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[Senate Hearing 109-463]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 109-463
 
     THE LEGISLATIVE PRESENTATION OF THE DISABLED AMERICAN VETERANS

=======================================================================

                                HEARING

                               BEFORE THE

                     COMMITTEE ON VETERANS' AFFAIRS
                          UNITED STATES SENATE

                       ONE HUNDRED NINTH CONGRESS

                             SECOND SESSION

                               __________

                           FEBRUARY 28, 2006

                               __________

       Printed for the use of the Committee on Veterans' Affairs

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

                                 ______

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                     COMMITTEE ON VETERANS' AFFAIRS

                      Larry Craig, Idaho, Chairman
Arlen Specter, Pennsylvania          Daniel K. Akaka, Ranking Member, 
Kay Bailey Hutchison, Texas              Hawaii
Lindsey O. Graham, South Carolina    John D. Rockefeller IV, West 
Richard Burr, North Carolina             Virginia
John Ensign, Nevada                  James M. Jeffords, (I) Vermont
John Thune, South Dakota             Patty Murray, Washington
Johnny Isakson, Georgia              Barack Obama, Illinois
                                     Ken Salazar, Colorado
                  Lupe Wissel, Majority Staff Director
               D. Noelani Kalipi, Minority Staff Director

                            C O N T E N T S

                              ----------                              

                           February 28, 2006
                                SENATORS

                                                                   Page
Craig, Hon. Larry, Chairman, U.S. Senator from Idaho.............     1
Salazar, Hon. Ken, U.S. Senator from Colorado....................     3
Akaka, Hon. Daniel K., Ranking Member, U.S. Senator from Hawaii..    21
Murray, Hon. Patty, U.S. Senator from the State of Washington....    23

                               WITNESSES

Jackson, Paul W., National Commander, Disabled American Veterans, 
  accompanied by: David W. Gorman, Executive Director, Washington 
  Headquarters; Arthur H. Wilson, National Adjutant; Joseph A. 
  Violante, National Legislative Director; Edward E. Hartman, 
  National Director of Voluntary Services; Edward R. Reese, Jr., 
  National Service Director; and Judy M. Steinhouse, National 
  Commander, Disabled American Veterans Auxiliary................     6
    Prepared statement...........................................    10

                                APPENDIX

Thune, Hon. John, U.S. Senator from South Dakota.................    37
Reyes, Hon. Silvestre, U.S. Congressman from Texas...............    37

     THE LEGISLATIVE PRESENTATION OF THE DISABLED AMERICAN VETERANS

                              ----------                              

                       TUESDAY, FEBRUARY 28, 2006

                               U.S. Senate,
                    Committee on Veterans' Affairs,
                                                   Washington, D.C.
    The committee met, pursuant to notice, at 2:10 p.m., in 
room SH-216, Hart Senate Office Building, Hon. Larry E. Craig 
(chairman of the committee) presiding.
    Present: Senators Craig, Salazar, Akaka, and Murray.

           OPENING STATEMENT OF HON. LARRY E. CRAIG, 
                    U.S. SENATOR FROM IDAHO

    Chairman Craig. Good afternoon, ladies and gentlemen. Thank 
you all for being with us. I am proud to convene the Senate 
Veterans' Affairs Committee, and I welcome all of you.
    It is a pleasure to welcome you here today to receive 
legislative presentations from the Disabled American Veterans.
    Before we begin, I would like to extend a very special 
welcome to the DAV members who have traveled from my home state 
of Idaho. I understand that Edger and Sharon Dungess are in the 
audience, our junior vice commander and DAV auxiliary 
commander, along with Brian Alspach, a national service 
supervisor, Francis Redding, a State commander for the 
Department of Idaho, and Barbara Redding, past national DAV 
officer. We welcome fellow Idahoans certainly to the committee.
    I would also like to welcome Mr. Paul Jackson, the national 
commander of the Disabled American Veterans. Congratulations on 
your selection as national commander, and thank you for joining 
us today.
    I will also welcome Senator Ken Salazar, a Member of the 
committee, who will be introducing Mr. Jackson, and welcome to 
other DAV and DAV auxiliary members at the witness table who I 
understand Mr. Jackson will introduce.
    Today's hearing is the first of several hearings that the 
committee will hold this year to receive legislative 
presentations of various veterans organizations. Although these 
Senate hearings are a departure from prior practice, I am 
pleased that veterans organizations will continue to have an 
opportunity to express their views to this committee, and I am 
confident this hearing will provide us with valuable input to 
consider as we tackle some of the important issues of this 
session.
    Before I turn it over to you, Mr. Jackson, I would like to 
say a few words about this committee's activities this last 
year and some important issues that we will confront this year.
    By any measure, this committee has had a busy and 
productive first session, convening 23 hearings here in 
Washington, nine field hearings, and four markups. These 
hearings led to the enactment of legislation to increase 
disability compensation and survivor payments, to provide 
traumatic injury insurance protection to seriously wounded 
service members, to increase the maximum amount of veterans' 
and service members' life insurance coverage, to provide 
integrated online information to survivors about Federal 
benefits, and to close the parole loophole that allowed certain 
capital offenders to receive burial and funeral honors.
    This committee also worked to fill a gap in VA's health 
care funding and approved legislation to improve housing and 
other benefits and to provide enhancement of health care 
programs.
    This session, we began by holding a hearing to examine 
employment programs for veterans and why these programs have 
not helped some groups of veterans find jobs. Exploring ways to 
improve the high unemployment rate among some groups of 
veterans, particularly young recently separated veterans and 
veterans with disabilities, will continue to be a very clear 
focus of this committee.
    Of course, now the committee's primary focus must be the 
President's fiscal year 2007 budget proposal for the Department 
of Veterans Affairs. As I stated at a hearing earlier this 
month, I believe this record budget request is extraordinary 
and shows that the President has made veterans a top priority, 
and I am pleased about that.
    I am concerned, however, that at the present spending rate, 
VA spending will double almost every 6 years and will soon 
collide with spending demands in other areas of our Government. 
Although we may wish that veterans funding exists in a vacuum, 
it simply does not, and we, those of us on this committee, are 
soon going to be faced with some very important decisions about 
how to deal with these fiscal realities.
    As I am sure you are all aware, the President has proposed 
one way for us to respond to these fiscal challenges, by asking 
7 and 8 priority veterans with no service-related disabilities 
to contribute $21 per month to enroll in the VA health care 
system and $15 for a 30-day supply of medicine.
    Although I personally find these proposals to be 
reasonable, I know DAV and other veterans organizations have 
voiced strong opposition. So I will reiterate my hope that your 
organization as well as other veterans organizations will 
engage this committee in a serious and candid discussion, if 
not about the President's proposals, then about other options.
    Mr. Jackson, your organization played a key role in seeking 
reform for the VA health care system 10 years ago, and we are 
now reaping the benefits of that reform with one of the 
highest-quality health care delivery systems in the Nation.
    Today, we have that topnotch health care, and it is under 
your leadership that DAV now has the opportunity to help us 
find ways to sustain this incredible health care system into 
the future.
    If we address these issues now, we can help ensure that 
future vets will not be faced with drastic or more difficult 
changes needed to solve the problems. I personally do not want 
to pass this issue on to the next guy. Instead, I want to pass 
on to tomorrow's veterans a sustainable quality health care 
system that provides quality care that is accessible to those 
who need it, but affordable to those who want it.
    I hope you agree with these goals, and are willing to work 
together, no matter whatever it takes to make sure that we 
resolve this issue and sustain the quality health care system 
that I know all of us are tremendously proud of.
    Again, thank you for all of you coming today to join with 
us in providing this testimony and the kind of continuing 
dialogue that your organization has had for so many years with 
this committee.
    Senator Akaka would like you to understand--let's see. He 
is not here yet for his opening statement, but I believe that 
he may be able to make it.
    We also have a vote at 2:30. So we will recess for a moment 
and step away, but with that in mind, let me turn to my 
Democratic colleague who is here, a new Member of the committee 
who I have enjoyed working with who, by his presence and his 
dedication to this committee, has shown his dedication toward 
America's veterans, Senator Ken Salazar of Colorado.
    Ken, I turn to you for any opening comments you would like 
to make and to the introduction of Mr. Jackson.
    Thank you.
    Senator Salazar. Thank you very much.
    What I would like to do, if it is okay with you, Mr. 
Chairman, is to make an opening statement and then have the 
immense privilege and honor of introducing Commander Jackson.
    Chairman Craig. Let me, before I do that, so we will move 
right into Mr. Jackson's testimony, I see that we are being 
joined by some of the House Veterans' Affairs Committee people, 
and I welcome you. I understand there may be some others 
coming.
    I understand that the House Veterans' Affairs Committee had 
an opportunity to hear DAV earlier this month. So I hope our 
colleagues in the House will understand that I must ensure the 
time be dedicated to the Senate Members. You are certainly 
welcome, and we appreciate that, but for the sake of timing and 
the sake of our colleagues, any question and answer and 
response will be dedicated only to U.S. Senators, but you are 
welcome. We appreciate you being here, and I recognize your 
presence. Thank you.
    Please.

   OPENING STATEMENT OF HON. KEN SALAZAR, U.S. SENATOR FROM 
                            COLORADO

    Senator Salazar. Good afternoon. Thank you, Chairman Craig, 
and I also want to thank Senator Akaka for holding this 
important hearing today.
    I want to thank the representatives of the DAV who are in 
attendance here today, especially those who have traveled from 
my State of Colorado, including Commander Jackson who just came 
back from Iraq and had a trip around the Nation doing some 
other things for the DAV.
    Although the format of the hearing this year is a little 
different from the past, I appreciate the opportunity that 
Senator Craig and Senator Akaka are providing us, so that we 
can hear from the DAV on your priorities. I am grateful for the 
work that each of you do in connection with our service to our 
Nation's disabled veterans.
    I am very proud to have a fellow Coloradan who is a 
commander, the national commander for the organization. I am 
confident that he will exemplify the State's commitment to 
these issues and that he will make Colorado and our Nation 
proud as he has always in his past.
    Today, I know is the first series of hearings on the 
legislative proposals of the major veterans service 
organizations that give us the Independent Budget. Every year, 
27 VSO's work very hard to present this independent budget to 
the Congress and to the executive branch. I appreciate the work 
that goes into the creation of that Independent Budget.
    These hearings for me were extremely valuable last year, my 
first year in the Senate and my first year of service on the 
Veterans' Affairs Committee, because they showed me your side 
of the story from the veterans' perspective.
    The hearings helped me understand the budget not from the 
view of simply the VA or from other Members of Congress, but 
from the people that the budget affects every day all across 
our country, the veterans themselves. That is why I keep a copy 
of the Independent Budget on my bookshelf. It lays out very 
clearly the steps we need to take to reform our Nation's 
veterans' services and to meet our obligation to provide for 
the men and women who have sacrificed so much for our country 
and for their families.
    At the center of the Independent Budget's recommendations 
for reform and at the forefront of priorities of disabled 
veterans across America is a critical issue of how to fund VA 
health care. As our Nation struggles with a growing health care 
crisis, we can all agree that the VA health care system serves 
as an example for how health care should be provided.
    In addition, though, through its medical research programs, 
the VA is frequently responsible for great strides in medical 
science that contribute significantly to the quality of health 
care across the country.
    Given the significance of the Veterans Health 
Administration to our Nation's health care system and the 
paramount importance of providing our Nation's veterans with 
the high-quality care that our Government and Nation has 
promised them, we owe it to our service members, our veterans 
and our Nation, to be honest about our needs and to provide 
funding adequate to meet those needs.
    While this year's budget request does a better job of 
meeting those standards and the one we considered a year ago, 
it does not take the steps that are necessary to ensure proper 
continuity of care for our Nation's veterans. We cannot keep 
responding to uncertain budget requests with appropriations we 
hope are adequate, only to be faced with additional shortfalls.
    This issue is especially important as our service members 
return from Iraq and Afghanistan in growing numbers and with 
severe service-connected disabilities. Instead of being forced 
to ration care by uncertainty about funding, VA officials and 
the veterans they serve deserve to know that the care they need 
will be there today, tomorrow, and every day for the years to 
come. The answer in my view is mandatory funding.
    I am a cosponsor of Senator Johnson's bill to ensure that 
funding for VA health care is guaranteed, and I will work hard 
to see that we continue to fight to make it become law.
    Unfortunately, VA health care funding is not our only 
challenge. We need to do much more to eliminate the claims 
processing backlog that exists with respect to veterans' 
benefits. It is so disheartening to think that the only thing 
standing between veterans in need and the benefits they have 
earned is sometimes a needless bureaucratic delay.
    We also must work down the disability tax and allow full 
concurrent receipt now. You should not have to subtract what 
you have suffered from what you have earned.
    As we strive to overcome these and all the challenges we 
face, I am proud to work with Senator Craig, my colleague and 
friend from Idaho, and Senator Akaka, my colleague and friend 
from Hawaii, as well as with our colleagues from the House of 
Representatives. Our priorities are your priorities, and I am 
proud to stand by you as we fight to achieve them.
    Before I introduce Paul Jackson, I also want to introduce, 
just very briefly, the most recent addition to the House 
Veterans' Affairs Committee. He happens to be someone whom I 
have known for the full 50 years of my life. He is a veteran 
himself, and he is the Congressman from the 3rd Congressional 
District of the State of Colorado which covers the Western 
Slope and Pueblo and parts of southern Colorado. It is the 
first time in our time together here in the U.S. Capitol that 
we actually get to sit on a committee together and hold a 
hearing together.
    So, Representative Salazar, welcome to the Senate side of 
things.
    Chairman Craig. Ken, I am assuming there is a last name 
similarity. Is there a relationship there, or are you just 
distant neighbors?
    Senator Salazar. You couldn't tell by the hair. Right?
    Chairman Craig. Well, I was drawing some conclusions. Yes. 
Welcome again.
    Congressman Salazar. Thank you, Mr. Chairman.
    Senator Salazar. He is my older brother. So he can pull 
rank in that respect, but I am the Senator. So maybe I can pull 
rank in that respect.
    Chairman Craig. Of course, you can. You are on your turf 
right now. Okay?
    Senator Salazar. Thank you. Thank you, Chairman Craig.
    Commander Jackson, it is my immense privilege to introduce 
you here today. You are not only a distinguished member of 
today's panel, but you also have distinguished yourself in the 
service to our country.
    As the national commander of one of the largest veterans 
service organizations in the Nation, I am so proud of the fact 
that you are also a fellow Coloradan.
    Commander Jackson served honorably in our Nation's military 
for 21 years, a career that included wartime service in both 
Korea and two tours of duty in Vietnam.
    He has served as a member of the U.S. Marine Corps, as a 
member of the U.S. Army 1st Infantry in the 101st Airborne 
Division, and 12 years after retiring from the military in 
1973, Commander Jackson joined the Disabled American Veterans 
where he has dedicated the last 20 years of his life to 
advocating on behalf of disabled veterans and their families.
    Commander Jackson, like the over 2 million veterans he 
works tirelessly for every day, is a service-connected disabled 
veteran. He does his job so well not only because he is a hard 
worker and a dedicated professional, but because he is 
intimately familiar with his constituents' priorities.
    He has served with DAV in a number of capacities, ranging 
from member of the DAV National Employment Committee to senior 
vice commander to his current position as national commander. I 
am especially proud of his service as a member of the DAV 
Department of the Colorado Board of Directors.
    Although he was born in Texas, Commander Jackson has been a 
fellow Coloradan since his days as a student at Pike's Peak 
Community College in Colorado Springs. He is a life member of 
the Colorado DAV Chapter 7 where he has impressively held all 
elected chapter offices. He has served our State in a number of 
important roles, including as a fraud investigator in 
Colorado's Department of Social Services.
    I am deeply proud that Commander Jackson, his wife Jean, 
and his four children call Colorado home, and a fellow 
Coloradan is serving as a national commander for such a 
distinguished organization. I am honored to have the 
opportunity to introduce Commander Jackson at today's hearing.
    Chairman Craig. Ken, thank you, and Commander Jackson, 
welcome again before the committee.
    As I did say, we have a vote at 2:30. We will allow you, of 
course, to complete your opening statement. We may then recess 
for a moment, run and vote. We will be back then for the 
balance of the committee and for questions.
    So please proceed, and welcome again.

