. Given that waiting times for care have decreased—thanks to the incredible work of your dedicated health staff—many of us here in Congress believe that

the ban on Priority 8 veterans should be rescinded. Because an enrollment decision

is typically made early in the year, I am curious as to what your position will be

on this year’s enrollment decision.

Response: In addition to the incredible work of VA staff, the suspension of Priority

8 enrollment contributed to the reduction in waiting times. I will consult with VA

staff to determine the need for continuing this suspension and/or the need to exercise another enrollment policy to balance demand with available resources for FY

2005. Equally important is the need to consider the out-year impact of enrollment

decisions in terms of expected resource availability, expected demand for VA health

care services and the potential for growing waiting lists and waiting times.

Question 2: In the past, VA has come under fire for the lack of timeliness of its

claims processing. While VBA has made progress in improving timeliness and accuracy of disability claims processing, further improvement is needed. Notably, VBA

has turned its attention to decreasing the amount of time it takes to process a claim

and taken its focus off of appeals.

A. How can a more balanced approach be reached?

Response A.: I am aware of the need for a balanced approach to managing our

claims workload. A balanced approach must be taken in the allocation of our personnel resources to ensure we are effectively managing the full spectrum of our

claims and appellate processing responsibilities.

VBA has recently increased its emphasis on addressing appeals, necessitated by

an increase in the rate and number of appeals filed. The increase is attributable to

several factors, including the dramatic increase in the output of claims decisions in

the last few years.

VBA and the Board recently signed an agreement regarding additional training

that would be provided to field stations to ensure appeals are ready to be certified

to the Board of Veterans’ Appeals. We need to continue to track and analyze appellate cases to determine how we can reduce the number of cases appealed to VBA

as well as those remanded by the Board for further development.

B. I am concerned that VBA does not have enough employees to process claims

timely and accurately. You noted in your pre-hearing questions that additional hiring is anticipated this year. Will this be reflected in the President’s Budget? If not,

where will the funding for these employees come from?

Response B.: As a result of the Consolidated Appropriations Act, 2005 (Public Law

108–447), an additional $125 million will be made available to VBA (through a

transfer of funds from medical care) for compensation claims processing. Of this

total, $75 million will be used in 2005 to fund additional staffing to address the increased volume of disability claims. The remaining $50 million will be used in 2006.

C. VA officials have acknowledged that VBAs compensation and pension claims

processing needs to be more productive, that is, to decide more claims without significant increases in staffing. How do you plan to improve claims processing productivity without significant staffing increases?

Response C.: Increased productivity does not depend solely on increases in staffing. Better training, new technologies, and more efficient organizational processes

and structures can also contribute significantly to higher levels of productivity. I believe we need to continue to focus on all of these areas.

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VA’s recent decision to consolidate the rating aspects of the Benefits Delivery at

Discharge Program to two regional offices is an example of the type of process and

structural change that I believe will allow VBA to be more productive. I will look

for additional opportunities to apply technology and make changes that will enhance

the delivery of benefits and services to veterans and their families.

Training is also key to improving productivity. I will focus our efforts on improving VBAs training systems, both for new employees and to raise the skill levels of

the more experienced staff. Improvements will be achieved through providing employees with more and better training and with up-to date tools and IT systems to

support their decisions. As employees develop their skills, they will work faster and

with fewer errors.

Question 3: VA has become increasingly reliant on contractors. Do you support

contracting out VA functions? If yes, do you have any concerns that it will erode

VAs ability to meet its mission? And what functions would you be comfortable contracting out services for?

Response: VAs primary goal is to provide the best possible service to veterans

within the current budget environment. As such, I will continually challenge the Department to examine ways to more effectively and efficiently use resources to better

meet veterans’ needs. Contracting out certain functions may provide one avenue for

meeting this goal. However, the provision of services such as direct medical care are

a core capability for the Department, and contracting out of these functions should

only be pursued on an exception basis where in-house resources are not available.

In addition, a clear business case must be made that justifies the rationale and provides assurance that contracting will not erode VAs ability to meet its mission. 38

U.S.C. 7409 affords the Department the flexibility to contract out for ‘‘scarce medical

specialist services at Department facilities’’ in this case. However, VAs experience

indicates that contracting out for such positions generally is much more expensive

than direct hiring.

In addition, under 38 U.S.C. 8153, ‘‘to secure healthcare resources which otherwise might not be feasibly available, or to effectively utilize certain other healthcare resources, the Secretary may, when the Secretary determines it in the best interest of the prevailing standards of the Department’s medical care program, make

arrangements, by contract or other form of agreement for the mutual use, or exchange of use, of health-care resources between Department health-care facilities

and any health-care provider, or other entity or individual.’’ Contract services in this

regard must also be supported by a clear business case that ensures the quality of

service provided by another source is as good as or better than the existing service

at reduced costs.

There are other situations where contracting for non-core VA functions may be

appropriate. Our analysis of these opportunities across the Veterans’ Benefits Administration (VBA) and National Cemetery Administration (NCA) indicate that contracting opportunities are generally limited due to the nature of the functions performed, the relatively small numbers of personnel involved, and the fact that they

tend to be highly geographically dispersed. Within VHA, we believe there may be

some opportunities to enhance the effectiveness and efficiency of certain non-core,

commercial, competitive functions, e.g., grounds maintenance, through the President’s Management Agenda (PMA) competitive sourcing initiative. However, 38

U.S.C. 8110(a) (5) prohibits VA from conducting certain cost comparisons with the

private sector unless funds are specifically appropriated for that purpose. Since

funds have not been specifically appropriated for the purpose of conducting cost

comparisons, VA’s previously, OMB-approved competitive sourcing program has

been on-hold until such time as legislative relief is obtained.

Question 4: GAO added VA’s disability programs, along with other federal disability programs, to its high risk list in 2003. VBA’s vocational rehabilitation and

employment program has been criticized for insufficient emphasis on helping disabled veterans return to work. In what ways will you ensure that VBA strengthens

its emphasis on helping disabled veterans reintegrate into the workforce?

Response: Secretary Principi established the Task Force on the Vocational Rehabilitation and Employment Program to conduct an independent assessment of the

program. The Task Force’s report, submitted in March 2004, contained many recommendations to produce a more proactive, employment-driven program.

VA is now in the process of implementing the recommendations. The most important of the recommendations is the Five-Track Employment Model, which calls for

VA to focus its efforts on:

• Reemployment of veterans with their previous employers.

• Access to rapid employment services with new employers.

• Self-employment for veterans whose disabilities preclude more conventional

channels of access to employment.

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• Long-term vocational rehabilitation services for veterans who need such services

to obtain suitable employment.

• Independent living services, with the possibility of employment when appropriate, for veterans whose disabilities are so severe at present as to preclude them

from working.

Along with developing this model, VA is testing a new field position, Employment

Coordinator. The Employment Coordinators will perform duties recommended by

the Task Force. It is anticipates that they will enhance the delivery of quality and

timely employment services and increase the number of veterans obtaining suitable

employment.

I will ensure that the actions taken by VA to implement the Task Force recommendations will give our disabled veterans the assistance they need to successfully reenter the workforce.

Question 5: ‘‘While you were at the RNC did you have dealings with the VSOs

and if so, what were the nature of those discussions?′′

Response: Yes, I recall during my 4 years as Chairman of the Republican National

Committee, that I had occasional meetings with the directors of several of the VSOs.

I can specifically recall having one meeting around a table in my office at the RNC,

but I do not recall what the substantive nature of the discussions addressed.

QUESTIONS FOR THE RECORD FROM SENATOR KAY BAILEY HUTCHINSON, COMMITTEE

ON VETERANS’ AFFAIRS; NOMINATION HEARING OF R. JAMES NICHOLSON TO BE

SECRETARY OF VETERANS AFFAIRS

Question 1: Currently, military retirees in many parts of the country are not allowed to register with permanent military health care providers due to the shortage

of military physicians. Do you believe that this situation can be corrected? How

would you go about it?

Response: VA has an effective primary care system in place. When veterans are

enrolled into the system, they are assigned a primary care physician. I would defer

the questions on military health care to DoD.

Question 2: Many veterans are anxiously waiting the Base Realignment and Closure (BRAC) results which should be released in May of this year. A loss of a base

or a post in a specific region of the country could mean that a deserving veteran

may have to travel many additional miles to seek a treatment. Are you approaching

the BRAC process with similar concerns?

Response: VA plans to cooperate fully with DoD throughout Base Realignment

and Closure.

Question 3: Recently, the Walter Reed Amputee center here in Washington, DC

has seen an influx of wounded and amputated veterans to its facility due to ongoing

operations in Iraq and Afghanistan. What is the process to allow these future veterans to transition from Walter Reed back to their home of record or to their permanent duty station? Are you confident of the VAs ability to serve these veterans?

Response: VA shares your concern that our Nation’s newest veterans get the

healthcare and benefits they deserve, particularly those who are ill or injured as a

result of their service in Iraq or Afghanistan. VA has worked hard over the past

18 months to implement numerous programs to ensure these veterans receive timely and high quality services and that their transition from DoD to VA is seamless

and efficient. For the first time, VA employees are stationed at many of the major

military treatment facilities (MTFs) receiving casualties from Iraq and Afghanistan.

