    [Appendix]
    [Detailed Budget Estimates by Agency]
    [Department of Veterans Affairs]
    [From the U.S. Government Publishing Office, www.gpo.gov]

    [[Page 829]]

                         DEPARTMENT OF VETERANS AFFAIRS

        The 1997 Budget provides $18,904 million in discretionary budget
    authority for veterans' health, benefits, and other services as
    summarized below:

                                      Description of Department of Veterans Affairs FY 1997 Discretionary Budget Authority
                                                                    (in millions of dollars)
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                         Workload (Noncapital        Current Infrastructure               New Presence \2\
                                           operating costs)   -------------------------------------------------------------------
                  Account              -----------------------                                                                    Initiatives \5\    Total
                                         Current   Additional  Equipment   NRM \1\   Construction  Construction  Activations \3\
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    Veterans Health Administration:
        Medical Care..................   16,306.2  ..........      475.2      227.0        311.4          58.6   ...............  ...............   17,378.4
        Medical Research..............      257.0  ..........  .........  .........  ............  ............  ...............  ...............      257.0
        MAMOE (admin).................       62.2  ..........  .........  .........  ............  ............  ...............  ...............       62.2
        Grants........................  .........  ..........  .........  .........         16.6          24.3   ...............  ...............       40.9
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    Veterans Benefits Administration..      662.5         5.3       11.2  .........         11.5   ............          12.3             89.7         792.5
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    National Cemetery System..........       72.6         3.5  .........  .........         18.1          34.1            0.8     ...............      129.1
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    Other \4\.........................      245.0     -10.7 a        1.4  .........          5.5   ............  ...............           3.0         244.2
    --------------------------------------------------------------------------------------------------------------------------------------------------------
          Total.......................   17,605.5        -1.9      487.8      227.0        363.1         117.0           13.1             92.7      18,904.3
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    \1\ NRM is Non-Recurring Maintenance.
    \2\ New Presence refers to funding for construction in locations previously without VA facilities (e.g. construction of the new Brevard County, Fla.,
      hospital, ambulatory clinic in Honolulu, and grants to states for construction of new cemeteries or extended care facilities).
    \3\ Activations also includes funding for equipment.
    \4\ Other includes General Operating Expenses for Department-level staff offices and entities such as the Board of Veterans Appeals (VBA), General
      Counsel, the Office of Inspector General, etc.
    \5\ For VBA, this column includes all of the program funds to support Information Technology except equipment costs and funding requirements associated
      with restructuring initiatives ($5.9 million).
    a Reduction reflects amount removed from GOE for Franchise Fund.

        Department of Veterans Affairs Implementation of the Government
                           Performance and Results Act

        The Government Performance and Results Act (GPRA) of 1993 represents
    the primary vehicle through which VA is developing more complete and
    refined performance information to determine better how well its
    programs are meeting their intended objectives.

        During FY 1995, VA continued its participation in GPRA pilot
    projects. All three of the formal pilots--National Cemetery System, Loan
    Guaranty Program, and New York Regional Office--made progress in
    developing performance measures that are tied to strategic goals and
    objectives. Several other internal pilot projects are also underway. The
    experience gained through participation in these pilots is being shared
    and applied through the Department so that VA will be positioned to
    implement the performance planning provisions of GPRA by September 1997.

        VA continues to make progress in identifying performance measures
    for its major programs. The identification, development, and use of more
    meaningful performance measures tied to strategic goals and objectives
    will continue to be a major focal point for the Department. The ultimate
    goal is to develop and use a single set of performance goals and
    measures throughout the program planning, budget formulation, budget
    execution, and accountability processes.

                         VETERANS HEALTH ADMINISTRATION

                                  Federal Funds

    General and special funds:

                                  Medical Care

        For necessary expenses for the maintenance and operation of
    hospitals, nursing homes, and domiciliary facilities; for furnishing, as
    authorized by law, inpatient and outpatient care and treatment to
    beneficiaries of the Department of Veterans Affairs, including care and
    treatment in facilities not under the jurisdiction of the Department;
    and furnishing recreational facilities, supplies, and equipment;
    funeral, burial, and other expenses incidental thereto for beneficiaries
    receiving care in the Department; administrative expenses in support of
    planning, design, project management, real property acquisition and
    disposition, construction and renovation of any facility under the
    jurisdiction or for the use of the Department; oversight, engineering
    and architectural activities not charged to project cost; repairing,
    altering, improving or providing facilities in the several hospitals and
    homes under the jurisdiction of the Department not otherwise provided
    for, either by contract or by the hire of temporary employees and
    purchase of materials; uniforms or allowances therefor, as authorized by
    5 U.S.C. 5901-5902; aid to State homes as authorized by 38 U.S.C. 1741;
    and not to exceed $8,000,000 to fund cost comparison studies as referred
    to in 38 U.S.C. 8110(a)(5); $17,008,447,000, plus reimbursements:
    Provided, That of the funds made available under this heading,
    $570,000,000 is for the equipment and land and structures object
    classifications only, which amount shall not become available for
    obligation until August 1, 1997, and shall remain available until
    September 30, 1998.
        Note.--A regular 1996 appropriation for this account had not been
    enacted at the time this budget was prepared. The 1996 amounts included
    in this budget are based on the levels provided in three continuing
    resolutions: P.L. 104-91, P.L. 104-92, and P.L. 104-99.

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0160-0-1-703      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Direct program:

            Operating expenses:
              Provision of veterans health
                  care:
    00.01       Acute Hospital Care.........       4,985       4,916       4,698
    00.02       Rehabilitative Care.........         289         280         287
    00.03       Psychiatric Care............       1,498       1,493       1,536
    00.04       Long Term Care..............       2,381       2,527       2,719
    00.05       Outpatient Care.............       4,173       4,577       5,015
    00.06       Community Based Care........         287         298         308
    00.07     CHAMPVA.......................          94          99         106
    00.08     Education and Training........         899         939         975
    00.09     Miscellaneous Benefits and
                Services....................         616         636         656
                                               ---------   ---------  ----------

    [[Page 830]]

    00.91       Total operating expenses....      15,222      15,765      16,300
            Capital investment:
              Provision of veterans health
                  care:
    01.01       Acute Hospital Care.........         362         331         294
    01.02       Rehabilitative Care.........          10          22          20
    01.03       Psychiatric Care............          85          81          72
    01.04       Long Term Care..............         147         139         124
    01.05       Outpatient care.............         233         221         197
    01.07       Education and Training......           1           1           1
                                               ---------   ---------  ----------

    01.91       Total capital investment....         838         795         708
                                               ---------   ---------  ----------

    01.92     Total direct program..........      16,060      16,560      17,008
    02.01 Reimbursable program..............          66          66          66
                                               ---------   ---------  ----------

    10.00   Total obligations...............      16,126      16,626      17,074
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested
            balance.........................         415         501         501
    22.00 New budget authority (gross)......      16,214      16,626      17,074
    22.30 Unobligated balance expiring......          -3
                                               ---------   ---------  ----------

    23.90   Total budgetary resources
              available for obligation......      16,626      17,127      17,575
    23.95 New obligations...................     -16,126     -16,626     -17,074
    24.40 Unobligated balance available, end
            of year: Uninvested balance.....         501         501         501
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Current:

    40.00   Appropriation...................      16,166      16,564      17,008
    40.75   Procurement reduction pursuant
              to P.L. 103-327...............         -18
    41.00   Transferred to other accounts...                      -4
                                               ---------   ---------  ----------

    43.00     Appropriation (total).........      16,148      16,560      17,008
          Permanent:

            Spending authority from
                offsetting collections:
    68.00     Offsetting collections (cash).          72          66          66
    68.10     Change in orders on hand from
                Federal sources.............          -6
                                               ---------   ---------  ----------

    68.90       Spending authority from
                  offsetting collections
                  (total)...................          66          66          66
                                               ---------   ---------  ----------

    70.00   Total new budget authority
              (gross).......................      16,214      16,626      17,074
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
          Unpaid obligations, start of year:

    72.40   Obligated balance: Appropriation       2,085       2,151       2,240
    72.95   Orders on hand from Federal
              sources.......................          34          28          28
                                               ---------   ---------  ----------

    72.99     Total unpaid obligations,
                start of year...............       2,119       2,179       2,268
    73.10 New obligations...................      16,126      16,626      17,074
    73.20 Total outlays (gross).............     -16,005     -16,537     -17,202
    73.40 Adjustments in expired accounts...         -60
          Unpaid obligations, end of year:

    74.40   Obligated balance: Appropriation       2,151       2,240       2,112
    74.95   Orders on hand from Federal
              sources.......................          28          28          28
                                               ---------   ---------  ----------

    74.99     Total unpaid obligations, end
                of year.....................       2,179       2,268       2,140
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority      14,005      14,218      14,800
    86.93 Outlays from current balances.....       1,928       2,253       2,336
    86.97 Outlays from new permanent
            authority.......................          66          66          66
    86.98 Outlays from permanent balances...           6
                                               ---------   ---------  ----------

    87.00   Total outlays (gross)...........      16,005      16,537      17,202
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

            Offsetting collections (cash)
                from:
    88.00     Federal sources...............         -45         -43         -43
    88.40     Non-Federal sources...........         -27         -23         -23
                                               ---------   ---------  ----------

    88.90       Total, offsetting
                  collections (cash)........         -72         -66         -66
    88.95 Change in orders on hand from
            Federal sources.................           6
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................      16,148      16,560      17,008
    90.00 Outlays...........................      15,933      16,471      17,136
    ---------------------------------------------------------------------------

                     Summary of Budget Authority and Outlays

                            [In millions of dollars]

                                         1995 actual  1996 est.   1997 est.
    Enacted/requested:
      Budget Authority..................      16,148      16,560      17,008
      Outlays...........................      15,933      16,471      17,136
    Legislative proposal, not subject to
        PAYGO:
      Budget Authority..................                                   3
      Outlays...........................                                   3
    Adjustment to 1996 continuing
        resolution levels:
      Budget Authority..................                     213
      Outlays...........................                     192          19
                                        ------------------------------------
    Total:
      Budget Authority..................      16,148      16,773      17,011
      Outlays...........................      15,933      16,663      17,158
                                        ====================================

        The following table presents a summary of selected performance
    trends for medical care, research, and education. The measures address
    performance covering access, financial management, customer
    satisfaction, quality, and workload.

                                                     1993 actual 1994 actual 1995 actual  1997 est
    Medical Care Summary:
      Unique users..................................   2,764,858   2,787,197   2,858,582   2,858,582
      Inpatient days of acute and rehabilitative
        care per unique user per year...............        16.0        15.4        14.9        14.0
      Outpatient visits per unique user per year....         9.0         9.6        10.3        11.6
    Median waiting time for a subspecialty referral
      (stable patient):
      Cardiology (days).............................        61.7        53.0        39.5        25.0
      Ophthalmology (days)..........................        67.8        62.1        38.0        25.0
    Obligations per unique user.....................      $5,285      $5,525      $5,641      $5,973
    Obligations per outpatient visit................        $167        $169        $171        $179
    Obligations per inpatient discharge.............      $9,931     $10,352     $10,924     $12,018
    Ratio of outpatient to hospitalized inpatient
        obligations.................................       0.416       0.438       0.475       0.559
    Aggregate customer service standard score for
      inpatients:
      Medicine......................................         N/A         79%         79%         81%
      Surgery.......................................         N/A         83%         83%         84%
      Psychiatry....................................         N/A         68%         68%         70%
      Other (neurology, acute rehabilitation, spinal
        cord injury)................................         N/A         72%         72%         73%
      All departments...............................         N/A         78%         78%         79%
      All except psychiatry.........................         N/A         80%         80%         81%
    % of inpatients reporting problems in areas of
      their preference for care and services:
      Medicine......................................         N/A         17%         16%         12%
      Surgery.......................................         N/A         13%         12%          8%
      Psychiatry....................................         N/A         39%         38%         34%
      Other (neurology, acute rehabilitation, spinal
        cord injury)................................         N/A         23%         22%         18%
      All departments...............................         N/A         23%         22%         18%
      All except psychiatry.........................         N/A         18%         17%         13%
      Average Joint Commission on Accreditation of
        Healthcare Organizations grid scores for
        surveyed hospitals..........................         86%         86%         89%         90%
    % of patients receiving care in accordance with
        set and accepted standards..................         95%         98%         96%         97%
    % of facilities successfully accredited by
        survey organizations........................        100%        100%        100%        100%
    Turnover rates:
      Physicians:
        Full-time...................................       11.5%        7.5%        7.0%        9.0%
        Part-time...................................       16.0%       15.0%       10.0%       13.0%
      Nurse practitioners:
        Full-time...................................         N/A       10.0%        6.0%        6.0%
        Part-time...................................         N/A       16.0%        9.0%        9.0%
    Research Summary:
      Total number of projects funded...............       2,003       1,870       1,771       1,598
      Total number of new projects funded...........         172         261         334         200
      % of projects receiving extramural funds......         56%         58%         58%         63%
      % of funds coming from extramural sources.....         55%         54%         54%         61%
      As measured by the appeals process, % of
        applicants for VA research support who
        accept decisions of merit review boards on
        their proposals.............................       98.3%       98.5%       98.3%       98.5%
    Education Summary:
      Total VA funded positions per year............      10,279      10,224      10,637      10,998
      Total primary care funded positions per year..       2,943       2,926       3,355       3,577
      Total individuals rotating through VHA per
        year........................................     104,964     108,515     108,703     108,703

    [[Page 831]]

    Mean first year stipend:
      Medical residents:
        National average stipend....................     $28,618     $29,632     $30,753     $30,753
        VA average stipend..........................         N/A     $28,294     $29,846     $30,530
      Optometry residents:
        National average stipend....................     $19,222     $19,222     $22,500     $22,500
        VA stipend..................................     $18,500     $19,222     $19,222     $22,500
      Podiatry residents:
        National average stipend....................     $16,200     $16,200     $22,500     $22,500
        VA stipend..................................     $15,500     $15,500     $15,500     $22,500
      Pharmacy residents:
        National average stipend....................     $24,500     $24,500     $26,500     $26,500
        VA stipend..................................     $22,500     $24,500     $24,500     $26,500
      Psychology interns:
        National average stipend....................     $15,700     $17,000     $17,000     $17,000
        VA stipend..................................     $15,700     $15,700     $17,000     $17,000

        This request incorporates a realignment of activities towards
    reflecting functions similar to other medical care institutions across
    the nation. Workload estimates continue to reflect a shift away from
    inpatient care to other care settings when consistent with desired
    medical outcomes.

        In 1997, increased costs are associated with: (1) payroll increases;
    and, (2) the increased cost of drugs and medicines, communications,
    provisions, prosthetics, medical and dental supplies, and operating
    supplies.

        Provision of Veterans Health Care--
            Acute hospital care.--Costs for 1997 are estimated to decrease
        by $254 million for operating medical, neurology, surgical and
        contract hospital beds, reflecting the shift to increased use of
        ambulatory care.
            Estimated operating levels are:

                                         1995 actual  1996 est.   1997 est.
      Patients treated..................     680,228     653,442     604,232
      Average daily census..............      16,028      14,607      12,851
      Average employment (including
        education and training).........      72,764      65,585      57,958

            Rehabilitative care.--An increase of $5 million in 1997 is
        estimated for providing rehabilitative care, including spinal cord
        injury care.
            Estimated operating levels are:

                                         1995 actual  1996 est.   1997 est.
      Patients treated..................      19,249      18,858      18,018
      Average daily census..............       1,779       1,643       1,473
      Average employment (including
        education and training).........       6,107       5,701       5,244

            Psychiatric care.--An increase of $35 million is estimated in
        1997 for the inpatient care of veterans with problems related to
        mental illness including alcohol and drug problems.

                                         1995 actual  I996 est.   1997 est.
      Patients treated..................     194,448     193,000     188,000
      Average daily census..............      13,300      12,500      11,760
      Average employment (including
        education and training).........      27,012      25,625      24,343

            Long-term care.--In 1997, an increase of $177 million is
        estimated for the care of residents in intermediate care beds, VA
        nursing homes and domiciliaries, community nursing homes and state
        homes.
            Estimated operating levels are:

                                         1995 actual  1996 est.   1997 est.
      Patients treated..................     140,960     138,975     137,476
      Average daily census..............      49,934      50,164      50,856
      Average employment (including
        education and training).........      34,734      35,112      35,599

            Outpatient care.--An increase of $414 million is estimated in
        1997 for the cost of outpatient medical and dental care provided by
        staff, physicians, and dentists participating under a fee basis
        arrangement for certain eligible veterans.

                  NUMBER OF MEDICAL VISITS AND DENTAL WORKLOADS

                                         1995 actual  1996 est.   1997 est.
      Medical visits (in thousands):
        Outpatient clinic visits........      26,122      28,195      29,792
        Community based visits..........       2,817       2,867       2,902
                                        ------------------------------------
            Total.......................      28,939      31,062      32,694
                                        ====================================
      Dental:
        Staff:
          Examinations..................     218,137     220,000     220,000
          Treatments....................     149,535     150,000     150,000
                                        ------------------------------------
            Total.......................     367,672     370,000     370,000
                                        ====================================
        Fee: Cases completed............      17,240      17,000      17,000
                                        ====================================
      Average employment (including
        education and training).........      53,793      58,090      66,972
                                        ====================================

            Community based care.--An increase of $9 million is estimated in
        1997 for providing care to veterans through a variety of programs
        that are primarily non-institutional based. These include: Adult Day
        Health Care; Community Based Domiciliary Aftercare; Community
        Residential Care; Compensated Work Therapy/Transitional Residence;
        Contract Alcohol and Drug Treatment and Rehabilitation; Home
        Dialysis; Health Care for Homeless Veterans; Homemaker/Home Health
        Aide Services; Hospital Based Home Care; HUD/VA Supported Housing;
        Intensive Psychiatric Community Care; Readjustment Counseling;
        Skilled Home Care; and Spinal Cord Injury Home Care.
            Visits and average employment are included in total outpatient
        activity as well as to show total outpatient levels.

                                         1995 actual  1996 est.   1997 est.
      Visits (in thousands).............       2,817       2,867       2,902
      Average employment, (including
        education and training).........       3,038       3,038       3,038

            Civilian health and medical program of the Department of
        Veterans Affairs (CHAMPVA).--A net increase of $7 million is
        estimated in 1997 for private hospital and outpatient care for
        dependents and survivors of certain veterans, reflecting the cost of
        inflation.
                                         1995 actual  1996 est.   1997 est.
      Average daily hospital census.....         142         150         150
      Outpatient (in thousands).........         822         850         850
      Average employment................         147         147         147

            Education and training.--An increase of $36 million is estimated
        in 1997 for residency and other health training services.
                                         1995 actual  1996 est.   1997 est.
      Average employment (all education
        and training average employment
        has been apportioned to the
        respective activities)..........       8,096       8,106       8,106
      Number of trainees................     108,703     108,703     108,703

            Miscellaneous benefits and services.--This covers such items of
        nondirect medical care and treatment as beneficiary travel, care of
        the dead, operation of personnel quarters at medical facilities, and
        the cost of furnishing supply, engineering, housekeeping, and other
        administrative support services to other departments on a
        nonreimbursable basis. An increase of $21 million is estimated for
        1997.

                                         1995 actual  1996 est.   1997 est.
      Average employment................       5,891       5,891       5,891

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0160-0-1-703      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------

          Direct obligations:

            Personnel compensation:
    11.1      Full-time permanent...........       6,478       6,557       6,757
    11.3      Other than full-time permanent         780         790         814
    11.5      Other personnel compensation..         811         838         852
                                               ---------   ---------  ----------

    11.9        Total personnel compensation       8,069       8,185       8,423
    12.1    Civilian personnel benefits.....       1,855       1,888       1,956
    13.0    Benefits for former personnel...          23          13          14
            Travel and transportation of
                persons:
    21.0      Employee travel...............          36          50          51
    21.0      Beneficiary travel............         100         111         112
    21.0      Interagency motor pool
                payments....................          11          12          12
    21.0      All other.....................          31          35          35
    22.0    Transportation of things........          26          28          28
    23.1    Rental payments to GSA..........          22          23          25
    23.2    Rental payments to others.......          48          52          53
    23.3    Communications, utilities, and
              miscellaneous charges.........         415         428         443
    24.0    Printing and reproduction.......          13          15          15
    25.2    Other contractual services......       1,157       1,245       1,284
            Medical care:
    25.6      Outpatient dental fees........          12          13          13

    [[Page 832]]

    25.6      Medical and nursing fees......         242         261         275
    25.6      Community nursing homes.......         331         331         347
    25.6      Contract hospitalization......         150         165         173
    25.6      Civilian health and medical
                program of the Veterans
                Administration..............          86          91          98
            Supplies and materials:
    26.0      Supplies and materials........       2,303       2,502       2,601
    26.0      Provisions....................          98         100         102
    31.0    Equipment.......................         527         571         475
    32.0    Land and structures.............         312         224         232
            Grants, subsidies, and
                contributions:
    41.0      Grants, subsidies, and
                contributions...............         186         208         232
    41.0      Grants to private
                organizations...............           6           7           7
    43.0    Interest and dividends..........           1           2           2
                                               ---------   ---------  ----------

    99.0      Subtotal, direct obligations..      16,060      16,560      17,008
    99.0  Reimbursable obligations..........          66          66          66
                                               ---------   ---------  ----------

    99.9    Total obligations...............      16,126      16,626      17,074
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 36-0160-0-1-703      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------
        Direct:
          Total compensable workyears:

    1001    Full-time equivalent employment.     199,605     195,311     195,311
    1005    Full-time equivalent of overtime
              and holiday hours.............       4,213       4,099       4,099
        Reimbursable:
          Total compensable workyears:

    2001    Full-time equivalent employment.         843         843         843
    2005    Full-time equivalent of overtime
              and holiday hours.............          18          18          18
    ---------------------------------------------------------------------------

                                  Medical Care

                  (Legislative proposal, not subject to PAYGO)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0160-2-1-703      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Direct program:

            Operating expenses:
              Provision of veterans health
                  care:
    00.04       Outpatient care.............                                   3
                                               ---------   ---------  ----------

    10.00   Total obligations (object class
              25.6).........................                                   3
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......                                   3
    23.95 New obligations...................                                  -3
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.25 Appropriation (special fund,
            indefinite).....................                                   3
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    73.10 New obligations...................                                   3
    73.20 Total outlays (gross).............                                  -3
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority                                   3
                                               ---------   ---------  ----------

    87.00   Total outlays (gross)...........                                   3
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................                                   3
    90.00 Outlays...........................                                   3
    ---------------------------------------------------------------------------

        Legislation is being proposed in 1997 that will allow the Veterans
    Health Administration to retain a portion of third party recoveries
    above the annual collection goal. Once the Department exceeds the goal
    defined in the legislation additional collections will be shared, with
    VA retaining twenty-five percent of third party collections from
    Category A veterans and one hundred percent of third party collections
    from Category C veterans. Medical Care Cost Recovery (MCCR) will
    transfer these amounts into the Medical Care account to improve the
    quality of health care for veterans. This transfer will take place in
    the fiscal year following collection.

                         Medical and Prosthetic Research

        For necessary expenses in carrying out programs of medical and
    prosthetic research and development as authorized by 38 U.S.C. chapter
    73, to remain available until September 30, 1998, $257,000,000, plus
    reimbursements.
        Note.--A regular 1996 appropriation for this account had not been
    enacted at the time this budget was prepared. The 1996 amounts included
    in this budget are based on the levels provided in three continuing
    resolutions: P.L. 104-91, P.L. 104-92, and P.L. 104-99.

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0161-0-1-703      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Direct program:

            Operating expenses:
    00.01     Medical research..............         173         192         186
    00.02     Rehabilitation research.......          26          29          27
    00.03     Health services research......          33          37          36
                                               ---------   ---------  ----------

    00.91       Total operating expenses....         232         258         249
            Capital investment:
    01.01     Medical research..............           3           9           4
    01.02     Rehabilitation research.......           1           4           2
    01.03     Health services research......           2           5           3
                                               ---------   ---------  ----------

    01.91       Total capital investment....           6          18           9
                                               ---------   ---------  ----------

    01.92     Total direct program..........         238         276         258
    02.01 Reimbursable program..............          51          51          45
                                               ---------   ---------  ----------

    10.00   Total obligations...............         289         327         303
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested
            balance.........................          10          20           1
    22.00 New budget authority (gross)......         301         308         302
    22.30 Unobligated balance expiring......          -3
                                               ---------   ---------  ----------

    23.90   Total budgetary resources
              available for obligation......         308         328         303
    23.95 New obligations...................        -289        -327        -303
    24.40 Unobligated balance available, end
            of year: Uninvested balance.....          20           1
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Current:

    40.00   Appropriation...................         251         257         257
          Permanent:

    68.00   Spending authority from
              offsetting collections:
              Offsetting collections (cash).          51          51          45
                                               ---------   ---------  ----------

    70.00   Total new budget authority
              (gross).......................         301         308         302
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation          63          47          67
    73.10 New obligations...................         289         327         303
    73.20 Total outlays (gross).............        -302        -307        -302
    73.40 Adjustments in expired accounts...          -3
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation          47          67          68
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority         184         189         189
    86.93 Outlays from current balances.....          67          67          68
    86.97 Outlays from new permanent
            authority.......................          50          51          45
                                               ---------   ---------  ----------

    87.00   Total outlays (gross)...........         302         307         302
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.00   Offsetting collections (cash)
              from: Federal sources.........         -51         -51         -45
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................         250         257         257

    [[Page 833]]

    90.00 Outlays...........................         251         256         257
    ---------------------------------------------------------------------------

        The Medical and Prosthetic Research account is comprised of the
    following three programs:

        Medical research.--This program is comprised of investigator-
    initiated and special research. In addition to the broad spectrum of
    biomedical research projects, priority is given to research Acquired
    Immune Deficiency Syndrome and conditions that frequently occur among
    veterans such as aging, alcoholism, schizophrenia, delayed stress
    disorders and other mental illness, and spinal cord injury and tissue
    regeneration. Cooperative studies include surgical treatment of angina
    pectoris, adjunct treatment of diabetes, and relative potency and side-
    effect liability of new and marketed sedatives.

        Rehabilitation research.--This program is dedicated to the
    development and application of science and technology to improve the
    care of physically disabled veterans through prostheses for the amputee,
    improved wheelchairs for the paralyzed, and better joint functions for
    the arthritic. It also includes care for those with visual, hearing, and
    speech disorders.

        Health services research.--This program provides support for health
    services projects at Department of Veterans Affairs medical centers for
    improving the effectiveness and economy of delivery of health services
    and improving the accessibility of services to veterans.

        In support of the research activities of these three programs, VA
    applies a variety of budgetary resources including appropriations from
    the Medical Care account and reimbursements from the DOD, Grants from
    the National Institutes of Health, private proprietary sources, and
    voluntary agencies which provide additional support for VA's
    researchers. The first table summarizes all budgetary resources for the
    Medical and Prosthetic Research account. The second table shows the
    total number of projects.

