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96–919PDF 2004

DEPARTMENT OF VETERANS AFFAIRS BUDGET

REQUEST FOR FISCAL YEAR 2005

HEARING

BEFORE THE

COMMITTEE ON VETERANS’ AFFAIRS

HOUSE OF REPRESENTATIVES 

ONE HUNDRED EIGHTH CONGRESS

SECOND SESSION

FEBRUARY 4, 2004

Printed for the use of the Committee on Veterans’ Affairs

Serial No. 108–30

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COMMITTEE ON VETERANS’ AFFAIRS 

CHRISTOPHER H. SMITH, New Jersey, Chairman 

MICHAEL BILIRAKIS, Florida 

TERRY EVERETT, Alabama 

STEPHEN E. BUYER, Indiana 

JACK QUINN, New York 

CLIFF STEARNS, Florida 

JERRY MORAN, Kansas 

RICHARD H. BAKER, Louisiana 

ROB SIMMONS, Connecticut 

HENRY E. BROWN, JR., South Carolina 

JEFF MILLER, Florida 

JOHN BOOZMAN, Arkansas 

JEB BRADLEY, New Hampshire 

BOB BEAUPREZ, Colorado 

GINNY BROWN-WAITE, Florida 

RICK RENZI, Arizona 

TIM MURPHY, Pennsylvania 

LANE EVANS, Illinois 

BOB FILNER, California 

LUIS V. GUTIERREZ, Illinois 

CORRINE BROWN, Florida 

VIC SNYDER, Arkansas 

CIRO D. RODRIGUEZ, Texas 

MICHAEL H. MICHAUD, Maine 

DARLENE HOOLEY, Oregon 

TED STRICKLAND, Ohio 

SHELLEY BERKLEY, Nevada 

TOM UDALL, New Mexico 

SUSAN A. DAVIS, California 

TIM RYAN, Ohio 

STEPHANIE HERSETH, South Dakota

PATRICK E. RYAN, Chief Counsel and Staff Director

(II) 
(III)

C O N T E N T S 

February 4, 2004

Page

Department of Veterans Affairs Budget Request for Fiscal Year 2005 .............. 1

OPENING STATEMENTS 

Chairman Smith ...................................................................................................... 1

Hon. Lane Evans, ranking democratic member, full committee on Veterans’

Affairs .................................................................................................................... 3

Prepared statement of Congressman Evans .................................................. 91

Hon. Steve Buyer, Chairman, Subcommittee on Oversight and Investigations . 18

Hon. Vic Snyder ....................................................................................................... 21

Hon. Bob Beauprez .................................................................................................. 23

Hon. Ciro D. Rodriguez ........................................................................................... 25

Hon. Rick Renzi ....................................................................................................... 26

Hon. Michael H. Michaud ....................................................................................... 28

Prepared statement of Congressman Michaud .............................................. 95

Hon. Darlene Hooley ............................................................................................... 30

Hon. John Boozman ................................................................................................. 31

Hon. Susan A. Davis ................................................................................................ 33

Hon. Rob Simmons, chairman, Subcommittee on Health .................................... 34

Prepared statement of Congressman Simmons ............................................. 93

Hon. Shelley Berkley ............................................................................................... 36

Hon. Ted Strickland ................................................................................................ 40

Hon. Tim Ryan ......................................................................................................... 42

Hon. Tom Udall ....................................................................................................... 43

Prepared statement of Congressman Udall ................................................... 99

Hon. Bob Filner, prepared statement of ................................................................ 104

Hon. Henry E. Brown, Jr., prepared statement of ................................................ 107

Hon. Corrine Brown, prepared statement of ......................................................... 108

Hon. Luis V. Gutierrez, prepared statement of ..................................................... 110

WITNESSES 

Brown, Master Sergeant Morgan, U.S. Air Force (ret.), Legislative Assistant, 

Air Force Sergeants Association and Co-chair, The Military Coalition ........... 73

Prepared statement of The Military Coalition ............................................... 178

Cullinan, Dennis M., National Legislative Director, Veterans of Foreign Wars 52

Prepared statement of Mr. Cullinan ............................................................... 144

Fuller, Richard B., National Legislative Director, Paralyzed Veterans of 

America ................................................................................................................. 48

Prepared statement of Mr. Fuller ................................................................... 128

Gaytan, Peter S., Principal Deputy Director, Veterans’ Affairs and Rehabilitation, The American Legion .................................................................................. 67

Prepared statement of Mr. Gaytan ................................................................. 155

Jones, Richard, National Legislative Director, AMVETS .................................... 50

Prepared statement of Mr. Jones .................................................................... 135

Norton, Colonel Robert F., U.S. Army (ret.), Deputy Director, Government 

Relations, Military Officers Association of America and Co-chair, Veterans 

Committee, The Military Coalition ..................................................................... 71

Prepared statement of The Military Coalition ............................................... 178
Page

IV

Principi, Hon. Anthony J., Secretary, Department of Veterans Affairs; accompanied by Robert H. Roswell, M.D., Under Secretary for Health, Department of Veterans Affairs; Vice Admiral Daniel L. Cooper, U.S. Navy (ret.), 

Under Secretary for Benefits, Department of Veterans Affairs; John W. 

Nicholson, Under Secretary for Memorial Affairs, Department of Veterans 

Affairs; William H. Campbell, Assistant Secretary for Management, Department of Veterans Affairs; and Mark Catlett, Principal Deputy Assistant 

Secretary for Management, Department of Veterans Affairs ........................... 4

Prepared statement of Secretary Principi ...................................................... 111

Schneider, Richard C., National Director, Veterans and State Affairs, NonCommissioned Officer Association ...................................................................... 69

Prepared statement of Mr. Schneider ............................................................. 169

Violante, Joseph A., National Legislative Director, Disabled American Veterans ...................................................................................................................... 47

Prepared statement of Mr. Violante ............................................................... 120

Weidman, Richard F., Director, Government Relations, Vietnam Veterans 

of America ............................................................................................................. 74

Prepared statement of Mr. Weidman ............................................................. 186

MATERIAL SUBMITTED FOR THE RECORD 

Charts: 

‘‘Medical Care Enacted Appropriations Includes Collections’’ ...................... 5

‘‘Health Care Workload’’ .................................................................................. 7

‘‘Medical Care Request Change Over Prior Year’’ ......................................... 9

‘‘VHA Major Projects Request Changes Over Prior Year’’ ............................ 11

‘‘Status of Disability and Pension Benefits Claims’’ ...................................... 14

‘‘Medical Collection Fund’’ ............................................................................... 20

Letter to Congressman Evans dated March 12, 2004, from Air Force Sergeants Association 217

Statements: 

Hon. Richard H. Baker, a Representative in Congress from the State 

of Louisiana ................................................................................................... 102

Mortgage Bankers Association ........................................................................ 195

Written committee questions and their responses: 

Congressman Evans to Department of Veterans Affairs .............................. 197

Congressman Strickland to Department of Veterans Affairs ....................... 210
(1)

DEPARTMENT OF VETERANS AFFAIRS 

BUDGET REQUEST FOR FISCAL YEAR 2005

WEDNESDAY, FEBRUARY 4, 2004

U.S. HOUSE OF REPRESENTATIVES, 

COMMITTEE ON VETERANS’ AFFAIRS, 

Washington, DC 

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

334, Cannon House Office Building, Hon. Christopher Smith (chairman of the committee) presiding. 

Present: Representatives Smith, Evans, Buyer, Snyder, Stearns, 

Rodriguez, Moran, Michaud, Hooley, Simmons, Strickland, Miller, 

Berkley, Boozman, Udall, Bradley, Davis, Beauprez, Ryan, Renzi, 

and Murphy. 

OPENING STATEMENT OF CHAIRMAN SMITH 

The CHAIRMAN. The hearing will come to order, and I’d like to 

wish everybody a good morning. 

This committee has always taken, as all of the members know, 

a very serious approach to its responsibility to recommend necessary funding levels for veterans’ benefits and services. However, 

controversy over matters having nothing to do with veterans funding resulted in unfortunate delays in the normal funding process. 

Fiscal year 2004 began more than 4 months ago, but the Department of Veterans Affairs is only now able to move forward and provide the services which we have provided funding for last October. 

In January, the President signed into law an appropriation 

measure that increased funding for veterans’ medical care by $2.5 

billion over the previous year, a 10 percent increase. A year earlier, 

he also signed a measure which belatedly increased funding by $2.6 

billion for fiscal year 2003. While all of us regret the delay in providing these funds, the bottom line is that more veterans will have 

access to vital health care services as a direct result of that budget. 

An estimated 74 percent of living veterans have used one or 

more of the programs which a grateful nation has provided for 

them. Some think that it’s time to rein in spending on veterans 

programs, that we’ve already done enough for veterans. I strongly 

disagree with those people, because I understand how much these 

programs have done to make our country what it is today. Let’s 

look at what this country might be like if some current veterans 

programs had not been authorized and adequately funded. 

The coffers of this country would be substantially leaner because 

veterans would not have achieved the level of income that the GI 

Bill enabled them to earn. 
2

The middle class in America would be much smaller, and the 

number of persons enrolled in colleges and universities would be 

less than half of what it is today. 

The housing stock in this country would be older, and several 

million houses would not exist. 

Many veterans would have died prematurely or would be experiencing debilitating illness. 

Our medical profession would be less skilled, and life-saving inventions and medicines would not be available. 

The cost of Medicare and other government-sponsored health 

programs would be tens of billions dollars higher than they are 

today. 

This Nation has a long history of taking care of veterans when 

they return from serving their country. Laws providing benefits for 

veterans were some of the first laws enacted by the first Congress. 

We continue that tradition today, not only because veterans deserve the gratitude of the Nation they served, but because it makes 

our Nation stronger and because it makes our Nation safer. 

It is evident that this Congress and this administration have embraced the cause of veterans. Just look at the legislation signed 

into law in the last 3 years: 

We increased the GI Bill education program by 46 percent. 

We authorized more generous health care and pension benefits 

for surviving spouses of those who die of a service-related cause. 

We’ve enacted a comprehensive array of authorities designed to 

end chronic homelessness among our veterans. 

We’ve authorized concurrent receipt of VA disability compensation and military retirement for almost 250,000 veterans. We’ve set 

in motion the largest national cemetery expansion since this program was established during the Civil War. Thanks to the 30 percent funding increase signed into law by President Bush during the 

last 3 years, over one million more veterans are using the VA 

health care system. 

In addition to these major legislative initiatives, which could not 

have been accomplished unless we worked in a bipartisan manner, 

we’ve seen services to veterans become more accessible and timely. 

This is a good record to build on. 

Mr. Secretary, I have heard you quote Oliver Wendell Holmes, so 

let me refer to you one of his best-known quotations: ‘‘The great 

thing in this world is not so much where you stand as in what direction you are moving.’’

The budget for veterans’ benefits and services unveiled on Monday is moving in the right direction. This budget requests almost 

$64.9 billion in appropriations for veterans’ benefits and services. 

And while it certainly doesn’t contain all the funding needed, it 

does request about 96 or 97 percent of what is required to get the 

job done. 

In addition to these are laudable proposals to reduce the financial burden of VA health care for former prisoners of war, terminally ill and low-income veterans. We welcome these proposals and 

the request for funds to pay for them. 

As in the past years, this budget doesn’t cover the full cost of all 

health care which veterans are seeking from the VA, nor does it 

account for any growth in that demand. Thus, Congress will have 
3

to add funds in the budget process, something we have done in 4 

of the past 5 years. Our work begins today. In addition to the Secretary, we have the Veterans Independent Budget to help guide us, 

and as in the past years, it sets an ambitious goal for Congress, 

and we do take that budget very, very seriously. 

I look forward to hearing from the Secretary and all of our very 

distinguished witnesses. I’d like to yield to Mr. Evans. And I would 

just point out to my colleagues, we will hear from the Secretary 

and then go to 5-minute questions. As you know, this committee 

cannot sit when there’s a joint session of Congress. That’s why we 

moved this back a half-hour. Then everyone will be recognized for 

their 5 minutes to make any comments or questions that they 

would like to make. 

I would like to yield to our Ranking Member, Mr. Evans. 

OPENING STATEMENT OF HON. LANE EVANS, RANKING DEMOCRATIC MEMBER, FULL COMMITTEE ON VETERANS’

AFFAIRS 

Mr. EVANS. Thank you, Mr. Chairman. This year’s Bush administration budget proposal for the Department of Veterans Affairs is 

a result of seriously misplaced priorities. I hope you will agree with 

me that a significant portion of the rehashed recommendations proposed should be soundly and quickly rejected. 

I don’t think anyone on this committee will celebrate an increase 

in the veterans’ medical care budget of less than 2 percent. Plus, 

we’ve seen before—and rejected on a bipartisan basis—the administration’s proposals that would increase pharmacy and primary 

care co-payments and establish user fees for veterans. 

The administration requested about a $500 million increase for 

veterans’s medical care, for a total of $27.4 billion, which does not 

include money collected from veterans and their insurers. In sharp 

contrast, without the projected savings from legislative initiatives 

or management efficiencies, the VA would require more than $2 

billion in additional appropriations. The President said that this 

was a ‘‘tough’’ budget, and he wasn’t wrong about that in terms of 

its impact on our veterans. 

In my view, this disappointing budget proposal is another profound example of the need to take the VA’s spending out of the political arena. Nine veterans’ service organizations have made mandatory funding of veterans’ health care their top legislative priority 

this year. 

Mr. Chairman, thank you for holding this timely hearing. I look 

forward to working with you and the veterans’ service organizations and the VA where we can. 

Thank you. 

[The prepared statement of Congressman Evans appears on p. 

91.] 

The CHAIRMAN. I thank my good friend. I’d like to welcome our 

first witness today, our good friend, the Honorable Anthony J. 

Principi, Secretary of Veterans Affairs. I’m sure most people in this 

room know the Secretary’s background. However, for those who 

don’t, here are some highlights of his very distinguished career. 

Prior to his nomination, Mr. Principi was secretary of QTC—

president, I should say—Medical Services, Inc., a group of profes-
4

sional service companies providing independent medical and administrative services and examinations. Before this, he was a senior vice president at Lockheed Martin, and a partner in the San 

Diego law firm of Luce, Forward, Hamilton & Scripps. 

Secretary Principi has worked on national policy issues and has 

held several executive-level positions in Federal Government. He 

chaired the Federal Quality Institute in 1991 and was chairman of 

the Commission on Servicemembers and Veterans transition Assistance established by Congress in 1996. He also has no trouble 

getting around Capitol Hill, having served as chief counsel and 

staff director of both the Senate Armed Services Committee and 

the Veterans’ Affairs Committee. 

A graduate of the U.S. Naval Academy in Annapolis and a combat-decorated Vietnam veteran, Secretary Principi first saw active 

duty aboard the destroyer USS Joseph P. Kennedy. He also commanded a river patrol unit in Vietnam’s Mekong Delta. 

Secretary Principi, you have served our Nation proudly and well, 

and this committee welcomes you. Please proceed as you like. 

STATEMENT OF HON. ANTHONY J. PRINCIPI, SECRETARY, DEPARTMENT OF VETERANS AFFAIRS; ACCOMPANIED BY ROBERT H. ROSWELL, M.D., UNDER SECRETARY FOR HEALTH, 

DEPARTMENT OF VETERANS AFFAIRS; VICE ADMIRAL DANIEL L. COOPER, U.S. NAVY (RET.), UNDER SECRETARY FOR 

BENEFITS, DEPARTMENT OF VETERANS AFFAIRS; JOHN W. 

NICHOLSON, UNDER SECRETARY FOR MEMORIAL AFFAIRS, 

DEPARTMENT OF VETERANS AFFAIRS; WILLIAM H. CAMPBELL, ASSISTANT SECRETARY FOR MANAGEMENT, DEPARTMENT OF VETERANS AFFAIRS; AND MARK CATLETT, PRINCIPAL DEPUTY ASSISTANT SECRETARY FOR MANAGEMENT, 

DEPARTMENT OF VETERANS AFFAIRS 

Secretary PRINCIPI. Thank you, Mr. Chairman, and good morning 

to you and to Mr. Evans and to the members of the committee. It’s 

always a pleasure to appear before you. 

This year and next year, if this budget is approved, 800,000 more 

veterans will receive VA medical care than in 2001, the year I became Secretary of Veterans Affairs. And these veterans are the 

human dividend of a series of increased budgets requested by the 

President, combined with active and successful advocacy in the 

Congress, especially the members of this committee. 

This first chart shows the unprecedented growth in VA’s medical 

care budget, more than 40 percent in health care alone over the 

past 3 years. And on behalf of America’s veterans, I thank the 

members of this committee for your contribution to this significant 

achievement.
5
6

Secretary PRINCIPI. In my view, this is the Golden Age of VA 

health care. Never has quality of care been so good. Never has access been this broad, with close to 700 community-based outpatient 

clinics I’m proud to have built on the successful legacy of my predecessors who moved the VA from a hospital-centric system to a patient-focused system, and we will continue to open more community-based outpatient clinics in the future so that more veterans 

have greater access to our health care system. 

And never before have we treated so many veterans at so many 

locations. This second chart shows the growth in our workload and 

the growth in our workload and the growth in our enrollees over 

a period of time, and certainly since I came into office in 2001, we 

have increased our enrollees by the end of fiscal year 2005 by 2 

million, and over 800,000 veterans, as I have indicated, are now 

the recipients of health care. This could not have been done without the President and without your support.
7
8

Secretary PRINCIPI. For 2005, our total health care budget authority would increase 3.4 percent under the old structure or 4.1 

percent under the new structure, and that does include medical 

care costs recovery collections, either first party co-payments or 

from insurance. That process began in 1998 when the Congress authorized collections to stay with the VA as new resources. And 

since that time, they have been included in our collections. 

I believe that this budget, combined with what we have been 

able to accomplish over the past 3 years in our growth, will allow 

us to sustain the gains we achieved over the last 3 years. 

This next chart shows the medical care request change over prior 

years, and I’m very, very proud that the President has increased 

through his request VA medical care dollars by 27 percent.
9
10

Secretary PRINCIPI. If the President’s request is approved by 

Congress, I believe we will have the resources we need to maintain 

our status as the gold standard of quality care and meet our goal 

of scheduling nonurgent primary care appointments for 93 percent 

of the veterans within 30 days, and 99 percent within 90 days. 

My goal, Dr. Roswell’s goal, our Under Secretary of Health, is to 

eliminate our waiting list in 90 days with a very, very significant 

budget that we received in 2004, albeit late, but I understand and 

appreciate t he difficulties of the appropriation process in Congress, 

but we will use those dollars as best we can in the 7 or 8 months 

remaining in this fiscal year to work down that waiting list and get 

veterans in in a timely manner. 

We will continue to focus on the medical needs of veterans identified by Congress as the highest priority, the service-connected disabled, the lower income who have few other options for health care 

in this country, and those veterans who need our specialized 

services. 

I know that Congress has been very, very concerned about our 

construction budget over the years, and this next chart will show 

that our budget request for 2005 almost more than doubles the construction request from the previous fiscal year. This will allow us 

to improve our facilities, to modernize our facilities, soon to be 

identified through the CARES process.
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Secretary PRINCIPI. In addition, it is my intent to use the author- ity granted by you and apply up to $400 million of the 2004 medical care appropriation to the CARES projects. We will see how 

things go this spring in terms of waiting lists, in terms of meeting 

our staffing needs and looking at our spend rate to determine how 

much of that $400 million we can use for new construction, modernization of our health care facilities. 

What that means is a total of almost a billion dollars in 2004 and 

2005 to transform VA’s medical facilities into a 21st century health 

care system. 

Perhaps most importantly, the budget will fund high quality care 

for veterans returning to our shores from overseas conflicts. Of the 

approximately 90,000 active duty servicemembers who served in 

Iraq and have been discharged, we have seen about 12 percent of 

them in our VA medical centers, about 9,700. Of the 15,000 who 

served in Afghanistan in Enduring Freedom and have been discharged, approximately 1,400 have come to the VA. 

We are engaged in a major outreach activity to contact them, to 

make sure that they know of their benefits. I will be sending a letter to just about all 90,000 of those young men and women to let 

them know about this program. And we’ve started putting out a 

brochure, Operation Iraqi Freedom, which explains in detail the 

benefits they’ve earned by their service to America in this time of 

war. 

There is no question, however, that we still have great challenges 

in the VA, and we are responding to those challenges in many different ways, and certainly policy initiatives are one way. 

First, we emphasize our commitment to the highest priority vet- erans by asking Congress to raise the income threshold to $16,500 

from $9,800 for exempting low income veterans from pharmacy copayments. This would impact about 500,000, almost 500,000 low 

income veterans who currently have to make pharmacy co-payments, and lift that burden from their shoulders. We’re talking 

about the poorest of the poor. 

We also ask that you eliminate all co-payments for former POWs. 

Propose to eliminate co-payments for hospice care. When veterans 

are in a contract hospice program and are paying co-payments, we 

want to stop that process. And in those cases where our patients 

must make co-payments to their health insurers for non-VA emergent care in emergency rooms in the private sector, we want the 

authority to reimburse those veterans the co-payments that they 

must make to their insurers. 

At the same time, we also ask Congress to approve both an increase in pharmacy co-payments and a very modest annual fee totaling less than $21 a month, a very small proportion of the cost 

of care for higher income nondisabled veterans using our system. 

This is not an enrollment fee. It would be an annual fee collected 

only from veterans actually receiving care in our system and could 

be paid on a monthly or an annual basis, depending on the needs 

of the veterans. 

I would just like to point out that for many, many years, the 

Congress has required enlisted personnel—petty officers, staff sergeants, tech sergeants, who served 20 years or more on active duty, 

probably in one war, maybe two wars—when they retire, with a 
13

very, very low retirement income, they must pay $254 a year to be 

enrolled in the TRICARE program, TRICARE Prime program. And 

when they reach 65, they must make $600 in payments to Medicare to HHS. I don’t think it’s unreasonable to ask someone who 

may have served only one hitch, has no disabilities from military 

service, and has an income higher than these retired enlisted persons, to make a very small monthly payment once they use it. And 

it’s not to enroll in a program, but rather when they use it. 

I believe that we can meet some of our challenges on our own. 

For example, I approved the recommendation from my Under Secretary, Dr. Roswell, to address regional funding imbalances by including all veterans—Category 7 veterans, Category 8 veterans— using our system and our resource allocation model. This will ensure those networks, those areas of the country that have a disproportionate share of higher income veterans, are counted in the 

allocation process so that they can meet the needs of those 

veterans. 

In addition to improving access to health care, the President directed me to bring the benefits processing system under control. 

And with your help, we have made substantial progress. This next 

chart shows that by the end of this past fiscal year, we brought the 

backlog of disability claims down from 432,000 to 253,000. It has 

gone back up since then because of a court case that made us hold 

onto claims for up to a year to give the veteran the opportunity to 

add additional evidence. Congress has fixed that problem for us. 

We believe the court misinterpreted the law you passed, and I believe that we’re going to be able to get that workload back down 

to my goal of 250,000.
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15

Secretary PRINCIPI. I’m also proud that the number of veterans 

receiving service-connected disability compensation is projected to 

increase to 2.6 million, up from 2.3 million in 2001. That’s 300,000 

addition, notwithstanding the fact that unfortunately many of our 

veterans, World War II and Korea, Vietnam, are passing on, men 

and women with service-connected disabilities, and we are proposing a $2.8 billion increase, almost a $2.8 billion increase to fund 

this improvement in the disability comp program. 

I think that’s come about because we’re bringing down the backlog, we’re making decision, and we’re serving service-connected veterans who have been exposed to herbicides and contract diabetes 

or other forms, other diseases. 

VA is not only health care and benefits, but as the chairman indicated, the President’s budget request will continue the greatest 

expansion of the National Cemetery system since the Civil War. 

We have opened one new cemetery. We have five close to completion. We will open up another six by the year 2009. That will expand our gravesite capacity by 85 percent, almost double our National Cemetery system’s gravesite capacity over the next 5 or 6 

years. And I thank you for your support in that area. 

That concludes my statement. I’m sorry for running over, Mr. 

Chairman. I’d be more than happy to answer any questions you 

might have. 

[The prepared statement of Secretary Principi appears on p. 111.] 

The CHAIRMAN. Thank you very much, Mr. Secretary. If you 

wouldn’t mind just briefly introducing your distinguished panel. 

Secretary PRINCIPI. I’m sorry, sir? 

The CHAIRMAN. If you wouldn’t mind introducing your distinguished panel. 

Secretary PRINCIPI. I’d be happy to. To my far left is General 

Jack Nicholson, our Under Secretary of Memorial Affairs. Admiral 

Dan Cooper, our Under Secretary of Benefits. Mark Catlett, our 

Principal Deputy Assistant Secretary for Management. Dr. Bob 

Roswell, our Under Secretary of Health, and William Campbell, our 

Assistant Secretary for Management. 

The CHAIRMAN. Thank you very much, Mr. Secretary. Let me 

just say to Mr. Nicholson, I understand your brother, Jim Nicholson, who is our U.S. Ambassador to the Vatican, with whom I was 

with recently and has worked very effectively on the human trafficking issue and other human rights issues, it’s his birthday today, 

so if you could convey to him my and many of our congratulations. 

Mr. NICHOLSON. Can I tell him you mentioned that? 

The CHAIRMAN. Please do. He’s doing an extraordinarily good job, 

and especially in the area of human trafficking, sex trafficking, 

which the Vatican and our government and other interested countries have made a major difference in, and I’ve worked that issue 

for years, so I want to thank him for that. 

Mr. Secretary, let me just say, it has been my privilege to serve 

on this committee for 24 years, and I would note and remind my 

colleagues that every year from President Reagan, President Bush, 

the previous Bush, Bill Clinton for 8 years and now President Bush 

again, we’ve received a budget that never quite got to where we 

wanted it to be as members of Congress, and I say that in a bipartisan way. 
16

We’ve received that budget as a starting point. We’re working 

with the administration, a work in progress, working with the appropriators. We have thankfully been able to ratchet up that budget, particularly in the medical care area, in a calm and deliberative 

way. And then at the end of the day, as we saw with the signing 

of the most recent appropriations omnibus bill, we get to at least 

within the ballpark of where we want to be. And I will predict that 

this year, this will be a starting point, as I said in my opening, this 

is 96, 97 percent of where we want to be, but it’s not there. 

So we will work, I give you and my colleagues the assurance, we 

will try to increase it in the area of medical care, because there are 

some veterans who will not get the kind of care that they need if 

we don’t make those efforts. So I would just throw that out for just 

a historical perspective. Every budget, with no exception over the 

last 24 years, has been at the opening stages where we want to be, 

and we look forward to working with you to get hopefully where 

veterans will be well served in total. 

I just wanted to ask you, 2 weeks ago when the President signed the omnibus bill increasing by $1.2 billion approximately than was 

requested from Congress just a year ago, this came, as you know, 

after a very vigorous debate. There were strong convictions. It was 

bipartisan, and thankfully we were able to prevail. I noticed in the budget, though, that $800 million of those funds 

may be carried over to the following year. Could you explain that 

for us? 

Secretary PRINCIPI. Certainly, Mr. Chairman. This is the second 

year, unfortunately, that we received our appropriation some 4 

months late. And there’s no directive, I can assure you, to hold 

back on spending appropriated dollars and carrying them over for 

the next fiscal year. I want our people to use the dollars, of course 

to use them widely and no year-end binge spending. These are taxpayer dollars. 