  STATEMENT OF PAUL W. JACKSON, NATIONAL COMMANDER, DISABLED 
 AMERICAN VETERANS, ACCOMPANIED BY: DAVID W. GORMAN, EXECUTIVE 
 DIRECTOR, WASHINGTON HEADQUARTERS; ARTHUR H. WILSON, NATIONAL 
 ADJUTANT; JOSEPH A. VIOLANTE, NATIONAL LEGISLATIVE DIRECTOR; 
  EDWARD E. HARTMAN, NATIONAL DIRECTOR OF VOLUNTARY SERVICES; 
 EDWARD R. REESE, JR., NATIONAL SERVICE DIRECTOR; AND JUDY M. 
  STEINHOUSE, NATIONAL COMMANDER, DISABLED AMERICAN VETERANS 
                           AUXILIARY

    Mr. Jackson. Thank you, Senator Salazar.
    Chairman Craig, I want to personally thank you for this 
opportunity to appear before you and your committee.
    Mr. Chairman and Members of the Veterans' Affairs 
Committee, please allow me to introduce those seated at the 
table with me as well as some of our distinguished guests: 
National Adjutant Art Wilson, Executive Directors Rick 
Patterson and Dave Gorman, National Service Director Randy 
Reese, Legislative Director Joe Violante, Volunteer Service 
Director Ed Hartman, Auxiliary National Commander Judy 
Steinhouse of North Dakota, Auxiliary National Adjutant Maria 
Tedrow, DAV Senior Vice Commander Bradley Barton of Oregon; 
Junior Vice Commanders Rob Reynolds of Virginia, Ray Dempsey of 
Illinois, Bobby Barrera of Texas, and Wallace Tyson of North 
Carolina; National Judge Advocate Mike Dobmeier of North 
Dakota, Past National Commander James Sursely of Florida, 
Chaplain Edward Bastille of California, and National Chief of 
Staff Norbert Wenthold.
    I would also like to introduce my wife Jean and my two 
daughters, Ida and Jeanine, in the back of me.
    Chairman Craig. Welcome to all of you.
    Mr. Jackson. I will ask the DAV National Executive 
Committee to please stand and be recognized.
    May I ask the members of the National Legislative Interim 
Committee to please stand.
    I wish to recognize Department of Colorado Commander 
Kenneth Camal, Adjutant Mike Terry, and the entire 17th 
District which includes Colorado.
    Mr. Chairman, in my remarks today, I will briefly touch on 
a number of important topics that my written statement covers 
in more detail.
    Chairman Craig. Commander, your full statement will be a 
part of the record. Please proceed.
    Mr. Jackson. I welcome any questions or comments from 
Members of the committee, and my staff will be available to 
respond.
    On behalf of the 1.5 million members of the Disabled 
American Veterans and its Auxiliary, I am pleased to discuss 
the agenda of our Nation's wartime disabled veterans and their 
families.
    Mr. Chairman, today, America's sons and daughters are 
serving in our armed forces, protecting our freedoms here and 
abroad.
    Having returned from Iraq on February 22nd, I can tell you 
that those brave men and women representing us over there makes 
me very proud to be an American. They make us all very proud.
    Sadly, though, all too many of them have come home bearing 
the wounds and scars of war. Not since the Vietnam War has our 
Nation had to deal with such a significant number of severely 
disabled wartime casualties.
    Although they do receive excellent military care from the 
military, I am concerned about whether they will be able to 
receive timely, quality health care from the VA well into the 
future.
    In March 2005, then-DAV National Commander Jim Sursely 
expressed our concern about the VA's ability to care for our 
Nation's veterans. In his testimony to the House and Senate 
Veterans' Affairs Committee, he cited a number of news articles 
about budget shortfalls at VA facilities across the country. 
Unfortunately, at that time, his concerns fell mostly on deaf 
ears.
    Then last June, the VA finally admitted to a critical 
shortfall, which Congress had to cover with supplemental 
appropriations.
    Mr. Chairman, I want to thank you, Ranking Member Daniel 
Akaka, and Senator Kay Bailey Hutchison for your advocacy in 
providing those much-needed funds. I also want to commend 
Senator Patty Murray for bringing the funding crisis to light 
very early on. Thank you all very much.
    However, despite that welcome infusion of funds, we 
continue to hear from the field that budget problems still 
persist. The hiring freeze is still in place, and employee 
levels in VA health care remain unchanged for the years 2005 
and 2006. And what's worse, we understand that the VA medical 
facilities are required to pay back the money they received to 
cover last year's funding shortfalls. For some facilities, the 
increase they receive will only help to pay for salary 
increases. Others report continued deficits and backlogs. Some 
are actually reducing health care, and some medical facilities 
are wondering how they will make it through the year.
    Mr. Chairman, veterans' health care remains underfunded, 
and that threatens the quality and availability of care to 
America's sick and disabled veterans, and just what kind of 
message does that send to the brave men and women who are 
fighting in the war on terrorism?
    Under the President's budget, medical services would rise 
from $22.5 billion to $24.7 billion, or a 9-percent increase. 
The DAV and the Independent Budget organizations are calling on 
Congress to provide almost $26 billion for medical services. 
This is almost $1.3 billion more than the President has 
requested, and we are united in opposing new fees and higher 
co-payments on certain veterans who choose to get their care 
from the VA.
    Mr. Chairman, we believe the veterans health care system is 
certainly worth the investment. The VA provides top-quality, 
cost-
effective care to a most deserving group of veterans.
    Today, the quality of VA care is recognized worldwide. 
Improvements in VA care are a result of the Health Care 
Eligibility Reform Act of 1996. In order to continue providing 
this world-class quality health care, the VA needs a critical 
mass of veterans, young and old, healthy and sick, to ensure it 
can continue to provide a full range of care.
    The long-term viability of the veterans health care system 
also depends on an adequate reliable funding stream. The DAV 
and other veterans service organizations are united in calling 
for guaranteed mandatory funding. Only then will sick and 
disabled veterans be able to receive this quality care in a 
timely manner now and in the future.
    We believe funding for veterans benefits and health care 
should be a top priority for our Government. They are a 
continuing cost of our national defense.
    Mr. Chairman, I will now focus on the benefits side of the 
VA.
    A core mission of the VA is providing benefits to relieve 
the economic effects of disability upon veterans and their 
families. Disability benefits are critical, and they should 
always be a top priority of the Government.
    We are pleased the President's budget would add more 
staffing in the education, vocational rehabilitation, and 
employment programs, but we are perplexed by the recommendation 
to reduce staffing for compensation claims processing.
    Likewise, we are concerned about longstanding problems and 
chronic understaffing in compensation and pension service. That 
is compounded by an expected increase in disability claims. 
While the President's budget calls for cutting 149 employees 
from the current level, the Independent Budget has recommended 
adding 1,300 claim workers. Because the already unacceptable 
backlog would grow even larger in 2006 and 2007, we urge the 
committee to recommend adequate staffing for C&P.
    Mr. Chairman, DAV's legislative mandates have been made 
available to your staff. So I will only comment on a few of 
them at this time.
    In addition to reforming the budget process for VA health 
care and improving accuracy and timeliness of the claims 
process, the members of the DAV call upon this committee to: 
increase the face value of service-disabled veterans' 
insurance, authorize VA to revise its premium schedule to 
reflect current mortality tables, extend eligibility for 
veterans' mortgage life insurance to service-
connected veterans rated permanently and totally disabled, 
support additional increases in grants for automobiles and 
specially adapted housing and provide an automatic annual 
increase based on the cost of living, and support legislation 
for full concurrent receipt of military longevity retirement 
pay and VA disability compensation for all affected veterans.
    We also ask support for S. 633 to authorize minting of 
coins to help fund the American Veterans Disabled for Life 
Memorial.
    Mr. Chairman, since our inception, the DAV has sought to 
protect the interests of all disabled veterans. The purpose our 
founders set for themselves in 1920 remains the same today: 
building better lives for America's disabled veterans and their 
families.
    I am extremely proud of what the DAV stands for and what we 
have accomplished in our 86-year history.
    In fulfilling our mandate of service, the DAV employs a 
corps of 260 professional trained national service officers 
located throughout the country and 24 transition service 
officers at military separate centers. All of our NSO's and 
TSO's are wartime service-
connected disabled veterans. About half of them are Gulf War 
veterans.
    Last year alone, our professional service officers 
counseled, free of charge, a quarter-million veterans and their 
family members in their claims for VA benefits.
    The DAV's Mobile Service Office Program puts our NSO's on 
the road to assist veterans where they live. Some of these 
offices on wheels were deployed to the areas hardest hit by 
Hurricanes Katrina and Rita, and the DAV provided nearly $1.8 
million in direct funding to disabled veterans and their 
families affected by the storms.
    In addition to those professional services, the DAV and its 
auxiliary together have more than 16,000 volunteers in VA 
hospitals and clinics. Last year, they logged 2.4 million hours 
of free service to the patients and VA.
    Since we began our free transportation program, the DAV has 
purchased and then donated to the VA nearly 1,700 vans at a 
cost of $34 million. This year, we will be presenting the VA 
with 129 more new vans.
    Since the transportation program began in 1987, our vans 
have provided nearly 9.5 million round trips to veterans, 
traveling more than 360 million miles. This program served 
disabled veterans in every State and every congressional 
district in the country, and for all they do to serve our 
veterans and their communities, these magnificent volunteers 
are a source of pride and inspiration for us all. I want to 
publicly acknowledge their commitment and compassion to our 
Nation's veterans.
    Thank you all very much. Mr. Chairman, this completes my 
testimony.
    [The prepared statement of Mr. W. Jackson follows:]

       Prepared Statement of Paul W. Jackson, National Commander 
                   of the Disabled American Veterans