VA staff brief servicemembers about VA benefits, including healthcare, disability

compensation, vocational rehabilitation, and employment. VA enrolls these veterans

into the VA system and begins to complete the necessary paperwork for their compensation claims prior to discharge from military service which eliminates any gap

in services or compensation. VA social workers facilitate the transfer of veterans

from Walter Reed and the other major MTFs to the VA Medical Center closest to

their home of record or most appropriate for the specialized services their medical

condition requires. In addition, each VA Medical Center and Veterans’ Benefit Administration Regional Office has identified a point of contact to ensure the seamless

transition of these veterans into the VA system. Vet Centers located throughout the

country are providing mental health services and counseling to returning veterans

and their families, as well as bereavement counseling to those who have lost a family member in Iraq or Afghanistan. The Department has increased the number of

transitional assistance briefings given to active duty, Reserve and National Guard

servicemembers who are discharging from military service. The purpose of the briefing is to educate servicemembers on the VA benefits available to them. In total, the

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Department held nearly 12,000 briefings reaching nearly 500,000 servicemembers,

including those aboard some Navy ships returning to the U.S.

VA has made great strides in ensuring our veterans experience a smooth transition between military and civilian life. VAs next challenge is to ensure that those

veterans and their families receive a high level of customer service. VA is working

to strengthen its support system for the family to include Fisher Houses, hotels and

meals. VAs goal is to honor each new veteran and their family with compassion, dignity, and coordination of every service and support that can help to restore function.

Question 4: A November report found unsanitary conditions at the Dallas Veterans Affairs Medical Center. I am concerned there is currently not a framework

for improving a facility so critical to the veterans of North Texas. What will you do

to remedy this shortcoming and prevent similar issues at other facilities?

Response: The Department of Veterans Affairs Office of the Inspector General

(OIG) report that you referred to cited the status of the VA North Texas Health

Care System (VANTHCS), Dallas during its May 2004 OIG Combined Assessment

Program (CAP) review. Subsequent to this review, the OIG published report number

04–01878–34, on November 26, 2004 and tasked VISN 17 to draft a response to the

findings that was due on January 19, 2005: VISN 17 submitted its response to the

findings by the suspense date.

The CAP review focused on 14 areas. In two of the areas the reviewers did not

identify concerns. In the remaining 12 areas, the reviewers noted a need for additional management attention.

VISN 17 and the VANTHCS began to immediately initiate action on the recommendations as early as the period following the OIG team exit briefing. An action

plan along with a spreadsheet was developed by VISN 17 to monitor the VANTHCS

progress in addressing the concerns noted by the OIG reviewers. Specific milestones

were established to monitor the levels of improvement. The leadership of VISN 17

has been highly involved in this process. Periodic meetings have been held to track

progress being made, and adjustments were made to ensure that milestones were

met. As a result of these improvement efforts, the majority of the problems noted

in the OIG CAP review were corrected by early January 2005. The VISN Director

has noted that the only reason that the VANTHCC is not currently within 100%

compliance is that some needed construction work has not been completed.

Key leadership positions in the Dallas facility will be filled by individuals tasked

to facilitate the changes required to bring the Dallas facility to a higher level of performance. The Acting Under Secretary for Health has appointed a 5-member General Medical Review Team, and tasked the VA Office of the Medical Inspector (OMI)

to review operations at the Dallas facility. The scope of the review includes interviews of key staff at the facility, and the review of five key operational areas. The

results of the findings of the two teams will be used to enhance the operations of

the Dallas facility in particular, and serve as a model to prevent similar situations

in the future in other VA facilities. These lessons learned will augment other programs already in place that provide continuous monitoring of operations, and quality improvement.

An example of programs already in place is the VHA System-wide Ongoing Assessment Review Strategy (SOARS) program. During 2004, the Veterans Health Administration (VHA) initiated the SOARS program. To date, this initiative has visited

32 VA medical facilities. The purpose of this initiative is to identify problems and

areas for improvement in 50+ key areas within medical facilities that includes

cleanliness, infection control, safety, privacy, and security concerns. SOARS utilizes

multi-disciplinary employees from throughout the system as Internal Consultants to

identify issues as ‘‘external observers’’. This also allows the sharing of strong practices and problem solutions from other environments and the ability to take ‘‘lessons

learned’’ back to other VA facilities. After a successful pilot phase, this program is

now able to complete 4 facility site visits a month on a continuous basis with more

planned for the future. SOARS will allow for the monitoring of past problems as

well as the early identification and correction of problematic areas in the future.

Question 5: On November 12, 2004, Secretary Principi announced that VA would

dedicate up to $60 million (up to $15 million annually over the next 4 years) for

research into Gulf War Illness. Secretary Principi has been on the forefront of this

issue, securing $14.6 million in federal funding over the past 5 years for research

into Gulf War related illness—much of it carried out at the University of Texas (UT)

Southwestern by Dr. Robert Haley.

Ambassador Nicholson, can we have your assurance that you will keep this promise to Gulf War veterans?

Response: As Secretary Principi stated on November 12, 2004, VA will commit up

to $15 million in additional federal funding in FY 2005 to support continued research into the cause of and potential treatments for Gulf War illnesses. This repVerDate 03-FEB-2003 10:29 Jun 14, 2005 Jkt 020113 PO 00000 Frm 00071 Fmt 6601 Sfmt 6621 D:\DOCS\20113.TXT SSC1 PsN: SSC1
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resents VA’s single largest set-aside of research funding for a specific area of investigation and almost 20 percent of all new research grant awards for FY 2005.

In response to a reporter’s question about commitments beyond FY 2005, Secretary Principi said, ‘‘I’m not making any out-year commitments. . . And we have

taken an unprecedented step by earmarking funds for this type of research. We certainly will look at it in 2006, 2007, 2008.’’

While it essential to find answers to what is causing Gulf War illness and to identify appropriate treatments, the specific financial commitment will need to be reviewed each year.

To implement the commitment for FY 2005 funding, VA is in the process of

issuing a new request for proposals. The proposed studies will undergo the same intensive evaluation and review for scientific rigor as all projects sponsored by VA research.

Also, VA plans to establish a center dedicated to the investigation of potentially

effective treatments for veterans with Gulf War illnesses. This center will use observational and epidemiologic methods to identify promising therapies and will conduct

pilot studies that may serve as prelude for more definitive clinical trials. To ensure

that this center is designed successfully to meet the methodological challenges of research in this difficult area of investigation, VA is working closely with the Research

Advisory Committee in forming a committee of expert advisors to assist in the planning and design of the center. The Committee will be meeting in early March.

VA has funded 111 projects on Gulf War veterans’ illnesses since 1991. The direct research costs of these studies as of October 2004 total $56.4 million. Indirect costs

associated with this research are estimated at $16.9 million (historical data suggest

indirect costs equal 30% of direct costs).

In FY 2004, VA approved 18 new Gulf War projects. Total funding over the life of these projects will exceed $9.5 million. VA is currently funding 48 ongoing Gulf

War studies in FY 2005. Areas of focus include: brain and nervous system; depleted

uranium; interaction of multiple exposures; treatments; and epidemiology. Direct research costs for these studies total $6 million.

Recent VA findings with impacts or potential for impacts in Gulf War veterans’

illnesses include: • Identification of a superior mode of treatment for veterans suffering from

undiagnosed Gulf War symptoms. • Finding that a statistically significant higher prevalence of ALS in Gulf War

veterans (led to presumptive service connection for compensation). • Confirmation of higher rates of PTSD and other psychological disorders among

Gulf War veterans. • Substantiation that adverse reproductive outcomes have not been more common

among veterans deployed to the Gulf War than among those who were not deployed.

Examples of ongoing VA studies include:

Neuroimaging: A team at the San Francisco VAMC has initiated the largest effort

to date to conduct research to detect any brain changes associated with Gulf War

veterans’ illnesses and to determine possible relationships with ALS. The team,

under Dr. Michael Weiner, will use a 4-Tesla magnetic resonance imaging-magnetic

resonance spectroscopy system that the VAMC acquired through grants from the

Department of Defense (DoD) and the National Institutes of Health (NIH).

Epidemiology. Studies conducted to date have not shown an excess of cancer-related deaths among Gulf War veterans. However, because many cancers are not rapidly fatal, VA recently funded a cancer prevalence study among Gulf War veterans.

Amyotrophic Lateral Sclerosis (ALS): VA has initiated a national registry for veterans with ALS and an accompanying genetic tissue bank (ALS-DNA) to build upon

its earlier prevalence study. The goals of the registry are to identify as completely

as possible all veterans with ALS, not just Gulf War era veterans, and to provide

a mechanism for VA to inform veterans with ALS about clinical drug trials and

other studies for which they may be eligible. The ALS-DNA bank will involve collection of DNA and plasma from blood samples from consenting ALS registry participants. It is the intent that these materials be made available for future genetic research on ALS. The Veterans’ ALS Registry has generated great enthusiasm and

praise among the national community of ALS researchers.

While not specific to Gulf War veterans, VA investigators are also conducting a

clinical trial to determine the safety and efficacy of sodium phenyl butyrate (NaPS)

in subjects with ALS. While there is no know treatment for ALS, NaPS is a pharmacological treatment that has been shown to extend survival in mice with ALS. This

study will also seek to identify optimal doses for NaPS and riluzole (currently, the

only approved drug for ALS) and examine their combined effects in ALS mice.

Depleted Uranium: VA continues to fund a clinical health surveillance of Gulf

War veterans who were exposed to depleted uranium (DU) oxides as a result of

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friendly fire incidents. Some of these veterans have retained DU fragments that

cannot be removed due to medical considerations, and the 39 surveillance participants, nine of whom remain on active duty, had significantly higher exposures than

other servicemembers who served in the Kuwaiti Theater of Operations. Testing to

date has found no differences in the frequency of musculoskeletal, cardiovascular,

psychiatric, nervous system, or other disorders. Although the kidney is the putative

critical organ for uranium toxicity under acute and chronic exposure conditions, no

evidence of renal dysfunction has been found. Of note, none of the participants’ offspring have had birth defects. This is far less than would have been expected. Despite these favorable outcomes, VA will continue to fund this surveillance to monitor

for any potential DU-related long-term health problems.