                         SUMMARY OF BUDGETARY RESOURCES

                            [In millions of dollars]

                                         1995 actual  1996 est.   1997 est.
    Medical and prosthetic research
    appropriation.......................         251         257         257
    Medical care appropriation..........         378         388         396
    Federal grants (NIH)................         185         194         203
    Other grants (voluntary agencies,
    private proprietary)................          98         101         106
    DOD reimbursements..................          19          14           0
                                        ------------------------------------
          Total budgetary resources.....         931         954         962
                                        ====================================

                               PROGRAM INDICATORS

                                         1995 actual  1996 est.   1997 est.
    Medical and Prosthetic Research
    projects............................       1,771       1,743       1,598

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0161-0-1-703      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------

          Direct obligations:

            Personnel compensation:
    11.1      Full-time permanent...........          38          40          41
    11.3      Other than full-time permanent          74          78          79
    11.5      Other personnel compensation..           5           5           5
                                               ---------   ---------  ----------

    11.9        Total personnel compensation         117         123         125
    12.1    Civilian personnel benefits.....          29          30          31
            Travel and transportation of
                persons:
    21.0      Employee travel...............           2           3           2
    21.0      All other.....................                       1           1
    23.3    Communications, utilities, and
              miscellaneous charges.........           1           1           1
    24.0    Printing and reproduction.......           1           1           1
    25.5    Research and development
              contracts.....................          56          66          57
    26.0    Supplies and materials..........          26          32          30
    31.0    Equipment.......................           6          18           9
                                               ---------   ---------  ----------

    99.0      Subtotal, direct obligations..         238         275         257
    99.0  Reimbursable obligations..........          51          52          46
                                               ---------   ---------  ----------

    99.9    Total obligations...............         289         327         303
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 36-0161-0-1-703      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------
        Direct:
          Total compensable workyears:

    1001    Full-time equivalent employment.       3,002       3,011       2,935
    1005    Full-time equivalent of overtime
              and holiday hours.............          23          23          23
        Reimbursable:
    2001  Total compensable workyears: Full-
            time equivalent employment......         674         653         550
    ---------------------------------------------------------------------------

           Medical Administration and Miscellaneous Operating Expenses

        For necessary expenses in the administration of the medical,
    hospital, nursing home, domiciliary, construction, supply, and research
    activities; administrative expenses in support of planning, design,
    project management, architectural, engineering, real property
    acquisition and disposition, construction and renovation of any facility
    under the jurisdiction or for the use of the Department of Veterans
    Affairs, including site acquisition; engineering and architectural
    activities not charged to project cost; and research and development in
    building construction technology; $62,207,000, plus reimbursements.
        Note.--A regular 1996 appropriaton for this account had not been
    enacted at the time this budget was prepared. The 1996 amounts included
    in this budget are based on the levels provided in three continuing
    resolutions: P.L. 104-91, P.L. 104-92, and P.L. 104-99.

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0152-0-1-703      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Operating expenses: Medical,
            hospital, nursing home, and
            domiciliary administration......          69          68          62
                                               ---------   ---------  ----------

    10.00   Total obligations...............          69          68          62
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......          70          68          62
    23.95 New obligations...................         -69         -68         -62
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................          70          64          62
    42.00 Transferred from other account....                       4
                                               ---------   ---------  ----------

    43.00   Appropriation (total)...........          70          68          62
                                               ---------   ---------  ----------

    70.00   Total new budget authority
              (gross).......................          70          68          62
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation           9           6           6
    73.10 New obligations...................          69          68          62
    73.20 Total outlays (gross).............         -71         -68         -63
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation           6           6           7
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority          65          62          56
    86.93 Outlays from current balances.....           6           6           6
                                               ---------   ---------  ----------

    87.00   Total outlays (gross)...........          71          68          63
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................          70          68          62
    90.00 Outlays...........................          71          68          63
    ---------------------------------------------------------------------------

        Medical, hospital, nursing home, and domiciliary administration.--
    Central office staff elements will continue to provide executive
    direction for all Department medical and construction programs through
    program development, implementation, and the administration of policies,
    plans, and objectives.

        The total employment represents 600 FTE for the 1997 Medical
    Administration and Miscellaneous Operating Expenses appropriation plus
    10 FTE transfer of certain information resources management functions
    from the General Operating Expenses (GOE) appropriation as part of an
    initiative to establish the Agency Chief Information Officer program.

    [[Page 834]]

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0152-0-1-703      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------

          Personnel compensation:

    11.1    Full-time permanent.............          45          45          40
    11.3    Other than full-time permanent..           2           2           1
    11.5    Other personnel compensation....           2           2           2
                                               ---------   ---------  ----------

    11.9      Total personnel compensation..          49          49          43
    12.1  Civilian personnel benefits.......           8           8           7
    21.0  Travel and transportation of
            persons: employee travel........           1                       1
    23.1  Rental payments to GSA............           5           5           5
    23.3  Communications, utilities, and
            miscellaneous charges...........           1           1           1
    25.2  Other services....................           3           3           3
    26.0  Supplies and materials............           1           1           1
    31.0  Equipment.........................           1           1           1
                                               ---------   ---------  ----------

    99.9    Total obligations...............          69          68          62
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 36-0152-0-1-703      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------
        Total compensable workyears:
    1001  Full-time equivalent employment...         778         647         610
    1005  Full-time equivalent of overtime
            and holiday hours...............           1           1           1
    ---------------------------------------------------------------------------

                     Health Professional Scholarship Program

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0163-0-1-703      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    10.00 Total obligations (object class
            41.0)...........................          10
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......          10
    23.95 New obligations...................         -10
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................          10
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation          15          11           8
    73.10 New obligations...................          10
    73.20 Total outlays (gross).............         -13          -3
    73.40 Adjustments in expired accounts...          -2
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation          11           8           8
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority           3
    86.93 Outlays from current balances.....          10           3
                                               ---------   ---------  ----------

    87.00   Total outlays (gross)...........          13           3
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................          10
    90.00 Outlays...........................          13           3
    ---------------------------------------------------------------------------

        Health professional scholarship.--To assist in the recruitment and
    retention of staff, this program provides grants for tuition, stipend,
    and other educational expenses for eligible students in programs leading
    to a degree in nursing or other allied health disciplines.

                        Medical Care Cost Recovery Fund

                  Unavailable Collections (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-5014-0-2-703      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------
        Balance, start of year:
    01.99 Balance, start of year............       1,072       1,101       1,156
        Receipts:
    02.01 Medical cost recovery.............         133         176         204
    02.02 Medical cost recovery, legislative
            proposal........................                      11          49
                                               ---------   ---------  ----------

    02.99   Total receipts..................         133         187         253
                                               ---------   ---------  ----------

    04.00 Total: Balances and collections...       1,205       1,288       1,409
        Appropriation:
    05.01 Medical care cost recovery fund...        -104        -132        -119
    05.03 Medical care, legislative proposal                                  -3
                                               ---------   ---------  ----------

    05.99 Subtotal appropriation............        -104        -132        -122
    07.99 Total balance, end of year........       1,101       1,156       1,287
    ---------------------------------------------------------------------------

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-5014-0-2-703      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.09 Operating expenses................          98         106         111
    00.10 Capital investment................           4          26           8
                                               ---------   ---------  ----------

    10.00   Total obligations...............         102         132         119
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested
            balance.........................           4           6           6
    22.00 New budget authority (gross)......         104         132         119
                                               ---------   ---------  ----------

    23.90   Total budgetary resources
              available for obligation......         108         138         125
    23.95 New obligations...................        -102        -132        -119
    24.40 Unobligated balance available, end
            of year: Uninvested balance.....           6           6           6
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    60.25 Appropriation (special fund,
            indefinite).....................         104         132         119
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation          14          14          34
    73.10 New obligations...................         102         132         119
    73.20 Total outlays (gross).............        -102        -112        -138
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation          14          34          15
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................         102         112         118
    86.98 Outlays from permanent balances...                                  20
                                               ---------   ---------  ----------

    87.00   Total outlays (gross)...........         102         112         138
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................         104         132         119
    90.00 Outlays...........................         102         112         138
    ---------------------------------------------------------------------------

        The Medical Care Cost Recovery (MCCR) Fund was established by the
    Omnibus Budget Reconciliation Act of 1990, P.L. 100-508. This Fund
    serves as a depository for all third-party insurance collections. A
    portion of these monies will be utilized to provide for FTE and other
    administrative costs associated with medical care cost recovery efforts.
    After providing for the estimated cost of operations for the ensuing
    year, remaining funds are transferred to the Department of Treasury
    before January of the next year.

        While the MCCR Fund reflects the program costs of both third-party
    and copayment activities, the receipts only reflect third-party
    recoveries. The table below presents the complete relationship between
    the costs of MCCR activities and the total collections, regardless of
    source, resulting from these activities.

        In 1997, the Administration will propose legislation to permanently
    extend current legal provisions due to expire in 1998. These provisions
    provide for the collection of third party health insurance payments for
    care provided by the VA for service-connected veterans with nonservice-
    connected conditions, including copayments and income verification
    provisions.

    [[Page 835]]

                              [In millions of dollars]

                Program activity             1995 actual   1996 est.   1997 est.
    Third-party recoveries..................         523         565         648
    Copayments and other collections........          51          77          81
                                               ---------   ---------  ----------

          Total collections.................         574         642         729
          Total program costs...............         102         132         119
    Ratio of costs to collections...........       17.8%       20.6%       16.3%

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-5014-0-2-703      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------

          Personnel compensation:

    11.1    Full-time permanent.............          53          57          59
    11.5    Other personnel compensation....          14          15          15
                                               ---------   ---------  ----------

    11.9      Total personnel compensation..          67          72          74
    12.1  Civilian personnel benefits.......          16          17          17
    21.0  Travel and transportation of
            persons.........................           2           4           3
    23.3  Communications, utilities, and
            miscellaneous charges...........           3           5           5
    25.2  Other services....................           4           5           7
    26.0  Supplies and materials............           6           4           5
    31.0  Equipment.........................           4          25           8
                                               ---------   ---------  ----------

    99.9    Total obligations...............         102         132         119
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 36-5014-0-2-703      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------
        Total compensable workyears:
    1005  Full-time equivalent of overtime
            and holiday hours...............          41          42          42
    1011  Exempt Full-time equivalent
            employment......................       2,254       2,295       2,295
    ---------------------------------------------------------------------------

    Public enterprise funds:

                        Medical Facilities Revolving Fund

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4138-0-3-703      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Operating expenses................           1           2           2
    00.02 Capital investment................           1           2           2
                                               ---------   ---------  ----------

    10.00   Total obligations...............           2           4           4
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested
            balance.........................          11          21          23
    22.00 New budget authority (gross)......          12           6           6
    22.20 Unobligated balance transferred...                                 -12
                                               ---------   ---------  ----------

    23.90   Total budgetary resources
              available for obligation......          23          27          17
    23.95 New obligations...................          -2          -4          -4
    24.40 Unobligated balance available, end
            of year: Uninvested balance.....          21          23          13
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Current:

    42.00   Transferred from other accounts.           6
          Permanent:

    68.00   Spending authority from
              offsetting collections:
              Offsetting collections (cash).           6           6           6
                                               ---------   ---------  ----------

    70.00   Total new budget authority
              (gross).......................          12           6           6
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation          -3          -2          -1
    73.10 New obligations...................           2           4           4
    73.20 Total outlays (gross).............          -2          -3          -4
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation          -2          -1          -1
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................                       1           2
    86.98 Outlays from permanent balances...           2           2           2
                                               ---------   ---------  ----------

    87.00   Total outlays (gross)...........           2           3           4
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.00   Offsetting collections (cash)
              from: Federal sources.........          -6          -6          -6
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................           6
    90.00 Outlays...........................          -4          -3          -2
    ---------------------------------------------------------------------------

        This account provides funds for the operating expenses of VA medical
    facilities furnishing nursing home care to certain veterans in receipt
    of pensions. Title 38 provides that a veteran with no spouse or child
    will only receive $90 per month in pension beginning the third full
    month following the month of admission to VA furnished nursing home
    care. The difference between the $90 the veteran receives and the amount
    otherwise authorized is transferred to this fund for spending expenses
    at the facility furnishing the nursing care.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4138-0-3-703      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------
    25.2  Other services....................                       1           1
    26.0  Supplies and materials............           1           1           1
    31.0  Equipment.........................           1           2           2
    99.0  Subtotal, reimbursable obligations           2           4           4
                                               ---------   ---------  ----------

    99.9    Total obligations...............           2           4           4
    ---------------------------------------------------------------------------

                         Canteen Service Revolving Fund

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4014-0-3-705      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Operating expenses:

    00.01   Acquisitions....................         119         140         142
    00.02   Direct operations...............          80          93          95
                                               ---------   ---------  ----------

    00.91     Total operating expenses......         199         233         237
    01.01 Capital investment: Sales program:
            Purchase of equipment and
            leasehold.......................           6          11          11
                                               ---------   ---------  ----------

    10.00   Total obligations...............         205         244         248
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.90 Unobligated balance available,
            start of year: Fund balance.....          21          26          26
    22.00 New budget authority (gross)......         209         245         248
                                               ---------   ---------  ----------

    23.90   Total budgetary resources
              available for obligation......         230         271         274
    23.95 New obligations...................        -205        -244        -248
    24.90 Unobligated balance available, end
            of year: Fund balance...........          26          26          27
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    68.00 Spending authority from offsetting
            collections (gross): Offsetting
            collections (cash)..............         209         245         248
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.90 Unpaid obligations, start of year:
            Obligated balance: Fund balance.          22          15          18
    73.10 New obligations...................         205         244         248
    73.20 Total outlays (gross).............        -212        -242        -245
    74.90 Unpaid obligations, end of year:
            Obligated balance: Fund balance.          15          18          20
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................         209         242         245
    86.98 Outlays from permanent balances...           3
                                               ---------   ---------  ----------

    87.00   Total outlays (gross)...........         212         242         245
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

            Offsetting collections (cash)
                from:
    88.00     Federal sources...............          -2          -2          -2
    88.40     Non-Federal sources...........        -207        -243        -246
                                               ---------   ---------  ----------

    88.90       Total, offsetting
                  collections (cash)........        -209        -245        -248
    ----------------------------------------------------------------------------

    [[Page 836]]

        Net budget authority and outlays:
    89.00 Budget authority..................
    90.00 Outlays...........................           3          -3          -3
    ---------------------------------------------------------------------------

        The Veterans Canteen Service was established to furnish, at
    reasonable prices, merchandise and services necessary to the comfort and
    well-being of veterans in VA medical facilities.

        Financing.--Operations will be financed from current revenues.

                            Statement of Operations (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   36-4014-0-3-705    1994 actual    1995 actual     1996 est.      1997 est.
    -----------------------------------------------------------------------------------------------
    0101  Revenue...........................         214            209           245            248
    0102  Expense...........................        -211           -206          -240           -242
                                            ------------ --------------  ------------  -------------
    0109  Net income or loss (-)............           3              3             5              6
    -----------------------------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   36-4014-0-3-705    1994 actual    1995 actual     1996 est.      1997 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
          Federal assets:

    1101    Fund balances with Treasury.....           7              3            14             16
            Investments in US securities:
    1102      Treasury securities, par......          37             38            39             38
    1106      Receivables, net..............           2              2             2              3
    1107      Advances and prepayments......                          2
    1206  Non-Federal assets: Receivables,
            net.............................           1
          Other Federal assets:

    1802    Inventories and related
              properties....................          26             27            28             31
    1803    Property, plant and equipment,
              net...........................          26             25            31             32
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................          99             97           114            120
        LIABILITIES:
          Federal liabilities:

    2101    Accounts payable................                          2
    2104    Resources payable to Treasury...           2              1             2              2
          Non-Federal liabilities:

    2201    Accounts payable................          13             10             8              7
    2207    Other...........................           8              5             8              8
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............          23             18            18             17
        NET POSITION:
    3200  Invested capital..................          45             44            57             60
    3600  Other.............................          31             34            40             43
                                            ------------ --------------  ------------  -------------
    3999    Total net position..............          76             78            97            103
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position          99             96           115            120
    -----------------------------------------------------------------------------------------------

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4014-0-3-705      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------

          Personnel compensation:

    11.1    Full-time permanent.............          38          40          41
    11.3    Other than full-time permanent..          17          17          17
                                               ---------   ---------  ----------

    11.9      Total personnel compensation..          55          57          58
    12.1  Civilian personnel benefits.......          15          16          16
    21.0  Travel and transportation of
            persons.........................           1           1           1
    25.2  Other services....................           3           3           3
    26.0  Supplies and materials............         125         156         159
    31.0  Equipment.........................           6          11          11
    99.0  Subtotal, reimbursable obligations         205         244         248
                                               ---------   ---------  ----------

    99.9    Total obligations...............         205         244         248
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 36-4014-0-3-705      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------
    2011  Total compensable workyears:
            Exempt Full-time equivalent
            employment......................       3,121       3,200       3,250
    ---------------------------------------------------------------------------

             Special Therapeutic and Rehabilitation Activities Fund

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4048-0-3-703      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Contracts.........................          15          20          21
    00.02 Education and training............           1           1           1
    00.03 Operating expenses................           8          10          11
                                               ---------   ---------  ----------

    10.00   Total obligations...............          24          31          33
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.90 Unobligated balance available,
            start of year: Fund balance.....           3           5           5
    22.00 New budget authority (gross)......          26          31          33
                                               ---------   ---------  ----------

    23.90   Total budgetary resources
              available for obligation......          29          36          38
    23.95 New obligations...................         -24         -31         -33
    24.90 Unobligated balance available, end
            of year: Fund balance...........           5           5           5
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    68.00 Spending authority from offsetting
            collections (gross): Offsetting
            collections (cash)..............          26          31          33
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation           1           2           2
    73.10 New obligations...................          24          31          33
    73.20 Total outlays (gross).............         -23         -31         -33
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation           2           2           2
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................          25          31          33
                                               ---------   ---------  ----------

    87.00   Total outlays (gross)...........          23          31          33
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.40   Offsetting collections (cash)
              from: Non-Federal sources.....         -26         -31         -33
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................
    90.00 Outlays...........................          -3
    ---------------------------------------------------------------------------

        This revolving fund, established pursuant to the Veterans Omnibus
    Health Care Act of 1976, Public Law 94-581, provides a mechanism for the
    furnishing of rehabilitative services to certain veteran beneficiaries
    who are receiving medical care and treatment from the Department of
    Veterans Affairs.

        Funds to operate the various rehabilitative activities and provide
    for the therapeutic work for remuneration for patients and members in VA
    health care facilities are derived from contractual arrangements with
    private industry or nonprofit entities. Public Law 102-54 authorizes VA
    to contract with any Federal agency, including VA, and authorizes the
    Fund to cover the training, education, and travel costs of employees
    associated with the rehabilitative programs. This is a self-sustaining
    fund, and therefore no appropriation is required to support these
    activities.

                            Statement of Operations (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   36-4048-0-3-703    1994 actual    1995 actual     1996 est.      1997 est.
    -----------------------------------------------------------------------------------------------
    0101  Revenue...........................          16             27            33             35
    0102  Expense...........................         -15            -23           -33            -35
                                            ------------ --------------  ------------  -------------
    0109  Net income or loss (-)............           1              4
    -----------------------------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   36-4048-0-3-703    1994 actual    1995 actual     1996 est.      1997 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
          Federal assets:

    1101    Fund balances with Treasury.....           3              7            10             14
            Investments in US securities:
    1106      Receivables, net..............           2              2             2              2

    [[Page 837]]

    1206  Non-Federal assets: Receivables,
            net.............................                          1             1              1
    1803  Other Federal assets: Property,
            plant and equipment, net........           1
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................           6             10            13             17
        LIABILITIES:
    2101  Federal liabilities: Accounts
            payable.........................           1              1             4              8
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............           1              1             4              8
        NET POSITION:
    3200  Invested capital..................           1
    3300  Cumulative results of operations..           4              8             8              8
                                            ------------ --------------  ------------  -------------
    3999    Total net position..............           5              8             8              8
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position           6              9            12             16
    -----------------------------------------------------------------------------------------------

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4048-0-3-703      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------
    25.2  Other services....................          21          28          29
    26.0  Supplies and materials............           2           1           3
    31.0  Equipment.........................           1           1           1
    99.5  Below reporting threshold.........                       1
                                               ---------   ---------  ----------

    99.9    Total obligations...............          24          31          33
    ---------------------------------------------------------------------------

                      Medical Center Research Organizations

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4026-0-3-703      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Operating expenses................          24          25          26
    00.02 Capital investment................           3           3           3
                                               ---------   ---------  ----------

    10.00   Total obligations...............          27          28          29
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.90 Unobligated balance available,
            start of year: Fund balance.....          17          17          17
    22.00 New budget authority (gross)......          27          28          29
                                               ---------   ---------  ----------

    23.90   Total budgetary resources
              available for obligation......          44          45          46
    23.95 New obligations...................         -27         -28         -29
    24.90 Unobligated balance available, end
            of year: Fund balance...........          17          17          17
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    68.00 Spending authority from offsetting
            collections (gross): Offsetting
            collections (cash)..............          27          28          29
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    73.10 New obligations...................          27          28          29
    73.20 Total outlays (gross).............         -27         -28         -29
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................          27          28          29
                                               ---------   ---------  ----------

    87.00   Total outlays (gross)...........          27          28          29
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

            Offsetting collections (cash)
                from:
    88.00     Federal sources...............          -1          -1          -1
    88.40     Non-Federal sources...........         -26         -27         -28
                                               ---------   ---------  ----------

    88.90       Total, offsetting
                  collections (cash)........         -27         -28         -29
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................
    90.00 Outlays...........................
    ---------------------------------------------------------------------------

        These nonprofit corporations provide a flexible funding mechanism
    for the conduct of approved research at Department of Veterans Affairs
    medical centers. These organizations will derive funds to operate
    various research activities from Federal and non-Federal sources. No
    appropriation is required to support these activities.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4026-0-3-703      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------
    25.2  Other services....................          17          18          19
    26.0  Supplies and materials............           7           7           7
    31.0  Equipment.........................           3           3           3
                                               ---------   ---------  ----------

    99.9    Total obligations...............          27          28          29
    ---------------------------------------------------------------------------

                                   Trust Funds

                        General Post Fund, National Homes

                        Transitional Housing Loan Program

                          (including transfer of funds)

        For the cost of direct loans, $7,000, as authorized by Public Law
    102-54, section 8, which shall be transferred from the ``General post
    fund'': Provided, That such costs, including the cost of modifying such
    loans, shall be as defined in section 502 of the Congressional Budget
    Act of 1974, as amended: Provided further, That these funds are
    available to subsidize gross obligations for the principal amount of
    direct loans not to exceed $70,000. In addition, for administrative
    expenses to carry out the direct loan programs, $54,000, which shall be
    transferred from the ``General post fund'', as authorized by Public Law
    102-54, section 8.
        Note.--A regular 1996 appropriation for this account had not been
    enacted at the time this budget was prepared. The 1996 amounts included
    in this budget are based on the levels provided in three continuing
    resolutions: P.L. 104-91, P.L. 104-92, and P.L. 104-99.

                  Unavailable Collections (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-8180-0-7-705      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------
        Balance, start of year:
    01.99 Balance, start of year............           2           2           5
        Receipts:
    02.01 General post fund, national homes,
            deposits........................          23          27          28
    02.02 General post fund, national homes,
            interest on investments.........           3           3           3
                                               ---------   ---------  ----------

    02.99   Total receipts..................          26          30          31
                                               ---------   ---------  ----------

    04.00 Total: Balances and collections...          28          32          36
        Appropriation:
    05.01 General post fund, national homes.         -26         -27         -28
    07.99 Total balance, end of year........           2           5           8
    ---------------------------------------------------------------------------

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-8180-0-7-705      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Religious, recreational, and
            entertainment activities........          22          23          25
    00.02 Research activities...............           4           4           4
    00.03 Therapeutic residence maintenance.                       1           1
    00.04 Therapeutic residence purchase and
            renovation......................           2           1
                                               ---------   ---------  ----------

    10.00   Total obligations...............          28          29          30
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.41 Unobligated balance available,
            start of year: U.S. Securities:
            Par value.......................          37          35          33
    22.00 New budget authority (gross)......          26          27          28
                                               ---------   ---------  ----------

    23.90   Total budgetary resources
              available for obligation......          63          62          61
    23.95 New obligations...................         -28         -29         -30
    24.41 Unobligated balance available, end
            of year: U.S. Securities: Par
            value...........................          35          33          31
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    60.27 Appropriation (trust fund,
            indefinite).....................          26          27          28
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation           2           3           5
    73.10 New obligations...................          28          29          30
    73.20 Total outlays (gross).............         -27         -27         -28
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation           3           5           7
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................          26          27          26

    [[Page 838]]

    86.98 Outlays from permanent balances...           1           2           2
                                               ---------   ---------  ----------

    87.00   Total outlays (gross)...........          27          27          28
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................          26          27          28
    90.00 Outlays...........................          27          27          28
    ---------------------------------------------------------------------------

        This fund consists of gifts, bequests, and proceeds from the sale of
    property left in the care of the facilities by former beneficiaries,
    patients' fund balances, and proceeds from the sale of effects of
    beneficiaries who die leaving no heirs or without having otherwise
    disposed of their estate. Such funds are used to promote the comfort and
    welfare of veterans at hospitals, nursing homes, and domiciliaries where
    no general appropriation is available. Public Law 102-54 authorizes
    compensation work therapy and therapeutic transitional housing and loan
    programs to be funded from the General Post Fund. In addition, donations
    from pharmaceutical companies, non-profit corporations, and individuals
    to support VA medical research are deposited into this fund. (38 U.S.C.
    chs. 83 and 85.)

        Also under this heading are the activities of the Transitional
    Housing Loan Program. This program provides loans to nonprofit
    organizations to assist them in leasing housing units exclusively for
    use as a transitional group residence for veterans who are in (or who
    have recently been in) a program for the treatment of substance abuse.
    The amount of the loan cannot exceed $4,500 for any single residential
    unit and each loan must be repaid within two years through monthly
    installments. The total amount of loans outstanding at any time may not
    exceed $100,000.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-8180-0-7-705      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------
    21.0  Travel and transportation of
            persons.........................           6           6           6
    25.2  Other services....................          10          10          10
    26.0  Supplies and materials............           8           8           8
    31.0  Equipment.........................           3           3           3
    99.5  Below reporting threshold.........           1           2           3
                                               ---------   ---------  ----------

    99.9    Total obligations...............          28          29          30
    ---------------------------------------------------------------------------

                        VETERANS BENEFITS ADMINISTRATION

                                  Federal Funds

    General and special funds:

                            Compensation and Pensions

        Note.--A regular 1996 appropriation for this account had not been
    enacted at the time this budget was prepared. The 1996 amounts included
    in this budget are based on the levels provided in three continuing
    resolutions: P.L. 104-91, P.L. 104-92, and P.L. 104-99.
        Activities formerly included in this account are proposed to be
    financed by three separate appropriation accounts in 1997 and are
    presented below in the ``Compensation'', ``Pensions'', and ``Burial
    benefits and miscellaneous assistance'' accounts. Amounts for 1995,
    1996, and 1997 are shown on a comparable basis. The following table
    shows the distribution of the amounts (dollars in millions) appropriated
    in 1995 and 1996 and requested in 1997.

                                         1995 actual  1996 est.   1997 est.
    Distribution of budget authority by
        account:
      Compensation......................     $14,579     $15,203     $15,393
      Pensions..........................       3,017       2,995       2,987
      Burial benefits...................         109         115         118
    Distribution of outlays by account:
      Compensation......................      14,806      14,109      15,382
      Pensions..........................       3,024       2,757       2,975
      Burial benefits...................         109         115         118

                                  Compensation

        For the payment of compensation benefits to or on behalf of veterans
    as authorized by law, $15,393,198,000, to remain available until
    expended, of which not to exceed $2,098,000 shall be reimbursed to
    ``General operating expenses'' for necessary expenses as authorized by
    chapters 11, 13, 51, 53, 55 and 61 of title 38, United States Code.
        For the payment, after June 30 of the current fiscal year, of
    compensation benefits to or on behalf of veterans as authorized by law,
    for unanticipated costs incurred for the current fiscal year, such sums
    as may be necessary. (38 U.S.C. 107, and chapters 11, 13, and 61)
        Note.--A regular 1996 appropriation for this account had not been
    enacted at the time this budget was prepared. The 1996 amounts included
    in this budget are based on the levels provided in three continuing
    resolutions: P.L. 104-91, P.L. 104-92, and P.L. 104-99.

