The Department of Veterans Affairs (VA) provides a range of benefits and services to veterans who meet certain eligibility criteria. These benefits and services include, among other things, hospital and medical care, disability compensation and pensions, education, vocational rehabilitation and employment services, assistance to homeless veterans, home loan guarantees, administration of life insurance as well as traumatic injury protection insurance for servicemembers, and death benefits that cover burial expenses. The Department carries out its programs nationwide through three administrations and the Board of Veterans Appeals (BVA). The Veterans Health Administration (VHA) is responsible for health care services and medical and prosthetic research programs. The Veterans Benefits Administration (VBA) is responsible for, among other things, providing compensations, pensions, and education assistance. The National Cemetery Administration (NCA) is responsible for maintaining national veterans cemeteries; providing grants to states for establishing, expanding, or improving state veterans cemeteries; and providing headstones and markers for the graves of eligible persons, among other things. The BVA reviews all appeals made by veterans or their representatives for entitlement to veterans' benefits, including claims for service connection, increased disability ratings, pension, insurance benefits, and educational benefits, among other things. This report provides a preliminary analysis of the President's budget request for FY2012 for the programs administered by the VA. The information provided in this report is based on the President's budget proposal provided to Congress on February 14, 2011, and does not reflect amounts contained in the Consolidated Appropriations Act, 2010 ( P.L. 111-117 ) nor funding levels included in the Full Year Continuing Appropriations Act, 2011 ( H.R. 1 as passed by the House of Representatives on February 19, 2011). This step has been taken to provide consistency when comparing funding levels across the fiscal years. Since the beginning of the fiscal year on October 1, 2010, VA benefits and services (except medical programs) have been funded under a series of five continuing resolutions (CRs)— P.L. 111-242 ; P.L. 111-290 ; P.L. 111-317 ; P.L. 111-322 ; and P.L. 112-4 . The Consolidated Appropriations Act, 2010 ( P.L. 111-117 ) provided advance appropriations for medical programs for FY2011. The report begins with a brief introduction to the Department's budget. Next, it provides funding levels requested by the President for FY2012 for VA health related programs. This is followed by a discussion of funding levels requested for mandatory programs and administration including programs such as construction of VA facilities and information technology. It should be noted that this not an exhaustive discussion of VA's budget request for FY2012. To provide some context to the discussion that follows, this section provides a brief introduction to the various accounts that fund the Department. The VA's budget is comprised of both mandatory and discretionary spending accounts. Mandatory funding supports disability compensation, pension benefits, education, vocational rehabilitation, life insurance, and burial benefits, among other benefits and services. Discretionary funding supports a broad array of benefits and services with a majority of funding going towards providing medical care to veterans. According to the President's budget documents, in FY2010 the total VA budget authority was approximately $127.2 billion. The FY2012 budget request for the VA is for approximately $132.1 billion in budget authority. The VA's health care program is funded through multiple appropriations accounts that are supplemented by other sources of revenue. The appropriation accounts used to support VA health care programs include (1) medical services, (2) medical administration (currently known as medical support and compliance), (3) medical facilities, and (4) medical and prosthetic research. In addition to direct appropriations accounts mentioned above, the Consolidated Omnibus Budget Reconciliation Act of 1985 ( P.L. 99-272 ), enacted into law in 1986, gave the VA the authority to bill some veterans and most health care insurers for nonservice-connected care provided to veterans enrolled in the VA health care system, to help defray the cost of delivering medical services to veterans. The Balanced Budget Act of 1997 ( P.L. 105-33 ) gave the VA the authority to retain these funds in the Medical Care Collections Fund (MCCF). The funds deposited into the MCCF would be available for medical services for veterans. These collected funds do not have to be spent in any particular fiscal year and are available until expended. In 2009, Congress enacted the Veterans Health Care Budget Reform and Transparency Act of 2009 ( P.L. 111-81 ) that authorized advance appropriations for three of the four accounts that comprise the VHA: medical services, medical support and compliance, and medical facilities. The medical and prosthetic research account is not funded as an advance appropriation, and is funded through the regular appropriations process. The medical