Question 6: Will you look carefully at the CARES Commission report and where

closure of a veterans’ facility has been recommended, give time and weight to the

appointed community task forces so local leaders may have a chance to maximize

the efficiency and productivity of each of these facilities?

Response: The Implementation Process for CARES includes the requirement for

stakeholder involvement by local VA facilities. For the additional study sites listed

in former Secretary Principi’s Decision Document, a formal process has been put in

place to include leaders from the community to provided advice to the Contractor

completing the studies. VISNs will be required to report on the progress of all

CARES initiatives to the CIS which I chair.

QUESTION FOR THE RECORD FROM SENATOR ARLEN SPECTER, COMMITTEE ON VET- ERANS’ AFFAIRS; NOMINATION HEARING OF R. JAMES NICHOLSON TO BE SECRETARY

OF VETERANS AFFAIRS

Question 1: The Veterans’ Park Conservancy (VPC), a group of concerned and

civic-minded veterans and residents in Los Angeles, is eager to create a 16-acre National Veterans’ Park on the undeveloped portion of land at the West Los Angeles

VA facility. Over the past 15 years, this group has worked to preserve, protect and

enhance the historic West Los Angeles VA property, including the National Cemetery and have made over $3 million of improvements in this property. Many donors

have made this work possible. The VPC intends to raise substantial private funding

for development of the Park and is looking to have some assurance of permanence.

Please review the January 21, 2005, letter addressed to me from Veterans’ Park

Conservancy regarding this matter and respond to their concern for the record. Ambassador Nicholson, will you work with Veterans’ Park Conservancy toward a mutually beneficial agreement regarding the creation of a National Veterans’ Park?

Response: The concerns addressed in this letter have been responded to by Secretary Principi in a letter dated October 8, 2004 (attached for the record). I will continue to work with Veterans’ Park Conservancy within the framework identified in

the Secretary’s response. The Memorandum of Understanding signed in July of 2001

is our commitment regarding the creation of a National Veterans’ Park and identifies the parameters of the partnership. The process described in the Memorandum

of Understanding was successful in a similar project VPC performed for improvements to the West Los Angeles National Cemetery. Although it is VAs intent to

have this area remain as parkland and open space, VA cannot consider preserving

this designated area in perpetuity in view of the ongoing Capital Asset Realignment

for Enhanced Services planning process. Included in that process will be a new Master Plan for the VA West Los Angeles campus that will guide the future use of the

property.

QUESTIONS FOR THE RECORD FROM SENATOR JOHN D. ROCKEFELLER IV, COMMITTEE

ON VETERANS’ AFFAIRS; NOMINATION HEARING OF R. JAMES NICHOLSON TO BE

SECRETARY OF VETERANS AFFAIRS

Question 1: Mr. Ambassador, as most people know, health care is my passion, and

I push for quality health care at every opportunity, especially for our veterans who

earned their benefits through distinguished service. Your predecessor, Tony

Principi, was a good friend to me and to veterans. His candor and his voice about

the true needs for VA health were crucial. I urge you to be as candid and as clear

about the true need our veterans within the VA health system as we all struggle

under the pressures of our budget deficits.

Response: The Fiscal Year 2006 Budget will enable VA to continue its mission of

providing high-quality, timely, and compassionate health care to all enrolled veterans who seek care. This budget enables VA to place its greatest emphasis on our

core population of veterans—those with service connected disabilities including reVerDate 03-FEB-2003 10:29 Jun 14, 2005 Jkt 020113 PO 00000 Frm 00073 Fmt 6601 Sfmt 6621 D:\DOCS\20113.TXT SSC1 PsN: SSC1
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turning OIF/OEF veterans; those with low income; and those who have specialized

needs—while asking veterans in Priority Groups 7 and 8 to make limited contributions toward the cost of their care. We believe that these contributions are modest

in light of the comprehensive, high-value, and high-quality care the Department

provides. In addition, this budget includes $700 million in construction to continue

the Department’s commitment to the CARES initiative, $100 million for the Mental

Health Initiative, and $100 million for Prosthetics. In future years, I assure you

that I will be a firm advocate for budgets that allow the Department to meet the

needs of all enrolled veterans who choose to come to VA for their health care.

Question 2: During the first Persian Gulf War, this committee asked many questions about Persian Gulf War illnesses. I was pleased that Secretary Principi did

an advisory task force on the issue, and he pledged $60 million in research to continue studies on the Persian Gulf War illnesses. I think VA should aggressively pursue additional research because we must have the facts, and I want to know if you

are committed to follow through on this issue.

Response: As Secretary Principi stated on November 12, 2004, VA will commit up to $15 million in additional federal funding in FY 2005 to support continued research into the cause of and potential treatments for Gulf War illnesses. This represents VA’s single largest set-aside of research funding for a specific area of investigation and almost 20 percent of all new research grant awards for FY 2005.

In response to a reporter’s question about commitments beyond FY 2005, Secretary Principi said, ‘‘I’m not making any out-year commitments . . . And we have

taken an unprecedented step by earmarking funds for this type of research. We certainly will look at it in 2006, 2007, 2008.’’

While it essential to find answers to what is causing Gulf War illness and to identify appropriate treatments, the specific financial commitment will need to be reviewed each year.

To implement the commitment for FY 2005 funding, VA is in the process of

issuing a new request for proposals. The proposed studies will undergo the same intensive evaluation and review for scientific rigor as all projects sponsored by VA research.

Also, VA plans to establish a center dedicated to the investigation of potentially

effective treatments for veterans with Gulf War illnesses. This center will use observational and epidemiologic methods to identify promising therapies and will conduct

pilot studies that may serve as prelude for more definitive clinical trials. To ensure

that this center is designed successfully to meet the methodological challenges of research in this difficult area of investigation, VA is working closely with the Research

Advisory Committee in forming a committee of expert advisors to assist in the planning and design of the center. The Committee will be meeting in early March.

VA has funded 111 projects on Gulf War veterans’ illnesses since 1991. The direct research costs of these studies as of October 2004 total $56.4 million. Indirect costs

associated with this research are estimated at $16.9 million (historical data suggest

indirect costs equal 30% of direct costs).

In FY 2004, VA approved 18 new Gulf War projects. Total funding over the life

of these projects will exceed $9.5 million. VA is currently funding 48 ongoing Gulf

War studies in FY 2005. Areas of focus include: brain and nervous system; depleted

uranium; interaction of multiple exposures; treatments; and epidemiology. Direct research costs for these studies total $6 million.

Recent VA findings with impacts or potential for impacts in Gulf War veterans’

illnesses include:

• Identification of a superior mode of treatment for veterans suffering from

undiagnosed Gulf War symptoms.

• Finding that a statistically significant higher prevalence of ALS in Gulf War

veterans (led to presumptive service connection for compensation).

• Confirmation of higher rates of PTSD and other psychological disorders among

Gulf War veterans.

• Substantiation that adverse reproductive outcomes have not been more common

among veterans deployed to the Gulf War than among those who were not deployed.

Examples of ongoing VA studies include:

Neuroimaging: A team at the San Francisco VAMC has initiated the largest effort

to date to conduct research to detect any brain changes associated with Gulf War

veterans’ illnesses and to determine possible relationships with ALS. The team,

under Dr. Michael Weiner, will use a 4-Tesla magnetic resonance imaging—magnetic resonance spectroscopy system that the VAMC acquired through grants from

the Department of Defense (DoD) and the National Institutes of Health (NIH).

Epidemiology. Studies conducted to date have not shown an excess of cancer-related deaths among Gulf War veterans. However, because many cancers are not rapidly fatal, VA recently funded a cancer prevalence study among Gulf War veterans.

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Amyotrophic Lateral Sclerosis (ALS): VA has initiated a national registry for veterans with ALS and an accompanying genetic tissue bank (ALS-DNA) to build upon

its earlier prevalence study. The goals of the registry are to identify as completely

as possible all veterans with ALS, not just Gulf War era veterans, and to provide

a mechanism for VA to inform veterans with ALS about clinical drug trials and

other studies for which they may be eligible. The ALS-DNA bank will involve collection of DNA and plasma from blood samples from consenting ALS registry participants. It is the intent that these materials be made available for future genetic research on ALS. The Veterans’ ALS Registry has generated great enthusiasm and

praise among the national community of ALS researchers.

While not specific to Gulf War veterans, VA investigators are also conducting a

clinical trial to determine the safety and efficacy of sodium phenyl butyrate (NaPS)

in subjects with ALS. While there is no know treatment for ALS, NaPS is a pharmacological treatment that has been shown to extend survival in mice with ALS. This

study will also seek to identify optimal doses for NaPS and riluzole (currently, the

only approved drug for ALS) and examine their combined effects in ALS mice.

Depleted Uranium: VA continues to fund a clinical health surveillance of Gulf

War veterans who were exposed to depleted uranium (DU) oxides as a result of

friendly fire incidents. Some of these veterans have retained DU fragments that

cannot be removed due to medical considerations, and the 39 surveillance participants, nine of whom remain on active duty, had significantly higher exposures than

other servicemembers who served in the Kuwaiti Theater of Operations. Testing to

date has found no differences in the frequency of musculoskeletal, cardiovascular,

psychiatric, nervous system, or other disorders. Although the kidney is the putative

critical organ for uranium toxicity under acute and chronic exposure conditions, no

evidence of renal dysfunction has been found. Of note, none of the participants’ offspring have had birth defects. This is far less than would have been expected. Despite these favorable outcomes, VA will continue to fund this surveillance to monitor

for any potential DU-related long-term health problems.

Question 3: In September 2004, the GAO issued a report noting that VA needs

better data to plan and prepare to serve veterans with Post-Traumatic Stress Disorder (PTSD). GAO specifically calls on VA to do a full assessment of current veterans receiving PTSD care. Then VA should work with DoD to help identify how

many servicemembers may need PTSD care and where they will be located. Given

that medical experts predict that about 15% of military personnel serving in Iraq

and Afghanistan will develop PTSD, the need for planning and care is real.

