DEPARTMENT OF VETERANS AFFAIRS

BUDGET REQUEST FOR 

FISCAL YEAR 2006

HEARING

BEFORE THE

COMMITTEE

ON

VETERANS’ AFFAIRS

HOUSE OF REPRESENTATIVES

ONE HUNDRED NINTH CONGRESS

FIRST SESSION

Printed for the use of the Committee on Veterans’ Affairs

Serial No. 109-1

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Ë20-426.PDF WASHINGTON : 2005

FEBRUARY 16, 2005
COMMITTEE ON VETERANS’ AFFAIRS

STEVE BUYER, Indiana, Chairman

MICHAEL BILIRAKIS, Florida LANE EVANS, Illinois, Ranking

TERRY EVERETT, Alabama BOB FILNER, California

CLIFF STEARNS, Florida LUIS V. GUTIERREZ, Illinois

DAN BURTON, Indiana CORRINE BROWN, Florida

JERRY MORAN, KANSAS VIC SNYDER, Arkansas

RICHARD H. BAKER, Louisiana MICHAEL H. MICHAUD, Maine

HENRY E. BROWN, JR., South Carolina STEPHANIE HERSETH, South 

JEFF MILLER, Florida Dakota

JOHN BOOZMAN, Arkansas TED STRICKLAND, Ohio

JEB BRADLEY, New Hampshire DARLENE HOOLEY, Oregon

GINNY BROWN-WAITE, Florida SILVESTRE REYES, Texas

MICHAEL R. TURNER, Ohio SHELLY BERKLEY, Nevada

DEVIN NUNES, California TOM UDALL, New Mexico

MIKE COPHER, Acting Staff Director

(II)
CONTENTS

February 16, 2005

 

Department of Veterans Affairs Budget Request for Fiscal Year

 2006 .............................................................................................

OPENING STATEMENTS

Chairman Buyer .............................................................................

Prepared statement of Chairman Buyer .......................................

Hon. Lane Evans, Ranking Democratic Member,

 Committee on Veterans’ Affairs .................................................

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

STATEMENTS FOR THE RECORD

Hon. Michael Bilirakis, Vice Chairman ........................................

Hon. Stephanie Herseth .................................................................

Hon. Corrine Brown ........................................................................

Hon. Jeff Miller ...............................................................................

Hon. Luis V. Guiterrez ...................................................................

Corey, Thomas H., National President, Vietnam Veterans of 

America ....................................................................................... 

Olanoff, Mark H., Executive Director, The Retired Enlisted

Association ...................................................................................

WITNESSES

Nicholson, R. James, Secretary, Department of Veterans Affairs 

Prepared statement of Secretary Nicholson ...............................

Fuller, Richard B. Fuller, National Legislative Director,

Paralyzed Veterans of America .................................................

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

Violante, Joseph A., National Legislative Director, Disabled

American Veterans ....................................................................

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

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

Foreign Wars ..............................................................................

Page

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(III)
Prepared statement of Mr. Cullinan ..........................................

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

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

Matz, William M.. Jr., USA (Ret.), President, The National

Association of Uniformed Services .........................................

Prepared statement of Major General Matz .............................

Colonel Robert F. Norton, USA (Ret.), Deputy Director,

*RYHUQPHQW5HODWLRQV0LOLWDU\2IÀFHUV$VVRFLDWLRQRI

America ....................................................................................

Prepared statement of Colonel Norton .......................................

Gaytan, Peter S., Director, National Veterans Affairs and

Rehabilitaion Commission, The American Legion ................

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

MATERIAL SUBMITTED FOR THE RECORD

Letters:

To Congressman Evans from Thomas G. Bowman, Deputy,

Department of Veterans Affairs, February 16, 2005 .............

To Chairman Buyer from The American Legion re: methodol-

 ogy to develop The American Legion’s Department of Veter-

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 ruary 22, 2005 ..........................................................................

To Secretary Nicholson from Congressman Evans and Con-

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 22, 2005 ....................................................................................

To Congressman Evans and Congressman Strickland from 

6HFUHWDU\1LFKROVRQUHPDQDJHPHQWHIÀFLHQFLHV0DUFK

 25, 2005 .................................................................................... 

To Secretary Nicholson from Congressman Evans and Con-

JUHVVPDQ6WULFNODQGUHPDQDJHPHQWHIÀFLHQFLHV$SULO

 2005 ..........................................................................................

To Vice Chairman Bilirakis, from the Independent Budget

Group, March 25, 2005 ............................................................

To Chairman Buyer from Secretary Nicholson re: responses to 

 questions for the record, July 8, 2005 ....................................

Charts:

VA Health Care and TRICARE enrollment fees and copay-

 ments ........................................................................................

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Budget ......................................................................................

Budget:

The Fiscal Year 2006 Independent Budget ................................

(IV)

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DEPARTMENT OF VETERANS AFFAIRS

BUDGET REQUEST FOR FISCAL YEAR 2006

WEDNESDAY, FEBRUARY 16, 2005

 HOUSE OF REPRESENTATIVES

 COMMITTEE ON VETERANS’ AFFAIRS,

 Washington, DC

 The Committee met, pursuant to notice, at 10:08 a.m., in Room 334, 

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Committee] presiding.

 Present: Representatives Buyer, Evans, Bilirakis, Filner, Brown of 

Florida, Moran, Baker, Michaud, Brown of South Carolina, Herseth,

Miller, Strickland, Boozman, Hooley, Berkley, and Udall.

 THE CHAIRMAN. The full Committee on Veterans’ Affairs will come 

to order on February 16, 2005.

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the 109th Congress, which is testimony on the Department of VeterDQV·$IIDLUVEXGJHWUHTXHVWIRUÀVFDO\HDU

2XUÀUVWZLWQHVVLVWKH6HFUHWDU\RI9HWHUDQV·$IIDLUVWKH+RQRUable R. James (Jim) Nicholson, the Secretary nominated by the PresiGHQW RQ'HFHPEHU+HZDVXQDQLPRXVO\FRQÀUPHGE\ WKH

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 Today is February 16th. So in 16 days, he should have all the answers today. Mr. Secretary, we welcome you.

 I would now like to recognize Mr. Evans for any opening statement 

that he may have. Mr. Evans?

OPENING STATEMENT OF HON. LANE EVANS, RANKING

 DEMOCRATIC MEMBER, COMMITTEE ON VETERANS’ 

AFFAIRS

MR. EVANS. Thank you, Mr. Chairman.

 This budget submitted to us on February 7th is one of the most 

dishonest and insensitive documents I have seen in over two decades 

in Congress.

 The administration’s budget not only severely shortchanges the nation’s sick and disabled veterans, it seeks to force hundreds of thousands of deserving veterans out of the VA health care system and to 

(1)
abandon its long-term care obligations. This will force the Department

of Veterans’ Affairs to sustain and even broaden the practice of rationing care to veterans that has been a hallmark of this administration.

 The bottom line is this, this budget is at least $3.2 billion short in 

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one veteran to pay for another veteran’s health care.

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seeking care. We cannot accept this.

 The administration intends to weaken the VA health care system 

through a staff reduction of more than 3,000 health care professionals, mostly nurses. We can’t accept this.

 The budget proposal would eviscerate VA’s nursing home program 

and state home nursing programs. We must not accept that, either.

 Under the Bush budget, there are no new initiatives to improve the 

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 I want to thank the veterans organizations that put together an 

independent budget. I want to thank those organizations who will 

testify later today. And I want to thank Secretary Nicholson. We

look forward to your testimony.

Thank you, Mr. Chairman.

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OPENING STATEMENT OF CHAIRMAN BUYER

THE CHAIRMAN. Thank you, Mr. Evans.

 Mr. Secretary, I’m glad you could be with us here today to share 

with the Committee the President’s proposed budget for 2006.

 Those of us on this Committee take very seriously our responsibility to ensure that the VA provides the highest quality health care 

for those who are enrolled now and those who will be enrolled in the 

future. We are honored by the trust placed in us by our respective 

caucuses. Capitol Hill can be a very partisan place. Sometimes we 

can also hear the politics of extreme, not only by members but perhaps even worse, by some organizations that associate themselves 

here in the Capitol.

 When we walk through this hearing room door, our effort is to leave 

the partisanship aside. That does not mean we will always agree. 

We do not. We communicate, and sometimes it is hard, but we work 

together so that we can provide the best possible services to those 

who have left freedom in their footsteps. Our guiding principles are 

no different than those who serve.

 Last Friday I had an off-site meeting with many of the veteran and 

military service organizations in Charleston, South Carolina on the 

campus of the Citadel.

 I took with me the Subcommittee Chairman, and the staff direc2
tors. We met with the top ten of the veterans service and military 

service organizations.

 We discussed how and where each participant who has served in 

the military took the oath of enlistment or of commissioning.

 The Vice Chairman of this Committee, Mr. Bilirakis, I’m sure can 

also remember where he took his oath for the Air Force. I am also 

quite certain that, Mr. Brown, you can remember where you took 

your oath for your enlistment in the South Carolina National Guard. 

I’m also quite certain it is true for Mr. Evans on where he took his 

oath in the United States Marine Corps, or Corporal Vic Snyder, who 

took his oath before he was shipped out to Vietnam with the United

States Marines.

 Service in the Armed Forces does not make one person more patriotic than another. Actually, I have always found that offensive. 

We all serve this country in many different ways and many different 

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 One might have a father who served and now works on behalf of 

veterans at a veterans’ hospital or a veterans’ service organization, 

where they volunteer in some capacity to help a veteran.

 Another may not have served in the military but they also serve 

here in Congress. They serve on the congressional staffs here for the 

Veterans’ Affairs Committee.

 Mr. Secretary, I’m sure you have many loyal employees who work 

in your administration, many of whom perhaps never served in the 

military, but, because of their intent, their service I don’t believe is 

much different from those who had served.

 I hope in your opening, I’m quite curious, I’d like to know where you 

took your oath. You went to a military academy. You took one there. 

You also took another one upon your commissioning.

 Those of us who have been instilled with certain values, we call 

them our military values. In the Navy and Marine Corps, it is honor, 

courage, commitment. In the Army, it’s loyalty, duty, respect, service, honor, integrity and courage. In the Air Force, it’s integrity 

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it is honor, respect, devotion to duty. In the Merchant Marine, it is 

integrity from within, respect for others, courage in diversity, and 

service above self.

 On Friday at the retreat in Charleston, we all agreed that these are 

WKHVDPHYDOXHVIRUZKLFKZHVHUYHQRZDQGZLOOGHÀQHRXUFRPPLWment to care for those veterans with Service-connected disabilities, 

those with low incomes and those with special health care needs.

 It is our job to receive this budget today, to listen and learn about 

how this administration seeks to better the VA and ensure that our 

health care resources continue to be concentrated on care for the enrolled veterans most in need of VA services.

 To make certain that our research continues to push the bounds 

3
of science in prosthetics; to have a seamless transition from DOD to 

VA to provide for timeliness of compensation and pension claims, and 

also to make sure that they are accurate and consistent; and to make 

sure that those men and women who come back receive not just governmental assistance, but receive an opportunity to live and to raise 

their quality of life above a paycheck.

 Mr. Secretary, several weeks ago, we met and discussed these very 

same issues. We talked about how our role is not to provide just 

governmental assistance. Many of us have been to Walter Reed and 

Bethesda.

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face. Some of them need mental health care. Some may need physical therapies. Some will need to learn to walk or to learn even how 

to throw a ball.

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eager to join back with their unit, even though they have disabilities. For those who cannot go back but instead go home, it is our 

job to make sure they have the ability to go home and be productive 

members of society and to live their lives, to have every opportunity 

to succeed.

 Mr. Secretary, I note from our conversation that you will join Mr.

Evans, this Committee, and me in this endeavor to make the VA the 

best it possibly can be.

 I thank you again for your service to country, both as an Army

Ranger, not only for your service in peace but also in war. I also 

thank you for your service to this country as ambassador to the Vatican and for answering the call of this President to serve as the Secretary of Veterans’ Affairs.

 We look forward to hearing your testimony today, and we look forward to working with you in the future.

 Mr. Secretary, if you would begin by introducing the staff who is 

accompanying you at the table, and then you may proceed with your 

opening statement.

STATEMENT OF THE HONORABLE R. JAMES NICHOLSON, SECRETARY, DEPARTMENT OF VETERANS AFFAIRS; ACCOMPANIED BY: JONATHAN B. PERLIN,

M.D., ACTING UNDER SECRETARY FOR HEALTH;

 VICE ADMIRAL DANIEL L. COOPER, U.S. NAVY

 (RETIRED), UNDER SECRETARY FOR BENEFITS;

RICHARD A. WANNEMACHER, ACTING UNDER SECRETARY FOR MEMORIAL AFFAIRS; TIM McCLAIN,

GENERAL COUNSEL, RITA A. REED, DEPUTY ASSISTANT SECRETARY FOR BUDGET

 SECRETARY NICHOLSON. Thank you, Mr. Chairman. It is a pleasure 

for me to introduce my colleagues at this table.

4
 I will start with the gentleman to my far left, who is Tim McClain,

who is General Counsel for the Department of Veterans Affairs. To

my immediate left is Dr. Jonathan Perlin, who is the Acting Under

Secretary of the Veterans’ Health Administration.

 To my far right, Dick Wannemacher, who is the Acting Under

Secretary for The National Memorial Administration. Coming this 

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for the VA, and on my immediate right is Ms. Rita Reed, who is the 

Deputy Assistant Secretary for Budget.

 Mr. Chairman and members of the Committee, it is a pleasure for 

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appear before you. I have now been in this job - this is the third day 

of my second full week. As you will see, I have not become an expert 

in every aspect of this vast and wonderful organization, I will assure 

you and probably make obvious to you.

 It is a tremendous privilege for me to have the opportunity to be 

serving my fellow veterans and my country men in this capacity with 

this responsibility at this time.

 Mr. Chairman, I do remember when I took my oath. I grew up in a 

town of 99 people in Northwest Iowa. I got a telegram by Morse Code. 

I’m not as old as Abe Lincoln, but it sounds like that. I did. It said I

was admitted to West Point.

 I headed out, went to New York City from a town of 99 people way 

up the Hudson River. On July 2, 1957, I took my oath and was sworn 

in as a member of the Corp Cadets and then was commissioned on 

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was the best thing that ever happened to me in my life.

 I would ask that my written statement be submitted for the record 

and that I be allowed to offer some brief remarks.

THE CHAIRMAN. Without objection, it will be entered.

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 SECRETARY NICHOLSON. Mr. Chairman and members of the ComPLWWHHIRUWKHEHWWHUSDUWRID\HDUKHDOWKFDUHEHQHÀWVDQGEXULDO

experts at the Department of Veterans’ Affairs have worked closely 

with the President’s team to assess the VA’s future resource needs.

 Their goal was to ensure that VA continues to care for those vetHUDQV ZKR FRXQW RQ XV WKHPRVW7KH3UHVLGHQW·V ÀVFDO \HDU 

budget proposal for $70.8 billion meets that need. $37.4 billion is 

proposed for entitlement programs, and $33.4 billion for discretionary programs.

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enacted level.

 The discretionary funding level would represent an increase of 

$880 million or 2.7 percent over the enacted level for 2005.

 The proposed mandatory spending level represents a $639 million 

5
or 1.7 percent increase over the 2005 level.

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represents a total increase of about 47 percent in medical care funding, with a 44 percent increase in discretionary funding alone.

 The President’s 2006 proposal will allow us to do the following: 

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standards of health care quality for which the VA is now nationally 

recognized, while treating over 5.2 million patients, about one million 

more patients than in 2001.

 It will allow us to follow through on a historical realignment of our 

health care infrastructure, reduce the backlog of disability compensation and pension claims, and continue the largest expansion of the 

national cemetery system since the Civil War.

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in delivering top notch health care have been stunning. The VA now 

exceeds the performance of private sector and medical care providers 

for all measurable key health care quality indicators.

 This is all the more impressive when you consider the explosive 

growth in VA health care usage.

 The VA expects to treat about one million more patients in 2006, 

for a total of 5.2 million then was done in 2001.

 The President’s 2006 budget asks that you enact two important 

provisions affecting only Priority 7 and Priority 8 veterans, an annual enrollment fee of $250 and an increase in the pharmacy co-payments from $7 to $15 for a 30 day supply of drugs.

 The proposed enrollment fee is similar to the fee legally required of 

military retirees enrolled in the TRICARE system, and some would 

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 As you know, most TRICARE enrollees have served on active duty 

for at least 20 years, and are former enlisted personnel with modest 

retirement incomes.

 The proposed enrollment fee would affect those veterans who may 

have served as few as two years and who have no Service-connected

disabilities.

 In addition, some of these veterans, those in Priority Group 8, have 

incomes above the HUD geographic means test.

 This budget proposal also ensures the following highest priority 

veterans receive the long term care they need -- those injured or disabled while on active duty, including veterans who served in Operations Iraqi Freedom and Enduring Freedom, those catastrophically 

disabled, patients requiring short term care subsequent to the hospital stay, and those needing hospice or respite care.

 These eligibility criteria would be applied to VA sponsored long 

term care services, including VA, community and state nursing 

homes. This would save approximately $496 million that would be 

6
redirected toward our high priority veterans.

 The Department would continue to expand access to non-institutional long term care with an emphasis on community based and in 

home care. In many cases, this approach allows veterans to receive 

these services in comfortable, familiar settings of their homes surrounded by their families.

 In order to be more prepared to care for our veterans returning 

from OIF and OEF, VA’s 2006 medical care request includes $1.2 

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to support the increasing workload associated with the purchase and 

repair of prosthetics and sensory aides to improve veterans’ quality 

of life, and includes $2.2 billion or $100 million over the 2005 level 

to standardize and further improve access to mental health services 

across the system.

 We are also proposing a number of program enhancements to cover 

out of pocket costs for emergency care that veterans receive at nonVA facilities, to exempt former POWs from co-payments for VA extended care services, and to exempt veterans from co-payments for 

hospice care delivered in hospitals or at home.