    Mr. Chairman and Members of the Veterans' Affairs Committee:
    As National Commander of the more than 1.5 million members of the 
Disabled American Veterans (DAV) and its Auxiliary, I am honored and 
privileged to appear before you today to discuss the agenda and major 
concerns of our nation's wartime disabled veterans and their families.
    Chairman Craig and Ranking Member Akaka, I thank you for your 
strong leadership of this Committee. During the first session of this 
Congress, this Committee was very active on veterans' issues. I also 
thank you for providing me with this opportunity to testify on the 
legislative goals of the DAV following the unilateral cancellation of 
joint hearings by the Chairman of the House Veterans' Affairs 
Committee.
    The opportunity to present testimony before joint hearings of the 
House and Senate Veterans' Affairs Committee has been a long-standing 
tradition enabling veterans service organizations (VSOs) the occasion 
to provide the authorizers of veterans' programs with our legislative 
agenda and concerns. These hearings also provided your members with the 
chance to address the numerous constituents who are present from their 
states, and it provided DAV members with the opportunity to see their 
elected officials respond to issues critical to them and other disabled 
veterans. Hundreds of DAV members make this annual pilgrimage to our 
nation's capital to witness this event.
    Again, however, let me thank you for fulfilling our request for 
this hearing today. It is our sincere desire that next year we can 
again provide our testimony before a joint hearing of the Veterans' 
Affairs Committees.
    In a speech on June 27, 1944, before the Republican National 
Convention in Chicago, Illinois, former President Herbert Hoover 
stated, ``Older men declare war. But it is the youth that must fight 
and die. And it is the youth who must inherit the tribulation, the 
sorrow, and the triumphs that are the aftermath of war.''
    Mr. Chairman, before you today are the young men and women from 
past generations who served this great nation in its time of need--its 
time of war.
    Today, it is our sons and daughters, grandchildren and, in some 
cases, great-grandchildren who are serving our nation in our armed 
services, protecting our freedoms here and abroad. Many are fighting 
and dying in our War on Terror in Operations Enduring Freedom and Iraqi 
Freedom. These brave men and women are attempting to bring peace and 
democracy to an area of the world that has known neither for centuries. 
These brave soldiers, sailors, airmen, Marines, and coast guardsmen, 
whether active duty, reservists, or national guardsmen, are also 
serving to ensure our safety and preserve our cherished way of life.
    It is because of our nation's ongoing War on Terror and the 
aftermath of that war on our youth that the DAV's focus on veterans' 
programs has been with an eye towards the future. Each day, new combat-
injured and other casualties of our War on Terror return to America for 
medical care and rehabilitation of their injuries. For many, 
rehabilitation of their physical wounds will require years of sustained 
medical and rehabilitative care services.
    Not since the Vietnam War has our nation had to deal with such a 
significant number of severely disabled wartime casualties. As of 
January 3, 2006, there were 381 amputees from Operations Iraqi Freedom 
and Enduring Freedom. These individuals have sustained the loss of an 
arm(s), leg(s), hand(s), and/or foot (feet). This number includes 276 
soldiers, 45 of whom have multiple amputations; 87 Marines, 14 of whom 
have multiple amputations; 7 sailors, one of whom has multiple 
amputations; 6 airmen, one of whom has multiple amputations. Of the 381 
amputees, 104, or 27 percent of these individuals have upper extremity 
amputations.
    Although the medical care and services they are receiving from the 
military today is excellent, I am concerned about their ability to 
receive quality health care in a timely manner from the VA in the 
future, if our government continues to fund VA programs at inadequate 
levels or undermines the ``critical mass'' of patients needed to 
provide a full continuum of quality health care to disabled veterans 
currently enrolled in the VA health care system and those who will 
enroll in the future.
    It has been stated: ``To prepare for the future, examine the 
present. To understand the present, study the past.'' The DAV has 
undertaken such a study.
    In a recently published history of the DAV, Wars & Scars, DAV's 
Adjutant and Chief Executive Officer, Arthur H. Wilson, noted:

          This great organization was formed as our country struggled 
        to deal with the painful effects of World War I. At this 
        moment, our Nation is struggling once again with the impact of 
        war--as American men and women face combat in Iraq, 
        Afghanistan, and other nations.
          A great deal has changed in the 85 years since the DAV was 
        founded, but this much has remained the same: those who come 
        home from war wounded and sick need the care and attention of a 
        grateful nation. . . .

    But the story on the pages that follow--the history of the Disabled 
American Veterans--is not a story of able-bodied people taking care of 
handicapped veterans. While it is certainly true that the American 
people have been invaluable partners in the DAV's mission, the work of 
our organization has been a self-help proposition since the beginning. 
The DAV--disabled veterans helping disabled veterans--continues working 
cohesively to build better lives for all disabled veterans and their 
families!
    Since its inception, the DAV, then known as Disabled American 
Veterans of the World War (DAVWW), looked to protect the interests not 
only of current veterans, but for those who would follow them.
    The DAV's first National Commander, Judge Robert S. Marx, of 
Cincinnati, Ohio, an Army infantry officer, who had the distinction of 
capturing the furthest point taken by the American Army prior to the 
armistice, and who was wounded by an enemy shell exploding over his 
battalion headquarters, convincingly pointed out that, as an organized 
national group, the voices of disabled veterans would be stronger in 
the halls of Congress and the White House. Judge Marx earned the 
honored title, ``Father of the DAV.''
    The purpose those disabled veterans set for themselves in 1921 
remains the same today: building better lives for all of our nation's 
disabled veterans and their families. The first goal the DAVWW wanted 
Congress to establish was one Federal agency that would have the 
authority to handle all programs for veterans. The DAVWW called upon 
Congress to consolidate veterans' programs that fell within the 
jurisdiction of three agencies: the Bureau of War Risk Insurance, the 
Public Health Service, and the Federal Board of Vocational Training. 
Working with other veterans' groups, the DAVWW eventually secured 
legislation establishing the Veterans' Bureau, later renamed the 
Veterans Administration, which was the forerunner of today's Department 
of Veterans Affairs.
    By 1926, the DAVWW had fielded a nationwide claim-filing assistance 
effort that eventually evolved into today's DAV National Service 
Program. I will discuss DAV's Service Program in more detail later. In 
1931, the Disabled American Veterans Service Foundation was created, 
the forerunner of the organization known today as the DAV National 
Service Foundation. At the time, the Foundation was the fundraising arm 
of the national organization and its chapters. It no longer fulfills 
such a comprehensive role, but its official mission remains ``to 
develop financial resources in support of the goals and purpose of the 
DAV, including providing support to DAV's National Service Program and 
other service initiatives.''
    In the dark days of the Great Depression, during 1932, high 
unemployment in America created a tax revenue problem for our 
government, and a crisis developed regarding the $2.4 billion bonus 
bill for our nation's World War I veterans. A ``Bonus Army'' of some 
20,000 unemployed American veterans came to Washington and set up camp, 
vowing to stay until Congress passed a bill providing full and 
immediate payment of their bonus certificates. However, after the 
Senate voted down the bill, known as the Patman Resolution, most of the 
veterans returned home. On July 28, 1932, on one of the saddest and 
most memorable days in the veterans' movement, General Douglas 
MacArthur led Federal troops and used tear gas to forcibly evict the 
Bonus Army from their huts along the Anacostia River. It was at the 
height of this crisis, that the National Economy League was formed. 
With many prominent citizens in its leadership, the league received 
substantial press attention as it fought against instances of what it 
saw as ``excess spending.''
    In an effort to cut Federal expenses, President Roosevelt imposed 
the Economy Act of 1933, which cut veterans' disability allowances by 
25 percent, approximately $400 million. Unfortunately, Roosevelt was 
quoted as saying:

        ``No one, because he wore a uniform must therefore be placed in 
        a special class of beneficiaries over and above all other 
        citizens. The fact of wearing a uniform does not mean that he 
        can demand and receive from his government a benefit which no 
        other citizen receives.''

    I believe President Roosevelt was wrong on that score, and so did 
Congress.
    Pressure from veterans' groups continued until a lump-sum bonus law 
was passed over Roosevelt's veto in 1936. Congress restored the cuts in 
veterans' benefits, but it took until 1948 to win back what the economy 
bill had taken away.
    On June 17, 1932, Congress recognized the DAV'S unique and 
outstanding service and issued a Federal charter to the organization. 
This document recognized the organization as the official voice of our 
nation's wartime disabled veterans.
    A decade later, the 1943 delegates to the DAVWW convention were 
treated to one of the best collections of speakers up until that time. 
VA Administrator Frank Hines, Kaiser Shipbuilding Corporation President 
Henry J. Kaiser, U.S. Civil Service Commissioner Arthur J. Flemming, 
and New York City Mayor Fiorello LaGuardia, all echoed a similar theme: 
``Thank God for the DAVWW in times like these when we need them the 
most!''
    With this country once again embroiled in war, the National 
Executive Committee felt it was time to update the name of the 
organization, and the DAVWW became the Disabled American Veterans--the 
DAV.
    With many returning disabled World War II veterans, the DAV 
initiated a new National Service Officer training program in October 
1944 at American University in Washington, DC., and 354 people were 
trained and employed as DAV National Service Officers. This training 
provided an exceptional base of service officers with the knowledge and 
expertise to ensure that disabled veterans receive their earned 
benefits under VA law.
    These 354 men and women who graduated from the 10 classes between 
1944 and 1948, formed the core of the DAV National Service Program, and 
provided a management team that led this organization for several 
decades.
    In 1994, 50 years after DAV's first training academy, DAV began a 
new 16-week training course at the DAV National Service Officer 
Training Academy at the University of Colorado at Denver. One of the 
first classes at the academy was greeted by a Member of the President's 
cabinet, Secretary Jesse Brown, instructing them on information they 
would need to know to help them serve disabled veterans. Secretary 
Brown stated, ``America has a solemn obligation to assure that the men 
and women who have served and sacrificed for this country and the cause 
of freedom will never be forgotten or neglected.''
    Like the founders of this great organization, we must be farsighted 
to ensure that VA remains a viable provider of veterans' benefits and 
health care services for our newest generation of disabled veterans. 
These young brave men and women will need the full continuum of care 
and services VA provides today, well into the latter part of this 
century.
    Last year, in March 2005, my predecessor, then National Commander 
James E. Sursely, expressed his concerns about the VA's ability to care 
for our nation's sick and disabled veterans and he reported the 
following to this Committee and the House Veterans' Affairs Committee:

          On December 20, 2004, I was briefed by the [VA] . . . on VA's 
        fiscal year (FY) 2005 budget outlook. While I was acutely aware 
        of the fact that the fiscal year 2005 budget approved by 
        Congress for VA was totally inadequate. . . . I was shocked and 
        dismayed to learn that the $1.2 billion increase for VA health 
        care provided by Congress above the Administration's request, 
        resulted in a zero net gain for the VA health care system. . . 
        .