But last year, because we received the appropriation late, in Feb- ruary again, we carried over some $770 million to this year. And 

our appropriation that year wasn’t as high as this year. So I anticipate that we will carry over $800 million, maybe even more than 

that, into the next fiscal year. But that’s just an assumption based 

upon getting the appropriation in February and not October. If it’s 

all spent this year, and spent wisely and making sure that veterans get health care, that’s absolutely fine, and modernizing 

equipment, that’s fine. But I think that’s a safe assumption. 

The CHAIRMAN. It appears to me that the $250 enrollment fee or 

whatever else we might want to call it, and the pharmacy co-payment hike as proposed in the budget for 7 and 8’s, would discourage its use. Can you explain that? I mean, last year when we 

looked at this, and the VA’s own forecasting model suggested a 

number of veterans would decide or opt to go elsewhere. That concerns many of us. You know, there are already co-payments for 

acute care beds, and there are already co-payments, modest as they 

are, for outpatient services. This additional fee—you broke it up 

month by month, which obviously makes it appear to be less, 

but——

Secretary PRINCIPI. It may discourage some use, Mr. Chairman, 

for veterans in 7 and 8 who have other options. I don’t believe it’s 
17

going to discourage anybody from using the VA health care system 

who has no other options. 

I remember not too long ago seeing a memo from some health administrator at one of America’s largest corporations urging the corporation to send a memo around to all of the employees, 50,000 employees who were veterans, urging them to abandon the corporation’s health care system and go over to VA and get their pharmaceuticals. Maybe they wouldn’t abandon their corporation’s health 

care system. 

So, yes, you might have a little bit of that. But I sincerely believe 

that it’s so modest that those with the higher income—I’m not saying they’re wealthy by any stretch of the imagination—would still 

get a wonderful health care benefit at a very, very small, small 

cost. 

The CHAIRMAN. I see my time is up. Mr. Evans. 

Mr. EVANS. Mr. Secretary, we appreciate your joining us this 

morning. We applaud you for your work that you do. But how 

would you characterize the fiscal year 2005 budget request? Is it 

a good budget request for the VA? 

Secretary PRINCIPI. I would characterize the 2004 request as a 

very, very good request, and I applaud the Congress for their assistance in this committee with the appropriation process. So I 

think it was a very, very good request. I’m very proud of it. 

You know, sure, I’ve never come before this committee and misrepresented the truth. I’ve always said that, you know, we need additional resources to meet this surging demand for health care 

brought on by open enrollment and a great benefit and quality and 

more and more outpatient clinics. 

But I feel that we have done extremely well. Not me, I mean, 

both the executive branch and this committee and the Congress 

working together. It’s not ideal, but we’ve come a long way, as I’ve 

indicated with these charts. And a million veterans getting more 

care since 2001 I think is an extraordinary accomplishment, and it 

would not have happened without the dedicated people in VHA and 

the work of the President and this committee and the Congress. 

Mr. EVANS. When we look at the resources that are available to 

fund the VA’s obligations for fiscal year 2005, it appears that you will be approximately $2 billion short if your proposed legislation 

is not enacted. Is this correct? 

Secretary PRINCIPI. Well, if the proposals are not enacted, as I 

indicated last year, we would fall short, and it would entail, you 

know, longer waiting lines or, you know, maybe a more difficult enrollment decision or additional resources. Those are the options 

that would be before us. But, you know, I’m counting on those policy proposals to help us generate some revenues so that we can expand the reach of health care. And the beauty is that you let us 

keep those resources and use them to benefit veterans. 

Mr. EVANS. I want to make sure you’re very clear about my feelings and concerns that you raised. And I appreciate it. We’ve 

worked together in the past. But just one more question here, and 

that is, did your request to OMB include full funding of the VA for 

that $2 billion? Did you talk to OMB about that? 

Secretary PRINCIPI. I asked OMB for $1.2 billion more than I 

received. 
18

Mr. EVANS. Okay. Thank you, Mr. Chairman. 

The CHAIRMAN. Chairman Buyer. 

OPENING STATEMENT OF HON. STEVE BUYER, CHAIRMAN, 

SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS 

Mr. BUYER. Thank you, Mr. Secretary. I support your firm commitment to continue a focus on veterans in the highest statutory 

priority groups. I believe that providing the timely, high quality 

health care to VA’s core constituency, the veterans with serviceconnected disabilities, those with lower incomes as you spoke of, 

and veterans with special health care needs, such as those with 

spinal cord injuries, loss of vision, I think you’ve got the right 

focus. 

Congress chose, back when we did eligibility reform back in 

1996, to ignore the warnings of the surge by GAO and CBO. We 

ignored those warnings and we sided with the testimony of the veterans service organizations. This committee and the VSOs had it 

wrong. The surge came. 

And now what’s happening is even some of the testimony that 

was provided by CBO, they warned us in the future Congresses you 

would see this type of politics that we’re seeing today of you coming 

and people then bashing and measuring compassion by the dollar; 

oh, you’re not giving us enough, when in fact we here in Congress 

have created this problem which you are having to manage. So we 

here are at fault for this. 

And I just want you to know, Mr. Secretary, I intend to explore 

those testimonies by the VSOs and also bring them to account. We 

can’t have people just come and testify and then we have this problem later on, and to think that this creation of a system for veterans that is now without shame, whereby veterans of whom are 

non-service-connected can just push our service-connected disabled 

veterans out of the way and leap ahead of them, I think this is 

wrong. So I want to applaud you, Mr. Secretary, for focusing on the 

core competencies here. 

Secondly, I also recognize that you inherited a large backlog in 

claims. I applaud you for the 40 percent reduction in claims over 

the last 3-year time period. I also recognize your modified budget 

account structure. I like it. Keep it up. I think it’s helpful to us as 

we examine the budget, and I suppose all the years I did with DOD 

budgeting, I like that. And transparency and seamlessness, and it 

permits us to examine. I think it also permits some more precise 

accountability of where the money is going. So I just wanted to 

share that with you. 

I also thank you for establishing the benefits delivery discharge 

program. When you set that up at the 136 military bases around 

the country, I believe it was to ensure a more seamless and timely 

transition of our active duty and reserve component men and 

women when they separate from active duty. It’s been long overdue, and it’s a great program. We’ve been watching what you’re 

doing, and we’re getting feedback. And I just want to applaud you 

for that. 

You also finally have brought about measurable performance outcomes in the department’s what I would classify as the undisciplined billion dollar information technology programs. And I hope 
19

your newly confirmed CIO continues to provide strong oversight of 

your IT programs and not let the decade-old project, VETSNETs 

and the CoreFLS project to continue to be funded without requiring 

a measurement of improvement. So I solicit your comments on your 

IT. 

Also with regard to the significant dent in your third-party 

claims processing, you have some great expectations that you’ve 

laid out in this budget, and I would welcome your comment as to 

whether or not you can realistically meet them. 

And last, I’d like your comment on whether you are pleased with 

the progress or lack of progress in the DOD-VA sharing initiatives, 

and will continue to monitor both of the departments’ commitment 

to the President’s mandate. I do recognize, Dr. Roswell, that you 

have an ongoing discussion with General Webb out at Tripler, and 

Mr. Secretary, it’s dumbfounding that we can have state of the art 

equipment at Tripler and you can throw a paper airplane from Tripler to the VA, yet in radiology where we run filmless x ray, that 

those two systems can’t talk and communicate to each other. 

So the more we get ahead and get on with it with DOD sharing, 

even in the purchasing of equipment, let’s be smart about our business. I’d welcome your comment. 

Secretary PRINCIPI. Well, I have a chart on medical care cost recovery, if you could please just bring that one up. Again, of course, 

we have increased collections, because we have more veterans 

being treated, and then we had an increase several years ago from 

$2 to $7 in pharmacy co-payments, but I think we’ve done a much, 

much better job over the past few years increasing the collections. 

Again, those dollars stay with the VA, which is the beauty of the 

whole thing, and there’s a real incentive to do well in this area.
20
21

Secretary PRINCIPI. So I believe that with the new systems coming on line, like patient financial services system and some of the 

electronic software applications and insurance verification and 

identification and accounts receivable, we’ll be able to continue to 

improve our collections from insurance companies. But, of course, 

as you know, Medicare is the biggest insurer in the Nation, and 

they’re off bounds to the VA, as well as many of the HMOs, that 

we have much difficulty collecting from them because they refuse 

to do so. And your support in that area, especially with the HMOs 

and the IPOs, whatever they’re called, would be very, very helpful. 

I’ll ask Dr. Roswell to talk about the radiology issue. 

Dr. ROSWELL. Thank you, Mr. Buyer, Mr. Chairman. We are very 

pleased with the level of sharing between the VA and DOD. As the 

Secretary mentioned in his opening comments, we now have an exchange of information including the receipt of lists of persons who 

have been discharged following service in Operation Enduring 

Freedom and Operation Iraqi Freedom. That has allowed us to do 

the needed directed outreach to make sure that those men and 

women have seamless health care, and we’re very pleased to be 

able to do that. 

With regard to the situation at Tripler, certainly the commitment 

that both the Department of Defense and the Department of Veterans Affairs have made to go to a data repository architecture to 

mount electronic medical records by the end of fiscal year 2005 will 

allow the sharing of digital imaging, including digital radiographs, 

at that location, and we’re very pleased with the progress that 

we’ve made within VA towards the data repository architecture 

with the electronic medical record, and certainly hope that similar 

progress is being made within DOD. 

The CHAIRMAN. Dr. Snyder. 

OPENING STATEMENT OF HON. VIC SNYDER 

Dr. SNYDER. Thank you, Mr. Chairman. Welcome, Mr. Secretary 

and gentlemen. Mr. Secretary, I think that medical inflation is running around 8 percent now, something in that range, nationally, 

and I know it’s hard to compare your system. Your medical care 

budget is a 4.1 percent increase. You’ve talked about the problems 

with surging demand, but it’s not just the surging demand of increased numbers, it’s also the problem of increased costs. 

I appreciate your candor in telling us that your request to OMB 

was $1.2 billion more than this budget, which means in my view 

that this budget is $1.2 billion short perhaps. But if I add on the 

$1.2 billion, that gets me to 8.39 percent right at medical inflation. 

And all those charts are great about showing increased bar graphs, 

but they don’t take into account the problems of medical inflation. 

I don’t think that’s a very fair comparison for the American public 

to make. But I appreciate your candor in telling us that you are 

aiming to get to that percent increase. 

A specific item—any comments you want to make about it are 

fine—but a specific item I would like you to spend some time on, 

and I don’t know what happened if you made your request, you 

were told you were going to be $1.2 billion short, and then you had 

to go back to your budget and look for ways to find that, but your 

research budget is a $50 million cut, your research, medical re-
22

search budget, is a $50 million cut. And that is—and fortunately, 

we see that in other places in the budget, not in your budget, the 

DOT, the basic research budget is a cut, an actual cut in dollars. 

This is not keeping up with inflation. This is a cut in dollars, and 

that’s real money. And would you tell us what your thinking was 

on the cut in the—— Secretary PRINCIPI. Yes, sir. If I can just address very quickly the 

medical inflation issue. We’re not subjected, although obviously we 

do have medical inflation, we’re not subjected to the same medical 

inflation that the private sector. Of course, 60 percent of our budget is payroll, and we’re capped. 

Of course, we have a physician recruitment and retention problem which we hope that the Congress will work with us on this 

year, as well as our pharmacy. We’ve done a great job, as you 

know, in keeping our pharmacy costs under control. 

On the research, yes, we’ve seen a slight cut in the research 

budget. However, I believe that’s more than offset by much more 

aggressive effort to attract research dollars from NIH. And I believe that the number of grants we’re getting—perhaps Dr. Roswell 

can comment on it—will more than offset the appropriation reduction but will increase the dollars actually coming to the VA in 

grants from NIH. 

Dr. ROSWELL. Thank you, Mr. Secretary and Dr. Snyder. The 

fiscal year 2005 budget request does combine the indirect research 

support with research support. And you’re correct about the 

reduction. 

It was our hope that we would offset that by being able to cap- ture NIH indirect funding for over $600 million in NIH-funded research that’s taking place within the Department of Veterans Affairs, and yet we’re one of a very small number of agencies who 

aren’t able to capture the indirect cost of research. 

Were we able to capture that NIH indirect cost for NIH funds, 

funding research in VA medical centers by VA investigators, serving the needs of veterans, then the offset in our appropriation 

would be more than made up, and we would certainly welcome 

your support to that end. 

Dr. SNYDER. Well, the problem is, is that the NIH budget has its 

own pressures. It surely is subject to the medical inflation rate, because most of their business is with institutions out there that are 

nongovernmental. The Department of Defense basic research budget is cut. 

I mean, I don’t think this is the best way to do government is 

to say we’re counting on another agency getting a robust increase 

to give us money to make up for the fact that we cut the research 

line by $50 million. I think one of the folks made some comments 

about your budget being budgetary gimmicks and smoke and mirrors, and I think it kind of laid it out for you. But I consider this 

last comment a bit of budgetary gimmickry and smoke and mirrors. 

The bottom line is, you all are cutting back on medical research 

and you’re counting on getting money from another federal agency 

that may well not happen. And I think it’s like the canary in the 

mine, you know. This is like the seed corn for the future. We’ve got 

a lot of veterans out there that are dealing with a lot of ailments. 

They want the ailment to go away. They don’t want to come to the 
23

VA hospital. They want to be able to see this stuff go away and 

be prevented and get the kind of treatments 10 and 15 and 20 and 

25 and 30 years from now that—you know what I’m talking about. 

Secretary PRINCIPI. Absolutely. 

Dr. SNYDER. And the VA has always been one of the most significant players in research in this country, and on certain illnesses, 

is the number one leader in the world on research in certain areas. 

Hepatitis C, prosthetics. And we’re cutting that. 

And I think that, Mr. Chairman, I would encourage us to pay 

very close attention to this research number, because I think it’s 

got some ominous—it’s not as sexy as a lot of this other stuff, but 

it’s got some ominous consequences for our long-term commitment—long-term commitment—to veterans’ health care. 

Secretary PRINCIPI. Dr. Snyder, I just want you to know that I 

feel very much like you do. We fought very, very hard for the research dollars. OMB, of course, they have pressures and it doesn’t 

make any difference who is in office, but we fought very hard. 

The CHAIRMAN. Mr. Beauprez. 

Mr. BEAUPREZ. Thank you, Mr. Chairman. Mr. Secretary, good to 

see you. I understand the budget constraints that you must be 

under, I suppose every agency is under. 

If you could in the few minutes we’ve got explore with me some 

of the efficiencies that you might have seen in drafting this budget, 

some of your expectations. I recall last year a lengthy discussion 

about your—about pharmaceuticals and savings that you hoped to 

realize there. Are there any significant efficiencies that maybe you 

see coming this year? 

Secretary PRINCIPI. Well, we’re proposing an efficiency rate of 1.5 

percent, which I think is very, very small compared to the private 

sector, what we’re seeing in productivity improvements in this 

country of ours because of technology, and so we’re probably less 

than half of what’s happening. 

And indeed, I think the vast investment that you have made in 

us in information technology is allowing us to do things smarter 

and better. 

You know, I just previewed a new software application that we 

brought online. We call it our capital asset management system, 

that allows us to track every lease we have, and believe me, we 

have thousands of leases. And by tying into the GSA databank, we 

know which leases we’re paying more than market value and which 

ones are less. So we can now go out and renegotiate leases and 

make those kinds of efficiencies improvements. 

Our medical care cost recovery has become much more efficient 

as we’ve consolidated some of that and brought on new technologies 

to help us collect money from insurance companies. 

DOD sharing. I can’t say enough about DOD sharing. In some 

areas, it doesn’t always work where we have a great population 

growth. But we need to do more together. We need to purchase together, procure equipment, procure pharmaceuticals, medical/surgical supplies. 

Standardization. I’ve preached to my people to go national contracting and standardization to drive down the costs. We don’t need 

to buy 15 different types of certain pieces of equipment. We can 

standardize that and discount it 10 or 20 percent. And when you 
24

procure $7 billion worth of goods and services, you know, you can 

cut off 5 percent or maybe a little bit more, you can save a lot of 

dollars. And we need to do more of that, and we are. But it’s a 

struggle to change cultures and the habits of how people have done 

things in the past. 

Mr. BEAUPREZ. Well, I bring it up probably because of a conversation at breakfast this morning with a manufacturer, a machine tool company in my own district, who’s got a contract with 

DOD, Navy specifically, and he said through their design and efficiency process, begin a very small business, what used to cost $100 

now costs $55. It basically cut the cost in half. 

And I don’t want to make work for you all, but I would suggest 

that it might be beneficial for members of this committee to understand more fully some of the efficiencies that you can achieve as 

you go forward. 

Let me pursue another line, if I might, and just throw in a comment as well. The cost recovery issue you all know is important to 

me. I’ve sponsored some legislation to assist in that. I hope we can 

find a solution in it. I would also second Dr. Snyder’s concern about 

research wherever it comes from, I hope we’re continuing our 

research. 

But long-term care. I notice a comment in one of the briefs that 

we have that you are continuing to look at closing some beds, and 

that of course raises alarms, but I also see comments about the 

changing nature of long-term care, more in-home hospice. Could 

you comment a little bit on where the VA sees that going? 

Secretary PRINCIPI. Yes. We are in fact trying to do more in noninstitutional care, by instituting programs and making sure we 

have uniformity across the country to allow veterans to reside in 

their homes for as long as possible. 

We believe that technology and better care management allows 

veterans to stay home, combined with respite care, adult day care, 

home-based primary care, you know, adult day care. So we believe 

that we can reach and help many more veterans if we can shift 

some of our focus into the noninstitutional care setting. 

But at the same, I know of the interest of this committee in 

maintaining a level of VA nursing home beds. And we are doing 

that. But we would like to see the community nursing home beds 

that we contract for, that allows veterans to reside in nursing home 

beds closer to their home, as well as the state homes that we have 

funded at an increased level, we are proposing that those be included in the definition of nursing home beds, and we think it’s 

more adequate and more balanced. 

Mr. BEAUPREZ. Thank you, Mr. Chairman. 

The CHAIRMAN. If the gentleman would yield just briefly before 

going to Mr. Rodriguez, just to amplify or to underscore how important this committee does see the nursing home, long-term nursing 

home issue, we had a hearing just a few days ago on that. Dr. 

Roswell knows it well. And there is strong bipartisan support for 

not decreasing but actually increasing the whole mix, including 

those beds that are provided on the federal level. So I just wanted 

to make that point. Mr. Rodriguez. 
25

OPENING STATEMENT OF HON. CIRO D. RODRIGUEZ 

Mr. RODRIGUEZ. Thank you, Mr. Chairman. And by the way, Mr. 

Chairman, I did listen to your comments regarding the need to continue to work on this budget. And, Mr. Secretary, I also listened 

to you, the fact that you had requested that additional $1.2 billion 

that was needed. 

The bottom line is the President’s budget raises health care costs 

for over 500,000 veterans, imposes new co-payments and enrollment fees that will cost veterans approximately $2 billion over a 

5-year period, according to the data. And in fact, over 5 years, the 

budget for the veterans health care program is $13.5 billion below 

the amount needed to maintain services for current levels. 

Mr. Chairman, I know that last year we worked together on increasing I know with yourself and Mr. Evans and others are making sure we would increase the budget, and I would hope that we 

do the same this time around. I just cannot believe that the administration would do this and continue to do that, and we’ve had difficulties in increasing that. And I saw the charts. But the reality 

is, even with the increased number—even with the increased number, Mr. Secretary, and you’ve done a tremendous job on a variety 

of areas, including the backlog, as well as the numbers, the fact is 

that we have 25 million veterans out there. 

And, yes, we’ve known, both during the Clinton administration 

and during the Bush administration, both Republicans and Democrats, we have failed to basically respond to the needs of our veterans, and we’ve known those numbers, both Democrats and Republicans. And there’s a real need for us to come forward. 

We’re in war right now, and this is shameful for us—it should 

be shameful for both Republicans and for Democrats, that we cannot come up with the resources that are needed for our veterans. 

And the reality is, the fact is that we are addressing less than 4.7 

percent of our veterans that are out there in need. 

And so we have a situation where almost 81 percent of our veterans are not even being serviced by the administration, Veterans 

Administration. And so based on the figures, if there’s over 25 million, we’ve got less than 4.7 of them, you know, there’s a large 

number out there. And we know the demographics, and we’ve 

known them in previous administrations also. 

And so, Mr. Chairman, I would hope that as we look at these 

numbers that we battle away together as we did the last time and 

try to come back. But I cannot believe that the administration 

would come back forward once again and begin to dialogue about 

some of the same issues that we had some concerns last year, and 

that was on the co-payments that we agreed that, you know, we 

were against and that we were not wanting to touch on those 

issues and that we needed some additional resources. 

Right now as far as I know, we still have some young people 

coming back from Iraq, from Afghanistan, that are coming back, 

some with serious illnesses. We went to Walter Reed. We see these 

young people coming back. 

I’m told also that it appears that the VA has added some 500 

million for medical care, an increase of less than 2 percent; an increase of less than 2 percent. That 4 percent that’s being talked 

about, I presume is the co-payments that are being added to that 
26

over the next—so it’s less than 2 percent increase. And I know Dr. 

Roswell has talked about the need for 13 to 14 percent overall in 

terms of just to keep up with existing programs, just to keep up 

with existing services. 

And as we get the reports from the President’s advisory task 

force on care, we know the disparity that exists between regions in 

areas in states throughout this country. The fact that we have certain areas in South Texas that to this day do not get the services 

that they should be getting because of the fact that they’re not 

there. And I know we’re working hard to try to meet those needs. 

But, you know, if nothing else, both Democrats and Republicans 

ought to look at this. 

This is an election year, and this budget, in all honesty, is embarrassing. And I’m glad to hear, Mr. Secretary, that you asked at least for an additional $1.2 billion, and I’m glad to hear the chairman say that this is not satisfactory, at least that’s what I gather 

that you were saying, that we need to do more. And I’m hoping 

that we buckle down and get some resources in this area, because 

this is something that we should not tolerate. 

And I’ve said this under Democratic administrations and I continue to say it under the Republican administration. The fact is 

that we’ve got to come to grips with this. This is unacceptable, and 

we’ve got to make some changes. And we can show all kinds of figures about increasing numbers. But the demographics show we’re 

probably still disproportionately responding to the need because of 

the need that’s out there. 

And so we can say, yes, we’ve made some inroads, but we’re not 

there yet, Mr. Secretary. 

The CHAIRMAN. Thank you. Mr. Renzi. 

OPENING STATEMENT OF HON. RICK RENZI 

Mr. RENZI. Thank you, Mr. Chairman. Mr. Secretary, thank you. 

It’s good to see you this morning. I don’t know always that you get 

the commendation that you deserve for your leadership and your 

service. I’m grateful for it. I think you speak with humility today 

in your stewardship role as you describe to a lot of the colleagues 

here the economies of scale that you’ve been able to find. 

I think you put together a great team. I commend you for it. I 

want to look into the budget and ask you, as I go through and 

looked, and I know last year when we got together, we spoke about 

a little bit of a judicial activism that we saw with the courts as it 

relates to the case involving Allen v. Principi with the alcohol, not 

the treatment of the alcohol or drug abuse, but the compensation 

of alcohol and drug abuse. 

I had a chance to go out to Prescott, where you have at the new 

Bob Stump Veterans Hospital out there, one of the finest detox centers in America, compared to anything. Arizona has a lot of detox 

centers. In talking with some of the addicts out there, and the addictions that they are struggling with, they don’t want the compensation. You talk to these guys and these gals coming out of addiction, and they’re not looking for another subsidy, another handout. They’re looking to pull themselves up by their own bootstraps. 

I wanted to give you a chance to expand upon if we’re able to 

get some sense into the courts, if we’re able to pull back from this, 
27

not the obligation we have to treat, certainly not to treat, but to 

compensate, the kind of savings and efficiencies you would see 

there, please. 

Secretary PRINCIPI. Well, it’s my understanding in the past we 

have proposed legislation that would prohibit payment of disability 

compensation to those who use alcohol or drugs. I think that was 

turned down. 

I believe the focus should be on rehabilitation. The veterans who, 

for whatever reason, have a substance abuse problem, the VA 

should have its doors open to address that issue, as well as other 

behavioral conditions that would lead to homelessness. I think 

that’s the most compassionate way to address this problem. 

So, you know, I’m just maybe a little too traditional. I’ve never 

believed that a disability compensation program was intended to 

compensate people for substance abuse problems. We have a responsibility to help cure them so that they don’t become homeless, 

and devote our resources there. 

I know veterans do have PTSD and they may turn to alcohol and 

substance abuse, and we should compensate for them for the 

PTSD. But I don’t believe they should be compensated for the substance abuse. That’s just a personal philosophy of mine. But I want 

to help them. 

Mr. RENZI. I’m with you. 

Secretary PRINCIPI. And we have added so much money to our 

homeless program. We’re going to have 10,000 beds, the grant and 

per diem program. We’re increasing funding from 175 million to 

188 million in 2005. I think the VA is the leading integrated provider of homeless services in this Nation. And we still have too 

many homeless veterans, but I think we’re making great progress, 

and it’s because of the dedicated employees in VA. 

Mr. RENZI. Sure. I wanted to give you a chance to expand on 

maybe the numbers that you think we could save, the efficiencies 

that could be found if we were able to roll it back. 

Secretary PRINCIPI. $2.8 billion that we compensate for substance 

abuse. 

Mr. RENZI. $2.8 billion. 

Secretary PRINCIPI. Sorry. Over 10 years. 

Mr. RENZI. I’m with you. But when we talk about shifting monies 

this year and we get down to arguing together and debating, we 

do have an ability within the system to find major amounts of monies that we can shift over into medical and true care. 

Lastly, I want to talk to you about, within the budget, the line 

item that you have for education, reaching out to our veterans, 

educating them on some of the programs that are available to 

them, I want to put a commercial in for a piece of legislation that 

we passed on a bipartisan basis that affects our disabled American 

veterans, allowing them to use their Montgomery GI Bill, not only 

to go to school and take entrepreneurship classes, but to develop 

small businesses. If it wasn’t for Mr. Rockefeller on the Senate 

side, we would have had a much limited piece of legislation that 

allows sole-source only to veterans, disabled American veterans 

within the business that they’re conducting with Veterans’ Affairs. 

We now have expanded that to include DOD, Homeland Security. 

I would ask your vision of educating the disabled American veteran 
28

so that they now know that they have this program available, that 

they can go out and develop a small business and do sole-source 

contracting with the government. 

Thanks, Mr. Secretary. 

Secretary PRINCIPI. Yes. I couldn’t agree more. I think the legislation that was enacted into law that now allows us to do more 

with disabled veterans in small business ownership is a long overdue step in the right direction. 

I think everything we can do to outreach to disabled veterans 

who are interested in pursuing their own business, help them get 

started, set aside some contracts for them, some small business 

contracts, I think it’s a very, very important step. 

The CHAIRMAN. Mr. Michaud. 

OPENING STATEMENT OF HON. MICHAEL H. MICHAUD 

Mr. MICHAUD. Thank you, Mr. Chairman. Good morning, Mr. 

Secretary. I appreciate your candor this morning and honesty, but 

I must say that I am very disappointed that we ask our military 

personnel to risk their lives around the world and the administration has presented us with a budget which fails to adequately provide the benefits and services earned by the men and women who 

wear the uniform as well as the budget does not even include the 

cost of the war in Iraq as it relates to veterans’ services. 

[The prepared statement of Congressman Michaud appears on p. 

95.] 

Mr. MICHAUD. I have four questions. The first one is can you explain why the administration is proposing to cut benefits for approximately 50,000 veterans per year who uses VA’s home loan 

program at a cost of $91 million over the 10-year period? 