What is VA doing to follow up on this GAO report, specifically, what priority will

VA make PTSD and care to our newest veterans, those returning from Iraq and Afghanistan?

Response: In follow up to the GAO report of September 2004, VAs Office of Environmental Epidemiology is identifying and tracking the numbers and locations of

Operation Enduring Freedom (OEF) and Operation Iraqi Freedom (OIF) veterans

being served by VA Medical Centers, outpatient clinics and Readjustment Counseling Service (Vet) Centers. To identify servicemembers who may need VA care, VA

is working closely with DoD to maintain accurate data on numbers of OEF/OIF returnees and their use of VA services. For those veterans already in the system the

Northeast Program Evaluation Center publishes an annual national analysis of all

PTSD treatment programs. This provides Networks and Facilities with demographic

analysis of the veterans seen in their programs.

Meeting the needs of our returning veterans and their families is among VAs

highest priorities. VAs approach toward the returning troops and their families is

guided by an emphasis on health promotion and preventive care principles. It focuses on patient and family education about good health care practices and behaviors to avoid. It avoids ‘‘over pathologizing’’ the veteran. For those who do have mental disorders, the orientation involves the concepts of rehabilitation that address a

patient’s strengths as well as deficits. It embodies a belief in recovery of function

to the greatest degree possible for each patient. This approach is designed to identify and resolve problems in readjustment to civilian life, before they progress to

problems requiring more intensive clinical interaction. Readjustment Counseling

Service takes the lead in providing this level of care through the 207 communitybased Readjustment Counseling Centers (RCS) throughout the United States. 50 additional Global War on Terrorism counselors have been added to these centers to

meet this need. In addition the Secretary has expanded authority to RCS to deliver

bereavement counseling to those in need.

For those that require clinical interaction, VA provides state-of-the-art psychotherapy and psychopharmacology treatments. The joint VA/DoD Clinical Practice

Guidelines direct evidence-based care for PTSD and other disorders that may be associated with PTSD and the stress of war such as Major Depression and Substance

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Use Disorders. VA provides this care through 144 specialized PTSD programs in all

States. These consist of specialized in-patient PTSD units, Residential Treatment

units, and Outpatient PTSD clinical teams. All patients are currently screened annually for PTSD. In addition an OIF/OEF clinical reminder tool in the computerized

medical record was developed for clinicians which reminds them that they are seeing a veteran who has recently been exposed in the War effort and needs to be

screened for PTSD, Depression, and Substance abuse.

Innovative clinical approaches are being pursued through the use of Public Law

180–170 funding which authorizes $5 million for the development of special outreach, health promotion, consultation, and liaison programs for returning veterans

in collaboration with Veterans’ Benefits Administration, DoD, and community resources. P.L. 108–170 also authorizes an additional $5 million each for the expansion of existing PTSD and substance use disorder treatment programs. In addition

the National Center for PTSD coordinates state-of-the-art research for the VA and

provides training and guidance to our clinicians. The National Center for PTSD produced an Iraqi clinician guide that provides a tutorial for practitioners on what they

might look for in returning soldiers/veterans who have served in Iraq.

Question 4: The CARES Commission was intended to be a strategic plan for VA

health care, but it did not truly consider long-term care issues and mental health

issues. I believe each should be a priority of VA given the needs of the veteran population. How are you going to deal with long-term care and mental health?

Response: I fully support the continuation of VAs assessment of LTC and Mental

Health (MH). VHA has recently completed new runs on LTC and MH workload

projects by market and by priority category for LTC. Strategic Planning Guidance

will be going out to the VISNs and facilities in the next month requesting operational plans to include Strategic Initiatives. Each VISN will prioritize its strategic

initiatives by year and within the year along with cost projections for inclusion in

the VISN and National Strategic Plan. LTC and MH initiatives are included in this

process. Implementation of all CARES initiatives, including LTC and MH initiatives, is dependent on future funding.

QUESTIONS FOR THE RECORD FROM SENATOR JAMES M. JEFFORDS, COMMITTEE ON

VETERANS’ AFFAIRS; NOMINATION HEARING OF R. JAMES NICHOLSON TO BE

SECRETARY OF VETERANS AFFAIRS

Question: VA Physician Assistants—Mr. Ambassador, the Congress has been

pushing the VA for many years to provide an advisory position within the VA for

Physician Assistants. The VA currently employs over 1,500 physician assistants

(PAs), who are a very important part of the VA healthcare structure. However, they

do not fall neatly into either the doctor or nurse category. In 2000, Congress passed

legislation directing the VA to implement a PA advisor to the Under Secretary for

Health. The following year, a part time position was established, but it was located

outside of Washington and given very little travel money. Congress has since reiterated that this position should be a full time position and be either located in the

Washington DC area, or provided with a sufficient travel budget to fulfill the advisory duties. As of yet, however, this has not happened.

The current PA Advisor’s lack of access to the department’s policy deliberations

hampers the department’s ability to fully and appropriately utilize this important

resource. Have you examined the issue of representation of the PAs in policy discussions, or the position of the PA Advisor? I understand that you may not have had

time to reach this level of detail, but I would appreciate your attention to this question at your earliest convenience and a response as to your plans for the PA Advisor

position.

Thank you.

Response: Prior to the enactment of P.L. 106–419, the Veterans’ Health Administration (VHA) had utilized a physician assistant (PA) in a Lead PA function for advice, policy input, and guidance since October 1997. Since 2000, VA has established

and filled the position of PA Advisor on a permanent or acting basis. This position

was and continues to be filled by a field-based PA who advises the Under Secretary

for Health (USH) while also performing clinical duties.

In 2001, the Secretary explained to Senator Jeffords and two fellow Senators the

reasons that VHA believes that the responsibilities of the position would be best fulfilled by a field-based PA position.

The PA Advisor and the PA Field Advisory Group are fully engaged in policy deliberations and are consulted concerning a range of issues. See attached Fact Sheet.

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RESPONSE TO SENATOR JEFFORDS CONCERNING THE PHYSICIAN ASSISTANT ADVISOR

TO THE UNDER SECRETARY

The PA Advisor position has been filled with a field-based PA, with financial support from headquarters for travel, training, and miscellaneous expenses.

Until recently, the position was 50 percent for headquarters duties; based on special projects, the amount of time has been increased to 75 percent for the past several months.

The Veterans’ Health Administration (VHA) has a long-standing practice of obtaining clinical program leadership using field-based clinicians. As VHA explained

in its May 2001 response to a prior Congressional inquiry concerning the PA Advisor position, this approach is not unique to PAs. VHA’s Office of Patient Care Services has a number of clinical program managers working at VA medical facilities

across the country. These include VHA’s Chief Consultant for Spinal Cord Injury,

located in Seattle, Washington; the Director, Podiatry Service, located in Cleveland,

Ohio; the Director, Radiology Service, located in San Francisco, California; the Director, Optometry Service, located in Baltimore, Maryland; and the Director, Infectious Diseases Program Office, located in Cincinnati, Ohio, to name only a few. All

of these clinicians devote half-time to national duties and half-time to local clinical

responsibilities.

VHA believes that utilizing ‘‘hands-on’’ clinical providers as national program

leaders where possible and allowing them to stay in the field provides several distinct advantages. First, clinical leaders maintain active practice, thus maintaining

their clinical skills and current awareness of technology, patient, and treatment

needs, demands, and developments. Second, they are able to approach national policy issues from the perspective of someone on the ‘‘front lines’’ taking care of patients. And third, when recruiting, VHA increases the pool of available candidates

since many well-qualified candidates may not wish to give up clinical work or move

to Washington for exclusively administrative assignments. We believe that these

same advantages accrue to a field-based PA Advisor with an active clinical practice.

Public Law 106–419, which added the Advisor on Physician Assistants to the

Under Secretary for Health’s cadre of national clinical leaders, did not specify a

duty station or how much time the position would be required to spend on PA Advisor duties. The legislative history of Public Law 106–419 would appear to indicate

that the intent of Congress was to allow the position to be based in the field.

PL 106–419 amended 38 U.S.C § 7306 to require that the Office of the Under Secretary for Health include, among other specified positions, ‘‘[t]he Advisor on Physician Assistants, who shall be a physician assistant with appropriate experience and

who shall advise the Under Secretary for Health on all matters relating to the utilization and employment of physician assistants in the Administration.’’ This language is silent as to where the PA Assistant should be stationed and whether his

or her advisory duties may be collateral to other assignments. However, there is

specific legislative history indicating that Congress intended that the PA Advisor

would be primarily assigned to a field facility and would simply travel to Washington to advise the U.S.H on an as-needed basis.

Prior versions of the bill (set forth in HR 4759 and HR 5109) provided that the

Advisor on Physician Assistants ‘‘may have a permanent duty station at a Department medical care facility in reasonable proximity to Washington, DC.’’ The legislative history shows that the version of the language enacted in PL 106–419 was approved as a compromise between HR 5109 and a Senate Veterans’ Affairs Committee (SVAC) bill, S. 1810, which made no specific reference to the PA Advisor’s

duty station. While the compromise language omitted the House bill’s reference to

a permanent duty station other than VACO, Senator Rockefeller—then the Ranking

Member of the SVAC—discussed the PA Advisor’s duty station when he introduced

the final bill on the Senate floor. Sen. Rockefeller’s comments (found at 416 Congo

Rec. S 10500, S10515) make it clear that the PA Advisor position was intended to

be filled by a field-based provider:

Another important provision in this legislation that I am very proud of is the creation of a physician assistant advisory position within the Veterans’ Health Administration (VHA).

