VA’s Fiscal Year 2007 Budget Request 

for the Compensation and Pension 

Programs of the Veterans Benefits 

Administration

Hearing

before the

Committee on Veterans’ Affairs

House of Representatives

Subcommittee on Disability Assistance 

and Memorial Affairs

one hundred ninth congress

Second session

February 16, 2006

Printed for the use of the Committee on Veterans’ Affairs

Serial No. 109-35

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26-289.PDF
Committee on Veterans’ Affairs

Steve Buyer, Indiana, Chairman

Michael Bilirakis, Florida Lane Evans, Illinois, Ranking

Terry Everett, Alabama Bob Filner, California

Cliff Stearns, Florida Luis V. Gutierrez, Illinois

dan burton, Indiana Corrine Brown, Florida

Jerry Moran, Kansas Vic Snyder, Arkansas

richard H. baker, Louisiana Michael H. Michaud, Maine

Henry E. Brown, Jr., South Carolina Stephanie Herseth, South 

Jeff Miller, Florida Dakota

John Boozman, Arkansas Ted Strickland, Ohio

Jeb Bradley, New Hampshire Darlene Hooley, Oregon

Ginny Brown-Waite, Florida Silvestre Reyes, Texas

Michael R. Turner, Ohio ShellEy Berkley, Nevada

John Campbell, California Tom Udall, New Mexico

 John T. Salazar, Colorado

JAMES M. LARIVIERE, Staff Director

Subcommittee on Disability Assistance

and Memorial Affairs

Jeff Miller, Florida, Chairman Shelley Berkley, Nevada, 

Jerry Moran, Kansas Ranking

Jeb Bradley, New Hampshire, Vice Chairman Tom Udall, New Mexico

Ginny Brown-Waite, Florida Lane Evans, Illinois

 

PAIGE MCMANUS, Subcommittee Staff Director

(II)
CONTENTS

February 16, 2006

 Page

VA’s Fiscal Year 2007 Budget Request for the Compensation 

  and Pension Programs of the Veterans Benefits Administration .......................................................................................... 

OPENING STATEMENTS

Chairman Miller .......................................................................... 

Prepared statement of Chairman Miller .................................... 

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

Prepared statement of Mr. Udall ..............................................

Witnesses

Cooper, Daniel L., Under Secretary for Benefits, Veterans

  Benefits Administration  ........................................................

Prepared statement of the Honorable Daniel L. Cooper .........

Lawrence, Brian, Assistant National Legislative Director, 

 Disabled American Veterans .................................................

Prepared statement of Mr. Lawrence .......................................

STATEMENTS FOR THE RECORD

Terry, James P., Chairman, Board of Veterans’ Appeals ........

Greene, William P., Jr., Chief Judge, U.S. Court of Appeals for

Veterans Claims .....................................................................

Greineder, David G., Deputy National Legislative Director,

AMVETS .................................................................................

QUESTIONS FOR THE RECORD

From Disabled American Veterans to Mr. Tom Udall .............

(III)

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16

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17

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45

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62
VA’s Fiscal Year 2007 Budget Request for the 

Compensation and Pension Programs of the Veterans 

Benefits Administration

Thursday, February 16, 2006

(1)

U.S. House of Representatives,

Subcommittee on Disability Assistance and

Memorial Affairs,

Committee on Veterans’ Affairs,

Washington, D.C.

 The Subcommittee met, pursuant to call, at 2:00 p.m., in Room 

340, Cannon House Office Building, Hon. Jeff Miller [Chairman of

the Committee] presiding.

 Present: Representatives Jeff Miller, Tom Udall.

 Mr. Miller. This hearing will come to order. Good afternoon, everybody. Thank you so much for being here on -- this is Thursday, 

isn’t it -- Thursday afternoon.

 Last week, we heard testimony from Secretary Nicholson on the 

VA-wide budget request for fiscal year 2007, and today we are meeting to review the request for the compensation, pension, and burial 

programs. VA estimates it will provide nearly $35 billion in compensation, pension, and burial benefits to almost 3 million veterans and

survivors in fiscal year 2006. The number of veterans filing claims

for compensation and pension has grown by more than 36 percent 

from 578,773 in fiscal year 2000, to over 788,000 in fiscal year 2005.

This increase can be attributed to a variety of factors, including the 

global war on terrorism, improved outreach activities, and the general aging of the veteran population.

  The Veterans Benefits Administration projects it will receive more

than 910,000 claims in 2006; over 98,000 of them the result of the sixstate targeted outreach program that was mandated in the Military 

Quality of Life and Veterans Affairs Appropriation Act of 2006.