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0153-0-1-701      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.02 World War I.......................           4           3           2
    00.03 World War II......................       3,478       3,412       3,277
    00.04 Korean conflict...................       1,140       1,155       1,138
    00.05 Vietnam era.......................       4,370       4,583       4,687
    00.06 Peacetime service.................       2,307       2,402       2,436
    00.07 Persian Gulf conflict.............         342         432         500
                                               ---------   ---------  ----------

    00.91   Total veterans..................      11,642      11,987      12,040
    01.04 World War I.......................          73          65          57
    01.05 World War II......................       1,266       1,302       1,321
    01.06 Korean conflict...................         372         394         411
    01.07 Vietnam era.......................         903         945       1,005
    01.08 Peacetime service.................         453         461         465
    01.09 Persian Gulf conflict.............          35          49          58
                                               ---------   ---------  ----------

    01.91   Total survivors.................       3,103       3,216       3,317
    02.01 Clothing allowance................          36          33          33
                                               ---------   ---------  ----------

    02.93   Total compensation..............      14,781      15,235      15,391
    09.01 Payment to general operating
            expenses........................           2           2           2
                                               ---------   ---------  ----------

    10.00   Total obligations...............      14,783      15,237      15,393
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested
            balance.........................         238          34
    22.00 New budget authority (gross)......      14,579      15,205      15,393
                                               ---------   ---------  ----------

    23.90   Total budgetary resources
              available for obligation......      14,817      15,239      15,393
    23.95 New obligations...................     -14,783     -15,237     -15,393
    24.40 Unobligated balance available, end
            of year: Uninvested balance.....          34
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................      14,173      15,176      15,393
    42.00 Transferred from other accounts...         406          29
                                               ---------   ---------  ----------

    43.00   Appropriation (total)...........      14,579      15,205      15,393
                                               ---------   ---------  ----------

    70.00   Total new budget authority
              (gross).......................      14,579      15,205      15,393
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation          36          13       1,142
    73.10 New obligations...................      14,783      15,237      15,393
    73.20 Total outlays (gross).............     -14,806     -14,109     -15,382
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation          13       1,142       1,153
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority      14,579      14,063      14,240
    86.93 Outlays from current balances.....         227          46       1,142
                                               ---------   ---------  ----------

    87.00   Total outlays (gross)...........      14,806      14,109      15,382
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................      14,579      15,205      15,393
    90.00 Outlays...........................      14,806      14,109      15,382
    ---------------------------------------------------------------------------

                     Summary of Budget Authority and Outlays

                            (in millions of dollars)

                                         1995 actual  1996 est.   1997 est.
    Enacted/requested:
      Budget Authority..................      14,579      15,205      15,393
      Outlays...........................      14,806      14,109      15,382

    [[Page 839]]

    Legislative proposal, not subject to
        PAYGO:
      Budget Authority..................                                 307
      Outlays...........................                                 276
    Legislative proposal, subject to
        PAYGO:
      Budget Authority..................                     -36        -129
      Outlays...........................                     -36        -129
                                        ------------------------------------
    Total:
      Budget Authority..................      14,579      15,169      15,571
      Outlays...........................      14,806      14,073      15,529
                                        ====================================

        This appropriation would provide for the payment of compensation
    benefits to veterans and survivors. Compensation is paid to veterans for
    disabilities incurred in or aggravated during active military service.
    Death and Indemnity Compensation is paid to survivors of servicepersons
    or veterans whose death occurred while on active duty or as a result of
    service-connected disabilities.

        The Secretary may pay a clothing allowance to each veteran who uses
    a prescribed medication for a service-connected skin condition, or wears
    a prosthetic or orthopedic appliance (including a wheelchair) which, in
    the judgment of the Secretary, tends to damage or tear the clothing of
    such veteran.

        Caseload and cost tables shown below do not include proposed
    legislation.

                AVERAGE NUMBER OF COMPENSATION CASES AND PAYMENTS

                                         1995 actual  1996 est.   1997 est.
    Veterans:
      Mexican border period.............          13          11          11
      World War I.......................         733         530         390
      World War II......................     709,248     674,100     638,700
      Korean conflict...................     192,309     188,600     184,600
      Vietnam era.......................     699,729     708,082     715,472
      Peacetime service.................     503,733     521,377     538,327
      Persian Gulf conflict.............     120,179     147,500     169,900
                                        ------------------------------------
          Total.........................   2,225,944   2,240,200   2,247,000
      Average payment per case, per year      $5,230      $5,351      $5,357
          Total obligations (in
            millions)...................     $11,643     $11,988     $12,041
                                        ====================================
    Survivors:
      Prior to Spanish-American War.....           1           1           1
      Spanish-American War..............          26          22          18
      Mexican border period.............           3           2           2
      World War I.......................       7,391       6,356       5,466
      World War II......................     127,579     124,788     122,252
      Korean conflict...................      37,443      37,310      37,220
      Vietnam era.......................      86,287      88,251      90,261
      Peacetime service.................      45,888      44,832      43,807
      Persian Gulf conflict.............       2,825       3,738       4,273
                                        ------------------------------------
          Total.........................     307,443     305,300     303,300
      Average payment per case, per year     $10,094     $10,531     $10,939
          Total obligations (in
            millions)...................      $3,104      $3,216      $3,319
                                        ====================================
    Clothing allowance:
      Number of veterans................      72,622      65,600      65,800
      Average payment per case, per year        $490        $503        $503
          Total obligations (in
            millions)...................         $36         $33         $33
                                        ====================================

                                  Compensation

                  (Legislative proposal, not subject to PAYGO)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0153-2-1-701      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.02 World War I.......................
    00.03 World War II......................                                  64
    00.04 Korean conflict...................                                  22
    00.05 Vietnam era.......................                                  92
    00.06 Peacetime service.................                                  48
    00.07 Persian Gulf conflict.............                                  10
                                               ---------   ---------  ----------

    00.91   Total veterans..................                                 236
    01.04 World War I.......................                                   1
    01.05 World War II......................                                  28
    01.06 Korean conflict...................                                   9
    01.07 Vietnam era.......................                                  21
    01.08 Peacetime service.................                                  10
    01.09 Persian Gulf conflict.............                                   1
                                               ---------   ---------  ----------

    01.91   Total survivors.................                                  70
    02.01 Clothing allowance................                                   1
                                               ---------   ---------  ----------

    02.93   Total compensation..............                                 307
                                               ---------   ---------  ----------

    10.00   Total obligations (object class
              42.0).........................                                 307
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......                                 307
    23.95 New obligations...................                                -307
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................                                 307
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    73.10 New obligations...................                                 307
    73.20 Total outlays (gross).............                                -276
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation                                  31
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority                                 276
                                               ---------   ---------  ----------

    87.00   Total outlays (gross)...........                                 276
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................                                 307
    90.00 Outlays...........................                                 276
    ---------------------------------------------------------------------------

        Legislation will be proposed to provide a cost-of-living adjustment
    (COLA) to all compensation beneficiaries including spouses and children.
    This increase, effective December 1, 1996, is expected to be 2.8 percent
    and cost $307 million in fiscal year 1997.

                                  Compensation

                    (Legislative proposal, subject to PAYGO)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0153-4-1-701      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 COLA round down...................                                 -18
    00.02 Repeal Gardner decision...........                     -36        -111
                                               ---------   ---------  ----------

    10.00   Total obligations (object class
              42.0).........................                     -36        -129
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......                     -36        -129
    23.95 New obligations...................                      36         129
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................                     -36        -129
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    73.10 New obligations...................                     -36        -129
    73.20 Total outlays (gross).............                      36         129
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority                     -36        -129
                                               ---------   ---------  ----------

    87.00   Total outlays (gross)...........                     -36        -129
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................                     -36        -129
    90.00 Outlays...........................                     -36        -129
    ---------------------------------------------------------------------------

        This legislative proposal would permanently round down annual COLA
    increases to the next lower full dollar amount.

        Legislation will also be proposed to clarify entitlement to benefits
    for disabilities resulting from medical care or vocational
    rehabilitation services provided by VA. This provision would repeal the
    Supreme Court ruling in the Gardner v. Brown case.

                                    Pensions

        For the payment of pension benefits to or on behalf of veterans as
    authorized by law, $2,986,932,000, to remain available until ex

    [[Page 840]]
    pended; of which not to exceed $24,319,000 shall be reimbursed to
    ``General operating expenses'' and ``Medical care'' for necessary
    expenses as authorized by chapters 51, 53, 55, and 61 of title 38,
    United States Code; and of which such sums as may be earned on an actual
    qualifying patient basis, shall be reimbursed to ``Medical facilities
    revolving fund'' to augment the funding of individual medical facilities
    for nursing home care provided to pensioners as authorized by chapter
    55: Provided, That $12,000,000 previously transferred from
    ``Compensation and Pensions'' to ``Medical Facilities Revolving Fund''
    shall be transferred to this heading.
        For the payment, after June 30 of the current fiscal year, of
    pension benefits to or on behalf of veterans as authorized by law, for
    unanticipated costs incurred for the current fiscal year, such sums as
    may be necessary. (38 U.S.C. chapters 15 and 61.)
        Note.--A regular 1996 appropriation for this account had not been
    enacted at the time this budget was prepared. The 1996 amounts included
    in this budget are based on the levels provided in three continuing
    resolutions: P.L. 104-91, P.L. 104-92, and P.L. 104-99.

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0154-0-1-701      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Pensions:

            Veterans:
    04.01     Improved law..................       2,092       2,099       2,105
    04.02     Prior law.....................          92          78          66
    04.03     Old law.......................           1           1           1
                                               ---------   ---------  ----------

    04.91       Total veterans..............       2,185       2,178       2,172
            Survivors:
    05.01     Improved law..................         667         663         661
    05.02     Prior law.....................         140         125         112
    05.03     Old law.......................           3           2           2
                                               ---------   ---------  ----------

    05.91       Total survivors.............         810         790         775
                                               ---------   ---------  ----------

    06.93     Total pensions................       2,995       2,968       2,947
          Other expenses:

    09.01   Medical facility expenses.......           2           3           3
    09.02   Reimbursement to GOE and VHA....          20          23          24
                                               ---------   ---------  ----------

    09.91     Total other expenses..........          22          26          27
                                               ---------   ---------  ----------

    10.00   Total obligations...............       3,017       2,994       2,974
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......       3,017       2,994       2,987
    22.20 Unobligated balance transferred...                                  12
                                               ---------   ---------  ----------

    23.90   Total budgetary resources
              available for obligation......       3,017       2,995       2,999
    23.95 New obligations...................      -3,017      -2,994      -2,974
    24.40 Unobligated balance available, end
            of year: Uninvested balance.....                                  25
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Current:

    40.00   Appropriation...................       3,343       3,044       2,987
    41.00   Transferred to other accounts...        -326         -50
                                               ---------   ---------  ----------

    43.00     Appropriation (total).........       3,017       2,995       2,987
          Permanent:

    62.00   Transferred from other accounts.           1
                                               ---------   ---------  ----------

    70.00   Total new budget authority
              (gross).......................       3,017       2,994       2,987
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation           8           3         239
    73.10 New obligations...................       3,017       2,994       2,974
    73.20 Total outlays (gross).............      -3,024      -2,757      -2,975
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation           3         239         240
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority       3,015       2,755       2,975
    86.93 Outlays from current balances.....           8           2
    86.97 Outlays from new permanent
            authority.......................           1
                                               ---------   ---------  ----------

    87.00   Total outlays (gross)...........       3,024       2,757       2,975
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................       3,017       2,995       2,987
    90.00 Outlays...........................       3,024       2,757       2,975
    ---------------------------------------------------------------------------

        Pension benefits may be paid to veterans or their survivors. A
    veteran's entitlement is based on active duty service of a specific
    length (normally 90 days or more) during a designated war period,
    disabilities considered permanent and total, and countable income below
    established levels. There is no disability requirement for survivor
    cases. Income support is provided at established benefit levels.

        Veterans who are under the age of 45 and are in receipt of a
    disability pension will be evaluated to determine whether a vocational
    goal is reasonably feasible. Those for whom a vocational goal is
    feasible are eligible for a program of vocational training.

        An automatic annual cost-of-living increase comparable to the annual
    social security increase is provided for those pensioners in the
    improved program and to parents receiving dependency and indemnity
    compensation. The increase, effective with payments made on January 1,
    1997, is expected to be 2.8 percent.

                  AVERAGE NUMBER OF PENSION CASES AND PAYMENTS

                                         1995 actual  1996 est.   1997 est.
    Veterans:
      Improved law......................     377,117     372,498     367,151
      Prior law.........................      57,388      48,664      41,317
      Old law and service...............         774         638         532
                                        ------------------------------------

          Total.........................     435,279     421,800     409,000
      Average payment per case, per year      $5,019      $5,163      $5,310
                                        ------------------------------------
          Total obligations (in
            millions)...................      $2,185      $2,178      $2,172
                                        ====================================
    Survivors:
      Improved law......................     216,191     210,291     205,264
      Prior law.........................     142,567     126,988     113,314
      Old law and service...............       4,684       3,821       3,122
                                        ------------------------------------
          Total.........................     363,442     341,100     321,700
      Average payment per case, per year      $2,230      $2,318      $2,411
                                        ------------------------------------
          Total obligations (in
            millions)...................        $811        $791        $776
                                        ====================================
    Vocational training:
      Trainees..........................         148         100          50
      Average benefit per year..........      $1,694      $1,740      $1,780
                                        ------------------------------------
          Total obligations (in
            millions) 1............
                                        ====================================
        1 Amounts round to less than $1 million.

                  Burial Benefits and Miscellaneous Assistance

        For the payment of burial benefits, emergency and other officers'
    retirement pay, adjusted-service credits and certificates, payment of
    premiums due on commercial life insurance policies guaranteed under
    Article IV of the Soldiers' and Sailors' Civil Relief Act of 1940, as
    amended, and for other benefits as authorized by law, $117,724,000, to
    remain available until expended. (38 U.S.C. 107, 1312, 1977, and 2106,
    chapters 23, 51, 53, 55, and 61; 50 U.S.C. App. 540-548; 43 Stat. 122,
    123; 45 Stat. 735; 76 Stat. 1198.)
        Note.--A regular 1996 appropriation for this account had not been
    enacted at the time this budget was prepared. The 1996 amounts included
    in this budget are based on the levels provided in three continuing
    resolutions: P.L. 104-91, P.L. 104-92, and P.L. 104-99.

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0155-0-1-701      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Burial benefits:

    07.01   Burial allowances...............          38          38          37
    07.02   Burial plots....................          13          13          13
    07.03   Service-connected deaths........          13          13          13
    07.04   Burial flags....................          14          15          16
    07.05   Headstones and markers..........          24          27          28
    07.07   Graveliners.....................           6           8           9
                                               ---------   ---------  ----------

    [[Page 841]]

    07.91     Total burial benefits.........         107         113         116
    08.03 Special allowance dependents......           1           1           1
    08.04 Equal access to justice...........           1           1           1
                                               ---------   ---------  ----------

    08.91   Total miscellaneous assistance..           2           2           2
                                               ---------   ---------  ----------

    10.00   Total obligations (object class
              42.0).........................         109         115         118
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......         109         115         118
    23.95 New obligations...................        -109        -115        -118
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................         111         112         118
    41.00 Transferred to other accounts.....          -2
    42.00 Transferred from other accounts...                       3
                                               ---------   ---------  ----------

    43.00   Appropriation (total)...........         109         115         118
                                               ---------   ---------  ----------

    70.00   Total new budget authority
              (gross).......................         109         115         118
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    73.10 New obligations...................         109         115         118
    73.20 Total outlays (gross).............        -109        -115        -118
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority         109         115         118
                                               ---------   ---------  ----------

    87.00   Total outlays (gross)...........         109         115         118
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................         109         115         118
    90.00 Outlays...........................         109         115         118
    ---------------------------------------------------------------------------

        Burial benefits.--Provides for: (a) the payment of an allowance of
    $300 (plus transportation charges where death occurs under VA care) to
    reimburse, in part, the burial and funeral expense of an eligible
    deceased veteran; (b) the payment of $150 for a plot allowance where an
    eligible veteran is not buried in a national cemetery or other cemetery
    under the jurisdiction of the United States; (c) the payment of a burial
    allowance up to $1,500 when a veteran dies as the result of service-
    connected disability; (d) furnishing a flag to drape the casket of each
    deceased veteran entitled thereto; (e) furnishing a headstone or marker
    for the grave of a veteran and, in certain cases, eligible dependents;
    and (f) authority to provide graveliners in the National cemetery
    system.

                            NUMBER OF BURIAL BENEFITS

                                         1995 actual  1996 est.   1997 est.
    Burial allowance....................      93,921      92,700      91,500
    Burial plot.........................      84,617      84,000      83,400
    Service-connected death.............      10,040      10,300      10,500
    Burial flags........................     447,206     682,800     464,200
    Headstone markers...................     284,786     320,000     326,000
    Headstone allowance.................          30          20          10
    Graveliners.........................      45,787      52,284      53,460

        Miscellaneous assistance.--Provides for: (a) payments to emergency
    officers of World War I and certain officers of the Regular
    Establishment who have retired because of service-connected disability;
    (b) payments for claims made pursuant to the provision of the World War
    Adjusted Compensation Act of 1924, as amended; (c) a special allowance
    (38 U.S.C. 1312) to dependents of certain veterans who died after
    December 31, 1956, but who were not fully and currently insured under
    the Social Security Act; and (d) payments authorized by the Equal Access
    to Justice Act.

                        MISCELLANEOUS ASSISTANCE CASELOAD

                                         1995 actual  1996 est.   1997 est.
    Retired Officers....................           6           5           4
    Adjusted service and dependence pay.
    Special allowance dependents........         158         158         158
    Equal Access to Justice payments....         265         265         265

                              Readjustment Benefits

        For the payment of readjustment and rehabilitation benefits to or on
    behalf of veterans as authorized by 38 U.S.C. chapters 21, 30, 31, 34,
    35, 36, 39, 51, 53, 55, and 61, $1,227,000,000, to remain available
    until expended: Provided, That funds shall be available to pay any court
    order, court award or any compromise settlement arising from litigation
    involving the vocational training program authorized by section 18 of
    Public Law 98-77, as amended.
        Note.--A regular 1996 appropriation for this account had not been
    enacted at the time this budget was prepared. The 1996 amounts included
    in this budget are based on the levels provided in three continuing
    resolutions: P.L. 104-91, P.L. 104-92, and P.L. 104-99.

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0137-0-1-702      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Direct program:

            Education and training:
    00.01     Sons and daughters............          91          88          86
    00.02     Spouses.......................          10          10          10
                                               ---------   ---------  ----------

    00.91       Total education and training         101          98          96
            Special assistance to disabled
                veterans:
    01.01     Vocational rehabilitation.....         298         349         388
    01.02     Housing grants................          16          16          16
    01.03     Automobiles, adaptive
                equipment, maintenance and
                repair......................          27          22          18
                                               ---------   ---------  ----------

    01.91       Total special assistance to
                  disabled veterans.........         341         387         422
    02.01   Work study......................          29          34          38
    02.02   Payments to states..............          13          13          13
    02.03   All-volunteer Assistance:
              Veteran's basic benefits......         672         747         809
                                               ---------   ---------  ----------

    02.93     Total direct program..........       1,156       1,279       1,378
          Reimbursable program:

    03.01   Veterans' basic benefits........          14          17          15
    03.02   Veterans' supplementary benefits          75          80          78
    03.03   Reservists benefits.............         108         112         111
    03.04   Jobs program....................           8
                                               ---------   ---------  ----------

    04.92     Total reimbursable............         204         209         204
                                               ---------   ---------  ----------

    10.00   Total obligations...............       1,360       1,488       1,582
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested
            balance.........................          65          93         152
    22.00 New budget authority (gross)......       1,395       1,554       1,431
    22.30 Unobligated balance expiring......          -5          -7
                                               ---------   ---------  ----------

    23.90   Total budgetary resources
              available for obligation......       1,455       1,640       1,582
    23.95 New obligations...................      -1,360      -1,488      -1,582
    24.40 Unobligated balance available, end
            of year: Uninvested balance.....          93         152
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Current:

    40.00   Appropriation...................       1,287       1,345       1,227
    41.00   Transferred to other accounts...         -95
                                               ---------   ---------  ----------

    43.00     Appropriation (total).........       1,192       1,345       1,227
          Permanent:

    68.00   Spending authority from
              offsetting collections:
              Offsetting collections (cash).         202         210         204
                                               ---------   ---------  ----------

    70.00   Total new budget authority
              (gross).......................       1,395       1,554       1,431
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation          85          51          55
    73.10 New obligations...................       1,360       1,488       1,582
    73.20 Total outlays (gross).............      -1,394      -1,484      -1,579
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation          51          55          58
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority       1,107       1,345       1,227
    86.97 Outlays from new permanent
            authority.......................         197         138         204
    86.98 Outlays from permanent balances...          89                     147
                                               ---------   ---------  ----------

    87.00   Total outlays (gross)...........       1,394       1,484       1,579
    ----------------------------------------------------------------------------

    [[Page 842]]

        Offsets:
          Against gross budget authority and outlays:

            Offsetting collections (cash)
                from:
    88.00     Federal sources...............        -197        -210        -204
    88.40     Non-Federal sources...........          -5
                                               ---------   ---------  ----------

    88.90       Total, offsetting
                  collections (cash)........        -202        -210        -204
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................       1,192       1,344       1,227
    90.00 Outlays...........................       1,191       1,274       1,375
    ---------------------------------------------------------------------------

                     Summary of Budget Authority and Outlays

                            (in millions of dollars)

                                         1995 actual  1996 est.   1997 est.
    Enacted/requested:
      Budget Authority..................       1,192       1,345       1,227
      Outlays...........................       1,191       1,273       1,374
    Legislative proposal, subject to
        PAYGO:
      Budget Authority..................                                 -20
      Outlays...........................                                 -20
                                        ------------------------------------
    Total:
      Budget Authority..................       1,192       1,345       1,207
      Outlays...........................       1,191       1,273       1,354
                                        ====================================

        This appropriation finances educational assistance allowances for
    certain peacetime veterans and for eligible dependents of those
    veterans: (a) who died from service-connected causes or have a total and
    permanent rated service-connected disability; and (b) servicepersons who
    were captured or missing in action. In addition, certain disabled
    veterans are provided with vocational rehabilitation, specially adapted
    housing grants, and automobile grants with the associated approved
    adaptive equipment. The funding level in 1997 will consist of
    appropriated funds of $1,227 million and available funds from 1996 of
    $152 million.

        The following table provides a comparison of trainees and costs for
    the Dependents Educational Assistance program.

                           NUMBER OF TRAINEES AND COST

                                         1995 actual  1996 est.   1997 est.
    Sons and daughters:
      Number of trainees................      34,793      33,925      33,097
      Average cost per trainee..........      $2,607      $2,608      $2,609
                                        ------------------------------------
          Total cost (in millions)......         $91         $88         $86
                                        ====================================
    Spouses and widow(ers):
      Number of trainees................       4,648       4,743       4,841
      Average cost per trainee..........      $2,052      $2,052      $2,051
                                        ------------------------------------
          Total cost (in millions)......         $10         $10         $10
                                        ====================================

        Special assistance to disabled veterans.--Service-disabled veterans
    requiring vocational rehabilitation receive assistance to cover the
    costs of subsistence, tuition, books, supplies, and equipment.

        Specially adapted housing grants, up to a maximum of $38,000, are
    provided to certain severely disabled veterans. Veterans who suffer
    service-connected blindness or who have lost the use of both upper
    extremities can receive up to $6,500.

        An allowance, up to a maximum of $5,500, is provided to certain
    service-disabled veterans and servicepersons toward the purchase price
    of an automobile. Adaptive equipment and the maintenance and replacement
    of such equipment is also provided.

        The following table shows a caseload and cost comparison for these
    beneficiaries.

                         CASELOAD AND AVERAGE COST DATA

    Vocational Rehabilitation:           1995 actual  1996 est.   1997 est.
      Number of trainees:
        10% rated disabled..............       3,806       3,311       2,881
        rehabilitated...................       1,308       1,530       1,835
        20% rated disabled..............      13,913      15,304      16,834
        rehabilitated...................       1,367       1,604       1,925
        30% rated disabled..............      11,218      13,224      14,523
        rehabilitated...................       1,294       1,506       1,807
        40% rated disabled..............       6,649       8,004       8,790
        rehabilitated...................         833         968       1,162
        50% rated disabled..............       3,639       4,176       4,586
        rehabilitated...................         452         510         611
        60% rated disabled..............       2,612       3,132       3,440
        rehabilitated...................         373         411         493
        70% rated disabled..............       1,004       1,392       1,529
        rehabilitated...................         156         187         225
        80% rated disabled..............         489         696         764
        rehabilitated...................          81          97         117
        90% rated disabled..............         151         348         382
        rehabilitated...................          37          44          53
        100% rated disabled.............       4,366       4,872       5,351
        rehabilitated...................         281         310         372
          Total number of trainees......      47,847      54,459      59,080
          Total number rehabilitated....       6,182       7,167       8,600
          Percent of total rehabilitated       12.92       13.16       14.56
      Average cost per trainee..........      $6,231      $6,405      $6,571
                                        ------------------------------------
          Total cost (in thousands).....    $298,132    $348,810    $388,215
                                        ====================================
    Housing grants:
      Number of housing grants..........         486         486         486
      Average cost per grant............     $33,620     $33,620     $33,620
                                        ------------------------------------
          Total cost (in thousands).....     $16,327     $16,327     $16,327
                                        ====================================
    Automobiles or other conveyances:
      Number of conveyances.............       1,141       1,141       1,141
      Average cost per conveyance.......      $4,921      $4,921      $4,921
                                        ------------------------------------
          Total cost (in thousands).....      $5,615      $5,615      $5,615
                                        ====================================
    Adaptive equipment (including
        maintenance, repair and
        installation for automobiles):
      Number of items...................       6,878       5,097       3,777
      Average cost......................      $3,139      $3,224      $3,311
                                        ------------------------------------
          Total cost (in thousands).....     $21,589     $16,433     $12,506
                                        ====================================

        Work-Study.--Certain veterans pursuing a program of rehabilitation,
    education, or training, who are enrolled as a full-time student, can
    work up to 250 hours and receive a maximum of $1,062.50 per semester,
    paid at the rate of the Federal or State minimum wage, whichever is
    higher.

                                         1995 actual  1996 est.   1997 est.
      Number of contracts...............      34,707      46,192      51,888

        Payments to States.--State approving agencies are reimbursed for the
    costs of inspecting, approving, and supervising programs of education
    and training offered by educational institutions and training
    establishments in which veterans, dependents, and reservists are
    enrolled or are about to enter.

        All Volunteer Force educational assistance (Montgomery GI Bill).--
    Public Law 98-525, enacted October 19, 1984, established two new
    peacetime educational programs: an assistance program for veterans who
    enter active duty during the period beginning July 1, 1985; and an
    assistance program for certain members of the Selected Reserve. The
    Readjustment benefits appropriation pays the basic benefit allowance for
    the peacetime veterans. Supplementary educational assistance for
    peacetime veterans and the basic benefit allowance for reservists are
    financed by payments from the Department of Defense and the Department
    of Transportation.