The VA Under Secretary for Health will designate a VHA physician assistant to

fill this position and charge that person with advising on all matters regarding the

employment and use of physician assistants within the Veterans’ Health Administration. The advisor may be assigned out in the field with periodical visits as necessary to VHA headquarters for reports, so that they are able to keep in touch both

with physician assistants working all over the country and the VA Under Secretary

for Health in VA Headquarters.

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In the past several months, VHA has increased the percentage of time that the

PA Advisor spends on advisor duties to 75% in order to meet the need to revise two

critical VHA policy documents, one a VHA Directive on the utilization of PAs and

the other VAs PA qualification standard. The Department will reconsider the PA

Advisor position again in the 3rd quarter of FY 2005, with a focus on the justifiable

need for the amount of time allotted to national issues and with due consideration

for reduced personnel ceilings, budgetary constraints and other national priority

issues.

VHA issued a national policy on the utilization of PAs, known as VHA Directive

2004–029: Utilization of PAs, in July 2004. This policy was developed with input

from the PA Advisor, the PA-FAC, other PAs, Primary Care physicians and nurses,

policy decisionmakers in VA Central Office, and other field staff.

VHA has undertaken a comprehensive revision of the qualification standards for

VA PAs, a process that again has involved input into the utilization of PAs from

the PA Advisor, the PA-FAC, and other stakeholders throughout the VA system.

In addition, VHA has established a PA-Field Advisory Committee (PA-FAC),

which had its first face-to-face meeting in Washington, DC, on May 17, 2004. Prior

to that meeting, VHA’s National Director for Primary Care met with officials of the

VA Physician Assistant Association, and the PA-FAC held monthly conference calls

during which various PA issues were discussed at length to obtain input. A member

of the PA-FAC also serves on VHA’s Primary Care-Field Advisory Committee to represent PAs’ interests, and VHA is currently developing PA training which would assist in PAs in their re-certification process.

Regarding the question of funding support for the PA Advisor’s official travel, the

level of funding has been equal to or greater than that provided to other individuals

for the performance of their official duties. The level of support has consistently increased over time to support PA professional activities.

QUESTIONS FOR THE RECORD FROM SENATOR KEN SALAZAR, COMMITTEE ON VETERANS’ AFFAIRS; NOMINATION HEARING OF R. JAMES NICHOLSON TO BE SECRETARY

OF VETERANS AFFAIRS

Question 1: Will you commit to use your best efforts to make the new VA medical

center at Fitzsimons a reality?

Response: VA continues to work on acquiring a site, preferably on the Fitzsimons

site, in close proximity to University of Colorado Hospital and the affiliate to maintain the positive working relationship that has been so successful for all.

Question 2: How will you advocate for sufficient health care funding to meet increasing demand given the historic deficits we face?

Response: The Fiscal Year 2006 Budget will enable VA to continue its mission of

providing high-quality, timely, and compassionate health care to all enrolled veterans who seek care. This budget enables VA to place its greatest emphasis on our

core population of veterans—those with service connected disabilities including returning OIF/OEF veterans; those with low income; and those who have specialized

needs—while asking veterans in Priority Groups 7 and 8 to make limited contributions toward the cost of their care. We believe that these contributions are modest

in light of the comprehensive, high-value, and high-quality care the Department

provides. In addition, this budget includes $700 million in construction to continue

the Department’s commitment to the CARES initiative, $100 million for the Mental

Health Initiative, and $100 million for Prosthetics. In future years, I assure you

that I will be a firm advocate for budgets that allow the Department to meet the

needs of all enrolled veterans who choose to come to VA for their health care.

Question 3: Will you work to lift the outdated and unfair income cap for care of

priority 8 veterans?

Response: I will consult with VA staff to determine the need for continuing this

suspension and/or the need to exercise another enrollment policy to balance demand

with available resources for FY 2005. Equally important is the need to consider the

out-year impact of enrollment decisions in terms of expected resource availability,

expected demand for VA health care services and the potential for growing waiting

lists and waiting times.

Question 4: Do you agree to exercise your authority to end co-pays and duplicative

physicals to permit access to prescription drugs?

Response: Historically, VA medical care has been defined by the provision of comprehensive services for veterans, encompassing care provided across the continuum

of time and care setting. VAs prescription benefit has been designed as an extension

of the care continuum, rather than an ‘‘add-on’’, non-integrated service. As medications have become more costly and/or more difficult for patients to obtain in the priVerDate 03-FEB-2003 10:29 Jun 14, 2005 Jkt 020113 PO 00000 Frm 00078 Fmt 6601 Sfmt 6621 D:\DOCS\20113.TXT SSC1 PsN: SSC1
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vate sector, it is understandable that interest in VA providing a prescription-only

benefit has increased. I am hopeful that the implementation of Medicare Part D

next year will provide an additional option for patients’ medication needs and will

improve access to prescription drugs.

Providing prescriptions to veterans in the absence of comprehensive medical care

is problematic for two primary reasons. First, and most importantly, I believe that

coordination of care by one provider is the cornerstone of high-quality health care.

Without up-to-date information such as a detailed medical history, a complete medication use summary, and other pertinent clinical information as can only be provided by a single Primary Care provider, there is risk that a course of treatment

for an individual patient which is based on incomplete or inaccurate information

could lead to significant negative outcomes. Specifically from a quality of care perspective, providing medication therapy in a fragmented, nonintegrated manner, as

is the norm in much of the U.S. health care system, is conducive to greater medication misadventures. VA has considerable experience to demonstrate that providing

pharmaceuticals as an integrated portion of VAs health care benefit is effective and

efficient from both a qualitative and quantitative perspective.

Second, from an economic perspective, dispensing prescriptions prescribed by nonVA doctors would dramatically increase VAs per capita expenditures for pharmaceuticals and has the potential to divert resources from other medical care programs. VA has maintained unprecedented control over its per prescription unit costs

by using sophisticated formulary management techniques and by assuring that prescriptions written by VA staff are consistent with the goals of the VA formulary

management process. VAs per capita pharmaceutical expenditures are well below

those of most, if not all, managed care organizations in the United States. This fact

is most impressive considering that VA cares for patients that are typically among

the oldest and sickest. Part of the reason for VAs success is the infrastructure in

place to develop and promulgate evidence-based drug treatment guidelines and an

effective National Formulary process. We strongly believe that the quality of care

provided by a comprehensive Primary Care delivery approach, integrated with a

well-managed National Formulary process is vastly superior to the fragmented,

medication therapy model that many Americans access today.

I support VA’s long-standing commitment to provide high quality, cost-effective

and safe healthcare to our Nation’s veterans who choose VA as their healthcare provider. However, based on the reasoning described above, at this time I do not support providing prescriptions to veterans outside of VA’s comprehensive medical care

program.

Question 5: How, specifically will you help reduce claims processing backlog for

disability and compensation claims? There are currently 8,247 claims pending at the

Denver Regional Office.

Response: Improvement of benefits claims processing has been an important goal

of the President. I am aware that much progress has been made both in reducing

the backlog and timeliness—and especially in the reduction of claims that had been

pending from our oldest veterans who had been waiting more than a year for decisions on their claims. Quality levels have also significantly improved.

The changes made included making the regional offices—and the claims processing procedures and supporting IT applications—more consistent and efficient and

improving the training and oversight of the programs. These major changes have

resulted in improvements in production, timeliness, and quality.

While there has been significant success, much remains to be done. VBA has seen

large increases in incoming claims and appeals, both from the returning

servicemembers and from older veterans who had not previously submitted claims.

We will continue to emphasize the improvements necessary to timely provide our

veterans with the benefits they deserve and which the Congress has so generously

made available.

I have been advised that the Denver Regional Office is working hard to reduce

its pending inventory and is making good progress. To assist the office, over 1,000

cases were transferred to other regional offices for processing during the first quarter of this fiscal year. The Denver office also hired eight additional employees in

2004, which was the largest single recruitment in the Veterans’ Benefits Administration’s Western Area.

Question 6: Will you advocate to end concurrent receipt regulations, the ‘‘disabled

veterans tax?’’

Response: Under current statutory authority, concurrent receipt of military retirement pay and veterans’ disability compensation is being phased in over a 10-year

period for retirees disabled to a degree of 50-percent or more, at 10-percent increments each year through 2013. In October, legislation was enacted by Congress and

signed by the President eliminating as of January 1, 2005, the phase-in period for

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concurrent receipt for retirees receiving veterans’ disability compensation for a disability rated 100-percent disabling. It is my understanding that the additional payments veterans receive as a result of concurrent receipt are generally received in

the form of increased military retirement pay, which veterans had previously

waived in order to receive VA disability compensation. Amounts veterans receive

from VA as disability compensation are generally unaffected. Therefore, I would

defer to the views of the Department of Defense on this issue.

Question 7: Funeral costs routinely cost many thousands of dollars. Those veterans who die from illness or injury directly related to their service receive only

$2,000 and the plot allowance for disabled or indigent veterans is only $300. Will

you agree to advocate to increase burial benefits to $3,700 and $1,100 respectively?

Response: I understand that VA provides a full range of burial benefits and services beyond the monetary benefits you mention. All of these are designed to help

defray the cost of burial. Included in these benefits is burial in a national or State

veterans’ cemetery at no cost to the veteran. Additionally, grave liners, headstones

and markers, and in some cases transportation fees to the nearest national cemetery

are available.

I also understand that in addition to these benefits many veterans are entitled

to burial assistance through other federal, State, and local governments, their employers, or fraternal organizations as well as through money they themselves have

set aside for this purpose either through pre-paid burial trusts or in insurance policies. I have learned that the Government has responded to veterans’ burial needs

in recent years by establishing several new national cemeteries and by significantly

enhancing the grant program under which State veterans’ cemeteries are established. The State Cemetery Grants Program now provides up to 100 percent of the

costs of improvements associated with the establishment, expansion, or improvement of a State veterans’ cemetery, as well as the cost of equipment necessary to

operate a new cemetery.