 Of particular concern to me is how VBA is going to handle this influx of claims. Under Admiral Cooper’s command, timeliness and accuracy of claims has indeed improved. In fiscal year 2005, it took on

average 167 days to process a claim, and the VBA’s accuracy rate was 

84 percent. While these numbers represent an improvement over 
2

fiscal year 2002 numbers, the year the Admiral was confirmed, they

represent a slight decline over fiscal year 2004, and we are always

looking to improve them further.

 One way to improve claims processing is through additional fulltime employees, or FTEs. While more FTE will help, it is not a cureall. And furthermore, it takes time to train those new employees, so 

the full benefit of additional FTE will not be realized at least for a

couple of years. 

  Our Subcommittee will continue to review the adjudication process

in an attempt to identify and eliminate inefficiencies. President Bush

is requesting $38 billion in mandatory funding to provide service-connected compensation, dependency and indemnity compensation, pension and burial benefits. This represents an increase of $3 billion, or

nine percent, over fiscal year 2006. And in addition, the President

requests $924 million in budget authority discretionary funding to 

cover the VBA’s operating costs items like salary, infrastructure, and 

contract medical examinations.

 I am pleased that the President’s budget includes additional funding for 176 FTE within VBA, but I am disheartened to know that the 

bulk of the FTEs will be assigned to vocational rehabilitation and 

education claims. There’s actually a decrease, I think, in direct compensation FTEs of 149. The Committee is assessing the methodologies used to insure this request is a sufficient one.

  [The opening statement of Chairman Miller appears on p. 16]

 Mr. Miller. Before I turn to Mr. Udall, who is sitting in for the 

Ranking Member, Ms. Berkley, I’d like to let everyone know that unfortunately we don’t have a whole lot of time today. The full Committee is meeting at 3:00 to further discuss the President’s budget 

request.

 Mr. Udall?

 Mr. Udall. Thank you, Chairman Miller.

 Thank you for holding this hearing today, and I welcome Admiral 

Cooper and his staff at the VBA, and Mr. Lawrence of the Disabled 

American Veterans organization. I am hopeful this hearing will help

us come to a clearer understanding regarding the fiscal year 2007

Veterans’ Affairs budget, and some of the concerns being expressed 

by members of this Committee.

 One particular area of concern, as it has been every year, is ensuring the timeliness and accuracy of claims processing. Admiral Cooper, you were before the Subcommittee not four months ago when we 

discussed the necessity to prepare a fiscal year 2007 VA budget that

would address claims processing needs.

 In reading the budget request now being submitted to Congress for 

fiscal year 2007, there is an expected increase in original claims, an

expected increase in appeals, an expected increase in overall work-
3

load, particularly from those men and women returning from the battlefields of Afghanistan and Iraq. Yet this request includes a decrease

in FTEs working on compensation claims. There would be 149 fewer 

FTEs at a time when the workloads in this area are only intensifying. 

I would echo Mr. Lawrence in saying that this request is perplexing, 

and I hope today’s hearing will allow for further discussion.

 The need to lower the number of backlog claims must be addressed, 

and it must be addressed now. Thank you again for those witnesses 

that are testifying. With 180,000 veterans in my district, these are 

issues of great importance to me, and I hope we can properly address 

each of these concerns. Thank you, Mr. Chairman.

  [The opening statement of Mr. Udall appears on p. 17]

Mr. Miller. I thank you very much, Mr. Udall. Our first witness

is Admiral Daniel Cooper, the Under Secretary for Benefits, and I understand you have a busy schedule as well. We thank you for being 

here. Accompanying the Admiral today is Mr. Jack McCoy, Associate 

Deputy Under Secretary for Policy and Program Management; Mr. 

Michael Walcoff, Associate Deputy Under Secretary for Field Operations; Ms. Renée Szybala, Director of the Compensation and Pension

Service; and Mr. James Bohmbach, Director of the Office of Resources

Management.

Admiral Cooper, please proceed.

STATEMENT OF DANIEL L. COOPER, UNDER SECRETARY 

FOR BENEFITS, VETERANS BENEFITS ADMINISTRATION;

ACCOMPANIED BY JACK MCCOY, ASSOCIATE DEPUTY

 UNDER SECRETARY FOR POLICY AND PROGRAM MANAGE-

 MENT, VETERANS BENEFITS ADMINISTRATION; MICHAEL

 WALCOFF, ASSOCIATE DEPUTY UNDER SECRETARY FOR

FIELD OPERATIONS, VETERANS BENEFITS ADMINISTRA-

 TION; RENÉE SZYBALA, DIRECTOR OF THE COMPENSA-

 TION AND PENSION SERVICE, VETERANS BENEFITS

ADMINISTRATION; AND JAMES BOHMBACH, DIRECTOR

 OF THE OFFICE OF RESOURCES MANAGEMENT, VETERANS BENEFITS ADMINISTRATION

Admiral Cooper. Thank you, Mr. Chairman. Mr. Chairman and 

Mr. Udall, I respectfully request that my written statement be entered in the record.