        The following table shows a caseload and cost comparison for these
    beneficiaries under existing legislation, and reflects the supplemental
    request.

                         CASELOAD AND AVERAGE COST DATA

                                         1995 actual  1996 est.   1997 est.
    Veterans:
      Number of trainees................     291,958     301,776     320,084

    [[Page 843]]

      Average cost per trainee..........      $2,604      $2,796      $2,821
                                        ------------------------------------
          Total cost (in thousands).....\1\ $760,390\2\ $843,907\3\ $902,867
                                        ====================================
    Reservists:
      Number of trainees................      97,246     114,825     109,243
      Average cost per trainee..........      $1,111        $988      $1,013
                                        ------------------------------------
          Total cost (in thousands).....    $108,004    $113,471    $110,693
                                        ====================================
        \1\ Includes $671,873 thousand of basic benefits (VA funded),
    $13,663 thousand of basic benefits (DOD funded), and $74,854 thousand of
    supplemental benefits (DOD funded).
        \2\ Includes $747,407 thousand of basic benefits (VA funded),
    $16,600 thousand of basic benefits, (DOD funded) and $79,900 thousand of
    supplemental benefits (DOD funded).
        \3\ Includes $809,167 thousand of basic benefits (VA funded),
    $15,400 thousand of basic benefits (DOD funded) and $78,300 thousand of
    supplemental benefits (DOD funded).

        Jobs Training.--Public Law 102-484 authorized the Department of
    Defense to enter into agreements with the Departments of Labor and
    Veterans Affairs to provide job assistance to members of the Armed
    Forces who are forced or induced to leave military service on or after
    August 2, 1990 as part of the drawdown. There was $9 million available
    to fund this program until September 30, 1995.

                                         1995 actual  1996 est.   1997 est.
    Veterans:
      Number of participants............      10,994
      Average cost per participant......        $698
                                        ------------------------------------
          Total cost (in thousands).....      $8,151
                                        ====================================

        To facilitate account restructuring and consolidation, Readjustment
    Benefits also reflects budget information for the Veterans' Job Training
    program. Eligibility for the Veterans' Job Training program terminated
    on March 31, 1990.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0137-0-1-702      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------
    41.0  Direct obligations: Grants,
            subsidies, and contributions....       1,156       1,279       1,378
    99.0  Reimbursable obligations:
            Subtotal, reimbursable
            obligations.....................         204         209         204
                                               ---------   ---------  ----------

    99.9    Total obligations...............       1,360       1,488       1,582
    ---------------------------------------------------------------------------

                              Readjustment Benefits

                    (Legislative proposal, subject to PAYGO)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0137-4-1-702      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Direct program:

            Special assistance to disabled
                veterans:
    01.01     Vocational rehabilitation.....                                 -20
                                               ---------   ---------  ----------

    02.93     Total direct program..........                                 -20
                                               ---------   ---------  ----------

    10.00   Total obligations...............                                 -20
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......                                 -20
    23.95 New obligations...................                                  20
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................                                 -20
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    73.10 New obligations...................                                 -20
    73.20 Total outlays (gross).............                                  20
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority                                 -20
                                               ---------   ---------  ----------

    87.00   Total outlays (gross)...........                                 -20
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................                                 -20
    90.00 Outlays...........................                                 -20
    ---------------------------------------------------------------------------

        The Administration is proposing legislation to overturn the Court of
    Veterans Appeals decision in Davenport v. Brown, which invalidated VA's
    long-standing regulations requiring a substantial linkage between the
    veteran's service-connected disability and his or her employment
    handicap.

      Reinstated Entitlement Program for Survivors Under Public Law 97-377

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0200-0-1-701      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Direct program:

    00.01   Benefit payments................          21          19          17
    00.02   Administrative expenses, VA.....           1           1           1
    00.03   Cole v. Brown payments..........           4           1
                                               ---------   ---------  ----------

    00.91     Total direct program..........          26          21          18
    01.01 Return of overpayment.............           1
                                               ---------   ---------  ----------

    10.00   Total obligations...............          27          21          18
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......          26          21          18
    23.95 New obligations...................         -27         -21         -18
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    68.00 Spending authority from offsetting
            collections (gross): Offsetting
            collections (cash)..............          26          21          18
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation          19          10           6
    73.10 New obligations...................          27          21          18
    73.20 Total outlays (gross).............         -35         -24         -18
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation          10           6           6
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................          16          21          18
    86.98 Outlays from permanent balances...          19           4
                                               ---------   ---------  ----------

    87.00   Total outlays (gross)...........          35          24          18
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.00   Offsetting collections (cash)
              from: Federal sources.........         -26         -21         -18
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................
    90.00 Outlays...........................           9           4
    ---------------------------------------------------------------------------

        In accordance with Public Law 97-377, this program restores social
    security benefits to certain surviving spouses or children of veterans
    who died of service-connected causes. Financing is provided in the form
    of offsetting collections from the Department of Defense.

                         CASELOAD AND AVERAGE COST DATA

                                         1995 actual  1996 est.   1997 est.
    Spouses.............................         496         440         390
    Average benefit.....................      $9,936     $10,277     $10,631
    Obligations (in millions)...........          $5          $5          $4
    Children............................       1,922       1,710       1,520
    Average benefit.....................      $8,120      $8,327      $8,493
    Obligations (in millions)...........         $16         $14         $13

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0200-0-1-701      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------
    25.2  Other services....................           1           2           1
    42.0  Insurance claims and indemnities..          25          19          17
    44.0  Refunds...........................           1
                                               ---------   ---------  ----------

    99.9    Total obligations...............          27          21          18
    ---------------------------------------------------------------------------

    [[Page 844]]

                       Veterans Insurance and Indemnities

        For military and naval insurance, national service life insurance,
    servicemen's indemnities, service-disabled veterans insurance, and
    veterans mortgage life insurance as authorized by 38 U.S.C. chapter 19;
    70 Stat. 887; 72 Stat. 487, $38,970,000, to remain available until
    expended.
        Note.--A regular 1996 appropriation for this account had not been
    enacted at the time this budget was prepared. The 1996 amounts included
    in this budget are based on the levels provided in three continuing
    resolutions: P.L. 104-91, P.L. 104-92, and P.L. 104-99.

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0120-0-1-701      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.04 Payment to national service life
            insurance fund..................           2           2           1
    00.05 Payment to service-disabled
            veterans insurance fund.........          29          35          31
    00.06 Total operating expenses..........           8           8           9
                                               ---------   ---------  ----------

    10.00   Total obligations...............          39          45          41
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested
            balance.........................           2
    22.00 New budget authority (gross)......          38          45          41
                                               ---------   ---------  ----------

    23.90   Total budgetary resources
              available for obligation......          40          45          41
    23.95 New obligations...................         -39         -45         -41
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Current:

    40.00   Appropriation...................          24          25          39
    42.00   Transferred from other accounts.          11          18
                                               ---------   ---------  ----------

    43.00     Appropriation (total).........          35          43          39
          Permanent:

    68.00   Spending authority from
              offsetting collections:
              Offsetting collections (cash).           2           2           2
                                               ---------   ---------  ----------

    70.00   Total new budget authority
              (gross).......................          38          45          41
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation           1
    73.10 New obligations...................          39          45          41
    73.20 Total outlays (gross).............         -39         -45         -41
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority          34          41          37
    86.97 Outlays from new permanent
            authority.......................           2           2           2
    86.98 Outlays from permanent balances...           3
                                               ---------   ---------  ----------

    87.00   Total outlays (gross)...........          39          45          41
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.40   Offsetting collections (cash)
              from: VMLI premiums...........          -2          -2          -2
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................          36          43          39
    90.00 Outlays...........................          37          43          39
    ---------------------------------------------------------------------------
        Note.--The Department of Veterans Affairs insurance policy loans are
    not an extension of Federal credit. Credit schedules previously shown
    for this account have been discontinued.

        Military and naval insurance.--Payments are made to the U.S.
    Government life insurance fund for certain World War I veterans for
    extra hazards of military service and for claims on war risk insurance
    issued to servicemen and veterans of World War I.

        National service life insurance.--Payments are made to the national
    service life insurance fund for certain World War II veterans for: (a)
    the extra hazards of service; (b) gratuitous insurance granted to
    certain persons unable to apply for national service life insurance; and
    (c) death claims on policies under the waiver of a premium while the
    insured was on active duty.

        Payments are also made to policyholders and beneficiaries on
    nonparticipating national service life insurance policies issued to
    World War II veterans with service-connected disabilities.

        Veterans mortgage life insurance (VMLI).--Payments are made to
    mortgage holders under this program which provides mortgage protection
    life insurance to veterans who have received a grant for specially
    adapted housing due to severe disabilities.

        The general decline in the number of policies and the amount of
    insurance in force is expected to continue in 1997 as indicated in the
    following table (dollars in thousands).

                                         1995 actual  1996 est.   1997 est.
    National service life insurance
        policies:
      Number of policies................       1,680       1,557       1,436
      Amount of insurance...............      $8,522      $7,789      $7,093
    VMLI policies:
      Number of policies................       4,002       3,850       3,700
      Amount of insurance...............    $224,933    $219,400    $218,200

        Payment to service-disabled veterans insurance fund.--Payments are
    made to the service-disabled veterans insurance fund to supplement the
    premiums and other receipts of the fund in amounts necessary to pay
    claims on insurance policies issued to veterans with service-connected
    disabilities.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0120-0-1-701      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------
    41.0  Grants, subsidies, and
            contributions...................          29          37          32
    42.0  Insurance claims and indemnities..          10           8           9
                                               ---------   ---------  ----------

    99.9    Total obligations...............          39          45          41
    ---------------------------------------------------------------------------

    Public enterprise funds:

                    Service-Disabled Veterans Insurance Fund

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4012-0-3-701      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Operating expenses:

    00.01   Death claims....................          38          42          45
    00.02   All other.......................          11          13          13
                                               ---------   ---------  ----------

    00.91     Total operating expenses......          49          55          58
          Capital investment:

    01.01   Total capital investment........          17          12          10
                                               ---------   ---------  ----------

    10.00   Total obligations...............          66          67          68
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.90 Unobligated balance available,
            start of year: Fund balance.....           8           3           6
    22.00 New budget authority (gross)......          62          70          66
                                               ---------   ---------  ----------

    23.90   Total budgetary resources
              available for obligation......          70          73          72
    23.95 New obligations...................         -66         -67         -68
    24.90 Unobligated balance available, end
            of year: Fund balance...........           3           6           5
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    68.00 Spending authority from offsetting
            collections (gross): Offsetting
            collections (cash)..............          61          70          66
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.90 Unpaid obligations, start of year:
            Obligated balance: Fund balance.           3           5           4
    73.10 New obligations...................          66          67          68
    73.20 Total outlays (gross).............         -63         -70         -68
    74.90 Unpaid obligations, end of year:
            Obligated balance: Fund balance.           5           4           4
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................          52          62          58
    86.98 Outlays from permanent balances...          11           8          10
                                               ---------   ---------  ----------

    87.00   Total outlays (gross)...........          63          70          68
    ----------------------------------------------------------------------------

    [[Page 845]]

        Offsets:
          Against gross budget authority and outlays:

            Offsetting collections (cash)
                from:
    88.00     Federal sources: Payments from
                VI and I....................         -29         -35         -31
              Non-Federal sources:
    88.40       Interest on loans...........          -1          -2          -2
    88.40       Insurance premiums earned...         -23         -24         -24
    88.40       Optional settlements........          -1          -1          -1
    88.40       Repayments of loans.........          -7          -8          -8
                                               ---------   ---------  ----------

    88.90       Total, offsetting
                  collections (cash)........         -61         -70         -66
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................
    90.00 Outlays...........................           2           2           2
    ---------------------------------------------------------------------------

        This fund finances the payment of claims on nonparticipating life
    insurance policies issued and currently is open for new issues to
    veterans having service-connected disabilities. The program provides
    insurance coverage for service-disabled veterans at standard rates.
    Administrative expenses are paid from the General operating expenses
    appropriation.

        Operating costs--
            Death claims.--Represents payments to designated beneficiaries.
            All other.--Represents payments to policyholders who surrender
        their policies for their cash value and hold endowment policies
        which have matured.

        Capital investment.--A policyholder may borrow up to 94 percent of
    the value of his policy.

        The trend in the number and amount of policies in force is indicated
    in the following table (dollars in thousands):

                                         1995 actual  1996 est.   1997 est.
    Number of policies..................     166,203     163,679     161,265
    Insurance in force..................  $1,518,916  $1,503,900  $1,490,800

        Financing.--Operations are financed from premiums and other
    receipts. Additional funds are received by transfer from the veterans'
    insurance and indemnities appropriation, instead of direct
    appropriations to this fund.

        Operating results and financial condition.--Since premium and other
    receipts are insufficient to cover operations, the fund continues to
    project liabilities in excess of assets. The deficit is expected to
    reach an estimated $462 million by September 30, 1997.

                            Statement of Operations (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   36-4012-0-3-701    1994 actual    1995 actual     1996 est.      1997 est.
    -----------------------------------------------------------------------------------------------
    0101  Revenue...........................          43             64            73             68
    0102  Expense...........................         -66            -66           -70            -71
                                            ------------ --------------  ------------  -------------
    0109  Net income or loss (-)............         -23             -2             3             -3
    -----------------------------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   36-4012-0-3-701    1994 actual    1995 actual     1996 est.      1997 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
    1101  Federal assets: Fund balances with
            Treasury........................          11              8            10              8
    1206  Non-Federal assets: Receivables,
            net.............................           2              1             2              3
    1601  Net value of assets related to
            pre-1992 direct loans receivable
            and acquired defaulted
            guaranteed loans receivable:
            Direct loans, gross.............          40             49            56             60
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................          53             58            68             71
        LIABILITIES:
          Non-Federal liabilities:

    2201    Accounts payable................           3              4             4              4
    2206    Pension and other actuarial
              liabilities...................         509            516           523            528
    2207    Other...........................           1              1             1              1
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............         513            521           528            533
        NET POSITION:
    3100  Appropriated capital..............           8              3             6              5
    3200  Invested capital..................        -468           -466          -466           -467
                                            ------------ --------------  ------------  -------------
    3999    Total net position..............        -460           -463          -460           -462
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position          53             58            68             71
    -----------------------------------------------------------------------------------------------

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4012-0-3-701      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------
    33.0  Investments and loans.............          17          15          13
    42.0  Insurance claims and indemnities..          49          52          55
                                               ---------   ---------  ----------

    99.9    Total obligations...............          66          67          68
    ---------------------------------------------------------------------------

                        Veterans Reopened Insurance Fund

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4010-0-3-701      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Operating expenses:

    00.01   Death claims....................          29          32          35
    00.02   Dividends.......................          31          31          29
    00.03   All other.......................           9          10           9
                                               ---------   ---------  ----------

    00.91     Total operating expenses......          69          73          73
          Capital investment:

    01.01   Policy loans....................           7           6           6
                                               ---------   ---------  ----------

    10.00   Total obligations...............          76          79          79
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
          Unobligated balance available, start of year:

    21.90   Fund balance....................           1                       1
    21.91   U.S. Securities: Par value......         500         498         491
                                               ---------   ---------  ----------

    21.99     Total unobligated balance,
                start of year...............         501         498         492
    22.00 New budget authority (gross)......          73          72          67
                                               ---------   ---------  ----------

    23.90   Total budgetary resources
              available for obligation......         574         570         559
    23.95 New obligations...................         -76         -79         -79
          Unobligated balance available, end of year:

    24.90   Fund balance....................                       1           1
    24.91   U.S. Securities: Par value......         498         490         478
                                               ---------   ---------  ----------

    24.99   Total unobligated balance, end
              of year.......................         498         491         479
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    68.00 Spending authority from offsetting
            collections (gross): Offsetting
            collections (cash)..............          73          72          67
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.91 Unpaid obligations, start of year:
            Obligated balance: U.S.
            Securities: Par value...........          24          28          32
    73.10 New obligations...................          76          79          79
    73.20 Total outlays (gross).............         -72         -76         -76
    74.91 Unpaid obligations, end of year:
            Obligated balance: U.S.
            Securities: Par value...........          28          32          35
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................          72          72          67
    86.98 Outlays from permanent balances...                       4           9
                                               ---------   ---------  ----------

    87.00   Total outlays (gross)...........          72          76          76
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

            Offsetting collections (cash)
                from:
    88.00     Federal sources: Interest on
                U.S. securities.............         -50         -48         -44
              Non-Federal sources:
    88.40       Interest on loans...........          -1          -1          -1
    88.40       Insurance premiums earned...         -18         -17         -16
    88.40       Repayments of loans.........          -5          -6          -6
                                               ---------   ---------  ----------

    88.90       Total, offsetting
                  collections (cash)........         -73         -72         -67
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................
    90.00 Outlays...........................          -2           4           9
    ---------------------------------------------------------------------------
        Note.--The Department of Veterans Affairs insurance policy loans are
    not an extension of Federal credit. Credit schedules previously shown
    for this account have been discontinued.

        This fund pays claims and administrative costs on participating life
    insurance policies issued during the period May

    [[Page 846]]
    1, 1965, through May 2, 1966, under three life insurance programs: (1)
    service-disabled standard insurance; (2) service-disabled rated
    insurance; and (3) nonservice disabled insurance availing disabled World
    War II and Korean conflict veterans an opportunity to acquire life
    insurance coverage who were no longer eligible for other Government
    insurance.

        Budget program--
            Death claims.--Represents payments to designated beneficiaries.
            Dividends.--Policyholders participate in the distribution of
        annual dividends.
            All other.--This represents payments to the General operating
        expenses appropriation for the administrative costs of processing
        claims and maintaining the accounts, and to those policyholders who:
        (a) surrender their policies for cash value; (b) hold endowment
        policies which have matured; and (c) have purchased total disability
        income coverage and subsequently become disabled.
            Policy loans made.--A policyholder may borrow up to 94 percent
        of the cash value of his policy at an interest rate adjusted to
        reflect private sector borrowing costs.
            The following table reflects the decrease in the number of
        policies and the amount of insurance in force (dollars in
        thousands):

                                         1995 actual  1996 est.   1997 est.
      Number of policies................     102,020      97,650      92,990
      Insurance in force................    $770,664    $751,800    $729,800

        Financing.--Operations are financed from premiums collected from
    policyholders and interest on investments. Excess earnings of the fund
    are now distributed to the policyholders in the form of an annual
    dividend.

                            Statement of Operations (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   36-4010-0-3-701    1994 actual    1995 actual     1996 est.      1997 est.
    -----------------------------------------------------------------------------------------------
    0101  Revenue...........................          71             69            68             63
    0102  Expense...........................         -72            -78           -69            -69
                                            ------------ --------------  ------------  -------------
    0109  Net income or loss (-)............          -1             -9            -1             -6
    -----------------------------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   36-4010-0-3-701    1994 actual    1995 actual     1996 est.      1997 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
          Federal assets:

    1101    Fund balances with Treasury.....           1
            Investments in US securities:
    1102      Treasury securities, par......         524            526           522            514
    1106      Receivables, net..............          12             12            11             10
    1206  Non-Federal assets: Receivables,
            net.............................           1                            1              1
    1601  Net value of assets related to
            pre-1992 direct loans receivable
            and acquired defaulted
            guaranteed loans receivable:
            Direct loans, gross.............          24             26            28             29
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................         562            565           562            553
        LIABILITIES:
          Non-Federal liabilities:

    2201    Accounts payable................          34             38            41             43
    2206    Pension and other actuarial
              liabilities...................         508            516           510            506
    2207    Other...........................           3              2             3              3
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............         545            557           555            553
        NET POSITION:
    3100  Appropriated capital..............         501            498           491            479
    3200  Invested capital..................        -484           -489          -483           -477
                                            ------------ --------------  ------------  -------------
    3999    Total net position..............          17              9             8              2
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position         562            566           563            555
    -----------------------------------------------------------------------------------------------

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4010-0-3-701      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------
    33.0  Investments and loans.............           7           7           7
    42.0  Insurance claims and indemnities..          35          38          40
    43.0  Interest and dividends............          34          35          32
                                               ---------   ---------  ----------

    99.9    Total obligations...............          76          79          79
    ---------------------------------------------------------------------------

                     Servicemen's Group Life Insurance Fund

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4009-0-3-701      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Premium payments..................         485         486         499
    00.02 All other.........................           4                       1
                                               ---------   ---------  ----------

    10.00   Total obligations (object class
              41.0).........................         489         486         500
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.91 Unobligated balance available,
            start of year: U.S. Securities:
            Par value.......................          42          15           1
    22.00 New budget authority (gross)......         461         472         500
                                               ---------   ---------  ----------

    23.90   Total budgetary resources
              available for obligation......         503         487         501
    23.95 New obligations...................        -489        -486        -500
    24.91 Unobligated balance available, end
            of year: U.S. Securities: Par
            value...........................          15           1           1
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Spending authority from offsetting
              collections:

    68.00   Offsetting collections (cash)...         459         472         500
    68.10   Change in orders on hand from
              Federal sources...............           2
                                               ---------   ---------  ----------

    68.90     Spending authority from
                offsetting collections
                (total).....................         461         472         500
                                               ---------   ---------  ----------

    70.00   Total new budget authority
              (gross).......................         461         472         500
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
          Unpaid obligations, start of year:

    72.40   Obligated balance: Offsetting
              Collections...................                       3           3
    72.95   Orders on hand from Federal
              sources.......................           2           4           4
                                               ---------   ---------  ----------

    72.99     Total unpaid obligations,
                start of year...............           2           7           7
    73.10 New obligations...................         489         486         500
    73.20 Total outlays (gross).............        -484        -486        -500
          Unpaid obligations, end of year:

    74.40   Obligated balance: Offsetting
              Collections...................           3           3           3
    74.95   Orders on hand from Federal
              sources.......................           4           4           4
                                               ---------   ---------  ----------

    74.99     Total unpaid obligations, end
                of year.....................           7           7           7
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................         440         467         500
    86.98 Outlays from permanent balances...          44          19
                                               ---------   ---------  ----------

    87.00   Total outlays (gross)...........         484         486         500
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.40   Offsetting collections (cash)
              from: Non-Federal sources:
              Withholdings from serviceman's
              pay...........................        -459        -472        -500
    88.95 Change in orders on hand from
            Federal sources.................          -2
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................
    90.00 Outlays...........................          23          14
    ---------------------------------------------------------------------------

        Budget program.--This fund finances the payment of group life
    insurance premiums to private insurance companies under the Servicemen's
    Group Life Insurance Act of 1965, as amended.

                            Statement of Operations (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   36-4009-0-3-701    1994 actual    1995 actual     1996 est.      1997 est.
    -----------------------------------------------------------------------------------------------
    0101  Revenue...........................         418            461           472            500
    0102  Expense...........................        -529           -489          -486           -500
                                            ------------ --------------  ------------  -------------

    [[Page 847]]

    0109  Net income or loss (-)............        -111            -28           -14
    -----------------------------------------------------------------------------------------------

    Credit accounts:

                     Guaranty and Indemnity Program Account

                          (including transfer of funds)

        For the cost of direct and guaranteed loans, such sums as may be
    necessary to carry out the purpose of the program, as authorized by 38
    U.S.C. chapter 37, as amended: Provided, That such costs, including the
    cost of modifying such loans, shall be as defined in section 502 of the
    Congressional Budget Act of 1974, as amended.
        In addition, for administrative expenses to carry out the direct and
    guaranteed loan programs, $107,703,000, which may be transferred to and
    merged with the appropriation for ``General operating expenses''.
        Note.--A regular 1996 appropriation for this account had not been
    enacted at the time this budget was prepared. The 1996 amounts included
    in this budget are based on the levels provided in three continuing
    resolutions: P.L. 104-91, P.L. 104-92, and P.L. 104-99.

                  Unavailable Collections (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-1119-0-1-704      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------
        Balance, start of year:
    01.99 Balance, start of year............         469         176         216
                                               ---------   ---------  ----------

    03.00 Offsetting Collections............         176         216
    04.00 Total: Balances and collections...         645         392         216
        Appropriation:
    05.01 Guaranty and indemnity program
            account.........................        -469        -176        -216
    07.99 Total balance, end of year........         176         216
    ---------------------------------------------------------------------------

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-1119-0-1-704      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Direct loan subsidy...............           6          17          13
    00.02 Guaranteed loan subsidy...........         262         375         361
    00.05 Reestimates of direct loan subsidy           7          13
    00.06 Interest on reestimates of the
            direct loan subsidy.............           1           3
    00.07 Reestimates of the guaranteed loan
            subsidy.........................         290         238
    00.08 Interest on reestimates of the
            guaranteed loan subsidy.........          53          11
    00.09 Administrative expenses...........          65          65         108
                                               ---------   ---------  ----------

    10.00   Total obligations...............         684         722         482
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......         684         722         482
                                               ---------   ---------  ----------

    23.90   Total budgetary resources
              available for obligation......         684         722         482
    23.95 New obligations...................        -684        -722        -482
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Current:

    40.00   Appropriation...................          65          65         108
    40.05   Appropriation (indefinite)......         150                     158
                                               ---------   ---------  ----------

    43.00     Appropriation (total).........         215          65         266
          Permanent:

            Spending authority from
                offsetting collections:
    68.00     Offsetting collections (cash)
                Total downward reestimate...         176         697
    68.26     Offsetting collections
                (unavailable balances)......         469         176         216
    68.45     Portion not available for
                obligation (limitation on
                obligations)................        -176        -216
                                               ---------   ---------  ----------

    68.90       Spending authority from
                  offsetting collections
                  (total)...................         469         657         216
                                               ---------   ---------  ----------

    70.00   Total new budget authority
              (gross).......................         684         722         482
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation           1
    73.10 New obligations...................         684         722         482
    73.20 Total outlays (gross).............        -684        -722        -482
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority         215          65         266
    86.93 Outlays from current balances.....           1
    86.97 Outlays from new permanent
            authority.......................         468         657         216
                                               ---------   ---------  ----------

    87.00   Total outlays (gross)...........         684         722         482
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.00   Offsetting collections (cash)
              from: Federal sources.........        -176        -697
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................         508          25         482
    90.00 Outlays...........................         509          25         482
    ---------------------------------------------------------------------------

    Summary of Loan Levels, Subsidy Budget Authority and Outlays by Program (in
                                millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-1119-0-1-704      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------
        Direct loan levels supportable by subsidy
                    budget authority:
    1159  Total direct loan levels..........         604       1,197       1,417
        Direct loan subsidy (in percent):
    1329  Weighted average subsidy rate.....        1.06        1.46        0.95
        Direct loan subsidy budget authority:
    1339  Total subsidy budget authority....           6          17          13
        Direct loan subsidy outlays:
    1349  Total subsidy outlays.............           6          17          13
    ----------------------------------------------------------------------------

        Guaranteed loan levels supportable by subsidy
                    budget authority:
    2159  Total loan guarantee levels.......      22,161      24,032      24,547
        Guaranteed loan subsidy (in percent):
    2329  Weighted average subsidy rate.....        1.18        1.56        1.47
        Guaranteed loan subsidy budget authority:
    2339  Total subsidy budget authority....         262         375         361
        Guaranteed loan subsidy outlays:
    2349  Total subsidy outlays.............         262         375         361
    ----------------------------------------------------------------------------

        Administrative expense data:
    3510  Budget authority..................          65          65         108
    3590  Outlays...........................          65          65         108
    ---------------------------------------------------------------------------

        As required by the Federal Credit Reform Act of 1990, this account
    records, for this program, the subsidy costs associated with the direct
    loans obligated and loan guarantees committed in 1992 and beyond,
    (including modifications of direct loans or loan guarantees that
    resulted from obligations or commitments in any year) as well as for the
    administrative expenses of this program. The subsidy amounts are
    estimated on a net present value basis.