Second question is, I understand you’re pleased with what the 

DOD is doing as far as sharing information. Are they sharing 

enough information with you, and do you feel that you are able to 

effectively plan to provide care for our military personnel as they 

return from Iraq and Afghanistan? 

The third question is, like you, I do believe that improving management efficiencies is extremely important. This budget, like previous budgets, has used management efficiencies to cover costs for 

the sake of improving management efficiencies of the management. 

Do you have itemized data to show where the VA actually has 

saved money in previous fiscal years? 

And my last question is, there is a severe threat concerning VA 

state homes, and we had a hearing just last week. States are being 

compelled to seek VA’s per diem payments as a veterans thirdparty liability and offset them against Medicaid payments to the 

homes. We were told last week by the National Association of State 

Veteran Homes that this approach may have a profound effect on 

their future operations and even cause some of these homes actually to close their doors. Does the VA have a position on this? 

Secretary PRINCIPI. I’d just start out, I think we may disagree on 

the budget. I appreciate your position and am certainly not trying 

to be argumentative. 

I’m very proud of our track record over the past 4 years, and I 

think—and our work with Congress to have a 40 percent increase 

in health care alone, which perhaps maybe after World War II, 
29

there was a big plus-up in the VA, but I think in modern history, 

the VA health care system has never seen such an increase that 

I know of. And I could be wrong, but I think we should be very, 

very proud of that, and I’m very proud of the President. That 40 

percent breaks down to 27 percent based upon the President’s request and the Congress added 13 percent to the President’s request 

over the past 3 years. 

Mr. MICHAUD. But, Mr. Secretary, may I interrupt? I appreciate 

those numbers. I’ve been in the legislature in Maine for 22 years, 

and I can appreciate how you can manipulate numbers. The bottom 

line is, veterans are not being taken care of today. And you can use 

these increases. 

The budget has been inadequately funded over a number of 

years, number one. Number two, with the cost of inflation, it definitely has caused a huge burden on the effect. 

Number three, when you look at the economics in this country, 

in the State of Maine, we’ve had labor market areas with over 38 

percent unemployment. And there are a lot of these veterans who 

lost their health care because of the private industry who had been 

subsidizing the VA, taking care of benefits for the veterans, and 

they need their help now. 

So there is a huge need out there. When I look at whether or not 

we’re taking care of our veterans, I look at are they receiving the 

services. 

I can appreciate using these numbers to try to justify it, and I 

appreciate all that you’ve done for the VA, and I know that you 

have to, you know, work for this administration, and I appreciate 

your additional money. Hopefully we’ll be able to get that increase 

in there. But don’t try to say that they’re being take care of, because they’re not because the real dollar figure is definitely not up 

there. 

Secretary PRINCIPI. I understand. I’d like to—certainly you raised 

a very important issue about the home loan program. There’s economic assumptions when that proposal came up that showed a cost 

savings. It now shows a cost over 10 years of $91 million, and I 

think that really needs to be looked at, and I’m sure the committee 

will look at it very, very carefully. 

I was very insistent that if there was going to be any change that 

active duty military personnel be exempt, because they move 

around all the time and can’t built up equity in their homes. So 

that active duty military personnel should be able to use that benefit as many times as they need to while they’re on active duty, but 

that after you become a veteran, to take advantage of it one time 

to build up equity, so that you can buy your home and put the 20 

percent down. But again, the economic assumptions have changed. 

And then there was another question. I think we’re making great 

progress. We’re not there yet, Congressman, on DOD-VA sharing, 

to make sure that we have seamless transition for our active duty 

personnel coming back from war, and to go into the VA health care 

system. But as Dr. Roswell said, by the end of 2005, we should 

have this bi-directional data sharing in place, but I do think we 

really made this a very high priority and am proud of the steps 

we’ve taken so far. 

The CHAIRMAN. Ms. Hooley. 
30

OPENING STATEMENT OF HON. DARLENE HOOLEY 

Ms. HOOLEY. Thank you, Mr. Chair. Thank you, Mr. Principi, for 

being here and for the job you do. Thank you for coming to Oregon. 

Our veterans have made personal sacrifices, and one of the things 

we said to them, they won’t have to worry about health care. I 

don’t think when they come back from battle they should have to 

worry about health care. 

The President’s budget falls about $2 billion short of what is 

needed to provide adequate health care to our Nation’s veterans. In 

fact, over the next 5 years, it will be over $13 billion below the 

amount needed to maintain services at the current level. 

The needs of our veterans are not being met. Funding for medical care per veteran has steadily declined in constant dollars over 

the last decade, while the number of veterans seeking health care 

has increased. 

In Portland VA, we have a waiting list of about a thousand veterans who want to see a primary care physician. We have something like 700 to 800 veterans each month trying to get into the 

health care system. It takes them over a year to get to see a primary care physician. Health care costs are going up. 

I mean, when you talk about a 2 percent increase, a 3 percent 

increase, the fact is under Medicare health costs are going up 8 

percent. I’ve talked to people who run hospitals, insurance programs, they’re talking 8—15, 14, 15 percent increases, and this 

budget doesn’t keep up with the increase in health care costs. 

One woman recently wrote me and she said, we got to the hospital about 3:00 p.m. and we were in the emergency room. I don’t 

know why they were in the emergency room. They got there at 

three o’clock in the afternoon. They waited until almost 12:30 a.m., 

9 hours, and there were still people ahead of them, and so they finally left. 

So my question is, what are we going to do about people—and 

this isn’t the only story I’ve heard about people waiting that long 

in emergency care. In fact, a woman who works for VA just this 

weekend told me that somebody had broken their toe and they 

were in the—they were waiting for, I don’t know, again, 9 or 10 

hours, and she was a mental health worker, and the person was 

fairly agitated, and she spent a lot of time trying to calm the person down. 

So how are we going to fix that? 

Secretary PRINCIPI. It’s a real challenge. You know, I think we 

need to keep in perspective that prior to 1998, only about 2.9 million veterans had eligibility for the full continuum of VA health 

care. And Congress made the decision to open the door to all 25 

million veterans, and it dramatically changed the face of the VA, 

to go from 3 million one year, and the next day you have 25 million 

who can go to outpatient clinics. 

And, you know, I wasn’t here then, but Congress must have envisioned that not all veterans would be able to get care, because they 

established—you established a priority scheme with seven, now 

eight different priority levels, and then you put in the law that the 

Secretary had to make an annual enrollment decision, quote, 

‘‘based upon the extent resources are made available to you in appropriation acts.’’
31

If it was intended that all 25 million would come, there would 

be no need for priority levels. There would be no need for enrollment decisions. I think there was an understanding that we may 

not be able to do that. 

And obviously when I came here, demand and budgets were just 

totally out of sync. And we were just growing, and veterans were 

being placed on waiting lists. Like, you know, you can enroll, but 

you’re not going to see a doctor for 6 months or a year. I mean, 

what kind of health care system is that? 

So we started to struggle to bring down the waiting list, and it’s 

been difficult, but we’re getting there. We’re doing that through increased resources that the President and you have given us. We’re 

doing it through advanced health access by incorporating new initiatives, building more outpatient clinics, hiring more doctors. So 

now we’re down to 30,000, but it’s still too many. And we’re still 

enrolling veterans at an unprecedented rate. 

So it is a challenge. 

Ms. HOOLEY. And yet we said to veterans——

Secretary PRINCIPI. I can’t disagree with you. 

Ms. HOOLEY. Right. But we said to veterans, if you’re going to 

serve in the military, if you’re going to put your life on the line, 

then we’re going to serve you and we’re going to provide health 

care, and we’ve got to figure out a way to do this. And again, we’re 

not going to do it with an increase of 2 percent or 3 percent or 5 

percent when you talk about health care costs going up and you 

talk about enrollment going up. 

Secretary PRINCIPI. I’d agree with you. 

Ms. HOOLEY. And it’s huge. 

Secretary PRINCIPI. You know, there is no higher priority for me 

than the kids—the kids—the young men and women in Iraq and 

Afghanistan. I mean, I’ve had two sons there at the same time. I 

feel deeply about this. This is very personal to me, and we have 

to be there. We have care coordinators now in every hospital. We 

have full time staff up at Walter Reed and Bethesda Naval Hospital to make sure none of these young heroes fall through the 

cracks. 

And I can assure you—I can assure you that we will do everything in our power to make sure that if they need health care, if 

they need prosthetics for lost limbs, we’re going to give them the 

best. And that’s just the way it has to be. There should be no higher priority than the disabled men and women who serve this country in uniform. And to the extent we can take care of many more 

people, wonderful. But we’ve got to remember who, you know, to 

care for him who shall have borne the battle were Lincoln’s words 

that are on the cornerstone of my building, who have borne the 

battle. They’re our highest priority in my view. 

The CHAIRMAN. The chair recognizes Mr. Boozman. 

OPENING STATEMENT OF HON. JOHN BOOZMAN 

Mr. BOOZMAN. Yes. First of all, I really do want to thank you and 

your staff, Mr. Secretary. I know that nobody—you’ve got a tremendously difficult job in dealing with this, but I believe with all my 

heart that you and your staff care about veterans as much as any-
32

body in this committee or anyplace. So we really do appreciate your 

hard work. 

A couple of things. You mentioned earlier about the co-pay with 

the HMOs, you know, and different entities and trying to get that 

money. Is the problem—do we have the legislation in place to get 

that done, or is it a matter of enforcement, or is it a matter of coding, or what do we need to do different to help you out in that 

respect? 

Secretary PRINCIPI. Maybe Dr. Roswell can answer more technically. We just have been very, very unsuccessful in collecting 

from HMOs the cost of the care. Private insurers, you know, employer insurance we do pretty well, but HMOs, and I think we need 

legislative help to require HMOs to reimburse us a reasonable level 

for the cost of the care that we provide to those who have paid premiums for health care in an HMO. 

Mr. BOOZMAN. Right. 

Secretary PRINCIPI. And those dollars could stay with the VA so 

that we can do as Congresswoman Hooley and Michaud asked us 

to do is to provide more health care, and I think that’s a component 

of the authority you’ve given us, but we’re struggling. 

But it’s also coding. We have internal problems. You know, getting our doctors to document what they do and then code properly 

and then send out that bill. I think we’re doing better in those 

areas, but we could use help. 

Mr. BOOZMAN. Well, I know you’re working on that. But you do 

then feel like legislation is needed to beef the thing up where we’ve 

got some penalties or whatever, some enforcement mechanism to 

actually to get them to come through. 

The other thing is, we mentioned, you know, about the seamless 

transition as far as from the DOD to VA. How about as far—you 

know, we, as a committee as a Congress, we’ve tried to encourage 

the DOD to cooperate better with us as far as facilities, you know, 

health care facilities and just some equipment sharing, you know, 

in that area. How is that coming? 

Secretary PRINCIPI. I think it’s much better today. Bob, you may 

want to answer. We have a joint economic council. We have a joint 

strategic plan, and we’re committed to it, but there are a lot of cultural and institutional barriers to really breaking down the walls 

completely. But I do think we’re light years ahead of where we 

were after Vietnam, maybe even after Persian Gulf I. 

My predecessor has made some great strides. I think we’re continuing to make strides, but there’s just more that needs to be 

done. 

Dr. ROSWELL. I would point out that in the Capital Asset Realignment to Enhance Services process, the CARES process, DOD 

was an active participant. Over 80 joint ventures were considered 

in the formulation of the regional and national CARES plan. A 

number of those were identified as priorities in the draft national 

plan, and we certainly hope that they will be in the recommendations that the CARES Commission presents to the Secretary in the 

next week or two. 

Mr. BOOZMAN. Okay. Thank you. 

The CHAIRMAN. The chair recognizes Ms. Davis. 
33

OPENING STATEMENT OF HON. SUSAN A. DAVIS 

Mrs. DAVIS. Thank you, Mr. Chairman. Welcome, Mr. Secretary, 

good to see you, and thank you for your commitment in San Diego 

as well. 

I wonder if I could ask a few questions about our help for our 

veterans who either have post-traumatic stress from other situations or certainly from the war in Iraq and Afghanistan. How much 

of this budget—we talked about long-term care last week and the 

questions that we all have, not just in the general population, but 

of course for our vets in trying to have the research available and 

to treat really our problems with mental illness today—how much 

of this budget is directed at that out of the medical dollars, if that 

number is available? 

I’m looking for the increases. What do we expect to see as a result of particularly Iraq and Afghanistan, and does this budget 

really reflect that? What would be our best guess on that? 

Secretary PRINCIPI. Well, we have proposed to increase our budget for PTSD alone from $167 million to $181 million, and the number of patients will grow from 59,000 to almost 64,000 2004 to 

2005, so there is an increase in the level of care for PTSD. 

But you know, it seems to me, and I should let Dr. Roswell comment, all of these conditions are intertwined. You know, they have 

PTSD, they may have substance abuse problems. They’re probably 

homeless in many cases, and they have mental health issues that 

need to be addressed. So I think it’s a matter of trying to address 

all of those underlying concerns. 

Dr. ROSWELL. I appreciate the question. It’s more than just dollars. It’s a cultural workforce sensitivity towards the needs. We 

have been fortunate that we haven’t yet seen a huge number of 

cases of PTSD in the men and women who’ve served in OIF and 

OEF. 

But I think that some of the world class research this committee 

alluded to earlier shows that as support systems weaken, as readjustment issues are encountered, as some of the fanfare dies down 

and people face going back to work, dealing with a spouse or a 

child who is not doing well in the school after the servicemember’s 

absence, that’s when PTSD becomes a problem. 

So we’re taking this hiatus, if you will, to focus our educational 

efforts, making sure that there’s heightened staff awareness, making sure that we’re using new clinical practice guidelines developed 

in concert with DOD, making sure that our staff are aware. We’re 

working with our readjustment counseling service as well as our 

mental health services to make sure that we have the sensitivity 

and the preparation to recognize PTSD at its earliest manifestation 

so that we can treat it definitively. 

Mrs. DAVIS. I appreciate the new interest in trying to track and 

alert people to the services that are available, but I would like you 

to think about, you know, realistically, are those gains enough? 

Should we putting more of our efforts up front? 

I’ve been to just far too many stand downs in San Diego, and, 

you know, it really is based largely on the kinds of care, the services that were not available to these people when they really needed them. And so if we can take a realistic look at that, that may 
34

be an area that we need to shift some resources as those needs become available and obvious. I appreciate that. 

I know that we have dealt with the long-term care issue, the fact 

that there would be fewer beds available. We’re making some assumptions I think that a lot of the veterans can be served at home 

perhaps with additional supplementary care. That may be an assumption that doesn’t work for this population, and we probably 

need to be taking another look at that as well. 

Mr. Secretary, I wonder if you could respond. Of the issues that you have tried to address of the $1.2 billion that you would have 

liked to have seen in this budget, would you share with us, what 

part of this budget gives you the greatest amount of concern? 

Secretary PRINCIPI. Well, there are a lot of things I’d like to do, 

Congresswoman Davis, to address the needs of veterans, to take 

care of more veterans if possible, you know. I grapple with the 

issue of the Category 8 veterans and should that door be opened 

again? If so, when? We still have a waiting list. 

So, you know, again, I’m very proud of what’s been done by people of the VA with your support, the President’s support, but I, you 

know, I—veterans live in—veterans are not as kind of a segmented 

group of people. We’re Americans. And, you know, terrorism is an 

issue for us and our families and the war and the economy and 

jobs, and, you know, taxes. All of these things impact the veteran 

community, because we are ordinary Americans. Some have done 

better than others. They scaled the walls of Normandy, came home 

and built modern America. And they faced the same challenges 

that all of us, that all Americans face. 

And so I want to be mindful to do everything I possibly can to 

advocate for veterans programs but also to remember that education for our children is important, et cetera, et cetera. And so 

there are priorities that you, the Members of the Congress and the 

President, have to determine how do we divide all of this up. And 

it’s a very difficult process. But I think that we have got it—we 

have done very, very well over the past 3 years. 

The CHAIRMAN. Chairman Rob Simmons. 

OPENING STATEMENT OF HON. ROB SIMMONS, CHAIRMAN, 

SUBCOMMITTEE ON HEALTH 

Mr. SIMMONS. Thank you, Mr. Chairman. Thank you, Secretary 

Principi. Let me just say for the record that you and I both served 

together in Vietnam, albeit you were in the Navy. I’ll forgive you 

for that, I suppose. But we also served together on the Senate side 

as Senate staffers back in the eighties, and it’s been a great pleasure for me over the last year or so to serve as chairman of the 

Health Subcommittee and to work with you and your fine staff to 

try to come up with better solutions for the health care of our veterans, better solutions. 

Now there are some good things in this proposal, and I have 

been through the proposal and I’m happy to see some of the good 

stuff. I’m happy to see that former prisoners of war will no longer 

have to do co-payments if they’re in a hospice program. I mean, 

gosh, almighty. It’s a small thing, but it sends a powerful message. 

And I’m glad that we’re increasing support for our homeless assistance programs because my experience—you said veterans are 
35

Americans. They are. I’m a veteran. I’m an American. If I’m sick 

and if I can get treatment at home, that’s what I’d prefer, to going 

to an institutionalized setting. And so I think that’s good and I 

think that’s worked very well around the country. 

Waiting lists for access. You know, we have heard all the horror 

stories. When the new VA principal for Connecticut was installed 

9 months ago, I said I want you to bring the waiting list down. Our 

waiting lists in Connecticut are under 30 days. That wasn’t done 

with passing a law. That wasn’t done with more money. That was 

done by setting a challenge out to the people that administer the 

programs and say 90 days plus is too much. Let’s see what you can 

do. And they brought it down to under 30 days, which is about 

what it takes me to get into my private care physician, which is 

kind of amazing. 

CARES process. I think the fact that we’re going forward with 

funding certain projects now because we see the need is really important. And I think that’s a real plus. 

Third-party claims. Huge. I want to expand it. I want to do more 

there. 

That being said, the chairman and I did go to the administration 

to OMB over the break, and we did lobby heavily for more dollars 

for veterans, and we I suspect were not successful. But then, that’s 

the beauty of our process and that’s the beauty of our system. The 

President has proposed it. It’s for us to dispose of it, and that 

means we conduct hearings, which we will, we make changes. 

That’s the way the system works, and that’s the way I think we 

should work. 

[The prepared statement of Congressman Simmons appears on p. 

93.] 

Mr. SIMMONS. And with that in mind, Mr. Secretary, my first 

question goes to the issue of the $1.2 billion. In anticipation of committee or subcommittee hearings on this budget, will you provide 

us with what was requested and denied in that $1.2 billion and in 

a timely fashion so we can take a look at it before we go into our 

hearing process this spring? 

Secretary PRINCIPI. We’ll provide that information. 

Mr. SIMMONS. I appreciate that. Secondly, the chart is pretty 

clear. Cumulative increases since FY 1996, 61 percent in funding. 

That’s your medical care appropriation. In most circumstances, 

that’s an awesome figure. I mean, it’s an awesome figure, except 

the unique VA patient load has gone up almost 76 percent. 

And, you know, that’s the ugly reality. As Mr. Buyer has pointed 

out very clearly, 1996, the Congress changed the rules of the game. 

Unfortunately, when we changed the rules of the game, we didn’t 

fund it. We failed to fund it. That’s not your fault. That’s our fault. 

That’s what we have to address. 

So my second question goes to the issue of pharmacy benefits. I 

feel that pharmacy benefits are a huge issue for many veterans 

who would like to access pharmacy, would like to capture the savings of VA pharmacy, but for one reason or another are not able 

to access the system, and that includes priority 7 and 8’s. Could 

you explain to me what you are proposing in the pharmacy area, 

and would you also explain for the record how your pilot program 

on pharmacy has worked? I believe you announced it last summer. 
36

Secretary PRINCIPI. The pilot program I thought went very, very 

well. We provided pharmaceuticals to I believe it was about almost 

8,000 veterans who had private sector physicians and only wanted 

the pharmaceutical benefit, in an effort to help those who are waiting a long time to see doctors just to get prescriptions filled, we did 

the pilot. I thought it worked very well. 

I’m hesitant to expand it right now. You know, I believe that 

what we need to do is get veterans in, get them seen in a timely 

manner, provide them with their pharmaceuticals. But a prescription only benefit program would have serious implications for the 

VA if we just became a—filled prescriptions. And I would imagine 

the costs would skyrocket because of that segment of the population who would just come to the VA just for script only. 

But it’s something that we continually explore, Mr. Simmons, 

and will continue to do so with you. 

Mr. SIMMONS. I appreciate that. I know my time has run out. My 

guess is that if we could provide veterans with a pharmacy benefit 

in a timely fashion, we would not see them waiting for 12 hours 

in the emergency room, because the prescription drugs would regulate their chronic condition, which would enhance their health. 

But I appreciate your testimony. We look forward to working 

with you and your staff and the VSOs in the spring to dispose of 

this budget that has been proposed to us. Thank you. 

The CHAIRMAN. Thank you, Chairman Simmons. Ms. Berkley. 

OPENING STATEMENT OF HON. SHELLEY BERKLEY 

Ms. BERKLEY. Thank you, Mr. Chairman, and happy birthday, 

Mr. Nicholson. It’s a pleasure to have you here on such a special 

day of your life. 

Mr. Principi, Secretary Principi, and Dr. Roswell, it’s always a 

pleasure to see you. I can’t tell you how much I appreciate all your 

efforts on behalf of the community that I represent trying to help 

me in my efforts to provide the veterans that live in the Las Vegas 

Valley with a full scale medical complex. 

By your own estimates, as you are well aware, the prediction is 

that the number of annual visits by veterans in the Las Vegas Valley to their primary care clinic will rise from the 200,000 that currently exist to a half a million in 2010. That is a mere 6 years from 

now. And as you are well aware, right now the veteran population 

in Las Vegas is continuing to explode, and the VA officials in 

southern Nevada are diligently trying to meet their health care 

needs with no clinics, no hospital and no long-term care facility. It 

is quite a chore for them to do that. 

I met with Mr. Hemple this past week, and as you know, he’ll 

be retiring in March, and I will have a new VA district director in 

March. This will be the third one in the 5 years that I’ve been serving, and I’m hoping that this one will last a little longer. I suspect 

there’s a little burnout, because the chore that they’ve been tasked 

with in the Las Vegas Valley is probably more than anybody can 

actually handle and do successfully. 

Veterans in southern Nevada and across the country are counting on the CARES plan to provide the necessary VA facilities. The 

President has requested $524 million to begin implementing recommendations associated with the CARES plan, which includes of 
37

course a full service VA medical complex in Las Vegas. My concern 

is when the CARES Commission submits a final plan, the concern 

is that the proposed resources for the VA construction programs 

will not be enough to begin this process. 

As the CARES blueprint is finalized, I am looking forward to 

working with you to deliver on our mutual promises made to the 

200,000 veterans in southern Nevada. Can you give me some 

idea—and again, let me very quickly share with everybody the fact 

that our clinic closed because of structural defects. I’ve got 80-yearold veterans standing in front of the ten VA facilities that are now 

scattered across the Las Vegas Valley waiting for a shuttle to pick 

them up in 110 degrees. That can’t go on very long. 

I also would like you to comment on where we are with the Department of Defense in this cockamamie proposal to share facilities, which simply does not work, and I think the Michael 

O’Callahan Hospital in Las Vegas is evidence that it doesn’t work, 

and the veterans get shortchanged when that happens. 

One other—or two other things, if I could. Long-term nursing 

home care. Since we have none, some would be great. And while 

I think home care is important and day care and respite care, all 

of that is wonderful for the mix, but I’ve got a unique type of veteran. Most of them moved to Las Vegas in their retirement years, 

and they are alone. They’ve lost their spouse. Home care, respite 

care, day care is not what they need. They need long-term nursing 

facilities to care for them when there is nobody—nobody else there 

to care for them. And so I’d like you to concentrate on those issues. 

But one other thing, before my time runs out: There’s been a continuing—my office is being barraged by concerns that the VA is allowing non-physicians to perform eye surgery in the VA hospitals. 

I would appreciate you enlightening me on that, because it’s becoming a drumbeat back home, and I’m wondering what is that drumbeat all about, Mr. Secretary? 

Secretary PRINCIPI. Okay. All right. 

Ms. BERKLEY. And you have about 30 seconds to answer all those 

questions. (Laughter.) 

Secretary PRINCIPI. Let me say, we should have $1.3 billion in this year, in 2005, for CARES, $1.3 billion, not really $524 million. 

That’s truly what the President requested, which is more than dou- ble from last year. But you gave me the authority to use $400 million of the medical care appropriation. We have carryover—not carryover, we just have—yeah, we have carryover. So the total amount available for CARES today should be $1.3 billion. 

Obviously, Las Vegas is a very high priority. You know of my 

commitment that we need to replace the clinic there. Dr. Roswell 

is in full agreement on the need for a 120-bed nursing home in Las 

Vegas, and we both agree that the capacity at O’Callahan—while 

I am a strong supporter of sharing, I believe it’s the way to go— they may not have the complete capacity to take care so that we 

have to send veterans to San Diego and to Los Angeles to get their 

care. That’s unacceptable. We need to do better. I’m hopeful that 

when we get CARES done, a strategic plan will be offset. 

Ophthalmologists are very upset that optometrists are doing 

laser surgery. They have launched a major, major campaign to stop 

optometrists from doing laser surgery. We did permit one or two 
38

optometrists who were licensed to do laser surgery to do it. The 

ophthalmologists felt that this was inappropriate. 

Dr. Roswell, do you have any—— Dr. ROSWELL. At present, no optometrists are performing laser 

surgery in the VA. We have asked for a suspension of that practice 

pending our ongoing negotiations with a variety of stakeholders, including ophthalmologists and others, to make sure that we allow 

a full expression of scope of practice within the Department of Veterans Affairs but don’t in any way endanger veterans. That simply 

will not be tolerated. 

Having said that, though, I don’t believe that the scope of practice of clinicians should be legislated by the Congress nor regulated 

by the executive branch of the Federal Government. I believe that’s 

a states rights issue, and we’re trying to develop and articulate and 

promulgate policy that honors that relationship but still safeguards 

veterans. 

Ms. BERKLEY. But you’ve suspended the practice of——

Dr. ROSWELL. It has been suspended. 

Ms. BERKLEY. Okay. And, Mr. Chairman, can I ask one more 

very quick question? Very quick, very quick. Thank you. Could 

you—when do you think the CARES Commission is going to finish 

their work? And then we can get some more space. 

Secretary PRINCIPI. They are finished. They’re going to submit 

the report to me on February 12 or 11. 

Ms. BERKLEY. Oh, that’s great. 

Secretary PRINCIPI. I will then take the balance of the month, 

probably, to review the recommendations, come up with a decision 

package, and get it to Congress. 

The CHAIRMAN. The chair recognizes Dr. Murphy. 

Ms. BERKLEY. Thank you very much. 

Dr. MURPHY. Thank you, Mr. Chairman. Thank you, Secretary. 

Because I’m anticipating press releases and critiques that may 

come out of this, I just thought I’d ask this straight-up question. 

Based upon the veterans budget, will there be any closing of beds, 

loss of care, reduction, whether it’s nursing home, hospital beds or 

anything else? 

Secretary PRINCIPI. Not because of the budget. 

Dr. MURPHY. Not because of the budget. Absolutely not, sir. So 

even any percentage reduction because of an increase in the number of veterans who may be asking for those? I just want to make 

sure I have it on the record. 