 Mr. Miller. Check and see if your mic is on, Admiral. I am sorry. 

Or you might pull it a little closer if you can. Looks like it is on, we 

just might need to get it a little closer.

 Admiral Cooper. Can you hear me now?

 Mr. Miller. Yes, sir.
4

 Admiral Cooper. I respectfully request that my written statement 

be made a part of the record.

 Mr. Miller. Without objection.

 Admiral Cooper. It is my pleasure to be here today to discuss the 

Department of Veterans’ Affairs request for the C&P programs. The 

Veterans’ Benefits Administration is responsible for administrating

a wide range of benefits and services for veterans, their families, and

their survivors. But at the heart of our mission are the disability 

compensation and pension programs. We specifically provide benefits and services to over 3.5 million disabled veterans and other beneficiaries. Since fiscal year 2000, VBA is experiencing an unyielding

increase in workload in claims receipts, claims complexity, and more 

direct contact with increasing numbers of service members and veterans. Disability claims from veterans, those returning from war as 

well as those from earlier periods, increased by, as you say, 36 percent from 2000 to 2005.

  VBA remains absolutely committed to delivering benefits and services to eligible claimants in a timely, accurate, and compassionate 

manner. To that end, we are requesting $1.24 billion in discretionary funds for the C&P program. The requested FTE is essential to 

provide the level of service expected by our nation for those who have 

sacrificed so much in the defense of our freedom.

  With a workforce that is sufficiently supported and correctly balanced, VBA can successfully meet the needs of our veterans while 

ensuring proper stewardship of taxpayer funds. We are requesting 

7863 direct C&P FTE in fiscal year 2007. This level will allow VBA

to focus on the improvements in the quality and timeliness of claims 

processing, and also reduce the inventory of pending claims. It will 

also allow for better management of the C&P program’s other major

work. The other major work includes appeals account maintenance,

activities for beneficiaries already receiving benefits, outreach, telephone and personal interview activity, and guardianship responsibilities. These additional workloads also increase as disabled veterans 

and the number of beneficiaries on our rolls increase.

 We are committed to improving our outreach efforts. We will continue the Seamless Transition program for service members who are 

medically separated or retired due to a traumatic injury. In this program, we work closely with each individual, active-duty personnel, 

at the start of the military medical evaluation board process, which 

then leads to discharge. We will also continue briefing the separating

and retiring service members about VA benefits and services through

their military organizations. These services include formal transition assistance programs, co-sponsored by DOD and Labor.

 Outreach efforts are also targeted to meet the increasing needs of 

National Guard and Reservists. Last year we held 8200 briefings. 

Separating military personnel also receive enhanced benefits through
5

our Benefits Delivery at Discharge program. We have people at 140

discharge sites around the country. Each of these endeavors reaches 

veterans in ways which encourage larger numbers of claims, but each 

is good for the veteran concerned.

 I would like to discuss for a minute the mandated special outreach. 

Section 228 of the Military Quality of Life and Veterans’ Affairs Appropriations Act of 2006 stated that the Department of Veterans’ Affairs shall conduct an information campaign in states with an average annual disability compensation payment of a less of an $7,300 

per year. This was the number, or the states according to the report 

issued by the Department of Veterans’ Affairs IG last year, as you 

recall.

 This direction is meant to inform all veterans receiving disability 

compensation in the six specific states by direct mail, or to tell them

by direct mail of the history of below-average disability compensation payments to veterans in those states, and to provide all veterans 

in those states, through broadcast and print advertising, with the 

historical information and instructions for submitting new claims. 

The states meeting that specific criterion are Connecticut, Illinois,

Indiana, Michigan, Ohio, and New Jersey.

Based on our experience with prior targeted outreach efforts, we 

expect, as you mentioned, 98,000 additional claims this year. No 

additional resources were allocated in that particular amendment 

to address those additional claims. The number of veterans filing

initial disability compensation claims and claims for deserved additional benefits has increased every year since fiscal year 2000. The

claims from returning Afghanistan and Iraq war veterans, as well as 

from veterans of earlier periods of service, have increased by about 

200,000 each year since 2000, and it is expected that these increases 

will continue.