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of two percent in 2006, which will yield about $600 million in savings.

 The $750 million requested for CARES, Capital Asset RealignPHQWIRU(QKDQFHG6HUYLFHVLQÀVFDOLVPLOOLRQPRUHWKDQ

the 2005 enacted level. At its core, CARES means greater access to 

higher quality care for more veterans closer to where they live.

 Its impact is already being felt in Chicago, where the proceeds from 

an enhanced use lease of VA’s Lakeside Hospital property are being 

reinvested in the VA’s Westside facility. This will lead to a new modern bed tower for Chicago’s veterans.

 Finally, the $786 million proposed in support of VA’s medical and 

prosthetic research program would fund about 2,700 high priority 

research projects to expand knowledge in areas critical to veterans’ 

health care needs.

 The combination of VA appropriations and funding from other 

sources would bring our 2006 research budget to nearly $1.7 billion.

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for the entitlement costs mainly associated with all entitlement benHÀWV2XUUHTXHVWDOVRLQFOXGHVELOOLRQIRUWKHPDQDJHPHQWRI

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over the 2005 enacted level.

 The VA takes seriously its obligation that every veteran’s claim 

must be treated fairly and equitably. We must be consistent.

 Our Inspector General has been directed to conduct a review of 

our disability claims adjudication process. The results will identify 

areas of inconsistency, and will help us formulate steps to remove to 

7
the maximum degree possible inconsistencies which obviously exist 

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 In addition to this independent system wide review, the Veterans’ 

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assist veterans and their survivors for disabilities and deaths attributable to their military service.

 The President’s request would also permit us to continue the benHÀWVGHOLYHU\DWGLVFKDUJHRU%''SURJUDP7KLVSURJUDPHQDEOHVDFWLYHGXW\6HUYLFHPHPEHUVWRÀOHGLVDELOLW\FRPSHQVDWLRQFODLPVZLWK

VA staff at military bases, complete their physical exams there, and 

have their claims evaluated before or closely following their military 

separation.

 The President’s 2006 budget includes $290 million in discretionary funding for VA’s burial program, which includes operating and 

maintenance expenses for the National Cemetery Administration, its 

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and the state cemetery grants program.

 This total is nearly $17 million or 6.4 percent over the 2005 enacted 

level. It includes $90 million for cemetery construction projects.

 Consistent with the provisions of the National Cemetery Expansion

Act of 2003, we are also requesting $41 million in major construction 

funding for land acquisition for six new national cemeteries and $32 

million for the state cemetery grants program.

 We believe veterans should have the option to be buried in a veterans’ cemetery located within 75 miles of their home. More than 80 

percent will have that option under this budget proposal.

 Mr. Chairman, I would be remiss if I did not note that last year 

VA’s National Cemetery Administration earned the highest rating 

ever achieved by a public or private organization in the 2004 American Customer Satisfaction Index. It was a rating of 95 on a scale of 

100.

 In closing, Mr. Chairman, despite the many competing demands for 

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and services a top priority of his Administration.

Mr. Chairman, our veterans deserve no less.

We are now prepared to take your questions. Thank you.

 THE CHAIRMAN. Thank you, Mr. Secretary. I have several questions. One will focus on seamless transition. I’d like to know what 

the Department is doing to ensure that Operation Iraqi Freedom and 

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 I recognize what you just mentioned with regard to the one exam 

and determinations upon discharge. We are hopeful that will lead to 

greater accuracy and timeliness in these determinations.

I would like for you to answer that in greater detail.

8
 I would also like for you to touch on CARES and even outside of 

CARES, with regard to competitive sourcing. I’d like your input on 

that.

I would also like you to talk about the third party collections.

 I know we have a pilot project out there. Unisys received the bid on 

that contract. It is in Ohio. I’ve been concerned about the growth of 

that contract and whether we need to have another competitive pilot. 

I would like your comments with regard to that.

 It is how we perfect the health system, whereby we do everything 

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necessary information, having the right codings, the doctors doing 

their jobs. We have to follow through the system. That is quite an 

investment.

 The other comment I would like you to make is with regard to - we 

are going to give you some running room -- with regard to IT. I’m

hopeful that you will come up with a proposal for the Committee with 

regard to how you can restructure IT so that your chief information 

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 We have been very concerned over the years on how much money 

we have been authorizing and appropriating here in Congress with 

regard to IT, and you have three stovepipe systems. We believe that 

if you are able to empower with budget authority your CIO, we can 

save money in the end.

 My last comment will be that I appreciate your highlighting the inequity that we presently have. When I offered TRICARE for Life and 

that passed, we instituted these co-pays and deductibles, and now 

when you have a situation whereby a VA hospital may be a TRICARE

provider, you are absolutely correct, you could have somebody, having only serviced for one tour of duty, go in just before that military 

retiree and he doesn’t have to pay the deductible, when in fact the 

military retiree does.

 We have an inequity in the system that we are going to need to 

address.

I yield to you, Mr. Secretary.

SECRETARY NICHOLSON. Thank you, Mr. Chairman.

 Let me start with the seamless transition. That is a very high 

priority in our agency, because we have to get it right. These people 

returning from Iraq and Afghanistan deserve no less. We have a senior individual in the agency who is our seamless transition guru, if 

you will. All of us are collaborating on that.

 I think great progress has been made. We have stationed VA representatives in some cases with returning units. We have put people on 

aircraft carriers to help orient and process people on their way home 

from deployment.

 We have people at all the major medical facilities. We have people 

in Gruenstadt, Germany.

9
 The goal is to impart good information and take the hassle out of 

the process for this person on active duty about to become a veteran, 

about to become an alumni of active service and become one of us, a 

veteran.

 I feel pretty good about the progress that is being made. I’ve conferred with Secretary Rumsfeld. We are working closely with the 

DOD on that. That, I think, is moving as it needs to. It is a priority.

 The CARES process is very commendable. It addressed a need 

there is out there to bring the Department of Veterans Affairs into 

the 21st Century. As you all know, most of the hospitals in stock 

were built to serve World War II returnees. The average age was 

over 50 years. The average age of a hospital in a civilian component 

today is about ten years. That is an issue. Another is some of our 

hospitals are not ideally located, given the demographic shifts of our 

country.

&$5(6DGGUHVVHGWKDWDQGWKHJHQHUDOLQHIÀFLHQFLHVWKDWDUHHQsured from this aged hospital and facility stock. We are now underway.

 Our job is implementation. I think that is going well. There are 

still about 18 sites I think that are still under review. There is a process that has commenced with getting a lot of community input that 

will result in what the disposition of those remaining 18 sites is.

 With tangible things happening, there is a new hospital planned 

in Las Vegas. There is a new hospital planned in Orlando. I mentioned in my opening statement a transaction that is occurring in 

Chicago, getting rid of redundant aged stock and resulting in a new 

tower there.

 This has to happen. It’s not without controversy, and in some cases 

pain.

 THE CHAIRMAN. Mr. Secretary, I recognize my light is on. My question is, is CARES competitive sourcing part of your plan? Then we 

will go to Mr. Evans.

 SECRETARY NICHOLSON. Yes, it is, Mr. Chairman. I would defer to 

my general counsel, Tim McClain, who has a deeper knowledge than 

I do.

THE CHAIRMAN. Thank you.

 MR. MCCLAIN. Mr. Chairman, thank you for the question. As you 

are aware, competitive sourcing is part of the President’s management agenda, and VA is doing competitive sourcing in all non-medical areas, medical facility areas.

 Currently, there is a law in Title 38 in Section 8110 that prevents 

VA from expending any funds to do any type of competitive sourcing 

for studies in medical centers or medical facilities.

 Obviously, that is our greatest area of purchasing. We have supported a legislative proposal simply that would allow us to expend 

appropriated funds doing studies in the medical facilities.

10
THE CHAIRMAN. You are going to send a proposal to us?

MR. MCCLAIN. Yes, sir.

THE CHAIRMAN. Thank you. Mr. Evans?

 MR. EVANS. Thank you, Mr. Chairman. The Government AccountDELOLW\ 2IÀFH KDVMXVW UHOHDVHG D UDWKHU GDPQLQJ UHSRUW DERXW WKH

9$·VIDLOXUHWRÀUPO\LPSOHPHQWDQ\RIWKHUHFRPPHQGDWLRQVRIWKH

Advisory Committee on Post-Traumatic Stress Disorder. It seems 

many of the recommendations are not scheduled to be implemented 

until after 2007.

 With this information, how can Congress have any assurance that 

the VA will be able to meet the needs of folks returning from Iraq and 

Afghanistan?

SECRETARY NICHOLSON. I am going to ask Dr. Perlin to respond, sir.

 DR. PERLIN. Good morning, Congressman Evans. The PTSD AdviVRU\&RPPLWWHHLVDQDGYLVRU\FRPPLWWHHWRWKH2IÀFHRIWKH8QGHU

Secretary on how we can best serve veterans. This GAO report identiÀHVDUHYLHZRISURJUHVVLQPHHWLQJUHFRPPHQGDWLRQVPDGHE\WKDW

Committee.

 It is not actually a report on the quality of PTSD care offered to 

America’s veterans. In fact, they do make mention in the report that 

the quality of care is world class.

 VA takes exception, because in fact, we would never be so presumptuous as to believe we can’t improve care, but the care that is being 

provided is really exceptional, and we have the capacity to meet the 

needs of veterans returning from Operations Iraqi Freedom and Enduring Freedom.

 With the support of Congress Public Law 108-170, $5 million is 

GLUHFWHGVSHFLÀFDOO\WRLQFUHDVHVXSSRUWIRU376'DQRWKHUPLOOLRQ

IRUVXEVWDQFHDEXVHGLVRUGHUVDQGDQRWKHUPLOOLRQVSHFLÀFDOO\IRU

outreach to Operation Iraqi Freedom veterans.

 This 2006 budget proposes an additional $100 million for mental 

health care.

 We are not alone in taking exception to this report. I would like 

permission to enter for the record responses from the two chairs of 

WKH376'$GYLVRU\&RPPLWWHHZKRGLVDJUHHZLWKWKHÀQGLQJV

 The actual mechanisms may lead to some interpretation, and we 

will be working with the Advisory Committee, as we have, in developing a robust mental health strategic plan that meets the remaining 

outstanding issues.

 We care for more than 200,000 patients now with PTSD. That

number increases by 20,000 annually. We have the resources and 

the skills. We will make improvements. We are adding additional 

resources. We want veterans to know and we want the employees 

who give passionate, dedicated, and effective care to know that this 

care is state-of-the-art.

 THE CHAIRMAN. Dr. Perlin, hearing no objection, your request shall 

11
be entered into the record.

DR. PERLIN. Thank you.

>7KHPDWHULDOWREHSURYLGHGZDVQRWDYDLODEOHDWWLPHRISULQWing.]

THE CHAIRMAN. Mr. Evans?

 MR. EVANS. I would like to ask about the enrollment fee and how 

that would work.

 SECRETARY NICHOLSON. Yes, sir. That is a good question. The way 

that it would work in the categories to whom it would apply, which 

are the lower categories, it would be for an annual enrollment fee 

for their healthcare, and it would be paid in the beginning of that 

12 month period, and then it would be good for that period and then 

renewed.

MR. EVANS. How would indigent veterans pay for that?

 SECRETARY NICHOLSON. It wouldn’t apply to indigent veterans, sir. 

It would apply only to the Category 7s and 8s who would be above the 

means testing in their locality. I believe administratively, it would 

work as it does in TRICARE for military retirees who are in the TRICARE system.

 They will probably be sent a bill and they pay the bill, like they 

would if they had a monthly insurance premium or something. It

would be an annual enrollment bill.

 MR. EVANS. I would like to submit my additional questions for the 

record.

 THE CHAIRMAN. Yes, Mr. Evans. All members may submit questions 

for the record to the Secretary.

>7KHPDWHULDOWREHSURYLGHGDSSHDUVRQS@

THE CHAIRMAN. Mr. Bilirakis, you are now recognized. Thank you, 

Mr. Evans.

MR. BILIRAKIS. Thank you, Mr. Chairman.

Yes, that’s working. Don’t charge me with the time, Mr. Chairman.

THE CHAIRMAN. I’ll restart the clock.

 MR. BILIRAKIS. I want to welcome you, Mr. Secretary, and to thank 

you for taking on this task. It’s a Herculean one, there’s no question 

about that. I imagine your years at the Vatican were probably soft 

compared to this.

 I want to welcome all of your staff, and of course, all of the panelists 

that come up after this panel.

,ZDQWWRPDNHDVWDWHPHQWEXWÀUVW,ZRXOGMXVWVD\0U6HFretary, that we are concerned about a lot of areas, but the seamless 

WUDQVLWLRQLVVXHLVYHU\VLJQLÀFDQW

 I’ve assumed the Chairmanship for the O&I Subcommittee. I met 

with Mr. Strickland and other members of that O&I Subcommittee,

and we are planning to travel around to see how things are really 

12
working out.

 I’m not asking a question regarding it, but I would say to you that is 

certainly in this day and age, with Iraq and Afghanistan particularly, 

it’s a very important area.

 Additionally, we passed the partial concurrent receipt repeal legisODWLRQ7KHUHZDVD9HWHUDQV·'LVDELOLW\%HQHÀWV&RPPLVVLRQWKDWLV

established by that law.

 I understand that the Commission is moving very, very slowly. 

We need to hear on that. I would appreciate your letting us know, 

giving us an update on what is taking place there. I realize that also 

involves DOD as well as the Veterans’ Administration. That is really 

one of my babies. I am very curious and very interested in knowing 

how that is going.

 The statement that I want to make, Mr. Secretary, pertains to 

Cooperation on veterans’ issues. I don’t know what the intent was in 

creating this Committee.

 Your role, of course, as Secretary, yes, you work for the President,

whoever the President might be. I would like to think that your role 

is primarily a role for the veterans. I like to think that our Committee is primarily a role for the veterans.

 We never get enough money to be able to satisfy all the veterans’ 

needs. It has never happened, regardless of who was President, or 

regardless of who is in charge of Congress.

 I used to sit over there for years and years when the other party 

was in charge and their Chairman used to complain about all the 

veterans moving into Florida every month, and how the amount of 

veterans’ spending increased. It was just a proportion of the spending increases that took place over the years. Virtually, in every area, 

we saw great spending increases, 120 percent, 130 percent increases 

over a period of time with veterans’ spending lagging behind, and 

only increasing like 40 to 50 percent.

 We are not going to solve even a portion of these problems if we 

don’t work together. What I am saying is we can sit up here and we 

can throw out the rhetoric and complain and things of that nature.

 We have to get together and we have to realize yes, politics involve 

compromise. We have to realize that is the case. You know my credentials as far as veterans are concerned.

 Either we are going to get something done that is good for the veterans or we are just going to have an awful lot of rhetoric and not really 

accomplish what is best for the veterans.

 I’m not admonishing anybody. I’ve talked to the Chairman, and 

I’ve agreed to be Vice-Chairman. I said, Mr. Chairman, I’m agreeing 

to be Vice-Chairman because I want to be a check and balance, and 

he said that’s why I’m asking you to serve as Vice-Chairman.

 I guess my time is up. I wanted to make that statement, Mr. Chairman. I just hope, we have the TV camera here and we are going to 

13
say certain things and it is going to play broad back home, but it’s 

the bottom line as to what we do for the veterans, and that’s what 

counts.

Thank you, Mr. Chairman.

>7KHVWDWHPHQWRI+RQ0LFKDHO%LOLUDNLVDSSHDUVRQS@

 THE CHAIRMAN. Thank you, Mr. Bilirakis. Mr. Michael Michaud of 

Maine, you are now recognized.

MR. MICHAUD. Thank you very much, Mr. Chairman.

0U6HFUHWDU\ÀUVWRIDOOFRQJUDWXODWLRQV

SECRETARY NICHOLSON. Thank you.

 MR. MICHAUD. As the President described, in May of 2003, there 

was a growing mismatch between the demands of VA and the resources we had made. Mr. Secretary, there is a debate going on in 

Congress about how best we can continue to provide for high quality 

care of veterans who are currently serving our country. This debate 

is occurring while we are now at war and as the numbers continue to 

grow. We have some disagreement as to whom has earned the right 

to receive the care for veterans.

 I believe caring for our veterans as Members of Congress, is part of 

our ongoing national security mission and therefore it should be our 

high priority. This budget must, as Abraham Lincoln stated, allow 

WKH9$WRIXOÀOOWKHPLVVLRQRIFDUHIRUKLPZKRVKDOOKDYHERUQHWKH

battle, and for his widow and his orphan. Veterans should not lack 

care. We should not abandon our long-term obligation. There are 

many demands on the VA; but that demand represents real veterans’ 

real needs across America.

 We have an obligation to care for those who put their lives on the 

line. This budget does not meet that obligation, in my opinion.

 I’m also very concerned about the long-term care provisions, and 

their effect on local veterans’ resources - the eligibility requirements 

for the state veterans’ homes so that the vast majority of our veterans 

who are not in homes should suddenly be ruled ineligible. I’m not 

sure that’s good policy.

 Mr. Secretary, I’m willing to work with you on particular problems. 

My question is that I understand a number of veterans’ integrated 

service networks may be experiencing budget shortfalls. First of all, 

have any of these veterans’ integrated service networks been afforded 

VXSSOHPHQWVIRUÀVFDO\HDU",VWKHUHDQ\LQGLFDWLRQWKDWDQ\RI

these networks are dealing with shortfalls by delaying service?

$QGÀQDOO\WKHÀVFDO¶EXGJHWDSSHDUVWRDVVXPHWKDW9$ZLOO

FDUU\RYHUDKDOIDELOOLRQGROODUVLQÀVFDO\HDU¶PRQH\$UHDQ\

of the veterans’ integrated service networks able to carry that money 

RYHURUZLOOWKDWEHDVKRUWIDOOLQÀVFDO\HDU¶"

 SECRETARY NICHOLSON. Thank you, sir. You raise some very important points.