    Within a month of the passage of the fiscal year 2005 
appropriations bill, stories began to appear around the country about 
the shortfalls in VA health care funding and its adverse impact on VA's 
ability to care for our nation's sick and disabled veterans.
    In a December 20, 2004 story in a Mississippi newspaper, it was 
noted that although the VA medical center in Jackson, Mississippi, will 
receive a 6 percent increase in its budget, it is ``not enough to fully 
fund everything. . . .''
    ``Colorado's veterans health care system is straining under 
unprecedented demand and a budget shortfall'' as reported in a December 
23, 2004 article in the Denver Post. . . . The system will get $3 
million less this year than expected. This 2 percent shortfall will 
mean a hiring freeze and a likely return of waiting lists for medical 
care, according to the VA director. . . . Actually, according to the 
article, the fiscal year 2005 budget is $700,000 less than the fiscal 
year 2002 funding levels--that's correct, $700,000 less than the fiscal 
year 2002 spending level.
    In Pennsylvania, the Van Zandt VA Medical Center faces a projected 
$5 million shortfall this fiscal year as reported by the Altoona 
Mirror. . . .
    In a news story out of Augusta, Maine, it was reported that there 
is an initial $14.2 million shortfall projected for the annual 
allocations at the VA Medical Center at Togus. . . . It was also noted 
that the annual deficit for the VISN . . . was pegged at $65 million; 
however, approximately $30 million had been found to reduce that 
shortfall.
    We have been told that the VA facility in Boise, Idaho, has an 
approximate $2 million deficit in fiscal year 2005. As a result of this 
deficit, no new programs will be started, there is a hiring freeze, and 
there will be no new growth in primary care patients.
    In New Mexico, there is a $4 million budget shortfall. As a result 
of this budget deficit, the hospital will lose 60 employees who will 
not be replaced.
    The Administration has proposed a fiscal year 2006 budget 
recommendation that is one of the most tight-fisted, miserly budgets 
for veterans programs in recent memory. Instead of providing adequate 
funds for the VA medical system, the budget proposes to shift the cost 
burden onto the backs of veterans, making health care more expensive 
and even less accessible for millions of America's defenders.
    The VA medical system has been strained to the breaking point over 
the years because its appropriation has failed to keep pace with the 
skyrocketing costs of health care and increased patient loads. As a 
result, VA facilities across the country are cutting staff and limiting 
services even as the number of veterans seeking care is on the rise.
    Mr. Chairman, that was a year ago. Between then and now, Congress 
stepped up and provided supplemental funding for VA for fiscal year 
2005, and designated $1.2 billion as emergency funding for fiscal year 
2006. The DAV was pleased when the President signed off on that 
emergency designation on January 28, 2006, and that money became 
available to VA. However, we are hearing from the field nationwide that 
budget woes are still present in 2006. The hiring freeze is still in 
place. A review of the recently submitted Administration's budget 
proposal demonstrates unchanged employee levels for fiscal years 2005 
and 2006.
    It is our understanding that VA medical facilities are required to 
``pay back'' a substantial portion of the money they received from VA 
Central Office for the shortfalls in funding for fiscal year 2005. Some 
facilities are reporting that the increase they received in the fiscal 
year 2006 budget will help to pay for salary increases only. Others 
report continued deficits and backlogs. Some are actually reducing non-
VA health care. And some medical facilities are questioning how they 
will make it through the year.
    Mr. Chairman, it is our sincere desire that Congress will not allow 
VA to get into another shortfall situation like the fiscal year 2005 
fiasco. The DAV was grateful that Congress enacted the requirement that 
VA report to Congress quarterly on its state of affairs. We look 
forward to reviewing that first report.
    Mr. Chairman, I can assure you that the DAV, along with the other 
members of the Independent Budget, AMVETS, Paralyzed Veterans of 
America, and Veterans of Foreign Wars of the United States, does not 
ask for more money for VA just to help VA build a large fiefdom. Our 
monetary and program recommendations are based on not only discussions 
with the ``bean counters'' and program directors at VA Central Office, 
but also on conversations with VA employees who are on the front line 
of providing care and services to our nation's sick and disabled 
veterans. We also receive information from our members and employees 
about the state of affairs at VA facilities nationwide.
    The time is now for all of us--Congress, the Administration, and 
the veterans' community--to come together to resolve the inherent 
problems involved in funding VA health care. It is shameful that 
veterans are forced each year to come to Congress to beg for necessary 
additional funding for VA programs.
    As called for in the President's fiscal year 2007 budget 
submission, total VA funding for the next fiscal year would increase 
about 12 percent, from the current $71.8 billion to $80.6 billion. More 
than half of the budget would go for mandatory programs such as 
disability compensation and pensions. Medical care for veterans would 
rise from $30.8 billion to $34.3 billion, or an 11 percent increase. As 
called for in the President's budget submission, medical services for 
veterans would rise from $22.5 billion to $24.7 billion, or a 9 percent 
increase. In testimony, VA is on record as stating that it needs an 
annual 13 percent to 14 percent increase in medical care funding to 
provide current services. Fortunately, this year's budget proposal 
comes much closer to meeting the needs of our nation's sick and 
disabled veterans than the past several years. Although there is still 
a significant gap between what has been proposed and what is needed to 
ensure timely access to health care services and benefit decisions.
    The DAV and other major veterans service organizations are united 
in calling on Congress to provide $25.99 billion for veterans medical 
services, almost $1.3 billion more than the President has requested, 
and we are united in opposition to imposing new fees and higher co-
payments on certain veterans who choose to get their care from the VA.
    Again, in light of last year's admonishment to not include such a 
proposal, the Administration wants to impose a new $250 annual user fee 
on certain veterans who also would see their prescription drug co-
payments almost doubled, from $8 to $15. Those veterans, some of whom 
are DAV members, already pay for the health care they receive from the 
VA. Adding to their out-of-pocket costs would force them out of the 
system and put even greater strain on resources needed to treat their 
fellow veterans. The cost of medical care for these veterans is the 
least costly care of any group of veterans treated by VA, and these 
groups bring in the highest level of collections.
    A medical system that only treats the sickest of the sick and the 
poorest of the poor is not sustainable and would be undesirable. In the 
end, it would seriously erode the quality of care for today's veterans 
and tomorrow's.
    Mr. Chairman, let us not forget that benefits and services for 
disabled veterans, in fact all veterans, remain primarily the 
responsibility of our government. The citizens and government of a 
country that sends its young sons and daughters to defend its homeland 
and fight its wars have a strong moral obligation to repay them for 
bearing such a heavy burden. While all citizens of this great nation 
enjoy our cherished freedoms and our way of life, less than 10 percent 
of our population have served, sacrificed, and paid a price for those 
freedoms and our life style. Our indebtedness to veterans is more 
important than any other part of our national debt because, without 
their sacrifices, we would not exist as a nation, nor would the 
citizens of many foreign nations enjoy the freedoms many Americans take 
for granted.
    While we can never fully repay those who have stood in harm's way 
protecting freedom, a grateful nation has established a system to 
provide benefits and health care services to veterans as a measure of 
restitution for their personal sacrifices and as a way for all citizens 
to share the costs of war and national defense.
    Because of their extraordinary sacrifices and contributions in 
preserving our cherished freedoms and way of life, veterans have earned 
the right to VA health care as a continuing cost of national defense 
and security. The Health Care Eligibility Reform Act of 1996 authorized 
eligible veterans access to VA health care and brought us closer to 
meeting our moral obligation as a nation to care for veterans and 
generously provide them the benefits and health care they rightfully 
deserve. It also authorized VA to provide a full continuum of care to 
veterans, thereby greatly improving the quality of care VA provides. 
Today, the quality of VA health care is recognized worldwide.
    In the mid-1990s, DAV partnered with nine other organizations to 
form the Partnership for Veterans Health Care Reform. At that time, the 
10 organizations, representing more than nine million veterans, 
petitioned Congress to reinvent veterans' health care.
    This Partnership also discussed another problem, chronic under 
funding of the VA health care system. We noted that discretionary 
funding for VA health care failed to keep pace with medical inflation 
and the changing needs of the veteran population. Further, as a result 
of the chronic under funding of the system, VA was forced to ration 
care, deny services to eligible veterans, restrict needed medical 
treatment, and forego the modernization of facilities and the purchase 
of necessary state-of-the-art medical equipment.
    Then and now, the solution seems rather obvious: ``guaranteed 
funding.'' We recommended that VA health care funding must be 
guaranteed for the provision of a comprehensive benefit package to all 
eligible veterans who choose VA. The Partnership asked Congress to make 
VA health care accounts non-discretionary.
    Congress passed the Health Care Eligibility Reform Act of 1996; 
however, Congress did not change the funding stream for VA health care. 
Therefore, because the level of funding to cover the costs of treating 
veterans is not guaranteed, and is repeatedly insufficient, VA is 
forced to ration medical care.
    Ten years after eligibility reform, DAV and other veterans 
organizations continue to petition Congress for meaningful action to 
ensure that VA has sufficient funding to care for those veterans who 
come to VA for their medical care needs. Guaranteed funding for VA 
health care is a viable solution to the current crisis in VA health 
care and is supported by all the major veterans service organizations.
    To guarantee the viability of the VA health care system for current 
and future service-connected disabled veterans, it is imperative that 
our government provide an adequate health care budget to enable VA to 
serve the needs of disabled and sick veterans nationwide. To meet those 
needs, it is imperative that the funding for the VA health care system 
be guaranteed and that all service-connected disabled veterans and 
other enrolled veterans be able to access the system in a timely manner 
to receive the quality health care they have earned. By including all 
veterans currently eligible and enrolled for care in a guaranteed 
funding proposal, the system and the specialized programs VA developed 
to improve the health and well-being of our nation's service-connected 
disabled veterans will be protected, now and into the future. To 
exclude a large segment of currently eligible and enrolled veterans 
from the VA health care system, however, could undermine VA's ability 
to provide a full continuum of care and specialty care to disabled 
veterans in the future.
    Mr. Chairman, DAV supports and endorses the efforts of the Senators 
from South Dakota to call for hearings by this Committee to examine the 
budget process to determine how best to serve the health care needs of 
our nation's sick and disabled veterans. Both Senators have also 
introduced legislation on changing VA health care funding from a 
discretionary funding stream to a mandatory funding process. Senator 
Johnson introduced S. 331, the Assured Funding for Veterans Health Care 
Act, and Senator Thune introduced S. 963, the Veterans Health Care and 
Equitable Access Act. DAV encourages all the Members of this Committee 
to support and co-sponsor this important legislation.
    When properly funded, the VA is able to provide cost-effective, 
quality health care services to millions of sick and disabled veterans 
each year. Additionally, treating veterans at VA rather than state-
sponsored programs helps to relieve the stress on states, which 
routinely pick up the cost of caring for the poor. For example, an 
analysis conducted by Missouri's state auditor in 2004 found the state 
could have saved at least $5.5 million if veterans who received 
benefits through Medicaid had instead received care from the VA. The 
specialized services provided by VA, such as acute and long-term care, 
actually subsidize Medicare and Medicaid programs at great savings to 
the Medicare Trust Fund and to taxpayers, since VA health care is less 
costly than the services provided by either Medicare or Medicaid. It 
makes fiscal sense to treat veterans in the VA health care system, 
instead of more costly care elsewhere.
    Missouri is not the only state to see a benefit in getting veterans 
off state rolls and into the VA. The State of Washington Department of 
Social and Health Services has recently used software to identify 
veterans enrolled in public assistance programs, and ``introduced'' 
more than 2,000 veterans to VA health care benefits. The state project 
manager claimed that the state has saved more than $4 million in fiscal 
year 2005 moving people from Medicaid to VA. Reportedly, of the nearly 
46,000 Medicaid enrollees who receive long-term care in the state of 
Washington, about five percent are veterans.
    VA is the largest integrated health care system in the United 
States with 7.5 million enrollees, 1,300 sites of care, including 156 
medical centers or hospitals, 720 outpatient clinics, 206 readjustment 
counseling centers, 43 residential rehabilitation treatment programs, 
and 134 nursing homes. VA has about 197,000 health care employees and 
affiliations with 107 academic health systems. The veterans health care 
system offers an array of specialized services to meet the complex 
health care needs of veterans who tend to be older, sicker, and poorer 
than the population as a whole. Many of these specialized services in 
areas such as prosthetics, spinal cord injury, blind rehabilitation, 
post traumatic stress disorder, serious mental illness, and traumatic 
brain injury are not readily available in the private sector.
    As the debate over national health care continues, this country 
cannot afford to ignore the hundreds of hospitals, clinics, nursing 
homes, and other facilities that care for America's veterans. In purely 
material terms, the nation can ill afford to lose the nearly 200,000 
dedicated health care professionals and support staff who provide this 
high-quality care and contribute to the economic stability of 
communities across the country. We cannot sit silently on the sidelines 
as the debate moves forward. The virtues and benefits of the VA health 
care system must be part of the debate. If we don't make our voices 
heard, we could be in jeopardy of losing the system designed to meet 
the unique health care needs of sick and disabled veterans.
    The change in the VA health care system due to eligibility reform 
has created a more cost-effective and efficient health care system. 
Progress made as a result of these changes has made VA a world leader 
in the health care industry. VA consistently sets the benchmark for 
patients' satisfaction in inpatient and outpatient services, according 
to the American Customer Satisfaction Index developed by the University 
of Michigan Business School. The Institute of Medicine has recognized 
the VA as one of the best in the nation for its integrated health 
information system. The top-notch research done at VA facilities 
benefits all Americans, not just veterans. VA medical, prosthetic, and 
health services researchers have received Nobel Prizes and other 
distinguished awards for their work at VA. Major breakthroughs 
pioneered by the VA are invaluable to the entire health care 
profession. The VA also leads the nation in geriatric research, 
education, and training and provides long-term care for thousands of 
veterans each year.
    In addition to these notable accomplishments, VA medical facilities 
are a strategically located national resource. By statute, the VA 
serves as a backup to the Department of Defense and the National 
Disaster Medical Systems in time of national emergency. This so-called 
fourth mission for the VA is especially important while the nation is 
at war and remains at risk for terrorist attacks that could injure or 
sicken thousands. However, this fourth mission has never been properly 
funded.
    Even though VA is unquestionably a success story, Congress 
typically provides an annual discretionary appropriation for veterans 
health care that falls far short of actual needs. Over the years, 
funding needed to ensure health care programs and services are readily 
accessible for veterans has not kept pace with inflation, let alone the 
increased demand for services.
    When resources are inadequate to meet demand, VA hospital directors 
are forced to ration care, and Veterans Health Administration (VHA) 
policymakers must make difficult decisions and set priorities for care 
delivery. The current discretionary funding method used to appropriate 
resources for VA, coupled with continued inadequate and frequently late 
budgets, have created a funding crisis in the system and jeopardize 
quality of care to America's sick and disabled veterans.
    We believe funding for veterans benefits and health care services 
should be a top priority for Congress and the Administration as a 
continuing cost of our national defense. Once the guns fall silent, 
veterans should not have to beg for benefits they have earned and 
rightfully deserve for their service and sacrifice. A promise of 
benefits and services alone is not good enough. Approved programs must 
be sufficiently funded. As a nation, we must be willing to bear the 
costs of providing special benefits to such a unique group--those men 
and women who were willing, on behalf of all Americans, to serve in 
peace time and fight our wars to preserve our cherished freedoms and 
democratic values. To assure the veterans medical care system is 
maintained as a top government priority, its funding should be 
mandatory to remove it from competition with politically popular but 
less meritorious projects and programs.
    An American servicemember injured today in Afghanistan or Iraq will 
need the VA health care system beyond the middle of this century. 
However, if the VA health care system is allowed to be significantly 
reduced, these brave men and women would not likely be able to 
replicate the special care they receive from VA in the private sector, 
which is currently undergoing a crisis of its own.
    During this period of war, emphasis has been placed on ensuring 
that newly returning war wounded veterans have top priority for 
treatment at VA facilities. Although no one would question that this 
new generation of veterans deserves ready access to VA's specialized 
health care services, we must not forget there are previous generations 
of veterans who continue to rely on the VA health care system for 
service-related injuries incurred decades ago. As veterans age, those 
with catastrophic spinal cord injury, limb loss, blindness, post 
traumatic stress disorder, and traumatic brain injury often require 
more medical attention than in the past for their service-connected 
conditions. Likewise, other veterans dependent on VA health care 
services deserve timely access to care as well. Funding must be 
sufficient to provide timely quality health care to all enrolled 
veterans.
    We recognize that providing full funding for VA health care will 
not solve all of VA's problems. However, VA, as the largest integrated 
health care system in the United States, must have a sufficient budget 
to effectively manage its health care programs and services and to hire 
the appropriate number of clinicians, nurses, and support staff to meet 
the demand for high-quality medical care. VA must also have the ability 
to adequately prepare for the coming year well in advance. With 
guaranteed funding, VA can strategically plan for the future to 
optimize its assets, achieve greater efficiency, and realize long-term 
savings. The current discretionary funding mechanism for VA medical 
care benefits neither VA nor taxpayers, and it certainly is having a 
negative impact on veterans.
    One thing is clear--the shortfall in the fiscal year 2005 budget 
for VA medical care has had a sobering effect on local medical centers, 
as I noted earlier. The Administration's initial budget recommendation 
for VA health care in fiscal year 2006 was a recipe for disaster. 
Backfilling these shortfalls does not have the same effect as providing 
VA with the proper funding levels at the beginning of each fiscal year.
    While we applaud the Members of this Committee for their action to 
correct the past shortfall in VA's health care funding, the need for 
after-the-fact corrections of funding shortfalls for VA health care 
places the VA health care system and those sick and disabled veterans 
who rely on that medical care at risk. Forcing VA to ration health care 
to veterans and then trying to play ``catch-up'' when much-needed funds 
are belatedly infused into the system is at cross purposes with 
providing quality health care in a timely manner. It also prohibits VA 
officials from adequately planning for future health care needs, such 
as hiring doctors, nurses, and other health care providers.
    As an organization dedicated to building better lives for disabled 
veterans and their families, we have an awesome responsibility 
regarding these important health care issues that impact our veterans 
and generations of veterans to come. Now, with our fighting men and 
women in battle and our veterans from past eras battling for needed 
care, our message is more important than it ever has been. Make the 
commitment now that you will stand up to be counted by supporting a 
change in the current VA health care budget process. By doing so we 
ensure the sacrifices of those who have served are recognized and 
honored.
    Mr. Chairman, mandatory health care funding would not create an 
individual entitlement to health care, nor change the VA's current 
mission. Making veterans health care funding mandatory would eliminate 
the year-to-year uncertainty about funding levels that have prevented 
the VA from being able to adequately plan for and meet the growing 
needs of veterans seeking treatment. Rationed health care is no way to 
honor America's obligation to the brave men and women who have so 
honorably served our nation and continue to carry the physical and 
mental scars of that service.
    Your support of guaranteed funding for veterans health care would 
further demonstrate your commitment to the men and women appearing 
before you today and the more than seven million veterans who have 
enrolled for VA health care. Again, I ask your active support of this 
critical legislation. At the very least, we should be afforded an 
opportunity to provide testimony on alternative methods to funding VA 
health care and openly discuss this issue with Members of this 
Committee and the VA present.
    Mr. Chairman, I will now focus on the benefits side of VA.
    A core mission of the VA is the provision of benefits to relieve 
the economic effects of disability upon veterans and their families. 
For those benefits to effectively fulfill their intended purpose, VA 
must promptly deliver them to veterans. The ability of disabled 
veterans to care for themselves and their families often depends on 
these benefits. The need for benefits among disabled veterans is 
usually urgent. While awaiting action by VA, they and their families 
suffer hardships; protracted delays can lead to deprivation, 
bankruptcies, and homelessness. Disability benefits are critical, and 
providing for disabled veterans should always be a top priority of the 
government.
    VA can promptly deliver benefits to entitled veterans only if it 
can process and adjudicate claims in a timely and accurate fashion. 
However, VA has neither maintained the necessary capacity to match and 
meet its claims workload nor corrected systemic deficiencies that 
compound the problem of inadequate capacity.
    Rather than making headway and overcoming the chronic claims 
backlog and consequent protracted delays in claims disposition, VA has 
lost ground to the problem, with the backlog of pending claims growing 
substantially larger. The claims backlog has swollen, and the appellate 
workload is growing at an alarming rate, suggesting further degradation 
of quality or at least continuation of quality problems.
    Insufficient resources are the result of misplaced priorities, in 
which the agenda is to reduce spending on veterans programs despite a 
need for greater resources to meet a growing workload in a time of war 
and a need for added resources to overcome the deficiencies and 
failures of the past. Instead of requesting the additional resources 
needed, the President has sought and Congress has provided fewer 
resources. Recent budgets have sought reductions in fulltime employees 
for the Veterans Benefits Administration (VBA) in fiscal years 2003 
through 2006. Since fiscal year 2003, VBA has lost about 500 employees. 
Such reductions in staffing are clearly at odds with the realities of 
VA's workload and its failure to improve quality and make gains against 
the claims backlog.
    The fiscal year 2007 budget submission again fails to provide 
sufficient resources to VBA to handle the claims workload. Let me now 
turn to the President's budget request for the VBA under the General 
Operating Expenses account. We are pleased to see that the President 
finally recognizes a need to add more staffing to meet the workloads in 
the education benefits program and the vocational rehabilitation and 
employment program, though these requests still fall short of what is 
necessary. At the same time, we are perplexed by the budget 
recommendation to reduce direct program staffing for compensation 
claims processing, an area with the most critical and widely 
acknowledged need for additional adjudicators.
    The President's budget requests 930 fulltime employees (FTE), an 
increase of 46 above the fiscal year 2006 authorization, for VBA's 
Education Service. As a partner in The Independent Budget (IB), the DAV 
recommends 1,033 FTE for Education Service. This increased staffing is 
needed to make up for improvident reductions in staffing in FYs 2004 
and 2005 and to meet the increased workload.
    For the Vocational Rehabilitation and Employment business line, the 
President's budget requests 1,255 FTE, an increase of 130 FTE over the 
fiscal year 2006 level. The IB recommends 1,375 FTE. This represents an 
additional 200 FTE as recommended by the VA Vocational Rehabilitation 
and Employment Task Force to improve the program, along with another 50 
additional FTE for management and oversight of contract counselors and 
rehabilitation and employment service providers.
    Based on the adverse and long-standing problems from chronic 
understaffing in VBA's Compensation and Pension Service (C&P), 
compounded by anticipated increased claims volumes, the IB recommended 
10,820 FTE for C&P Service. The President's budget requests 9,445 FTE, 
which would reduce direct program FTE for handling compensation claims 
by 149 in 2007. Even with ambitious assumptions of increased production 
during fiscal year 2006 and fiscal year 2007 despite this reduction in 
staffing and even with unsupported projections of slowed growth in the 
volume of new claims in both years, the budget concedes that the 
already unacceptable claims backlog would grow even larger in 2006 and 
2007. To knowingly request resource levels that will only make an 
intolerable situation worse, is indefensible, and we urge the Committee 
to recommend adequate staffing for C&P.
    VA must have a long-term strategy focused principally on attaining 
quality and not merely achieving production numbers. It must have 
adequate resources, and it must invest them in that long-term strategy 
rather than reactively targeting them to short-term, temporary, and 
superficial gains. Only then can the claims backlog really be overcome. 
Only then will the system serve disabled veterans in a satisfactory 
fashion, in which their needs are addressed timely with the effects of 
disability alleviated by prompt delivery of benefits. Veterans who 
suffer disability from military service should not also have to 
needlessly suffer economic deprivation because of the inefficiency and 
indifference of their government.
    Once again, this year's budget recommendations fail to provide the 
necessary resources and, therefore, the timely adjudication of claims 
continues to remain at risk.
    Mr. Chairman, major policy positions of the DAV are derived from 
resolutions adopted by the delegates to our annual National 
Conventions. Since our first National Convention in 1921, the DAV's 
annual legislative program has served to guide our advocacy for 
disabled veterans in accordance with the will of our members. Our 2006 
mandates cover a broad spectrum of VA programs and services and have 
been made available to your Committees and to the members of your 
staffs. Since DAV was founded in 1920, promoting meaningful, 
reasonable, and responsible public policy for disabled veterans has 
been at the heart of who we are and what we do. Our will and commitment 
come from the grassroots, nurtured in the fruitful soil of veterans' 
sacrifices and strengthened by the vitality of our membership.
    With the realization that we shall have the opportunity to more 
fully address those resolutions during hearings before your Committees 
and personally with your staffs, I shall only briefly comment upon a 
few of them at this time.
    What I communicate to you here today echoes the hopes and desires 
and, in some cases, the despair of disabled veterans, who appeal to the 
conscience of the nation to do what is right and just. Accordingly, in 
addition to correcting the budget process for VA health care and the 
problems at VBA prohibiting the timely and accurate production of 
claims decisions, the members of the DAV call upon the Members of this 
Committee to:
     Increase the face value of Service Disabled Veterans' 
Insurance (SDVI). The current $10,000 maximum for life insurance for 
veterans was first established in 1917, when most annual salaries were 
considerably less than $10,000. The maximum protection available under 
SDVI should be increased to at least $50,000 to provide adequately for 
the needs of our survivors.
     Authorize VA to revise its premium schedule for SDVI to 
reflect current mortality tables. Premium rates are still based on 
mortality tables from 1941, thereby costing disabled veterans more for 
government life insurance than is available on the commercial market.
     Extend eligibility for Veterans Mortgage Life Insurance to 
service-connected veterans rated permanently and totally disabled.
     Support additional increases in grants for automobiles or 
other conveyances available to certain disabled veterans and provide 
for automatic annual adjustments based on increases in the cost of 
living.
     Provide additional increases in the specially adapted 
housing grant and automatic annual adjustments based on increases in 
the cost of living.
     Support legislation to remove the prohibition against 
concurrent receipt of military longevity retirement pay and VA 
disability compensation for all affected veterans.
     Support equal medical services and benefits for women 
veterans.
     Extend commissary and exchange privileges to service-
connected disabled veterans.
     Extend space-available air travel aboard military aircraft 
to 100 percent service-connected disabled veterans.
     Support legislation to allow all veterans to recover 
amounts withheld as tax on disability severance pay. Currently, a 3-
year statute of limitations bars many veterans from recovering the non-
taxable money withheld by the Internal Revenue Service.
     Restore protections against unwarranted awards of 
veterans' benefits to third parties in divorce actions by prohibiting 
courts from directly ordering payment of such benefits to third 
parties, other than dependent children.
     Support the fullest possible accounting of our POW/MIAs 
from all wars and conflicts.
     Support an expansion of POW presumptions.
     Provide educational benefits for dependents of service-
connected veterans rated 80 percent or more disabled.
    In honor of the brave men and women--our heroes who have sacrificed 
so much and who have contributed greatly to protect and defend our 
cherished freedoms--who were disabled as a result of their military 
service, the DAV is providing major support to the Disabled Veterans' 
LIFE Memorial Foundation in its work to construct a memorial to 
disabled veterans in Washington, D.C. Congress has enacted legislation 
that authorizes construction of the memorial on select lands in the 
shadow of the U.S. Capitol. There are companion bills in both 
chambers--H.R. 1951 in the House and S. 633 in the Senate--to provide 
for the minting of coins by the Treasury to commemorate disabled 
veterans and to contribute the surcharges on the coins to the fund for 
construction of the American Veterans Disabled for Life Memorial. I 
want to especially urge the Members of this Committee to give their 
full support to this legislation. During the 108th Congress, the Senate 
passed S. 1379, the forerunner to S. 633.
    Mr. Chairman, as you can see, our work for disabled veterans and 
their families continues to involve many issues and many challenges. 
Although we can be proud of the accomplishments made on behalf of 
disabled veterans in the past, much remains to be done. When it comes 
to justice for disabled veterans, we cannot be timid in our advocacy. 
This Committee and the DAV, working together with mutual cooperation, 
must battle for what is best for our nation's disabled veterans. 
Veterans have every right to expect their government to treat them 
fairly. We call upon you, the Members of this Committee, as our 
advocates in Congress, to educate your colleagues about the priorities 
of disabled veterans.
    Our nation's history of meeting our obligations to veterans has 
fallen short not only of its highest ideals but also of its 
capabilities. We simply have not always kept veterans at the top of the 
list of national priorities. Our government can no longer excuse its 
failure to provide veterans the benefits and services they rightfully 
deserve by saying it cannot afford to fully honor its promises. We have 
the means to meet those obligations. Now our nation, a nation once 
again at war, must demonstrate it has the will to do so.
    Mr. Chairman, previously, I talked about DAV's proud past. I will 
now discuss where the DAV is currently.
    For 86 years, the DAV has been dedicated to one, single purpose: 
building better lives for disabled veterans and their families.
    In fulfilling our mandate of service to America's service-connected 
disabled veterans and their families and in keeping faith with the 
principle on which this organization was founded, which is that this 
nation's first duty is to care for its wartime disabled veterans, their 
dependents and survivors, the DAV employs a corps of 260 National 
Service Officers (NSOs), located throughout the country, about half of 
whom are Gulf War veterans, and a number are veterans of Operations 
Iraqi Freedom and Enduring Freedom. Last year alone, these men and 
women, all wartime service-connected disabled veterans themselves, 
represented--free of charge--over 158,790 veterans and their families 
in their claims for VA benefits, obtaining for them more than $2.7 
billion in new and retroactive benefits. Our NSOs also participated in 
199,302 Rating Board appearances.
    Mr. Chairman, the DAV continues to strive to more effectively meet 
veterans' needs and ensure they receive the benefits our grateful 
nation has authorized for them. Several years ago, DAV undertook two 
additional initiatives to enhance and expand benefits counseling and 
claims representation services to the veterans' community. The first of 
the two programs involves outreach to members of the Armed Forces at 
the location and time of their separation from active duty. The second 
involves services to veterans in the communities where they live.
    For benefits counseling and assistance to separating servicemembers 
in filing initial claims, the DAV has hired and specially trained 24 
Transition Service Officers (TSOs), who provide these services at 
military separation centers, under the direct supervision of DAV NSO 
Supervisors. This enhancement in assistance to those seeking veterans' 
benefits will contribute to the DAV's goal of maintaining its 
preeminent position as a provider of professional services to veterans. 
In 2005, our TSOs conducted 2,068 briefing presentations to groups of 
separating service-
members, with 103,963 total participants. TSOs counseled 55,070 persons 
in individual interviews, reviewed the service medical records of 
43,500 and filed benefit applications for 28,137, again, at no charge 
to the separating servicemembers.
    The DAV's Mobile Service Office (MSO) program is a part of the same 
goal. By putting our NSOs on the road to rural America, inner cities, 
and disaster areas, the DAV assists veterans where they live, which 
increases accessibility to the benefits our nation provides for 
veterans. The DAV has 10 of these specially equipped mobile offices on 
tour to make stops in the communities across this country. During 2005, 
our Mobile Service Offices interviewed 13,347 persons filed 9,938 
claims.
    These specially equipped MSOs and disaster relief teams were 
deployed by DAV to the Gulf Coast regions hardest hit by Hurricanes 
Katrina and Rita. These mobile offices allow the DAV to provide much-
needed assistance to displaced disabled veterans and their families. As 
many residents of the stricken areas were evacuated to other 
communities, the DAV NSOs nationwide assisted qualified veterans at the 
various evacuation sites and elsewhere. To date, in support of DAV's 
disaster relief efforts, nearly $1.8 million in direct assistance was 
provided to disabled veterans and their families.
    In addition to the dedicated services performed by DAV's NSOs and 
TSOs, equally vital are the activities of the more than 16,420 DAV and 
Auxiliary members who selflessly volunteer their valuable time to 
assist America's sick and disabled veterans. Last year alone, these men 
and women continued to serve this nation by providing over 2.4 million 
hours of critical services to hospitalized veterans, saving taxpayers 
nearly $42.6 million in employee costs.
    The DAV also employs 181 Hospital Service Coordinators at VA 
facilities across the country. The DAV's transportation program 
provides essential transportation to and from VA health care facilities 
to those veterans who could not otherwise access needed medical care. 
Last year, DAV's National Transportation Network logged in more than 22 
million miles and transported more than 613,000 veterans to VA health 
care facilities. More than 9,000 volunteer drivers spent 1.3 million 
hours transporting veterans during 2005. Since our national 
transportation program began in 1987, more than 9.5 million veterans 
have been transported about 360 million miles.
    In 2005, DAV presented the VA with 119 Ford vans. This year, we 
will be presenting VA with 127 vans. Since 1987, the DAV has donated 
1,668 vans, at a cost of $34 million. Our commitment to this program is 
as strong as ever. We have vans in every state and nearly every 
Congressional district serving our veterans--your constituents. DAV not 
only advocates on behalf of our nation's veterans, but we also continue 
to give back to our nation and our fellow veterans.
    As you can see, the DAV devotes its resources to the most needed 
and meaningful services for our disabled veterans. These services aid 
veterans directly and support and augment VA programs. We are able to 
do so only with the continuing support of an American public that is 
grateful for all that our veterans have done.
    I hope I have demonstrated that America's disabled veterans, rather 
than being satisfied to rest on their laurels, continue to stand ready 
to actively and unselfishly be involved in their communities and across 
the nation to assist our government in meeting the needs of other 
service-connected disabled veterans, their dependents and survivors.
    Mr. Chairman, this completes my testimony. Thank you for allowing 
me the opportunity to appear before you on behalf of the Disabled 
American Veterans to share our proud record of service to veterans and 
our country and to discuss our agenda and our concerns for the second 
session of the 109th Congress. Thank you also for all that your 
Committee has done and for all that you will do for veterans in the 
future.
    May God bless America. And, may God bless America's brave young men 
and women who have been placed in harm's way in our fight against 
terrorism.