 The most important factors leading to these high levels of claims 

are the operations in Iraq and Afghanistan, the increased number 

of beneficiaries on the rolls with resulting additional claims for increased benefits as they get older, and improved and expanded outreach activities.

 The increase in claims receipts is not the only change affecting 

our processing requirement. The greater number of disabilities that 

veterans now claim on each one, the increasing complexities of the 

disabilities being claimed, and extensive changes in laws requiring 

a more thorough process, pose the major challenges to claims workload.

 In my mind, the best thing that we can do is to have a robust training program. This is key to our long-term improvement, the improvement that we need in both quality and consistency of our decisions. 

Training enables VBA to be flexible and responsive to changing

workload volume. VBA is engaged in an ongoing effort to improve its 
6

training systems, to standardize IT for new employees, and to raise

the skill levels of existing staff. We have deployed new training tools 

and centralized training programs. New hires receive comprehensive

training and a consistent foundation in claims processing principles 

through a national, centralized training program.

  Local training is provided using standardized curricula. Improved

computer-based training tools have been developed. We have developed a skills certification instrument for assessing the knowledge

level of our veterans service representatives. We have plans to do the 

same with our rating VSRs and eventually with our decision review 

officers, field examiners, and pension maintenance centers. Skill

certification will enable VBA to identify systemic knowledge deficits

through the testing process.

 In summary, Mr. Chairman, although VBA has made and will 

continue to make important improvements in processing, IT applications, accountability, training, and outreach, we have been unable 

to keep up with the myriad factors complicating claims processing. 

In my opinion, with the increases in personnel we received in 2006, 

and that we are bringing on board now and are training, and the 

promise of retaining a relatively high level for the foreseeable future, 

we stand a good chance of turning the corner on delivering this very 

important benefit. One lesson I’ve learned, however, is that the rules

in this complicated endeavor are always subject to change.

 Mr. Chairman, that concludes my testimony. I greatly appreciate the chance to be here, and look forward to answering your questions.

  [The statement of Daniel Cooper appears on p. 21]

 Mr. Miller. Thank you very much, Admiral. One thing that I am 

interested in is the six-state targeted outreach language that was in 

the appropriations bill. I am interested in knowing if you were afforded an opportunity to comment on the expected impacts on claims 

processing?

 Admiral Cooper. I was afforded the opportunity on two occasions to 

talk to a couple of staffers. And at that time, the first question was,

“What do you think of this?” and I told them. Frankly, I told them 

it was terrible public policy to go out and focus on merely six states, 

because all states have certain problems.

And the second thing I told them was -- and remember, this all 

came out of the discussion of PTSD and the IG’s investigation of disparity among the states. One thing I told them was we had not found 

major errors in the claims that we had looked at and, therefore, I did

not think it was a good idea. However, I was not asked for a vote.

At one time, I was further asked, if we knew the number of FTE

that we were getting in 2006 and how would we allocate those, if in 

fact that amendment came to fruition. We told them and they didn’t 
7

like the answer. What we showed is that we would have to allocate, 

if we were going to try to keep some control in those six states, most 

of these people into those six states.

 Those are the two questions I was asked, and neither of them 

proved to be germane.

Mr. Miller. I know you have the flexibility to move staff around,

and that you’re in the process of strengthening the training programs 

for your ratings staff, but I am not quite sure, however, how you expect to reduce the backlog that currently exists with fewer employees, 

in conjunction with the retirements, turnovers, and the time it takes

to train new hires. Can you give us a comfort level on that?

Admiral Cooper. You may recall that in 2003 we really pushed 

on pending claims. We pushed the number down to 253,000 pending claims. Now, I will tell you that at that same time, appeals and 

remands went up, and I then decided we need to do things across the 

board. However, for the next two years, the number of people that 

we had available to do the work went down. The number of claims 

went up.

As a result, in 2006 I asked for an increase of 731 additional people, 

because at that time, and this was toward the end of ‘05, my level of 

FTE in the C&P arena was going down, and across all VBA, was going down to 12,200.

 I pointed out to them that I needed at least 731 additional FTE, 

and that is what I got in the budget, 12,931 FTE.

 Now, I am trying to build up to that. I think, as of a couple days 

ago, we were at about 12,750. We have allocated staffing numbers

out to get us up to the 12,900 allowed, and we have to then do the 

training, as you mentioned, and that will take some time.

As we were focusing on this budget -- and remember, we start the 

budget 18 months ahead of time. And so taking the information I

knew at that time, we looked at staffig needs. The second point I

would like to make is, the total number of people we have in C&P and 

burial, I look at that total number of people. And what you see is that 

in claims processing we were going to decrease 148, but in pension, 

we were going to increase by a number of 86. So, I do play around 

with those numbers, but if I can get to 911, 12,911, then I feel I have 

a good chance to train people to do the job properly.