Secretary PRINCIPI. I can assure you there is going to be no cutback, no closures. We have the CARES process ongoing, as you 

know, and that involves some consolidations and closures and 

openings and new hospitals. But as a result of this budget, sir, I 

do not anticipate any cutback in service. 

Dr. MURPHY. Because I know last year we ended up seeing some 

criticisms of that, and I just want to make sure we avoid any cutbacks along those lines. 

Jumping to another issue here, I wanted to ask about funding 

that deals with state veterans homes in Pennsylvania, we have veterans homes where it costs about $200 per day for care per veteran, and the VA I think kicks in about $56 or so per diem for ‘‘VArecognized’’ veterans. And yet Pennsylvania has the largest Army 
39

guard in the Nation, the fourth largest air guard, several major reserve components, including just in my district alone, they’ve got 

an Army reserve regional command headquarters, a Marine and 

Navy reserve command headquarters, the 28th Infantry Division of 

the Pennsylvania National Guard, et cetera. And most of all who 

may have also served in the war on terror in some way or another. 

But I understand now what currently happens is there is a distinction made between who may qualify for getting some federal assistance or per diems if they’re in a veterans home for care versus 

a distinction between those who may have been active duty versus 

those who are reservists? 

Secretary PRINCIPI. I don’t believe so, Congressman Murphy. I’m 

not—I may not understand the question. I may have to follow up 

with you personally. Why don’t we look at that? 

Dr. MURPHY. That’s fine. I’d appreciate it. 

Dr. ROSWELL. The states do have some authority to establish priorities for access to the state veterans homes. That’s not a federally 

regulated issue. Our policies address the per diem reimbursement, 

the certification of those, the delivery of services, but not specifically what criteria the states choose concerning access. 

Dr. MURPHY. Well, I just bring that up because I’d like to pass 

it on to you and get some feedback. 

And one other area I wanted to ask about, I know a lot of comments were made last year about waste, fraud and abuse within 

the VA system. One area that I particularly tried to pursue had to 

do with finding other ways of purchasing medical equipment and 

supplies such as reverse online auctions or other elements like 

that. I left it with Mr. McKay. I guess he’s now gone to another 

job. 

And I’d appreciate a follow-up on that to see what other kinds 

of moves are being made within the Veterans Administration to improve purchasing because I know where you can save money, that’s 

money that can go on to other care, and I was impressed with some 

of the efforts that the VA had before with identifying waste, fraud 

and abuse and improving efficiency, so I’d love to hear some updates on that. 

Mr. CAMPBELL. Yes, sir. We have, at the urging of the Secretary, 

we had a procurement reform task force that is giving us savings 

of over $250 million annually on buying medical and surgical 

equipment and supplies. 

We also have been using, to some limited extent, reverse auctions. We started off using the U.S. Navy’s reverse auction software, and we have tried it on a limited amount. 

We’re also doing things like going back and making sure that 

we’re not paying people twice. We have audit recovery programs. 

We have a post-award audit recovery program which over the past 

2 years has recovered $63 million. We’ve gotten about $8 million 

in eliminating duplicate payments at our financial services center 

in Austin, Texas over the last 2 years, and we are doing things like 

better bill paying so that we reduce the late interest penalties that 

we’ve paid. We’ve cut that back down to below I believe this past 

year we went down below a million dollars for the first time, 

$906,000, and we are increasing our discounts that we’re taking 

from vendors. 
40

So in the past year, we have gotten about $4 million in improved 

bill paying where we’re reducing our late interest penalties and 

we’re improving our discounts. 

We’re also getting larger amounts of rebates on using our micro purchase cards. Last year we got $17.5 million in rebates. We’ve 

subsequently renegotiated our contract for the next 5 years, and we 

anticipate even without an increase in the volume, we should get 

at least $25 to $27 million a year. 

So we’re looking at every efficiency we can. 

Dr. MURPHY. Thank you. I appreciate that. Thank you, Mr. 

Secretary. 

The CHAIRMAN. The chair recognizes the gentleman from Ohio, 

Mr. Strickland. 

Mr. STRICKLAND. Thank you, Mr. Chairman. Mr. Secretary, I’d 

like to begin my remarks by thanking you for your service to our 

country. And on two occasions when I’ve been with you, you’ve 

mentioned your two sons. And I know you’re very proud of them, 

and I want to thank you for their service to our country as well. 

I think you are a good and decent man. My only wish is that the 

folks at OMB were as concerned about veterans as I believe in my 

heart that you are, sir. 

I have a question regarding the Allen decision, and——

Secretary PRINCIPI. Which decision, sir? 

Mr. STRICKLAND. The Allen decision, regarding the compensation 

for alcohol and substance abuse. My understanding is that compensation for those reasons is always secondary to a service-connected condition. Is that correct? 

Secretary PRINCIPI. That is correct. I have general counsel here, 

but I want to make sure. I believe that is correct. 

Mr. STRICKLAND. Okay. And you had mentioned that if we ceased 

providing this particular compensation that there was a savings 

perhaps over 10 years of $2.8 billion. And I’m wondering, are you 

able to track that? I mean, do you have actual data that would support that 2.8 number that you shared with us? 

Secretary PRINCIPI. I believe we do, Mr. Strickland. I would want 

to follow up with you, sir, to make sure I gave you all the data. 

But I believe that in our compensation, disability compensation 

rolls, we can track that amount and, you know, extrapolate what 

the savings would be over 10 years. 

Mr. STRICKLAND. Okay. Thank you for that. What we’re talking 

about here is a budget, and a budget is a reflection of our Nation’s 

values. And it is all about establishing priorities. I mean, I think 

that’s the most significant thing that any legislative body does or 

members of a legislative body is establish priorities. 

Lots of things, good things, need to be done. We can’t do them 

all. And so as a government, we decide which things are more important than other things. Now I believe that we all understand 

that the proposals in this budget regarding the co-payment for 

medicines, the—I won’t call it the enrollment fee, but the use fee 

of $250 year. The Congress rejected those proposals in the past, 

and I think that most of us who are realistic understand that 

they’re likely, most likely to be rejected this time. 

You said if those proposals are not enacted, earlier you mentioned three results. There could be longer waiting lines. You would 
41

have to make perhaps more difficult enrollment decisions, or additional resources. And it seems to me that we all understand that 

additional resources are needed. And we are making decisions here 

with this budget. 

Now, Mr. Secretary, you and I have talked, and I’m going to 

bring out an issue here in the committee that I think all of my colleagues need to understand, and I’m talking about the memo. I’m 

talking about the memo regarding the proactive dissemination or 

marketing of VA services. And I’m going to read from that memo, 

and I’d like for my colleagues just to listen to these words. It was 

dated July the 18th, 2002, from Mrs. Laura Miller. And some of the 

things she says in that memo are this: 

‘‘VHA has achieved significant advances in quality and coordination of patient care. However, the current situation put those advances at risk. In this environment, the marketing of VA services, 

such activities as health fairs, veteran open houses to invite new 

veterans to the facilities, or enrollment displays at VSO meetings, 

are inappropriate. Therefore, I am directing each network director 

to ensure that no marketing activities to enroll new veterans occurs 

within your networks, even though some sites might have local capacity. As a national system, all facilities are expected to abide by 

this policy. Marketing activities could include those mentioned 

above, as well as generalized mailings to veterans, local newspaper 

articles encouraging veterans to enroll, or similar public service announcements.’’

This memo is proof positive that we need more resources in this 

system. And, Mr. Secretary, my time is up and I don’t know if the 

chairman will give you an opportunity to explain or not or to comment. I hope he does. But——

Secretary PRINCIPI. I’d be pleased, Mr. Strickland, and I appreciate your concerns. I just want to assure you that we have not 

stopped outreach. I would never stop education and providing our 

veterans with all the information they need. I felt at the time when 

we had a waiting list of some 318,000 veterans, you know, engaging in marketing activities so to speak like I mentioned that corporation going out there to make sure we take them from the corporation and enroll them in the VA health care system, I didn’t 

think it was appropriate until we got the waiting lists down. 

But I’ve always wanted, and it was a clarification to that memo, 

to make sure that health fairs stand downs, TAP programs, outreach, pamphlets like this go out. So I do want to clarify that. I 

understand the point you’re making, and I respect your position. 

But I think there is a difference between outreach and marketing. 

And as soon as we get this waiting list taken care of and there’s 

room at the VA, then we should do everything we can to get veterans into the system. 

So I think there may be a little bit of misunderstanding with regard to what I intended and how I’m trying to approach it, but I 

feel strongly about making sure veterans understand what they’ve 

earned, and if they choose to use the VA system, we’re there for 

them. 

The CHAIRMAN. Mr. Ryan. 
42

OPENING STATEMENT OF HON. TIM RYAN 

Mr. RYAN. Thank you, Mr. Chairman. I also, as Mr. Strickland 

said, would like to thank you. You’re in a very difficult position. 

And I know just witnessing over the last year what a tremendous 

job you’ve done in trying to negotiate the rapids in the system. 

But I think there is something that needs to be talked about that 

I think, as I sat here for the last hour and a half, has not been 

talked about, and it’s like the big elephant sitting in the middle of 

the room that nobody wants to talk about, and it’s the tax cuts. 

And I know, or I believe that we can’t have a specific discussion 

on this issue without having a general discussion the budget. And 

I know that this isn’t the budget committee, and I know you’re not, 

you know, working at OMB, so it’s difficult. But Mr. Strickland 

made the point. It’s about priorities, and that’s what we have to do 

here is decide what our priorities are. And I think for the President 

to say that we should have another trillion dollars in tax cuts over 

the next 10 years, which is $100 billion a year, for primarily folks 

who make a lot of money and have a lot of money, and to take the 

resources away from—and puts you in a predicament and us in a 

predicament to make these very, very difficult decisions I think 

really is a tragedy. And I wanted to be on record saying that, that 

when we talk about priorities and we use some general language, 

I believe it comes down to the tax cuts. And I wanted to be on 

record for saying that. 

Now Dr. Snyder talked a little bit about the prosthetic research cuts, $50 million that would no longer be available. Can you explain or just talk a little bit about as we’re losing men and women 

daily in Iraq, most of them in my visit to Walter Reed, most of 

them are amputees, is the VA doing anything as far as projections 

to figure out when these soldiers return if it continues at the current pace, is the VA keeping the proper statistics to say in the next 

year—because we’re projected to be over there for at least the next 

5 years—is this system going to be ready to handle the influx of 

these soldiers? 

Secretary PRINCIPI. I believe so. You know, one loss of American 

life, one wounded soldier up at Walter Reed is certainly one too 

many for me. But as I look at the current situation, I’m grateful 

that relative to, you know, Vietnam where we lost 58,000 killed 

and hundreds of thousands severely wounded and, you know, 

Korea, World War II, 400,000 killed, millions wounded, the numbers today are very small. But still, we need to be there for them. 

I will tell you that one area that I really think that the VA needs 

to spend more of its resources, and I think the current war highlights it, is building a center of excellence in amputee research and 

rehabilitation. Again, I go back to our core mission, to care for people who have been wounded and disabled in combat or in training. 

And today, because of body armor and battlefield medicine, we’re 

keeping these young soldiers and marines alive, but they’re coming 

back with amputation. And we need to do everything in our power 

to develop the most modern prostheses available for them and to 

have a rehabilitation program that’s second to none in this country. 

And I think we’ve lost the edge. We spend a lot of money on research at the VA, $1.4 billion, between VA appropriations that you 

give us and NIH funding, DOD funding, and I don’t think we spend 
43

enough on this area. So I just—timing is perfect, because we just 

had a meeting on this subject yesterday, and I called in a number 

of amputees from Vietnam, guys I served with who lost their legs 

and arms in Vietnam. And they agreed. We’re not doing enough. 

And so it’s a serious issue in my view. 

Mr. RYAN. Well, thank you for your comments. My concern is 

that the President and the administration maybe doesn’t share 

your own personal vision as I started this out. 

Secretary PRINCIPI. I know it’s a $50 million reduction, but it’s 

a very, very large base, and like I said and Dr. Roswell said, we 

need to go after that indirect funding from NIH and go for more 

grants from NIH. And that’s very important. I think we can offset that $50 million by getting more money from NIH. They send the 

grants out. There’s no reason why it shouldn’t come to the VA. 

Mr. RYAN. Thank you. Mr. Chairman, can I have 30 seconds just 

to? My last question was the projections of—do you have any numbers as far as how many of these young soldiers are going to be 

coming back as amputees? Are we projecting down the road? I’m 

just——

Secretary PRINCIPI. I think to date we have 120 amputees. I 

would like to provide it for the record. Maybe you can come up and 

see it. But I think it’s 120. I don’t know if we have a projection of 

the total number. But right now it’s in the hundreds who have 

been disabled by virtue of having lost an arm or a leg. 

Mr. RYAN. Thank you very much. 

The CHAIRMAN. Thank you. Mr. Udall. 

OPENING STATEMENT OF HON. TOM UDALL 

Mr. UDALL. Thank you, Mr. Chairman. And, Mr. Secretary, 

thank you for being here with us today. Let me first of all say that 

I sense, and you don’t need to answer this part of it, I don’t think 

you like these cuts that have been presented in your budget, cuts 

in research, cuts in benefits, cuts in dollars to veterans, and clearly 

these were decisions that were made above your pay grade in 

terms of priorities for the Nation. 

And you can hear members talking, and you’ve heard it throughout the day that we don’t think the priorities are right, and we 

think we ought to dedicate additional resources to veterans. And I 

think you’re going to see a bipartisan group of representatives 

move to try to give you additional money. And I hope that you will 

continue the fight within the administration to make sure that 

when that movement happens that it’s accepted, and you don’t 

need to answer that part of it. You’re a good soldier and you have 

to come up here and do what’s been assigned you. 

But Secretary Principi, I want to get back to this whole issue of 

the research, and Dr. Roswell talked about it. And this is this indirect cost issue. You’ve got a cutback of $50 million in the budget 

on research. In the last 15 months, the Oversight Committee of 

this Veterans Committee has taken testimony, and we’ve shown in 

our testimony that NIH once paid for indirect costs of third-party 

research conducted on VA property. So they once did it. 

We showed in the testimony that NIH pays indirect costs to 

other organizations for indirect costs associated with research 

grants, and we have also shown that NIH pays foreign organiza-
44

tions indirect costs. They don’t pay the VA, but they pay foreign 

organizations indirect costs. The funds to pay for those indirect 

costs now come out of veterans health care. And if you look at the 

budget of NIH since 1998, it’s doubled to $28.8 billion. 

Now I think, you know, you asked us to help. I think we have 

helped a lot. I wrote to Health and Human Services Secretary 

Thompson asking him to pay the rent, to pay the VA. Ranking 

Member Evans wrote you on March 12 and asked you also to pursue this reimbursement. If we could recover the full amount of this 

reimbursement, it would take care not only of the $50 million but 

a lot more, as you know. 

[The prepared statement of Congressman Udall appears on p. 

99.] 

Mr. UDALL. So my question is, what is happening in the administration to pull the parties together? I think you’re pushing for this. 

I think somebody at a higher level needs to pull you in and pull 

Secretary Thompson in, get the decision made and get this thing 

rolling. Because this is a significant amount of money that could 

come in. It could help veterans now, and we just need to do it. 

And so could you elucidate a little bit on that and let us know 

what your position is on it? 

Secretary PRINCIPI. Well, I’d like to—let me defer to the Under 

Secretary, who has really been tracking this very, very closely and 

working closely with HHS and the Hill to try to resolve this. There 

are just some strong views I guess at NIH and other places against 

providing this indirect funding to VA. But perhaps Dr. Roswell 

can——

Dr. ROSWELL. Thank you, Mr. Secretary. And Mr. Udall, you’re 

absolutely correct in your assertion. Based on the current level of 

NIH funding provided already to VA investigators, if we were reimbursed at our actual cost of supporting those grants, at approximately 23 percent of the cost, which is modest by comparison to 

most major academic institutions, if we were reimbursed at that 

level, it would bring over $117 million of additional funding in to 

VA research support which would more than offset the $50 million 

reduction that’s in the proposed budget. 

We sought that with our negotiations with OMB, quite frankly. 

We were told that other agencies were impacted. We’ve not been 

able to identify other federal agencies outside the Department of 

Veterans Affairs that have anywhere near our level of NIH funding. So we don’t believe that this is precedent-setting and would 

create a tremendous burden on NIH. 

We have worked with NIH to negotiate this. We continue to dialogue with NIH and are continuing to pursue options that would 

allow the reimbursement for unfunded administrative support 

within the Department of Veterans Affairs, and we certainly thank 

you for your support to that end. 

Mr. UDALL. Thank you. And thank you, Mr. Chairman. 

The CHAIRMAN. Thank you, Mr. Udall. Let me just ask one final 

question, Mr. Secretary. As you know, one of the passions that I 

have, and I have many on this committee on veterans affairs, is for 

the homeless. It was after a tremendous amount of work. It was 

bipartisan. Mr. Evans and I authored a very sweeping $1 billion 
45

Homeless Veterans Assistance Act that was signed into law in 2001 

in December. 

And one of the many aspects of that mutually reinforcing law, 

and our hope was, and I would just remind everyone, was to end 

homelessness within a decade, and the numbers then were 275,000 

homeless on any given night, which is an outrage. You know, 18 

divisions worth of our men and women on the streets at any given 

night. That should be something that all of us roll up our sleeves, 

not just to mitigate but to end completely. 

We authorized in that legislation, as you know, ten new domiciliaries. As a matter of fact, while we were going through the process 

of hearings and field visits, this committee learned clearly that 

domiciliaries work. They are one of the most effective means of matriculating someone who is out on the streets and changing their 

lives. And the VA has a tremendous track record in rehabilitating 

a life that otherwise would be lost through the doms. 

We authorized ten new doms. To the best of my knowledge, not 

one of those have been authorized or appropriated for or opened by 

the VA. My request today would be for you—and we have worked 

in a bipartisan way to up significantly the amount of money available to the VA for veterans health care for all veterans’ programs, 

including doms, that at least three, maybe more, in this fiscal year 

would be opened so that we can meet the needs of our—and it’s 

something that I feel passionately about, I know other members of 

this committee feel passionately about, and it’s something that’s 

doable, and I would hope that you could give us a yes on that. 

Secretary PRINCIPI. Well, I know of your commitment and I share 

that commitment for homeless veterans. I quite honestly was not 

aware of the ten domiciliaries. I know we’ve increased funding for 

long-term workloads in domiciliaries from three—what is that, 

three thousand, three million? 

Dr. ROSWELL. Three thousand, seven hundred. 

Secretary PRINCIPI. Three thousand seventy-two to 4,389. Mr. 

Chairman, let me look at this domiciliary issue to see what’s been 

appropriated in that regard. 

I think as you know, we’re doing a great deal with the grant and 

per diem program. We’re increasing the number of beds to 10,000. 

We have a joint initiative with HUD and HHS to establish some 

permanent housing, especially those with mental illness. And I’ll 

continue to work with you, because I think it is a pressing problem. 

I think we’re making great progress—I think we’re making 

progress. I think the number of homeless is down to about 200,000 

now, so it’s going in the right direction but still far too high. 

The CHAIRMAN. I do appreciate that, and I hope you’ll work with 

us. I mean, one of the reasons why obviously the compelling need 

for more health care dollars is why members of this committee, including the chairman, fought so hard through a very arduous process, because we know the need is there. This, in addition to the 

other issues that everyone talks about, and I’m glad that the numbers are going down. But these doms work, and we did authorize 

ten with the full expectation that they would be funded. So I hope 

you will go back. And I would just say to my friends on the committee, we plan a series of oversight hearings on the homeless 

issue. The good news, as you just relayed, of the numbers going 
46

down, but also what additional things we ought to be doing, again, 

to end homelessness of our veterans. 

Pursuant to Rule 11(i), the committee stands in recess pending 

conclusion of the joint session of Congress, and then we will reconvene—my estimate is about 12 o’clock or so—with the next panel. 

Thank you. 

Secretary PRINCIPI. Thank you, Mr. Chairman, Mr. Evans. 

[Recess.] 

The CHAIRMAN. The committee will reconvene. And I would like 

to welcome our next panel, the Independent Budget, which consists 

of four veterans service organizations, the Disabled American Veterans, the Paralyzed Veterans of America, AMVETS and the Veterans of Foreign Wars. 

Our first witness will be Mr. Joseph Violante, a disabled Vietnam veteran, who has been the National Legislative Director of the 

Disabled American Veterans since July of 1997. A New Jersey native, Mr. Violante served with the 2nd Battalion, 4th Marines in 

Vietnam and was discharged in 1972 with the rank of sergeant. 

Mr. Violante was a practicing attorney in Thousand Oaks, California, before moving to Washington, D.C. where he then worked 

as a staff attorney for the Department of Veterans Affairs’ Board 

of Veterans Appeals in 1985. 

Joe also chaired the Veterans Appeals Committee of the Federal 

Circuit Bar Association from 1992 to 1996. 

We will then hear from Mr. Richard Fuller, who is the National 

Legislative Director for the Paralyzed Veterans of America, or PVA. 

Mr. Fuller graduated with a Bachelor of Arts degree from Duke 

University in 1968. He served in the United States Air Force from 

1968 to 1972, stationed 21⁄2 years in Vietnam and Southeast Asia 

as an air crew Vietnamese linguist with the Air Force Security 

Service. 

We will next hear from Mr. Rick Jones, who has been the National Legislative Director of AMVETS since January of 2001. 

Rick is an Army veteran who served as a medical specialist during the Vietnam War era. 

Rick completed undergraduate work at Brown University prior to 

his Army service and earned a master’s degree in public administration from East Carolina University in Greenville, North Carolina, following military service. 

And finally, we’ll hear from Mr. Dennis Cullinan, who has been 

the Director of the National Legislative Service for Veterans of Foreign Wars of the United States since 1997. He started with the 

VFW Washington office staff in 1983 as a service officer trainee 

with the National Veterans Service. 

Prior to being honorably discharged from the U.S. Navy in 1970, 

Dennis served as an electronics technician aboard the USS Intrepid 

and completed three tours of duty in Vietnamese waters. 

I’d like, Joe, if you could begin, we will go to each of our distinguished panelists. 
47

STATEMENTS OF JOSEPH A. VIOLANTE, NATIONAL LEGISLATIVE DIRECTOR, DISABLED AMERICAN VETERANS; RICHARD 

B. FULLER, NATIONAL LEGISLATIVE DIRECTOR, PARALYZED 

VETERANS OF AMERICA; RICHARD JONES, NATIONAL LEGISLATIVE DIRECTOR, AMVETS; AND DENNIS M. CULLINAN, NATIONAL LEGISLATIVE DIRECTOR, VETERANS OF FOREIGN 

WARS 

STATEMENT OF JOSEPH A. VIOLANTE 

Mr. VIOLANTE. Thank you, Mr. Chairman. As has been our custom in the past, each organization will testify on their section of 

the Independent Budget. 

On behalf of the Disabled American Veterans and its auxiliary, 

I thank you for allowing us to present our assessment of the President’s fiscal year 2005 budget and to provide our own alternative 

recommendations for resources and program improvements. 

Mr. Chairman, after reviewing the President’s budget submission, I have a better understanding of the famous quote uttered by 

Yankee great Yogi Berra when he said ‘‘it’s deja vu all over again.’’

The FY 2005 budget submission is last year’s budget, only worse. 

In an election year, it sends a chilling message about what our Nation’s veterans, especially those disabled in military service, can expect in the future. 

Again this year, the President’s budget submission contains few 

legislative recommendations to improve, expand or add new benefits for veterans. The budget recommends a cost of living adjustment for compensation based on the projected 1.3 percent increase 

in the cost of living, which will again be rounded down to the nearest whole dollar. We urge Congress to discontinue the practice of 

rounding down our COLA. 

Again, the budget seeks legislation to deny compensation to disabled veterans who suffer greatly from their service-connected posttraumatic stress disorder and other mental disorders if they selfmedicate to escape the agony and develop secondary disability as 

a result. We again urge you to send the administration another resounding no in response to this request for unjust action. 

I would like to thank the members of the committee whose efforts successfully resulted in the passage of legislation to improve 

and expand benefits for disabled veterans, including removing the 

2-year limitation on accrued benefits and increasing grants for specially adaptive housing and automobiles and burial benefits. However, to remain effective for their purposes, these benefits must be 

adjusted for increases in the cost of living and to address other 

needed improvements. 

Therefore, the Independent Budget continues to include recommendations for legislation to increase the amount of the automobile grant and the grants for specially adaptive housing and to 

provide for an automatic annual adjustment for increased costs. 

For substantive improvements to the insurance programs, the IB 

recommends legislation to authorize VA to use modern mortality 

tables instead of the 1941 mortality tables to determine life expectancy for purposes of commuting premiums for service-disabled veterans’ insurance, and to increase the maximum protection available 
48

under the base policy of service-disabled veterans insurance from 

$10,000 to $50,000. 

We are extremely concerned about the inadequate resources requested for veterans’ benefits administration (VBA) in the President’s budget. The budget requests 829 fewer full-time employees 

(FTE) for fiscal year 2005 than authorized at the end of the last 

fiscal year, fiscal year 2003, and 540 FTE below the fiscal year 

2004 level. We do not see how VBA can achieve enough productivity improvements to offset such a substantial loss of resources. 

The budget also substantially scales back investments in ongoing 

programs to modernize VBA’s essential information technology improvements. The IB recommends that C&P (Compensation and 

Pension) Service be authorized 7,757 FTE for fiscal year 2005. Although VA had initially projected that its workload would allow it 

to draw down its FTE, those projections did not take into account 

an additional 391,000 claims and an additional 52,000 appellate 

caseload over the next 5 years VA now expects incidental to judicial 

and legislative changes. 

The President’s budget proposes 7,270 FTE or 487 fewer direct 

program FTE for C&P services in fiscal year 2005 than in fiscal 

year 2003. To aid in the accuracy and uniformity in claims adjudication and to achieve the greater efficiencies of modern information technology, VA began its compensation and pension evaluation 

redesign initiative during 2001. VA needs approximately $3.5 million in fiscal year 2005 to continue development of this system, and 

the IB recommends that Congress provide this essential funding. 

To sustain current levels of performance with its projected workload, vocational rehabilitation and employment services needs to 

retain the staffing strengths it had at the end of fiscal year 2003. 

In addition, the Secretary’s VR&E task force team has made a 

number of recommendations to improve voc rehab and employment 

services for veterans and projected that approximately 200 additional FTE will be needed to implement those substantive changes. 

The IB therefore recommends that Congress authorize 1,131 direct 

program FTE for VR&E in fiscal year 2005. 

Mr. Chairman, in closing, just let me say that we appreciate very 

much what this committee has done in enacting many of the recommendations found in the Independent Budget over the last several years, and we would hope that you will again find our recommendations meritorious and will shepherd legislation through 

this year to adopt more of them. 

Thank you. That concludes my statement. I’d be happy to answer 

any questions. 

[The prepared statement of Mr. Violante appears on p. 120.] 

The CHAIRMAN. Thank you very much. Mr. Fuller. 

STATEMENT OF RICHARD B. FULLER 

Mr. FULLER. Mr. Chairman and members of the committee, as 

one of the four veterans service organizations publishing the Independent Budget, Paralyzed Veterans of America is pleased to 

present the views of the Independent Budget regarding the funding 

requirements of the VA health care system for 2005. 

This is the 18th year PVA, along with AMVETS, Disabled American Veterans, and Veterans of Foreign Wars have presented the 
49

Independent Budget, a policy and budget document that represents 

the true funding needs of the Department of Veterans Affairs. 