        The Guaranty and Indemnity Fund was established to replace the Loan
    Guaranty Revolving Fund with respect to loans closed after December 31,
    1989. The following Federal guaranty protects lenders against losses:
    (a) for loans of $45,000, or less, 50 percent of the loan is guaranteed;
    (b) for loans greater than $45,000, but not more than $56,250, $22,500;
    (c) for loans more than $56,250 but less than $144,000, the lesser of
    $36,000 or 40 percent of the loan; or (d) for loans greater than
    $144,000, the lesser of $50,750 or 25 percent of the loan.

        The Administration is proposing legislation which will make
    permanent three provisions of OBRA 1993 due to expire in 1998: (1) the
    loan origination fee increase of .75 percent; (2) the three-percent fee
    for multiple home loans with less than five percent down; and (3) the
    current law on resale losses on loans.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-1119-0-1-704      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------
    25.3  Purchases of goods and services
            from Government accounts........          65          65         108
    41.0  Grants, subsidies, and
            contributions...................         619         657         374
                                               ---------   ---------  ----------

    99.9    Total obligations...............         684         722         482
    ---------------------------------------------------------------------------

    [[Page 848]]

              Guaranty and Indemnity Direct Loan Financing Account

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4127-0-3-704      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Direct loans......................         604       1,197       1,417
    00.02 Interest on Treasury borrowing....          57          19          34
    00.03 Cash advances.....................           1
    00.04 Property sales expense............                                   1
    00.05 Property improvement expense......                                   1
    00.06 Property management/other expense.                       1
    00.07 Pymt of dwnward reest. to Program
            Acct............................                     102
    00.08 Pymt. of excess interest earned to
            Program Acct....................                      11
                                               ---------   ---------  ----------

    10.00   Total obligations...............         662       1,330       1,453
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New financing authority (gross)...         662       1,330       1,453
    23.95 New obligations...................        -662      -1,330      -1,453
    ----------------------------------------------------------------------------

        New financing authority (gross), detail:
    67.15 Authority to borrow (indefinite)..         590       1,277       1,404
          Spending authority from offsetting
              collections:

    68.00   Offsetting collections (cash)...         578         951       1,219
    68.47   Portion applied to debt
              reduction.....................        -506        -898      -1,170
                                               ---------   ---------  ----------

    68.90     Spending authority from
                offsetting collections
                (total).....................          72          53          49
                                               ---------   ---------  ----------

    70.00   Total new financing authority
              (gross).......................         662       1,330       1,453
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.90 Unpaid obligations, start of year:
            Obligated balance: Fund balance.          41           2           5
    73.10 New obligations...................         662       1,330       1,453
    73.20 Total financing disbursements
            (gross).........................        -701      -1,328      -1,453
    74.90 Unpaid obligations, end of year:
            Obligated balance: Fund balance.           2           5           5
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    87.00 Total financing disbursements
            (gross).........................         701       1,328       1,453
    ----------------------------------------------------------------------------

        Offsets:
          Against gross financing authority and
              financing disbursements:

            Offsetting collections (cash)
                from:
    88.00     Federal sources: Payments from
                program account.............         -15         -33         -14
              Non-Federal sources:
    88.40       Repayments of principal.....          -4          -7         -12
    88.40       Interest received on loans..         -17         -38         -51
    88.40       Fees........................          -5         -12         -14
    88.40       Interest from Treasury......         -41
    88.40       Loan sale proceeds, net.....        -499        -820      -1,074
    88.40       Cash sale of properties.....                      -5         -11
    88.40       Other revenue...............           3         -36         -43
                                               ---------   ---------  ----------

    88.90       Total, offsetting
                  collections (cash)........        -578        -951      -1,219
    ----------------------------------------------------------------------------

        Net financing authority and financing
            disbursements:
    89.00 Financing authority...............          84         379         234
    90.00 Financing disbursements...........         123         377         234
    ---------------------------------------------------------------------------

                   Status of Direct Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4127-0-3-704      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------
        Position with respect to appropriations act
                    limitation on obligations:
    1111  Limitation on direct loans........
    1131  Direct loan obligations exempt
            from limitation.................         604       1,197       1,417
                                               ---------   ---------  ----------

    1150    Total direct loan obligations...         604       1,197       1,417
    ----------------------------------------------------------------------------

        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........         150         227         546
    1231  Disbursements: Direct loan
            disbursements...................         604       1,197       1,417
          Repayments:

    1251    Repayments and prepayments......         -21          -7         -12
    1253    Proceeds from loan asset sales
              to the public with recourse...        -495        -820      -1,074
    1262  Adjustments: Discount on loan
            asset sales to the public or
            discounted......................          -3         -46         -63
    1263  Write-offs for default: Direct
            loans...........................          -8          -5         -12
                                               ---------   ---------  ----------

    1290    Outstanding, end of year........         227         546         802
    ---------------------------------------------------------------------------

        As required by the Federal Credit Reform Act of 1990, this non-
    budgetary account records all cash flows to and from the Government
    resulting from direct loans obligated in 1992 and beyond (including
    modifications of direct loans that resulted from obligations in any
    year). The amounts in this account are a means of financing and are not
    included in the budget totals.

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   36-4127-0-3-704    1994 actual    1995 actual     1996 est.      1997 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
    1101  Federal assets: Fund balances with
            Treasury........................          93            113
    1206  Non-Federal assets: Receivables,
            net.............................           3              5
          Net value of assets related to
              post-1991 direct loans
              receivable:

    1401    Direct loans receivable, gross..         126            185           425            617
    1404    Foreclosed property.............                          1
                                            ------------ --------------  ------------  -------------
    1499      Net present value of assets
                related to direct loans.....         126            186           425            617
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................         222            304           425            617
        LIABILITIES:
          Federal liabilities:

    2102    Interest payable................          40
    2104    Resources payable to Treasury...         181                          420            609
          Non-Federal liabilities:

    2201    Accounts payable................           1              2             5              8
    2204    Liabilities for loan guarantees.                        302
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............         222            304           425            617
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position         222            304           425            617
    -----------------------------------------------------------------------------------------------

            Guaranty and Indemnity Guaranteed Loan Financing Account

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4129-0-3-704      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Acquisition of homes..............         406       1,324       1,433
    00.02 Losses on defaulted loans.........         107         366         388
    00.03 Property sales expense............          19          75          91
    00.04 Property management expense.......          10          24          31
    00.05 Property improvement expense......           7          14          17
    00.06 Loans acquired....................          33          13          16
    00.07 Payment of downward reestimate to
            program account.................         167         462
    00.08 Payment of excess interest to
            program account.................           9         122
    00.09 Other expenses....................           3
                                               ---------   ---------  ----------

    10.00   Total obligations...............         761       2,400       1,976
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.90 Unobligated balance available,
            start of year: Fund balance.....       2,854       3,428       3,343
    22.00 New financing authority (gross)...       1,335       2,315       2,327
                                               ---------   ---------  ----------

    23.90   Total budgetary resources
              available for obligation......       4,189       5,743       5,670
    23.95 New obligations...................        -761      -2,400      -1,976
    24.90 Unobligated balance available, end
            of year: Fund balance...........       3,428       3,343       3,693
    ----------------------------------------------------------------------------

        New financing authority (gross), detail:
    68.00 Spending authority from offsetting
            collections (gross): Offsetting
            collections (cash)..............       1,335       2,315       2,327
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.90 Unpaid obligations, start of year:
            Obligated balance: Fund balance.          12          18          56
    73.10 New obligations...................         761       2,400       1,976
    73.20 Total financing disbursements
            (gross).........................        -755      -2,362      -1,986
    74.90 Unpaid obligations, end of year:
            Obligated balance: Fund balance.          18          56          47
    ----------------------------------------------------------------------------

    [[Page 849]]

        Outlays (gross), detail:
    87.00 Total financing disbursements
            (gross).........................         755       2,362       1,986
    ----------------------------------------------------------------------------

        Offsets:
          Against gross financing authority and
              financing disbursements:

            Offsetting collections (cash)
                from:
              Federal sources:
    88.00       Payments from program
                  account...................        -604        -624        -361
    88.00       Recoveries from direct loans
                  conveyed to the direct
                  loan financing account....         -33        -875      -1,068
    88.25     Interest on uninvested funds..        -207        -154        -164
              Non-Federal sources:
    88.40       Funding fees................        -424        -441        -476
    88.40       Cash sale of properties.....         -50        -210        -246
    88.40       Other collections...........         -17         -11         -11
                                               ---------   ---------  ----------

    88.90       Total, offsetting
                  collections (cash)........      -1,335      -2,315      -2,326
    ----------------------------------------------------------------------------

        Net financing authority and financing
            disbursements:
    89.00 Financing authority...............                                   1
    90.00 Financing disbursements...........        -580          47        -340
    ---------------------------------------------------------------------------

                 Status of Guaranteed Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4129-0-3-704      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------
        Position with respect to appropriations act
                    limitation on commitments:
    2131  Guaranteed loan commitments exempt
            from limitation.................      22,161      24,032      24,547
                                               ---------   ---------  ----------

    2150    Total guaranteed loan
              commitments...................      22,161      24,032      24,547
    ----------------------------------------------------------------------------

        Cumulative balance of guaranteed loans
                    outstanding:
    2210  Outstanding, start of year........     101,094     121,307     142,769
    2231  Disbursements of new guaranteed
            loans...........................      22,161      24,032      24,547
    2232  Guarantees of loans sold to the
            public with recourse............         495         820       1,074
    2251  Repayments and prepayments........      -1,930      -2,316      -2,725
          Adjustments:

    2261    Terminations for default that
              result in loans receivable....         115         366         388
    2262    Terminations for default that
              result in acquisition of
              property......................        -406      -1,324      -1,433
    2263    Terminations for default that
              result in claim payments......        -107        -120        -135
    2264    Other adjustments, net..........        -115           4
                                               ---------   ---------  ----------

    2290    Outstanding, end of year........     121,307     142,769     164,485
    ----------------------------------------------------------------------------

        Memorandum:
    2299  Guaranteed amount of guaranteed
            loans outstanding, end of year..      44,700      55,215      83,743
    ----------------------------------------------------------------------------

        Addendum:
          Cumulative balance of defaulted guaranteed
              loans that result in loans receivable:

    2310    Outstanding, start of year......          22          37         109
    2331    Disbursements for guaranteed
              loan claims...................         115         366         388
    2351    Repayments of loans receivable..          -2          -4         -11
    2361    Write-offs of loans receivable..         -98        -290        -353
                                               ---------   ---------  ----------

    2390      Outstanding, end of year......          37         109         133
    ---------------------------------------------------------------------------

        As required by the Federal Credit Reform Act of 1990, this non-
    budgetary account records all cash flows to and from the Government
    resulting from loan guarantees committed in 1992 and beyond (including
    modifications of guaranteed loans that resulted from commitments in any
    year). The amounts in this account are a means of financing and are not
    included in the budget totals.

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   36-4129-0-3-704    1994 actual    1995 actual     1996 est.      1997 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
    1101  Federal assets: Fund balances with
            Treasury........................       2,866          3,445         3,399          3,740
          Net value of assets related to
              post-1991 direct loans
              receivable:

    1403    Accounts receivable from
              foreclosed property...........         121             37            36             40
                                            ------------ --------------  ------------  -------------
    1499      Net present value of assets
                related to direct loans.....         121             37            36             40
          Net value of assets related to
              post-1991 acquired defaulted
              guaranteed loans receivable:

    1504    Foreclosed property.............                        194           336            337
                                            ------------ --------------  ------------  -------------
    1599      Net present value of assets
                related to defaulted
                guaranteed loans............                        194           336            337
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................       2,987          3,676         3,771          4,117
        LIABILITIES:
    2101  Federal liabilities: Accounts
            payable.........................                         18
    2204  Non-Federal liabilities:
            Liabilities for loan guarantees.       2,987          3,658         3,771          4,117
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............       2,987          3,676         3,771          4,117
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position       2,987          3,676         3,771          4,117
    -----------------------------------------------------------------------------------------------

                 Guaranty and Indemnity Fund Liquidating Account

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4023-0-3-704      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Capital investment:

    00.01   Acquisition of homes............         239         267         245
    00.02   Property improvements...........           6           6           6
    00.04   Cash advances...................                       2           2
    00.05   Acquisition of defaulted
              guaranteed loans..............          12          11           9
                                               ---------   ---------  ----------

    00.91     Total capital investment......         257         286         262
          Operating expenses:

    01.01   Property management expense.....          12          10          10
    01.02   Sales expense...................          19          15          17
    01.03   Claims-Individual Homes.........         150         176         161
                                               ---------   ---------  ----------

    01.91     Total operating expenses......         181         201         188
                                               ---------   ---------  ----------

    02.93   Claims-Individual Homes.........         438         487         450
                                               ---------   ---------  ----------

    10.00   Total obligations (object class
              33.0).........................         438         487         450
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.90 Unobligated balance available,
            start of year: Fund balance.....         251         439         311
    22.00 New budget authority (gross)......         626         361         390
                                               ---------   ---------  ----------

    23.90   Total budgetary resources
              available for obligation......         877         800         701
    23.95 New obligations...................        -438        -487        -450
    24.90 Unobligated balance available, end
            of year: Fund balance...........         439         311         251
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    68.00 Spending authority from offsetting
            collections (gross): Offsetting
            collections (cash)..............         626         361         390
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.90 Unpaid obligations, start of year:
            Obligated balance: Fund balance.          41          23          26
    73.10 New obligations...................         438         487         450
    73.20 Total outlays (gross).............        -456        -485        -452
    74.90 Unpaid obligations, end of year:
            Obligated balance: Fund balance.          23          26          24
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................         286         361         390
    86.98 Outlays from permanent balances...         170         123          62
                                               ---------   ---------  ----------

    87.00   Total outlays (gross)...........         456         485         452
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

            Offsetting collections (cash)
                from:
    88.00     Federal Sources: Payments from
                Direct Loan Financing
                Account.....................        -571        -322        -349
              Non-Federal sources:
    88.40       Loan and other repayments...           4           3           3
    88.40       Sale of homes, cash.........         -49         -34         -38
    88.40       Interest on loans...........          -3          -2          -2
    88.40       Collection of claims
                  (veteran indebtedness)....          -7          -5          -4
    88.40       Other revenue...............                      -1
                                               ---------   ---------  ----------

    88.90       Total, offsetting
                  collections (cash)........        -626        -361        -390
    ----------------------------------------------------------------------------

    [[Page 850]]

        Net budget authority and outlays:
    89.00 Budget authority..................
    90.00 Outlays...........................        -170         124          62
    ---------------------------------------------------------------------------

                   Status of Direct Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4023-0-3-704      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------
        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........          22          13          12
    1231  Disbursements: Direct loan
            disbursements...................           4
    1251  Repayments: Repayments and
            prepayments.....................          -1
    1264  Write-offs for default: Other
            adjustments, net................         -12          -1
                                               ---------   ---------  ----------

    1290    Outstanding, end of year........          13          12          12
    ---------------------------------------------------------------------------

                 Status of Guaranteed Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4023-0-3-704      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------
        Cumulative balance of guaranteed loans
                    outstanding:
    2210  Outstanding, start of year........      17,668      16,569      15,467
    2251  Repayments and prepayments........        -703        -659        -615
          Adjustments:

    2262    Terminations for default that
              result in acquisition of
              property......................        -246        -267        -245
    2263    Terminations for default that
              result in claim payments......        -150        -176        -162
                                               ---------   ---------  ----------

    2290    Outstanding, end of year........      16,569      15,467      14,445
    ----------------------------------------------------------------------------

        Memorandum:
    2299  Guaranteed amount of guaranteed
            loans outstanding, end of year..       6,214       5,800       5,417
    ----------------------------------------------------------------------------

        Addendum:
          Cumulative balance of defaulted guaranteed
              loans that result in loans receivable:

    2310    Outstanding, start of year......          40          18          21
    2331    Disbursements for guaranteed
              loan claims...................         149         127         108
    2351    Repayments of loans receivable..          -7          -5          -4
    2361    Write-offs of loans receivable..        -164        -119        -100
                                               ---------   ---------  ----------

    2390      Outstanding, end of year......          18          21          25
    ---------------------------------------------------------------------------

        As required by section 502 of the Congressional Budget Act of 1974,
    this account records all cash flows to and from the Government resulting
    from direct loans obligated and loan guarantees committed prior to 1992.
    This account is shown on a cash basis. All new activity in this program
    in 1992 and beyond (including modifications of direct loans or loan
    guarantees that resulted from obligations or commitments in any year) is
    recorded in corresponding program and financing accounts.

        Budget program--
            Acquisition of homes.--
                                         1995 actual  1996 est.   1997 est.
    Number of property acquisitions
    processed...........................       3,534       3,765       3,381
    Average amount per acquisition......     $69,614     $71,006     $72,568
    Total obligations (in millions).....        $246        $267        $245

            Property improvements.--
                                         1995 actual  1996 est.   1997 est.
    Number of properties improved.......       3,720       3,765       3,381
    Average amount per property.........      $1,681      $1,715      $1,752
    Total obligations (in millions).....          $6          $6          $6

        Cash advances--
            Vendee loans.--Small cash advances are occasionally made to
        borrowers to cover taxes, hazard insurance, and necessary repairs.
        These amounts are added to the loan balance.
                                         1995 actual  1996 est.   1997 est.
    Total obligations (in millions).....         -$7          $2          $2

            Property management expense.--Property management expenses
        include all the costs of ownership of acquired properties except
        capitalized expenditures made incident to the acquisition and
        rehabilitation of properties.

                                         1995 actual  1996 est.   1997 est.
    Average number of properties........       1,660       1,546       1,639
    Average amount per property.........      $7,015      $6,291      $6,429
    Total obligations (in millions).....         $12         $10         $11

            Property sales expense.--Sales expense includes brokers' fees
        and advertising costs incident to the sale of properties owned by
        VA.
                                         1995 actual  1996 est.   1997 est.
    Number of sales.....................       4,327       3,339       3,574
    Average amount per sale.............      $4,451      $4,540      $4,640
    Total obligations (in millions).....         $19         $15         $17

            Loss on defaulted guaranteed loans.--These payments are made to
        lenders in accordance with the VA guaranty contract. In most home
        loan cases, they represent the difference between the amount owed by
        the veteran on a defaulted loan and the value of the foreclosed
        property as established by VA.

                                         1995 actual  1996 est.   1997 est.
    Individual homes:
      Number of claims..................       3,631       4,183       3,757
      Average amount per payment........     $41,222     $42,046     $42,971
      Total obligations (in millions)...        $150        $176        $161

                            Statement of Operations (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   36-4023-0-3-704    1994 actual    1995 actual     1996 est.      1997 est.
    -----------------------------------------------------------------------------------------------
    0101  Revenue...........................         347            563           450            360
    0102  Expense...........................        -403           -446          -356           -285
                                            ------------ --------------  ------------  -------------
    0109  Net income or loss (-)............         -56            117            94             75
    -----------------------------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   36-4023-0-3-704    1994 actual    1995 actual     1996 est.      1997 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
    1101  Federal assets: Fund balances with
            Treasury........................         273            453           319            264
          Net value of assets related to
              post-1991 direct loans
              receivable:

    1402    Interest receivable.............                                        2              2
    1403    Accounts receivable from
              foreclosed property...........          23             84           176            161
                                            ------------ --------------  ------------  -------------
    1499      Net present value of assets
                related to direct loans.....          23             84           178            163
          Net value of assets related to
              pre-1992 direct loans
              receivable and acquired
              defaulted guaranteed loans
              receivable:

    1706    Foreclosed property.............                         13
                                            ------------ --------------  ------------  -------------
    1799      Value of assets related to
                loan guarantees.............                         13
          Other Federal assets:

    1803    Property, plant and equipment,
              net...........................         170            103           133            117
    1901    Other assets....................                        -84
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................         466            569           630            544
        LIABILITIES:
    2101  Federal liabilities: Accounts
            payable.........................          21             13            11              9
    2207  Non-Federal liabilities: Other....                         -1
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............          21             12            11              9
        NET POSITION:
    3200  Invested capital..................         193            116            99             84
    3300  Cumulative results of operations..         251            441           520            451
                                            ------------ --------------  ------------  -------------
    3999    Total net position..............         444            557           619            535
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position         465            569           630            544
    -----------------------------------------------------------------------------------------------

    [[Page 851]]

                          Loan Guaranty Program Account

                          (including transfer of funds)

        For the cost of direct and guaranteed loans, such sums as may be
    necessary to carry out the program, as authorized by 38 U.S.C. chapter
    37, as amended: Provided, That such costs, including the cost of
    modifying such loans, shall be as defined in section 502 of the
    Congressional Budget Act of 1974, as amended.
        In addition, for administrative expenses to carry out the direct and
    guaranteed loan programs, $33,810,000, which may be transferred to and
    merged with the appropriation for ``General operating expenses''.
        Note.--A regular 1996 appropriation for this account had not been
    enacted at the time this budget was prepared. The 1996 amounts included
    in this budget are based on the levels provided in three continuing
    resolutions: P.L. 104-81, P.L. 104-92, and P.L. 104-99.

                  Unavailable Collections (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-1025-0-1-704      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------
        Balance, start of year:
    01.99 Balance, start of year............         131          87          22
                                               ---------   ---------  ----------

    03.00 Offsetting Collections............                      11
    04.00 Total: Balances and collections...         131          98          22
        Appropriation:
    05.01 Loan guaranty program.............         -44         -76         -14
    07.99 Total balance, end of year........          87          22           8
    ---------------------------------------------------------------------------

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-1025-0-1-704      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Direct loan subsidy...............          21          16          14
    00.05 Reestimates of the direct loan
            subsidy.........................          14          50
    00.06 Interest on reestimates of the
            direct loan subsidy.............           8          10
    00.09 Administrative expenses...........          59          52          34
                                               ---------   ---------  ----------

    10.00   Total obligations...............         103         128          48
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......         103         128          48
    23.95 New obligations...................        -103        -128         -48
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Current:

    40.00   Appropriation...................          59          52          34
          Permanent:

            Spending authority from
                offsetting collections:
    68.00     Offsetting collections (cash).                      11
    68.26     Offsetting collections
                (unavailable balances)......          44          76          14
    68.45     Portion not available for
                obligation (limitation on
                obligations)................                     -11
                                               ---------   ---------  ----------

    68.90       Spending authority from
                  offsetting collections
                  (total)...................          44          76          14
                                               ---------   ---------  ----------

    70.00   Total new budget authority
              (gross).......................         103         128          48
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation           2
    73.10 New obligations...................         103         128          48
    73.20 Total outlays (gross).............        -105        -128         -48
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority          59          52          34
    86.93 Outlays from current balances.....           2
    86.97 Outlays from new permanent
            authority.......................          44          76          14
                                               ---------   ---------  ----------

    87.00   Total outlays (gross)...........         105         128          48
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.00   Offsetting collections (cash)
              from: Federal sources.........                     -11
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................         103         117          48
    90.00 Outlays...........................         104         117          48
    ---------------------------------------------------------------------------

    Summary of Loan Levels, Subsidy Budget Authority and Outlays by Program (in
                                millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-1025-0-1-704      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------
        Direct loan levels supportable by subsidy
                    budget authority:
    1159  Total direct loan levels..........         899         885         894
        Direct loan subsidy (in percent):
    1329  Weighted average subsidy rate.....        2.34        1.81        1.56
        Direct loan subsidy budget authority:
    1339  Total subsidy budget authority....          21          16          14
        Direct loan subsidy outlays:
    1349  Total subsidy outlays.............          21          16          14
    ----------------------------------------------------------------------------

        Guaranteed loan levels supportable by subsidy
                    budget authority:
    2159  Total loan guarantee levels.......           1           1           1
        Guaranteed loan subsidy (in percent):
    2329  Weighted average subsidy rate.....       13.34       14.29       15.04
    ----------------------------------------------------------------------------

        Administrative expense data:
    3510  Budget authority..................          59          52          34
    3590  Outlays...........................          59          52          34
    ---------------------------------------------------------------------------

        As required by the Federal Credit Reform Act of 1990, this account
    records, for this program, the subsidy costs associated with the direct
    loans obligated and loan guarantees committed in 1992 and beyond
    (including modifications of direct loans or loan guarantees that
    resulted from obligations or commitments in any year) as well as the
    administrative expenses of this program. The subsidy amounts are
    estimated on a net present value basis.

        The purpose of the VA home loan guaranty program is to facilitate
    the extension of mortgage credit on favorable terms by private lenders
    to eligible veterans. As of January 1, 1990, the guaranty on all new
    loan originations is provided by the Guaranty and Indemnity Fund, except
    for manufactured home loans. Guaranty amounts made prior to the
    establishment of the new Fund will be paid from the Loan Guaranty
    Revolving Fund in case of foreclosure. The guaranty protects lenders
    against the following losses: (a) for loans of $45,000 or less, 50
    percent of the loan is guaranteed; (b) for loans greater than $45,000,
    but not more than $56,250, $22,500; (c) for loans more than $56,250 but
    less than $144,000, the lesser of $36,000 or 40 percent of the loan; or
    (d) for loans greater than $144,000, the lesser of $50,750 or 25 percent
    of the loan.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-1025-0-1-704      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------
    25.3  Purchases of goods and services
            from Government accounts........          59          52          34
    33.0  Investments and loans.............          44          76          14
                                               ---------   ---------  ----------

    99.9    Total obligations...............         103         128          48
    ---------------------------------------------------------------------------

                   Loan Guaranty Direct Loan Financing Account

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4125-0-3-704      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Direct loans......................         899         885         894
    00.02 Interest on Treasury borrowing....         139           9          13
    00.03 Property sales expense............           1           1           1
    00.04 Property management expense.......                       1           1
    00.05 Property improvement expense......                       1           1
    00.06 Pymt. to receipt acct. for dwnward
            reest...........................                      10
    00.07 Payment of excess interest earned
            to receipt account..............                       1
    00.09 Cash advances/other expenses......           1
                                               ---------   ---------  ----------

    10.00   Total obligations...............       1,040         908         910
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New financing authority (gross)...       1,040         908         910

    [[Page 852]]

    23.95 New obligations...................      -1,040        -908        -910
    ----------------------------------------------------------------------------

        New financing authority (gross), detail:
    67.15 Authority to borrow (indefinite)..         856         869         880
          Spending authority from offsetting
              collections:

    68.00   Offsetting collections (cash)...         987         842         854
    68.47   Portion applied to debt
              reduction.....................        -803        -803        -824
                                               ---------   ---------  ----------

    68.90     Spending authority from
                offsetting collections
                (total).....................         184          39          30
                                               ---------   ---------  ----------

    70.00   Total new financing authority
              (gross).......................       1,040         908         910
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.90 Unpaid obligations, start of year:
            Obligated balance: Fund balance.         152           4           4
    73.10 New obligations...................       1,040         908         910
    73.20 Total financing disbursements
            (gross).........................      -1,187        -908        -910
    74.90 Unpaid obligations, end of year:
            Obligated balance: Fund balance.           4           4           4
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    87.00 Total financing disbursements
            (gross).........................       1,187         908         910
    ----------------------------------------------------------------------------

        Offsets:
          Against gross financing authority and
              financing disbursements:

            Offsetting collections (cash)
                from:
    88.00     Payments from program account.         -43         -27         -14
              Non-Federal sources:
    88.40       Repayment and prepayments of
                  principal (-).............          -9         -17         -19
    88.40       Interest received on loans..         -98         -66         -73
    88.40       Loan sale proceeds, net.....        -833        -673        -684
    88.40       Fees........................          -8          -9          -9
    88.40       Cash sale of properties.....          -1         -24         -29
    88.40       Other revenue...............           5         -26         -26
                                               ---------   ---------  ----------

    88.90       Total, offsetting
                  collections (cash)........        -987        -842        -854
    ----------------------------------------------------------------------------

        Net financing authority and financing
            disbursements:
    89.00 Financing authority...............          53          66          56
    90.00 Financing disbursements...........         200          66          56
    ---------------------------------------------------------------------------

                   Status of Direct Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4125-0-3-704      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------
        Position with respect to appropriations act
                    limitation on obligations:
    1111  Limitation on direct loans........
    1131  Direct loan obligations exempt
            from limitation.................         923         885         894
                                               ---------   ---------  ----------

    1150    Total direct loan obligations...         923         885         894
    ----------------------------------------------------------------------------

        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........         428         473         669
    1231  Disbursements: Direct loan
            disbursements...................         933         885         894
          Repayments:

    1251    Repayments and prepayments......         -41         -16         -19
    1253    Proceeds from loan asset sales
              to the public with recourse...        -828        -711        -724
    1262  Adjustments: Discount on loan
            asset sales to the public or
            discounted......................          -4          38          40
          Write-offs for default:

    1263    Direct loans....................          -7
    1264    Other adjustments, net..........          -8
                                               ---------   ---------  ----------

    1290    Outstanding, end of year........         473         669         860
    ---------------------------------------------------------------------------

        As required by the Federal Credit Reform Act of 1990, this non-
    budgetary account records all cash flows to and from the Government
    resulting from direct loans obligated in 1992 and beyond (including
    modifications of direct loans that resulted from obligations in any
    year). The amounts in this account are a means of financing and are not
    included in the budget totals.