 The third thing I would say to you is, we have not yet started the 

six state rollout. I have everything ready to go, but right now we are 

operating under a letter from Senator Craig that asks that we refrain 

from starting until further notified. So right now, everybody I have

is working on the claims we have aboard.

 Mr. Miller. Mr. Udall?

 Mr. Udall. Thank you, Chairman Miller. The VA’s testimony is 

similar to the testimony at the full hearing. The Administration has 

proposed a decrease of 149 FTE who directly handle compensation 
8

claims in 2007, despite an expectation that the number of veterans 

seeking benefits will continue to rise. For a number of years VBA has

indicated that a backlog of 250,000 pending claims is an acceptable 

current inventory, although we refer to the backlog as a total number 

of pending rating claims.

 In any system, there will be a number of claims which the staff can 

be expected to handle in a reasonable amount of time. That number 

has historically been reported as 250,000. As of February 11th, 2005, 

there were 368,900 rating claims pending. The number at the close 

of 2006 is currently projected to be 417,852. And at the end of 2007,

396,834. This level of pending rating claims is unacceptably high. 

Additional staff will be needed to improve services to veterans. How 

many staff would be needed to reduce the pending claims to 250,000 

by the end of fiscal year 2007?

 Admiral Cooper. I cannot answer that question, primarily because 

I don’t know when we will finally be told to do the on site outreach. 

With what I have right now, we can start bringing the claims backlog 

down. I think the chances of getting to 250,000, with all the other 

work and we do with the people we have right now, I don’t think we 

can get there by that time. We have projected certain numbers, and

in my written statement, I think on page two, there is a table that 

shows both what I see as the effect if we have to suddenly start the 

outreach, and what I think we can achieve if we do not, given the 

levels that we have.

 Mr. Udall. The year-end inventory is still high though, right?

 Admiral Cooper. Yes, sir. You are correct.

 Mr. Udall. Yes, okay.

 Admiral Cooper. If I could state one thing, I -- 

 Mr. Udall. Please.

 Admiral Cooper. I don’t mean to interrupt but, in trying to keep 

up with things across-the-board and do this broad range of things 

the we have to do, as I mentioned, when I first came aboard I focused

specifically and had the whole group focus on getting pending claims

down. But these other things bobbed up, as Ms. McCarthy will tell 

you -- and Ms. McCarthy knows more about most of my stuff than I

do sometimes, I am afraid. But the fact is that, in working across 

the board, we have done a pretty good job on appeals and remands.

Remands are the decisions that come back from the Board of Veterans’ Appeals. Three years ago there were 30,000. Today there are 

about 20,000. We have also reduced the time to process appeals and 

remands.

 So we are making some progress. As you say, however, the incoming workload has come in faster than we can handle, and I have had 

reduced people over the last couple of years. I feel that I have finally been given the people that, once I get them aboard and trained, 

should allow us to make good approach.
9

Further I would say to you, as we have made changes in leadership in the various regional offices, and then tried to get a degree

of uniformity across all those regional offices, I think today we have

more uniformity than certainly they have seen in a good while, and I

believe I have very good people now in each of my regional offices.

 So I think that together that we will eventually get on top of this. 

Obviously, if there’s a large influx -- and our projected 98,000 is a

very large influx -- then I just have to do the best I can with what

we have.

 Mr. Udall. And Admiral, to be clear here, there’s no way that you 

can estimate on the basis of how the numbers of staff people that process claims, what it would take to tackle that 98,000, or to get it down 

to 250,000? Just giving me a rough estimate of -- I know that you are 

making all these changes, but based on your history, you should be 

able to make an educated guesstimate, I would think.

 Admiral Cooper. What I would do is tell you that the 98,000, that 

increases us by one eighth of the total number. So, if I were to give 

you a rough estimate, which obviously I can’t do officially, I would

say that about one eighth increase, that would be a very hard one to 

absorb. But I would say to you, as the Chairman mentioned, it is the 

training that takes a long time. So, even if today suddenly all these 

people appeared, I would be inundated because of the need to train 

them and get them up to speed.

 Mr. Udall. Sure, sure. No, I understand that.

You don’t have the lights on, so I don’t know when I am supposed 

to quit.

 Mr. Miller. You keep right on going.

 Mr. Udall. I just keep right on going? I might be here forever.

 Mr. Miller. You’ve got five more minutes.

 Mr. Udall. Okay.

  Admiral, are the VBA’s first-quarter receipts for fiscal year 2006

on track with the three percent increase projected in the Administration’s -- 

 Admiral Cooper. No, they are not. They are about 15 percent above 

2004, but they are about three percent below 2005.