Mr. Chairman, we are becoming increasingly troubled by the 

delays in enacting VA appropriations. For the past 2 years alone, 

the VA health care system has had to struggle along at previous 

year’s inadequate funding levels for nearly one-third of each year. 

These delays directly affect the health care received by veterans. 

This deplorable state further points to the importance of a mandatory funding mechanism for VA health care. But until that happens, we ask that this Congress move expeditiously to put necessary funding levels in place by the start of fiscal 2005. 

The Administration’s budget request for health care is a shocking 

one, providing once again woefully inadequate funding levels for 

sick and disabled veterans. The budget calls for only a $310 million 

increase in appropriate dollars for the medical care account, a mere 

1.2 percent increase over fiscal year 2004. This is the smallest 

health care appropriation request of any Administration in nearly 

a decade. Indeed, the VA Under Secretary for Health himself testified in this room just last year that the VA requires a 12 to 14 percent increase just to keep its head above water. 

In addition, once again we are faced by a request that relies too 

heavily on budget gimmicks and accounting sleight of hand, rather 

than on real dollars that veterans need. The Administration is 

again resurrecting its user fee and increased co-payment schemes, 

proposals soundly rejected by the House and Senate last year. 

And once again, we see unrealistic management efficiencies utilized to mask how truly inadequate this budget is. The VA must 

be accorded real dollars in order to care for real veterans. 

For fiscal year 2005, the Independent Budget recommends a medical care amount of $29.791 billion. This amount represents an 

increase of $3.2 billion over the amount provided in fiscal year 

2004. The Independent Budget recommendation is a conservative 

one. The VA health care system, in order to fully meet all of its 

demands and to ameliorate the effects of chronic underfunding, 

could use many more dollars. 

The Independent Budget recommendation provides for the impact of inflation on the provision of health care and mandatory salary increases of health personnel. It provides resources to begin 

funding the VA’s critical fourth mission, to back up the Department 

of Defense health care system. It provides increased prosthetics 

funding and long-term care funding, and provides enough resources 

we believe to enroll all Priority 8 veterans. 

For medical and prosthetic research, the Independent Budget is 

recommending $460 million. This represents a $54 million increase 

over the fiscal 2004 amount, which was the committee’s recommendation last year as well in its views and estimates. 

Sadly, the Administration has proposed cutting research, according to our estimates and calculations, by $21 million. Accepting 

this level of $385 million would set the research grant program 

back 6 years to fiscal year 1999 levels. 

I would like to add, based on the testimony earlier this morning, 

that there seems to be some thought that by increasing indirect 

costs that we could offset this particular cut. In actuality, indirect 

costs don’t cover what this cut cuts. According to what we under-
50

stand from VA sources, this reduction equates to eliminating approximately 500 clinical researchers. These are not only doctors 

who are conducting research. They are also clinicians providing 

care for veterans. This has a real impact in human terms. 

In closing, the VA health care system faces two chronic problems. 

The first is underfunding, which I have already outlined. The second is a lack of consistent funding. The budget and appropriations 

process over the last number of years demonstrates conclusively 

how the VA labors under the uncertainty of not knowing how much 

money it is going to get, but equally important, when it’s going to 

get it. No Secretary of Veterans Affairs, no VA hospital director, 

and no doctor running an outpatient clinic knows how to plan and 

even provide care on a daily basis without the knowledge that the 

dollars needed to operate those programs are going to be available 

when they need them. 

The only solution we can see for this is for this committee and 

the Congress as a whole to approve legislation removing VA health 

care from the discretionary side of the budget process and making 

annual VA budgets mandatory. The health care system can only 

operate properly when it knows how much it is going to get and 

when it is going to get it. We look forward to working with this 

committee in order to begin the process of moving a bill calling for 

mandatory funding through the House and Senate as soon as 

possible. 

This concludes my testimony, Mr. Chairman. I’ll be happy to answer any questions you may have. 

[The prepared statement of Mr. Fuller appears on p. 128.] 

The CHAIRMAN. Mr. Fuller, thank you very much. Mr. Jones. 

STATEMENT OF RICHARD JONES 

Mr. JONES. Mr. Chairman, Mr. Strickland, it’s an honor to represent AMVETS before you in this magnificent hearing room. As 

co-author of the IB, AMVETS is pleased to provide you with our 

recommendations on the resources necessary to carry out a responsible National Cemetery Administration budget for fiscal year 

2005. 

We note and appreciate your strong leadership and continuing 

support. As they say on the campaign trail, you get it. You understand. And as congressional champions, you help lead the country 

on issues important to veterans and their families. 

The National Cemetery Administration maintains more than 2.6 

million gravesites on approximately 14,000 acres of cemetery land 

while providing more than 100,000 interments annually. The VA is 

scheduled to open new cemeteries in Atlanta, Oklahoma, Pittsburgh, Detroit, Miami and Sacramento. Also under legislation 

passed last year, VA is directed to design and construct cemeteries 

at six new locations in Philadelphia, Birmingham, Jacksonville, Bakersfield, Greenville, and Sarasota, Florida. 

Without the strong commitment of Congress and its authorizing 

and appropriations committees, the VA would likely fall short of 

burial space for millions of veterans and their eligible dependents. 

It should be recognized that not only is the interment rate increasing and the construction of new facilities accelerating, there are repair and upgrades needed. 
51

The Study on Improvements to Veterans Cemeteries, a comprehensive report submitted in 2002 by VA to Congress on the conditions at each cemetery, identified nearly $300 million in more 

than 900 projects for gravesite renovation and repair. 

The Independent Budget veterans service organizations recommend that Congress and VA work together to establish a 

timeline for funding these projects based on the severity of the 

problems. Volume 3 of the study describes veterans cemeteries as 

national shrines, saying that one of the most important elements 

of veterans cemeteries is honoring the memory of America’s brave 

men and women who serve in the Armed Forces. 

More than 30 years ago, Congress formally recognized veterans 

cemeteries as national shrines. They stated: ‘‘All national other veterans cemeteries...shall be considered national shrines as a tribute 

to our gallant dead.’’ Moreover, many of the individual cemeteries 

within the system are steeped in history. The monuments and 

markers represent the very foundation of these United States. 

These grounds represent a national treasure that deserves to be 

protected and nurtured. 

Unfortunately, the system has been and continues to be seriously 

challenged. The National Cemetery Administration operation requires continued adequate funding to ensure that NCA remains a 

world class quality operation to honor veterans and recognize their 

contribution and service to the Nation. 

And the members of The Independent Budget recommend that 

Congress provide, because the challenge ahead is so clear, $175 

million in fiscal year 2005 for the operational requirements of the 

National Cemetery Administration, for the national Shrine initiative, and for the backlog of repairs. We recommend your support 

for a budget consistent with the National Cemetery Administration’s growing demands and in concert with the respect due every 

man and woman who wears the uniform. This is an increase of 

nearly $30 million over current year requests—over next year’s 

request. 

Regarding the State Cemetery Grants Program, the funding for 

the State Cemetery Grants Program, the members of the IB recommend $37 million in the new fiscal year. The State Cemetery 

Grants Program has helped increase burial service for veterans, especially those living in less densely populated areas. 

For example, this year the Independent Budget service organizations, as we all do, we expect fast track operations to open in Boise 

and Kansas and Massachusetts and in the Tidewater area of Virginia. The Tidewater area, I might note, serves over 200,000 

veterans. 

To augment support for veterans who desire burial in state cemeteries or in their local communities or churches, the members of 

the Independent Budget recommend a series of additions in the 

current provisions of statute for burial. Among these is the plot allowance. We would like to see the plot allowance lifted to $725 

from the current level of $300. The plot allowance now covers less 

than 6 percent of funeral costs. A series of other provisions are in 

the Independent Budget. 
52

Mr. Chairman, this concludes my statement. I thank you again 

for the privilege to present our views and I’d be pleased to answer 

any questions you might have. 

[The prepared statement of Mr. Jones appears on p. 135.] 

The CHAIRMAN. Thank you very much, Mr. Jones. Mr. Cullinan. 

STATEMENT OF DENNIS M. CULLINAN 

Mr. CULLINAN. Thank you very much, Chairman Smith, Mr. 

Strickland and Mr. Michaud. On behalf of the men and women of 

the Veterans of Foreign Wars, I express our deep appreciation for 

including us in today’s most important hearing. As has already 

been mentioned, the VFW is responsible for the construction portion of the VA budget, so I will limit my testimony today to that 

area. 

A historical overview of VA major and minor construction clearly 

shows that since 1993, VA’s construction budget and annual appropriations for both major and minor projects continue to drop sharply to current low levels. 

Most unfortunately, VA construction funding has been in steady 

decline. In FY 1993, the combined total was approximately $600 

million. However, by FY 2003, the total had decreased to only 

about $300 million, and the budget we’re looking at today, the total 

would only be about $200 million, excluding the money put in for 

CARES. 

VA’s history low construction budgets the last 12 years is an explicit indication of poor stewardship of the system’s facility capital 

assets. It also files in the face of a moral as well as statutory mandate to provide for the short and long-term care needs of our most 

seriously service-connected veterans. 

The administration is once again proposing counting state nursing home beds as part of the long-term care capacity. We view this 

as being a disgraceful attempt to circumvent both the letter and intent of the law with a number of our most deserving and vulnerable veterans suffering as a consequence. 

We are all aware of the Price Waterhouse study that concluded 

that VHA has significantly underfunded its construction spending 

and continues to do so. The VFW and the other IB VSOs are concerned that if the CARES implementation costs are factored into 

the appropriation process, Congress will not or will not be able to 

fully fund the VA system, further exacerbating the current obstacles impeding veterans’s access to quality health care in a timely 

manner. 

It is our opinion that VA should not proceed with CARES mission changes and consolidations until sufficient funding is appropriated for the construction of the new facilities and renovation of 

existing hospitals to take their place. 

We acknowledge the administration’s proposal to provide CARES 

with $524 million in FY 2005. But as was testified earlier today, 

in fact $1.3 billion is needed for this to properly expedite this process in 2005. 

We view the administration’s proposal to provide only $3.7 billion 

over the next 7 fiscal years to be totally inadequate. 
53

We are dismayed at the administration proposal to provide a to- tally inadequate $97 million and $69 million for major and minor 

construction respectively in FY 2005. 

We and the other IB VSOs recommend that Congress appro- priate $571 million to the major construction account for 2005. This 

amount is needed for seismic correction, clinical and environmental 

improvements, National Cemetery Administration, construction, 

land acquisition and claims. We also call upon the Congress to appropriate $545 million to the 

minor construction account for 2005. These funds contribute to construction projects costing less than $7 million. This appropriation 

also provides for a regional office account, National Cemetery Administration account, improvements and renovation in FA research 

facilities, a staff office account and an emergency fund account. Increases provide for inpatient and outpatient care and support infrastructure, physical plant and historic preservation projects. 

The Independent Budget in fiscal year 2004, we cited the recommendations of the President’s Task Force to improve health care 

delivery for our Nation’s veterans, the PTF. That report was made 

final in 2003. To underscore the importance of this issue, we will 

again cite the recommendations of the PTF. 

In short, the PTF asserts that the VA must accomplish three key 

objectives: 

(1) Invest adequately in the necessary infrastructure to ensure 

safe, functional environments for health care delivery; 

(2) Right-size their respective infrastructures to meet projected 

demands for inpatient, ambulatory, mental health, and long-term 

care. 

And finally, the third: (3) Create abilities to respond to a rapidly 

changing environment using strategic and master planning to expedite new construction and renovation efforts. Clearly, the administration’s proposed budget for fiscal year 2005 is inadequate to this 

task. 

It has been suggested that the VA medical system has vast quantities of empty space that can be cost effectively reused for medical 

care services. Due to a number of factors, including age, location, 

lack of ability to properly configure these properties, this proposal 

simply is not viable. 

VA should perform a comprehensive analysis of its own excess 

space and deal with it appropriately. Some of this space is located 

in historic structures that must be preserved and protected. Some 

space may be appropriate for enhanced use, others may not. 

Mr. Chairman, I’ll simply conclude by expressing the fact that we 

are once again mystified that this budget would preclude the expenditure of any funds for four emergency preparedness centers 

that were authorized last Congress. We simply can’t understand it. 

And with that, I’ll conclude. 

Thank you, Mr. Chairman. 

[The prepared statement of Mr. Cullinan appears on p. 144.] 

The CHAIRMAN. Thank you very much, Mr. Cullinan. And thank 

you all. I think the Independent Budget has been a very valuable 

source of documentation, gives us a blueprint from very knowledgeable sources—yourselves. I actually read and study the Independent Budget. 
54

I think the 113 pages that make it up this year really provide 

us a reliable database that rivals the VA itself in terms of their 

forecasting capabilities. So I want to thank you for the many recommendations that you make in it. 

You know, there are some organizations in other areas of jurisdiction on this Hill that say we want this or we want that, but very 

often, there’s a threadbareness to it in terms of the justification. 

You tell us things very often that make us scratch our heads and 

say, we should have known that. And the VA very often also is enlightened about what may be going on under their own jurisdiction 

that they were not aware of. 

So the Independent Budget is a very, very valuable source, and 

I want to thank you for spending the time and the effort and the 

expertise to give us the wisdom that it provides. Like I said, it’s 

a blueprint. Last year we used it, the VA’s forecasting model and 

other sources, and our own independent analysis as well. We came 

out with recommendations that were in the end very close to what 

you were recommending, and that became our marching orders, if 

you will, as a committee in a bipartisan way to make our case to 

the rest of the Congress as to why VA health care spending in particular needed to be ratcheted up significantly. 

I would also encourage you, and I know you do this, but I would 

encourage my colleagues as well, as I will do throughout the next 

few months, to take the time to read this document or at least read 

portions of it. You know, we do rely on the division of labor that 

Congress affords through the committee system, but there are 

many people in very important gatekeeper positions who need to 

take the time to read this and to become aware of its comments. 

Because you’re not crying wolf. You’re not suggesting the impossible. You are I think right on the money in terms of what is needed for our veterans. 

You know, I was very happy to hear our Secretary, Secretary 

Principi, earlier in the hearing talk about the needs of veterans. He 

related to us that he had asked for an additional $1.2 billion, which 

did not make its way into the final product. That’s for real veterans’ services, health care services that will go unrecognized and 

unprovided for if we do not provide that. 

And then if you factor in some of the other items, like the $250 

enrollment fee, the increases in co-pays for pharmaceuticals, which 

we did not enact last year, and for good reason. That too has a 

price tag that I think needs to be put over on the appropriated dollars side. So we will make our best case, I can assure you, using 

the very valuable information you have provided. 

Mr. Violante, you mentioned deja vu all over again, the Yogi 

Berra statement. Well, I would use another one of his statements 

when he said it ain’t over till it’s over. This committee, again, I 

think plays a very valuable, sometimes not appreciated role in advising our colleagues, admonishing our colleagues, taking actions 

on the floor and everywhere else in between to say this is a real 

number. These are real men and women who if we don’t provide 

these resources, they will not get the care that they are entitled to 

and deserve. 
55

You know, you haven’t asked for the moon. You’ve asked for 

what’s needed. And I can assure you, I and my colleagues will try 

our level best to do just that. 

I just don’t really have any questions. I mean, one of the nice 

things about your presentations, both your oral and your written, 

and then the Independent Budget itself, is that it’s comprehensive. 

It has much girth to it, and, you know, I’m very appreciative for 

that. 

One of the things that I was concerned about in the testimony 

today was the $800 million carryover. You know, the Senate was 

a little slow, as we all know, in getting their final product, voting 

on the appropriations bill. We weren’t as slow but we weren’t as 

fast as we would all like. But that shouldn’t be, I don’t think, a pretext for taking those appropriated dollars and punting and putting 

them into 2005. They’re for 2004, and they ought to be used for 

2004 to meet the gap that exists. So I can assure you that we will 

be looking to make sure that that’s not used as a filler as we move 

forward into 2005. 

And I thank you, Mr. Cullinan, for mentioning the emergency 

preparedness centers. I am baffled in the extreme how a bill that 

passed in a bipartisan way, I was the prime sponsor I’m happy to 

say, but it was a bipartisan bill that established these emergency 

preparedness centers, centers of excellence, to look at the radiological, biological and chemical weapons that very possibly could be 

used against our men and women in uniform, and by extension, civilian populations. 

And I can tell you without any fear of contradiction, after we had 

our hearing, at which we saw that there was an overwhelming 

need for those kinds of centers, that when anthrax hit my own district in Hamilton Township, we were woefully unprepared, and I’m 

not convinced that we are any better prepared today. 

Yes, we’ve moved the ball a little bit, but we need every level of 

government, and the VA has been sterling in its centers of excellence, whether it be for battlefield injuries or spinal cord injury. We 

need to allow the good people at the VA working in concert with 

NIH and others to take the lead on this, because we’re not as prepared as we might think we are. And to say that bioshield or some 

other piece of legislation automatically covers it just isn’t true. 

And I would also remind my colleagues, we had a floor vote on 

this. There was a bar in the appropriations bill when the VA-HUD 

bill was on the floor that said none of these funds shall be used 

to implement this legislation and this law. I offered the amendment, and it got well in excess of 300 votes in favor of stripping 

out that bar. And I think this is the second year in row, and like 

I said, I’m baffled in the extreme. We have asked the VA to weigh 

in on this, and I would hope that the appropriators would not seek 

to do that again next year. 

Because if this does hit, if there is a problem relating to radiological, biological or chemical and we didn’t do all that we could 

possibly do, there’s an accountability issue here for those who said 

we shouldn’t have these centers of excellence. Nobody can say to 

me with a credible face, with a straight face, that we’re doing too 

much in the area of research into what those terrible agents can 
56

do and will do if they’re ever used against our men and women in 

uniform or the civilian population. 

We’ve only done the tip of the iceberg, and this wasn’t the panacea or the fix. This was part of a concerted effort to lessen our vulnerability on this score. So we’re going to push hard on that, and 

I plan on having a hearing as well in this committee to look at bioshield and other laws to see what gaps remain. Because this is a 

modest amount of money. We authorized $20 million each year 

over 5 years. 

We know for a fact that the VA was ready to go out and roll that 

out. They had a number of VA hospitals, research, including one 

in my state, Florida, all over, who were ready to go to put in their 

submissions and try to procure some of this money or to obtain 

some of this money to get down to the basic research. So again, I’m 

very discouraged but will not give up in trying to get those additional dollars. 

But again, I thank you, the Independent Budget and all of you 

with your expertise give us a tremendous opportunity to do good 

for our veterans with facts, figures, and it’s an excellent product. 

And I wish that every member of Congress and every member of 

the United States Senate would read it. 

I yield to Mr. Strickland. 

Mr. STRICKLAND. Thank you, Mr. Chairman. And, Mr. Chairman, 

I would like unanimous consent that all members would have 5 

legislative days to revise and extend their remarks. 

The CHAIRMAN. Without objection. 

Mr. STRICKLAND. Thank you, sir. Thank you, gentlemen, for 

being here. Before I ask a question related to your specific testimonies, I’m going to go back to something that happened a little 

earlier this morning when I was asking Secretary Principi regarding the gag order. 

And after that meeting, Laura Miller, who had issued the memo, 

came in, and I don’t want to be critical of Mrs. Miller. I’ve known 

her for a long time. She served in Ohio before coming to Washington, and I have a great deal of respect for her capabilities. But 

she indicated to me that there is a difference between marketing 

and outreach. And I indicated to her that I was going to go back 

and get a dictionary and try to, you know, distinguish the difference in the meanings. 

But the bottom line is, the policy of the VA is for one purpose, 

and that is to limit the number of veterans who are coming in for 

services. That’s the only reason for such a policy. And I simply said 

to her, why don’t you just rescind the memo then if you’re doing 

all of these things—health fairs, meetings, news releases, other 

publications and so on—just rescind the meeting? 

Now I’ve joined with the Vietnam Veterans of America, and we 

have instituted legal action against the VA. It was a last resort. It 

occurred after I had written the President, I had written the Secretary, I had met with the Secretary. We had discussed in detail. 

This policy is offensive to me. It is offensive that we would have 

a policy for the specific purpose of limiting the number of veterans 

who become aware of VA services and consequently come in to receive services they are legally entitled to receive. 
57

Having said that, I’ll move on to this question. The VA has ex- pressed a desire to transfer some $400 million from VA medical 

care to the CARES investment fund in this fiscal year as was authorized in the omnibus appropriations bill. And I would just like 

for each of you to tell me how you respond to that, if it’s something 

you agree with, disagree with, or have concerns about. 

Mr. FULLER. Congressman Strickland, let me respond to that by 

saying that we were rather concerned about that, to say the least, 

last year when the appropriation was going through. I think you 

all are aware and were very much involved in the long, hard battle 

that we got starting just a year ago when the Administration came 

in with its request. We had to go to the budget committees and the 

budget process and the allocations and the appropriations process 

in the House and the Senate as we do every year. That was a long, 

hard fight to try to get that budget for this year bumped up, and 

particularly in the medical care side. Then, all of a sudden, to see $400 million of that long, hardfought for money now going to subsidize another program that was 

already underfunded, the VA construction program, we became 

quite concerned about that. Our concern about CARES has always 

been that the ‘‘E’’ in CARES stands for enhancements. If CARES 

is designed to improve services for veterans, there’s going to be a 

price tag on that. The CARES report itself says this price tag is 

somewhere in the neighborhood of $4 or $5 billion to be spent over 

some unknown period of time in the future. 

If that’s to be the case, then we want to see the real dollars put 

into the VA construction budgets on a yearly basis to plan, build, 

construct and design these new and better facilities. We should not 

try to rob Peter to pay Paul by siphoning this cost out of already 

short medical care dollars. 

Mr. CULLINAN. Mr. Strickland, I would just add to that that certainly this situation certainly illustrates the problem with the current funding methodology or when it doesn’t work right. The reason that that money is there is the appropriation was made, I 

think it was almost 5 months late, and that’s a travesty. 

As was said earlier, money for a given fiscal year should be spent 

within that fiscal year, but if you get it 5 months late, that’s not 

going to work out. And that’s a real problem. 

Mr. VIOLANTE. And DAV also has concerns about that transfer 

of those funds. I mean, they’re there for a specific purpose, and 

they’re not being used for that purpose. 

Mr. JONES. Mr. Strickland, regarding the $400 million transfer, 

put it in context. You have a projected $800 million carryover. If 

you took the $400 million out of medical care, replaced it with what 

you project to be carryover, you then have $400 million remaining, 

if I’m correct, $800 million minus 400 is $400 million. 

If you then took the average cost of serving a priority veteran at 

$2,500, which the VA says is about right, and divided that into the 

$400 million remaining, you could do two things. You could shift 

the funds, take care of CARES. You could replace the funds out of 

the 800 carryover, and you could open VA to Priority 8 veterans. 

You could serve 167,000 veterans with the remaining $400 million. 

So we’re concerned about $400 million, but we’re more concerned 

about the carryover. If you’re going to transfer $400 million out of 
58

medical care into CARES, what are you talking about with the 

carryover? 

Mr. STRICKLAND. I want to thank each of you. I’m sorry we don’t 

have more time, but we have additional questions, and maybe we 

can either submit them to you or have an additional round of questioning. Thank you. Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you. Mr. Bradley. 

Mr. BRADLEY. Thank you very much, Mr. Chairman. I have nothing at this time. 

The CHAIRMAN. Mr. Michaud. 

Mr. MICHAUD. Thank you, Mr. Chairman. I want to thank the 

VSOs for all that you’ve been doing for our veterans, and especially 

I want to thank you for this Independent Budget. It definitely is 

a document I definitely read, and it is very helpful and it really 

puts things in perspective, and that’s part of the problem I had earlier today with the Secretary’s remarks when you talk about 

percentage. 

And, yes, we have increased the budget by a certain percentage. 

But when it’s inadequately funded in the first place, number one, 

but when you actually look at the real dollars and the effect that 

it’s having, I think that tells another whole story. So I do appreciate all that you’ve been doing to help keep this committee informed of what’s happening. 

And when you look at the carryover issues, the dollars and because of the lateness of the budget when it passed, it leads me to 

believe that the only way we’re going to ever solve this problem is 

for mandatory funding. And I think it’s an area that hopefully the 

committee will continue to work in a bipartisan manner to try to 

put forward that guaranteed funding so that we’ll not have to deal 

with this issue year after year, which we definitely should not be 

having. 

So I don’t have any questions at this time, Mr. Chairman, but 

I do want to thank the VSOs for everything that you have done as 

it relates to veterans. 

Mr. FULLER. If I might say, Mr. Michaud, we have provided a 

copy of the Independent Budget, a pre-release copy for all members 

of the committee. The published document with the Administration’s numbers will be back from the printer next week. In the 

meantime, it is online and it has its own web site, which is 

www.independentbudget.org. Independentbudget is one word. 

Mr. JONES. Is that dot org? 

Mr. FULLER. Dot org, yes. That’s my commercial for the day. 

Mr. MICHAUD. Thank you. 

The CHAIRMAN. Mr. Bradley. 

Mr. BRADLEY. Yes, and I apologize to the members for not thanking them for being here and looking forward to working with you 

to make sure that we take care of America’s veterans. I didn’t have 

any questions at this point in time. Got a lot of reading to do and 

look forward to working with you, as I said. Thank you. 

The CHAIRMAN. Thank you. Dr. Snyder. 

Dr. SNYDER. Thank you, Mr. Chairman. And I apologize. I got 

kind of confused on the schedule, Mr. Chairman. I had to run to 

another meeting and went back to my office. It was getting close 

to eleven, and you all just kept going right on through the session. 
59

And so I thought, well, I’ll—anyway. You actually, the Spanish, our 

Spanish leader and friend finished before this hearing finished. So 

I got confused. 

And I’ve got to go the Armed Services at one, but I was—and so 

you’ve all probably talked about this some, but really I think Secretary Principi is a fine man. I think we’re lucky to have him. And 

of course one of his qualities is his candor, and so somebody asked 

him, well what did you ask for from OMB? And we’ve gone years 

here without having anyone tell us what they asked from OMB, 

and he said I wanted $1.2 billion more. Well, there it was right 

there. So we’re going through all these gyrations. What’s the bottom line? Secretary Principi, who I—he doesn’t strike me as a 

budget padder. He doesn’t strike me as somebody who would build 

in stuff in that budget that they can cut away and have OMB cut 

out fluff or something. He looks to me like he’s a straight shooter. I suspect he shoots straight with OMB. And he said he wanted $1.2 

billion more. And the reason I don’t think he’s padding his budget is when I look at that research number. They cut $50 million. I 

mean, that’s real money. That means there’s somebody out there 

that’s doing research right now that’s not going to get funded in 

another year. 

So I think that’s a problem. During the break, I went—and I also 

heard Secretary Principi gave very eloquent testimony while I was 

in my office watching this, talking about research. He talked about 

having met with Vietnam veterans with prosthetics. I’m sure you 

all heard that, were in the room when you heard that testimony. 

I mean, he clearly gave a very strong case. I think he talked about 

a center for excellence and prosthetics and a need for additional 

money in research on prosthetics. And a number—he said in the 

hundreds of amputees we have from the current war. 

So he just made a very strong argument for wanting to have a 

good research number. But it tells me that by him having to cut 

that $50 million in the research budget, he was not padding that 

budget that went to OMB. So I think $1.2 billion—we may just 

want to make a motion, Mr. Chairman, we add $1.2 billion and all 

go home and just trust Secretary Principi. 

But one of the things they were talking about was, well, we can 

get this money from NIH, which I think is just really strange. 

We’ve fought this fight before. It’s not going to work. And frankly, 

that doesn’t have anything to do with VA’s responsibility to properly funding research. 