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   36-4125-0-3-704    1994 actual    1995 actual     1996 est.      1997 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
    1101  Federal assets: Fund balances with
            Treasury........................         925            905           890            900
    1206  Non-Federal assets: Accounts
            Receivables, net................          15             12
          Net value of assets related to
              post-1991 direct loans
              receivable:

    1401    Direct loans receivable and
              related foreclosed property,
              net...........................         319            355           355            358
    1404    Foreclosed property.............                          5
                                            ------------ --------------  ------------  -------------
    1499      Net present value of assets
                related to direct loans.....         319            360           355            358
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................       1,259          1,277         1,245          1,258
        LIABILITIES:
          Federal liabilities:

    2101    Accounts payable................           4
    2102    Interest payable................                          5            10             13
    2104    Resources payable to Treasury...                      1,272         1,338          1,395
          Non-Federal liabilities:

    2201    Interest payable................         148
    2203    Debt............................       1,107
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............       1,259          1,277         1,348          1,408
        NET POSITION:
    3100  Appropriated capital..............                                     -103           -150
                                            ------------ --------------  ------------  -------------
    3999    Total net position..............                                     -103           -150
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position       1,259          1,277         1,245          1,258
    -----------------------------------------------------------------------------------------------

                   Loan Guaranty Direct Loan Financing Account

                  (Legislative proposal, not subject to PAYGO)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4125-2-3-704      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.03 Interest on Treasury Borrowing....                       2           4
    00.04 Payment to Liquidating Account for
            Enhanced Debt Collection........                      90
                                               ---------   ---------  ----------

    10.00   Total obligations...............                      92           4
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New financing authority (gross)...                      92           4
    23.95 New obligations...................                     -92          -4
    ----------------------------------------------------------------------------

        New financing authority (gross), detail:
    67.15 Authority to borrow (indefinite)..                      90
          Spending authority from offsetting
              collections:

    68.00   Offsetting collections (cash)...                      29          25
    68.47   Portion applied to debt
              reduction.....................                     -27         -21
                                               ---------   ---------  ----------

    68.90     Spending authority from
                offsetting collections
                (total).....................                       2           4
                                               ---------   ---------  ----------

    70.00   Total new financing authority
              (gross).......................                      92           4
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    73.10 New obligations...................                      92           4
    73.20 Total financing disbursements
            (gross).........................                     -92          -4
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    87.00 Total financing disbursements
            (gross).........................                      92           4
    ----------------------------------------------------------------------------

        Offsets:
          Against gross financing authority and
              financing disbursements:

    88.00   Offsetting collections (cash)
              from: Repayment from
              Liquidating Account for debt
              collection....................                     -29         -25
    ----------------------------------------------------------------------------

        Net financing authority and financing
            disbursements:
    89.00 Financing authority...............                      63         -21
    90.00 Financing disbursements...........                      63         -21
    ---------------------------------------------------------------------------

        This schedule shows the off-budget financing effects of the
    Administration's proposal to repeal restrictions on the collection of
    loan guaranty debts and authorize VA to collect all

    [[Page 853]]
    loan guaranty debts by Federal income tax refund offset. This proposal
    would take effect in 1996.

                 Loan Guaranty Guaranteed Loan Financing Account

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4126-0-3-704      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    10.00 Total obligations.................
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.90 Unobligated balance available,
            start of year: Fund balance.....                       1           1
    22.00 New financing authority (gross)...
                                               ---------   ---------  ----------

    23.90   Total budgetary resources
              available for obligation......                       1           1
    23.95 New obligations...................
    24.90 Unobligated balance available, end
            of year: Fund balance...........           1           1
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    87.00 Total financing disbursements
            (gross).........................
    ----------------------------------------------------------------------------

        Net financing authority and financing
            disbursements:
    89.00 Financing authority...............
    90.00 Financing disbursements...........
    ---------------------------------------------------------------------------

                 Status of Guaranteed Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4126-0-3-704      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------
        Position with respect to appropriations act
                    limitation on commitments:
    2131  Guaranteed loan commitments exempt
            from limitation.................           1           1           1
                                               ---------   ---------  ----------

    2150    Total guaranteed loan
              commitments...................           1           1           1
    ----------------------------------------------------------------------------

        Cumulative balance of guaranteed loans
                    outstanding:
    2210  Outstanding, start of year........           2         836       1,510
    2231  Disbursements of new guaranteed
            loans...........................           1           1           1
    2232  Guarantees of loans sold to the
            public with recourse............         833         673         684
    2251  Repayments and prepayments........
    2263  Adjustments: Terminations for
            default that result in claim
            payments........................
                                               ---------   ---------  ----------

    2290    Outstanding, end of year........         836       1,510       2,195
    ----------------------------------------------------------------------------

        Memorandum:
    2299  Guaranteed amount of guaranteed
            loans outstanding, end of year..         834         674         685
    ---------------------------------------------------------------------------

        As required by the Federal Credit Reform Act of 1990, this non-
    budgetary account records all cash flows to and from the Government
    resulting from loan guarantees committed in 1992 and beyond (including
    modifications of guaranteed loans that resulted from commitments in any
    year). The amounts in this account are a means of financing and are not
    included in the budget totals.

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   36-4126-0-3-704    1994 actual    1995 actual     1996 est.      1997 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
    1101  Federal assets: Fund balances with
            Treasury........................                          1             1              1
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................                          1             1              1
        LIABILITIES:
          Federal liabilities:

    2101    Accounts payable................
    2104    Resources payable to Treasury...
    2105    Other...........................                          1
    2204  Non-Federal liabilities:
            Liabilities for loan guarantees.
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............                          1
        NET POSITION:
    3100  Appropriated capital..............
                                            ------------ --------------  ------------  -------------
    3999    Total net position..............
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position                          1
    -----------------------------------------------------------------------------------------------

                Loan Guaranty Revolving Fund Liquidating Account

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4025-0-3-704      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Capital investment:

    00.01   Acquisition of homes............         692         890         729
    00.02   Property improvements...........          38          49          40
    00.03   Repurchase of loans sold, net...          32          24          19
    00.06   Cash advances, vendee loans.....           3           2           2
    00.07   Acquisition of defaulted
              guaranteed loans..............          63          48          37
                                               ---------   ---------  ----------

    00.91     Total capital investment......         828       1,013         827
          Operating expenses:

    01.01   Property management expense.....          41          41          42
    01.02   Sales expense...................          63          62          64
    01.05   Claims processed................         178         175         149
    01.06   Other expenses..................          24           1
                                               ---------   ---------  ----------

    01.91     Total operating expenses......         306         279         255
                                               ---------   ---------  ----------

    10.00   Total obligations (object class
              33.0).........................       1,134       1,292       1,082
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.90 Unobligated balance available,
            start of year: Fund balance.....         282         403         287
    22.00 New budget authority (gross)......       1,255       1,176       1,163
                                               ---------   ---------  ----------

    23.90   Total budgetary resources
              available for obligation......       1,537       1,579       1,450
    23.95 New obligations...................      -1,134      -1,292      -1,082
    24.90 Unobligated balance available, end
            of year: Fund balance...........         403         287         369
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    68.00 Spending authority from offsetting
            collections (gross): Offsetting
            collections (cash)..............       1,255       1,176       1,163
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.90 Unpaid obligations, start of year:
            Obligated balance: Fund balance.          58          49          57
    73.10 New obligations...................       1,134       1,292       1,082
    73.20 Total outlays (gross).............      -1,143      -1,285      -1,091
    74.90 Unpaid obligations, end of year:
            Obligated balance: Fund balance.          49          57          48
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................       1,143       1,176       1,091
    86.98 Outlays from permanent balances...                     109
                                               ---------   ---------  ----------

    87.00   Total outlays (gross)...........       1,143       1,285       1,091
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

            Offsetting collections (cash)
                from:
    88.00     Federal sources: Payments from
                loan guarantee direct loan
                financing account...........        -899        -885        -894
              Non-Federal sources:
    88.40       Loan and other repayments...         -70         -56         -45
    88.40       Cash sale of properties.....        -140        -133        -136
    88.40       Collection of veteran
                  indebtedness..............         -48         -46         -44
    88.40       Interest income.............         -65         -53         -42
    88.40       Sale of loans, net..........         -30
    88.40       Other Income................          -3          -3          -2
                                               ---------   ---------  ----------

    88.90       Total, offsetting
                  collections (cash)........      -1,255      -1,176      -1,163
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................
    90.00 Outlays...........................        -112         109         -72
    ---------------------------------------------------------------------------
                     Summary of Budget Authority and Outlays
                            (in millions of dollars)

                                         1995 actual  1996 est.   1997 est.
    Enacted/requested:
      Budget Authority..................
      Outlays...........................        -112         109         -72
    Legislative proposal, subject to
        PAYGO:
      Budget Authority..................
      Outlays...........................                     -90
                                        ------------------------------------

    [[Page 854]]

    Total:
      Budget Authority..................
      Outlays...........................        -112          19         -72
                                        ====================================

                   Status of Direct Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4025-0-3-704      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------
        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........         628         528         513
    1231  Disbursements: Direct loan
            disbursements...................          24
          Repayments:

    1251    Repayments and prepayments......         -47         -40         -38
    1253    Proceeds from loan asset sales
              to the public with recourse...         -28
    1261  Adjustments: Capitalized interest.           9           8           7
          Write-offs for default:

    1263    Direct loans....................          -8          -7          -7
    1264    Other adjustments, net..........         -50          24          19
                                               ---------   ---------  ----------

    1290    Outstanding, end of year........         528         513         494
    ---------------------------------------------------------------------------

                 Status of Guaranteed Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4025-0-3-704      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------
        Cumulative balance of guaranteed loans
                    outstanding:
    2210  Outstanding, start of year........      38,665      15,774       7,308
    2251  Repayments and prepayments........     -22,021      -7,487      -2,546
          Adjustments:

    2262    Terminations for default that
              result in acquisition of
              property......................        -692        -890        -729
    2263    Terminations for default that
              result in claim payments......        -178         -89         -44
                                               ---------   ---------  ----------

    2290    Outstanding, end of year........      15,774       7,308       3,989
    ----------------------------------------------------------------------------

        Memorandum:
    2299  Guaranteed amount of guaranteed
            loans outstanding, end of year..       8,046       4,749       2,801
    ----------------------------------------------------------------------------

        Addendum:
          Cumulative balance of defaulted guaranteed
              loans that result in loans receivable:

    2310    Outstanding, start of year......       1,699       1,499       1,360
    2331    Disbursements for guaranteed
              loan claims...................         216         191         173
    2351    Repayments of loans receivable..         -94         -46         -44
    2361    Write-offs of loans receivable..        -322        -284        -258
                                               ---------   ---------  ----------

    2390      Outstanding, end of year......       1,499       1,360       1,231
    ---------------------------------------------------------------------------

        As required by the Federal Credit Reform Act of 1990, this account
    records, for this program, all cash flows to and from the Government
    resulting from direct loans obligated and loan guarantees committed
    prior to 1992. This account is shown on a cash basis. All new activity
    in this program in 1992 and beyond (including modifications of direct
    loans or loan guarantees that resulted from obligations or commitments
    in any year) is recorded in corresponding program and financing
    accounts.

        Budget program--
            Acquisition of homes.

                                         1995 actual  1996 est.   1997 est.
      Number of property acquisitions
        processed.......................      12,613      15,901      12,746
      Average amount per acquisition....     $54,872     $55,969     $57,201
      Total obligations (in millions)...        $692        $890        $729

            Property improvements.

                                         1995 actual  1996 est.   1997 est.
      Number of properties improved.....      13,817      17,419      13,963
      Average amount per property.......      $2,751      $2,806      $2,868
      Total obligations (in millions)...         $38         $49         $40

            Repurchase of loans sold, net.

                                         1995 actual  1996 est.   1997 est.
      Number of loans repurchased.......       1,037         778         584
      Average amount per repurchase.....     $30,655     $31,268     $31,956
      Total obligations (in millions)...         $32         $24         $19

        Cash advances--
            Vendee loans.--Small cash advances are occasionally made to
        borrowers to cover taxes, hazard insurance, and necessary repairs.
        These amounts are added to the loan balance.

                                         1995 actual  1996 est.   1997 est.
      Total obligations (in millions)...          $3          $2          $2

            Property management expense.--Property management expenses
        include all the costs of ownership of acquired properties except
        capitalized expenditures made incident to the acquisition and
        rehabilitation of properties.

                                         1995 actual  1996 est.   1997 est.
      Average number of properties......       6,644       6,391       6,455
      Average amount per property.......      $6,227      $6,352      $6,492
      Total obligations (in millions)...         $41         $41         $42

            Sales expense.--Sales expense include brokers' fees and
        advertising costs incident to the sale of properties owned by VA.

                                         1995 actual  1996 est.   1997 est.
      Number of sales...................      15,935      15,480      15,517
      Average amount per sale...........      $3,943      $4,022      $4,110
      Total obligations (in millions)...         $63         $62         $64

            Loss on defaulted guaranteed loans.--These payments are made to
        lenders in accordance with the VA guaranty contract. In most home
        loan cases, they represent the difference between the amount owed by
        the veteran on a defaulted loan and the value of the foreclosed
        property as established by VA.

      Individual homes:                  1995 actual  1996 est.   1997 est.
        Number of claims................      13,264      12,909      10,854
        Average amount per payment......     $13,081     $13,343     $13,637
        Total obligations (in millions).        $174        $172        $148

      Manufactured homes:
        Number of claims................         743         412         224
        Average amount per payment......      $6,236      $6,361      $6,501
        Total obligations (in millions).          $5          $3          $1

                            Statement of Operations (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   36-4025-0-3-704    1994 actual    1995 actual     1996 est.      1997 est.
    -----------------------------------------------------------------------------------------------
    0101  Revenue...........................       1,096            898           787            809
    0102  Expense...........................        -661           -923          -857           -825
                                            ------------ --------------  ------------  -------------
    0109  Net income or loss (-)............         435            -25           -70            -16
    -----------------------------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   36-4025-0-3-704    1994 actual    1995 actual     1996 est.      1997 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
          Federal assets:

    1101    Fund balances with Treasury.....         354            457           287            369
            Investments in US securities:
    1106      Investments...................         394            273           265            255
    1206  Non-Federal assets: Accounts
            Receivable, net.................           1              1             1              1
          Net value of assets related to
              post-1991 direct loans
              receivable:

    1402    Interest receivable.............          10              8             7              7
    1403    Credit program receivables and
              related forclosed property,
              net...........................                        540           526            505
                                            ------------ --------------  ------------  -------------
    1499      Net present value of assets
                related to direct loans.....          10            548           533            512
          Net value of assets related to
              pre-1992 direct loans
              receivable and acquired
              defaulted guaranteed loans
              receivable:

    1706    Foreclosed property.............         597
                                            ------------ --------------  ------------  -------------
    1799      Value of assets related to
                loan guarantees.............         597

    [[Page 855]]

          Other Federal assets:

    1803    Property, plant and equipment,
              net...........................         533            342           332            320
    1901    Other assets....................          -2             -2
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................       1,887          1,619         1,418          1,457
        LIABILITIES:
          Federal liabilities:

    2101    Accounts payable................          58             43            41             40
    2105    Other...........................          38             37
    2204  Non-Federal liabilities:
            Liabilities for loan guarantees.         894            747           727            699
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............         990            827           768            739
        NET POSITION:
    3200  Invested capital..................       1,525          1,154           924            739
    3300  Cumulative results of operations..         269            385           212            246
    3500  Future funding requirements.......        -897           -747          -486           -267
                                            ------------ --------------  ------------  -------------
    3999    Total net position..............         897            792           650            718
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position       1,887          1,619         1,418          1,457
    -----------------------------------------------------------------------------------------------
        Note.--This statement excludes unfunded contingent liabilities under
    loan guarantee and insurance programs.

                Loan Guaranty Revolving Fund Liquidating Account

                    (Legislative proposal, subject to PAYGO)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4025-4-3-704      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Capital investment:

    00.06   Payment to Direct Loan Financing
              due to enhanced debt
              collection....................                      29          25
                                               ---------   ---------  ----------

    10.00   Total obligations (object class
              33.0).........................                      29          25
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......                     119          25
    22.40 Capital transfer to general fund..                     -90
                                               ---------   ---------  ----------

    23.90   Total budgetary resources
              available for obligation......                      29          25
    23.95 New obligations...................                     -29         -25
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    68.00 Spending authority from offsetting
            collections (gross): Offsetting
            collections (cash)..............                     119          25
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    73.10 New obligations...................                      29          25
    73.20 Total outlays (gross).............                     -29         -25
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................                      29          25
                                               ---------   ---------  ----------

    87.00   Total outlays (gross)...........                      29          25
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

            Offsetting collections (cash)
                from:
    88.00     Federal sources: Receipt from
                financing account due to
                debt collection.............                     -90
    88.40     Non-Federal sources: Enhanced
                debt collection.............                     -29         -25
                                               ---------   ---------  ----------

    88.90       Total, offsetting
                  collections (cash)........                    -119         -25
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................
    90.00 Outlays...........................                     -90
    ---------------------------------------------------------------------------

        This schedule shows the effects of the Administration's proposal to
    repeal restrictions on collection of loan guaranty debts. The VA would
    be permitted to collect all loan guaranty debts by Federal salary offset
    or Federal income tax refund offset. This proposal would take effect in
    1996.

                   Status of Direct Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4025-4-3-704      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------
        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........                                 -29
    1251  Repayments: Repayments and
            prepayments.....................                     -29         -25
                                               ---------   ---------  ----------

    1290    Outstanding, end of year........                     -29         -54
    ---------------------------------------------------------------------------

                            Statement of Operations (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   36-4025-4-3-704    1994 actual    1995 actual     1996 est.      1997 est.
    -----------------------------------------------------------------------------------------------
    0101  Revenue...........................                                      119             25
    0102  Expense...........................                                      -29            -25
                                            ------------ --------------  ------------  -------------
    0109  Net income or loss (-)............                                       90
    -----------------------------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   36-4025-4-3-704    1994 actual    1995 actual     1996 est.      1997 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
    1101  Federal assets: Fund balances with
            Treasury........................                                       90             75
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................                                       90             75
        LIABILITIES:
    2105  Federal liabilities: Other........                                       90             75
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............                                       90             75
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position                                       90             75
    -----------------------------------------------------------------------------------------------

                           Direct Loan Program Account

                          (including transfer of funds)

        For the cost of direct loans, such sums as may be necessary to carry
    out the program, as authorized by 38 U.S.C. chapter 37, as amended:
    Provided, That such costs, including the cost of modifying such loans,
    shall be as defined in section 502 of the Congressional Budget Act of
    1974, as amended: Provided further, That during 1997, within the
    resources available, not to exceed $300,000 in gross obligations for
    direct loans are authorized for specially adapted housing loans.
        In addition, for administrative expenses to carry out the direct
    loan program, $80,000, which may be transferred to and merged with the
    appropriation for ``General operating expenses''.
        Note.--A regular 1996 appropriation for this account had not been
    enacted at the time this budget was prepared. The 1996 amounts included
    in this budget are based on the levels provided in three continuing
    resolutions: P.L. 104-91, P.L. 104-92, and P.L. 104-99.

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-1024-0-1-704      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.09 Administrative expenses...........           1
                                               ---------   ---------  ----------

    10.00   Total obligations (object class
              25.3).........................           1
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......           1
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................           1
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    73.10 New obligations...................           1
    73.20 Total outlays (gross).............          -1
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority           1
                                               ---------   ---------  ----------

    87.00   Total outlays (gross)...........           1
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................           1
    90.00 Outlays...........................           1
    ---------------------------------------------------------------------------

    [[Page 856]]

    Summary of Loan Levels, Subsidy Budget Authority and Outlays by Program (in
                                millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-1024-0-1-704      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------
        Direct loan subsidy (in percent):
    1329  Weighted average subsidy rate.....       11.76       28.13       46.77
    ----------------------------------------------------------------------------

        Administrative expense data:
    3510  Budget authority..................           1
    3590  Outlays...........................           1
    ---------------------------------------------------------------------------

        As required by the Federal Credit Reform Act of 1990, this account
    records, for this program, the subsidy costs associated with the direct
    loans obligated in 1992 and beyond (including modifications of direct
    loans that resulted from obligations in any year) as well as the
    administrative expenses of this program. The subsidy amounts are
    estimated on a net present value basis.

        Direct loans to veterans.--Specially Adapted Housing (SAH) loans are
    made to certain totally disabled veterans to supplement grants
    authorized to assist the veteran in acquiring suitable housing units
    with special features necessary due to the nature of their disabilities.
    Veterans receiving SAH loans are exempt from the loan origination fee.

        Direct (vendee) loans.--A vendee loan is established when a VA-owned
    property is sold on terms to a veteran or a non-veteran. Under current
    law, a veteran or a non-veteran receiving a vendee loan is charged a
    loan origination fee of 1 percent.

                         Direct Loan Financing Account

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4128-0-3-704      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Direct loans/Recoveries paid to
            other accounts..................           6          20          31
    00.02 Interest on treasury borrowing....           1           1           2
                                               ---------   ---------  ----------

    10.00   Total obligations...............           7          21          33
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New financing authority (gross)...           7          21          33
    23.95 New obligations...................          -7         -21         -33
    ----------------------------------------------------------------------------

        New financing authority (gross), detail:
    67.15 Authority to borrow (indefinite)..           6          19          29
          Spending authority from offsetting
              collections:

    68.00   Offsetting collections (cash)...           1           3           6
    68.47   Portion applied to debt
              reduction.....................                      -1          -2
                                               ---------   ---------  ----------

    68.90     Spending authority from
                offsetting collections
                (total).....................           1           2           4
                                               ---------   ---------  ----------

    70.00   Total new financing authority
              (gross).......................           7          21          33
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    73.10 New obligations...................           7          21          33
    73.20 Total financing disbursements
            (gross).........................          -7         -21         -33
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    87.00 Total financing disbursements
            (gross).........................           7          21          33
    ----------------------------------------------------------------------------

        Offsets:
          Against gross financing authority and
              financing disbursements:

            Offsetting collections (cash)
                from:
    88.00     Federal source: Payments from
                program account.............                      -2          -2
              Non-Federal sources:
    88.40       Non-Federal sources:
                  repayment of principal....                                  -1
    88.40       Interest on loans...........                      -1          -3
    88.40       Interest on uninvested funds          -1
                                               ---------   ---------  ----------

    88.90       Total, offsetting
                  collections (cash)........          -1          -3          -6
    ----------------------------------------------------------------------------

        Net financing authority and financing
            disbursements:
    89.00 Financing authority...............           6          18          27
    90.00 Financing disbursements...........           6          18          27
    ---------------------------------------------------------------------------

                   Status of Direct Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4128-0-3-704      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------
        Position with respect to appropriations act
                    limitation on obligations:
    1111  Limitation on direct loans........           1
    1112  Unobligated direct loan limitation         -52         -31
    1113  Unobligated limitation carried
            forward.........................          57          51          31
                                               ---------   ---------  ----------

    1150    Total direct loan obligations...           6          20          31
    ----------------------------------------------------------------------------

        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........           1           6          27
    1231  Disbursements: Direct loan
            disbursements...................           6          20          31
    1251  Repayments: Repayments and
            prepayments.....................          -1
    1264  Write-offs for default: Other
            adjustments, net................                       1
                                               ---------   ---------  ----------

    1290    Outstanding, end of year........           6          27          58
    ---------------------------------------------------------------------------

        To facilitate account restructuring and consolidation, the Direct
    Loan Financing Account also reflects budget information for the Native
    American Veterans Housing Direct Loan Financing Account and the
    Transitional Housing Loans Financing Account.

        As required by the Federal Credit Reform Act of 1990, this non-
    budgetary account records all cash flows to and from the Government
    resulting from direct loans obligated in 1992 and beyond (including
    modifications of direct loans that resulted from obligations in any
    year). The amounts in this account are a means of financing and are not
    included in the budget totals.

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   36-4128-0-3-704    1994 actual    1995 actual     1996 est.      1997 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
    1101  Federal assets: Fund balances with
            Treasury........................           1              2             1              1
          Net value of assets related to
              post-1991 direct loans
              receivable:

    1403    Accounts receivable from
              foreclosed property...........                          6             7              8
                                            ------------ --------------  ------------  -------------
    1499      Net present value of assets
                related to direct loans.....                          6             7              8
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................           1              8             8              9
        LIABILITIES:
    2103  Federal liabilities: Debt.........                          1                            1
    2203  Non-Federal liabilities: Debt.....           1              7             8              8
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............           1              8             8              9
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position           1              8             8              9
    -----------------------------------------------------------------------------------------------

                 Direct Loan Revolving Fund Liquidating Account

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4024-0-3-704      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    10.00 Total obligations.................
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.90 Unobligated balance available,
            start of year: Fund balance.....          14
    22.00 New budget authority (gross)......           5           4           3
    22.40 Capital transfer to general fund..         -18          -4          -3
                                               ---------   ---------  ----------

    23.90   Total budgetary resources
              available for obligation......           1
    23.95 New obligations...................