14
 First, let me address the fact that - this is somewhat in response, 

also, to Congressman Bilirakis’ point of my role. I’m an advocate for 

veterans. When I was asked to do this job and considered it, that was 

one of the most appealing things to me. Because as I said, in my life, 

having the opportunity to serve in the Armed Services changed my 

life permanently to the good, and I think that has happened to millions and millions of Americans.

 Americans answer to call. In a perfect world, everybody that has 

put on that uniform and taken that oath, I think it would be great if 

we could provide them with a full panoply of goods and services.

 We are not in that world. We are in a more constrained world. We

have to make decisions and priorities and decide who it is that needs 

us the most. I think that is those veterans who have been disabled as 

a result of their service, either physically or mentally, or contracted 

a chronic condition as a result of that. Those who served us and are 

down on their luck and down and out, and those that maybe subsequently contracted some acute condition and have a special need.

 We take care of those people. Those are our priority. There are a 

lot of those. It’s expensive.

 That is the reason that we ask that we be able to continue to take 

care of them, and as a result, for those that are doing well and are 

healthy, not able to do as much as we probably would like.

/HWPHUHVSRQGWR\RXUVSHFLÀFTXHVWLRQDERXWGLYLVLRQV,QP\WZR

weeks, I have not been made aware of any division that has requested 

additional money for any purchases or is undergoing under deferral 

of purchases or maintenance. I will defer to the Acting Under Secretary for help and see if he would like to add anything to that.

Dr. Perlin?

 DR. PERLIN. Congressman, no VISN has submitted a request for 

additional funds. As you know, we have to operate to spread the resources through the year. At the end of the year, much equipment is 

purchased. I think you will see a pick up in purchasing of equipment 

at that time.

THE CHAIRMAN. I thank the gentleman for his contribution.

 MR. MICHAUD. Mr. Chairman, I’d like to provide additional questions for the Secretary, for the record.

 THE CHAIRMAN. Yes, indeed. If we have time, depending on the 

PHPEHUVZH FRXOGGR D UDSLGÀUHVHFRQG URXQGGHSHQGLQJ RQ WKH

Secretary’s time.

 I now yield to Mr. Henry Brown of South Carolina. Mr. Secretary, if 

you need an interpreter, we can bring back Mr. Hollings. Mr. Brown

is the Subcommittee Chairman on Health.

 MR. BROWN. Thank you, Mr. Chairman. Thank you, Mr. Secretary. Congratulations on the appointment. I certainly look forward 

to working with you, as we look outside the box and meet the health 

care needs for our veterans.

15
0\TXHVWLRQLVDERXWKHDOWKFDUHUHVRXUFHVFDULQJIRUWKHEHQHÀWRI

veterans. There is a great potential for VA and DOD and other medical entities to come together to share expensive equipment, especially 

services in facilities. This is seen between the Charleston Medical

Center and the Medical University of South Carolina.

 What progress can we expect to see in the next couple of years to 

facilitate direct sharing of goods and services and eliminate some of 

the barriers that have limited progress in such collaborations?

 SECRETARY NICHOLSON. I would start off by saying that is a very 

positive goal. In the context of sharing facilities, we are involved in 

the planning and siting of a new VA hospital in Denver, which is my 

home town. It is contemplated that DOD will have six to eight percent of the space in that new facility.

 As to the sharing of goods and services, I am going to defer to Dr.

Perlin and ask him to answer that.

 DR. PERLIN. Congressman Brown, we have enjoyed a close working 

relationship with both the Department of Defense as well as with the 

Medical University of South Carolina. I think we were able to help 

each other, as on the 75 year lease with the Medical University to 

transfer Dodghty Street, which I understand increased access and allowed them to commence with phase one of their hospital. It has also 

increased revenues by $1 million a day.

 That sets the stage for additional discussions about the sharing of 

high tech equipment, and subspecialty services. The Department of 

Defense was very enthusiastic about the design phase for the community-based outpatient clinic at the Naval Weapons Station.

 These are projects that we are very interested in because they improve the care of veterans and the care in the community.

 MR. BROWN. Thank you very much. One of the things we were 

concerned with is the facilities we have in the veterans’ hospitals are 

getting old. The Medical University is going through extensive rebuilding of facilities that are outdated.

)RUWKHEHQHÀWRIDOOWD[SD\HUVWKLVZRXOGEHDQLGHDORSSRUWXQLW\

to bring together some of those resources and establish a model similar to Colorado.

 Veterans in my district, and I guess we have over 70,000, with 

travel between the different health facilities, some up to 150 miles 

away.

,WKLQNZHKDYHWRÀQGDOWHUQDWLYHZD\VZKHWKHUYRXFKHUVPLJKW

be a solution or other revenue sharing sources.

Thank you very much.

 THE CHAIRMAN. I thank the gentleman for his contribution. Ms.

Stephanie Herseth of South Dakota is now recognized.

 MS. HERSETH. Thank you, Mr. Chairman and Mr. Evans, for your 

leadership on the Committee. Thank you, Mr. Secretary. Congratulations on your appointment. We appreciate your service to the coun16
try previously and now in your tenure with the VA, in serving the 

veterans, and the service of your colleagues as well.

 As you know, we have had an organizational change with the 

6XEFRPPLWWHH RQ %HQHÀWV DQG , ZLOO EH ZRUNLQJ FORVHO\ ZLWK 0U

Boozman from Arkansas, who chairs that Subcommittee. I would like 

to pose a couple of questions as it relates to economic opportunities 

VSHFLÀFDOO\LQWKHDUHDRIHGXFDWLRQHPSOR\PHQWDQGYRFDWLRQDOUHhabilitation. Then I will submit other questions as it relates in particular to the care that our outpatient clinics provide to rural veterans, which is common in South Dakota and many other districts and 

states represented here today on the Committee.

)LUVWLQWKHDUHDRIYHWHUDQV·HGXFDWLRQEHQHÀWVWKH3UHVLGHQW·V

budget request would eliminate 14 full time staff positions with the 

VA’s education service.

 As you know, education claims are expected to increase due to more 

veterans seeking to take advantage of the Montgomery G.I. Bill, as 

well as the new Chapter 1607, Guard and Reserve education program 

enacted last year as part of the National Defense Authorization Act

of 2005.

 I would like to know just how this request to eliminate these full 

WLPHSRVLWLRQVZRXOGEHMXVWLÀHG

 As I’m sure you are aware, the number of veterans applying for vocational rehabilitation and employment services increased dramatically over the last decade, roughly a 75 percent increase.

 Demand for this service will surely continue due to the many injuries suffered by our troops serving in Iraq and Afghanistan.

 Recognizing the great importance of providing quality employment services to our transitioning disabled Servicemembers, former 

Secretary Principi established a task force to review the vocational 

rehabilitation employment program, VR&E, from top to bottom.

 This VR&E task force issued a comprehensive report in May of 

last year. The report contained 102 recommendations to improve the 

VR&E program and reform it to be responsive to 20th Century needs 

of Service-connected disabled veterans.

 The task force recommended an additional 228 full time staff positions for the VR&E program, including 27 in headquarters, 112 in 

UHJLRQDORIÀFHVLQUHJLRQDORIÀFHVIRUFRQWUDFWLQJDQGSXUFKDVLQJ

and eight quality assurance staff.

 The President’s budget request doesn’t provide any resources consistent with the VA’s own VR&E task force report. Rather, the PresLGHQW·V EXGJHW VLPSO\ UHÁHFWV D UHGLVWULEXWLRQ RI PDQDJHPHQW DQG

support personnel.

 I would like it if you would also share your thoughts on meeting 

the report’s recommendations in light of this shortfall of necessary 

resources.

>7KHVWDWHPHQWRI+RQ6WHSKDQLH+HUVHWKDSSHDUVRQS@

17
 SECRETARY NICHOLSON. Congresswoman Herseth, those are important questions and an important area. I have spent some time, among 

many other things, that we have been doing the last two weeks, looking at education. I agree with you about its importance. I feel myself 

a product of what it can mean to you in our country.

 Because they are so important, I am going to ask Admiral Cooper 

to answer that with more learned experience and detail than I have 

at this point on that. If you would, Admiral.

 MR. COOPER. Yes, sir. In the education question that you asked, you 

will note that in 2005, we in fact had 888 people, which is the highest 

number we have had in education in recent years.

We took a very close look at this. We are trying to keep a balance. 

We had 888, which was an increase over previous years. Yes, we will 

drop back maybe 14 in 2006. I have to look at that.

We do not know - 

 MS. HERSETH,MXVWZDQWWRLQWHUMHFW,DSSUHFLDWHWKDWÁH[LELOLW\

and the fact that you keep an eye and notice that close to retirement, 

that we have that transition of people who can provide training for 

those other claims that may be coming after.

 MR. COOPER. Yes, ma’am. I am watching that extremely carefully. 

As I say, we have that number of people. As far as the 1607, we do 

not know what now what the effect is. I don’t think we will see much 

effect in 2005. Again, that is something I have to watch and make 

adjustments. The 1607 program just became effective last October.

 We are about to sign an MOU with DOD to make sure we carry 

that out properly, and we are working on how to make the payments 

in that particular program.

 We are watching that very carefully. I have very good leadership 

in education. I think I will have enough warning if I need to do other 

things, but I think right now we are proceeding properly.

 The second question you had on vocational rehabilitation, we set 

up this Task Force because we were very concerned about not only 

the leadership but the execution of our vocational rehabilitation program, primarily because I think it had lost focus and was not focusing 

on employment. It was focusing more on training.

 We have replaced the leadership pretty much across the board. We

have also focused, as the study stated, on employment. As a result, 

ZHDUHVHWWLQJXSÀYHGLIIHUHQWWUDFNVIRUDYHWHUDQWRJDLQHPSOR\-

ment, ranging from somebody coming back and getting re-employed 

by the previous employer through a full college education to independent living.

 We have set that up at four test sites. We are continuing to run 

the tests for three or four more months and then we will expand that 

DFURVVWKHERDUGWRDOORIRXUUHJLRQDORIÀFHV

 That is the main part of the recommendations. There were 102. Of

18
the 102, there are probably 20 or so we will not implement. However,

34 have been implemented today, and I expect in excess of 50 percent 

to be implemented by the end of this year.

 THE CHAIRMAN. I thank the gentlelady for her questions. To my colleagues, I have received word that we are going to have votes around 

11:30. If you look at the time, if we try to restrict ourselves within 

WKHÀYHPLQXWHVZHPLJKWEHDEOHWRGRWKLV0U6HFUHWDU\ZLWKRXW

your having to wait while we go vote and come back. We will see how 

this plays itself out.

Mr. Jeb Bradley of New Hampshire, you are now recognized.

 MR. BRADLEY. Thank you very much, Mr. Chairman. I appreciate 

your leadership and that of Mr. Evans and Mr. Secretary, welcome to 

this Committee. It is a pleasure to meet you.

 I would like to turn to the overall health care item in the budget, 

which is in the President’s budget about $30.7 billion. Depending

on how you calculate it, I think you have estimated it is about a 2.5 

percent increase.

0\TXHVWLRQWR\RXVLULVWKDWJHQHUDOO\PHGLFDOLQÁDWLRQLVUXQning at a much higher rate. It could be as high as three times that, 

number one.

1XPEHUWZR\RXKDYHKDGVWDIIHUVWKDWKDYHWHVWLÀHGEHIRUH&RQgress in the past that in order to maintain the services that veterans 

have come to expect, it would generally take about a 13 to 14 percent 

increase.

 Given those numbers and the budget perspective that we see before us in this presentation, how are you going to be able to maintain 

those commitments?

SECRETARY NICHOLSON. That’s a good question, Congressman Bradley, and one we have discussed and I discussed with my team here.

7KHUHDUHVRPHPDMRUHIÀFLHQFLHVWKDWKDYHEHHQHQDFWHG LQRXU

delivery system such that it brings us down to be quite a bit below in 

LQÁDWLRQZKDWLWLVLQJHQHUDOLQWKHFLYLOLDQFRPSRQHQW

We can do this with this number, given our demands.

 I am going to ask Dr. Perlin if he would like to add anything to that. 

He’s the guy that has crunched these numbers the most.

 DR. PERLIN. Thank you, Congressman, for the question. Your

question really asks if we have the resources to do the job. In consideration of this budget with the policy proposals that it contains, we 

have the resources to do this job.

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represented in the Wall Street Journal and USA Today. It’s ability 

to allow us to leverage our scale and the Federal supply schedules allows us to meet the needs with the budget.

MR. BRADLEY. Thank you very much for that answer.

19
 My second question is that it is estimated that there will be as 

many as 430,000 veterans who require long term care services from 

the VA over the next decade, but this budget calls for a reduction in 

500 beds.

 Once again, how do you square that with being able to complete the 

mission? Thank you.

 SECRETARY NICHOLSON. If you look back, Congressman, you will see 

that number has really drastically gone down. The number of people 

in beds and extended care to the model of taking care of these people 

now and allowing them to stay in their own habitat, their own environment, closer to their families, their spouses, if you will, their own 

homes.

 That has been done and I think has been done effectively through 

the use of telemedicine, through the use of outpatient based clinical 

care, going out to them with both health care providers and social 

workers. The combination of that has brought a large reduction.

 That trend is continuing. It’s working. Of course, there are those 

for whom that doesn’t work. They do need to be in a bed.

Dr. Perlin, would you like to add anything?

 DR. PERLIN. Thank you. Ten years ago, we would have said the 

population is aging, we need more hospital beds. But medicine has 

moved from the hospital to the clinic. A decade ahead of us, care 

moves more from the clinic to the home.

 Our goal is to provide care in the least restrictive environment and 

the most humane way possible.

 The technology that the Secretary alluded to, such as the use of 

telemedicine, allows patients to successfully age in place and have 

their needs met.

This budget actually allows us to substantially increase by 79 percent the number of patients cared for in non-institutional settings.

 We have increased the resources by nearly $60 million for non-institutional care, and we have seen a growth in our care coordination, 

ZKLFK VSHFLÀFDOO\ LV WKH DSSOLFDWLRQ RI WKRVH WHFKQRORJLHV WR DOORZ

those veterans, veterans with chronic illness and older veterans to 

successfully age in place, maintaining social, community and even 

spousal relationships.

 MR. BTRADLEY. Thank you. Mr. Chairman, I yield back the balance 

of my time.

 THE CHAIRMAN. Good try. Mr. Strickland of Ohio is now recognized.

 MR. STRICKLAND. Thank you, Mr. Chairman. Mr. Secretary, welcome.

 Mr. Secretary, in the early 1940s in World War II, this country subjected many of our veterans to mustard gas, nerve agents, and they 

didn’t know what had been done to them. They were sworn to secrecy. 

They weren’t followed up with afterwards. Many of them now, if they 

20
are alive, are in their 80s.

 Earlier this month, I received a letter requesting an update from 

VA about their contacting these World War II veterans to give them 

medical exams, provide them with assistance if they needed it.

 In the early 1990s, the VA promised they would make every effort 

to contact these individuals and to see that they got the help they 

needed. The only thing the VA did to my understanding is to put 

some ads in a magazine, they put out no letters, made no phone calls, 

and no effort of active outreach.

 As the new Secretary, I’m asking you, sir, will you do everything 

SRVVLEOH WRUHDFK RXW WRÀQG WKHVH LQGLYLGXDOVDQG WRSURYLGH WKHP

with assistance that I believe this country should provide to them?

 SECRETARY NICHOLSON7KDW·VDTXHVWLRQWKDWLVÀUVWLPSUHVVLRQIRU

me, Mr. Strickland. I will assure you that I will take it on board and 

will look at it and get back to you.

 I don’t fully know the extent of that. I will get back with you after 

looking into it.

 MR. STRICKLAND. I appreciate that, sir. Thank you so much. I did 

send you a letter earlier this month. Do you have a comment, sir?

 MR. COOPER. Yes, Mr. Strickland. If I could address that for a second. We in fact are working actively with DOD right now. We have 

received 4,000 names. We are in the process of checking our records, 

and in the next two to three weeks, we will get letters out to everyone 

for whom we have current addresses.

 We are then simultaneously contacting IRS and Social Security to 

get whatever other addresses we can, and for those we cannot get, we 

ZLOOJRWRDFLYLOLDQJURXSWRWU\WRÀQGDGGUHVVHV

 We are in fact in the process of implementing this plan. We are 

giving veterans a number to call. We are also referring them to VA

hospitals for medical care and so on.

 MR. STRICKLAND. I thank you for your response and I thank you, Mr.

Secretary, for your response as well.

 Mr. Secretary, there has been discussion here of management efÀFLHQFLHVDVDZD\RIVDYLQJPRQH\DQGSHUKDSVFDOOLQJIRUDOHVVHU

appropriation for health care. You have indicated, I think, you are 

DQWLFLSDWLQJPDQDJHPHQWHIÀFLHQFLHVRIWZRSHUFHQWDSSUR[LPDWHO\

or $1.8 billion. It seems like a lot of money.

 If these are not achieved, and if the co-payments and the user fee 

are rejected by the Congress, as I hope they will be, it seems to me 

that the VA is going to fall far short of what is needed to provide for 

VA health care.

,QÀVFDO\HDUWKH9$HVWLPDWHGPDQDJHPHQWVDYLQJVRI

million to partially offset the cost of VA health care. That estimate 

was accepted at face value, was based on implementation of vigorous 

competitive sourcing, increasing employment productivity, shifting 

from patient to outpatient care, reducing travel, maintenance and 

21
repair services and supplies.