But during the break, I found out NIH’s budget went up 2.6 percent. So my guess is, they don’t feel like they’re rolling in tall cotton this year with a lot of extra money, you know, just keeping 

pace with inflation, and because it’s medical research, you can’t 

take the normal inflation rate, because a lot of it does get caught 

up in this 8 percent or so of medical research. 

And the DOD, the basic research budget is down 4 percent. Now 

basic research is your basic sciences, not medical. But my point is, 

we’ve got a problem in our—I think throughout the budget, and 

have had for a while, except for NIH, of research being cut. But 

this was really brought home in this budget today I thought. That 

the Secretary didn’t get $1.2 billion. He had to find things to cut. 

And when you start cutting research dollars when we’ve got, you 
60

know, some real challenges out there for our veterans in their 

health care and the special needs that they have. This is down to 

the bone now on some of those line items. So that was just my comment I wanted to make. If you all have any comments about that. 

Mr. JONES. May I just give a quick comment? If you take the 

Secretary’s request, $1.2 billion, add to that the $1.2 billion he said 

he asked OMB for but did not get. And then remember there’s an 

$800 million carryover. Adding those together, you come up exactly 

to what the IB is recommending for the next—for fiscal year 

2005—$3.2 billion increase. 

Mr. FULLER. Dr. Snyder, we are also very concerned about this 

research cut. We’ve never seen anything like this being proposed 

in recent history, if I recall, at all. At the magnitude of a $50 million cut, we went back and looked at the record. That amount 

would bring VA research back to about the 1999 level. 

There was a lot of discussion this morning with the Secretary 

and others on the fact that if we were only able to get this indirect 

cost from NIH, this could offset the cut here. That’s not the case 

at all, because the indirect costs are totally apart from cutting $50 

million out of the direct grant program of the VA. We understand 

that reduction equates to losing about 500 clinician researchers lost 

to the system not only performing research, but also providing clinical care for veterans at the same time. 

I find it difficult to believe, and it’s very admirable that we want 

to set up a center of excellence in prosthetics. I think that’s a marvelous thing for the VA to do. VA has been in the past a leader 

in prosthetic research. But how do you start these new initiatives 

if you’re cutting the research budget by $50 million in one particular year? I think they don’t quite match the intent and the reality of their budget proposal. 

Dr. SNYDER. My understanding is that, Mr. Chairman, that 

somebody had asked and the Secretary said that he would provide 

us with his—what he had asked for specifically in that $1.2 billion. 

It will be interesting to see what his number, what his requested 

number is. I suspect it’s more than $50 million. I suspect it’s just 

an inflationary increase. But I think probably it’s more than just 

$50 million that got cut out of his budget request. I’ll bet it’s closer 

to 65 or so. 

But I appreciate you all for being here and appreciate the work 

you put in on this. And I think we ought to keep talking about this 

research issue, because this has got ramifications throughout our 

budget, not just for health care on the DOD side in terms of how 

we fight future wars and how we take care of our men and women 

in uniform before they become veterans. And if we keep cutting research all across the budget or don’t fund it properly or don’t take 

advantage of the opportunities out there in science and technology 

for research, we do a disservice to the American people. 

Thank you. 

The CHAIRMAN. Thank you very much, Dr. Snyder. Just to amplify a little bit from the budget submission, that 499 FTE that 

would be lost if that budget cut were to go through, when you really start breaking it out, you see what damage that potentially could 

do in the biomedical laboratory science research, we would lose 85 
61

people; health services research, 17; rehab research, 21; clinical 

science research, 26 people; and in medical care support, 350. 

So it’s a very significant number to drop or decline. So I thank 

you for your questions along that line. Yes, Doctor? 

Dr. SNYDER. Just a final comment. And I appreciate your interest 

in this issue. It’s something, you know, I had my own health problems this year with surgery and all, but. 

The CHAIRMAN. You’re looking great. 

Dr. SNYDER. Yeah, thank you very much. But, you know, every 

family has somebody that has medical things. So we all—we spend 

a lot of time talking about access to care and paying for medicines 

and transportation to doctors and all that. 

The bottom line is, you know, we’re all still young enough. Think 

what health care is going to be like 30—I’m planning to be here 

40 years from now. But we’ve got some real opportunities to prolong life and the quality of life, but it doesn’t come for free. And 

I think the American people somehow think it’s not just enough 

that we have a good looking VA building like we do in Little Rock 

and we have it staffed. What we want is as years go by that what 

happens in there gets better and better and better. 

And so, you know, paralysis. I mean, who knows where we’ll be 

30 or 40 years from now with regard to quadriplegia. Maybe it will 

be a curable disease. It won’t be if we don’t put the money into it. 

Thank you. 

The CHAIRMAN. I agree. You know, speaking for myself, I think 

this cut is totally unwarranted and counterproductive because 

every dollar we spend in research is needed, and we’ve seen this 

with the NIH and other monies that we expend. You almost can’t— there’s no overload capacity in cancer research, and especially in 

medical care for our veterans. There are horizons that have not, or 

challenges that have not been met. So hopefully we can restore 

every dollar of that. Let me just ask a couple of follow-up questions 

or just make points. Mr. Jones, you had commented on older VA 

cemeteries. As you probably know, our staff visited the TOGUS 

main cemetery a year ago. It was closed in 1954. The conditions 

were unacceptable. I wrote to the Secretary, and he immediately 

moved to try to rectify the situation. And what should the VA be 

doing to restore those older VA sites, if you could respond to that? 

And I would just also, to Mr. Cullinan, as you know, we passed 

Public Law 108–170, which was the first in a number of years, VA 

construction budgets as part of the health care initiative or health 

budget, that provides $276 million for eight named projects, $86 

million for five advanced planning projects, which will carry additional dollars if the planning goes as we anticipate, and authorizes 

studies in four additional areas, including in the State of New 

Jersey. 

The third time’s the charm. We had passed previous bills that 

died in the Senate. I remember H.R. 811, which provided $550 million over 2 years. We thought that, you know, was warranted. 

CARES was used as a pretext to say wait until they do their work 

on CARES before we do this seismic and other construction advancements, and it never went through. 

Mr. Moran had a bill that we did as well, passed the House, unfortunately died in the Senate. So this one finally was passed. You 
62

may just want to comment further. Because I’m afraid that if 

CARES gets delayed or perhaps if anything goes forward, some of 

these very important projects will again be put on the back burner, 

you know, delay is denial. 

Mr. CULLINAN. Mr. Chairman, our observation has been that 

CARES is being used as a justification, as an excuse to bring construction basically to a halt in VA, period. And it’s certainly manifest in the President’s budget submission, what they would provide 

for actual, you know, major or minor construction projects. 

CARES has become a block, a barricade to proper construction 

projects, proper renovations, our concerns about seismic deficiencies, all of these things have been brought to a halt by CARES. 

And one has to question how long it’s going to take for CARES to 

go forward to any extent. 

There’s not enough money being provided or being offered by the 

President to really pull it off in the upcoming fiscal year. There 

seems to be an ongoing delay in the presentation of the study. The 

Secretary indicated earlier he expects to get the CARES study February 12, I believe he said, and then they’re going to look at it for 

another month, and then maybe it’s going to come to light. And one 

might suppose that, you know, election year politics could provide 

another barrier. 

We’re very, very concerned. 

The CHAIRMAN. Mr. Jones? 

Mr. JONES. Yes, sir. Critical projects have been identified and associated with the National Shrine Commitment initiative. These 

projects include gravesite renovations, headstone alignment, repair 

of roofs, drives, parking lots, walks, buildings, statues, memorials 

and all related projects. 

This is the answer to care for older cemeteries, those cemeteries 

that are no longer open. If we are to have a commitment to the National Shrine initiative, we need to ensure that it’s a priority. To 

get the job done, we need to have priority funding for the National 

Shrine initiative. I think that’s essential, to answer your question, 

and the question of others who visit these shrines and recognize 

what service has been given to this country and the debt we owe 

so many people who have gone before us. 

The CHAIRMAN. Ms. Davis? 

Mrs. DAVIS. Thank you, Mr. Chairman. I know in your testimony 

you talk about the loss of budget dollars, and I’m just wondering, 

and you probably have addressed this, one is the real consequences, and I think, Mr. Fuller, you speak to the consequences 

in the budget to our military families. I wonder if you wanted to 

just elaborate on what you think those consequences would be. 

And Mr. Violante, I just wonder, thinking—you mentioned the 

trend, that the trend is in your estimation is gong the wrong way, 

what we would anticipate 5 years from now. Where do you see the 

real impact to be, judging on the gaps in this particular budget? 

Either one, Mr. Cullinan or—— Mr. CULLINAN. Could I? I could speak to that in budgetary terms, 

and it’s a thought that kind of clarified in my mind when I was 

listening to Mr. Buyer speak earlier. A number of years ago, we all 

fought to get to allow VA to collect and retain third-party collections, the idea being, at least among ourselves and our friends here 
63

in Congress, that these dollars would be used to augment the system, to supplement appropriations. Of course, we all understood 

that there’d be some shifting. Obviously there would be some 

shifting. 

But for 2005, we’re presented with a budget, depending on 

whether you use the traditional methodology or the new methodology, where collections represent five to six times as much as the 

appropriation support. That’s not augmenting appropriations, 

that’s supplanting them. And if that trend continues, we’re in a 

horrible situation, both ethically and in practical terms. The money 

is not going to be there to sustain the system. 

There is language in the President’s 2005 budget which basically 

mandates that dollars be spent on Categories 1 through 6 before 

7’s may be addressed, as long as 1 through 6’s needs are properly 

attended to, whatever that means exactly. Once again, that’s a 

dangerous situation. Sevens, which should be designated as 5’s in 

our mind anyway—they don’t really make all that much money— could suddenly be pushed out of the system. 

There is the tendency again. We could have a system in a number of years that would be hard put to properly provide for the veterans that it does serve, and those veterans that it would be allowed to serve would be drastically diminished. I guess that’s my 

gravest concern. 

Mr. FULLER. I’d just like to reiterate one point. It appears that 

every time OMB or an Administration is facing a budget deficit or 

problems or doesn’t want to spend the money on veterans’ health 

care, then they recommend another increase in a user fee or a copayment or raise this charge or that charge, which gathers in a lot 

of money, but it’s also very, very painful for veterans. 

Last year when we saw these same co-payments and user fees 

raised, we brought in an example of a PVA member who relies on 

the VA health care system for his specialized services and requires 

a lot of stuff, a lot of supplies, a lot of equipment, a lot of health 

care. We gauged what he was paying now and what he would be 

paying under the new system, and it just about tripled it. It went 

into the thousands of dollars. These are people who are not necessarily affluent, but who, when they rely on the VA health care 

system, have to make a choice of whether they’re going to spend 

that money or go without the health care itself. That’s the real 

concern. 

Mrs. DAVIS. What we think about as the benefits couldn’t be cut 

in half or even greater than that in the future, and that might be 

a picture that we don’t want to paint. 

Mr. FULLER. Well, I think we also have to face the fact that we 

have a chronic problem in VA health care system now—waiting 

times. The reason people have to wait a long time is because there 

isn’t enough staff to be able to actually staff the clinics to push people through on a timely basis. And where do you get staff? You get 

staff from adequate budgeting. Not only the amount of budget you 

get, but also when the VA gets that particular appropriation. That 

has become a problem as well. 

Mrs. DAVIS. Thank you. Is there anything else in particular? I 

know always in a hearing there’s that feeling when you leave, oh, 

I wish I would have. Is there anything that wasn’t in your testi-
64

mony that you haven’t had an opportunity to answer and you really would like us to leave here focused on that particular issue? 

Mr. FULLER. If I could just raise a topic which I didn’t dwell very 

much on in my testimony but which was also raised here I believe 

briefly is the really serious reductions and cuts in the number of 

nursing home beds that are in this particular document. 

I mean, this is really shocking. 

Mrs. DAVIS. It’s about 5,000. Is that the number you have? 

Mr. FULLER. Yes. One of the historic functions of the VA going 

way back was long-term care and domiciliaries and housing. It’s 

very clear to us that the VA just wants to abdicate this mission 

and then push people off into either Medicaid or state homes or 

other state programs. 

From PVA’s standpoint, home and community-based services are 

the most humane way to deal with a long-term situation if the 

home is adequate and the help is adequate at home. The level of 

care is appropriate for the patient. But, home and community 

based care cannot really be a substitute for all types of long-term 

care services. You need nursing homes. You need the ability that 

the VA has. 

Historically, VA nursing homes have been better staffed, better 

equipped, with higher skills than what you could possibly find in 

the private sector. They are able to take extraordinarily complex 

patients, such as ventilator-dependent patients and people with 

very high levels of chronic dementia. We would just hate to see the 

VA lose this expertise in caring for the aging veteran. 

Mrs. DAVIS. I appreciate that. Thank you. I know I raised that 

issue earlier today as well. 

Mr. VIOLANTE. Congresswoman Davis, one thing that really sent 

the message home to me when the VA briefed us on the budget was 

dealing with the COLAs. And for their employees in 2004, they projected a 2 percent COLA. They wound up with a 4 percent COLA, 

and that meant that on the health care side, it cost VA hundreds 

of millions of dollars to make up that difference in the COLA. That 

came out of our health care. On the benefits side, it was about $30 

million. This year they’re projecting a 1.5 percent increase for their 

COLA. So if you’re going to give them more, you might want to factor in some additional money to do that so it doesn’t have to come 

out of the program funds. 

Ms. SNYDER. Thank you very much. Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you, Ms. Davis. And if I could, Mr. Fuller, 

and I’m sure you’ve seen the VA’s numbers. I agree with you. As 

a matter of fact, we had a hearing last week focusing on the longterm health care crisis and the fact that we’re not meeting our 

needs, that the Millennium Health Care Act passed just a few 

years ago was designed to put in a floor, not a ceiling, and certainly 

a floor now that has been breached if this proposal were to go 

through. 

While we’re happy that the VA suggests that the state home 

nursing will rise 30 percent from 14,674 to 19,010, I agree with you 

that the VA itself should not see a 37 percent decrease, which is 

in their data, from 13,391 to 8,500. Yes, there’s a big push towards 

noninstitutional care. An 84 percent increase year over year is 

what they’re suggesting here. But as you pointed out, that’s not ap-
65

plicable in all cases, and there are so many cases, as we all know 

from our own personal experience—from our grandparents and others—that works, but only in a limited set of circumstances. 

Last year we fought very hard to ensure that the proposed 5,000 

decrease in VA nursing home beds would not happen. I can assure 

you we will do the same thing this year. Mr. Strickland. 

Mr. STRICKLAND. Mr. Chairman, I don’t have any questions, but 

I’m just sitting here, you know, the more this budget becomes exposed, the more bizarre this becomes. I mean, we are in the middle 

of a war. We’re talking about going to Mars. And we’re talking 

about cutting 5,000 beds out of long-term care for veterans. And 

this budget is unrealistic. It’s not going to happen. We’re not going 

to impose those co-payment increases. I don’t think—I don’t think 

Republicans or Democrats either one in this House is going to accept that. And I don’t think they’re going to accept the $250 user 

fee or whatever it’s now being called. 

And this budget is based upon the assumption that that’s going 

to happen. So not only are we short to begin with, based upon most 

of what I think all of us in here believe, you know, if these proposals don’t take place, we’re going to be even shorter. 

And if I can just say one thing about the research. I got a call 

from a colleague this summer during the August recess. This colleague said to me, you know, I’ve been thinking about this VA system. You know, why don’t we just get rid of the VA health care system? And why don’t we just let people, you know, go to the Cleveland Clinic or wherever they want to go get their health care? I 

think we could save a lot of money. 

He said, you know, I think I’ll as the GAO to do an investigation 

of this to just tell us how much money we could save. And I’m 

thinking, go right ahead. In fact, I said to him, go right ahead. 

Why don’t you do that? Because I think what he’ll find out is we 

wouldn’t save money. The VA is efficient in providing the kind of 

services it provides. 

And one of the things that I am most proud of when I talk to 

people about the VA system and why it should be preserved is the 

research that goes on. Christopher Reeves has made whatever 

progress that he’s made in significant part because of research that 

took place at the VA facility in Cleveland, Ohio. Breast cancer research that’s gone on in the VA. I mean, this is a jewel. We should 

be so proud of this research effort, and we should just commit ourselves to protecting it. 

So I just wanted to say that. Mr. Chairman, I know where you 

are on all of these things, and so, you know, because sometimes I 

feel like I’m kind of preaching to the choir so to speak, especially 

when we talk to each other in this room. But these are important 

things. And I just want to—I want to thank you. Keep up the fight. 

I think the fact that you are unified and this is a unified effort put 

forth by the various VSOs gives it great power. 

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

The CHAIRMAN. Thank you very much. I want to thank our very 

distinguished panel again for the great work you’ve done past, 

present and I know in the future going forward. Your presentations 

today were very enlightening and very helpful. 
66

Thank you. I’d like to ask our final panelists, group of panelists, 

panel number three, to be seated, and beginning with Mr. Peter 

Gaytan, who is the Principal Deputy Director of the Veterans’ Affairs and Rehab Division for the American Legion. 

He attended Wesley College in Dover, Delaware where, Mr. 

Gaytan earned a B.A. in political science. He also is a graduate of 

the Defense Information School of Fort Meade, Maryland. 

Mr. Gaytan entered the U.S. Air Force, and after completing initial training, served as Military Protocol Liaison with the 435th 

Airlift Wing at Dover Air Force Base in Delaware. In addition to 

his active duty service, Peter served 6 years with the 5412th Airlift 

Wing, U.S. Air Force Reserve, as a public affairs specialist. 

Next we’ll hear from Mr. Richard Schneider, who is the National 

Director of the State/Veterans’ Affairs Non Commissioned Officers 

Association. 

Mr. Schneider has a Bachelor of Science degree from the University of Southern Colorado and a master of arts from the University 

of Northern Colorado. 

Mr. Schneider served in the United States Air Force from August 

1957 to September of 1990. He retired at the grade of chief master 

sergeant. 

Next we’ll hear from Colonel Robert F. Norton, U.S. Army (Retired), who is co-chair of the Veterans Committee for The Military 

Coalition. When he wears his other hat, he is the Deputy Director 

of Government Relations for the Military Officers Association of 

America. 

After earning his undergraduate degree, he enlisted in the U.S. 

Army as a private and was commissioned as a second lieutenant 

of infantry after completing officer candidate school. After a tour of 

duty in Vietnam as a civil affairs platoon leader with the 196th Infantry Brigade in I Corps, he transferred to the Army Reserve and 

taught school at the secondary level. 

Colonel Norton served in various staff positions with the 356th 

Civil Affairs Brigade, U.S. Army Reserve, until he volunteered to 

return to active duty in 1978. He served two tours in the Office of 

the Secretary of Defense. He finished his career as Special Assistant to the Principal Deputy Assistant Secretary for Defense, Special Operations/Low Density Conflict, and retired in 1995. 

Next we will hear from Master Sergeant (Retired) Morgan D. 

Brown, who is also a Co-Chair of the Veterans Committee for The 

Military Coalition. Mr. Brown also serves as the Legislative Assistant for the Air Force Sergeants Association. He entered the United 

States Air Force and completed Basic Military Training, Law Enforcement Specialist Training, the Military Working Dog Patrol 

Dog Course, all at Lackland Air Force Base in Texas. 

He held various positions during his time in the military, including Law Enforcement Patrolman, Narcotic Detector Dog Handler, 

Explosive Detector Dog Handler and Kennelmaster. 

We will then hear from Mr. Richard Weidman, who serves as Director of Government Relations on the National Staff of the Vietnam Veterans of America. He served as a medic with Company C, 

23rd Med, Americal Division, located in I Corps of Vietnam in 

1969. 
67

Rick has served as a consultant on legislative affairs to the National Coalition for Homeless Veterans, and served at various times 

on the VA Readjustment Advisory Committee, the Secretary of Labor’s Advisory Committee on Veterans Employment and Training, 

the President’s Committee on Employment of Persons with Disabilities, on Disabled Veterans, and numerous other advocacy posts in 

veterans affairs. 

So, Mr. Gaytan, if you could begin. 

STATEMENTS OF PETER S. GAYTAN, PRINCIPAL DEPUTY DIRECTOR, VETERANS’ AFFAIRS AND REHABILITATION, THE 

AMERICAN LEGION; RICHARD C. SCHNEIDER, NATIONAL DIRECTOR, VETERANS AND STATE AFFAIRS, NON-COMMISSIONED OFFICER ASSOCIATION; COLONEL ROBERT F. NORTON, U.S. ARMY (Ret.), DEPUTY DIRECTOR, GOVERNMENT 

RELATIONS, MILITARY OFFICERS ASSOCIATION OF AMERICA AND CO-CHAIR, VETERANS COMMITTEE, THE MILITARY 

COALITION; MASTER SERGEANT MORGAN BROWN, U.S. AIR 

FORCE (Ret.), LEGISLATIVE ASSISTANT, AIR FORCE SERGEANTS ASSOCIATION AND CO-CHAIR, THE MILITARY COALITION; AND RICHARD F. WEIDMAN, DIRECTOR, GOVERNMENT RELATIONS, VIETNAM VETERANS OF AMERICA 

STATEMENT OF PETER S. GAYTAN 

Mr. GAYTAN. Thank you, Mr. Chairman, for the opportunity to 

express the views of the 2.8 million members of the American Legion regarding the Department of Veterans Affairs 2005 budget 

request. 

The American Legion continues a proud tradition of advocating 

for proper funding levels to ensure America’s veterans receive the 

health care and benefits they have earned through their honorable 

service to this country. As American servicemembers continue to 

fight for our freedom in more than 130 countries worldwide, it is 

the responsibility of this committee, as well as the entire Congress, 

to provide a budget that will allow VA to fulfill its mission. 

In the FY 2005 budget request, there is a continued emphasis on 

the treatment of the core mission veteran population. Term ‘‘core 

mission veteran population’’ does not appear in Title 38. In 1998, 

eligibility reform ensured all eligible veterans could seek health 

care through VA, not simply those designated as the core mission 

veteran population. 

Since then, we have seen VA shut its door on Priority Group 8 

veterans. Tailoring the patient population to meet the budget was 

not the intent of Congress when VA eligibility was reformed. The 

American Legion urges this committee to fund VA at a level that 

will ensure all veterans have access to the VA health care system. 

The VA budget must reflect the true demand for care. 

Today veterans continue to suffer as the result of a system that 

has been routinely unfunded and is now ill equipped to handle the 

large influx of veterans waiting to use their services. Despite recent 

progress, veterans continue to experience long waiting times for 

medical appointments as well as long waiting times for claims adjudication. The American Legion applauds Secretary Principi for 

his efforts to reduce the extreme backlog of patients waiting to re-
68

ceive care at VA facilities, and we urge VA to continue to implement practices that will eliminate the backlog systemwide. 

Last year the American Legion initiated an effort to learn firsthand the concerns of VA facility directors. Under the ‘‘System 

Worth Saving’’ initiative, Past National Commander Ron Conley 

visited 60 Veterans’ Affairs medical centers, and so far this year, 

a team of Legionnaires has visited more than 25 facilities. 

We are learning one of the main issues of concern for facility directors is the increase in medical care collection fund targets. The 

VA medical centers are concerned over the significant increases in 

their MCCF goals and what impact the restriction on enrolling any 

Priority Group 8 veterans will have on their ability to meet these 

goals. 

The American Legion shares their concerns, and we are also concerned about the impact of certain proposals included in the FY 

2005 budget request that seek to generate increased revenue for 

VA from the pockets of veterans instead of through allocation of 

federal funds. 

The American Legion opposes the continuation of the suspension 

of enrollment of new Priority Group 8 veterans. Denying veterans 

access to VA health care, particularly while the Nation is at war, 

is the wrong message to send, not only to the members of the all 

volunteer force, but also to the young men and women who may 

be considering a life of service in the U.S. Armed Forces. The American Legion also opposes the implementation of a $250 

annual enrollment fee for non-service-connected Prior Group 7 veterans and all Priority Group 8 veterans. The American Legion 

would urge Congress to once again reject this proposal just as it 

did last year. 

While the American Legion applauds the initiatives to exempt 

any hospice care from co-payments, and to exempt former POWs 

from co-payments for extended care services, we do not support increasing the pharmacy co-pay from $7 to $15 for Priority Group 7 

and 8 veterans. 

Additionally, the American Legion opposes the proposed regulatory change that would increase outpatient primary co-pays from 

$15 to $20 for all Priority 7 and 8 veterans. The American Legion 

would rather VA seek reimbursements for CMS for all enrolled 

Medicare-eligible veterans being treated for non-service connected 

medical conditions before trying to balance the budget on the backs 

of Priority Group 7 and 8 veterans. 

The American Legion is very concerned with the proposed reduction in long-term care beds. We did submit testimony for the record 

at the hearing last week, and the American Legion is very concerned about this issue, and VA must meet the mandates of the 

Millennium Health Care Bill, and eliminating long-term care beds 

is not the answer. 

The American Legion recommends $30 billion for VA medical 

care in FY 2005, without inclusion of MCCF collections. 

The American Legion advocates for all MCCF collections to be 

added to the budget numbers and not be treated as an offset to the 

budget. 

Regarding the Veterans Benefits Administration, the American 

Legion is committed to ensuring VA will adjudicate veterans’
69

claims fairly and impartially within a reasonable amount of time. 

We commend Secretary Principi for the dramatic reduction in the 

claims backlog in the past 2 years. At the end of August 2003, VBA 

reported the number of pending claims had been reduced to 

265,000, and the average processing time was now about 160 days. 

While these improvements are very much needed, we must keep 

in mind that faster is not always better. The drive to achieve the 

mandated production quotas must not compromise VBA’s quality 

improvement efforts. The lack of appropriate action on thousands 

of claims has resulted in over 134,000 pending appeals. Even 

though there is an effort to resolve appeals at the regional office 

through the decision review officer program, most cases will eventually go to the Board of Veterans Appeals for final decision. 

The American Legion is pleased with the FY 2005 budget request 

proposal to address the influx of claims resulting from returning 

servicemembers from Operation Enduring Freedom and Operation 

Iraqi Freedom. These deserving veterans should not be told to wait 

in line when turning to VBA. 

Given the many and varied issues that VBA is faced with, it is 

imperative that Congress critically evaluate the level of discretionary funding requested and whether this will enable the regional offices to operate efficiently and provide timely quality service that this Nation’s veterans expect and deserve. 

In closing, the American Legion would like to join with our colleagues who earlier expressed support for mandatory funding. We 

fully support designating funding for VA medical care as a mandatory funding item within the federal budget. 

Mr. Chairman, the American Legion is fully committed to working with this committee to ensure that America’s veterans receive 

the entitlements they have earned. 

Thank you again for this opportunity. 

[The prepared statement of Mr. Gaytan appears on p. 155.] 

The CHAIRMAN. Thank you very much for your testimony. Mr. 

Schneider. 

STATEMENT OF RICHARD C. SCHNEIDER 

Mr. SCHNEIDER. Thank you very much, Mr. Chairman Smith and 

members of the committee. It’s a pleasure to be here and to represent the Non Commissioned Officers Association and its global 

membership today. 

And today it’s especially meaningful, because so many of our 

members are deployed as members of the active duty military. 

They’re in Afghanistan. They’re in Iraq, and they are looking for 

support from the home front for many of the things they do. But 

one of the things that they don’t need to hear on the other side of 

the pond is that there is a question in the care that may be available for them through the Department of Veterans Affairs. 