    [[Page 857]]

    24.90 Unobligated balance available, end
            of year: Fund balance...........
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    68.00 Spending authority from offsetting
            collections (gross): Offsetting
            collections (cash)..............           5           4           3
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.90 Unpaid obligations, start of year:
            Obligated balance: Fund balance.           3           2           1
    73.10 New obligations...................
    73.20 Total outlays (gross).............          -1          -2
    74.90 Unpaid obligations, end of year:
            Obligated balance: Fund balance.           2           1
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................                       1
    86.98 Outlays from permanent balances...           1           1
                                               ---------   ---------  ----------

    87.00   Total outlays (gross)...........           1           2
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

            Offsetting collections (cash)
                from:
              Non-Federal sources:
    88.40       Loan and other repayments...          -4          -3          -2
    88.40       Interest on loans...........          -1          -1          -1
                                               ---------   ---------  ----------

    88.90       Total, offsetting
                  collections (cash)........          -5          -4          -3
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................
    90.00 Outlays...........................          -5          -2          -3
    ---------------------------------------------------------------------------

                   Status of Direct Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4024-0-3-704      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------
        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........          17          14          11
    1251  Repayments: Repayments and
            prepayments.....................          -5          -4          -3
    1264  Write-offs for default: Other
            adjustments, net................           2           1
                                               ---------   ---------  ----------

    1290    Outstanding, end of year........          14          11           8
    ---------------------------------------------------------------------------

                            Statement of Operations (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   36-4024-0-3-704    1994 actual    1995 actual     1996 est.      1997 est.
    -----------------------------------------------------------------------------------------------
    0101  Revenue...........................           2              1             1              1
    0102  Expense...........................
                                            ------------ --------------  ------------  -------------
    0109  Net income or loss (-)............           2              1             1              1
    -----------------------------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   36-4024-0-3-704    1994 actual    1995 actual     1996 est.      1997 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
    1101  Federal assets: Fund balances with
            Treasury........................          18              3             3              3
          Net value of assets related to
              post-1991 direct loans
              receivable:

    1403    Accounts receivable from
              foreclosed property...........          17             13            12             11
                                            ------------ --------------  ------------  -------------
    1499      Net present value of assets
                related to direct loans.....          17             13            12             11
          Net value of assets related to
              pre-1992 direct loans
              receivable and acquired
              defaulted guaranteed loans
              receivable:

    1706    Foreclosed property.............                          1
                                            ------------ --------------  ------------  -------------
    1799      Value of assets related to
                loan guarantees.............                          1
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................          35             17            15             14
        LIABILITIES:
          Federal liabilities:

    2101    Accounts payable................           2              2             1              1
    2105    Other...........................           1
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............           3              2             1              1
        NET POSITION:
    3200  Invested capital..................          17             13            13             12
    3300  Cumulative results of operations..          15              2             1              1
                                            ------------ --------------  ------------  -------------
    3999    Total net position..............          32             15            14             13
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position          35             17            15             14
    -----------------------------------------------------------------------------------------------

              Native American Veteran Housing Loan Program Account

                          (including transfer of funds)

        For administrative expenses to carry out the direct loan program
    authorized by 38 U.S.C. chapter 37, subchapter V, as amended, $434,000;
    which may be transferred to and merged with the appropriation for
    ``General operating expenses''.
        Note.--A regular 1996 appropriation for this account had not been
    enacted at the time this budget was prepared. The 1996 amounts included
    in this budget are based on the levels provided in three continuing
    resolutions: P.L. 104-91, P.L. 104-92, and P.L. 104-99.

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-1120-0-1-704      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Direct loan subsidy...............           1           2           2
                                               ---------   ---------  ----------

    10.00   Total obligations (object class
              41.0).........................           1           2           2
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested
            balance.........................           4           4           2
    22.00 New budget authority (gross)......
                                               ---------   ---------  ----------

    23.90   Total budgetary resources
              available for obligation......           4           4           2
    23.95 New obligations...................          -1          -2          -2
    24.40 Unobligated balance available, end
            of year: Uninvested balance.....           4           2
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    70.00 Total new budget authority (gross)
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    73.10 New obligations...................           1           2           2
    73.20 Total outlays (gross).............          -1          -2          -2
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.93 Outlays from current balances.....           1           2           2
                                               ---------   ---------  ----------

    87.00   Total outlays (gross)...........           1           2           2
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................
    90.00 Outlays...........................           1           2           2
    ---------------------------------------------------------------------------

    Summary of Loan Levels, Subsidy Budget Authority and Outlays by Program (in
                                millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-1120-0-1-704      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------
        Direct loan levels supportable by subsidy
                    budget authority:
    1159  Total direct loan levels..........           6          20          31
        Direct loan subsidy (in percent):
    1329  Weighted average subsidy rate.....        7.72        7.72        7.72
        Direct loan subsidy budget authority:
    1339  Total subsidy budget authority....           1           2           2
        Direct loan subsidy outlays:
    1349  Total subsidy outlays.............           1           2           2
    ---------------------------------------------------------------------------

                     Education Loan Fund Liquidating Account

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4118-0-3-702      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    10.00 Total obligations.................
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.90 Unobligated balance available,
            start of year: Fund balance.....           8

    [[Page 858]]

    22.00 New budget authority (gross)......           1           1           1
    22.40 Capital transfer to general fund..          -8          -1          -1
                                               ---------   ---------  ----------

    23.90   Total budgetary resources
              available for obligation......           1
    23.95 New obligations...................
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    68.00 Spending authority from offsetting
            collections (gross): Offsetting
            collections (cash)..............           1           1           1
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    73.10 New obligations...................
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    87.00 Total outlays (gross).............
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.40   Offsetting collections (cash)
              from: Deductions for
              offsetting collections: Non-
              Federal sources...............          -1          -1          -1
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................
    90.00 Outlays...........................          -1          -1          -1
    ---------------------------------------------------------------------------

                   Status of Direct Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4118-0-3-702      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------
        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........           3           3           3
                                               ---------   ---------  ----------

    1290    Outstanding, end of year........           3           3           2
    ---------------------------------------------------------------------------

        To facilitate account restructuring and consolidation, the Education
    Loan Fund Liquidating Account also reflects budget information for the
    Vocational Rehabilitation Revolving Fund Liquidating Account.

        As required by the Federal Credit Reform Act of 1990, this account
    records, for the Education Loan fund, all cash flows to and from the
    Government resulting from direct loans obligated prior to 1992. All new
    activity in this program in 1992 and beyond is recorded in corresponding
    program and financing accounts.

                       WORKLOAD, AMOUNT LOANED AND REPAID

                                         1995 actual  1996 est.   1997 est.
    Number of loans outstanding.........       3,547       3,047       2,547
    Average amount per loan outstanding.        $825        $809        $799
    Repayment of loans (in thousands)...        $433        $431        $404

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   36-4118-0-3-702    1994 actual    1995 actual     1996 est.      1997 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
    1101  Federal assets: Fund balances with
            Treasury........................           8
          Net value of assets related to
              pre-1992 direct loans
              receivable and acquired
              defaulted guaranteed loans
              receivable:

    1601    Direct loans, gross.............           3              3             2              2
    1603    Allowance for estimated
              uncollectible loans and
              interest (-)..................          -2             -2            -2             -1
    1604    Direct loans and interest
              receivable, net...............           1              1                            1
                                            ------------ --------------  ------------  -------------
    1699      Value of assets related to
                direct loans................           1              1             1              1
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................           9              1             1              1
        NET POSITION:
    3100  Appropriated capital..............           8              8
    3300  Cumulative results of operations..           1             -7             1              1
                                            ------------ --------------  ------------  -------------
    3999    Total net position..............           9              1             1              1
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position           9              1             1              1
    -----------------------------------------------------------------------------------------------

                 Vocational Rehabilitation Loans Program Account

                          (including transfer of funds)

        For the cost of direct loans, $49,000 as authorized by 38 U.S.C.
    chapter 31, as amended: Provided, That such costs, including the cost of
    modifying such loans, shall be as defined in section 502 of the
    Congressional Budget Act of 1974, as amended: Provided further, That
    these funds are available to subsidize gross obligations for the
    principal amount of direct loans not to exceed $2,822,000.
        In addition, for administrative expenses necessary to carry out the
    direct loan program, $507,000 which may be transferred to and merged
    with the appropriation for ``General operating expenses''.

                       Education Loan Fund Program Account

                          (including transfer of funds)

        For the cost of direct loans, $1,000, as authorized by 38 U.S.C.
    3698, as amended: Provided, That such costs, including the cost of
    modifying such loans, shall be as defined in section 502 of the
    Congressional Budget Act of 1974, as amended: Provided further, That
    these funds are available to subsidize gross obligations for the
    principal amount of direct loans not to exceed $3,000.
        In addition, for administrative expenses necessary to carry out the
    direct loan program, $204,000; which may be transferred to and merged
    with the appropriation for ``General operating expenses''.
        Note.--A regular 1996 appropriation for these accounts had not been
    enacted at the time this budget was prepared. The 1996 amounts included
    in this budget are based on the levels provided in three continuing
    resolutions: P.L. 104-91, P.L. 104-92, and P.L. 104-99.

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-1114-0-1-702      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.09 Administrative expenses...........           1           1           1
                                               ---------   ---------  ----------

    10.00   Total obligations (object class
              25.3).........................           1           1           1
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......           1           1           1
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................           1           1           1
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    73.10 New obligations...................           1           1           1
    73.20 Total outlays (gross).............          -1          -1          -1
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority           1           1           1
                                               ---------   ---------  ----------

    87.00   Total outlays (gross)...........           1           1           1
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................           1           1           1
    90.00 Outlays...........................           1           1           1
    ---------------------------------------------------------------------------

    Summary of Loan Levels, Subsidy Budget Authority and Outlays by Program (in
                                millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-1114-0-1-702      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------
        Direct loan levels supportable by subsidy
                    budget authority:
    1159  Total direct loan levels..........           2           2           2
        Direct loan subsidy (in percent):
    1320  Voc. Rehab. Loan Subsidy rate.....        2.75        2.75        1.75
    1320  Education Loan Subsidy rate.......        0.00       26.53       34.83
                                               ---------   ---------  ----------

    1329    Weighted average subsidy rate...        2.75        2.75        1.75
    ----------------------------------------------------------------------------

        Administrative expense data:
    3510  Budget authority..................           1           1           1
    3590  Outlays...........................           1           1           1
    ---------------------------------------------------------------------------

    [[Page 859]]

        This fund provides loans of up to $791 (based on indexed Chapter 31
    Subsistence allowance rate) to veterans enrolled in a program of
    vocational rehabilitation who are temporarily in need of additional
    funds to meet their expenses.

        To facilitate account restructuring and consolidation, the
    Vocational Rehabilitation Loan Program Account also reflects budget
    information for the Education Loan Fund Program Account. The Education
    Loan program provides loans of up to $2,500 to dependents of veterans
    who are eligible for training benefits under chapter 35, title 38,
    U.S.C. and who are without sufficient funds to meet their education
    related expenses.

        As required by the Federal Credit Reform Act of 1990, this account
    records, for this program, the subsidy costs associated with the direct
    loans obligated in 1992 and beyond, as well as the administrative
    expenses of this program. The subsidy amounts are estimated on a present
    value basis; the administrative expenses are estimated on a cash basis.

             Vocational Rehabilitation Direct Loan Financing Account

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4112-0-3-702      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Direct loans......................           2           2           2
                                               ---------   ---------  ----------

    10.00   Total obligations...............           2           2           2
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New financing authority (gross)...           2           2           2
    ----------------------------------------------------------------------------

        New financing authority (gross), detail:
    67.15 Authority to borrow (indefinite)..           2           2           2
          Spending authority from offsetting
              collections:

    68.00   Offsetting collections (cash)...           2           2           2
    68.47   Portion applied to debt
              reduction.....................          -2          -2          -2
                                               ---------   ---------  ----------

    68.90     Spending authority from
                offsetting collections
                (total).....................
                                               ---------   ---------  ----------

    70.00   Total new financing authority
              (gross).......................           2           2           2
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation           1           1           1
    73.10 New obligations...................           2           2           2
    73.20 Total financing disbursements
            (gross).........................          -2          -2          -2
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation           1           1           1
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    87.00 Total financing disbursements
            (gross).........................           2           2           2
    ----------------------------------------------------------------------------

        Offsets:
          Against gross financing authority and
              financing disbursements:

    88.40   Offsetting collections (cash)
              from: Non-Federal sources.....          -2          -2          -2
    ----------------------------------------------------------------------------

        Net financing authority and financing
            disbursements:
    89.00 Financing authority...............
    90.00 Financing disbursements...........
    ---------------------------------------------------------------------------

                   Status of Direct Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4112-0-3-702      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------
        Position with respect to appropriations act
                    limitation on obligations:
    1111  Limitation on direct loans........           2           2           2
                                               ---------   ---------  ----------

    1150    Total direct loan obligations...           2           2           2
    ----------------------------------------------------------------------------

        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........           1           1           1
    1231  Disbursements: Direct loan
            disbursements...................           2           2           2
    1251  Repayments: Repayments and
            prepayments.....................          -2          -2          -2
                                               ---------   ---------  ----------

    1290    Outstanding, end of year........           1           1           1
    ---------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   36-4112-0-3-702    1994 actual    1995 actual     1996 est.      1997 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
    1101  Federal assets: Fund balances with
            Treasury........................           2              3             1              1
          Net value of assets related to
              post-1991 direct loans
              receivable:

    1401    Direct loans receivable, gross..           1              1             1              1
                                            ------------ --------------  ------------  -------------
    1499      Net present value of assets
                related to direct loans.....           1              1             1              1
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................           3              4             2              2
        LIABILITIES:
    2103  Federal liabilities: Debt.........           2              2             2              3
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............           2              2             2              3
        NET POSITION:
    3300  Cumulative results of operations..           1              1
                                            ------------ --------------  ------------  -------------
    3999    Total net position..............           1              1
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position           3              3             2              3
    -----------------------------------------------------------------------------------------------

        To facilitate account restructuring and consolidation, the
    Vocational Rehabilitation Direct Loan Financing Account also reflects
    budget information for the Education Direct Loan Financing Account.

        As required by the Federal Credit Reform Act of 1990, this non-
    budgetary account records all cash flows to and from the Government
    resulting from direct loans obligated in 1992 and beyond. The amounts in
    the account are means of financing and are not included in the budget
    totals.

                                   Trust Funds

                   Post-Vietnam Era Veterans Education Account

                  Unavailable Collections (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-8133-0-7-702      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------
        Balance, start of year:
    01.99 Balance, start of year............          65          64          64
        Receipts:
    02.01 Deductions from military pay......           5           5           4
    02.02 Contributions.....................          16          11          15
                                               ---------   ---------  ----------

    02.99   Total receipts..................          21          16          19
                                               ---------   ---------  ----------

    04.00 Total: Balances and collections...          86          80          83
        Appropriation:
    05.01 Post-Vietnam era veterans
            education account...............         -22         -16         -19
                                               ---------   ---------  ----------

    05.99 Subtotal appropriation............         -22         -16         -19
    07.99 Total balance, end of year........          64          64          64
    ---------------------------------------------------------------------------

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-8133-0-7-702      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Payment to post-Vietnam era
            trainees........................          33          24          18
    00.02 Payment to section 901 trainees...           1           1           1
    00.03 Participant disenrollments........          26          32          56
                                               ---------   ---------  ----------

    10.00   Total obligations...............          60          57          75
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested
            balance.........................         264         226         185
    22.00 New budget authority (gross)......          22          16          19
                                               ---------   ---------  ----------

    23.90   Total budgetary resources
              available for obligation......         286         242         204
    23.95 New obligations...................         -60         -57         -75
    24.40 Unobligated balance available, end
            of year: Uninvested balance.....         226         185         130
    ----------------------------------------------------------------------------

    [[Page 860]]

        New budget authority (gross), detail:
    60.27 Appropriation (trust fund,
            indefinite).....................          27          21          23
    60.45 Portion precluded from obligation.          -5          -5          -4
                                               ---------   ---------  ----------

    63.00   Appropriation (total)...........          22          16          19
                                               ---------   ---------  ----------

    70.00   Total new budget authority
              (gross).......................          22          16          19
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation          -8          -6          -4
    73.10 New obligations...................          60          57          75
    73.20 Total outlays (gross).............         -58         -54         -75
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation          -6          -4          -4
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................          22          16          19
    86.98 Outlays from permanent balances...          36          38          56
                                               ---------   ---------  ----------

    87.00   Total outlays (gross)...........          58          54          75
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................          22          16          19
    90.00 Outlays...........................          58          54          75
    ---------------------------------------------------------------------------

        This account consists of voluntary contributions by eligible
    servicepersons and matching contributions provided by the Department of
    Defense. The fund provides educational assistance payments to
    participants who entered the service after December 31, 1976, and are
    pursuing training under chapter 32, title 38, U.S.C. Section 901 is a
    non-contributory program with educational assistance provided by the
    Department of Defense. Public Law 99-576, enacted October 28, 1986,
    closed the program permanently for new enrollments effective March 31,
    1987. The estimated activity in the fund follows:

        CONTRIBUTIONS, PARTICIPANTS, DISENROLLMENTS, REFUNDS AND TRAINEES

                                 [In thousands]

                                         1995 actual  1996 est.   1997 est.

    Total budget authority..............     $21,689     $15,860     $19,008
      Servicepersons....................      $5,339      $4,743      $4,216
      Transferred from Department of
        Defense (bonus).................                   8,470       6,292
      Transferred from Department of
        Defense (matching)..............      15,285       1,808       7,800
      Transferred from Department of
        Defense (Section 901)...........       1,054         839         700
      Transferred from Department of
        Defense (Section 903)...........          11
    Total participants (end of year)....     355,159     325,059     243,550
    Total contributors (end of year)....       3,039       2,700       2,400
    Average contribution per contributor
    (actual dollars)....................      $1,757      $1,757      $1,757
    Number of disenrollments............      24,488      30,100      81,509
    Total refunds.......................     $25,817     $31,725     $56,036
    Total trainees......................      18,927      14,000      10,400
    Total trainee cost..................     $32,593     $24,108     $17,909
    Average cost per trainee (actual
    dollars)............................      $1,722      $1,722      $1,722
    Section 901 trainees................         232         194         162
    Section 901 trainee cost............      $1,003        $839        $700

        The status of the fund, excluding noncash transactions, is as
    follows (in thousands of dollars):

                                         1995 actual  1996 est.   1997 est.

    Undisbursed balance of fund, start
    of year.............................    -198,659    -155,596    -110,041
                                        ====================================
    Cash income during the year:
    Proprietary receipts (contributions
    from servicepersons)................       5,339       4,743       4,216
    Intrabudgetary transactions:
    (contributions from Department of
    Defense)............................      16,350      11,117      14,792
                                        ------------------------------------
          Total annual income...........      21,689      15,860      19,008
                                        ====================================
    Cash outlays during the year:
      Payments to trainees..............      33,596      24,947      18,609
      Refunds to participants
        (disenrollments)................      25,817      31,725      56,036
                                        ------------------------------------
          Total cash outlay.............      59,413      56,672      74,645
                                        ====================================
      Balance unavailable for obligation      -5,339      -4,743      -4,216
    Undisbursed balance of fund, end of
    year................................     155,596     110,041      50,188
                                        ====================================

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-8133-0-7-702      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------
    41.0  Grants, subsidies, and
            contributions...................          34          25          19
    44.0  Refunds...........................          26          32          56
                                               ---------   ---------  ----------

    99.9    Total obligations...............          60          57          75
    ---------------------------------------------------------------------------

                      National Service Life Insurance Fund

                  Unavailable Collections (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-8132-0-7-701      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------
        Balance, start of year:
    01.99 Balance, start of year............                                   1
        Receipts:
    02.01 Premium and other receipts........         272         281         258
    02.02 Interest..........................       1,074       1,042         991
    02.03 Payments from general and special
            funds...........................           2           2           2
                                               ---------   ---------  ----------

    02.99   Total receipts..................       1,348       1,325       1,251
                                               ---------   ---------  ----------

    04.00 Total: Balances and collections...       1,348       1,325       1,252
        Appropriation:
    05.01 National Service Life Insurance
            fund............................      -1,348      -1,324      -1,250
    07.99 Total balance, end of year........                       1           2
    ---------------------------------------------------------------------------

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-8132-0-7-701      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Operating expenses:

    00.01   Death claims....................         746         825         860
    00.02   Disability claims...............          31          31          30
    00.03   Matured endowments..............          35          37          21
    00.04   Cash surrenders.................          32          29          26
    00.05   Dividends.......................         790         779         730
    00.06   Interest paid on dividend
              credits and deposits..........          73          78          78
    00.07   Payment to general operating
              expenses......................                      28          28
                                               ---------   ---------  ----------

    00.91     Total operating expenses......       1,706       1,807       1,773
          Capital investment:

    01.01   Policy loans....................         143         136         138
    01.02   Policy liens....................           1
                                               ---------   ---------  ----------

    01.91     Total capital investment......         144         136         138
                                               ---------   ---------  ----------

    10.00   Total obligations...............       1,850       1,943       1,911
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.91 Unobligated balance available,
            start of year: U.S. Securities:
            Par value.......................      10,836      10,854      10,748
    22.00 New budget authority (gross)......       1,868       1,837       1,754
                                               ---------   ---------  ----------

    23.90   Total budgetary resources
              available for obligation......      12,704      12,691
    23.95 New obligations...................      -1,850      -1,943      -1,911
    24.91 Unobligated balance available, end
            of year: U.S. Securities: Par
            value...........................      10,854      10,748      10,590
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    60.27 Appropriation (trust fund,
            indefinite).....................       1,348       1,324       1,250
    68.00 Spending authority from offsetting
            collections: Offsetting
            collections (cash)..............         520         513         504
                                               ---------   ---------  ----------

    70.00   Total new budget authority
              (gross).......................       1,868       1,837       1,754
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
          Unpaid obligations, start of year:

            Obligated balance:
    72.40     Appropriation.................          14          10           5
    72.41     U.S. Securities: Par value....       1,017       1,100       1,133
                                               ---------   ---------  ----------

    72.99     Total unpaid obligations,
                start of year...............       1,031       1,110       1,138
    73.10 New obligations...................       1,850       1,943       1,911
    73.20 Total outlays (gross).............      -1,770      -1,916      -1,858
          Unpaid obligations, end of year:

            Obligated balance:
    74.40     Appropriation.................          10           5           5

    [[Page 861]]

    74.41     U.S. Securities: Par value....       1,100       1,133       1,185
                                               ---------   ---------  ----------

    74.99     Total unpaid obligations, end
                of year.....................       1,110       1,138       1,190
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................         520         513         504
    86.98 Outlays from permanent balances...       1,249       1,403       1,355
                                               ---------   ---------  ----------

    87.00   Total outlays (gross)...........       1,770       1,916       1,858
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

            Offsetting collections (cash)
                from:
              Non-Federal sources:
    88.40       Repayments of loans.........        -113        -117        -121
    88.40       Optional settlements........          -7          -7          -5
    88.40       Net income offsets
                  adjustments...............        -400        -389        -378
                                               ---------   ---------  ----------

    88.90       Total, offsetting
                  collections (cash)........        -520        -513        -504
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................       1,348       1,324       1,250
    90.00 Outlays...........................       1,249       1,403       1,354
    ---------------------------------------------------------------------------
        Note.--The Department of Veterans Affairs insurance policy loans are
    not an extension of Federal credit. Credit schedules previously shown
    for this account have been discontinued.

        This fund was established in 1940 for the World War II servicemen's
    and veterans' insurance program. Over 22 million policies have been
    issued under this program. Activity of the fund reflects a rising claim
    workload. The trend in the number and amount of policies in force is
    shown as follows (dollars in millions):

                                             1995 actual   1996 est.   1997 est.

    Number of policies......................   2,219,497   2,124,277   2,025,027
    Insurance in force......................     $19,862     $19,465     $19,023

        This fund is operated on a commercial basis to the extent possible.
    The income of the fund is derived from premium receipts, interest on
    investments, and payments which are made to the fund from the Veterans
    insurance and indemnities appropriation.

        Assets of the fund, which are largely invested in special Treasury
    interest-bearing securities and in policy loans, are expected to
    decrease from $12,932 million as of September 30, 1996 to $12,829
    million as of September 30, 1997. The actuarial estimate of policy
    obligations as of September 30, 1997, total $12,717 million, leaving a
    balance of $112 million for contingency reserves.

        The status of the fund, excluding noncash transactions, is as
    follows (in millions of dollars):

                      Status of Funds (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-8132-0-7-701      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------
        Unexpended balance, start of year:
    0100  Uninvested balance................          14          10           5
    0101  U.S. Securities: Par value........      11,853      11,954      11,983
                                               ---------   ---------  ----------

    0199    Total balance, start of year....      11,867      11,964      11,988
        Cash income during the year:
          Proprietary receipts:

    0220    NSLI fund, Premium and other
              receipts......................         272         287         258
          Intragovernmental transactions:

    0240    NSLI fund, Interest.............       1,074       1,047         991
    0241    NSLI fund, Payments from general
              and special funds.............           2           2           2
          Offsetting collections:

    0289    Offsetting Collections..........         520         513         504
                                               ---------   ---------  ----------

    0299    Total cash income...............       1,868       1,848       1,755
        Cash outgo during year:
    0500  National Service Life Insurance
            fund............................      -1,770      -1,824      -1,355
        Unexpended balance, end of year:
    0700  Uninvested balance................          10           5           5
    0701  U.S. Securities: Par value........      11,954      11,983      12,383
                                               ---------   ---------  ----------

    0799    Total balance, end of year......      11,964      11,988      12,388
    ---------------------------------------------------------------------------

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-8132-0-7-701      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------
    33.0  Investments and loans.............         143         136         138
    42.0  Insurance claims and indemnities..         843         922         938
    43.0  Interest and dividends............         863         885         835
    99.5  Below reporting threshold.........           1
                                               ---------   ---------  ----------

    99.9    Total obligations...............       1,850       1,943       1,911
    ---------------------------------------------------------------------------

                  United States Government Life Insurance Fund

                  Unavailable Collections (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-8150-0-7-701      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------
        Balance, start of year:
    01.99 Balance, start of year............
        Receipts:
    02.01 Interest and profits on
            investments in public debt
            securities......................           9           7           7
        Appropriation:
    05.01 United States government life
            insurance fund..................          -9          -7          -7
    07.99 Total balance, end of year........
    ---------------------------------------------------------------------------

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-8150-0-7-701      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Operating expenses:

    00.01   Death claims....................           8           8           8
    00.03   Matured endowments..............           2           2           1
    00.05   Dividends.......................           6           5           5
    00.06   Interest paid on dividend
              credits and deposits..........           1           1           1
                                               ---------   ---------  ----------

    00.91     Total operating expenses......          17          16          15
    01.01 Capital investment: Policy loans..           1
                                               ---------   ---------  ----------

    10.00   Total obligations...............          18          16          15
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.91 Unobligated balance available,
            start of year: U.S. Securities:
            Par value.......................          96          87          79
    22.00 New budget authority (gross)......          10           9           9
                                               ---------   ---------  ----------

    23.90   Total budgetary resources
              available for obligation......         106          96          86
    23.95 New obligations...................         -18         -16         -15
    24.91 Unobligated balance available, end
            of year: U.S. Securities: Par
            value...........................          87          79          72
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    60.27 Appropriation (trust fund,
            indefinite).....................           9           7           7
    68.00 Spending authority from offsetting
            collections: Offsetting
            collections (cash)..............           2           2           1
                                               ---------   ---------  ----------

    70.00   Total new budget authority
              (gross).......................          10           9           9
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
          Unpaid obligations, start of year:

            Obligated balance:
    72.40     Appropriation.................           1
    72.41     U.S. Securities: Par value....          19          19          18
                                               ---------   ---------  ----------

    72.99     Total unpaid obligations,
                start of year...............          20          19          18
    73.10 New obligations...................          18          16          15
    73.20 Total outlays (gross).............         -20         -19         -15
          Unpaid obligations, end of year:

            Obligated balance:
    74.40     Appropriation.................
    74.41     U.S. Securities: Par value....          19          18          18
                                               ---------   ---------  ----------

    74.99     Total unpaid obligations, end
                of year.....................          19          18          18
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................           2           2           1
    86.98 Outlays from permanent balances...          16          17          14
                                               ---------   ---------  ----------

    87.00   Total outlays (gross)...........          20          19          15
    ----------------------------------------------------------------------------

    [[Page 862]]

        Offsets:
          Against gross budget authority and outlays:

    88.40   Offsetting collections (cash)
              from: Repayments of loans.....          -2          -2          -1
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................           9           7           7
    90.00 Outlays...........................          18          17          14
    ---------------------------------------------------------------------------
        Note.--The Department of Veterans Affairs insurance policy loans are
    not an extension of Federal credit. Credit schedules previously shown
    for this account have been discontinued.