 That was for 2004. We are now in 2005. Is the VA able to docuPHQWIRUXVWKDWWKRVHPDQDJHPHQWHIÀFLHQFLHVWKDWZHUHDQWLFLSDWHG

for that year were achieved? Should we not do that before we go 

DKHDG DQG DQWLFLSDWH IXUWKHUPDQDJHPHQW HIÀFLHQFLHV IRU WKH QH[W

ÀVFDO\HDU"

 SECRETARY NICHOLSON. Congressman, I’m going to respond based 

on what my understanding is. In the last two budget cycles, we have 

PHWRXUH[SHFWDWLRQVRQHIÀFLHQFLHVDQGVDYLQJVZKLFKJLYHVXVWKH

FRQÀGHQFHWKDWZHFDQPHHWWKRVHZHDUHSURMHFWLQJIRU

 MR. STRICKLAND. Excuse me for interrupting, sir. Time is very short. 

Can you or can Dr. Perlin provide us with documentation as to where 

DQGKRZWKRVHHIÀFLHQFLHVZHUHPHWDQGFDQZHDOVREHSURYLGHGZLWK

WKRVH LQVWDQFHVZKHUH WKH HIÀFLHQFLHVZHUHPD\EH QRWPHW IRU H[-

ample, the VA lost $250 million, according to a GAO report on the 

Core FLS project.

 Did you count the failures as well as the successes when you calFXODWHGZKHWKHURUQRWWKHPDQDJHPHQWHIÀFLHQFLHVWKDWZHUHDQWLFLpated actually were achieved?

 SECRETARY NICHOLSON. I’ll give you a very quick answer and tell you 

our information at the VA is your information. We will look into that 

and come back to you with our answer. I don’t think we can answer 

that on a line item basis here today.

:HKDYHKDGVLJQLÀFDQWVDYLQJV:HKDYHKDGKLFFXSV<RXPHQtioned one of them. I feel pretty good about where we are headed and 

WKHHIÀFLHQFLHVZHDUHJRLQJWRDFKLHYHWKURXJKVWDQGDUGL]DWLRQDQG

competitive purchasing, particularly in the pharmaceutical area, and 

VRPHRWKHUHIÀFLHQFLHVZHDUHORRNLQJDWLQFOXGLQJLQRXU,7DUHD

As to the details, we will have to get back to you.

 THE CHAIRMAN. Mr. Strickland, thank you for your contribution. 

Please be responsive to Mr. Strickland’s questions, I think it is very 

appropriate. He is asking for how you came up with your budget. It is 

really an appropriate question. Please be responsive to the member.

SECRETARY NICHOLSON. Yes.

THE CHAIRMAN. Mr. Turner of Ohio, you are now recognized.

 MR. TURNER. Thank you, Mr. Chairman. Thank you, Mr. Secretary. 

0RVWRIRXUSHUVSHFWLYHVRQDQDWLRQDOEXGJHWFDQEHGHÀQHGLQSDUW

by our local experience. I want to talk to you for a moment about a 

local issue and ask the question as to the national policy, and I am 

going to return to the issue of nursing home beds.

 Previously when you were answering, I understand the concepts of 

\RXUVKLIWLQGHÀQLQJWKHQHHGIRUORQJWHUPFDUH,XQGHUVWDQGWKDW

with the changes that are occurring in the way services are provided, 

WKHLPSRUWDQFHRIDJHLQSODFHDQGWKHEHQHÀWVÀQDQFLDOO\EXWDOVR

WKHEHQHÀWVLWKDVWRWKHSDWLHQWVWKHPVHOYHV

 I tend to for as long as possible not shift an individual into institu22
tional care, looking to non-institutional care.

 I’m also familiar with the policies that permit the VA for both access buildings, to lease them out with partner organizations, and also 

the provisions that allow the VA to look to the nursing home area, 

to look at community assets and resources as opposed to expanding 

veterans’ VA center resources.

 I’m a little concerned because last year in my community we have 

a nursing home facility that had been renovated, and is a quality facility by everyone’s standards. It was providing quality services. An

unexpected announcement was sent to all the residents that it was 

going to be closed and they were going to be returned home or sent 

out to a community facility as part of the policy of looking to community assets.

 Obviously, my understanding was that the community use of resources was to prevent expansion but not to be used for closing a 

facility.

 Mr. Secretary, your predecessor in October came to our community 

and reversed that decision and allowed the nursing facility to remain 

open and the patients could stay there.

 In looking to the large population that you have that is coming and 

still looking at the alternatives of care that you are going to provide 

so that you don’t have the same stream percentage that would end up 

in institutional care, it still seems to me that it is an important role 

for the VA to play in having nursing home facilities.

 The reports I received were not only just quality of care but also 

the comradery, the spirit that occurs within a veterans’ nursing facility that contributes to the overall success of long term care for the 

patients.

 In looking at the policy and the issue of eliminating your average 

daily census issues and reductions in beds, I want to make certain 

that you are not looking to a policy of actually the VA center receiving in its nursing care facilities to get out of the business and to quit 

providing that service.

 SECRETARY NICHOLSON. It is an important question, Congressman. 

Thank you. I can assure you that the VA is not looking at getting out 

of that business. There are those that really need it and are counting 

on it and need to be there.

 There are categorical priorities of those who need it the most, and 

that is who we need to prioritize so we can serve.

 I am going to ask Dr. Perlin if he would like to detail that a little 

further as to those people who need that care and that we will be 

there for them.

 DR. PERLIN. Mr. Congressman, as the Secretary has said, we are not 

looking to get out of the nursing home business. However, our care 

ZLOOEHGHOLYHUHGÀUVWDQGIRUHPRVWWRWKRVHPRVWKLJKO\VHUYLFHFRQnected veterans in Priority Groups one through three, and to those 

23
YHWHUDQVZKR UHDOO\KDYHGLIÀFXOW\ LQKDYLQJ WKHLUQHHGVPHW HOVHwhere, such as those with special needs like ventilator dependence. 

We will be there for those veterans as well.

 Those veterans who are coming out of the hospital and need acute 

rehabilitation to get back to normal living, we will be there for those 

veterans.

 Those veterans who require hospice care, we will be there for those 

veterans. Those veterans whose families need respite from caring for 

those veterans 24 hours a day, we will be there for those veterans as 

well.

 The commitments, as I’ve detailed, will be there for those veterans 

whose needs can’t be met appropriately in the community environment with new technologies.

 MR. TURNER. Since I have just a moment, since you gave that list, 

again, my question concerns your actually being the direct provider 

of the nursing home services versus just looking at scattering the 

services out in the community.

 Will you have a nursing home facility that is of high quality and 

providing quality services?

 DR. PERLIN. Yes, we will continue to have the nursing homes at our 

VA facilities, absolutely.

 THE CHAIRMAN. The gentleman’s time has expired. Ms. Berkley to 

inquire.

 MS. BERKLEY. Thank you very much, Mr. Chairman, and thank you, 

Mr. Evans, for your leadership. Welcome, Secretary Nicholson. I am 

looking forward to working with you. I had a wonderful relationship 

with your predecessor. He was responsive and accessible.

 Please take this as an invitation to visit us in Nevada. On behalf 

of myself and the veterans that I represent, I want to thank you for 

including in the 2006 budget funding for a full service VA medical 

center that we desperately need. The medical center will have a long 

term care facility, a hospital, and an outpatient clinic, none of which 

we have now. I am very excited about that.

 However, in the 2006 budget, there is $199 million that has been 

requested, and that is $27 million short of the projections on what 

it will cost in order to build this facility. I understand the $27 million will be requested in the 2007 budget, and construction will be 

FRPSOHWHGLQ&DQ\RXFRQÀUPWKLV"$QGZKHQGR\RXH[SHFW

us to break ground? And when do you expect these facilities to be 

completed?

 SECRETARY NICHOLSON. Thank you, Congresswoman. What I can’t 

tell you - and if someone else at the table can, I would like them to do 

so - is when we anticipate breaking ground.

 DR. PERLIN. I will have to get back to you with the exact information.

 MS. BERKLEY. I have been a buffer to protect my constituents. I

24
think it is important to get this information.

 Let me just say very, very quickly, because I know the time is short, 

what my veterans are saying. I have heard an awful lot from my veterans about the President’s State of the Union address.

 There is particular concern about the $250 user fee and the co-pay. 

0RVWRIP\YHWHUDQVDUHVHQLRUVRQÀ[HGLQFRPHVDQGWKLVLVDORWRI

money. I have never heard from a veteran from anywhere - Vietnam, 

Korea - that hasn’t said the same thing about when they enlisted, 

what they were promised from the person that enlisted them.

 There is no contradiction here that they were promised health care 

EHQHÀWVIRUOLIH$JDLQ,·YHQHYHUKHDUGDQ\RQHVD\WKDWLVQRWZKDW

was said. They had an expectation of this. I just wanted to put that 

in your mind, that this is not going over particularly well.

 The President’s budget provides $762 million less than needed to 

maintain current services for veterans’ health care. This turns into 

a loss of almost 3,000 nurses nationwide. I have a huge and critical 

nursing shortage in southern Nevada. The VA has done an extremely good job in recruiting and retaining our nurses, but if there is a cut, 

we are going to lose them and they are going to go back to the numbers that we used to have, and instead of having a vacancy rate of 2.5 

percent, which is quite good, that is going to go up dramatically.

 The budget also has a cut of $350 million for veterans’ nursing 

homes. I can’t remember who brought that up in their line of questioning. I have no nursing facilities for veterans, as you know. They

are going to be built, and hopefully, they are going to be done by 

2009.

 I do have a state home, but even the executive director of the NeYDGD2IÀFHRI9HWHUDQV·6HUYLFHVVDLGWKH3UHVLGHQW·VEXGJHW OLPLWV

nursing home grants to those severely injured in the line of duty.

 I don’t have any other facilities to send my veterans to. We have a 

critical nursing home shortage in southern Nevada. We can’t move 

our veterans anyplace else. I have tremendous concerns about that.

 I hope that you will take a good look at the proposed budget and 

help the President see that some of these cuts are inconsequential in 

the scheme of things, and I know you are dealing with a huge budget 

and have extraordinary needs and limited resources. These cuts are 

going to do a tremendous disservice to our veterans and do damage.

 On mental health issues, a large number of my veterans, particularly from the Vietnam era, need to be provided mental health 

counseling, and particularly those coming back from Iraq. I’ve seen 

it happen with my Vietnam era veterans that have suffered tremendously because of the lack of mental health care. It would be inexcusable not to provide these services and adequate funding needed to do 

that.

Thank you very much.

SECRETARY NICHOLSON. Thank you.

25
 THE CHAIRMAN. Ms. Berkley, we gave you great latitude, because 

Mr. Bilirakis and I have talked several times before about the conFHUQVWKDW\RXKDYHLQ1HYDGDWKLVLQÁX[RISRSXODWLRQLVVRPHWKLQJ

that no one else is experiencing around the country at the level that 

you are. We want to be very responsive.

Mr. Filner, you are now recognized.

 MR. FILNER. Thank you, Mr. Chairman. Welcome, Mr. Secretary. 

Before I start, I want to make sure we have a recording of Dr. Perlin’s

advocacy of bulk purchases and how great that was for our nation. 

You should tell the President that so we could get a Medicare bill that 

says the exact same thing, which we are prohibited to do by law right 

now. I hope you will go to the President immediately!

 Mr. Secretary, welcome. You said you were an advocate for veterans. In answer to the same question later on, you said basically we 

are “going with the VA we have rather than the one we want,” paraphrasing the Secretary of Defense.

 I see those two statements to be in contradiction with each other. 

I don’t think an advocate would give us a budget that basically says 

WKDWLWLVWKHYHWHUDQVZKRDUHJRLQJWRKDYHWRSD\IRUWKHGHÀFLWWKDW

is created by the same administration that is proposing the budget.

 It is the veterans who are going to have to deal with that. Mr.

Bradley brought up the point, and I am going to drive it home clearly. 

It is the VA that said a year or so ago that it may take a 12 to 14 percent annual increase just to keep up with the services that you have, 

and even more, I think, is needed with not only the people coming 

back but what we have learned about Hepatitis C, PTSD, et cetera.

 Our needs continue to increase, and yet you come here with a budget - if you don’t get your legislative proposals for the enrollment fee 

and the co-payments – that proposes less than one-half of 1 percent 

increase in the health budget for the veterans of this nation.

 That is not advocacy! We have an administration that says support 

our troops, support our troops, and when they come home, they are 

JRLQJWRÀQGD9$WKDWLVQRWDGHTXDWHWRWKHQHHGVWKH\KDYH

 The President presents to us a Social Security proposal that is estimated to be trillions of dollars, gives tax cuts with a couple of trillion 

to the wealthy, and yet when it comes to the veterans, says “I’m sorry, 

we have to save here,” I say that if the choice is giving more money to 

people who have it rather than what was promised to veterans, I am 

going to choose the veterans every time.

 You also said “your information is our information.” What did you 

ask OMB for in your budget request?

SECRETARY NICHOLSON. Congressman, I was not involved in - 

 MR. FILNER. Come on, Mr. Secretary. Tell me what the previous 

Secretary asked for.

SECRETARY NICHOLSON. I don’t know.

 MR. FILNER. You don’t know what your own department asked from 

26
OMB for our veterans? You say you are an advocate. How do you not 

know that?

SECRETARY NICHOLSON. This budget was a year-long - 

 MR. FILNER. Don’t play games, Mr. Secretary. You can just ask 

somebody. Ask any one of these people.

 SECRETARY NICHOLSON. Mr. Cooper, do you know what was asked 

for from OMB?

MR. COOPER. If I could, Congressman - 

MR. FILNER. Admiral Cooper, do you know?

 THE CHAIRMAN. Mr. Filner, I think it would be productive for us not 

to quibble with the Secretary.

 MR. FILNER. I asked a question after he said your information is our 

information. He doesn’t know what the request from his own departPHQWZDVWRWKH%XGJHW2IÀFH7KDWLVLQH[FXVDEOH

 SECRETARY NICHOLSON. When I was answering Mr. Strickland’s

question, things that are developed, policies, and accounting records 

and things for the public domain are certainly yours and would be 

made available to you on your request.

 MR. FILNER. Are you familiar, in your two weeks as Secretary, with 

the Independent Budget?

SECRETARY NICHOLSON. Yes, sir.

 MR. FILNER. I would read it carefully. Most of us take this as a 

Bible. It is put together by people who understand the system. They

are not asking for the moon. They are not asking just for the asking. 

It is a professional and very conservative look at the VA, what it 

takes to save the veterans.

 They have asked, if you take out your legislative proposals, for 

$3.4 billion more than your budget. $3.4 billion. That is the highest 

ÀJXUHVLQFH,·YHEHHQRQWKH&RPPLWWHHRIWKHGLIIHUHQFHEHWZHHQDQ

administration budget and an Independent Budget.

 If you don’t get your legislative proposals -- the enrollment fee, 

which I think is disgraceful. You have to pay, after you have been a 

veteran, to use our system? Come on. If you are not going to get that, 

I don’t understand how you are going to meet the needs of our veterDQVZLWKWKDWELOOLRQGHÀFLWMXVWIURPDYHU\FRQVHUYDWLYHORRN

at what the VA has to do. I don’t know how you are going to do it. I

think you better advocate for more money. I certainly would advocate to get you more money. If you do, I hope you will use it wisely.

 Certainly, this Congressman and most of the people on this side are 

not going to vote for a budget that is not worthy of our veterans.

 THE CHAIRMAN. I thank the gentleman for his contribution. I look to 

Mr. Boozman of Arkansas, the Subcommittee Chairman on Economic

Opportunity.

 MR. BOOZMAN. Thank you. I don’t have a question. I just have a 

comment. Again, I welcome you here and look forward to working 

with you and your staff as we have in the past.

27
 As Chairman of the Economic Opportunity Subcommittee, again, 

on the seamless transition, it is very important. We are going to 

make sure that the VA, VETS, National Guard, DOD, all work together as these guys come home and again assure that we truly do 

have a seamless transition.

 Again, thank you for being here and I look forward to working with 

you.

SECRETARY NICHOLSON. Thank you, sir.

THE CHAIRMAN. Ms. Corrine Brown of Florida.

MS. BROWN. Thank you, Mr. Chairman and Mr. Secretary.

7KHÀUVW3UHVLGHQWRIWKH8QLWHG6WDWHV*HRUJH:DVKLQJWRQVDLG

the rate at which our young people are likely to serve in any war, 

QRPDWWHUKRZMXVWLÀDEOHVKRXOGEHGLUHFWO\SURSRUWLRQDWHDVWRKRZ

they perceive the veterans of earlier wars are treated and appreciated by their country.

 As far as I am concerned, this budget should be dead on arrival. 

The President and the administration proposed to the Congress and 

we decide priorities. You can say something about a country, about 

priorities, by the budget, what we hold as important.

 We practice reverse Robin Hood, robbing from the poor and working people to give tax breaks. These veterans have paid their dues.

 I live in Florida. Most of my case work are veterans. They can’t 

get into the system. They have long waiting lists. There is some 

problem. One-third of the veterans are in the streets, one-third of the 

homeless people on the streets are veterans because they are not getting the proper health care or they have fallen through the system.

 How do we propose - most of us in Congress think nothing of a copayment of $10 to $15, but our veterans cannot afford it. We are trying to fund a department to increase fees. That is unacceptable.

 I have been on conferences with the House and the Senate. When

we get in the closed door, we can’t afford it. That is unacceptable. 

How are these veterans going to afford these additional fees is what 

I want to know.

 SECRETARY NICHOLSON. Thank you, Congresswoman, particularly 

for the obvious concern you have for veterans. Let me respond in a 

couple of ways.

 One is to point out to you that this Administration brought about 

with the help of the Congress almost a 50 percent increase in health 

FDUHEHQHÀWVDQGSHQVLRQDQGFRPSHQVDWLRQEHQHÀWVVLQFHLWKDVEHHQ

here.

 This year does represent a pause, if you will, in that incline that 

you have seen.

 MS. BROWN. Mr. Secretary, did you know that the increase had gone 

up to 130 percent, the increase in needs?