The Non Commissioned Officers Association recognizes that the 

Secretary of VA has done a marvelous job, but he has also done it 

year after year after year with an underfunded budget. This committee has been instrumental in ensuring the funds to provide for 

the care of America’s veterans. This year is no different. 

I was floored and almost fell off my chair this morning when the 

Secretary said he was $1.2 billion short in his budget. I listened 
70

to the numbers a day ago at VA, and I read yesterday in the paper, 

the federal page, the report of a reporter who said VA was about 

2 percent funded for the current year and 2005, and that 1.8 percent was for medical health care. And I thought that is a tragedy. 

It’s a tragedy that must be stopped. We must fund the program 

right. 

Three areas that I’m going to hit very quickly is benefits. There’s 

savings in the VA budget by eliminating employees, full-time employees who work in the federal benefits side of the Department of 

Veterans Affairs. And the wonderful news is, we have technology. 

We can expedite. We can create productivity. We can have efficiency. And if you look at the numbers of the past year, yes, the 

numbers have changed, the cases have come down, yes they have 

come down, but there’s still a backlog. 

And if you look at the numbers, you see a number that just 

makes me kind of grit my teeth, and that number is 88 percent accuracy rate acceptable. Well, I’ll agree, that’s a damn sight better 

than 65 or 70 percent years ago, but 88 percent accuracy rate is 

unacceptable. It should never be tolerated. Twelve out of every 

hundred people not having their claim filed right, that is wrong. 

The veterans health side. We’ve heard about the projection of the 

co-pay for pharmaceutical benefits, an increase from 7 to the magical teen numbers. Sevens and eights. No, we don’t agree with that. 

Leave it alone. 

A user fee of $250. Wrong. These people paid their dues. They 

are entitled to their benefits. You might say they’re non-serviceconnected veterans, and they may well be, but they served America. They stood in the breach. Their lives never got on, and now 

they need a support system, and that support system is the institution that we have promised them over the past 5 years. 

And I want to comment one thought. One thought. VA asked us 

to work with them to ensure that we would open the Department 

of Veterans Affairs to non-service-connected veterans. Part of that 

concept of opening up VA was all the money they were going to 

bring in from their insurance parties, all the money they were 

going to bring in that was going to expand at the local facility within the local network services for those veterans. Well, you know as 

well as I do, that has not necessarily happened. The money now 

is an offset. It’s included into the budget number and it adds to 

this record budget that we’re getting, and adding cost this year 

doesn’t do anything more than make available more dollars so that, 

quote, the appearance of a record budget next year will also be 

available. That’s flat wrong. Long-term care, we need more 

facilities. 

Mr. Chairman, you said it right earlier today. Years ago we said 

we needed domiciliaries for homeless veterans and other issues. VA 

has gone through a transformation, and the transformation was inpatient to outpatient. You cannot take care of all America’s veterans as an outpatient. We need those domiciliaries. We need mental health beds in our facilities for those who are homeless, for 

those who have substance abuse, for those who have alcohol abuse 

programs. We need to move VA back in line to taking care of those 

people. 
71

I would also submit to you, long-term care, veterans are the 

worst liars in the world. As a matter of fact, they’re not the worst. 

They’re the best liars in the world. Doctor has to approve a veteran 

for long-term care and he says, how are you feeling, sarge? And the 

veteran says, gee, I never felt better in my life. Damn lie. He 

doesn’t have a wife at home. He doesn’t have children at home. He 

doesn’t have a support structure around him, and yet he’s telling 

this doctor how well he’s doing, and the doctor is saying, God, this 

guy is independent. He doesn’t need to be in a facility. We’ll send 

him back home and look at him against next year. Wrong, wrong, 

wrong. Need to take care of him. 

Other points that I would make are in the statement that I have 

submitted for the record, and I commend that statement to you. 

Two areas that I would ask you to look at, and I’ll not comment 

long on them. One is we fixed in part DIC benefits for spouses who 

remarry, and we wanted age 55. We got age 57. Again, wrong. It 

ought to be 55 consistent with other programs. 

Educational benefits, the VEAP enrollments. That will be addressed later. We support reopening those who have never had the 

opportunity to sign up for the Montgomery GI Bill to have that opportunity. 

For our guard, people who received an incentive to join the National Guard because they would have a Montgomery GI Bill entitlement but the time, the clock started running the day they signed 

the paper, and they had X number of years to complete the program, many of those people in Iraq today, the clock ran out on 

their GI Bill benefits years ago. I think we ought to extend, and 

NCOA recommends that we extend the MGIB entitlement to those 

who still have remaining entitlement on their Montgomery GI Bill. 

The rest of the statement we could talk about for hours, and I’ll 

tell you what, it would be fun. The red light has been on. You’ve 

been gracious, and I’ll stop. Thank you so much. 

[The prepared statement of Mr. Schneider appears on p. 169.] 

The CHAIRMAN. Mr. Schneider, thank you very much for your 

testimony. And as you know, we are working with you and with 

others on the Montgomery GI Bill extensions, and we have right 

now at the CBO a request for a cost estimate on what it would cost 

to reopen that eligibility. Because I agree with you, and I think we 

all agree with you that it’s a wrong that has to be fixed. So thank 

you for those recommendations. 

Colonel Norton. 

STATEMENT OF COLONEL ROBERT F. NORTON 

Col. NORTON. Thank you, Mr. Chairman and members of the 

committee for this opportunity to present testimony today on behalf 

of The Military Coalition. 

The Coalition represents the collective interests of 35 military 

and veterans organizations, including a number of organizations 

that have testified at this hearing today, and we have a combined 

membership of over five-and-a-half million members. 

First, Mr. Chairman, I want to thank the individual members of 

the committee and Congress at large for enacting last year historic 

legislation on concurrent receipt for severely disabled retired veterans. This was landmark legislation. We greatly appreciate that 
72

the Congress took this step. More needs to be done, but this was 

a tremendously historic piece of legislation, and we are grateful for 

the continued progress on that issue. 

Let me talk for a moment, Mr. Chairman, about mandatory funding for VA health care. We’re very disappointed that last year a 

presidential task force’s major recommendations on VA health care 

have not been acted on. Across the board, we had representatives 

from business, health care experts from across the country, veterans and military representatives—a bipartisan commission appointed by the President. 

They came forward and recommended to you, to the President, 

and frankly, they recommended to the Nation that it was now time 

to put the VA health care system on solid fiscal basis and provide 

mandatory funding or some other mechanism that would guarantee 

and ensure funding for America’s veterans. And frankly, Mr. Chairman, the Military Coalition is dismayed and disappointed that that 

pivotal recommendation of the President’s own task force has been 

ignored. 

The VA budget submission fails to implement the full funding 

mandate, and we strongly recommend that this committee and 

Congress provide the additional resources needed to close the gap 

between growing demand and capacity. 

The second funding issue I’d like to highlight, Mr. Chairman is 

that of seamless transition between active duty and veteran status. 

This has come up in a number of places this morning and this 

afternoon. And frankly, the VA and DOD have made significant 

progress in coordinating services, and we commend that progress. 

The VA has posted staff at major military medical facilities like 

Walter Reed and Bethesda Naval Hospital to smooth the transition 

of severely wounded and ill servicemembers into the VA system. 

Benefits delivery at discharge has been a successful project at the 

start, some 136 separation transfer points are participating. 

But I learned last week, Mr. Chairman, at the Worldwide 

TRICARE Conference that coordination activities for the less acutely disabled could be improved. Right now there are 250,000 troops 

being rotated in and out of Iraq—the single largest peacetime rotation since World War II. It’s imperative that the VA and DOD 

build on their collaboration by improving outreach and transition 

services at all military hospitals, redeployment sites and separation 

activities. We recommend that the committee oversee this process 

and ensure that there are sufficient funds to support the needs of 

returning servicemembers, including the more than 350,000 members of the Guard and Reserve, our Nation’s newest veterans, who 

have been mobilized since 9/11. 

And related to that, Mr. Chairman, I want to emphasize on behalf of the Coalition that more needs to be done on seamless 

transferrable medical records for our servicemembers. This is not 

just about technology. We know, Mr. Chairman, that there are two 

robots on Mars. If we can put that technology on Mars, we can do 

better to ensure records from our servicemembers are transferred 

seamlessly between DOD and VA. This is not just about business. 

This is about those people who have raised their hands. They need 

to have the proper care throughout their service careers in active 
73

duty and into veteran status until the day that they pass from this 

life. 

Not only does this help veterans, but frankly this also saves the 

government billions of dollars in terms of initial claims, proper diagnosis on active duty, and when they get into the VA, medical 

care, and research. This needs to be done, and it’s not being done. 

There was a hearing last November that indicated it would be until 

2006 or 2007 till this project gets completed. But this needs to be 

done now. 

As a number of members have indicated today, we are at war. 

We have thousands of young men and women who will be returning with PTSD problems and other health conditions. They need to 

have a smooth seamless transition from DOD into VA, and The 

Military Coalition asks your support for this activity. 

Mr. Chairman, I would be happy to take your questions and 

those of the members of the committee, and I thank you again for 

this opportunity to testify today. 

[The prepared statement of Colonel Norton appears on p. 178.] 

The CHAIRMAN. Colonel Norton, thank you very much. Mr. 

Brown. 

STATEMENT OF MASTER SERGEANT MORGAN BROWN 

Sgt. BROWN. Mr. Chairman, distinguished members of the committee, good afternoon, and thank you for the opportunity to 

present testimony on behalf of The Military Coalition. I’d like to 

just touch briefly on a couple of education issues that the Coalition 

would appreciate you looking at this year. 

The TMC appreciates your efforts in recent years to increase the 

value of the GI Bill. You have actually taken significant steps towards having the program actually pay the full cost of books, tuition and fees, and we hope that you will continue to work towards 

that end. 

We also ask that you provide an enrollment opportunity in the 

Montgomery GI Bill for those who declined the old veterans educational assistance program. Currently, there are about 90,000 active duty members in this situation, and these individuals are the 

senior NCOs and officers leading the younger troops in the war on 

terrorism and in Iraq and Afghanistan. 

In the past, you enacted legislation which allowed the participants the opportunity to enroll in the Montgomery GI Bill. However, the decliners have never had the opportunity. Consequently, 

they have no educational transition benefit. The TMC recommends 

that the committee authorize an enrollment opportunity for career 

servicemembers who turned down the Bill. 

And finally, more than 350,000 Guard and Reserve members 

have been mobilized since September 11, 2001. Thousands more 

are preparing to deploy, and many of these individuals are parttime or full-time students. Due to the recent increases in the Montgomery GI Bill, the Selected Reserve GI Bill benefit has not kept 

pace with the active duty counterpart. In 1985, Congress set the 

Selected Reserve GI Bill benefit rate at 47 percent of the active 

duty benefit. With the recent increases in the Chapter 30 benefit, 

the value of the Selected Reserve benefit fell to 29 percent. The Se-
74

lected Reserve rate needs to be increased in order to reestablish 

proportional parity with the active duty Montgomery GI Bill. 

And, Mr. Chairman, that’s all I’ll cover today. The TMC looks 

forward to working with you on behalf of all veterans. We thank 

you and the members of this committee for your leadership and 

commitment to the men and women of the Armed Forces who so 

valiantly serve and have served this Nation. 

[The statement of Master Sergeant Brown appears on p. 178.] 

The CHAIRMAN. Mr. Brown, thank you very much for your testimony. Mr. Weidman. 

STATEMENT OF RICHARD F. WEIDMAN 

Mr. WEIDMAN. Mr. Chairman, on behalf of Tom Corey, our National President of Vietnam Veterans of America, I thank you, sir, 

and this distinguished panel for allowing us the opportunity to testify here today. 

I also want to second the thanks about the extraordinary moral 

and political courage demonstrated by yourself and by many of 

your colleagues on this committee on both sides of the aisle last 

year to secure the budget that we did have in the end. It was a 

true test of why one is in public office and reminded us at VVA, 

although it was put in a slightly sexist way, Lyndon Johnson once 

said that boys run for office to be somebody; men run for office in 

order to do something. And there were a lot of men and women on 

this committee and in this Congress last session, and we look forward to winning the battle again this year. 

VVA’s recommendation for the medical care account of VA is 

$31.31 billion. We arrived at that, Mr. Chairman, by taking the 

$28.5 billion, which is what ultimately the Under Secretary for 

Health admitted was what was needed last year in hard cash appropriated funds in order to reopen the system to Category 8’s. We 

took that and applied the 6 percent projected just pure medical inflation, not increased medical costs, just pure inflation by the Center for Medicare and Medicaid Services, utilizing the same methodology that we did in the whitepaper which was released last summer. And that took us to $30.31 billion. 

It is our estimate that it will take approximately $1 billion to 

start to rebuild the organizational capacity, particularly in mental 

health, but also in the other specialized services, and in acute care, 

where we have a dangerously low patient-to-RN and patient-toLPN ratio. 

And last but by no means least, we have not even begun to address properly the whole issue of Hepatitis C across this country. 

Most of the clinics are underfunded. Most of the clinics are understaffed, and we are now looking at a train wreck in the making 

that will hit us by the year 2010 or 2011 unless we successfully 

deal with Hepatitis C here today. That would bring, with the main 

budget, bring all of veterans health administration to $31.42 

billion. 

VVA is proud to be an endorse of The Independent Budget for 

the Veterans Service Organizations and agree with their calculations, with that one exception of medical care account, on virtually 

every other category. 
75

I want to express our thanks to our brother and sister organizations for the extraordinary effort that they put forward and their 

fine work which enhances all of our credibility, not just the VSOs, 

but our friends in the Congress. 

I also want to talk a bit about triage. It was with a great deal 

of sadness and certainly no anger or elation that Vietnam Veterans 

of America joined with Representative Strickland. Usually we get 

into trouble all by ourselves, Mr. Chairman, but this time we had 

some guidance. But we have been deeply concerned and asking 

about outreach and pushing on outreach about restoration for some 

time. 

Outreach, marketing. We went to the dictionary when this has 

been brought up to us, and we can find no difference between 

them. In fact, the best definition of how to reach a homeless veteran or a veteran who is reluctant to come to the VA, no one is 

more skeptical than homeless veterans. You have to go, and the 

definition of ‘‘marketing’’ in the dictionary is—that we consulted— is to sell the individual on the services so that the individual buys 

the service. There is no better description of what needs to be done 

on an individual basis in order to get an individual homeless veteran to come into the system to establish that kind of trust and get 

them the help that they need in order to come to full recovery and 

go on and lead a productive life. 

We were deeply—we had backed in this hearing room last year 

the temporary suspension of Category 8’s as a necessary triage decision. Less than 3 weeks—about 3 weeks later, we were in a meeting on CARES and discovered that the temporary suspension was 

slugged into the planning figures for VAs through the year 2023. 

That is one heck of a temporary suspension. 

We were quite upset with that. We went to the chief of staff of 

VA and said, well, we’re a little taken aback by this. What we believe happened because—and I wanted to mention, as I was starting to say, about the whole issue of outreach and joining in the suit 

to restore proper outreach, is it comes back to the question of lack 

of resources, and now VA is planning for the future not to have 

enough resources on a permanent basis, as a way of limiting who 

is eligible. 

If in fact folks want to change who is eligible under Title 38, 

then let’s do it through the front door. Let’s do it openly. Let’s do 

it honestly. And frankly, Vietnam Veterans of America and I’m 

sure all of us in this room will welcome that debate out in the sunshine. It is through the back door in the dark of night of by de facto 

underfunding the VA system and therefore denying Category 8’s. 

This is not a victimless crime, we would suggest. This outreach 

in education is key. Most Vietnam veterans go nowhere near the 

VA system. Most Vietnam veterans and those of us who served on 

the ground in country have no idea that our prostate cancer rate 

is many, many times that of our nonveteran cohort group. And 

therefore, we need to be checked much more often. 

And if folks do get sick, and many have gotten sick and died from 

prostate cancer who served on the ground in Vietnam, they perish, 

never having a clue that they died for their country as a result of 

wounds and exposures that were received in Vietnam. That leaves 

the family in debt instead of with DIC. It is that kind of example 
76

that we would use that excluding Category 8’s as a matter of 

course is excluding people who should be Category 1 because ultimately they would be 50 percent or more service-connected before 

they perish. 

In regard to the research dollars, we would second and feel very 

strongly that the refocus that Secretary Principi and commend the 

VA and the Secretary for refocusing VA research on the wounds of 

war. But to cut VA, the overall appropriation at this time is particularly bad. 

I want to just finish up, Mr. Chairman, by saying, as usual, we 

were going to talk about the purpose of VA. The purpose of VA is 

to care for he who hath borne the battle. Currently, the VA has no 

idea who borne the battle. You don’t even know by looking at the 

VA health care system who served in a combat theater of operations. They do not ask the questions on military history that they 

should be asking in order to do a complete diagnosis and lead to 

wellness, and that leads us to where we are today. 

The gap between where we need to be and where we are will 

never be made up through the ordinary budget process. It will 

never be made up, no matter what heroic efforts, no matter how 

much moral and political courage you and your distinguished colleagues display. The only solution to this is moving to mandatory 

funding. We have to quote/unquote ‘‘go off budget.’’ Whatever you 

want to call it. And that is the only way that we will achieve the 

money that we need now to start restoring the system to its organizational capacity in order to be ready for the young men and 

women coming home as well as taking care of the veterans who are 

already of previous generations in very much need of the care that 

VA only can provide when it’s doing its job, focusing on being a veterans health care system as opposed to just general health care 

that happens to be for veterans. 

Mr. Chairman, once again, I thank you, and I particularly thank 

you for your indulgence in allowing me to run slightly over time. 

[The prepared statement of Mr. Weidman appears on p. 186.] 

The CHAIRMAN. Thank you very much, Mr. Weidman. And like 

the previous panel, I want to thank all of you for the good work 

that you do, the very timely and extensive recommendations you 

make, not just at today’s hearing and in anticipation of it, but 

throughout the entire year. 

As you know, we take seriously those recommendations. We very 

often turn them into solid legislative proposals. You look at the 

bills that have been passed in the last several years, it is replete 

with insights and recommendations that have come right from you. 

So I do appreciate that. We all appreciate that very, very much. 

As we went to our benefits bill, seven titles, 39 different district 

provisions in that bill. So many of them were recommendations 

that had come directly from you from the field. 

When you talk about the GI Bill, Colonel Norton, I couldn’t be 

more in agreement, and all of you who raised it. When we raised 

it a couple of years ago by 46 percent, that’s not what we wanted. 

We wanted more than that. Just to keep pace with the rising cost 

of inflation at our colleges and universities and junior colleges, 

which have been growing almost exponentially in the last 10 years, 
77

the GI Bill fell into disuse because it wasn’t enough for a benefits 

package. 

So again, your recommendations there were so helpful, and we 

have legislation we’re preparing now that would meet some of 

those additional needs, and we will work it hard in this Congress. 

I just would ask maybe a question, if I could. The recommendation in the administration’s budget for $1.3 billion in management 

efficiencies. I’m not totally sure how after last year’s billion, if it 

ever materializes, that we can squeeze that much out of productivity and synergistic work in the VA with DOD/VA sharing or 

however they define management efficiencies. Another 1.3 this 

year. Do you think that’s a realistic figure, or do you think that’s 

just something that was put in there to plug a hole? Mr. Weidman? 

Mr. WEIDMAN. If it were management efficiencies, I think you 

would find not only Vietnam Veterans of America but my distinguished colleagues from all the other organizations would be all for 

it. 

We have long since passed that. For the last 4 years, it has been 

a code word for reducing services. It’s as simple as that, sir. 

The CHAIRMAN. Yes, Colonel Norton? 

Col. NORTON. Mr. Chairman, I’d just like to comment on the VA/

DOD sharing process. It’s a good process. There are opportunities 

out there, and DOD and VA have looked at opportunities to collaborate on equipment purchasing, facility sharing and so forth. 

But what we’re concerned about in the Coalition is that, again, 

when you look at the word ‘‘CARES’’ you don’t see a metric that 

says how does this collaboration enhances services for eligible beneficiaries. Whether they’re active duty, whether they’re retired, 

whether they’re returning servicemembers from Iraq, whether 

they’re veterans. 

So, collaboration is okay, and ultimately it may improve management efficiency, but we want to know, and we want to see what 

those efficiencies are going to produce in terms of access, quality 

of care, reducing waiting times. In other words, enhancing services. 

The ‘‘E’’ in CARES has to be a capital E if this thing is going to 

work between DOD and VA. 

The CHAIRMAN. Yes? 

Mr. GAYTAN. Mr. Chairman, I’d just like to add what Colonel 

Norton mentioned about the CARES initiative and the management efficiencies, the American Legion is very concerned about the 

CARES initiative and the proposals that are coming out of the 

draft national plan. 

Our main concern is not that a more efficient run VA system— that’s the goal of the American Legion as well as the CARES Commission. What we want to ensure is that any recommendations 

that come out of the CARES Commission do not suspend services 

while they’re implementing any of the reconfiguring or realignment 

of facilities. 

Not only can we not suspend those services, but we need to ensure that when the final recommendations are carried forth and 

funded and in place that none of the veterans in the local areas 

will be without care that they had prior to the CARES initiative. 

Mr. SCHNEIDER. I think also on management efficiencies, the administration is very big on the score card and ranking performance 
78

and the rest of it, and I think we need to start identifying the information to fill the score card in and setting a standard that is going 

to be acceptable and to just pursue on in directions to go into interagency dealings and what have you saying that this will result in 

better management, we need to define the process and what the result is going to be, as Bob said. 

Mr. WEIDMAN. Real management efficiencies are achieved by getting people in and diagnosing them correctly at the early stages of 

maladies, such as whether that be Hepatitis C, whether that be 

prostate cancer, whether that be you name it. 

And if we focus on asking the right questions and focus on being 

on the military history and asking questions that pertain to the individual’s veteranness, if you will, we will save a heck of a lot of 

money down the line. But you can’t do that when you bar the majority of veterans, and the majority of veterans in this Nation of the 

24 million indeed are Category 8 veterans, when you bar them 

from even walking through the front door to do a preliminary physical based on when and where they served, what branch and what 

actually happened to them. 

And they’re barred from doing that now. And this makes no 

sense. We’re going to wait until they get so sick they become indigent, and then we’ll see them when they’re terminally ill. And how 

expensive is that both in human terms, in economic opportunity 

costs, and in straight cash outlays, Mr. Chairman? It’s going to be 

enormously expensive. 

Mr. SCHNEIDER. I’d like to just add one other comment, and I 

touched on it lightly before, the transformation of VA from inpatient to outpatient. The next transformation, in my judgment, 

needs to be the reassessment of mental health professionals, practitioners working in veterans health administration. 

All of the studies today and all of the reports that come up here 

from Congress from the different working groups in mental health, 

the homeless veterans group, the woman’s advisory, all show documented decline in mental health, and all of them report surveys 

and other instruments that reveal that integrating mental health 

practitioners into the medical clinics will result in cost savings over 

the years. 

A management efficiency that can give back millions of dollars 

by better utilizing resources at that level needs to be pursued. I’m 

delighted that Mr. Principi, Secretary Principi, has in fact appointed a working group to explore this, and I was shocked again 

and surprised, delightfully surprised, that the individual who was 

appointed to chair it was Dr. Fran Murphy. 

And the reason I was so surprised, because she sat at this table 

years ago and said we don’t need domiciliaries. We don’t need mental health, that we can do this on an outpatient basis. I think that 

her current years of service and her research has showed that, hey, 

I may have made a mistake years ago, and she’s pursuing this with 

a lot of vim and vigor. And that I believe is going to be the next 

transformation of VA, and it may give back the cost savings that 

will help the operating costs come down. 

The CHAIRMAN. Thank you very much. I appreciate that. Mr. 

Strickland. 
79

Mr. STRICKLAND. Thank you, Mr. Chairman. Mr. Schneider, I 

was struck by your most recent comments. Before coming to the 

Congress, I had never served in a political office, but I did serve 

as a psychologist in a maximum security prison. And unfortunately, I worked in that prison with many veterans who suffered 

from PTSD and other kinds of mental health ailments that had 

never really been recognized or appropriately timely treated. 

And they find themselves then, as veterans, people who had honorably served this Nation, but their lives on the line at great risk, 

being confined to a prison, I think in large part because they did 

not receive the kind of intervention they needed. 

So I appreciate your concern. And I’m struck by the word games 

we’re kind of playing with outreach versus marketing. It kind of reminds me of the definition whatever ‘‘is’’ is. The fact is that the 

issue is a life and death issue, as I understand your testimony, Mr. 

Weidman, because you shared with us that the data shows that if 

you were in Vietnam and you were exposed to Agent Orange or 

perhaps other toxic chemicals, that you are at increased risk of developing certain cancers, and in the case you mentioned, prostate 

cancer. 

And are you telling us as a committee that there are Vietnam 

veterans out there who may have this illness or be at risk and need 

screening to see if they are developing this illness, and simply because they do not have the information that they may be at increased risk, and are entitled to services from the VA, may not be 

accessing those services? And if that’s the case, this gag order that 

we’ve been talking about really has life and death implications. Is 

my description of the circumstances reasonable, logical, or is there 

something wrong with that reasoning from your point of view? 

Mr. WEIDMAN. No, sir. You hit it right on the head. The example 

that I gave in the written testimony goes right to this. You have 

an individual, and we know that the prostate cancer rate—and Ms. 

McCarthy will probably correct me immediately after, but I believe 

it’s roughly five times the incidence in our cohort group of those 

who did not serve in the military. So you’re much more likely to 

get it. And that’s one of the things that we believe is causing this 

bump where the incidence of prostate cancer in America is going 

up among men at an earlier and earlier age, but nobody’s looking 

at the fact that there’s a huge number of us who are getting it who 

are Vietnam in-country vets, in that cohort group. 

So you may not get tested because you don’t know you need to 

get tested more often. You may also, because you make $35,000 a 

year or in your district, $30,000 a year. 

Mr. STRICKLAND. Or $24,000 I think in my district, certain parts 

of it. 

Mr. WEIDMAN. Then $24,000 a year, you make $26,000, and 

you’re not eligible. You’re a Category 8. You’re defined as a quote/

unquote ‘‘higher income vet.’’ Talk about newspeak. 

Mr. STRICKLAND. May I interrupt just a moment to remind you 

that those of us who serve here in the House make somewhere in 

the vicinity of $150,000. It offends me that we would consider 

someone who makes such a modest income ‘‘higher income’’ for the 

purpose of being excluded. But please continue. 
80

Mr. WEIDMAN. That is $10 or $12 more than most of the veterans 

service organizations, Mr. Strickland. But we don’t have to maintain two residences. (Laughter.) 

But the issue here is deadly serious, and it is, it’s just that deadly serious. That individual, if they don’t have medical insurance, 

and many of them don’t, they’re not going to be able to pay straight 

out for that, even if they have the knowledge that they need to get 

tested because they served in Vietnam. 

Mr. STRICKLAND. Can I ask you this question, sir? Do you 

know—and I don’t know this question, so I’m asking it in good 

faith—do you know if it is possible for the VA to identify those who 

have served, perhaps have been exposed, and to proactively reach 

out to them to inform them of their increased risk? Does the VA 

have that capacity, or are you aware of whether or not they do? 

Mr. WEIDMAN. The VA only has that capacity if in fact the individual has used the VA sometime since they came out of the military, or recently. Many people—you came home from Vietnam and 

used the GI Bill for some period of time, but don’t even live in the 

same state or part of the country. 

If in fact they’re service-connected disabled for any condition, 

then the VA knows where they are, and the VA can in fact do a 

mailing or try to reach people other ways. 