 Mr. Udall. Okay. As I believe you know, I am very concerned about 

the difficulties experienced by veterans who are seeking service-connected compensation for Post-Traumatic Stress Disorder, PTSD.

 Admiral Cooper. Yes, sir.

 Mr. Udall. According to experts in the field, service members exposed to multiple combat traumas are at risk for more severe PTSD

than veterans exposed to a single incident. In your testimony, you 

discussed the difficulty in documenting, quote, “the event causing the

stress disorder,” end quote. Are service members who are subjected

to the constant threat of IEDs and suicide bombers while serving in 

Iraq; for example, in convoys and transport activities, required to 
10

document one specific event to support their claim for PTSD?

 Admiral Cooper. I would say to you that it is a much more complicated process than that, and if they are exposed to IED or whatever 

they are exposed to, that is in the unit records. And we then go to the 

records to try to find what it is that might have caused it. The nexus

between the event or the several events and PTSD has to be drawn by 

the medical examiner. The Veteran,usually, will designate the event, 

or the series of events that is the stressor and then they are sent for a 

medical exam. We are working very closely because the Secretary, as 

you recall, is very interested in helping these people better acclimate 

to civilian life, and to be cured and not carry the problem of PTSD. 

And so we are working together with VHA to try to do everything 

better.

 Mr. Udall. In a lot of cases, the medical exams aren’t accepted, not 

accepted in terms of determining the stressor; is that the case?

 Admiral Cooper. I can’t talk about the past. I can tell you we are 

working closely now, and I would expect, yes, the medical exam will 

give us the nexus. And I think we are making changes. We are looking very closely, as you know, both VHA and the President’s commission, have tasked the Institute of Medicine to do two different studies 

on PTSD, to try to help us better understand, and thereby have better 

medical examinations. And do it in such a way that we can tell if 

somebody is pulling our leg, or if in fact they have, really, PTSD, and 

in fact there is a nexus between their condition and some event that 

caused it.

 Mr. Udall. Now, I want to go back to the poor-performing offices. 

And I know you have been dealing with those by having no new staff, 

and I am concerned about those reports of no new staff, and those offices having no realistic hope of improving their performance, based

on VBA’s resource allocation formula. What actions can VBA take 

to improve the performance of low-performing offices? Could the VA

send in a strike team to help deal with the pending backlog, or take 

other actions to give these offices a fresh start? What is your approach going to be there?

 Admiral Cooper. We have several things that we do in order to try 

to help offices. My goal is to help offices, but -- one of the main things

we did when I was in charge of a study before I got this job, was to try

to figure out what we could do better. And one of the things we noted

is poor offices have a large pending backlog, because they weren’t doing things properly, or they didn’t have good leadership. So we determined that we were not merely going to allow poor offices to continue

doing poor jobs and probably not have good training.

 So we decided we would allocate differently. We have a very specific allocation that is done looking at what we expect them to receive the next year, what their quality is, what their timeliness is, 

and a couple other factors, to determine where we send new people. 
11

Now, for as those offices that are backlogged, we also have them work

specifically on preparing claims for adjudication, and then brokering

them out to other regional offices. So we try to help them get on their

feet by better developing the claim.

 We also have a group from headquarters that I send out to one 

third of my regional offices every year, and they are there for about a

week, doing both training and inspection, to see what they can do better. We have all of our regional offices organized into four areas, and

we have very well-trained area directors, very sharp area directors 

who have lots of experience, and they go to every one of their offices

at least once a year, and work with them.

 Then I go to the training program that we are putting in, the training program that started last year, and we are enforcing it across the 

board with everybody having certain requirements; specifically, 80

hours of training a year.

Another area of intrest is IT. We are improving IT with something called VETSNET, which I am sure you all have heard about. 

VETSNET is extremely important. Three years ago we put in a component called MAP-D. Two years ago, we put in a component called 

RBA 2000, and I dictated -- modestly speaking -- that each one of 

those be enforced across the board, and everybody use them, and that 

will eventually help us tremendously, if you compare today with 10 

years ago.

And so we are trying to do all these things to improve, as well as get 

on top of this major problem that we have.

 Mr. Udall. Thank you very much. Thank you, Admiral.

 Mr. Miller. Thank you, Admiral, and we may have some more 

questions we would like for you to take for the record. We will send 

them to you, since we are a little bit pinched for time, and we will 

move on.

 Admiral Cooper. Thank you very much.

 Mr. Miller. Thank you, sir. 