    Chairman Craig. Commander, thank you very much.
    Sitting and listening to your testimony and especially 
those last comments expressed so very clearly, the dedication 
you and your organization have had and continue to have for its 
members and for other veterans, that is a tremendous record, 
and you are to be congratulated for it.
    The vote that I had mentioned earlier has just started. I 
am going to recess the committee for a few moments, and Ken 
Salazar, being younger than I, might get there sooner to vote, 
but as soon as we can get there and get back, we will be here. 
My guess is we will stand down for upwards of about 10 minutes.
    Thank you. The committee will stand in recess.
    [Recess taken from 2:35 p.m. to 2:50 p.m.]
    Chairman Craig. Thank you all very much for your patience. 
The vote is still underway. Some of our colleagues will be 
joining us, but most importantly, we have been joined by 
Senator Akaka, the Ranking Democrat on this committee, and 
Senator Patty Murray of Washington. So we will turn to them 
first, Commander, for any opening comments they would wish to 
make, and as our other colleagues arrive, we will allow that, 
and then we will turn to you once again for questions of all of 
our colleagues.
    With that, let me turn to the gentleman I enjoy working 
with on this committee. We have shared good times, and most 
importantly, I love holding field hearings in his State in 
February. He just could not understand, when he asked me last 
summer to go to Hawaii for field hearings, why I would want to 
do it, and I said, ``Of course, I will come, but not in the 
summertime.'' So this past month, we had some excellent field 
hearings over there, and I enjoy working with Senator Akaka.
    Senator Akaka, the floor is yours.