 SECRETARY NICHOLSON. We are serving a million more veterans than 

ZHZHUHLQÀVFDO

28
 MS. BROWN. The veterans, the ones I’m talking about are the ones 

that are older, they don’t have the income. They have a lot of needs. 

They are very frustrated. When I talk to them, they are almost in 

tears because they feel in their prime time, they gave their best to 

this country.

 The question is what are we going to give back to them. Maybe I’m

the only one in this body that has these kinds of veterans. They move 

to Florida. They have high expectations. We are not meeting their 

QHHGV,W·VDFRQVWDQWÀJKW

 We want to close some of the sites. It is just one thing after another. The veterans are not getting what they need from the system. 

We have the money. It’s just the matter of priorities. They are not 

priorities with this Administration. I hope to God it will be a priority 

with this Congress.

(YHU\\HDUZHKDYHWKLVÀJKW/HWPHWHOO\RX6HFUHWDU\-HVVH

Brown. I dearly loved that man. He fought the administration for 

veterans. He didn’t care who the President was. He was an advocate 

for the veterans. That’s why I’m on this Committee and have been 

RQWKLV&RPPLWWHHIRU\HDUV,FDUHDERXWWKHP,·PJRLQJWRÀJKW

for them.

 As far as I’m concerned, this budget is dead on arrival. I yield back 

the balance of my time.

>7KHVWDWHPHQWRI+RQ&RUULQH%URZQDSSHDUVRQS@

 THE CHAIRMAN. I thank the gentlewoman. I will yield one minute 

IRUDUDSLGÀUHIRUDQ\ERG\ZKRPD\KDYHIROORZXS0U0LFKDXG

you are now recognized for one minute.

 MR. MICHAUD. Thank you, Mr. Chairman. Togus Hospital in Maine

actually has reported a shortfall. They have been told that the delivery of the MRI machine has been postponed, which actually could 

save a lot of money. I’m sure if that happened at the Togus Hospital

in Maine, it is happening elsewhere.

 I would just ask that VA please look at that. I know that is a big 

problem.

SECRETARY NICHOLSON. Thank you. We will look into that.

MS. BROWN. Mr. Chairman?

THE CHAIRMAN. Ms. Brown.

 MS. BROWN. I just want to make sure that the questions that I have 

-

 THE CHAIRMAN. Hold it just a second. Mr. Michaud, do you yield 

back?

MR. MICHAUD. I yield back.

THE CHAIRMAN. Will the gentlewoman yield for a moment?

MS. BROWN. Yes.

THE CHAIRMAN. Mr. Bilirakis?

 MR. BILIRAKIS. The Veterans Administration has now and has al29
ways had input into the formation of the President’s budget, yes or 

no?

SECRETARY NICHOLSON. I can tell you it has in this budget, yes, sir.

MR. BILIRAKIS. Thank you, Mr. Chairman.

 MS. BROWN. I move that my questions will be made a part of the 

record. I want to know that my questions are going to be answered.

 THE CHAIRMAN. We will ask the Secretary, just as we did with Mr.

Strickland, that for any questions submitted by any member of this 

Committee, the answers shall be responsive. If they are not, you may 

resubmit.

 SECRETARY NICHOLSON. Indeed. Let me say I welcome the oversight 

responsibilities that you have for this agency. It is a very big agency, 

there are 235,000 people throughout the country. From what I’ve

seen so far, they are fantastic.

 Whenever someone is performing an oversight or an audit, I would 

welcome to hear about that. We want to do the best job we can.

MS. BROWN. Thank you.

THE CHAIRMAN. Mr. Filner?

MR. FILNER. Thank you, Mr. Chairman.

0U6HFUHWDU\\RXDUHLQDGLIÀFXOWSRVLWLRQDV\RXDUHUHSUHVHQWLQJ

the administration as Secretary in presenting the administration’s 

budget. You also understand that we have looked at your predecessors as advocates for veterans.

 I guess I just wish that in your testimony, you were more honest; 

\RXDUHQRWJRLQJWRPDNHWKHHIÀFLHQFLHVDQG\RXNQRZLW<RXDUH

not going to get the legislative proposals, and you know it. You going 

to have less money than you know you need.

 Just state that. What would you like to do? You are the professionals. Get across what you need to do the job for the people who have 

given us this nation. You know these things in this budget are not 

going to happen. It’s a charade.

Let’s get to realities.

SECRETARY NICHOLSON. Could I respond, Mr. Chairman?

 MR. FILNER. I would like to submit my questions, too, since everybody else is.

 SECRETARY NICHOLSON. I would like, if I could, just to respond in one 

way to your point, which I appreciate. In the interest of just making 

sure that people understand what we are talking about in this realm 

of the enrollment fee and a co-payment, we have prepared a little 

chart that I would like to submit for the record, if I could, Mr. Chairman.

THE CHAIRMAN. It will be entered without objection.

>7KHSURYLGHGPDWHULDODSSHDUVRQS@

 SECRETARY NICHOLSON. We will distribute it to the members. It is 

showing the medical care regime for a person who served 20 years in 

30
the Service. The example they have used would be a sergeant E-7

with 20 years of service that is receiving TRICARE under the DOD

SURJUDPZKLFK,WKLQN\RXZLOOÀQGLVDOPRVWXQLYHUVDOO\DFFODLPHG

by the people that are using it.

 Those are the people that when they took the oath and the recruiter 

told them if you serve a career in this, you will be given health care 

for life. Those are the people to whom that was told, I think, and to 

whom it is indeed owed. They now have, because of you, this TRICARE system, which everybody I’ve talked to really likes it.

 If you look at this, you will see this is somebody who served 20 

years who is paying an enrollment fee for services and certain co-pays 

for services.

 The proposal that we have in this budget, Mr. Filner and members, 

is for those people that in a means test of the local income levels are 

able to pay this. It is not for the poor veteran.

MR. FILNER. Do you know what that number is?

SECRETARY NICHOLSON. It varies.

MR. FILNER. It is around $25,000.

SECRETARY NICHOLSON. I think in San Francisco, it is about

$71,000.

 MR. FILNER. People earning as little as $25,000 could be in this category. I would not call them all that able to contribute to the medical 

care they were promised.

THE CHAIRMAN,DSSUHFLDWHWKHJHQWOHPDQ·VVORZÀUH

 MR. FILNER. Mr. Chairman, could I also introduce into the record 

the budget of 2006, the Independent Budget and the differences? I

would like to introduce that into the record, also.

THE CHAIRMAN. Without objection.

>7KHSURYLGHGPDWHULDODSSHDUVRQSDQGS@

MS. BROWN. Mr. Chairman, one other point, please.

THE CHAIRMAN. Yes, ma’am.

 MS. BROWN. The Secretary just mentioned this schedule with TRICARE, which I think is a very good program, for people who have 

served 20 years or more.

 We need to keep in mind that some people go into the Service that 

don’t even live 20 years, particularly in time of war.

 The question is we should not pit one veteran against another. 

What we need to do, in this country, we don’t have proper health care. 

That’s a problem. Those people who have contributed to this country 

and when they need help and assistance, the question is whether or 

not they are going to be a priority and whether or not we are going to 

be there for them. That’s the question. I don’t know the answer.

Thank you.

THE CHAIRMAN. I thank Ms. Brown for her contribution.

 Mr. Secretary, I want to thank you for coming. I want to thank you 

31
for bringing your staff on the formulation of the President’s budget. 

I also thank you for telling your story and where you came from, a 

town of 99.

 I grew up in a town of approximately 200. I took my oath as a cadet 

at the Citadel, but I remember my commissioning oath at Fort Bragg,

given to me by Lieutenant Colonel O’Johnson.

 Why do members of the military remember their oath? They remember it vividly because they said they will give their life to defend 

the Constitution. It is an oath which they embrace and it is implanted 

in their minds. We are then inculcated with what are called values. 

We refer to them as military values. I read them with regard to all 

the branches of our Services.

 It is the bond which we all share. It is the dimension by which we 

see the world. It is our common understanding and it is our bond.

 With regard to the prioritizations of care, Congress, when we did 

the eligibility reform, set out the priorities of care. As we set forth 

those priorities in categories one through six, it is the responsibility, 

I believe, of the nation to care for the disabled, the injured, the veterans with special needs and the indigents. Those are the priorities the 

nation held for a very, very long time.

 When we did the eligibility reform, we had hoped and made assumptions that as we would open it up to the non-Service-connected

disabled veterans and non-compensatory veterans, that we would 

EULQJHIÀFLHQFLHVDQGHFRQRPLHVRIVFDOH

 We received testimony from many that it would be budget neutral 

and in fact, it would be an enhancer, a revenue stream.

 The reality is that it is not what happened. We are now at war and 

we have some challenges. We have over 10,000 wounded. We have a 

VA that has perhaps a generation skip with regard to handling some 

of these catastrophic injuries the actual duty force is about to hand 

off to you, Mr. Secretary.

 The generation skip means the VA knew how to handle a lot of 

these catastrophic injuries from World War II, Korea, and Vietnam. 

They cared for the aged population, and now we have something 

pretty strong coming our way. We will also have as many as 100,000 

veterans with post-traumatic stress disorder.

 When we refer to caring for the veteran, it is not only the physical 

disabilities but also the mental.

 We also in the generosity of this Congress said to those soldiers, 

sailors and Marines, who are in these operations in Afghanistan and 

Iraq, that when you come back home, we are going to care for you for 

two years. We have also opened up more enrollment into VA health 

care.

 Beginning to understand the impact of that is something we have 

to do.

+RZ&RQJUHVVGLGWKDW,EHOLHYHLVWKHIXOÀOOPHQWRIRXUYDOXHVWKH

32
reason we set out these priorities of care.

 I appreciate your highlighting with regard to the TRICARE system. Again, with that system, there was no push back from anyone 

with regard to the co-pays and deductibles. As a matter of fact, I

think Mr. Bilirakis is correct. Maybe if we had been better listeners 

to Dave Gorman of the Disabled American Veterans who raised the 

concerns echoed by OMB and CBO, perhaps if we had created that 

system with those deductibles like that, maybe we wouldn’t be where 

we are today.

 When you create a system and then you try to add something to it 

later, you get an echo. You get a reaction. That is what we have right 

now. We have to work through this. This will be very challenging for 

the members of this Committee.

 I also want you to know that with regard to the disabled and the injured and special needs veterans, we will work with you with regard 

to how we focus on our core constituency of the VA. We will make 

sure there is a centric in our focus. We want to make sure that just 

because their life has changed, that we ensure they have the opportunity to live, and that means beyond governmental assistance.

-XVWEHFDXVH\RXVHQGWKHPDFKHFNDQGWKH\ÀQGWKHLUOLIHLQD

bottle, that is not a quality of life.

 We reorganized on this Committee to work with the administration 

RQWKHVHIRFXVHVDWWKLVWLPHRIZDU:HWRRNWKH%HQHÀWV&RPPLWWHH

and we cut it into two subcommittees, and working with the minority 

to in fact carry forward on that obligation.

 I will let you know that we are reorganizing our appropriations process here in Congress. When I went before the Steering Committee 

with regard to this Chairmanship, I gave a recommendation to the 

Steering Committee that they reorganize the appropriations process, 

that they take the military personnel and MILCON and marry that 

with the VA.

 The reason I asked that the personnel of the military be with the 

VA in the appropriations process is the TRICARE program that you 

just mentioned.

 As we can talk about these efforts with regard to seamless transition, sharing initiatives between DOD and VA, and having one decision maker, one Subcommittee in appropriations, to work with us in 

these endeavors, I am most hopeful that never again will we have 

these scenarios whereby the Army buys one digital x-ray machine, 

the VA buys one, it is right across the street, and yet the two systems 

are incompatible and can’t talk to each other.

 Hopefully we are going to end that kind of stuff and we are going 

to work together, and that is the reason we did that appropriations 

process.

 I wanted to highlight the changes we had made here in Congress. 

Mr. Secretary, we thank you. We thank your staff. We look forward 

33
WRZRUNLQJZLWK\RXGXULQJWKHVHYHU\GLIÀFXOWWLPHV

 The Committee will also be submitting questions for the record. 

Again, please be responsive to any written questions. Thank you, Mr.

Secretary.

 SECRETARY NICHOLSON. We will be glad to. Thank you, Mr. Chairman.

 THE CHAIRMAN. Our second panel consists of representatives of the 

Independent Budget. We have Mr. Richard Jones from AMVETS. 

Joseph A. Violante of the Disabled American Veterans. Richard B.

Fuller of Paralyzed Veterans of America. Mr. Dennis M. Cullinan of 

Veterans of Foreign Wars.

 These gentlemen are the national legislative directors for their 

respective organizations. Gentlemen, if you would please proceed to 

the witness table.

 For my colleagues, the 11:30 vote got pushed back to 12:00. We will 

just wait to hear the bells.

 Gentlemen, we are prepared to take your testimony. We will proceed in any order which you gentlemen prefer.

 MR. JONES. Mr. Chairman and Ranking Member, Mr. Evans, members of the Committee, my name is Rick Jones, AMVETS Legislative

Director and Chairman of The Independent Budget steering - 

 THE CHAIRMAN. Would the gentleman suspend? Will the members 

please come to order. You may proceed.

 MR. JONES. Thank you, sir. My name is Rick Jones, Chairman of 

The Independent Budget Steering Committee.

 With your consent, sir, we would like to proceed having PVA give the 

KHDOWKSRUWLRQ'LVDEOHG$PHULFDQ9HWHUDQVSUHVHQWLQJWKHEHQHÀWV

area, the Veterans of Foreign Wars presenting the CARES construction portion, and have AMVETS follow up with the burial option.

 THE CHAIRMAN. With no objection, your written testimony will be 

submitted for the record.

STATEMENTS OF RICHARD B. FULLER, NATIONAL LEGISLATIVE DIRECTOR, PARALYZED VETERANS OF

AMERICA; JOSEPH A. VIOLANTE, NATIONAL LEGISLATIVE DIRECTOR, DISABLED AMERICAN VETERANS;

 DENNIS M. CULLINAN, NATIONAL LEGISLATIVE DIRECTOR, VETERANS OF FOREIGN WARS; AND RICHARD

 JONES, NATIONAL LEGISLATIVE DIRECTOR, AMVETS

STATEMENT OF RICHARD B. FULLER

 MR. FULLER. Thank you, Mr. Chairman. I’m Richard Fuller, national legislative director for Paralyzed Veterans of America.

 In the 19 years since The Independent Budget was published, PVA

KDVDOZD\VFRRUGLQDWHGWKHPHGLFDOFDUHVHFWLRQ,ZLOOFRQÀQHP\

34
remarks to that issue.

 The Administration’s 2006 budget request provides very little if 

any new appropriated dollars for the VA health care system. It relies 

on overly optimistic third party collections, as usual, accounting gimPLFNVDQG WRWDOO\XQUHDOLVWLFPDQDJHPHQWHIÀFLHQFLHV WRGHULYH LWV

EXGJHWÀJXUHV

 The Independent Budget gives a clear assessment of the coming 

needs and rising costs of health care, projects VA will need a $3.4 billion increase in 2006. At 12 percent, this increase is actually below 

WKHRUSHUFHQWWKHSUHYLRXV8QGHU6HFUHWDU\IRU+HDOWKWHVWLÀHG

before this Committee that he would need.

 In the interest of time, I would just like to make three points. For

the past two years, the members of this Committee and its counterpart in the other body, likewise, the appropriation committees, have 

realized that a $250 user fee and a $15 prescription co-pay are unduly 

onerous to veteran patients, and they were rejected.

 We urge the Committee to reject these proposals once more. Two

million veterans would be affected by these increases.

0U&KDLUPDQ,ZRXOGMXVWOLNHWREULHÁ\UDLVHRQHSRLQWDERXWD

misconception that has been repeated several times during this hearing, that these increases in fees would only apply to category 7s and 

8s. They also apply to catastrophically disabled veterans in category 

4, who are in category 4 because of their special needs. This would 

increase the burden on these veterans who are in great need of specialized health care, paraplegics and quadriplegics seeking care for 

specialized services at VA.

 Secondly, the effect of the proposed drastic reductions in funding 

would be catastrophic. Finally it is true we have seen increases in 

SDVW\HDUVEXWZHKDYHDÁXFWXDWLRQQRZRIIXQGLQJXSDQGGRZQXS

DQGGRZQZKLFKPDNHVLWYHU\GLIÀFXOWIRU9$WRPDQDJHLWVHOI

 For that reason, we continue to ask the Congress to provide a guaranteed funding plan for the VA health care system.

>7KHVWDWHPHQWRI5LFKDUG%)XOOHUDSSHDUVRQS@

THE CHAIRMAN. Thank you, Mr. Fuller.

Mr. Violante?

STATEMENT OF JOSEPH A. VIOLANTE

 MR. VIOLANTE. Mr. Chairman and members of the Committee, good 

afternoon. I’m Joe Violante with Disabled American Veterans.

 As with our primary responsibility in the Independent Budget, I

ZLOODGGUHVVPDLQO\WKHUHFRPPHQGDWLRQVIRUWKHEHQHÀWVSURJUDPV

 This year, the President’s budget recommends only one legislative 

FKDQJHIRUYHWHUDQV·EHQHÀWVWKDW LVDFRVWRI OLYLQJDGMXVWPHQWIRU

compensation. We support that recommendation. We include a num35
ber of other recommendations in the Independent Budget. I won’t 

attempt to cover those at this time.

,KRSHWKH&RPPLWWHHZLOOUHIHUWRWKH,%IRUVSHFLÀFVDQGIRUUHDsons for these recommendations.