services account funds health care services provided to eligible veterans and beneficiaries in VA's medical centers, outpatient clinic facilities, contract hospitals, state homes, and outpatient programs on a fee basis; the medical support and compliance account funds management and administration of the VA health care system, including financial management; and the medical facilities account includes funds for the operation and maintenance of the VA health care system's capital infrastructure (excluding construction), such as costs associated with utilities, facility repair, laundry services, and groundskeeping. The Veterans Health Administration (VHA) operates the nation's largest integrated direct health care delivery system. While Medicare, Medicaid, and the Children's Health Insurance Program (CHIP) are also publicly funded programs, most health care services under these programs are delivered by private providers in private facilities. In contrast, the VA health care system could be categorized as a veteran-specific national health care system, in the sense that the federal government owns the medical facilities and employs the health care providers. The VA's health care system is organized into 21 geographically defined Veterans Integrated Service Networks (VISNs). Although policies and guidelines are developed at VA headquarters to be applied throughout the VA health care system, management authority for basic decision making and budgetary responsibilities are delegated to the VISNs. As of FY2010, VHA operates 152 hospitals (medical centers), 133 nursing homes, 791 community-based outpatient clinics (CBOCs), 6 independent outpatient clinics, and 300 Readjustment Counseling Centers (Vet Centers). In 2009, VA began a pilot Mobile Vet Center (MVC) program to improve access to services for veterans in rural areas, and the Department has deployed 50 MVCs. VHA also operates 9 mobile outpatient clinics. The VHA pays for care provided to veterans by private-sector providers on a fee basis under certain circumstances. This program pays non-VA health care providers to treat eligible veterans when medical services are not available at VA medical facilities or in emergencies when delays are hazardous to life or health. Fee basis care includes inpatient, outpatient, prescription medication, and long-term care services. Inpatient and outpatient care are also provided in the private sector to eligible dependents of veterans under the Civilian Health and Medical Program of the Department of Veterans Affairs (CHAMPVA). The VHA also provides grants for construction of state-owned nursing homes and domiciliary facilities and collaborates with the Department of Defense (DOD) in sharing health care resources and services. Apart from providing direct patient care to veterans, VHA's other statutory missions are to conduct medical research, to serve as a contingency backup to the Department of Defense (DOD) medical system during a national security emergency, to provide support to the National Disaster Medical System and the Department of Health and Human Services as necessary, and to train health care professionals in order to provide an adequate supply of health personnel for the VA and the nation. In FY2011 approximately 8.4 million of the 22.1 million living veterans in the nation were enrolled in the VA health care system. It is estimated that in FY2012 there would be approximately 8.6 million veterans enrolled in the system. Of the total number of enrolled veterans in FY2011, VA anticipated treating approximately 5.5 million unique veteran patients. For FY2012, VHA estimates that it will treat about 5.6 million unique veteran patients or 1.4% over the FY2011 estimate. The VHA also estimates that outpatient visits would increase from 85.8 million in FY2011 to 90.8 million in FY2012, an increase of 5.1 million, or 5.9%. It also anticipates an increase in inpatients treated from 931,028 in FY2011 to 959,920 in FY2012, an increase of 28,892, or 3.1%. The Obama Administration released its FY2012 budget on February 14, 2011. The Administration's FY2012 budget request for VHA (medical services, medical support and compliance, medical facilities, and medical and prosthetic research) is $51.4 billion. In total the FY2012 budget request for VHA is $54.4 billion including medical care collections (see Table 1 ). The President's budget proposal also revises the FY2012 advance appropriations request—included in the FY2011 President's budget request—by lowering the advance appropriations by $713 million to reflect the 2011 and 2012 estimated civilian pay freeze. Additionally, the Administration is proposing to set up a $953 million contingency fund that would provide additional funds up to $953 million to become available for obligation if the Administration determines that additional funds are required due to changes in economic conditions in 2012. Furthermore, as required by the Veterans Health Care Budget Reform and Transparency Act of 2009 ( P.L. 111-81 ), the President's budget is requesting $52.4 billion in advance appropriations for the three medical care appropriations (medical services, medical support and compliance, and medical facilities) for FY2013.