          OPENING STATEMENT OF HON. DANIEL K. AKAKA, 
                    U.S. SENATOR FROM HAWAII

    Senator Akaka. Thank you. Thank you very much, Mr. 
Chairman.
    Now you know how gracious he is and how I enjoy working 
with him in a bipartisan manner. We all do this all for the 
sake of helping our veterans, and we will continue to do this 
together here on the committee. Again, I want to say I really 
enjoy working with Chairman Larry Craig.
    It is a pleasure for me to be here today. When they 
mentioned this room, I said, ``Well, I guess this room will be 
bigger than we need,'' but you see what has happened. We have 
people outside the door trying to get inside, but I am 
delighted to see all of you here today. That tells us how 
important these hearings are for our country.
    I want to thank and welcome the national commander of the 
Disabled American Veterans, Mr. Paul Jackson and also all 
members of DAV who have made the journey to the Nation's 
Capital to express their concerns about veterans health care 
and benefits. This is truly democracy in action.
    DAV has long been a leader in advocating on behalf of 
disabled veterans, and I see that your proud tradition is 
continued today.
    I would like to acknowledge some of our Members here from 
the House who are seated here on this side. I am also glad to 
say hello to them. There is Congressman Michaud, also 
Congresswoman Hooley, Congressman Tom Udall, and Congressman 
John Salazar brother of Senator Ken Salazar. Good to have you 
folks here with us.
    At this time, I would like to be the first person to say 
``aloha'' to Brenda Reed. She is moving to Hawaii, and I am 
sure she will soon fall in love with the rich culture and 
generous people of my home state and will continue to help 
veterans.
    Also, if there are any other Members here today from 
Hawaii, I thank them for their presence here.
    After reviewing your testimony, I share many of the 
concerns that you present to the committee today. During this 
time last year, many of us here in Congress were sounding the 
alarm that the VA budget was facing a crisis situation, as you 
will recall.
    Many months later, the administration acknowledged this 
fact, and Congress took action to provide emergency funding. 
This year, I will remain dedicated to ensuring that VA has the 
resources it needs to care for all veterans.
    Questions still remain as to whether or not the 
administration's proposed budget for the next year adequately 
takes returning service members into account.
    I also am concerned about the VA research program being 
slated for a cut under this budget. I want you to know that I 
will continue to oppose efforts to reduce veterans 
compensation, as we saw with the ill-fated PTSD review. Now the 
Institute of Medicine is currently conducting a review of PTSD 
diagnosis and compensation. It is my hope that the Institute of 
Medicine suggests improvements to diagnosis, but not reductions 
to how we now compensate our veterans for their invisible 
wounds. In this time of conflict abroad, reduction in benefits 
would send a wrong message to veterans and service members who 
are transitioning from military to civilian life.
    With regard to the VBA budget, I am concerned whether or 
not this budget provides an adequate level of staffing for 
compensation claims rating. Whatever the reason for the 
increase in compensation claims, VA must be ready to adjudicate 
claims in a timely and accurate manner.
    I will continue to monitor VA's workload and rating output 
because our veterans deserve nothing less than their claims 
rated accurately and in a reasonable amount of time.
    I am also proud to be a cosponsor of Senator Johnson's 
American Veterans Disabled for Life Memorial. DAV is the 
leading advocate for this legislation, and I applaud your 
efforts.
    My last priority is near and dear to my heart. As a veteran 
of World War II, I owe a great deal of where I am today due to 
the GI bill educational benefits I used as a young man. With 
this in mind, I will continue to look for ways to enhance and 
modernize educational benefits to more adequately prepare 
veterans for the new challenges of our economy.
    In closing, I would like once again to thank Commander 
Jackson and the membership of DAV. Your service and your 
dedication to this Nation and its veterans is unquestionable.
    I look forward to your presentation and working with you in 
the future.
    Thank you very much, Mr. Chairman.
    Chairman Craig. Senator Akaka, thank you very much.
    Now let me turn to Senator Patty Murray of the State of 
Washington, and, of course, Patty, in your absence, the 
commander spoke well of you and your diligence this past year 
as we worked our way through this budget difficulty with the 
Veterans Administration.
    Please proceed.

 OPENING STATEMENT OF HON. PATTY MURRAY, U.S. SENATOR FROM THE 
                      STATE OF WASHINGTON

    Senator Murray. Thank you very much, Mr. Chairman, and 
thank you and Senator Akaka for holding this important hearing. 
I want to welcome our colleagues on this side from the House as 
well and thank you for your tremendous work in advocacy on 
behalf of veterans as well. We are pleased to have you join us.
    Commander Jackson, thank you for coming today and your 
testimony, and really, this is a true unbelieving statement to 
see so many people here today behind you who are here to remind 
us that, when we send men and women to war, we have a 
responsibility to keep the promises we gave them and, when they 
return home, be there to support them, and I want to thank each 
and every one of you on behalf of a very grateful Nation for 
your service and to let you know this is one Senator that will 
not forget the sacrifices you made.
    Commander, I want to thank you for your statement. I 
apologize for not being here before, but I heard reference to 
it as I was coming into the room, and I share your concerns 
about--first of all, we like the number, but this is a budget 
that doesn't fix the funding problems that we have, and it is 
really built around denying care instead of meeting real needs. 
For me, that is just something that I cannot support. So I am 
going to continue to do everything I can here to make sure we 
meet the needs of those who served us, without asking them more 
than they have already given.
    I was back home this last week, like many of my colleagues, 
and held hearings around my State on the issues facing 
veterans. I was in Spokane, Seattle, and Shelton, and I 
actually even went to Fort Lewis and talked to current members 
who are serving about some of the responsibilities we have and 
what they were seeing out there.
    I heard firsthand about veterans who are still struggling 
to get care. I heard about recently separated service members 
who couldn't get a job. They had been home from Iraq for 6 
months and couldn't get a job. I heard about Iraq War veterans 
who were waiting months to get in to a doctor.
    I heard about long delays in the process for getting 
disability veterans benefits, and I held a hearing in Seattle 
on the issue of M.S. and veterans who have returned home and 
there is a 7-year deadline on being able to get veterans 
disability benefits if you are diagnosed with M.S., Gulf War 
veterans who are returning, and M.S. is a very hard disease to 
diagnose. I know because my father, who was a World War II 
disabled veteran, had multiple sclerosis. I know the disease 
well, and there should not be an arbitrary deadline of 7 years 
because many of our Gulf War veterans are coming home, and it 
is 10 to 12 years later before they are diagnosed, and they 
shouldn't be denied service.
    So I will continue to do that, but, Mr. Chairman, you need 
to know I was in Spokane, Washington, and held a hearing, and I 
hold hearings for veterans all the time. It was a jammed 
hearing, and I was just impressed with how many people turned 
out. The No. 1 thing that they came to tell me was that they 
did not want to see proposed enrollment fees and copays because 
it would hurt low-income veterans and all veterans, and it is 
something that they really felt strongly about. So I came away 
from that very impressed.
    They were not there to ask for a handout or a favor or to 
be seen as trying to take anything from their Government. They 
were there saying:

          ``I served my country. I went there on a promise that was 
        made to me, and I am fighting not for myself, but for those who 
        follow me, that their benefits are not taken away or they sign 
        up and, depending on how well you do later in life, you get 
        benefits. I am fighting for the veterans following me.''