)RURXUEHQHÀWVSURJUDPZHPRVWO\QHHGVRPHÀQHWXQLQJWRPDNH

them better serve their purposes. Persistent problems with the delivHU\RIEHQHÀWVGLPLQLVKHVWKHLUHIIHFWLYHQHVV

7KH RSWLPXP HIÀFLHQF\ REWDLQDEOH LQ WKHDGPLQLVWUDWLRQ RISURgrams cannot overcome inadequate resources. Year after year, the 

President’s budget requests inadequate resources, but supposedly 

FRQWDLQWKHULJKWVROXWLRQWRÀ[WKHSUREOHPQRQHWKHOHVV

<HDUDIWHU\HDUWKHSUREOHPUHPDLQVXQÀ[HG7KHVROXWLRQVDUH

ÁDZHGEHFDXVHWKH\DUHEXLOWDURXQGLQDGHTXDWHUHVRXUFHV1RRQH

disputes that the VA can obtain and should continue to pursue new 

HIÀFLHQFLHVEXWKLJKO\RSWLPLVWLFDQGYDJXHO\FRQFHLYHGQHZHIÀFLHQcies cannot justify cutting the workforce and investing too little in 

tools to do the job when VA is already in the hole.

 Past reductions in the workforce are the foundation of the problems. If the VA continues to curtail its resource requests to extraneously impose budget targets rather than requesting resources called 

for by a realistic assessment of its production capacity in relation to 

its workload, its service to veterans simply cannot improve to acceptable levels.

 In the Independent Budget, we endeavor to provide a more honest 

assessment of VA resource needs. I will again refer you to my written 

VWDWHPHQWDQGWKH,%WRFRYHUWKHVSHFLÀFV

 I simply say here that we recommend more employees for the VetHUDQV·%HQHÀWV$GPLQLVWUDWLRQ WKDQ LQ WKH3UHVLGHQW·VEXGJHW:H

recommend funding for information technology initiatives, to which 

the President’s budget appears to include no funding.

 The President’s budget claims that its priority goal is to improve 

the timeliness and accuracy of claims processing. The inadequacy of 

the resources it requests contradicts that claim, however.

 In preparing your views and estimates for the Budget Committee, 

we therefore urge this Committee to consider our recommendations 

in light of these inescapable facts.

 That concludes my statement, Mr. Chairman. I’ll be happy to answer any questions a member of this Committee may have.

>7KHVWDWHPHQWRI-RVHSK$9LRODQWHDSSHDUVRQS@

THE CHAIRMAN. Thank you.

Mr. Cullinan?

STATEMENT OF DENNIS M. CULLINAN

 MR. CULLINAN. Thank you, Mr. Chairman and members of the 

36
Committee. I am Dennis Cullinan. I’m the legislative director for 

the Veterans of Foreign Wars of the U.S., and on behalf of the 2.4 

million men and women of the VFW and our auxiliaries, I express our 

deep appreciation for being included in today’s important VA budget 

hearing.

 The VFW is responsible for the construction portion of the IB, so I

will limit today’s testimony to two main areas, CARES and long term 

care.

 In light of the administration’s totally inadequate budget request 

for VA, we are very concerned that Congress may not adequately fund 

all CARES’ proposed changes and projects. This will greatly worsen 

the obstacles now impeding veterans’ timely access to quality health 

care.

,WLVRXURSLQLRQWKDW9$VKRXOGQRWSURFHHGZLWKWKHÀQDOLPSOHPHQWDWLRQ RI &$5(6 XQWLO VXIÀFLHQW IXQGLQJ LV DSSURSULDWHG LQ D

separate account for construction of new facilities and renovations of 

existing hospitals.

 Supporting this view is the fact that the Administration’s budget would devote the total funding for major or minor construction of 

$699.8 million to CARES, leaving nothing for non-CARES’ projects.

0U&KDLUPDQ LWGHÀHVFUHGLELOLW\DQGJRRGUHDVRQWKDWWKH9$

will or should suspend all non-CARES’ related construction projects 

to include essential non-recurring maintenance, seismic corrections 

and other safety issues and so forth. It is for this reason that CARES

EH IXQGHGVHSDUDWHO\ WRSURYLGHVXIÀFLHQW IXQGLQJDQG WRDYRLGWKH

temptation to engage in this kind of budgetary slight of hand.

 We recommend that Congress appropriate, not including funding 

VSHFLÀFWR&$5(6PLOOLRQWRPDMRUFRQVWUXFWLRQIRUÀVFDO\HDU

2006. We also recommend that Congress appropriate $716 million to 

the minor construction account.

 With respect to long term care, we are equally dismayed. The

budget proposal slashes $350 million from veterans’ nursing homes 

by serving 20,000 fewer residents and completely eliminating $104 

million in state grants.

 This would have devastating consequences for veterans in need of 

long term care and the system that is to serve them into the future.

In total, the Administration plans to save $606 million by restricting eligibility to nursing home care.

 VA and the nation has an obligation to provide for a full continuum 

of health care to those who served this country. Long term care is an 

essential part of this. This budget advocates that responsibility.

 We look to you, Mr. Chairman and the other members of this Committee to come to the aid of this nation’s veterans in need and reject 

this proposal.

Thank you, Mr. Chairman. That concludes my testimony.

>7KHVWDWHPHQWRI'HQQLV0&XOOLQDQDSSHDUVRQS@

37
THE CHAIRMAN. Thank you.

Mr. Jones?

STATEMENT OF RICHARD JONES

 MR. JONES. The members of the Independent Budget recommend 

&RQJUHVVSURYLGHPLOOLRQLQÀVFDO\HDUIRUWKHRSHUDWLRQDO

requirements of the National Cemetery Administration and the National Shrine initiative, and a backlog of repairs.

 In total, our funding recommendation for NCA represents a $40 

million increase over the Administration’s request for next year, an 

increase almost entirely aimed at improving the NCA shrine initiative.

 As you know, pursuant to past legislation, VA awarded a contract 

to Logistic Management Institute to conduct an assessment of veterans’ burial needs. One of those reports entitled National Shrine

Commitment, dealt with capital improvements needed at existing 

veterans’ cemeteries.

 ,W LGHQWLÀHG UHVWRUDWLRQ RU UHSDLUSURMHFWV HVWLPDWHG WR FRVW

$280 million. The Independent Budget veterans’ service organizations recommend funding be accelerated to correct current issues. 

We all know delayed maintenance results in an exponential increase 

in the costs of repairs.

:H DOVR UHFRPPHQG LQ WKH GRFXPHQW FHUWDLQ EXULDO EHQHÀWV EH

increased and enhanced, rather than be eroded as they have in value 

over the years.

,Q WKHVHULHVRIEHQHÀWVUHFRPPHQGHG,ZRXOG OLNH WRKLJKOLJKW

one matter. With the heightened interest in increasing the Service

member’s death gratuity from $12,000 to $100,000 or more, the Independent Budget service organizations ask you to recognize that 

deaths also result from the wounds incurred in service long after the 

ODVWVKRWLVÀUHG

 We therefore recommend a modest increase in the Service conQHFWHGEHQHÀWV WR IURP WKHFXUUHQW OHYHO RI7KDW LV

one-third of the current rate for those killed in service, in combat. It

is much less in the sights of what you are currently focusing on.

 This request, of course, would restore the allowance to its original 

SURSRUWLRQRIEHQHÀWVDQGEXULDOH[SHQVHDQG WHOODOOYHWHUDQVWKDW

WKHLUVDFULÀFHLVJLYHQLQDSSUHFLDWLRQDVLWVRZHOOGHVHUYHV

 We thank you, sir, for allowing each of us three minutes to present 

our portions of the Independent Budget.

>7KHVWDWHPHQWRI5LFKDUG-RQHVDSSHDUVRQS@

 THE CHAIRMAN. Thank you very much. I want to thank the gentlemen for coming to Charleston. I think it was a very productive day. 

Any time we can get out of this town and sit down and have some 

38
frank discussions, I think it’s a good thing.

7KHÀUVWWKLQJ,ZRXOGDVNRIHDFKRI\RXWHOOPHZKHUH\RXZHUH

when you took your oath, either of enlisting or commissioning.

 MR. FULLER. Mr. Chairman, I was at Fort Hollin outside of Baltimore. I don’t think it exists anymore, and I hope it doesn’t.

THE CHAIRMAN. Mr. Violante?

 MR. VIOLANTE. I was attending University of Dayton and decided 

it was time to drop out of school and enlist, so I enlisted in Ohio and 

took my oath in Cincinnati, Ohio.

 MR. CULLINAN. Mr. Chairman, I was in the Federal Building in Buffalo, New York on August 23rd, and it was warm for a change.

 MR. JONES. Fort Dix, New Jersey, 1970, a few days before Thanksgiving.

THE CHAIRMAN. Thank you, gentlemen.

 One of the things that I learned is you can take a lot of experts 

and you can take a lot of economists, and they build their modeling to 

GHWHUPLQHWKHÀQDQFLQJ,QWKHHQGLWVWLOOLVYHU\GLIÀFXOWEHFDXVH

ZHDUHGHDOLQJZLWKDJKRVWSRSXODWLRQ3HRSOHWKDWHEEDQGÁRZDQG

utilize many different systems.

 It’s challenging to come up with a good number. The VA uses a priYDWHVHFWRUDFWXDULDOÀUPWRKHOSGHYHORSWKHLUHVWLPDWHVRIWKHIXQGV

needed to provide care to all veterans.

 I’d like to know who develops the estimates that are used in the 

Independent Budget and what are the assumptions that are used to 

HQVXUHWKDWWKHVHSURMHFWLRQVDFFXUDWHO\UHÁHFWWKHKHDOWKFDUHQHHGV

of the enrollees.

 MR. FULLER. Mr. Chairman, we use the same formula that VA uses 

in preparing its budget for its submission to OMB. You basically 

EUHDNGRZQSHUVRQQHOFRVWVUHJXODULQÁDWLRQDU\LQFUHDVHVDQGPHGLFDOLQÁDWLRQLQFUHDVHVSOXVSURMHFWLRQVRILQFUHDVHVLQGHPDQGWKDW

will be placed on the system.

 I think you heard a lot about the shrinkage in the number of nursing home beds in the system today. Likewise, the same is true as 

far as mental health beds are concerned. We add initiatives into The

Independent Budget in order to ramp those programs back up, as the 

Congress has mandated by statute.

 Our budget is accumulated every single year based upon what we 

factor the needs are. In past years, we have had communications 

ZLWK9$RIÀFLDOVZKRFDOOHGRXUQXPEHUVEDVLFDOO\RQWUDFN

 THE CHAIRMAN. Gentlemen, I think it would be helpful to me, I appreciate your oral testimony, if you would place in writing the science 

behind how you come up with your budget estimates. It would be very 

helpful. People like to use numbers and they throw them around. If I

know the methodology, how you came up with those numbers, I think 

it would be very important. Some people place a lot of credibility with 

them, and I need to know.

39
MR. FULLER. We will be happy to provide that, Mr. Chairman.

THE CHAIRMAN. Thank you very much. Mr. Filner?

 MR. FILNER. Thank you for being here. Mr. Chairman, I take it we 

are having a meeting tomorrow to submit our views and estimates to 

the Budget Committee? Is that correct?

 THE CHAIRMAN. Yes, we are, 10:00 a.m. We are to hold a business 

meeting tomorrow. That is what we are going to do, we are going 

to sit down and talk about it; the challenge we all have is that this 

Committee’s views and estimates are to be reported to the Budget

Committee on the 23rd.

MR. FILNER. We are not voting on that tomorrow?

 THE CHAIRMAN. We are holding the business meeting at 10:00 tomorrow morning, Mr. Filner.

 MR. FILNER. Okay. The Independent Budget is one that many of 

us, certainly on this side, take very seriously.

 As I said earlier, the President submitted a Social Security proposal with a couple of trillion dollars worth of borrowing.

 If they can propose borrowing for Social Security, if there is borrowing to fund a tax cut, borrowing to fund a war, and yet the veterans 

KDYH WRVWD\ZLWKLQ WKLVÀ[HGEXGJHW:HKDYH WKHPRQH\,WKDV

been spent everywhere else. We are putting our VA budget under 

different rules, Mr. Chairman, and I think that is wrong.

,KHDUGPHQWLRQHG ́FRUHYHWHUDQVμ,VWKHUHDQ\GHÀQLWLRQRIWKDW"

,VWKHUHDGHÀQLWLRQ"'RHVDQ\ERG\NQRZ"

 MR. JONES. Title 38, there are no words in the code that say this is 

a core group to be served. The Veterans Administration was opened 

to all veterans according to the appropriations available and gave the 

Secretary some authority to make decisions regarding the resources 

he had at the time.

 MR. FILNER. I agree with that. I think we can serve all veterans 

with high quality health care.

Thank you, Mr. Chairman.

 THE CHAIRMAN. I thank the gentleman for his contribution. Mr.

Bilirakis?

 MR. BILIRAKIS.,ÀQGP\VHOIDJUHHLQJDWOHDVWLQSDUWZLWK0U)LOner in that I do also believe - 

>/DXJKWHU@

 MR. BILIRAKIS. Come on, we haven’t disagreed that much, for crying 

out loud. You just handle it differently than I do.

 I believe our veterans deserve complete coverage. I really do. That

may be one of the reasons why I am vice-chair of the Veterans Committee.

 We could probably approach something like that if we would all 

work together, but we don’t. You pit us one against the other with 

your Independent Budget.

 I remember in the days when the other party was in charge. I don’t 

40
remember an Independent Budget. I don’t remember going through 

an Independent Budget business or anything of that nature. I don’t 

remember that.

 We were dealing with the President’s budget, whoever the President happened to be, and trying to work with that, and in the eyes of 

some people, it was good, and in the eyes of other people, it is not so 

good. I was generally in the category of people thinking it was not 

so good.

 Bob, you remember that. We have worked well together over the 

years.

 As far as the President’s budget is concerned, it is a negotiating 

point. It’s a draft. I suspect your Independent Budget is intended to 

be a negotiating point or a draft.

 I would hope that you would expect us to come up with something 

so that we are not pitted against each other. That’s ridiculous for 

us to be pitted against one another. I’m not saying you intend that. 

That’s really what takes place as a result of your budget versus the 

President’s budget and what not.

 MR. FILNER. With that attitude, I appreciate what you are saying. 

We have talked many times about this. I think we have to have a 

working meeting and let’s do it.

THE CHAIRMAN. The Committee will stand in recess for a vote.

>5HFHVV@

 THE CHAIRMAN. The Committee will come to order. I will go to Mr.

Bradley for any questions he may have.

MR. BRADLEY. Thank you very much, Mr. Chairman.

 In the Independent Budget, in the medical care system, and I

ZDVQ·WH[SHFWLQJWRDVNWKHIXOOTXHVWLRQOHWPHVHHLI,FDQÀQGWKH

citation, page 79.

<RXWDONDERXWVHHLQJDVLJQLÀFDQWLQFUHDVHLQWKHORQJWHUPFDUH

needs over the next decade, in particular, the number of veterans 85 

years and older are expected to increase by over 400,000.

 Could you just talk about that a little bit, where you see things going with the proposals in the budget?

 MR. FULLER. As we did back in the mid-1980s when all of a sudden 

9$DQGWKLV&RPPLWWHHVDZWKLVKXJHLQÁX[RI:RUOG:DU,,YHWHUDQV

and started to make plans for caring for the aging veteran.

 We were never very successful in doing that, basically because of 

annual inadequate budgets to try to make changes and so forth. The

reports done by the VA called for a huge increase in nursing home 

beds and services.

 We are projecting now, putting myself in the next generation of 

DJLQJYHWHUDQVDKXJHLQÁX[QRWRQO\IURPWKH.RUHDQ:DUYHWHUDQV·

side but also from the Vietnam veterans’ side.

 I doubt if VA has any long term plans on how to meet this particular 

demand. I think we heard today their concept in meeting the demand 

41
is to actually shrink eligibility for who are eligible. As the Secretary

said, it is about $400 million in “savings” achieved to enhance the 

services for those veterans who remain behind.

 Historically, when we have seen this happen in changes in eligibility, you only have to wait for the next budget cycle, and our dear 

friends at OMB say well, you are not treating this many veterans so 

you don’t need that money and they take it away from you.

 I think speaking from an organization that represents people with 

very serious disabilities, a nursing home’s the last place in the world 

you would want to see an individual placed. Alternative institutional 

care is something that we have followed very, very closely. As the 

Secretary said, it’s the most humane way to do it.

 What we need to be careful about, however, is that we don’t say 

that is the panacea for the entire problem. We have paraplegics and 

quadriplegics who cannot be taken care of effectively at home. The

VA nursing homes have been the safety net in this process. It’s very 

GLIÀFXOWWRSODFHSHRSOH OLNHWKLV LQWKHSULYDWHVHFWRU LQDFRQWUDFW

nursing home. They just won’t accept them there.

 What we are trying to show here is that we need to move forward 

in improving long term care programs because there is going to be 

anticipated external demand.

MR. BRADLEY. Do I still have more time? I can’t see the light.

THE CHAIRMAN. Yes.

 MR. BRADLEY. The second question, you talked about the enrollment 

fee and the co-pays for priority 7s and 8s. I have to admit, I worked 

my way through a lot of this material and read it, but I didn’t see 

any description of the category 4, paraplegics that you talked about. 

Perhaps you could talk about that a little bit more on the numbers 

again.

 MR. FULLER. Care was taken in order to give a higher priority to 

those with catastrophic disabilities, who needed specialized services 

WKDWWKH\ZRXOGRQO\ÀQGLQ9$7KHVWDWXWHDOORZHGWKHPWREHHQrolled as a category 4, which gave them some protection from the 

Secretary’s authority to dis-enroll people. He could actually dis-enroll people in category one through eight if he wanted to under the 

statute.

 But, it gave them higher level of protection and also ensured they 

maintained access. Subsequent to that, because of the way the statXWHZDV GUDIWHG WKH 9$ DQG*HQHUDO &RXQVHO·V2IÀFH LQ 9$PDGH

the determination that while they were enrolled as category 4s, those 

who had higher incomes and would quality as being either category 7 

or 8 would still have to pay all the co-pays, all the fees, the outpatient 

fees, the inpatient fees, the prescription fees and everything else.