If you ask the average—and incidentally, the majority of serviceconnected disabled veterans do not use the VA for any of their 

health care. I mean, we don’t talk about that much, but they don’t. 

And therefore, they’re ignorant, as are most people ignorant, of 

what are the 15 conditions that are service-connected presumptive 

for exposure to herbicides, Agent Orange and other herbicides and 

toxins in Vietnam. Folks don’t know. 

And that’s the whole point of doing a physical. But if you have 

a physical that is focusing on the veteranness, with Vietnam it’s 

this stuff; with Gulf War I it’s another thing; with Korea it’s another, et cetera. Depending on when and where you served, what 

branches you served in. 

But if you can’t get access to the system at all, and there’s no 

effort to work through the medical societies, through the AMA, the 

American Public Health—there is on the part of the veterans service organizations, but not of VA, to our knowledge, or it hasn’t had 

an impact, where civilian doctors know to ask the question, did you 

serve on active duty in the U.S. military? And then they have a 

protocol available that will go into PC where they could actually do 

it there, one or the other. 

At one point I asked—the Under Secretary and I got into a significant discussion on it between the two of us. And is someone 

whom I respect enormously. I think he’s a fine man, a wonderful 

doctor, and a very good leader. But the issue was, he excoriated me 

for saying you’re getting angry at a primary care physician for not 

knowing to ask the questions, as an example, once again, that I’m 

most familiar with, in Vietnam, about strongyloides or melioidosis. 

Strongyloides and melioidosis are tropical parasites. They can remain dormant, we know from American veterans who served in 

Burma, more than 50 years. When they reposit, it’s sometimes, and 

actually manifest and develop, it is sometimes misdiagnosed as 

chronic fatigue syndrome, but nine times out of ten plus, it is diag-
81

nosed as chronic acute depression. Sound familiar? VA is treating 

1.2 million people. And supposing it is only—and VA has known 

since 1980 that 6 to 9 percent of Vietnam veterans carry it in their 

body. 

So supposing it is only 60,000 veterans that are receiving 

antidepressants, but what’s really wrong with them is melioidosis 

or strongyloides? That’s 60,000 people who ain’t never gonna get 

well because we’re not treating the right thing, number one. The 

economic opportunity cost and the impact on their family, and the 

expense of giving them medications. And I said to the Under Secretary that that’s malpractice. He said you can’t say that. I said, 

well, I just did. I would call it malpractice. 

And he said you’re holding that physician and getting angry at 

that physician, and that’s not legitimate. And I said, you’re right. 

That physician doesn’t know. But that physician doesn’t know because you didn’t tell him. Because you made no effort to train him. 

Because you made no effort to cue him. And that is the same of 

it. Because at that point it becomes willful ignorance. 

And the same thing is true on outreach. VA has always done a 

lousy outreach job on Agent Orange and on the toxic maladies. But 

it’s done a much worse job in the last couple of years. 

I just want to share one thing, Mr. Chairman, if you’ll indulge 

me. I quoted at the last leadership board meeting, which was the 

day before, and it was only after this that we decided to move 

ahead with the suit on outreach. At that leadership board meeting, 

I asked the question of the VISN directors, and I think 20 out of 

the 21 were there. How many people here in your VISN are doing 

more outreach—and I used the word ‘‘outreach’’—outreach today 

than you were one year ago? One person raised their hand. 

I asked a second question. How many people in this room, how 

many VISN directors, are doing about the same? It was either five 

or six, I’m not sure exactly. But it was no more than six. So then 

I asked the question, how many people in this room are doing 

somewhat to significantly less than they were a year ago in regards 

to outreach? And all the rest of them raised their hand. 

That—then I called Tom Corey, our national president, and we 

checked with Mr. Strickland and the attorneys, and we decided to 

go ahead and file suit the next morning. And that was the final decision. Because it was from them. It wasn’t just our assessment. 

Our assessment already was from our people that we’re going 

ahead. In the hallway outside the hearing room today, Ms. Miller 

came up and said to me, you know, I know about that. And I said, 

well, Laura, you were there. And she said, no I wasn’t. I was out 

of the room. But afterwards, I approached each of the VISN directors individually, and they now all agree that they’re doing the 

same or possibly even more outreach than they were a year ago 

when approached by their immediate supervisor. And I thought, 

wow. What a phenomenon that is. We can make all kinds of management efficiencies if we just approach it in the correct manner. 

So I’m sorry to go on about that, Mr. Chairman, but I think it’s 

important, because it cuts to the quick of the mission. The quick 

of the mission is not to save money. The quick of the mission is 

to take care of veterans, of men and women, American citizens, 

where they have been lessened by virtue of military service to 
82

country. And it’s a covenant, not a contract, between the individual 

who takes a step forward to defend the Constitution of the United 

States and the rest of the American people that where lessened 

spiritually, economically, physiologically or neuropsychiatrically, 

that the people of America will do what’s necessary to make them 

whole. 

That first one, spiritually, is not the business of government, but 

it is all of our business, and not just our churches and synagogues. 

But the other three are the province of government, and that is to 

help folks get a job, help get the training to get a job, and to take 

care of folks so they’re physically well enough and so that they’re 

neuropsychiatrically well enough to get past the terrible 

neuropsychiatric wounds of war. 

And if people who’ve never been in combat think it doesn’t 

change you, you’re changed forever dramatically. Some deal with it 

and go through it better over a period of time, but some don’t. But 

the point is, you’ve got to have focus on those wounds, and you’ve 

got to have the available service, and short of that, or accompanying that, you’ve got to have proper education and outreach 

through the medical societies, through the public media and PSAs, 

through outreach to places where veterans might be. 

Mr. STRICKLAND. Thank you, sir, and thank you for your patience, Mr. Chairman. 

The CHAIRMAN. Thank you. Mr. Michaud. 

Mr. MICHAUD. Thank you very much, Mr. Chairman. 

I want to commend an excellent panel again this afternoon, for 

your testimony. I can’t say that I disagree with anything that any 

of you said. I agree wholeheartedly with what you have said. 

My biggest concern, actually, when I listened to the President’s 

State of the Union Address, was when he had talked substantially 

about the war in Iraq, but did not talk about our veterans, and I 

was concerned that when he presented his budget, that there will 

not be adequate funding for our veterans, and I find that the budget that is presented to us is definitely inadequate when you talk 

about the veterans’ health care issues, and that was pretty much 

stated, I think, by the Secretary this morning, where he did not 

even get his funding request that he had asked for, and I’m sure 

his funding request does not take care of the needs of the veterans. 

I guess my question is, what I’m hearing a lot from our servicemen and the people who are in the Guard, particularly since the 

war in Iraq and Afghanistan had broken out and the rotation of 

our military, that there is a big strain on the Guard, as well. 

Do you feel that everything that’s happened with the rotation 

issue, but also, equally as important, the lack of funding and the 

constant battle that you have to go through here in Congress to get 

health care benefits that are earned by our veterans, that that is 

going to cause a problem as far as people enrolling in the military, 

as well as the Guard? 

Mr. GAYTAN. Sir, you mentioned the constant battle that the 

VSOs wage every year for an adequate budget, or what’s deemed 

an adequate budget. Specifically, that statement is why the majority of the VSOs are supporting mandatory funding for VA medical 

care. 
83

If this were funded in the way Social Security and Medicare 

were, we wouldn’t be waging these battles every year. Of course, 

it wouldn’t be to the degree that we need to now. 

You mentioned Guard rotation and the influx of returning veterans. I think Richard Fuller from PVA mentioned it earlier, that 

to enable VA to meet the requirements of these returning veterans 

in addition to the veterans who are already here and relying on VA 

for their care, there needs to be won under this process of appropriations an adequate budget at a level that will allow VA to provide the services that are needed. 

In addition too, and specifically, is a budget that arrives on time, 

a budget that will allow the VA directors to hire the full-time employees and obtain the resources they need to meet the requirements of the veterans. 

The backlog that the American Legion has experienced in the 

past year under our System Worth Saving and our I Am Not a 

Number campaigns, we went out and identified specifically those 

individual veterans—we didn’t use numbers, we used faces, names, 

individuals who are waiting six, eight, 12 months to get the services they need—those backlogs are a result of inadequate funding. 

Earlier today, we got into the discussion of eligibility reform. The 

American Legion long supported eligibility reform, and a lot of the 

backlog and the problems that VA is facing right now, some people 

are choosing to point fingers at 1998 and the eligibility reform as 

the major cause of that. 

Well, eligibility reform as supported by the American Legion included revenue, new revenue streams which were Medicare reimbursement, DOD reimbursements, and premium-based coverage for 

veterans and their dependents. 

The eligibility reform of 1996 that was finally implemented in 

1998 would have allowed those revenue streams to reach VA. 

That influx of revenue, of funding would have helped to leave the 

doors open to veterans who have earned their health care through 

the VA, and shutting the door to Priority Group 8 veterans right 

now under this form of appropriations is just the beginning. 

That’s why the American Legion fully supports mandatory funding for VA medical care. 

Col. NORTON. Mr. Michaud, I thank you for your comment. 

I would just offer the observation, looping back on the issue of 

outreach, that very often mobilized members of the National Guard 

and Reserve forces don’t even know that once they complete their 

campaign tours in places like Bosnia, Afghanistan, and Iraq, that 

they are American veterans. 

Now, there has been some progress made to identify and put out 

brochures and so forth, but the DOD and the VA have to do a lot 

more to educate these troops and to outreach to them, to market 

to them that they now are American veterans. 

If you talk to a lot of Reservists and National Guardsmen, you 

will find out that when they come back, they just think they’re 

back in the Guard and back in the Reserve, and they’re not veterans, because they did not serve full 2, 3, or 4 or more years on 

active duty, but once they complete a campaign tour overseas, they 

are veterans, and the issue is getting that outreach to them to 

make sure that they know that they’re eligible for VA health care, 
84

they’re eligible for applying for disability benefits, they’re eligible 

for all the services that the VA provides. 

In the spring, as you know, 40 percent of the forces on the 

ground in Iraq will be from the Guard and Reserve, and these rotations will continue on for the next few years. 

We need to know for sure that both the Defense Department and 

the VA are planning for the kind of resources that will be needed 

to treat this large and growing population of returning veterans in 

all aspects of the care that they will need, including PTSD. 

It’s one thing to, you know, to take care of the severely disabled, 

because you can see them. I’ve seen them. I’ve met them at Walter 

Reed. 

It’s another thing for returning veterans from the Suni Triangle 

in Iraq to have silent, disabling disabilities, PTSD from the kind 

of 24/7 stress that they’re under, unseen threats day and night as 

they go up and down the roads, as they fly, as they go about doing 

their missions. 

I’d also like to point out, if I may, Mr. Chairman, many of these 

servicemembers today, unlike my generation, they’re married, they 

have young children. 

The issue that we have not addressed, and was not spoken to 

here today, is that for this growing problem of PTSD, many of them 

return home to families. 

Those families themselves may need the kind of counseling that 

frankly is not available today in the VA system. This is a growing 

problem. 

World War II, Korea, the Vietnam generation for the most part 

were single servicemembers, most of them drafted, but today, more 

than 60 percent of separating and retiring veterans are married 

and have families, and we must prepare for the kind of clinical 

support for PTSD and other mental services that these veterans 

are likely to see. 

Frankly, the stories about suicide, that’s a public issue out there 

right now, but below the surface of those who actually take their 

own lives, there are many, many more who are suffering disabling 

problems, and those disabling problems of PTSD will carry over 

into their family setting, and that’s an issue, Mr. Chairman, I hope 

that you and the committee will look at, because frankly, we don’t 

think that, in the Military Coalition, that this has been looked at 

properly. 

The CHAIRMAN. Would my friend yield for a moment? 

As you probably know, we have authorized that kind of inclusion 

of the family members, and whether or not the VA is actually implementing that is something we need to deal with by way of oversight. 

Interestingly enough, I just completed a series of what I call oneto-one meetings throughout my district, and I heard from a wife 

whose husband is a Vietnam veteran, but suffers from very severe 

post-traumatic stress disorder, and she said that when he is at the 

VA—and this goes to what one of our witnesses said earlier—he is 

on his, quote, best behavior, and suggests that everything is fine, 

doesn’t want in any way to show the stress that he truly is facing. 

Then he comes home, and she said, you know, life is miserable, 

and her daughter is with her, as well, because he is suffering so 
85

acutely, but she says, ‘‘The VA doesn’t want to hear from us, 

doesn’t include us in any way.’’ So I think your point about coming back to children and wife or 

husband is a very apt point, and we need to do, I think, some oversight to see what kind of inclusiveness the VA is doing to make 

sure those family members are heard, because they may see a 

whole different presentation of the affected person that they need 

to factor into their treatment protocol. 

Yes, Mr. Weidman? 

Mr. WEIDMAN. Just two things, Mr. Chairman. 

I also have been up to Walter Reed quite a bit, both at Malone 

House and Ward 54, in addition to Ward 57, and there are quite 

a number of folks, where they’re are just bursting at the seams. 

They’re trying to do groups with 25, 26 people, and that doesn’t 

work. You can’t do group therapy with that many people, hard-core 

combat vets, and that’s who most of these folks are. 

I think it will also come to light next week that there’s a significant problem with PTSD with folks who haven’t returned home, 

and large numbers. 

VVA, we made a recommendation last year, we would strongly 

encourage you to do it this year, which is to include in the views 

and recommendations an additional $17.5 million to $18 million for 

the VA vet centers. They haven’t had an increase in the VA vet 

centers in, I think it’s over 12, 13 years. 

That would be for 250 additional counselors and for each of the 

208 vet centers, that each of the 208 vet centers have a certified 

family counselor who is also certified in treatment of post-traumatic stress disorder to be able to deal with the whole family unit, 

because if you don’t deal with the whole family unit, it’s not going 

to work, and the whole purpose of the vet centers, when they’re at 

their best, is not just to treat the veteran, but to keep the family 

together and help the veteran get and/or keep the job he or she already has. 

So the family counselor is, you have folks out there who have 

been trying to do that for years, but they’re not really trained in 

it. This would be a perfect opportunity and a perfect timing to go 

ahead and add those additional staff, sir. 

The CHAIRMAN. Yes, Mr. Schneider. 

Mr. SCHNEIDER. One last thought, also, is that our people coming 

back from this war is a cost of the war. 

So often we hear statements on the news on the television that 

the cost of the war is going to require another $50 billion. 

We can’t let the administration or the public forget that taking 

care of these veterans, these war veterans is a 50-year progression, 

and it gets only worse for the families and for the individuals. 

A comment regarding the troops coming back to Walter Reed and 

Bethesda and other locations is, they come back so quickly. 

Medical care is great. You know, medics, the triage, getting them 

to Germany, getting them on other planes, bringing them in here 

is tremendous. 

One of the things that they come back without is any personal 

possessions, and it’s amazing that Walter Reed and Bethesda have 

shared the lack of personal possessions, the need for sneakers, the 

need for sweatsuits so that they can wind down and do their own 
86

thing, and so many organizations raising money to provide it to 

Walter Reed and to Bethesda for these types of items. 

I’m absolutely amazed that a nation doesn’t recognize that it’s 

got an obligation, and take care of these people when they come 

back, so it’s not fund-raising in New Mexico or someplace else trying to send a pocket of money to the hospital. 

It’s great what the people of America are doing, but I don’t know 

that we necessarily always fulfill our obligations as Americans to 

those who go into harm’s way when we as a Nation send them to 

go. 

The CHAIRMAN. Mr. Schneider, you may find it of interest to 

know, we recently wrote a letter to Secretary Rumsfeld asking that 

VSOs have greater access—in some cases they have no access at 

all—to our military hospitals like Walter Reed, where some of 

those amenities as well as other good support services could be 

provided. 

So we have not heard back from him yet, but we fired that off 

several weeks ago. 

Mr. WEIDMAN. We couldn’t get official permission at VVA, either, 

Mr. Chairman, but like my fellow New York City kid, Colonel Norton, both 196th Division, we just said, ‘‘Okay. Well, listen, we’re 

going up to visit so-and-so on Ward 57,’’ and once you’re in, you’re 

in, just do what needs to be done in every way to try and support 

these young people, including materially, as Mr. Schneider pointed 

out, but it would be a heck of a lot easier if we got some cooperation from Secretary Rumsfeld, and once a signal comes down, it 

will happen. 

The CHAIRMAN. Yes. 

Mr. GAYTAN. Mr. Chairman, I would just like to add, with this 

discussion about the importance of mental health care within the 

VA, I think it’s key to note that within the CARES draft national 

plan, all seven, each of the seven facilities that are targeted for 

closure, they each provide extensive mental health care in dementia, Alzheimer’s, and those facilities and those services are going to 

be on the chopping block when this CARES recommendation is 

finalized. 

The American Legion is very concerned about that. We are putting that in our testimony when we go around to each CARES 

Commission hearing, and we’re letting them know of our concern 

over that. 

The CHAIRMAN. I appreciate that, and you earlier point about 

holding harmless current services, I think, is very well taken. 

This committee will do a very vigorous oversight when and if 

that list, if the Secretary accepts it, and I think February 12 is the 

day that he will get it. 

What he does with it after that remains to be seen, but if that 

goes forward, we will do our due diligence to make sure that current services and those who are receiving services are held harmless. 

As mentioned by one of our witnesses earlier, I think it was this 

panel, the ‘‘e’’ in enhanced needs to be emphasized as well, because, 

you know, realignment is one thing. We’ve seen this with previous 

BRACs. 
87

Not only did we see MILCON grind to a halt at a number of military bases, including one in my own district at Lakehurst, because 

it was always, ‘‘Well, we might have a BRAC, we may end up losing this facility, so we went years without very important additions 

to that facility, which made it more vulnerable to a BRAC, as well, 

so it was two sides of the same sword. When we finally did it, it 

cost more money. 

BRAC certainly has done, maybe some good, but it also leaves 

some things to be desired in terms of unanticipated costs to close 

those or radically realign many of those facilities. 

And here, we’re talking about a clientele that has to have absolutely uninterrupted service. 

You don’t say, ‘‘Well, go find it somewhere else.’’ With BRAC, you 

could move the servicemembers to some other facility and hopefully 

there’s no brain drain with people who refuse to go on the civilian 

side. 

I know I’m on your borrowed time, Mr. Michaud, so I will yield 

back my time to you. I’m sorry about that. 

Mr. MICHAUD. Thank you very much, Mr. Chairman. 

I always appreciate listening to you, because you definitely do 

feel strongly about veterans and veterans’ issues. 

I’ve learned a lot this past year that I’ve been a Member of Congress from your leadership, and I really appreciate it, and really 

appreciate the panel. 

Mr. Weidman had mentioned earlier that hopefully we’ll win this 

battle of the budget again this year. 

I hope that we’ll win the war and get mandatory funding, because one of the things that I’ve seen going on just this short time 

I’ve been a Member of Congress, Mr. Chairman, is the statistics 

that are being thrown around, you can make statistics say whatever you want to say, and usually it’s to try to justify the budget 

that’s before us, have the statistics justify the budget, and that’s 

wrong. It’s dead wrong. 

When I look at adequately funding issues dealing with veterans, 

I look at what’s happening out there in the real world, what is actually happening to our veterans. Are they homeless? Do they have 

to have a large waiting list? 

Are they getting the services that they need? The answer is no, 

and that’s how I look at budget issues, not on statistics, because 

you can manipulate those statistics anyway you want, to make it 

look like you’re doing a good job, when in fact you are not doing 

a good job. 

When you talk about the outreach program, one of the things as 

a Member of Congress that I’m doing in the State of Maine is, we 

are having an outreach program to outreach to our veterans’ community to let them know what services and benefits they have, 

that they rightfully have earned. 

I thought Maine was the only state that was not taking lists. 

Evidently, hearing the conversation today, there are other facilities 

around the country that are no longer even accepting Priority 8s, 

which is wrong, because that’s not giving us an accurate figure of 

the need that is out there. 
88

If we’re going to provide the funding for the need, we have to 

know what that need is, and we’re not getting that, because they’re 

no longer allowed to even sign up, and that’s wrong. 

So I do want to thank the VSOs here for continuing to fight for 

issues. 

I really want to thank Chairman Smith for your long and hard 

fighting efforts over the number of years that you’ve been in Congress fighting for veterans’ issues. I hope that you continue that 

fight with us and the VSOs, and hopefully, we will ultimately win 

that battle—the war, rather—and get mandatory funding. 

So thank you very much for all that you’ve done for us. 

The CHAIRMAN. Thank you, Mr. Michaud, and thank you for your 

fine work as well, as the ranking member on our subcommittee, 

and I look forward to working with you and going forward in a bipartisan way. 

Mr. Rodriguez, another ranking member. 

Mr. RODRIGUEZ. Thank you, Mr. Chairman. I also want to thank 

you, because I know you’ve battled alongside in terms of making 

things happen for our veterans, and I also want to thank all the 

organizations. 

Without your efforts, I know we would be lacking tremendously, 

even more so than what we’re lacking now, so I want to personally 

thank each and every one of you and the organizations and everyone that you represent for being there for our veterans. 

I just wanted to talk a little bit, and I was real pleased that the 

Vietnam Veterans of America came forward on that. 

I know that no one likes to go to the courts, but I think that it 

was apparent that something needed to happen, and it’s unfortunate, because I do have some concerns that if we have an atmosphere of not reaching out, an atmosphere of not educating our veterans about what exists out there, and then we have a CARES 

process going along where there are some recommendations of even 

some closures because of the fact that we don’t have sufficient veterans there or attending, when we know full well that there are a 

lot in need, that that’s not right, that’s not appropriate, that we 

ought to do whatever we can. 

I wanted to throw out, and maybe some of you might have more 

information than what we’ve been given, and that is that I was told 

that, because I was concerned after we did the SHAD piece of legislation, and we identified some five or seven thousand veterans that 

might have been exposed to the chemical and biological tests that 

we did on them, and I was informed that they were not part, that 

they were still going to solicit that, and I don’t know if some of you 

have any information. 

I’ve been told that they were still going to reach out to them. I 

don’t know how that’s going to happen or how that’s going to occur, 

but if you could provide some feedback in that area. 

Secondly, and Mr. Chairman, I would appeal to you, too, and 

maybe to the organizations out here, from a homeland defense perspective, as much as we’re critical about the VA not being there for 

us, yet it’s still the only system nationwide from a health care perspective that’s there to respond in case of a serious emergency, serious problems that might occur, and we’ve done legislation already, language to identify some four sites throughout the country 
89

as a first response team in case there’s a major attack anywhere 

in the country or a major epidemic or whatever, or even from a natural disaster, you know, where the VA could play a role, because 

it’s the only system we have nationwide, and we have passed the 

language, but we have not passed any monies for it. 

So I wanted to get your feedback, because we really need to look 

at it also in terms of a homeland defense perspective, but also in 

terms of where we’re at right now, and I wanted to throw that out 

to some of the members. 

Mr. WEIDMAN. Let me take your second one first, if I could. 

The VVA believes very strongly in that fourth mission, and appreciate very much, Mr. Chairman, your leadership on that for trying to move forward with the Centers of Excellence, and that VA 

has a very key role to play about the wounds of war, including toxins, if in fact we will only marshal it. I think it was 10 days after 9/11 the Congress passed $24 billion 

for homeland security, and it was divvied up among the agencies. VA ostensibly was going to get $77 million for that in order to 

deal with the fourth mission of VA, ultimately, according to Dr. 

Roswell, only got $2 million out of $24 billion. 

Now, we have no idea how many millions went into bike paths 

that somehow is going to make us more secure against al Queda, 

but something is wrong with that picture, because VA, we get 

upset with VA not because VA is bad, because VA is good. 

There was a time when VA wasn’t all that good, and it has now 

changed dramatically. The problem is that there aren’t the resources there to have enough people to hit critical mass to serve 

everyone well, and to serve folks safely, safely medically, because 

in many cases, we think it’s medically dangerous. 

In regard to SHAD, there’s a good deal that’s happening on that, 

Mr. Rodriguez. I’ll be glad to brief you off-line, if you will, but suffice it to say that VVA is probably doing more outreach at this 

point than VA is. 

They said they’ve sent a letter to everyone, but Commander Jack 

Alderson, who was commander of two of the major tests, including 

Big Tom and Command of the Tugs, still has yet to receive a letter, 

and we’ve given them his address. 

I mean, that’s just one example, and I don’t mean to fault it. I 

think they’ve tried, but they’ve tried on their own terms, and have 

turned down all help from us as to how to better reach the people 

who were involved. 

So it is problematic, where they’re not doing outreach but they 

say they’re doing outreach, so it’s hard to figure out exactly what 

is going on there from the outside. 

Mr. RODRIGUEZ. I was wondering, American Legion? 

Mr. GAYTAN. Yes. Regarding the fourth mission of VA, the American Legion supports funding that is adequate for VA to meet their 

goal of the fourth mission. 

I think it’s easy for us to forget that mission of VA and their obligations to provide backup to DOD in case of emergency, especially 

when we’re up here fighting for the essentials that VA operates 

under every day. 

Because 9/11 was a while ago now, I think the importance of the 

fourth mission needs to be raised again. 
90

The American Legion has a resolution, and we’ve put that in our 

full testimony, of the importance of the fourth mission, and we as 

the voice of veterans and veterans’ organizations, we need to remind Congress and VA and the administration of the obligation to 

fulfill the funding needed for VA to meet any obligations placed in 

front of them, especially the fourth mission. 

Mr. RODRIGUEZ. Have you heard any data on the SHAD effort? 

Mr. Gaytan. Yes. Actually, we have a lot of information. 

If you wanted specifics on SHAD, I could get our staff, we have 

a staff that handles exposures, and SHAD being one of them, they 

have a lot of information that we can share with you and let you 

know of our concerns over that. 

Mr. RODRIGUEZ. Maybe, Mr. Chairman, I guess the Subcommittee on Health might be able to get a hearing just to get an 

update on SHAD. 

The CHAIRMAN. Sure. 

Mr. GAYTAN. We would welcome that. 

The CHAIRMAN. I want to thank the gentleman for his work on 

Project SHAD and the ongoing efforts to identify and properly treat 

those who were mal-affected by it, so I appreciate your good work 

on that. 

As you know, the legislation was included in our bill that went 

to the President and was signed into law. 

Are there any other questions for our panel? 

[No response.] 

The CHAIRMAN. Then I want to thank our very distinguished 

panel for your insights. You’ve given us a boatload of ideas to work 

on. 

This will not be the last time we ask for your counsel, and I’m 

sure we’ll receive it, and thank you so much for testifying and for 

your patience for being here during this rather lengthy hearing. 

I’d like to just point out for the record that Congresswoman 

Brown-Waite would have been here today, but she is recovering 

from recent surgery, will be with us again next week. 

Without objection, regarding a statement by Congressman Baker, 

who is chairing his own subcommittee hearing on capital markets 

and insurance, I would ask that it be made a part of the record. 

[The statement of Hon. Richard H. Baker appears on p. 102.] 

The CHAIRMAN. And as was asked earlier, any member who 

would like to submit any comments for the record, may have 5 legislative days within which to do so. 

[The statements of Hon. Bob Filner, Hon. Henry E. Brown, Jr., 

Hon. Corrine Brown, and Hon. Luis V. Gutierrez appear on pp. 

104, 107, 108, and 110.] 

The CHAIRMAN. Without further ado, the hearing is adjourned. 

[Whereupon, at 2:30 p.m., the committee was adjourned.] 
(91)

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WRITTEN COMMITTEE QUESTIONS AND THEIR RESPONSES 

CONGRESSMAN EVANS TO DEPARTMENT OF VETERANS AFFAIRS
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Æ