 Our next witness, while they are clearing the table, is Mr. Brian 

Lawrence. He is the Assistant National Legislative Director for the 

DAV, and they are the organization responsible for the benefits portion of the Independent Budget. Mr. Lawrence, thank you for being 

with us today, and as you know, we have a backstop; we have a full 

committee meeting at 3:00. So if you would, please proceed. 
12

STATEMENT OF BRIAN LAWRENCE, ASSISTANT NATIONAL

 LEGISLATIVE DIRECTOR, DISABLED AMERICAN VETERANS

Mr. Lawrence. Thank you, Mr. Chairman. I am pleased to appear 

before you on behalf of the 1.2 million members of the DAV to present 

the IB recommendations regarding the Veterans’ Benefits Administration.

  We view adequate staffing levels for the VBA business lines as one

of the most important issues for consideration in this component of 

the VA budget, so I will first address recommended numbers, fulltime employees -- or FTEs, and time permitting I will include some 

IB recommendations regarding the benefit programs.

 The level of funding sought in the president’s ‘07 budget would increase operating expenses by nearly $114 million, approximately an 

11 percent increase over last year’s level. We are greatly encouraged 

that the administration has proposed a substantial increase in resources for VBA. The need for such an increase has become critical, 

and we deeply appreciate the president’s bearing on this issue. With 

the proposed budget, VBA staffing would be increased in ‘07 by 173

FTE. C&P service would be authorized 9445 FTE, which is a total

increase of 14. However, the number of FTE under the subcategory, 

“Direct Compensation,” would be reduced by 149. The net gain of 

FTE would be as a result of increases in other VBA activities. This 

recommendation is somewhat perplexing since one of the Administration’s stated goals is to decrease the number of backlog compensation claims.

Additionally, ongoing hostilities in Iraq and Afghanistan, along 

with an aging veteran population, will almost certainly increase the 

number of claims for compensation. In the five-year period from the

end of 2000 to the end of 2005, the volume of disability claims increased 36 percent, or an average of 7.2 percent annually. VA projects that the number of disability claims will increase three percent 

during ‘06, and two percent in ‘07. But even with those modest projections for increased work, the number of direct program FTE should

be increased. Especially since VA estimates that above the projected

increases in regular claims work, it will receive an additional 98,000 

claims from its outreach to veterans in six states with the lowest average competition payments, as mandated by last year’s legislation.

 It appears VA contemplates and accepts an increase in the claims 

backlog during these two years, despite the fact that it projects in

increase in production.

  In the IB, we have recommended a substantially higher staffing

level that we believe reflects a more realistic assessment of what VA

needs to deliver benefits in a timely manner. The IB recommends

that the ‘06 staffing of 9431 FTE for C&P be increased to 10,820, and
13

I would invite your attention to the IB in my written statement, for 

the basis of that recommendation.

  Similarly, we have recommended staffing levels for the educational

program and vocational rehabilitation and employment program, 

that we think are necessary to get the job done in an acceptable manner. Though the administration’s budget seeks increases for these 

programs, the IB recommendations are slightly higher. We recommend an increase of 149 for educational service, compared with the 

Administration’s request of 46. And we recommend an increase of 

250 FTE vocational rehabilitation, compared with the administration’s requested increase of 130.

 In addition to ensuring that VBA has the resources necessary to 

accomplish its mission, Congress must also make adjustments to the

programs from time to time, to address increases in the cost of living, 

and other needed improvements. The IB makes a number of such 

recommendations, and we invite the committee’s attention to that 

section in the IB.

 Mr. Chairman, that concludes my statement. I thank you for this 

opportunity, and I will be happy to answer any questions you may 

have.

  [The statement of Brian Lawrence appears on p. 32]

 Mr. Miller. I thank you very much. You mentioned an increase 

in FTE of some 1,375 more than the President’s request. You asked 

us to refer to the Independent Budget for the methodology. Can you 

just give us an encapsulated version of how those numbers were derived?

 Mr. Lawrence. The exact wording in the IB is based on accepted 

percentages from previous years. They just look back to the previous

two or three years, and project those percentages onto the upcoming

year.

 Mr. Miller. Is there anything that VBA can do to address the 

claims backlog that doesn’t require funding, new funding, or is that 

the only solution that you see?

 Mr. Lawrence. No, sir. Part of the problem is just to adjudicate

claims properly the first time. And you know, the backlog is created

because claims are appealed and they are sent to the Board of Veterans’ Appeals, and then they are remanded back to the regional office. 

So they end up reworking claims when that shouldn’t be necessary. 

The original rating decision should be adequate, and remands for minor issues such as improper exams would alleviate a lot of backlog.