While VA benefits may not cover every expense associated with a burial, I believe

they do represent a comprehensive list of benefits and services available to honor

America’s veterans at the time of death.

Question 8: Will you advocate to readjust mortgage assistance levels to keep pace

with real estate process and inflation?

Response: The amount of guaranty that VA provides on a loan determines the

amount of the loan that a lender will make to a veteran. Lenders will generally

make a no-down payment VA loan for up to four times the amount of the VA guaranty. However, as your question rightly recognizes, the guaranty amount has sometimes become insufficient to permit all veterans to buy the homes of their choice

with their VA home loan benefit.

I am pleased that both the Administration and the Congress have recognized the

problem and recommended and passed legislation that will go a long way toward

alleviating it. As the result of the Veterans’ Benefits Improvement Act of 2004, the

guaranty amount is indexed at 25% of the ‘‘conventional conforming loan limit,’’

which is the limit on loans that can be purchased by Fannie Mae and Freddie Mac.

The conforming loan limit is set annually by Freddie Mac to adjust for inflation and

market conditions. When this limit increases, the VA guaranty will also increase to

25% of the new limit. In practical terms this means that lenders will now make a

VA no-down payment loan for up to the conventional conforming limit, which is currently $359,650.

Question 9: Members of the National Guard and Reserve become eligible for 2

years of health care through the VA after being deployed for more than 180 consecutive days. Given the increased reliance on Guard and Reserve in Iraq (where Guard

and Reserve make up 40% of the troops) and the global war on terrorism, thousands

of soldiers are becoming eligible for VA benefits—at the same time the President

is contemplating freezing funding for VA health care at last year’s level. What will

you do to support this newest generation of VA clients, to ensure a seamless transition from serving overseas to receiving care through the VA, and to guarantee that

these heroes will not return home to waiting lists or doctor shortages?

Response: VA has recognized the importance of seamless transition by opening a

new VHA office dedicated to coordinating this critical issue. VA has been and will

continue to work with DoD to ensure that we collect and share information on veterans serving in Operations Enduring Freedom and Iraqi Freedom. VA is also working with its health care actuary to assess the impact of these veterans on our health

care system and ensuring that we plan for and are prepared to deliver the health

care needed by this newest cohort of veterans. VHA is committed to ensuring its

core constituency receives the services they need and is also closely monitoring access to health care in terms of waiting lists.

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Question 10: The New England Journal of Medicine recently found that as many

as 1-in-6 servicemembers returning from Iraq may suffer from Post Traumatic

Stress Syndrome, but that many servicemembers do not receive mental health care.

What can the VA do to improve mental health care for veterans?

Response: The New England Journal of Medicine article by Dr. Charles Hoge

found that the percentage of study subjects whose responses met the screening criteria for major depression, generalized anxiety, or PTSD was 15.6–17.1% after duty

in Iraq. Of those who screened positive for a mental disorder only 23–40% sought

mental health care. The good news from this study is that 83% of the returning

troops did not meet the screening criteria for mental disorders. The great majority

of them will not suffer long-term consequences of their war zone experience, although many will have some short-term reactions to the horrors of war. Of those

who do develop mental/emotional problems, PTSD will not be the only problem to

be addressed. Major depression and substance abuse are two problems that can be

recognized with screening and successfully treated. VAs approach toward the returning troops and their families is guided by an emphasis on health promotion and

preventive care principles. It focuses on patient and family education about good

health care practices, and behaviors to avoid. It also avoids ‘‘over pathologizing’’ the

veteran. For those who do have mental disorders, the orientation involves the concepts of rehabilitation that address a patient’s strengths as well as deficits. It embodies a belief in recovery of function to the greatest degree possible for each patient. This approach is designed to identify and resolve problems in readjustment

to civilian life, before they progress to problems requiring more intensive clinical

interaction.

Program staff are contacting returned troops including members of the National

Guard & Reserves, and families in forums such as preventive health/educational

briefings that allow for informal sharing of information about stress related disorders and coping mechanisms, and availability of the range of VA psychosocial support services. Other activities such as participation in Public Service Announcements, presentations at community sites such as schools, faith-based and professional organizations, liaison with (Veterans Service Organizations, State Veterans’

Affairs Departments, and Military Unit Organizations), and other innovative approaches relevant to the local community may also be employed. Collaboration with

Readjustment Counseling Service is a key element of these successful interventions.

VA provides comprehensive care for veterans with mental disorders through a

continuum of services designed to meet patients’ changing needs. The intensity of

care ranges from acute in-patient settings, to residential services for those who require structured support prior to returning to the community, to a variety of outpatient services. Outpatient care includes mental health clinics, ‘‘partial hospitalization’’ programs such as day hospitals and day treatment centers that offer care 3–

5 days a week to avert the need for acute or extended in-patient care, and intensive

case management in the community. Long term in-patient or nursing home care is

available if needed. VAs mental health programs include programs designed to meet

the needs of special populations of patients including those with schizophrenia,

major depression, PTSD, and addictive disorders.

VA mental health care is based on two core elements: state-of-the-art

psychopharmacology and evidence-based psychotherapy and psychosocial rehabilitation. Evidence-based practices are outlined in Clinical Practice Guidelines (CPGs),

created jointly with DoD, including CPGs on major depression, serious mental disorders, substance use disorder, and PTSD.

Research in future practices is performed by Clinical research and services delivery entities such as QUERI (Quality Enhancement Research Initiative), ten Mental

Illness Research, Educational and Clinical Centers (MIRECCs), and VA’s National

Center for PTSD.

VA is known as a world leader in PTSD treatment and research, and will continue to deliver state-of-the-art care to veterans with PTSD.

Question 11: According to the National Coalition on Homeless Veterans, as many

as 500,000 veterans spend at least one night a year homeless. They also have circulated that 1-in-4 homeless people in this country is a veteran. What can the VA

do to improve the lot faced by homeless veterans, who according to some estimates

may number as high as 500,000?

Response: VAs efforts to improve the, circumstances faced by homeless veterans

are aimed at enhancing the continuum of services for homeless veterans. This includes: 1) outreach; 2) assistance in securing access to medical and mental health

treatment, including substance abuse treatment; 3) case management; 4) transitional housing; 5) assistance in improving income support; and 6) assistance with

permanent housing.

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To this end, VA intends to offer funding through capital grants to increase the

number of faith-based and community-based transitional housing beds that will be

available for homeless veterans across the country. VAs goal is to provide support

through per diem payments for approximately 10,000 community-based beds by

2009.

VA will continue the 29 Special Needs Grants to allow existing community-based

grant and per diem recipients and their VA medical center partners to enhance

services for special segments of the homeless population to include: (1) chronically

mentally ill, (2) frail elderly, (3) women, including women with children, and (4) terminally ill homeless veterans. VA is committing approximately $30 million across

a 3-year period to support these partnership projects.

VA also intends to expand and augment the Domiciliary Residential Rehabilitation and Treatment Program for Homeless Veterans by activating 7 new programs

and adding staffing to 10 existing programs in FY 2005. With these program activations, VA will have more than 2,100 domiciliary residential rehabilitation beds dedicated to homeless veterans.

VA will continue to work with the Departments of Housing and Urban Development (HUD), Health and Human Services (HHS), and Labor (DOL) in supporting

collaborative initiatives that address the needs of chronically homeless people, including homeless veterans, by providing permanent housing, primary and mental

health care and support services. VA’s contribution to these collaborative projects

includes the provision of case management services for homeless veterans who are

enrolled in these programs. In addition, VA’s Northeast Program Evaluation Center

(NEPEC) is monitoring the programs and conducting a long-term evaluation to determine the effectiveness of this innovative approach.

VA is increasing its efforts of outreach to incarcerated veterans who are at risk

of becoming homeless upon release from jails and prisons. These outreach efforts are

aimed at providing veterans with detailed information about VA services and benefits that are available to them upon release and providing them with contact information for VA staff, staff in other Federal, State, and local government agencies,

and staff in community-based programs so they can access services more easily.

VA will continue to work toward implementation of at least 3 projects to develop

long term transitional housing for homeless veterans under the Loan Guarantee for

Multifamily Transitional Housing for Homeless Veterans Program. Conditional commitment letters issued to date would guarantee loans totaling $9.57 million and

would support approximately 367 transitional housing beds for homeless veterans.

Finally, VA is incorporating performance measures into VA Network Director’s

Performance Plans that focus on homeless veterans’ access to primary care and

mental health treatment. By identifying benchmarks and setting goals for improvement, VA expects to improve homeless veterans’ access to health care services.

QUESTIONS FOR THE RECORD FROM SENATOR JOHN THUNE, SENATE VETERANS’

AFFAIRS COMMITTEE; NOMINATION HEARING OF R. JAMES NICHOLSON TO BE SECRETARY OF VETERANS AFFAIRS

Question: I understand the VA is considering a proposal to standardize testing

equipment made available to veterans suffering with diabetes.

• What data do you have to indicate that quality of care will not be compromised

by switching veterans to different test equipment?

• What will the direct and indirect costs be to transition to a national program?

How will these costs be measured?

• What are the VAs plans for obtaining public input into this program? Has the

VA considered an advisory committee to monitor key aspects of the program including quality of care, access to testing equipment, and overall implementation?

Last year Congress extended the authorization of long term care (e.g. nursing

home, geriatric day care, and home health care, etc.) to veterans with service connected disabilities rated 70% or higher. This is a 1-year extension of the 5 year authority originally provided for in the Veterans’ Millennium Health Care Act of 1999.

Terminating this program could have a negative impact on World War II and Korean Veterans and chronically ill Vietnam Veterans. Will you seek a permanent authorization for long-term health care?