    I really came away impressed with that.
    I think our veterans deserve better. I think they deserve 
fair treatment. Their policies should not be limited by copays 
and fees that are arbitrary. I think that when veterans signed 
up to serve us, they were promised care equal to their 
sacrifice, no asterisks, no pauses, and we should follow 
through on that.
    Finally, Mr. Chairman, I think we need a real budget based 
on real numbers and reality, and I fear that we are going down 
the same road if we don't do that today.
    So, Commander, thank you for your testimony. Thank you to 
everyone for being here. We have a lot of work ahead of us, but 
you all shouldn't have to come to a meeting like this to remind 
us of the promises we made. We should do it on our own, and I 
will continue to fight for that.
    Thank you very much.
    Chairman Craig. Patty, thank you very much.
    Now we will move to questions by those of us who are here.
    Commander and to your panel and team assembled, let me ask 
a couple of questions that I think put into context part of the 
struggle we are dealing with.
    Last year, I worked with my colleagues, as you mentioned, 
and the administration to plug a gap in the funding of the VA's 
budget. A total of $2.7 billion in supplemental funding was 
provided to make up for not only an unexpected surge in demand, 
but also the inaccurate way in which VA, in my opinion, had 
projected their budget. It was an error, it was found, and we 
corrected it, and we did so in a joint and bipartisan effort. I 
mentioned, as did you, that Senator Kay Bailey Hutchison who 
chairs the Subcommittee of Appropriations that I serve on for 
MILCON and veterans helped lead that fight along with Senator 
Feinstein. Senator Murray was involved, certainly Senator 
Akaka, and myself. We accomplished that.
    We also said at that time to our Secretary and to VA that 
no longer would we tolerate guesstimates or unrealistic 
projections; that they were to go to work and bring us a 
process that delivered numbers that we and they--while we might 
differ on approaches, but at least the numbers would be 
accurate, and they were to report on a quarterly basis.
    We have had that first report, and they will now report on 
a quarterly basis to Congress as to the spend-downs in the 
programs and to see whether they are accurate and reasonable 
projections, and I think that is a major step forward.
    With that accomplishment, this year the President, the 
administration, has proposed an 11.3-percent increase in VA 
medical care. In a medical care dynamic which is relatively 
flat, that seems like a tremendous increase, and yet we know 
that it is probably necessary, and we will certainly work to 
get it.
    If that request is enacted, VA medical care funding will 
grow by about 69 percent over 2001. Now, in reality and the 
reason I am saying that is for all of you to understand how we 
have to deal with this in placing it in context not alone, not 
separate from all other budgets, but in context with our 
national Federal budget.
    At the present rate of growth, 11.3 percent, if we were to 
sustain that, that means that VA health care in the broad sense 
will double every 6 years. This is a phenomenal challenge. 
Please understand that, and everyone who is here who speaks 
about programs and importance and quality and access speaks 
about money in reality and how we deal with making sure that 
there is access and that it is all well funded.
    I have not at this moment, out of hand, said no to the 
President's concept of fees. Here is why I have not. Because I 
am struggling with how to replace them if the Congress says no, 
and I would not be surprised if the Congress says no. To 
replace them will cost the budget, if we sustain this level of 
spending, not higher levels that some are advocating including 
your organization, we will have to find about $800 million, 
close to a billion dollars, give or take. That is if we deny 
some other level of resource and revenue coming in, and that is 
why I said wait a moment.
    Last year, I would not in any way accept the proposal. I 
ruled it out, out of hand, and yet this year, in the context of 
where we want to take the quality of our health care and the 
access to the system--and all of us want that--there remains a 
reality check that I have got to force myself through and that 
the Appropriations Committee, based on their allocation as it 
relates to resource, is going to have to put itself through.
    So, having said that, this is not to put you on the spot. 
This is to put us into a reality check of where we go from here 
because, if you don't accept a $21-a-month fee for 7's and 8's 
to gain access to the system and you don't accept going to $15 
for a 30-day prescription drug fill, my guess is some on our 
committee and some in the appropriating committee will want to 
look for alternative revenue sources, other than just 
borrowing.
    According to a 10-year-old testimony that I have been 
looking at, that was introduced in the record at our budget 
hearing earlier this month, your organization, the DAV, did not 
previously oppose asking for some higher-income veterans to 
contribute to the cost of receiving care from VA.
    Can you give us an idea of what circumstances led your 
organization to change its views on the issue, which it is 
obvious by your testimony you have, and have you thought about 
alternative revenue sources for maybe this category of veteran 
who might have other kinds of insurance, other kinds of health 
care access, but because of the quality of health care in the 
veterans system today is choosing to come to the VA?
    Mr. Jackson. Mr. Chairman, before someone answers that, we 
use the term ``for the good of the order.''
    Would you allow me to introduce some young men that have 
come in, please?
    Chairman Craig. Absolutely. Please do.
    Mr. Jackson. These are some brave Americans that are seated 
behind us here who have been wounded and disabled in the war on 
terrorism, and if you would, please, allow me to introduce 
them.
    Army Sergeant Tyler Hall of Alaska.
    Chairman Craig. Welcome.
    Mr. Jackson. Army Sergeant First Class Chris Baine of 
Pennsylvania.
    Army Sergeant Wasem Khan, originally from Pakistan, now a 
U.S. citizen.
    Chairman Craig. Gentlemen, thank you for your service. 
Welcome to the committee.
    Mr. Gorman. Mr. Chairman.
    Chairman Craig. David.
    Mr. Gorman. If I may try to respond to your question. If it 
were 10 years ago that we gave testimony, it might well have 
been myself that delivered the testimony.
    Chairman Craig. David, it was.
    Mr. Gorman. It was?
    Chairman Craig. I won't quote your testimony at that time, 
but it was you. Yes.
    Mr. Gorman. I wasn't sure, but I knew you were.
    Back then, I believe we said something for the record that 
went that service-connected veterans, service-connected 
disabled veterans, medically indigent veterans or poor veterans 
should be allowed to get the spectrum of VA health care that 
they need and that they should be eligible for.
    Others who come into the system should come in with either 
copayments, deductibles, or third-party private insurance 
reimbursements.
    I think the key to your question is the ``or.'' We have the 
copayments. We have the private insurance from third parties. 
So that has already taken place. We agreed back at that point 
in time that one of those or, as we have it now in law, a 
combination of at least two of those have come into play.
    We still don't think it's--let me back up a minute. The 
whole concept back then when these copayments were made into 
law, they were temporary, and they were temporary for the 
purpose of deficit reduction.
    I can well remember meetings where I sat in personally that 
those discussions held true. They were to be on a temporary 
basis and end when the budget was no longer in deficit. We have 
come out of that. We came out of that situation under another 
administration, and those copayments and insurances continued, 
much to our dismay.
    It has been all along, we didn't like the idea. We went 
with it because we thought out of necessity at the time. At 
that point in time, we came out in opposition to the 
deductibles. We don't think they are needed.
    I think the VA--and I am not sure of the numbers, but it is 
hundreds of thousands of veterans who were in the system now 
getting care and VA billing their private insurance companies, 
collecting $2 billion, I think, in third-party insurers. VA 
estimates hundreds of thousands of those veterans would be 
knocked out of the system or would opt out of the system if 
deductibles were to be required.
    So you are taking, on the one hand, veterans who were in 
the Category 7's and 8's, requiring deductibles to be paid, 
while they are getting third-party reimbursement from them. 
Those veterans would go away from the system, which means a 
good portion of the third-party reimbursements that the VA 
collects would likewise out of necessity go away.
    So, in likelihood, you could be costing the VA scarce 
dollars by imposing deductibles.
    Chairman Craig. Well, certainly, I have heard that 
argument, and I am not denying that there may well be some fact 
to it.
    If you were to shift that kind of payment, you would 
obviously shift the pattern of use. People respond to dollars 
and cents.
    Mr. Gorman. And the one further point I would make, Mr. 
Chairman, is all along we have maintained that any additional 
revenue stream that comes into the VA should be supplemental to 
appropriations and should not supplant the Federal Government's 
obligation to adequately appropriate dollars for veterans 
health care.
    Chairman Craig. Thank you.
    Senator Akaka, questions?
    Senator Akaka. Thank you very much, Mr. Chairman.
    You are in constant contact with veterans throughout the 
country. Are you concerned with the message that veterans with 
PTSD may be getting as a result of the now-defunct PTSD review, 
the Disability Benefits Commission's evaluation and assessment 
of benefits provided under current law and the Institute of 
Medicine study on treatment, diagnosis, and compensation to 
veterans with PTSD?
    What is your membership telling you about this?
    Mr. Violante. Senator Akaka, we are hearing from our 
membership. They are concerned. We think that it was ill-
advised early on when the VA came out with that original 
review. It put a lot of veterans who didn't have to be at risk, 
at risk, thinking about it.
    We are also somewhat concerned, although we heard from the 
Deputy Secretary on Sunday, that the IOM review was put in 
place to assist VA to determine whether or not they are 
providing the proper care to veterans who are suffering from 
post-traumatic stress disorder.
    We hope that IOM will look at it from that aspect. I know a 
lot of veterans out there are concerned about that study, and 
unfortunately, there are a lot of veterans now who are 
returning from our war on terror who have been identified as 
suffering from post-
traumatic stress disorder.
    So we just hope that this IOM study and the VA moves 
forward in ensuring that these veterans not only receive proper 
level of benefits for their disabilities, but also the proper 
care.
    Senator Akaka. The President is clear on who should be 
eligible for VA health care, those with service-connected 
health needs.
    Do you think the system as we know it today can survive if 
eligibility is severely narrowed? Can we continue to train 
nearly half of all physicians in the United States, maintain 
specialty programs unparalleled in the community, and teach the 
rest of the health care system about quality management if 
eligibility is limited only to service-connected health needs?
    Mr. Gorman. We don't believe so, Senator Akaka.
    You need, as the commander pointed out in both his written 
and oral remarks today, old and young, healthy and unhealthy 
veterans in this system. You need a critical mass of patients 
for the VA to be able to take care of, to recruit the 
professionals, to be trained, competent quality health care 
providers. I think pretty soon if you only concentrated on the 
service-connected disabled veteran in the VA health care 
system, you would have a system that would simply shrivel up on 
the vine, and then it would be one that could be easily 
contracted out to the private sector that I don't believe is 
good for the disabled veteran, the VA, or, in that case, for 
that matter, the American taxpayer, which it has been clearly 
shown by data the VA is clearly the cheaper provider of care 
than anybody else out there and the more quality provider of 
care than anybody else out there.
    Senator Akaka. On National Guard and Reserve participation 
and the MGIB program, as some of you may know, VA assisted me 
in attending college, as I mentioned, and after I left military 
service. I am thankful for my education and opportunities in 
life that have been afforded me because of that education.
    I am concerned that some in military service may not 
receive benefits that mirror their service commitment. Can you 
make recommendations to the Reserve and Guard components of the 
MGIB program?
    Mr. Violante. Senator, the GI bill is not really a DAV 
issue, although we are involved in it to the extent we are a 
member of the Independent Budget, and we certainly do support, 
with the added emphasis on the use of the National Guard and 
the Reserve in our current war on terror, their ability to 
receive the same benefits as our active-duty military, but to 
be more specific than that, again, it is not an issue that DAV 
plays a major role in.
    Senator Akaka. Thank you very much, Mr. Chairman. My time 
has expired.
    Chairman Craig. Senator Akaka, thank you very much.
    Senator Murray.
    Senator Murray. Thank you very much, Mr. Chairman.
    You know, there are two ways to put a veterans' health care 
budget together. One is to determine how much money you want to 
spend on it, and then write the rules, so everybody fits within 
that spending package. The other is to determine how many 
veterans need access to health care and put the money in to 
cover that.
    I kind of go with the latter one, but I am concerned 
because, as we all remember the fiasco we went through on 
funding last year, we know why there were increased costs and 
why we were short. We were not accounting for the increased 
rate of health care costs, as the chairman referred to a few 
minutes ago, that we have to take into account. We have an 
increased number of Iraq and Afghani soldiers returning who are 
accessing our VA health care system. We have a number of 
veterans who served in Korea and Vietnam and even World War II 
who didn't access VA health care until they reached an older 
age or their employer said ``I'm no longer providing health 
care'' and then they went into the VA system. So we know that 
we have increased numbers of veterans who are accessing VA 
health care. It is an excellent system, and they deserve the 
care, and we should have it there for them. So we have to 
budget for it.
    One of the things that I think we are not taking into 
account today, Commander--and I would like to ask you about 
this--is that as the new Medicare Part D prescription drug plan 
goes into effect, I am hearing from many seniors who are 
calling up Medicare to ask about signing up for the new 
prescription drug plan and are asking if they are a veteran, 
and if they are, they are told don't sign up for this, go into 
the VA health care system.
    I am worrying we are not budgeting for that, for those now 
coming into the VA health care system as a direct result of 
another agency telling them to go that way in services they 
need.
    Are you hearing, Commander, of any stories that you are 
aware of, of more and more veterans accessing VA health care 
today who are being driven there by the new prescription drug 
plan itself?
    Mr. Gorman. I am not sure, Senator Murray, we are hearing 
an awful lot of that, but even before Medicare Part D came into 
effect, veterans were coming to the VA simply for their 
medications, and as a result, the VA was treating them as a 
whole patient, enrolling them in the system, and giving them 
their VA health care.
    There is no question that it is advantageous to many to get 
their medications through the VA, but they also are seeing the 
benefits of getting their health care through VA at the same 
time. So it is sort of a dual-edged sword that is costing the 
VA because these veterans are entitled to care. It is costing 
both for the provision-of-care aspect as well as the 
prescription aspect, too.
    Senator Murray. How do you think that the VA should change 
its budget model, so it can better track the needs of our 
veterans?
    Mr. Gorman. Well, we believe--we are a proponent of some--
the system today, we believe is broken. We have been a 
proponent and a strong advocate of guaranteed or mandatory 
funding.
    We think that is the way to go, and I think that fits the 
latter category of what you are talking about, but I simply 
believe--and I welcomed the Chairman's remarks about working 
together, sitting down, and trying to come to some kind of an 
agreement on what the VA should be and who it should be for. I 
think that is essential if we are going to tackle this problem.
    I think clearly the mistakes of last year are going to be 
repeating themselves. Whether it be this year to that 
magnitude, I don't know yet, but it is not going to be fixed 
adequately to take care of the number of veterans that need to 
come into the system.
    And we are worried about the generation, like these three 
young men behind us, who in all probability, 60 years from now, 
are going to continue to need the benefits of the VA health 
care system. They are going to need their treatment. We worry 
that it may not be there for them, and that would be a national 
travesty, let alone a travesty for those individual veterans.
    So there is a model out there somewhere that is going to 
fit. It is going to be better than what we have now. It may not 
be a full model of what we all would like to see, but it has to 
be better than what we have today, and we very much welcome the 
opportunity to sit down with, out of necessity again, not only 
this committee, but your counterpart in the House and the 
Administration to come to some kind of a rationalization of how 
we are going to do this and how we are going to tackle it.
    Senator Murray. Well, it is really important we do that, so 
that we can set that as a priority when we do our budget. The 
Budget Committee is going to be making up the budget next week, 
and if we set a parameter that is too low, it will impact our 
ability later in the year to be able to fund VA at what we need 
to do.
    So I think we need a much better budget model, so we can 
accurately portray what we need, and we would be happy to work 
with you on any suggestions that you might have.
    Let me ask another question, if I still have time, Mr. 
Chairman. Last fall, this committee had a hearing on trying to 
get more VA individual unemployment recipients back to work. 
Would you share with us your thoughts on trying to push more of 
our disabled veterans off of IU and into the workforce?
    Mr. Violante. I am not sure it is a good idea to force them 
off. Certainly, I think we believe that if an individual is 
able to work and gets the proper vocational rehabilitation 
training and can move into the workforce, that that is great. 
To just identify scaling down on individual unemployability and 
trying to force veterans out into the workforce by reducing 
their rating is another story that we wouldn't support, but I 
think that any time that you can get individuals back into the 
workforce and making their own living, it benefits not only the 
individual, but the society. But it just depends on how it is 
done.
    Senator Murray, if I could go back to your first question, 
we are seeing that there are several States, including the 
State of Washington and Missouri, that have now undertaken 
identifying veterans on State rolls. As you all know, State 
dollars for Medicare and Medicaid are being tightened up, and 
they are looking at ways to get individuals off of their rolls 
and are identifying veterans and encouraging them and 
introducing them to the VA health care system. So that is 
another thing that we need to be----
    Senator Murray. That will impact our budget. You are 
absolutely right.
    Mr. Violante. Definitely.
    Senator Murray. Thank you for your comments.
    I know my father, as I told you, who had multiple sclerosis 
would have loved to work, but his disease prevented him from 
doing that and making him feel even worse because he was 
collecting--any kind of disability, because he wasn't working, 
I think is sort of the wrong message to be sending to people.
    One other quick question. As I was doing the M.S. hearing 
that I had last week, I heard about the difficulty that many 
people--well, veterans were not getting the information they 
needed about what they qualified for in terms of disability or 
any other benefits. What is your impression of the VA in doing 
outreach today to try and find men and women who served to make 
sure they are getting their benefits, whether it is Agent 
Orange or Gulf War syndrome or other impacts?
    Mr. Gorman. From what we know and what we understand about 
VA and what we have seen, they are not doing enough.
    I think when you do outreach out of necessity, it creates 
work, an additional workload, an additional volume of veterans 
coming into the system for whatever benefit, and I simply don't 
think they are prepared to do that, from either the health care 
system or the compensation delivery system. So I think they are 
holding back on some outreach that could be very, very valuable 
to veterans across the country.
    Senator Murray. I appreciate that very much.
    Thank you, Mr. Chairman.
    Chairman Craig. Patty, thank you very much for those 
questions.
    A couple of more questions, David. I want to go back to 
your earlier statement because I am not in disagreement with 
what you said on what you said back in 1996, I believe, but if 
I understand your answer to the previous question, suggesting 
that lower-
priority veterans pay their own way through a combination of 
copays, deductibles, and billable insurance, and since that 
time, Congress has come through on copays and billable 
insurance--we agree on that. But copayments were already a part 
of the law in 1996. Isn't that correct?
    Mr. Gorman. I believe so.
    Chairman Craig. So wasn't your statement an amplification 
of what was already existing law?
    Mr. Gorman. I think at the time, although there may have 
been a provision of law, they were still in effect temporary, 
and that was the understanding we entered into with the 
Congress, that they would be and remain temporary until a 
certain point in time.
    Chairman Craig. Until such time.
    Mr. Gorman. But I don't think--without looking at the 
context of my full testimony at that time, which I----
    Chairman Craig. That is fair.
    Mr. Gorman [continuing]. Am at some disadvantage, I don't 
believe we said that all three of those should be a part of law 
and should be imposed upon veterans. I think it was a 
combination or the ``or'' as far as--private insurance, I think 
was the key.
    Chairman Craig. In your testimony, Commander, you used the 
word ``guaranteed funding,'' and in response I think either to 
Senator Akaka or Senator Murray, the word ``mandatory'' and/or 
``guaranteed'' was used.
    I would like to pursue that just a little bit because any 
of us who sit here in Congress today, although we are yet 
unwilling to do it, in a very short time have got to recognize 
that that light at the end of the tunnel coming at us is a very 
big fast freight train, and it is called Social Security and 
Medicare. There isn't an economist in this country who would 
argue against the statement I am about to make, that if you 
leave things exactly where they are today, that in a reasonably 
short time, possibly 2030, with our baby-boomers hitting the 
Social Security market and therefore eligibility for Medicare, 
that those two programs along with Medicaid will consume the 
entire Federal budget, including veterans, Interior, 
Agriculture, Defense gone unless we make significant hard 
political choices in whatever form they will be, and I can't 
even predict that yet because Congress is very resistant.
    Those are tough decisions. They impact human lives. They 
impact constituents--and constituents, every 6 years here in 
the Senate, go to the polls to vote. We are really squirming 
right now on a way to figure it out. We don't want to face 
those hard tough issues in whatever form we face them, but they 
are there. We know they are there, and the sooner we fix them, 
the easier they will be on not only the recipient of the 
benefit, but the economy at large and those who pay into the 
budget for the purpose of keeping those programs going.
    So, in view of these challenges we are facing, I am 
struggling, in all seriousness, with adding another major $100-
billion program to mandatory spending with the growth rates 
that are obvious within this. Using the word ``mandatory'' or 
``guaranteed,'' could you explain to me what you mean?
    You have just heard Senator Murray talk about shifting how 
you budget. That kind of gets to the point of being mandatory 
because obviously you determine numbers and needs and fund 
accordingly. How do we deal with that in your own mind?
    Mr. Gorman. Well, first of all, it is a matter of 
priorities.
    You say people's lives that were impacted. The young men 
and women who have put on the uniform, gone off to foreign 
shores to do our battles for us to preserve the life and the 
ideals we have, have put themselves in harm's way. Many, most, 
have come back unscathed, but those who have not, the 
individuals who we believe should be ratcheted up to a level 
that have nothing but the highest priority for Government 
services in this country, it is the Federal Government foreign 
policy decisions that create disabled veterans. They are not 
created by people's own whims or IBM or Ford Motor Company. 
They are created by the Federal Government's foreign policy.
    So, having said that, I would agree with Senator Murray to 
the point that instead of drawing a circle and filling it with 
money and saying within this circle are the number of veterans 
we can treat, we must, out of necessity, especially now as we 
are at war, and it appears we are going to be at war for some 
period of time in the future, which means many thousands of 
more young men and women are going to put themselves in harm's 
way and many more are going to come back in need of VA 
services.
    You need to take, in our view, the number of veterans who 
require VA medical care services and have an adequate budget to 
treat those veterans. It is a simplistic statement to make, I 
know and I realize that. To try to formulate it into a way that 
is workable is very, very difficult, and I think that is where 
we have been--I say ``we''--the whole veterans community have 
been at sort of a loggerhead with each other for some time. How 
do we accomplish that?
    There has not been, in my opinion, an honest debate on that 
issue, and I think that is what has been sorely lacking. 
Although we talk about it and we go across the other side of 
the Capitol and talk about it over there, the Administration is 
always on the outside of that discussion. There aren't those 
discussions going on with all interested parties.
    When Secretary Principi was in office, one of the last 
things we talked to him about--and he agreed to--was to create 
what we called a Veterans Health Care Summit, trying to get the 
administration, VA officials, people who know the system, know 
how the system works, to sit down together at a table and throw 
everything out there and talk about it. That, out of necessity, 
would include you, your staff, the House Veterans' Affairs 
Committee staff, hopefully the appropriators.
    It is going to take everybody to sit down and say this is 
an issue we have to face, it is a priority, how are we going to 
reasonably do it, and I believe somewhere in the middle of all 
of what we have today and the call for mandatory funding, 
somewhere in there, there is a solution to this problem that is 
going to save the VA health care system, and it is going to 
allow them to continue to treat the veterans it needs to treat.
    Chairman Craig. Well, David, I disagree with nothing of 
what you said.
    Now, I don't know whether this administration's--at this 
time--numbers are right. Time will tell. If they are accurate 
and justify the 11.3-percent increase, most of that is spent 
and directed at disabled and service-connected, and those 
numbers, even including the incoming, if you will, these young 
men and others serving in Iraq and Afghanistan, the number is 
relatively flat, not a dramatic increase.
    So this is a substantial budget increase, but to address 
those that are almost--now I say almost--I don't want to put 
words in your mouth--almost outside your comment, 7's and 8's, 
not disabled, not by definition poor, not rich, but not poor, 
not service-connected, and yet many VSO's say all are entitled.
    I agree with the broad statement, but I will tell you where 
I come down. I come down for the disabled and the service-
connected and the truly needy, and I have a little trouble. And 
I will tell you this. You have probably heard me tell this 
story before, but maybe the audience hasn't. When a retired 
medical doctor living in a lovely home by a golf course who 
happens to be a veteran is very angry at me because he can't 
get access to the pharmaceutical program, tells me I am not 
doing my job, something is wrong with that picture. He can 
afford not to be there, but he is led to believe that he is 
entitled.
    I do not believe this system will sustain itself under any 
scenario if we don't recognize some of those problems.
    To say that the President is wrong in what he proposed is 
to argue that the President isn't attempting to challenge us 
into the debate and into the discussion you have just proposed, 
to recognize what is glaringly obvious, or more importantly, 
ultimately to get the Congress to finally back off because the 
revenue simply doesn't exist and for us to have to start moving 
around numbers as it relates to the truly needy, the disabled, 
and the service-connected.
    That is what I am going to struggle with. Senator Murray is 
going to do the same. We come at it a little differently. Both 
of us have the same goal, and we are very proud of the system 
that we have an opportunity to impact in our service here in 
the Senate.
    I say to all of you, these gentlemen sitting at your front 
table here serve you very well. We have candid and open 
dialogue, and we will continue to do that as we wrestle through 
this issue, and I have already explained to you the 
difficulties we will go through in the coming months to bring 
about a budget at this level or above or somewhere near in 
relation to how this budget has been put together or how we 
will put it together.
    Let me tell you, Commander, I thank you sincerely today for 
your comments, for bringing your organization to the Senate. We 
are pleased and proud to have you here.
    With that, Senator Murray, do you have any other questions 
you would like to ask?
    Senator Murray. I just have a quick final comment. First of 
all, let me preface it by saying last year when the VA finally 
did come forward and say that they had a huge budget deficit 
problem, Senator Craig is to be commended for coming forward 
immediately and working with us to resolve that, and he was 
there every step of the way for the veterans, and we all owe 
him a debt of gratitude for that.
    He is right in that we have a little different philosophy 
on veterans and veterans health care funding, and I just have 
to say that when someone signs up for service, there is no 
asterisk on the form saying if you have a swimming pool or you 
go to Mexico in the summer, you don't qualify. And I don't 
think any of us are ready to go out today to where we are 
trying to recruit men and women to go to Iraq or Afghanistan to 
fight the war on terror, that we are going to put an asterisk 
in there, and I think we have an obligation as a country to set 
our priorities within our budget to make sure we have the 
funding for the VA. If it comes up and costs more because that 
is what it costs, then we have an obligation to figure out how 
to do that within the budget, and I am going to keep advocating 
for that.
    Thank you, Mr. Chairman.
    Chairman Craig. Thank you very much.
    Mr. Gorman. Mr. Chairman, may I just have one more moment--
--
    Chairman Craig. Please, David, go right ahead.
    Mr. Gorman [continuing]. Based on something you just said?
    Whereas the service-connected and the medically indigent 
are, in fact, the most important people we want to try to take 
care of, one other scenario--and I am not proposing that this 
is the solution, but it might be something to think about--is 
that you have a mandatory or guaranteed funding stream for 
those two categories of veterans and you make a discretionary 
funding stream for others that are found eligible to come into 
the VA health care system.
    Chairman Craig. Thank you.
    Mr. Gorman. Thank you, sir.
    Chairman Craig. I mean that most sincerely. That is the 
kind of creative thinking we have all got to get to here.
    A lot of people criticized our President this past year for 
proposing reform in Social Security. He started a very 
important national debate. We will have to pick it up someday 
in the future to resolve it, and as we will other issues. So I 
am not going to suggest to any of you I am going to create a 
national debate when it comes to the veterans system, but I am 
going to make awfully darn sure that during my tenure, those 
who we feel are most eligible receive the quality of care that 
I believe is addressed to them.
    Well, I understand other Senators may be en route. We have 
gone on and held you here long enough, and we will add their 
opening statements to the record. The committee record will 
remain open for a week. There may be some additional questions 
to be asked of you.
    Senator Murray, thank you for attending, some of our House 
Members who attended, and most important to you, Commander, to 
you and all of those who are behind you and the 1.3 million, I 
believe you said, you represent. Thank you so much for your 
presence here today and your commitment to veterans.
    The committee will stand adjourned.
    [Whereupon, at 3:42 p.m., the committee was adjourned.]