And for those type of problems, we recommend increased training, 

or proper training for adjudicators. We recognize right now that VA

has a large turnover in employees that are senior adjudicators that

are taking a wealth of knowledge with them, and they are being replaced by people that need training, and that it is a very complex 
14

system, and it takes a while for these new employees to ramp up to 

operate at that level.

 Mr. Miller. Is it your testimony that the vast majority of the incorrect adjudications are a result of improperly trained staff?

 Mr. Lawrence. I am not in a position to say the vast majority, but

I would say -- 

 Mr. Miller. You have an idea of a percentage? Your testimony is 

more geared toward VBA incorrectly deciding claims, and I am interested on what basis is that, or is there a vast majority of claims that

are submitted that are not fully developed, that do in fact need more 

information?

 Mr. Lawrence. A lot of them have inadequate exams; they are not 

ready to be rated. They get to the Board of Veterans’ Appeals, and 

information has been left out. The problem stems a lot from the desire to show production at the regional office level. They are more

concerned about producing numbers, rather than property adjudicating claims and getting it done right the first time.

 Mr. Miller. But I am trying to figure, you just said a lot of them

are not ready to be adjudicated.

 Mr. Lawrence. Right.

 Mr. Miller. What makes them ready? Who makes them ready?

 Mr. Lawrence. Thorough exams, for one thing.

 Mr. Miller. And where does that responsibility lie?

 Mr. Lawrence. Well, it lies probably both with VBA and VHA. The 

VBA needs to clarify when a rating is sent for an examination, exactly the information that they seek to be able to do the rating.

 Mr. Miller. I am trying to get at, because I am not a veteran 

and I don’t know the process as a veteran would from personal experience, but I understand that there are forms that are filled out,

require backup information that is submitted to VBA. And you are 

saying today that because of production numbers, the VA feels a need 

to move those through, and possibly some of them are remanded or 

kicked back.

  I am trying to find out where the disconnect is. I understand that

there is a staff turnover and some training issues at VBA, and some 

things that really need to take place -- and nobody is denying that 

-- through attrition. But we also heard testimony either yesterday 

or the day before -- maybe yesterday -- the same thing is happening 

in the VSOs. And a lot of those folks that are helping the veterans 

fill out their paperwork, I am trying to figure out what percentage is

improperly filled out, incomplete, or what percentage is absolutely

complete, and VBA just misses it. Do you have a clue?

 Mr. Lawrence. I don’t have that number available.

 Mr. Miller. Okay. Mr. Udall?

 Mr. Udall. Thank you, Mr. Chairman. As, Mr. Lawrence, you said 

in your testimony, the Independent Budget recommends a staffing
15

level of 10,820 for the compensation and pension service. How many 

additional FTE recommended by the Independent Budget are for direct compensation work?

 Mr. Lawrence. I would have to get back to you with that number. 

I don’t recall right off.

 Mr. Udall. Okay. Could you do that?

 Mr. Lawrence. Absolutely.

  [The information requested appears on p. 62]

 Mr. Udall. Thank you.

 Should the VA reevaluate the criteria needed for persons employed 

as decision review officers and adjudicators?

 Mr. Lawrence. Could you restate the question, please?

 Mr. Udall. Should the VA reevaluate the criteria needed for persons employed as decision review officers and adjudicators?

 Mr. Lawrence. I don’t know that a reevaluation of the criteria -- 

and I am just speaking off-the-cuff, here, and not one part of the IB

-- that the initial criteria I am not sure is what the problem is, but 

just the ramping-up period, and the training to prepare them to begin

doing their job is, I know, lacking in some instances.

 Mr. Udall. Thank you very much. Thanks, Mr. Chairman.

 Mr. Miller. Thank you very much, and we also may have additional questions that we may want to submit to you for the record. 

Thank you for being with us.

 We all know that caring for and compensating the men and women 

who are injured as a result of their military service is the core mission of the VA. And I realize that some do not like the label of “core

constituency,” as we heard yesterday, but I believe that is who Abraham Lincoln was referring to during his second inaugural address, 

when he said that it is the nation’s duty to care for him who have 

bourne the battle, and for his widow, and his orphan, as we heard this 

morning from the Gold Star wives representative.

 I look forward to working with each of you as we carry out this 

solemn obligation. Without objection, statements will be entered into

the record for the Board of Veterans’ Appeals, the U.S. Court of Appeals for Veterans Claims, and AMVETS.

  [The attachments appear on pgs. 35, 45 and 54]

 Mr. Miller. And with nothing further, this hearing is adjourned.

  [Whereupon, at 2:51 p.m., the Subcommittee was adjourned.]

 
(16)

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