Response: VA has two primary goals connected with standardization of Self Monitoring Blood Glucose (SMBG) equipment. First, we must ensure that veterans with

diabetes receive the best care possible, including using reliable, state-of-the-art

SMBG equipment with which they are comfortable; and second, we must pursue

every opportunity to leverage our volume purchasing power to achieve savings to

support more care for veterans.

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Our initial efforts to implement standardization will be focused on providing new

devices to veterans newly diagnosed with diabetes, to those whose existing equipment fails, as well as those patients who choose to change equipment on their own

accord. Local VA providers will work with veterans who use the current standard

SMBG equipment to offer transition to the new device. As is true with all VHA

standardization efforts, individuals for whom the new device is not appropriate will

be offered alternate SMBG devices. No one will be forced to change devices, and VA

has made a commitment to various stakeholders to allow patients to continue to use

their existing devices after a national award is made. Moreover, we would never

prescribe a device that is not clinically appropriate for the individual patient.

VAs experience with standardization of pharmaceuticals and other medical supplies has shown that we can achieve significant savings to support expanded care

to veterans, while simultaneously maintaining and in some cases, improving outcomes. The annual volume of SMBG strips has increased 70% from 91 million strips

in FY 1999 to 155 million strips for FY 2004; however, the discounts offered by the

vendors using this contract strategy have not significantly changed. The cost per

strip has dropped by only a penny in the last 3 years even though utilization has

increased. Currently VA spends approximately $53 million dollars annually on blood

glucose strips dispensed in the outpatient setting. Based on past standardization efforts however, a conservative estimate of SMBG devices cost avoidance would be in

the range of 15–25% off of the current price. This would represent an $8M to $13M

gross reduction in VAs annual cost for SMBG device strips. If VA were to make an

award for 2 years, with 4 renewal options, the total gross reduction could approach

$64M to $104M.

In September 2003, VA convened a multidisciplinary advisory group consisting of

physicians, nurses, diabetic educators, medical technologists, and pharmacists and

charged the group to review the SMBG medical literature and develop options for

further SMBG standardization. This advisory group is conducting market research

and clinical evaluations in this area, to include identifying direct and indirect transitional costs, and measurement of the same. Once the advisory group completes its

evaluation and VA has had an opportunity to reviews its findings and analyses, VA

officials will be pleased to brief the Committee on the results.

The Veterans’ Health Care, Capital Asset, and Business Improvement Act of

2003, Public Law 108–170, extended the long-term care provisions of the Veterans’

Millennium Health Care and Benefits Act of 1999 (the ‘‘Millennium Act’’, Public

Law 106–117) for a 5-year period ending on December 31, 2008. We believe that

periodic review and reauthorization of this authority by Congress is appropriate.

Section 1710B of title 38, United States Code, directs that the Secretary operate

and maintain a program to provide extended care services to the extent and in the

amount provided in advance in appropriations acts for such purposes. The law specifies that such services shall include geriatric evaluation, nursing home care, domiciliary services, adult day health care, respite care, and such other non-institutional

alternatives to nursing home care as the Secretary may furnish as medical services

under section 1701 (10) of title 38, United States Code.

Section 1710A of title 38, United States Code directs that the Secretary shall provide nursing home care (1) to any veteran who is in need of such care because of

a service-connected disability, and (2) to any veteran who is in need of such care

and who has a service-connected disability rated at 70% or more.

These categories of veterans are commonly termed ‘‘mandatory veterans’’ under

the provisions of the Millennium Act.

Chairman CRAIG. To all of my colleagues, again, let me thank

you for your cooperation and for allowing us to expedite this process, as we have effectively done this morning. I will leave the vote

open for one full day. There are absent Members who might wish

to cast their vote on this most important topic, and without objection of the Committee we will do so.

We will also ask the Ambassador—a variety of our colleagues are

submitting questions, and the timeliness of his responses to those

questions will be very, very important for completing a full record.

Lastly and finally, Mr. Ambassador, let me again congratulate

you on being nominated by the President. We will move as expeditiously as we have and can to get you in place. It is obvious to me

and to you, I think, that there are a good many concerns to be addressed and that we have our colleagues here who are certainly

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going to be active participants with you in making sure they are

effectively addressed and that you, the Administration, and the

Senate and the House combined can work cooperatively together in

a bipartisan way to make that happens.

With that, the hearing will stand——

Senator Jeffords.

Senator JEFFORDS. How do I stand on the vote?

Chairman CRAIG. You have been recorded as having voted aye.

The vote remains open, and we have several of our colleagues

who were absent. We will seek them out to see if they want to vote

before it is closed.

With that, the hearing will stand adjourned.

[Whereupon, at 12:41 p.m., the hearing adjourned]

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APPENDIX

PREPARED STATEMENT OF JAMES B. KING, EXECUTIVE DIRECTOR, AMVETS

Chairman Craig, Ranking Member Akaka and Members of the Committee, it is

a pleasure to submit AMVETS testimony on President George W. Bush’s nomination

of Ambassador R. James ‘‘Jim’’ Nicholson to be the Secretary of the Department of

Veterans Affairs. Thank you for this opportunity and thank you, also, for scheduling

this confirmation hearing as early as you have in the new Congress.

As National Executive Director for AMVETS (American Veterans), I would like

to congratulate you, Senator Craig and Senator Akaka, on being voted by your colleagues, respectively, as Chairman of the Senate Veterans’ Affairs Committee and

Ranking Member. Your prior service on the Committee has been superb. You have

helped charter a course for this Committee that has enabled the Nation to express

its gratitude to the brave men and women who have served in our military forces

and sacrificed so much to preserve our freedoms. I look forward to working with you

in the days ahead.

I would also like to briefly comment on the service of outgoing Secretary Tony

Principi, who has been an outstanding advocate for veterans’ issues, and successfully lead the VA with passion, commitment and dedication.

Secretary Principi has been a true friend to America’s veterans, and we sincerely

appreciate everything he has done on their behalf. He set out to make a positive

difference 4 years ago when he accepted the position, and he has done exactly that.

Secretary Principi has served the veterans community with distinction, and we will

miss him. We wish him well in his future endeavors.

Mr. Chairman, we are certainly mindful of the importance of this high national

office. The Department of Veterans Affairs is the federal government’s second largest department, responsible for a nationwide system of health-care services, benefits

programs and national cemeteries supporting more than twenty-four million veterans. Its role is central to ensuring that our veterans receive critical medical care,

benefits to which they are legally entitled, and lasting remembrance for their selfless sacrifices, patriotism, and unswerving dedication to this Nation whenever

America called.

Over the course of the last several years, AMVETS has witnessed VA health care

shift from an in-patient hospital base to a more comprehensive outpatient care system. Frankly, change in VA health care has been enormously successful and presented veterans with a day and night difference in quality of care. In fact, when

the prestigious New England Journal of Medicine published a 2003 study on the

quality of care, the VA system received the highest rated measures and proved to

be ‘‘significantly better’’ than non-VA care.

Uncertainty about the future direction of VA health care, however, is causing concern to rise. We are hopeful that the next Secretary can improve overall delivery

of veterans’ health care. Despite growth in the VA budget, we watch certain veterans being shut out of the system designed for their care; we see curtailment of

services at clinics and care units across the Nation due to stringent resources; and

we hear some continue to propose budgetary restraint, new fees and higher pharmaceutical co-payments to access the care veterans earned through their military service.

The new nominee will immediately face these matters and many other challenges,

including health care funding shortfalls, access to care, and timely care for veterans

currently enrolled in the system. During President Bush’s first term, the number

of veterans enrolled in VA’s health care network grew from 4 million to 7 million.

Conflicts in Iraq and Afghanistan have produced the highest number of U.S. casualties in two generations and many American soldiers will face a lifetime of injury

from their military service. Given these facts, it is critical that the new nominee

show a willingness to work with the members of this Committee, others in the ConVerDate 03-FEB-2003 10:29 Jun 14, 2005 Jkt 020113 PO 00000 Frm 00085 Fmt 6601 Sfmt 6621 D:\DOCS\20113.TXT SSC1 PsN: SSC1
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gress and in the veterans community to ensure that resources keep pace with a system struggling to care for sick and disabled veterans.

The members of AMVETS staunchly believe the Department of Veterans Affairs

should be led by an individual who understands that freedom is not free; that the

price is too frequently measured in terms of lives lost and citizen soldiers either

physically or psychologically injured for life—men and women whose service to our

Nation left them hurt and too often unable to fully recover from the wounds of their

military service. This leader must be a veterans’ advocate for he and the department

he leads must continue to advance the Nation’s commitment to provide effective,

prompt attention to the well-being of our veterans.

In these terms, AMVETS will work hand-in-hand with President George W.

Bush’s nominee to ensure VA’s mission is met and the promises made to America’s

veterans are kept. We are heartened by the fact Mr. Nicholson is an outstanding

veteran who has displayed a lifelong commitment to and respect for our men and

women in uniform. His prior service as an Army Ranger, decorated Vietnam veteran, businessman, and most recently, as Ambassador to the Vatican, has demonstrated a life of service to his Nation and importantly to the community in which

he lives.

As a successful Colorado businessman, Army Ranger, and ambassador who will

now work, following confirmation, to coordinate policymaking and administration of

the second largest federal department, Jim Nicholson will need to call on all his

skills in the coming weeks when the President’s new budget hits the table.

Clearly in order to meet his pledge to halve the budget deficit, the President will

be looking to freeze some spending and cut burgeoning federal programs. We anticipate a tight budget, but we expect the administration and Congress to work together and recognize the need for a strong defense at home and abroad and a strong

commitment to America’s brave veterans who when called didn’t tell their country

they had other priorities and simply couldn’t answer the call.