                            A P P E N D I X

                              ----------                              

 Prepared Statement of Hon. John Thune, U.S. Senator from South Dakota

    Mr. Chairman, thank you for holding this hearing to give our 
veterans' service organizations an opportunity to present their 
legislative priorities before the Senate. I'd also like to welcome Paul 
Jackson, National Commander of the DAV.
    As I have noted before, budgets are an indication of where we, as a 
government, place our priorities. Clearly, veterans funding is a very 
high priority in this budget request, as it is one of the few areas of 
the budget that has been proposed to receive generous increases in 
funding. In fact, the President's 2007 budget would represent a 75 
percent increase since 2001 in funding for veterans programs.
    I look forward to today's testimony, and thank you again, Mr. 
Chairman, for holding this important hearing.

                               __________

Prepared Statement of Hon. Silvestre Reyes, U.S. Congressman from Texas

    Mr. Chairman, as a life member of the Disabled American Veterans 
(DAV), I would like to thank you and Ranking Member Akaka for allowing 
Members of the House to participate in today's hearing and for allowing 
the DAV to present their legislative priorities. Their knowledge of the 
needs of their membership is vital to the budget process as we consider 
fiscal year 2007 funding for veterans programs.
    As in previous years, the Administration's budget request includes 
legislative proposals that would impose enrollment and pharmaceutical 
co-pay fees on our nation's veterans. I find this absolutely 
unacceptable and assure you that I will work with the House Veterans' 
Affairs Committee to remove this language in a bipartisan fashion as we 
have done in the past.
    I am also concerned that not enough progress has been made to 
increase the number of healthcare professionals working for the 
Department of Veterans Affairs (VA) so that we can substantially 
decrease the wait period for medical services. Unfortunately, these 
issues are not new and, as the VA witnessed last year, the number of 
Iraqi Freedom and Operation Enduring Freedom veterans is only 
increasing.
    To this end, I recently joined my colleagues in the House Committee 
on Veterans' Affairs in submitting our ``Minority, Additional, and 
Dissenting'' views and estimates for the fiscal year 2007 Department of 
Veterans Affairs budget. Our recommendation would eliminate the 
President's legislative proposals for enrollment and pharmaceutical co-
pay fees and lift the Administration's enrollment ban on new Priority 8 
veterans. In addition, our estimates provide the needed funding for 
Post Traumatic Stress Disorder outpatient and inpatient programs while 
ensuring the Department of Veterans Affairs maintains an adequate 
number of health care professionals to meet the demand for services.
    Again, I would like to thank the representatives of the DAV for 
taking the time to be here today. Their dedication to our nation's 
veterans is commendable and I look forward to working with my 
colleagues to provide the VA a budget that will meet all the needs of 
our nation's veterans.
  

                                  
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