 These are very high end users of the system. A quadriplegic or 

paraplegic has multiple prescriptions, catheters, bowel equipment, 

pads, skin care, all kinds of things. We have presented this informa42
tion to this Committee in the past. That comes to a big bill, a huge 

monthly bill, which could be hundreds of dollars.

 We are seeing in some same cases, it might become so burdensome 

that the individual leaves the VA system and its specialized care and 

VSLQDOFRUGLQMXU\FHQWHUVDQGWULHVWRÀQGDFKHDSHUZD\WRJHWKLV

health care and he gets himself into real medical trouble.

 That was something that we thought we would bring up to the 

Committee. Everybody keeps saying it’s only 7s and 8s and this others groups, people including service connected, the indigent and those 

with special needs are in a somehow higher category. I just thought 

it was important to bring that up.

MR. BRADLEY. That affects about 2 million?

 MR. FULLER. The imposition of the increased co-pays and the $250 

enrollment fee affects 2 million enrollees in category 7 and 8. Two

million people would be affected.

 THE CHAIRMAN. Mr. Fuller, I am glad you gave that explanation. I

EHOLHYHLWUHDOO\GHÀQHVWKHFRPSDVVLRQRIDQDWLRQZKHQWKH\SHUPLWted those category 4s and specialty needs. You are absolutely right. 

That is very, very expensive, and it’s a cost for which the VA said we 

are going to absorb. Would you concur?

 MR. FULLER. I would certainly agree. I think the VA has shown 

they can provide certain types of specialized services. If you look at 

care for amputees, care for people with spinal cord injuries, care for 

blinded veterans and so forth, I think it is only natural that VA would 

lead the nation in these and spinal cord injury care as well.

 THE CHAIRMAN. My point is when we absorb that cost, that really 

DOVRKHOSVGHÀQHWKHFRPSDVVLRQRIWKHQDWLRQ,GRQ·WKHDUWKDWYHU\

often. I think it does.

 I really get going whenever I see inequities. I like fairness. This

conversation that is happening here in Washington with regard to 

the death gratuity, I’m just curious for your personal opinions.

 These proposals that are headed this way, the death gratuity will 

end up in the Armed Services Committee, which Mr. Evans sits on, 

and this Committee would have any Servicemembers’ Group Life Insurance piece of that.

 You are right. We have a burial piece for which The Independent

Budget recommended an increase from the $2,000 to $4,000. There

is a death gratuity to help remediate expenses, some for burial, for 

those who do not choose national cemeteries, and we have the SGLI

piece.

 Now there has been this eagerness to put our arms around the 

YHWHUDQDQGWKHIDPLO\DQGIXUWKHUGHÀQHFRPSDVVLRQ:KDWDERXW

$100,000 if someone dies in the combat theater?

 What I ask of you is that in the military, it is all about a team; it is 

the team concept. When we do that, we recognize that it can be anyZKHUHIURPÀYHWRVHYHQWRRQHUDWLRRIVXSSRUWSHUVRQQHOWRSXWRQH

43
combatant in the theater. The theater combat operations has even 

changed. You could have someone loading a bomb on a B-2 bomber in 

Missouri and the bomb drops and kills him, but he’s not in theater, or 

he went to the theater and came back.

 It’s always changing. We have always been fair. I understand the 

Marine Corps has come out now and opposed it because they wanted 

everyone to be treated the same. They don’t want to say well, since 

you were in combat, therefore you should be treated differently than 

someone who wasn’t, yet that guy in combat wouldn’t be successful 

had he not been trained right, and the logisticians had not done their 

job.

 We recognize in the military, for the Army, you wear your combat 

patch. That is a sort of in your face. I was there, you weren’t. You

have ribbons that you earned. Then there is this feeling by those 

who didn’t go to the war that somehow they are placed at a disadvantage.

 I’m just curious about your thoughts with regard to some of the 

proposals that are bouncing around, and include your thoughts on 

SGLI, please.

 MR. CULLINAN. Mr. Chairman, representing the Veterans of Foreign

Wars, we certainly understand the impulse to provide a greater benHÀWWRWKHVXUYLYRUVRIWKRVHZKRZHUHNLOOHGLQFRPEDW

 We have to agree with what I believe you are saying, it should be 

fair. It should be equal across the board. You could have an individual who was killed while loading a bomb or performing some other 

task essential to successfully carrying out a combat operation.

 It should be equal. It should be across the board. I understand the 

impulse though.

 THE CHAIRMAN. Do the other gentlemen concur with the testimony 

of VFW?

 MR. JONES. 3KLORVRSKLFDOO\LWLVFRUUHFWWRSURYLGHWKDWEHQHÀWWR

all military individuals, their families, those folks who were killed in 

service to country. It is the value that they give to that service that 

we should recognize. There is no way we could possibly repay the 

family for its loss, but a loss in training, a loss in combat is a loss to 

a family of an individual who served this country and helped defend 

its cherished freedoms.

 THE CHAIRMAN. Thank you. With regard to this question on category 4, I don’t know what the Committee is going to do yet with 

regard to our budget views and estimates. If in fact we say we are going to cure this inequity between the active duty and those who may 

have only served one tour, and create an enrollment fee along with a 

deductible.

 If we were to exclude the category 4, would there be any objections 

from anyone?

 MR. CULLINAN. Mr. Chairman, we absolutely do not object to that 

44
provision, protecting those severely disabled veterans. I’d like to say 

something else about that.

 The vast majority of those who have served this nation in uniform 

did not make it a career, I think 90 percent or something like that. 

Among those, you have those who saw Omaha Beach, Korea, Vietnam. Today we have Iraq, Afghanistan.

 On the other side, we have those individuals who chose to devote 

a portion of their lives to military service, a military career. Among

those, there are those who have not seen combat.

 While both accomplishments are valuable and important, we have 

a problem distinguishing between the worthiness of their respective 

services.

 What I am saying is we object to the enrollment fee and the copays.

 THE CHAIRMAN. Am I to then assume that you do not see an inequity between charging the deductible and enrollment fee with TRICARE for military retirees, versus someone who only served one tour 

of duty?

 MR. CULLINAN. They have certainly earned the Tri-Care for life 

package. On the other hand, the category 8 veterans in the main are 

not wealthy individuals. Category 7, although their incomes may 

come above the national poverty threshold, they are not rich people. 

They need the help and the care that VA provides. They have come 

to rely on it.

In that sense, no, we do not perceive - it’s a question of need.

THE CHAIRMAN. You do not perceive that as an inequity?

MR. CULLINAN. No.

 MR. JONES. Sir, it seems to me we are continuing to speak of these 

priority veterans from an economic framework, those with income 

above $24,000. I think it is important for us to understand that these 

are the soldiers, sailors, airmen and Marines who walk the patrol 

somewhere in Iraqi or elsewhere across the globe. They are the heroic men and valiant women who answer our nation’s call, and with 

God’s grace, they return from service whole and able to continue their 

lives without disabling injury or illness.

 As we speak, these warriors may be replacing a buddy who yesWHUGD\JDYHWKHXOWLPDWHVDFULÀFH7RGD\WKHVHSDWULRWVDUHUHDG\

to take their place voluntarily in defense of freedom and our way of 

life.

 The members of AMVETS, in regard to your question, believe that 

these men and women whose future income may exceed an income 

threshold which currently serves to deny them future health care eligibility should be able to seek care at VA if they have the need following their military service.

 It is the least our nation can do to those on whom America depends 

to defend her liberty. That is AMVETS’ position on that question, 

45
sir.

 THE CHAIRMAN. Mr. Jones, it also is in the statute as needs and 

means. Isn’t that correct?

MR. JONES. Needs and means. Absolutely.

 THE CHAIRMAN. We are very challenged by the growing number on 

7s and 8s versus the priorities that we face. We recognize that and 

talked about that in Charleston; right?

 MR. JONES. Yes, sir. I would say as far as AMVETS goes, we would 

be happy to give our place, an 8 or 7, would be pleased to give their 

SODFHVDVORQJDVLWLVSDUWRIWKHGHÀFLWSDFNDJHWKDWKDVEHHQFRPEHG

for lesser priorities.

 Let me give you one example of the problem we face right now. 

Last year in the Omnibus Budget Reconciliation Act, was placed a 

four year $1 billion program to provide health care to illegal aliens. 

At the same time, we are talking about pushing 1.1 million 7s and 

8s out of the system with a higher co-pay and with a doubling of 

prescription marks. It is an user tax on veterans who defended the 

country, and yet we are providing $250 million a year over the next 

four years to provide health care for illegal aliens.

 That is the problem with the priorities here, sir. The box that we 

are in is an OMB box. The box needs to be more broad. There needs 

to be some wisdom in the budget process to comb these things out.

 THE CHAIRMAN. The box that we are in is the box which we constructed. Mr. Evans?

 MR. EVANS. I want to thank the panel and the Independent Budget

proposal you have presented. Thank you.

 THE CHAIRMAN. Thank you, Mr. Evans. I want to thank you for the 

time that you put into the budget submission. We look forward to 

ZRUNLQJZLWK\RX7KHUHDUHPDQ\DUHDVRQZKLFKZHDJUHHDQGÀQG

common interests. We look forward to continued work.

 MR. FULLER.0U&KDLUPDQLI,FRXOGMXVWPDNHMXVWRQHTXLFNÀQDO

comment. We will give you as requested the format of how we develop our budget. I think it would be helpful for the Committee and 

for everyone if you requested VA to give you their process as well.

THE CHAIRMAN. I already have, Mr. Fuller.

 The second panel has now concluded. We would ask the third panel 

WRFRPHIRUZDUG:HZRXOGOLNHWRWKDQNRXUÀQDOSDQHOWRGD\

 We have Major General William M. Matz, Jr., U.S. Army retired, 

president of the National Association for Uniformed Services. Peter S. Gaytan, director, National Veterans Affairs and Rehabilitation

Commission, American Legion. Colonel Robert F. Norton, U.S. Army

UHWLUHGGHSXW\GLUHFWRU*RYHUQPHQW5HODWLRQV0LOLWDU\2IÀFHUV$Vsociation of America.

General Matz, please begin.

46
STATEMENTS OF WILLIAM M. MATZ, JR., PRESIDENT,

THE NATIONAL ASSOCIATION FOR UNIFORMED

SERVICES; PETER S. GAYTAN, DIRECTOR, NATIONAL

 VETERANS AFFAIRS AND REHABILITATION COMMISSION, THE AMERICAN LEGION; AND ROBERT F.

NORTON, DEPUTY DIRECTOR, GOVERNMENT RELATIONS, MILITARY OFFICERS ASSOCIATION OF

AMERICA

STATEMENT OF WILLIAM M. MATZ, JR.

 MR. MATZ. Mr. Chairman, on behalf of the members of the National

Association for Uniformed Services, I want to thank you for this opportunity to present our views on the proposed budget for the DepartPHQWRI9HWHUDQV·$IIDLUVIRUÀVFDO\HDU

 I would also like to begin by thanking you, sir, for inviting NAUS to 

participate in the veterans’ summit that you organized at the Citadel 

last week. This meeting in my view established a great foundation for 

our future relationship with you, with your Committee subchairmen, 

and also your staff. We also appreciated the willingness during that 

summit to listen.

 One of the issues brought up at that meeting, and I think everyone 

was in agreement with, is the urgent need for seamless transition. 

There has been a lot of very good dialogue here today on that.

 This is the seamless transition for our active duty and our Reserve

personnel as they depart DOD medical care and transition into the 

VA medical care.

 Recently, I had a personal meeting with the Commandant of the 

0DULQH&RUSVLQKLVRIÀFHDVSDUWRIP\FDWFKLQJXSKHUHMXVWWDNLQJ

over as the president of this association.

 During that meeting, he emphasized to me the importance of taking care of the most catastrophically disabled during this transition 

to veterans’ care.

$FFRUGLQJO\RXUÀUVWSULRULW\KHUHZLWKRXUDVVRFLDWLRQLVWRKHOS

you, sir, and your Committee to continue your efforts toward this 

seamless transition, not only for the catastrophically disabled, but 

also for all eligible veterans.

 We think we can achieve this by implementing the following, and I

will simply give you two recommendations.

 First, we need to develop an electronic medical record. This record will be the cornerstone of any seamless transition initiative. In

today’s world of technology, it makes no sense from my perspective 

that a Service member still needs to hand carry a paper record for 

IRXUÀYHRU\HDUVDQGWKHQXSRQGLVFKDUJHKDYHWKHUHFRUGVHQW

to paper archives, then have to start a whole new record when he 

shows up at the VA.

47
 Secondly, we need a single stop separation physical examination. 

A Service member takes a physical exam when he is discharged. In

some cases, just days later, they have to take another physical to 

TXDOLI\IRUEHQHÀWVLQWKH9$V\VWHP

 As part of this single stop examination, we are also recommendLQJWKHQHHGWRH[SDQG9$·VEHQHÀWVGHOLYHU\DWGLVFKDUJHWKH%''

process, which also was discussed earlier today. Expand that to all 

GLVFKDUJHORFDWLRQVLQPDNLQJDGHWHUPLQDWLRQRI9$EHQHÀWVEHIRUH

separation.

 I think where we have this discharge process now, it is working 

pretty well. My members tell me it is working well where it is.

 Clearly, this will allow more disabled veterans to receive their benHÀWVLQDWLPHO\PDQQHU

 I think we must of course be realistic, that during the time of budJHWGHÀFLWVDQGZLWKWKHFRXQWU\DWZDUGROODUVIRUDOOJRYHUQPHQW

programs are tight. We feel the funds for care and support of our 

veterans is money well spent.

 6RPH JRYHUQPHQW RIÀFLDOV KDYH VWDWHG UHFHQWO\ WKDW SURYLGLQJ

HDUQHGEHQHÀWVIRUWKRVHZKRKDYHVHUYHGLVKXUWIXO,QUHDOLW\IURP

my perspective as an infantryman for 32 years, taking care of veterans is helpful to the nation’s cause. Also, in my view, I think it will 

enhance the recruiting efforts of our Armed Forces.

 Retired military and veterans can be among the best recruiters if 

they can report their promises were kept after their service was over. 

Also, from my perspective, it could have the opposite effect if veterans 

GRQ·WUHFHLYHWKHLUSURPLVHGEHQHÀWV

 We worked hard on our written testimony and it expands in detail 

where a plus-up of funds for the VA is needed. I would enjoin all of 

you to please read that.

 In closing, we need to continue our efforts towards making the 

transition of our departing troops as seamless as possible, and we 

need to keep the promises to those who have served to ensure they 

will continue, from my perspective, to be among the very best recruiters when our country needs a strong Armed Forces.

 Thank you, sir, and the other members of this Committee for your 

past and your ongoing efforts. We look forward to working with you 

as we work through this year.

>7KHVWDWHPHQWRI:LOOLDP00DW]-UDSSHDUVRQS@

THE CHAIRMAN. Thank you for your testimony.

 Colonel Norton?

STATEMENT OF ROBERT F. NORTON

 MR. NORTON. Thank you, Mr. Chairman and Ranking Member,

Congressman Lane Evans, and distinguished members of the Com48
mittee, for the opportunity to appear before you today on behalf of the 

PHPEHUVRIWKH0LOLWDU\2IÀFHUV$VVRFLDWLRQRI$PHULFD

 First, Mr. Chairman, I want to congratulate you on your appointment as Chairman. We look forward to working with you and your 

new Subcommittee chairs. I also want to say on behalf of our national 

president, Admiral Ryan, thank you very much for the opportunity to 

participate in last week’s meeting at the Citadel. It was a very useful 

opportunity for us, and we really greatly appreciate the time that you 

committed to that, to dialogue on veterans’ issues.

 I will address three issues from my prepared statement, and ask 

WKDWWKHIXOOWH[WEHHQWHUHGLQWRWKHRIÀFLDOWUDQVFULSWRIWRGD\·VKHDUing.

 First, MOAA strongly supports full funding for the VA health care 

and claims processing systems. With tens of thousands of new veterans returning from combat zones every day and future veterans being 

deployed every day, now is not the time to cut back on VA health care, 

or to accept continued lengthening of the disability claims backlog.

 A nation that can provide an $82 billion supplemental to prosecute 

the war must be able to provide for the needs of those who have borne 

the battle and their families.

 MOAA recommends, as did the Presidential Task Force, that the 

Committee support full funding to meet the rising demands in VA

health care.

 Second, MOAA believes much more needs to be done to help Service

men and women and their families to make a smooth transition from 

the Armed Forces into the VA.

7KHKDQGRIIEHWZHHQ'2'DQG9$LVVWLOOSODJXHGZLWKLQHIÀFLHQcies that affect active duty troops, mobilized National Guard and Reserve soldiers and their families. Action on seamless transition has 

not lived up to the talk, Mr. Chairman.

 During this time of war, we really need a “Manhattan Project” to 

complete action on electronic medical records, VA disability claims 

ÀOLQJEHIRUHGLVFKDUJHDQRQHVWRSVHSDUDWLRQSK\VLFDODQGHOHFWURQic DD214, and tracking of military occupational exposures.

 For years now, rhetoric has far out paced action, and we have made 

very little progress towards these goals. We need greater pressure 

RQWKH'HIHQVH'HSDUWPHQWDQGWKH9$WRJHWWKLVÀ[HGQRZVRRXU

veterans will get better access to care and services, and the governPHQWFDQÀQDOO\UHDOL]HWKHSURMHFWHGVDYLQJV

 Thirdly, MOAA recommends restructuring and improving the 

0RQWJRPHU\*,%LOO2XUIRUFHVLQWKHÀHOGDFWLYHGXW\*XDUGDQG

Reserves, operate as a total force, but the G.I. Bill is built on an outPRGHG&ROG:DUSODWIRUPWKDWVHWVDÀUHZDOOEHWZHHQWKHDFWLYHGXW\

and the Guard and Reserve G.I. Bill.