In summary, Mr. Chairman, AMVETS supports Jim Nicholson’s nomination as

Secretary of the Department of Veterans Affairs. We believe he is a committed individual who will do his very best to serve America’s veterans and lead a department

of more than 230,000 employees. We urge you and your Committee to forward his

nomination favorably to the full Senate for confirmation.

Chairman Craig, thank you again for providing AMVETS the opportunity to submit testimony concerning the nomination of Jim Nicholson as Secretary of Veterans

Affairs.

We look forward to working with you, Ambassador Nicholson, and others in Congress to resolve the issues facing VA today. As we find ourselves in times that

threaten our very freedom, our Nation must never forget those who ensure that our

freedom endures.

DEPARTMENT OF COLORADO VETERANS OF FOREIGN WARS

OF THE UNITED STATES.

Arvada, CO, January 23, 2005.

Hon. LARRY E. CRAIG, Chairman,

Committee on Veterans’ Affairs, U.S. Senate.

Re: Jim Nicholson, Secretary of Veterans Affairs.

DEAR CHAIRMAN CRAIG, This letter written on behalf of the nearly 30,000 members of the Department of Colorado Veterans of Foreign Wars of the United States,

and its’ Ladles’ Auxiliary, and the nearly 465,000 veterans in our State is in support

of the confirmation of Jim Nicholson to be the next Secretary of Veterans Affairs.

It is not only a great honor for Jim to be nominated by the President, but by this

nomination he has placed his faith in Jim for this most important position.

We in Colorado know of Jim’s long term interest and commitment for veterans

and their families. He will be an outstanding advocate for this Nation’s veterans,

their families, and the armed forces of this great country.

We fully support his nomination, and ask for your Committee’s vote in favor of

his confirmation.

Very truly yours,

DEPARTMENT OF COLORADO, VFW

R.E. ‘‘Bob’’ Clements,

Commander.

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cc: U.S. Senator Wayne Allard, U.S. Senator Ken Salazar, John J. Senk, Jr., Adjutant General, Veterans of Foreign Wars of the United States, Robert Wallace, Executive Director, Washington Office, Veterans of Foreign Wars of the United States.

NATIONAL ASSOCIATION OF HOME BUILDERS,

January 24, 2005.

Hon. LARRY E. CRAIG, Chairman,

Senate Veterans’ Affairs Committee.

DEAR CHAIRMAN CRAIG: On behalf of the 220,000 members of the National Association of Home Builders (NAHB), I would like to express our enthusiastic support

for Ambassador Jim Nicholson as the next Secretary of the Department of Veterans

Affairs. Ambassador Nicholson’s strong background and proven leadership capabilities make him an outstanding choice for this cabinet position.

Ambassador Nicholson’s commitment to his country, defined by his service in our

Nation’s military, will give him the practical experience needed to address the full

range of concerns facing our Nation’s veteran community. Moreover, his leadership

for the past 3 years in his role as the United States Ambassador to the Vatican will

serve him well while overseeing a department of more the 230,000 employees at the

Department of Veterans Affairs.

From a housing perspective, as a former developer, I believe his experience will

guide him as we work together to ensure those who have served our country have

access to affordable housing.

We urge you to confirm Ambassador Nicholson’s nomination as Secretary of Veterans Affairs.

Sincerely,

GERALD HOWARD,

Executive Vice President

and Chief Executive Officer

NATIONAL ASSOCIATION OF REALTORS, AL MANSELL, CRB, PRESIDENT,

January 24, 2005.

Hon. LARRY E. CRAIG, Chairman,

Committee on Veterans’ Affairs, United States Senate.

DEAR MR. CHAIRMAN: On behalf of the more than one million members of the National Association of Realtors, let me first congratulate you upon your election as

Chairman of the Senate Veterans’ Affairs Committee. The National Association of

Realtors looks forward to working with you on a range of housing issues affecting

veterans under the VA Home Loan Guaranty Program.

With this letter the National Association of Realtors is pleased to support the

nomination of Jim Nicholson as Secretary of the U.S. Department of Veterans Affairs. For the past 3 years Mr. Nicholson has served as the U.S. Ambassador to the

Vatican. Prior to this he served as Chairman of the Republican National Committee.

Mr. Nicholson has a distinguished career in the military, having served as an Army

Ranger in Vietnam and graduating from the U.S. Military Academy. He was a practicing attorney and has an extensive background in residential real estate development. His experience in real estate will serve him well as the overseer of the VA

Home Loan Guaranty Program which is an important program to our membership.

The National Association of Realtors represents a wide variety of housing industry professionals committed to the development and preservation of the Nation’s

housing stock and making it available to the widest range of potential homebuyers.

The Association has a long tradition of support for the VA Home Loan Guaranty

Program and has worked diligently with the Department of Veterans Affairs to fashion housing policies that ensure the VA programs meet their mission responsibly

and efficiently.

The VA Home Loan Guaranty Program has made mortgage credit available to

many veterans whose loans otherwise would not have been made. The program has

helped many deserving veterans realize the American dream of owning a home and

the program has had a profound impact on our Nation’s economy and our mortgage

markets. We stand ready to work with Secretary-Nominee Nicholson to address veterans housing issues encompassing his ideas, visions and innovations.

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The National Association of Realtors welcomes the selection of Jim Nicholson as

Secretary of the Department of Veterans Affairs, and we appreciate your grateful

consideration of our endorsement.

Sincerely,

AL MANSELL,

President.

AMERICAN ASSOCIATION OF NURSE ANESTHETISTS,

January 26, 2005.

Senator LARRY E. CRAIG,

Washington, DC 20510.

Senator DANIEL K. AKAKA,

Washington, DC 20510.

DEAR MR. CHAIRMAN AND RANKING MEMBER: On behalf of the more than 33,000

Certified Registered Nurse Anesthetists (CRNAs) including the 530 full time CRNAs

employed in the VA health system, we encourage Members of the Senate to confirm

the President’s nominee for Secretary of Veterans Affairs (VA), Jim Nicholson.

With an Army career that includes 8 years of active duty as an Army Ranger,

medals of distinction for combat in Vietnam, and 22 years in the Reserves, Mr.

Nicholson has been chosen by President Bush to lead this Nation’s Veterans’ health

system. The profession of nurse anesthesia was begun treating America’s soldiers

in the battlefields of the 19th Century, a tradition of care continually improved and

extended through the 21st Century as a substantial proportion of AANA members

have worked to ensure safe anesthesia care to our U.S. Armed Forces and Veterans

past and present. We look forward to working with Mr. Nicholson to promote anesthesia patient safety within our VA facilities, support educational funding for the

VA-DoD nurse anesthesia school in Ft. Sam Houston, Texas, and ensure quality

healthcare to all Veterans. The Administration has been more than gracious in extending us the open door to address issues of concern to ensuring safe and effective

anesthesia care, so that we might together improve healthcare for those men and

women who have served this country honorably in the military. I am sure that Mr.

Nicholson will continue such a relationship.

If we can ever be of service during this process, please feel to contact Frank Purcell, Director of Federal Government Affairs in our Washington, DC office at (202)

484–8400.

Sincerely,

FRANK T. MAZIARSKI, President,

CRNA, MS, LTC, ANC,

American Association of Nurse Anesthetists (AANA).

CAROL M. CRAIG, President,

CRNA, Association of Veterans’ Affairs,

Nurse Anesthetists (AVANA).

NATIONAL VIETNAM & GULF WAR VETERANS COALITION

Hon. LARRY E. CRAIG, CHAIRMAN,

Senate Committee on Veterans’ Affairs,

Re: Hon. Jim Nicholson Secretary-designate, Department of Veterans Affairs.

DEAR MR. CHAIRMAN: The National Vietnam & Gulf War Veterans’ Coalition is

a federation of 98 veterans groups. One of our ten (10) goals is to have qualified

Vietnam and Gulf War veterans appointed to high visibility government positions.

Colonel Jim Nicholson (USA-ret.) is a Vietnam Veteran, a graduate of the United

States Military Academy, and a former U.S. Army Ranger who received the Combat

Infantry Badge and the Bronze Star for service to his country. He knows and understands veterans and the military. It is with this in mind that we are pleased to

strongly endorse and support Jim Nicholson for the position of Secretary of Veterans

Affairs.

My organization and I have previously worked with Jim when he served as Chairman of the National Republican Committee. We were impressed with his availability to listen to our concerns, his fairness with regard to all matters, and his interest in improving the conditions of the men and women who have served in the

Armed Forces of the United States. Jim Nicholson is a man of integrity in whom

we have instilled our confidence and whom we feel will be an effective advocate for

both the Bush Administration and this country’s veterans. We urge you, the Senate

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Committee on Veterans’ Affairs, and the United States Senate to support Colonel

Nicholson.

Respectfully,

JOHN J. MOLLOY, JR.,

Chairman.

ROLLING THUNDER, INC., NATIONAL CHAPTER 1

Neshanic Station, NJ,

January 18, 2005.

Hon. LARRY E. CRAIG, CHAIRMAN,

Senate Committee on Veterans’ Affairs.

DEAR MR. CHAIRMAN: Rolling Thunder, Inc. National, a group of veterans and citizens concerned with all veterans, current and future, wholeheartedly endorse the

Honorable Jim Nicholson for the position of Secretary of Veterans Affairs.

Our organization feels that Colonel Jim Nicholson, a retired Vietnam Veteran,

truly knows and understands veterans and the military. We feel he will listen to

our concerns and will be fair in all matters to improve the conditions of the men

and women who have served and are serving in the Armed Forces of the United

States. We strongly urge you, the Senate Committee on Veterans’ Affairs, and the

United States Senate to support Colonel Nicholson as the next Secretary of Veterans Affairs.

Sincerely,

SGT. ARTIE MULLER,

Founder/National

Executive Director.

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