,IDFWLYHGXW\EHQHÀWVDUHUDLVHGIRUWKH*,%LOOWKH5HVHUYHSURgram should be raised proportional to the active duty rate. There are 

49
huge challenges ahead in recruiting for all components, active, Guard

and Reserve. It will be essential for this Committee and the Armed

Forces Committee to improve and integrate both G.I. Bill programs.

 My prepared statement outlines initiatives that we believe are 

needed now to modernize the G.I. Bill for the 21st Century force.

 Thank you again, Mr. Chairman, for the opportunity to testify today. I look forward to your questions.

>7KHVWDWHPHQWRI5REHUW)1RUWRQDSSHDUVDWS@

THE CHAIRMAN. I thank the gentleman.

Mr. Gaytan?

STATEMENT OF PETER S. GAYTAN

 MR. GAYTAN. Thank you, Mr. Chairman. Thank you for the opportunity to express the views of the 2.7 million members of The American Legion regarding the Department of Veterans’ Affairs 2006 budget request.

 The American Legion urges this Committee to fund VA at a level 

that will ensure all veterans have access to the VA health care sysWHP7KH9$EXGJHWPXVWUHÁHFWWKHWUXHGHPDQGIRUFDUH

 The American Legion is concerned about the impact of certain 

SURSRVDOV LQFOXGHG LQWKHÀVFDO\HDUEXGJHWUHTXHVWWKDWVHHN

to generate increased revenue for VA from the pockets of veterans 

instead of through allocation of Federal funds.

 The American Legion opposes the implementation of a $250 annual 

enrollment fee for non-Service connected priority group 7 veterans 

and all priority group 8 veterans. This newly imposed fee would simply charge currently eligible veterans without providing any guarantees of improvement in access to care at the very system created to 

treat their unique needs.

 The American Legion would urge Congress to once again reject this 

proposal just as it did last year.

 While the American Legion applauds the initiatives to eliminate 

co-payments for hospice care, to exempt former POWs from co-payments, and for VA to pay co-pays for emergency care for enrolled veterans at private hospitals, we do not support increasing the pharmacy co-pay from $7 to $15 for priority 7 and 8 veterans.

 While the American Legion realizes the importance of adequately 

funding VA, we support other options that would create additional 

revenue streams for VA, such as Medicare reimbursement.

 The American Legion would rather the VA seek reimbursement 

for CMS for all enrolled Medicare eligible veterans being treated for 

non-Service connected medical conditions before trying to balance a 

budget on the backs of priority groups 7 and 8 veterans.

 The American Legion recommends $34.1 billion for VA medical 

50
care. The American Legion continues to advocate for all MCCF collections to be added to the budget numbers and not be treated as an 

offset to the budget.

 The American Legion opposes restricting eligibility for state veterans’ homes per diem payments for long term care to veterans in priority groups 1 through 3 and catastrophically disabled priority group 4 

veterans.

 The state veterans’ homes have been a successful cost sharing 

program between VA, the states and the veterans. Veterans in state 

veterans’ homes tend to be without family, indigent, requiring aide 

DQGDVVLVWDQFH7KLVSURSRVDOZRXOGVSHOOÀQDQFLDOGLVDVWHUIRUWKRVH

homes and would result in a new population of homeless elderly veterans on our streets, especially in those states with poor Medicaid

nursing home reimbursement rates.

 The American Legion supports increasing the amount of authorized per diem payments to 50 percent of the costs of nursing home 

and domiciliary care provided to veterans in state veterans’ homes, 

and full reimbursement for veterans with 70 percent or greater Service connected disabilities.

 The National Association of State Veterans’ Homes and VA should 

develop mutual planning efforts, enhance medical sharing agreePHQWVDQGHQKDQFHXVHFRQVWUXFWLRQFRQWUDFWVZLWKTXDOLÀHGSURYLGers.

 Mr. Chairman, the American Legion is fully committed to working 

with this Committee to ensure that America’s veterans receive the 

entitlements they have earned.

Thank you again for the opportunity to be here today.

>7KHVWDWHPHQWRI3HWHU6*D\WDQDSSHDUVDWS@

THE CHAIRMAN. Thank you. I appreciate your testimony.

 As I opened with other panels, gentlemen, I would like to know 

where you were when you took your oath either in enlistment or commissioning.

 MR. MATZ. I was commissioned through the ROTC program at Gettysburg College, and it was 4 June 1961 at Gettysburg College.

THE CHAIRMAN. Thank you. Colonel Norton?

 MR. NORTON. Mr. Chairman, I entered the Army from Brooklyn,

New York at Ft. Hamilton on October 19, 1966, and a little over a 

\HDUODWHU,WRRNP\VHFRQGRDWKDVDFRPPLVVLRQHGRIÀFHURQ$XJXVW

27, 1967 at Ft. Benning, Georgia. At that time, the Benning School

for Boys.

THE CHAIRMAN. Right.

>/DXJKWHU@

 MR. GAYTAN. I actually enlisted on July 17, 1991 in Richmond,

Virginia in the Air Force.

51
52

THE CHAIRMAN. Very good. Thank you.

 You can do that on your time. He would like to know when your 

discharges occurred. I will let you cover that.

 Gentlemen, I would like your thoughts. You were here, were you 

not, when I asked the second panel questions with regard to the death 

gratuity, its impact upon the total force and the team concept which 

we have in theater versus those out of theater. I would appreciate 

your personal thoughts on the issue.

 MR. GAYTAN. I can speak for the American Legion. We as well as 

the VFW understand the urgency to increase the death gratuity. You

brought up the fact that it may be an inequity and how it is awarded 

to individuals.

 Knowing that the American Legion is a veterans’ services organization and we are run with organizational resolutions, since attention 

KDVEHHQJLYHQWRWKHLQFUHDVHLQWKHJUDWXLW\EHQHÀWWKH$PHULFDQ

Legion is considering that. Your point of view will be taken into consideration.

 What you brought up brings a new facet to our debate over support 

of the increase in the death gratuity and the fairness of that. The

American Legion is still developing an organizational opinion on exactly which direction that desire to improve the payment for a death 

gratuity should be directed.

 Mr. Norton. Mr. Chairman, this issue really is about the families 

left behind. As all of us have experienced in recent years after 9/11 

with the loss of our brothers and sisters in combat, there were also 

losses from military training and other accidents.

 The families that are left behind, and as you know, most of the force 

today is married, have to adjust to this enormous burden of grief and 

JHW WKHLU OLYHV EDFN WRJHWKHU7RPDNH DUWLÀFLDO GLVWLQFWLRQVDERXW

deaths in combat zones as opposed to other aspects of military service 

LVDUWLÀFLDODQGWKLVUHDOO\GRHVDJUHDWGLVVHUYLFHWRWKHVHIDPLOLHV

whose wives, sons, daughters, et cetera, have given the ultimate sacULÀFHWRRXUFRXQWU\

 MR. MATZ. Clearly, sir, an increase in the death gratuity is needed, 

number one.

 Number two, I guess to second my colleagues here, death is death, 

ZKHWKHULWLVRQWKHEDWWOHÀHOGRUZKHWKHULWLVVRPHRQHZKRLVVHUYing at Ft. Benning and something happens. We as an association, 

and I honestly cannot say I’ve gone out and polled all my 180,000 

members, but in anticipation of this question, I did do my best to try 

to get a feel from them and sort of see what the reaction would be if 

it did not go to everybody, so clearly our association is with these two 

folks here.

 We feel if it is going to be increased, it is about the families and it 

should be increased across the board.

 THE CHAIRMAN. Mr. Evans, you are now recognized for any ques-
53

tions you may have of this panel.

 MR. EVANS. I just want to thank them again. We appreciate you. 

Thank you, Mr. Chairman, for holding the hearing again.

THE CHAIRMAN. Thank you, Mr. Evans. Mr. Bradley?

 MR. BRADLEY. Thank you again, Mr. Chairman. It’s been a great 

hearing.

 Not a lot of attention has been paid to prosthetics issues and research this morning and now this afternoon. The Independent Budget, I believe, recommends a $67 million increase over the President’s

submitted budget.

 Given the 10,000 injuries that we are experiencing in Iraq and a lot 

of soldiers are coming home with injuries that they would not have 

VXUYLYHGLQSDVWFRQÁLFWVDQGWKDWLQYROYHVDOVRWKHOLPEZRXOG\RX

care to comment on that issue, any of you?

 MR. GAYTAN. I can comment for the American Legion, aside from 

the Independent Budget’s recommendation. If you look at the full 

testimony from the American Legion, our staff, and this may come in 

line with your question earlier, Mr. Chairman, about developing our 

recommendations for the budget, our staff analyzes the prior budJHWVWDNHV LQWRDFFRXQWWKH LQÁDWLRQDU\ LQFUHDVHV LQPHGLFDOFRVWV

DQGDOVRWKHDQWLFLSDWHGLQÁX[RIYHWHUDQV

 With the war going on, as you mentioned, and the advances in 

EDWWOHÀHOGPHGLFLQHDQGEDWWOHÀHOGFDUHDQGWKHDUPRUWKDWLVEHLQJ

worn by these individuals, in past wars, those lives may have been 

ORVWRQWKHEDWWOHÀHOGZKHUHWKRVHLQGLYLGXDOVDUHFRPLQJEDFNZLWK

life altering disabilities due to those improvements in protection.

 The American Legion recommended an increase for medical prosthetics research as well, equivalent hopefully to the impact of those 

veterans returning from Iraq and Afghanistan.

 MR. NORTON. I would only add, sir, that I’ve been to Walter Reed

and I’ve seen some of the amazing technologies that have been developed and are being developed for those who are wounded in the 

FRQÁLFWVLQZKLFKZHDUHLQYROYHGWRGD\

 To me, there is really not enough that we can do for these great 

young heroes that come back wounded in mind or body. As Pete indiFDWHGWKHUHLVDQHQRUPRXVRSSRUWXQLW\WRIXUWKHUUHÀQHDQGGHYHORS

these technologies to restore as much function as possible.

 A robust prosthetics budget is very, very important to those who 

KDYHUHDOO\VXIIHUHGKRUULÀFDOO\LQWKHVHFRQÁLFWV

 MR. MATZ. I would concur wholly with that. Another point I would 

bring out, as you know, so many of these young men and women who 

are being hit with these IEDs, it’s a dirty infantry war over there, 

they are losing their limbs but they are coming back here. They are 

being rehabilitated and they want to stay in the Service. They want 

to continue to serve for you and I. The Service wants them.

 Whatever you can do to increase that budget for these prosthetic 
54

devices, I would encourage it.

MR. BRADLEY. Thank you, Mr. Chairman. I yield the balance.

 THE CHAIRMAN. Thank you. I would also, as I asked the last panel 

with regard to the Independent Budget, ask the American Legion

the same question, since your testimony was an exact number. You

recommended $31.4 billion with regard to health care. I would like 

for you to submit to the Committee, and as a matter of fact, as soon 

as possible, because we have until the 23rd to get our budget submission, I would like to know the methodology and your modeling with 

regard to your tables and how you made your predictions, assumptions, and estimates, to come up with this number of $31.4 billion, 

please.

MR. GAYTAN. Yes, sir.

 THE CHAIRMAN. With regard to the testimony of the Secretary and 

you have heard my remarks, with regard to what I refer to as an inequity between the active duty who are charged the higher co-pays, deductibles, enrollment fees, than someone who may have only served 

one tour of duty, do any of you gentlemen have an opinion?

 General Matz, do you think that is an inequity or do you think it 

is not?

 MR. MATZ. First of all, and we have talked about this, the issue on 

the 7s and 8s. I’m just getting into this. I believe that when we were 

bringing the 7s and 8s into the programs, they were really strongly 

encouraged to come into it.

 My feeling and our association’s feeling is we made them a promise. 

We should not go back now and charge them the $250 just to enroll in 

a program, and increase the pharmacy co-pay.

 Our position is we should not touch that. However, what the Committee might want to consider is if you open it up again, if it’s opened 

up again to other 7s or 8s, you might want to address it with those 

people. However, those people who are currently in the program now, 

the 7s and 8s, should not have to pay this additional fee.

 MR. NORTON. Mr. Chairman, I think you addressed part of this 

earlier. You made a comment, I think you made reference to whether 

there should have been enrollment fees done back when when eligibility reform was enacted.

 As General Matz indicated, when open enrollment was implemented in 1998, which started the open enrollment era, that continued 

through two Administrations, four years running, and those folks 

came under a certain set of “rules and engagement,” if you will.

 We feel it is unfair at this point to go back and change the rules on 

them. They were folks who were invited into the VA to help the VA

transform itself from a hospital based system then to a comprehensive outpatient based system today.

 We don’t think it is fair to turn around and transfer the responsibility for funding the care that they came into the system onto their 
backs.

 I would also say, too, Mr. Chairman, if I might, that we are really 

not in the business of pitting one group of veterans, retired veterans, 

against other veterans. We just simply don’t care to go there.

 THE CHAIRMAN. Colonel Norton, we have a problem. We have a problem, gentlemen. Whether you want to say it or whether we want to 

dance, we have a military retiree that is waiting in that waiting area 

but has to pay that enrollment fee and higher co-pays and deductibles 

versus someone whom may have only served one tour of duty.

 I just want you to know, we can talk about it, we can do the forensics of it, but I just throw out we have to cure something that we have 

in front of us.

 MR. NORTON. A substantial number of these veterans, 7s and 8s, 

Mr. Chairman, as you know, are Medicare eligible. They have paid 

into Medicare over a life time of work. It seems to us that a more 

practical long term sustainable way to take care of them in terms of 

non-Service connected conditions, would be to allow them to use their 

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 THE CHAIRMAN. I have been an advocate of co-pays and deductibles 

for a long time. It is about modulating the utilization rate. People

can say whatever they want about why we use them. I’ve heard that 

testimony here today.

 I just want you to know as I do my oversight over health systems, 

that is what we do. You both belong to very strong organizations, 

along with some others, who helped me when I created TRICARE for 

Life. I didn’t have any pushback with regard to co-pays and deductibles.

 We conclude this third panel. I ask unanimous consent for general 

leave for members to submit opening statements and questions for 

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This will complete our hearing. We thank you for your testimony.

>:KHUHXSRQDWSPWKHFRPPLWWHHZDVDGMRXUQHG@

55
(56)

APPENDIX

PREPARED STATEMENT OF CHAIRMAN BUYER

 Mr. Secretary, I am glad you can be with us today to share with the 

Committee the President’s proposed budget for 2006.

 Those of us on this Committee take very seriously our responsibility to ensure that VA provides the highest quality of health care for 

those who are enrolled now and those who will enroll in the future. 

We are honored by the trust placed in us by our respective caucuses. 

Capitol Hill can be a very partisan place. But when we walk through 

this hearing room door, we leave labels and partisanship outside.

 That does not mean we always agree. We do not. But we communicate—sometimes it is hard—but we work together so that we can 

provide the best possible services to those who have left freedom in 

their footsteps.

 Our guiding principles are no different than of those who served. 

Last Friday, I held an offsite meeting with many Veterans and Military Service Organizations in Charleston, South Carolina, on the 

campus of The Citadel.

 We discussed how and where each participant who served in the 

military took the oath of enlistment or commission.

 The Vice Chairman of this Committee, Mr. Bilirakis, can remember 

where he took the oath in the Air Force.

Mr. Brown can recall where he took the oath for the South Carolina 

National Guard.

 The same is true for Mr. Evans in the Marine Corps. or Corporal 

Vic Snyder who served in Vietnam with the Marines.

 Service in the Armed Forces does not make one person more patriotic than another. We all serve this country in different ways. One

might have a father who served and now work on behalf of veterans 

in a VSO. Another may not have served in the military but serve 

here in Congress and took their oath across the street.

 Mr. Secretary, I am sure you, too, can recall where you took your 

oath. I hope you will share that with us.

 Those who serve have instilled in them certain values—military 

values:

Navy and Marine Corps: Honor-Courage-Commitment
Army: Loyalty-Duty-Respect-Service-Honor-Integrity-Courage

 Air Force-Integrity First - Service before self - Excellence in all 

that we do

 Coast Guard: Honor-Respect and Devotion to Duty

 Merchant Marine: Integrity from within – Respect for others – 

Courage in adversary – Service above self.

 On Friday at the retreat, we all agreed that these are the same 

YDOXHVLQZKLFKZHVHUYHQRZDQGZKLFKGHÀQHRXUFRPPLWPHQWWR

care for those veterans with service-connected disabilities, those with 

lower incomes, and those with special health care needs.

 It is our job to receive this budget today, to listen and learn about 

how this Administration seeks to better the VA and ensure that our 

health care resources continue to be concentrated on care for enrolled 

veterans most in need of VA services, to make certain that our research continues to push the bounds of science in prosthetics, hearing 

and so on, to have a seamless transition from DOD to VA, to provide 

for the timeliness of compensation and pension claims, and to make 

sure that those men and women who come back receive not just governmental assistance but receive an opportunity to live.

 Mr. Secretary, several weeks ago we met and discussed these very 

same issues. We talked about how our role is not to provide just government assistance. Many of us have been to Walter Reed or BethesGD :H NQRZ ÀUVW KDQG WKH VLJQLÀFDQW FKDOOHQJHV WKRVHPHQ DQG

women face. Some will need mental health, some will need physical 

therapy, and some will need to learn to walk or throw a ball.

:HVWDQG LQDPD]HPHQWDWWKHLUVDFULÀFHDQGWKRVHZLOOLQJDQG

eager to join back with their unit. For those who cannot go back but 

instead go home....it is our job to make sure they have the ability to 

go home and be productive members of society and to live their life. 

To have every opportunity to succeed.

 Mr. Secretary, I know from our conversation that you will join Mr.

Evans, this Committee and me in this endeavor to make the VA the 

best it can possibly be.

 I thank you again for your service to country both as a Ranger and 

for answering the call of this President as Secretary of Veterans Affairs. I look forward to hearing your testimony today and working 

with you in the future. 

57
PREPARED STATEMENT OF CONGRESSMAN EVANS

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