        This fund was established in 1919 to receive premiums and pay claims
    on insurance issued under the provisions of the War Risk Insurance Act.
    The general decline in the activity of the fund is indicated in the
    following table (dollars in millions):

                                         1995 actual  1996 est.   1997 est.
    Number of policies..................      25,108      23,088      21,428
    Insurance in force..................         $85         $77         $71

        The fund is operated on a commercial basis to the extent possible.
    The income of the fund is derived from interest on investments and
    payments from the Veterans insurance and indemnities appropriation.
    Effective January 1, 1983, premiums were discontinued since reserves
    held in the fund were adequate to meet future liabilities of the
    program.

        Assets of the fund, which are largely invested in interest-bearing
    securities and policy loans, are estimated to decrease from $105 million
    as of September 30, 1996, to $97 million as of September 30, 1997, as an
    increasing number of policies mature through death or disability. The
    actuarial evaluation of policy obligations as of September 30, 1997,
    totals $95 million, leaving a balance of $2 million for contingency
    reserves.

        The status of the fund, excluding noncash transactions, is as
    follows (in millions of dollars):

                      Status of Funds (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-8150-0-7-701      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------
        Unexpended balance, start of year:
    0100  Uninvested balance................           1
    0101  U.S. Securities: Par value........         116         106          97
                                               ---------   ---------  ----------

    0199    Total balance, start of year....         117         106          97
        Cash income during the year:
          Intragovernmental transactions:

    0240    Interest and profits on
              investments in public debt
              securities, USGLI, VA.........           9           7           7
          Offsetting collections:

    0289    Offsetting Collections..........           2           2           1
                                               ---------   ---------  ----------

    0299    Total cash income...............           9           9           8
        Cash outgo during year:
    0500  United States government life
            insurance fund..................         -20         -17         -14
        Unexpended balance, end of year:
    0700  Uninvested balance................
    0701  U.S. Securities: Par value........         107          97          90
                                               ---------   ---------  ----------

    0799    Total balance, end of year......         107          95          90
    ---------------------------------------------------------------------------

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-8150-0-7-701      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------
    33.0  Investments and loans.............           1
    42.0  Insurance claims and indemnities..          10          11          11
    43.0  Interest and dividends............           7           5           4
                                               ---------   ---------  ----------

    99.9    Total obligations...............          18          16          15
    ---------------------------------------------------------------------------

                      Veterans Special Life Insurance Fund

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-8455-0-8-701      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Operating expenses:

    00.01   Death claims....................          39          45          48
    00.02   Cash surrenders.................           5           5           4
    00.03   Dividends.......................         103         103         101
    00.04   All other.......................          46          52          54
                                               ---------   ---------  ----------

    00.91     Total operating expenses......         193         205         207
          Capital investment:

    01.01   Total capital investment........          26          25          26
                                               ---------   ---------  ----------

    10.00   Total obligations...............         219         230         233
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.91 Unobligated balance available,
            start of year: U.S. Securities:
            Par value.......................       1,378       1,397       1,409
    22.00 New budget authority (gross)......         238         242         239
                                               ---------   ---------  ----------

    23.90   Total budgetary resources
              available for obligation......       1,616       1,639       1,648
    23.95 New obligations...................        -219        -230        -233
    24.91 Unobligated balance available, end
            of year: U.S. Securities: Par
            value...........................       1,397       1,409       1,415
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    68.00 Spending authority from offsetting
            collections (gross): Offsetting
            collections (cash)..............         238         242         239
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
          Unpaid obligations, start of year:

            Obligated balance:
    72.90     Fund balance..................           1           1           1
    72.91     U.S. Securities: Par value....         131         150         161
                                               ---------   ---------  ----------

    72.99     Total unpaid obligations,
                start of year...............         132         151         162
    73.10 New obligations...................         219         230         233
    73.20 Total outlays (gross).............        -201        -218        -219
          Unpaid obligations, end of year:

            Obligated balance:
    74.90     Fund balance..................           1           1           1
    74.91     U.S. Securities: Par value....         150         161         176
                                               ---------   ---------  ----------

    74.99     Total unpaid obligations, end
                of year.....................         151         162         177
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................          72          68          39
    86.98 Outlays from permanent balances...         130         150         180
                                               ---------   ---------  ----------

    87.00   Total outlays (gross)...........         201         218         219
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

            Offsetting collections (cash)
                from:
    88.20     Interest on U.S. securities...        -146        -145        -142
              Non-Federal sources:
    88.40       Interest on loans...........          -2          -5          -5
    88.40       Insurance premiums earned...         -74         -73         -72
    88.40       Optional settlements........          -2          -3          -3
    88.40       Repayments of loans.........         -13         -15         -17
                                               ---------   ---------  ----------

    88.90       Total, offsetting
                  collections (cash)........        -238        -242        -239
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................
    90.00 Outlays...........................         -37         -23         -20
    ---------------------------------------------------------------------------
        Note.--The Department of Veterans Affairs insurance policy loans are
    not an extension of Federal credit. Credit schedules previously shown
    for this account have been discontinued.

        This fund finances the payment of claims on life insurance policies
    issued before January 3, 1957, to veterans who served in the Armed
    Forces subsequent to April 1, 1951. No new policies can be issued.
    Policyholders may elect to purchase total disability income coverage
    with the payment of additional premiums.

        Budget program--
            Death claims.--Represents payments to designated beneficiaries.
            Cash surrenders.--A policyholder may terminate his or her
        insurance by cashing in the policy for its cash value.

    [[Page 863]]

            Dividends.--Policyholders participate in the distribution of
        annual dividends.
            All other.--Classified in this category are payments to
        policyholders who: (a) hold endowment policies which have matured;
        (b) have purchased total disability income coverage and subsequently
        become disabled; and (c) are paid interest on dividend credits and
        deposits.
            The following table reflects the decrease in the number of
        policies and the amounts of insurance in force (dollars in
        millions):

                                         1995 actual  1996 est.   1997 est.
      Number of policies................     262,851     256,690     250,110
      Insurance in force................      $2,858      $2,831      $2,801

        Financing.--Payments from this fund are financed primarily  from
    premium  receipts  and  interest  on investments.

        Operating results and financial condition.--Favorable mortality
    experience on insurance written against this fund has kept death claim
    payments well below the amount of premium and interest receipts, thereby
    producing an annual increase in the total revenue of the fund. Excess
    earnings of the fund are now distributed to the policyholders in the
    form of an annual dividend.

                            Statement of Operations (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   36-8455-0-8-701    1994 actual    1995 actual     1996 est.      1997 est.
    -----------------------------------------------------------------------------------------------
    0101  Revenue...........................         229            228           229            225
    0102  Expense...........................        -229           -226          -229           -225
                                            ------------ --------------  ------------  -------------
    0109  Net income or loss (-)............                          2
    -----------------------------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   36-8455-0-8-701    1994 actual    1995 actual     1996 est.      1997 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
          Federal assets:

    1101    Fund balances with Treasury.....           1              1             1              1
            Investments in US securities:
    1102      Treasury securities, par......       1,509          1,546         1,570          1,590
    1106      Receivables, net..............          36             94            37             37
    1206  Non-Federal assets: Receivables,
            net.............................           2                            3              3
    1601  Net value of assets related to
            pre-1992 direct loans receivable
            and acquired defaulted
            guaranteed loans receivable:
            Direct loans, gross.............          81             37           104            112
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................       1,630          1,678         1,715          1,744
        LIABILITIES:
          Non-Federal liabilities:

    2201    Accounts payable................         151            168           184            198
    2206    Pension and other actuarial
              liabilities...................       1,435          1,465         1,486          1,500
    2207    Other...........................          20             20            19             19
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............       1,606          1,652         1,689          1,717
        NET POSITION:
    3100  Appropriated capital..............       1,378          1,397         1,409          1,415
    3200  Invested capital..................      -1,353         -1,370        -1,382         -1,388
                                            ------------ --------------  ------------  -------------
    3999    Total net position..............          25             27            27             27
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position       1,631          1,679         1,716          1,744
    -----------------------------------------------------------------------------------------------

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-8455-0-8-701      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------
    33.0  Investments and loans.............          26          25          26
    42.0  Insurance claims and indemnities..          76          88          91
    43.0  Interest and dividends............         117         117         116
                                               ---------   ---------  ----------

    99.9    Total obligations...............         219         230         233
    ---------------------------------------------------------------------------

                                  CONSTRUCTION

                                  Federal Funds

    General and special funds:

                          Construction, Major Projects

        For constructing, altering, extending and improving any of the
    facilities under the jurisdiction or for the use of the Department of
    Veterans Affairs, or for any of the purposes set forth in sections 316,
    2404, 2406, 8102, 8103, 8106, 8108, 8109, 8110, and 8122 of title 38,
    United States Code, including planning, architectural and engineering
    services, maintenance or guarantee period services costs associated with
    equipment guarantees provided under the project, services of claims
    analysts, offsite utility and storm drainage system construction costs,
    and site acquisition, where the estimated cost of a project is
    $10,000,000 or more or where funds for a project were made available in
    a previous major project appropriation, $249,900,000, to remain
    available until expended; Provided, That except for advance planning of
    projects funded through the advance planning fund and the design of
    projects funded through the design fund, none of these funds shall be
    used for any project which has not been considered and approved by the
    Congress in the budgetary process; Provided further, That no funds from
    any other account except the ``Parking revolving fund'', may be
    obligated for constructing, altering, extending, or improving a project
    which was approved in the budget process and funded in this account
    until one year after substantial completion and beneficial occupancy by
    the Department of Veterans Affairs of the project or any part thereof
    with respect to that part only.
        Note.--A regular 1996 appropriation for this account had not been
    enacted at the time this budget was prepared. The 1996 amounts included
    in this budget are based on the levels provided in three continuing
    resolutions: P.L. 104-91, P.L. 104-92, and P.L. 104-99.

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0110-0-1-703      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Replacement and modernization.....         143          98          53
    00.02 Nursing home care.................          36
    00.04 Research and education............          11
    00.05 Outpatient improvements...........          48          95         116
    00.06 Other improvements................         141         159          26
    00.07 National cemeteries...............          34           6         134
    00.08 Replacement or renovation of
            regional offices................          34           5           1
                                               ---------   ---------  ----------

    10.00   Total obligations...............         447         363         330
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested
            balance.........................         891         768         541
    22.00 New budget authority (gross)......         323         136         250
                                               ---------   ---------  ----------

    23.90   Total budgetary resources
              available for obligation......       1,214         904         791
    23.95 New obligations...................        -447        -363        -330
    24.40 Unobligated balance available, end
            of year: Uninvested balance.....         768         541         460
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................         324         136         250
    40.75 Reduction pursuant to P.L. 104-19.          -1
                                               ---------   ---------  ----------

    43.00   Appropriation (total)...........         323         136         250
                                               ---------   ---------  ----------

    70.00   Total new budget authority
              (gross).......................         323         136         250
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation         810         826         773
    73.10 New obligations...................         447         363         330
    73.20 Total outlays (gross).............        -431        -416        -322
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation         826         773         781
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority           1           6          11
    86.93 Outlays from current balances.....         430         410         311
                                               ---------   ---------  ----------

    87.00   Total outlays (gross)...........         431         416         322
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................         323         136         250
    90.00 Outlays...........................         431         416         322
    ---------------------------------------------------------------------------

    [[Page 864]]

                     Summary of Budget Authority and Outlays

                            (in millions of dollars)

                                         1995 actual  1996 est.   1997 est.
    Enacted/requested:
      Budget Authority..................         323         136         250
      Outlays...........................         431         416         322
    Adjustment to 1996 continuing
        resolution levels:
      Budget Authority..................                      62
      Outlays...........................                       3          17
                                        ------------------------------------
    Total:
      Budget Authority..................         323         198         250
      Outlays...........................         431         419         339
                                        ====================================

        The major construction request improves access to VA health care for
    thousands of veterans and expands VA's national cemetery system. Funds
    are included for a new hospital and nursing home at Brevard County,
    Florida, and a replacement hospital at Travis Air Force Base in
    California. Funds are also requested for construction of an outpatient
    clinic and renovation of related support space at Tripler Army Medical
    Center in Honolulu, Hawaii. Outpatient improvements will also be funded
    at Wilkes-Barre, Pennsylvania. Funds are provided to correct patient
    environmental deficiencies at VA hospitals in Marion, Indiana;
    Salisbury, North Carolina; and Pittsburgh (UD), Pennsylvania. Two new
    cemeteries will be constructed at Chicago, Illinois, and Dallas/Fort
    Worth, Texas. Additional funds are provided to remove asbestos from
    Department-owned buildings, to pay VA's share of the costs related to
    the cleanup of hazardous waste, to reimburse the Judgment Fund for the
    payment of claims and settlements, and to support advanced planning and
    design activities.

                            [In millions of dollars]

                                         1995 actual  1996 est.   1997 est.
    Replacement and modernization.......         105          33          75
    Research and Education..............          26
    Outpatient and extended care........         205          28          59
    Safety deficiencies.................
    Functional modernization and plant
    maintenance.........................          33          71          84
    Other departments...................          13          10          35
    Supplemental appropriation provided
    under P.L. 103-211..................
    Reprogramming/transfer..............         -26
    Design fund offset..................                      -5          -3
    Rescission pursuant to P.L. 104-19..         -31
      Procurement reduction pursuant to
        P.L. 103-327....................          -1
                                        ------------------------------------
          Total budget authority........         323         136         250
                                        ====================================

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0110-0-1-703      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------
    11.3  Personnel compensation: Other than
            full-time permanent.............           1           1           1
    25.2  Other services....................          34          28          32
    26.0  Supplies and materials............           1           1           2
    31.0  Equipment.........................           4           3           3
    32.0  Land and structures...............         407         330         292
                                               ---------   ---------  ----------

    99.9    Total obligations...............         447         363         330
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 36-0110-0-1-703      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------
    1001  Total compensable workyears: Full-
            time equivalent employment......          37          50          50
    ---------------------------------------------------------------------------

                          Construction, Minor Projects

        For constructing, altering, extending, and improving any of the
    facilities under the jurisdiction or for the use of the Department of
    Veterans Affairs, including planning, architectural and engineering
    services, maintenance or guarantee period services costs associated with
    equipment guarantees provided under the project, services of claims
    analysts, offsite utility and storm drainage system construction costs,
    and site acquisition, or for any of the purposes set forth in sections
    316, 2404, 2406, 8102, 8103, 8106, 8108, 8109, 8110, and 8122 of title
    38, United States Code, where the estimated cost of a project is less
    than $10,000,000; $189,241,000, to remain available until expended,
    along with unobligated balances of previous ``Construction, minor
    projects'' appropriations which are hereby made available for any
    project where the estimated cost is less than $10,000,000: Provided,
    That funds in this account shall be available for (1) repairs to any of
    the nonmedical facilities under the jurisdiction or for the use of the
    Department which are necessary because of loss or damage caused by any
    natural disaster or catastrophe, (2) temporary measures necessary to
    prevent or to minimize further loss by such causes, and (3) capital
    contribution payments under enhanced-use leases, authorized by
    subchapter V of chapter 81 of title 38, United States Code, not to
    exceed $3,000,000 per lease.
        Note.--A regular 1996 appropriation for this account had not been
    enacted at the time this budget was prepared. The 1996 amounts included
    in this budget are based on the levels provided in three continuing
    resolutions: P.L. 104-91, P.L. 104-92, and P.L. 104-99.

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0111-0-1-703      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Nursing home care.................          15          18          13
    00.02 Research and education............           9           3           4
    00.04 Other improvements................         111         140         140
    00.06 National cemeteries...............           9           9          15
    00.07 Computer centers, additions and
            alterations.....................           2           7           7
    00.08 Replacement or renovation of
            regional offices................           5          10          11
                                               ---------   ---------  ----------

    10.00   Total obligations...............         151         187         190
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested
            balance.........................          29          30          32
    22.00 New budget authority (gross)......         153         190         189
                                               ---------   ---------  ----------

    23.90   Total budgetary resources
              available for obligation......         182         220         221
    23.95 New obligations...................        -151        -187        -190
    24.40 Unobligated balance available, end
            of year: Uninvested balance.....          30          32          32
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................         154         190         189
    40.75 Reduction pursuant to P.L. 104-19.          -1
                                               ---------   ---------  ----------

    43.00   Appropriation (total)...........         153         190         189
                                               ---------   ---------  ----------

    70.00   Total new budget authority
              (gross).......................         153         190         189
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation         138         157         181
    73.10 New obligations...................         151         187         190
    73.20 Total outlays (gross).............        -133        -163        -177
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation         157         181         195
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority          29          49          49
    86.93 Outlays from current balances.....         104         114         127
                                               ---------   ---------  ----------

    87.00   Total outlays (gross)...........         133         163         177
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................         153         190         189
    90.00 Outlays...........................         133         163         177
    ---------------------------------------------------------------------------

        The Construction, minor projects appropriation, which funds
    construction projects costing less than $3 million, is used to reduce
    risks to patient life and safety, correct code deficiencies, and improve
    ambulatory care settings. Legislation is being proposed to increase the
    limit on minor construction projects from $3 million to $10 million.

    [[Page 865]]

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0111-0-1-703      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------

          Personnel compensation:

    11.3    Other than full-time permanent..           4           5           5
                                               ---------   ---------  ----------

    11.9      Total personnel compensation..           4           5           5
    25.2  Other services....................          31          38          39
    26.0  Supplies and materials............           1           2           2
    31.0  Equipment.........................           3           4           4
    32.0  Land and structures...............         112         138         140
                                               ---------   ---------  ----------

    99.9    Total obligations...............         151         187         190
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 36-0111-0-1-703      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------
    1001  Total compensable workyears: Full-
            time equivalent employment......          80          80          80
    ---------------------------------------------------------------------------

            Grants for Construction of State Extended Care Facilities

        For grants to assist States to acquire or construct State nursing
    home and domiciliary facilities and to remodel, modify or alter existing
    hospital, nursing home and domiciliary facilities in State homes, for
    furnishing care to veterans as authorized by 38 U.S.C. 8131-8137,
    $39,909,000, to remain available until expended.
        Note.--A regular 1996 appropriation for this account had not been
    enacted at the time this budget was prepared. The 1996 amounts included
    in this budget are based on the levels provided in three continuing
    resolutions: P.L. 104-91, P.L. 104-92, and P.L. 104-99.

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0181-0-1-703      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    10.00 Total obligations (object class
            41.0)...........................          53          47          40
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested
            balance.........................           6
    22.00 New budget authority (gross)......          47          47          40
                                               ---------   ---------  ----------

    23.90   Total budgetary resources
              available for obligation......          53          47          40
    23.95 New obligations...................         -53         -47         -40
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................          47          47          40
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation         146         134         140
    73.10 New obligations...................          53          47          40
    73.20 Total outlays (gross).............         -64         -41         -44
    73.40 Adjustments in expired accounts...          -1
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation         134         140         136
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.93 Outlays from current balances.....          64          41          44
                                               ---------   ---------  ----------

    87.00   Total outlays (gross)...........          64          41          44
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................          47          47          40
    90.00 Outlays...........................          64          41          44
    ---------------------------------------------------------------------------

        In 1996, the Department plans to obligate $47.4 million to assist
    nine States to acquire or construct State home facilities for furnishing
    domiciliary or nursing home care to veterans, and expand, remodel, or
    alter existing buildings for furnishing domiciliary, nursing home, or
    hospital care to veterans.

            Grants for the Construction of State Veterans Cemeteries

        For grants to aid States in establishing, expanding, or improving
    State veteran cemeteries as authorized by 38 U.S.C. 2408, $1,000,000, to
    remain available until expended.
        Note.--A regular 1996 appropriation for this account had not been
    enacted at the time this budget was prepared. The 1996 amounts included
    in this budget are based on the levels provided in three continuing
    resolutions: P.L. 104-91, P.L. 104-92, and P.L. 104-99.

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0183-0-1-705      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    10.00 Total obligations.................           5           9           4
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested
            balance.........................          10          10           3
    22.00 New budget authority (gross)......           5           1           1
                                               ---------   ---------  ----------

    23.90   Total budgetary resources
              available for obligation......          15          11           4
    23.95 New obligations...................          -5          -9          -4
    24.40 Unobligated balance available, end
            of year: Uninvested balance.....          10           3
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................           5           1           1
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation           7           9          12
    73.10 New obligations...................           5           9           4
    73.20 Total outlays (gross).............          -3          -5          -3
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation           9          12          13
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.93 Outlays from current balances.....           3           5           3
                                               ---------   ---------  ----------

    87.00   Total outlays (gross)...........           3           5           3
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................           5           1           1
    90.00 Outlays...........................           3           5           3
    ---------------------------------------------------------------------------

        This program will enable the Department to assist States in
    establishing, expanding, or improving State-operated veterans
    cemeteries.

    Public enterprise funds:

                             Parking Revolving Fund

        For the parking revolving fund as authorized by 38 U.S.C. 8109,
    income from fees collected, to remain available until expended, which
    shall be available for all authorized expenses except operations and
    maintenance costs, which will be funded from ``Medical care''.
        Note.--A regular 1996 appropriation for this account had not been
    enacted at the time this budget was prepared. The 1996 amounts included
    in this budget are based on the levels provided in three continuing
    resolutions: P.L. 104-91, P.L. 104-92, and P.L. 104-99.

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4538-0-3-703      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Operating expenses: Parking leases           1           2           2
    01.01 Capital investment: parking
            construction program............          17           6           2
                                               ---------   ---------  ----------

    10.00   Total obligations...............          18           8           4
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested
            balance.........................          25          26          21
    22.00 New budget authority (gross)......          18           3           3
                                               ---------   ---------  ----------

    23.90   Total budgetary resources
              available for obligation......          43          29          24
    23.95 New obligations...................         -18          -8          -4
    24.40 Unobligated balance available, end
            of year: Uninvested balance.....          26          21          20
    ----------------------------------------------------------------------------

    [[Page 866]]

        New budget authority (gross), detail:
          Current:

    40.00   Appropriation...................          16
          Permanent:

    68.00   Spending authority from
              offsetting collections:
              Offsetting collections (cash).           2           3           3
                                               ---------   ---------  ----------

    70.00   Total new budget authority
              (gross).......................          18           3           3
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation          17          24          17
    73.10 New obligations...................          18           8           4
    73.20 Total outlays (gross).............         -11         -15         -13
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation          24          17           8
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority           1
    86.93 Outlays from current balances.....           8          12          10
    86.97 Outlays from new permanent
            authority.......................           2           3           3
                                               ---------   ---------  ----------

    87.00   Total outlays (gross)...........          11          15          13
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.40   Offsetting collections (cash)
              from: Non-Federal sources.....          -2          -3          -3
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................          16
    90.00 Outlays...........................           9          12          10
    ---------------------------------------------------------------------------

        The Parking Revolving Fund provides funding for the construction and
    lease of parking facilities at various medical centers. Income from fees
    collected will be used for leases.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4538-0-3-703      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------
    23.2  Rental payments to others.........           1           2           2
    32.0  Land and structures...............          17           6           2
    99.0  Subtotal, reimbursable obligations          18           8           4
                                               ---------   ---------  ----------

    99.9    Total obligations...............          18           8           4
    ---------------------------------------------------------------------------

                          Pershing Hall Revolving Fund

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4018-0-3-705      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested
            balance.........................           1           1           1
    22.00 New budget authority (gross)......
                                               ---------   ---------  ----------

    23.90   Total budgetary resources
              available for obligation......           1           1           1
    23.95 New obligations...................
    24.40 Unobligated balance available, end
            of year: Uninvested balance.....           1           1           1
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation           1           1           1
    73.10 New obligations...................
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation           1           1           1
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    87.00 Total outlays (gross).............
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................
    90.00 Outlays...........................
    ---------------------------------------------------------------------------

        The Pershing Hall Revolving Fund was created to operate and manage
    Pershing Hall, an asset of the United States, located in Paris, France.
    All operating expenses for Pershing Hall are borne by the Revolving Fund
    and all receipts generated by the operation of Pershing Hall are
    deposited in the Revolving Fund.

        To facilitate account restructuring and consolidation, the Pershing
    Hall Revolving Fund also reflects budget information for the Nursing
    Home Revolving Fund and Grants to the Republic of the Philippines. The
    Nursing Home Revolving Fund provides for the construction, alteration,
    and acquisition (including site acquisition) of nursing home facilities
    and is available only as provided in appropriations acts. The Grants to
    the Republic of the Philippines previously provided for the effective
    care and treatment of U.S. veterans in the Veterans Memorial Medical
    Center (VMMC). However, with the suspension of U.S. veteran admission to
    the VMMC, the continuing appropriation of U.S. funds to maintain and
    upgrade the physical plant at this facility was discontinued.

                           DEPARTMENTAL ADMINISTRATION

                                  Federal Funds

    General and special funds:

                           General Operating Expenses

        For necessary operating expenses of the Department of Veterans
    Affairs, including uniforms or allowances therefor; not to exceed
    $25,000 for official reception and representation expenses; hire of
    passenger motor vehicles; and reimbursement of the General Services
    Administration for security guard services, and the Department of
    Defense for the cost of overseas employee mail; $843,730,000: Provided,
    That funds under this heading shall be available to administer the
    Service Members Occupational Conversion and Training Act.
        Note.--A regular 1996 appropriation for this account had not been
    enacted at the time this budget was prepared. The 1996 amounts included
    in this budget are based on the levels provided in three continuing
    resolutions: P.L. 104-91, P.L. 104-92, and P.L. 104-99.

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0151-0-1-705      1995 actual   1996 est.1997 est.\1\
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Direct program:

            Veterans benefits:
    00.01     Executive direction...........          30          36
    00.02     Veterans assistance...........          73          76
    00.03     Compensation, pension, and
                education...................         197         209
    00.04     Compensation and Pensions.....                                 226
    00.05     Education.....................                                  55
    00.06     Vocational rehabilitation and
                counseling..................          38          39          46
    00.07     Support services..............         201         199         225
    00.08     Information Resources
                Management..................          96         101          89
    00.09     Insurance\2\..................          15                       2
    00.11     General administration........         214         213         201
                                               ---------   ---------  ----------

    00.91     Subtotal, direct program......         864         873         844
          Reimbursable program:

    01.01   Loan Guaranty...................          82          80         137
    01.02   Insurance.......................                      32          32
    01.03 Other.............................         120         122          72
                                               ---------   ---------  ----------

    01.91   Subtotal, reimbursable program..         202         234         241
                                               ---------   ---------  ----------

    10.00   Total obligations...............       1,066       1,107       1,085
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested
            balance.........................                      26
    22.00 New budget authority (gross)......       1,092       1,082       1,085
                                               ---------   ---------  ----------

    23.90   Total budgetary resources
              available for obligation......       1,092       1,108       1,085
    23.95 New obligations...................      -1,066      -1,107      -1,085
    24.40 Unobligated balance available, end
            of year: Uninvested balance.....          26
    ----------------------------------------------------------------------------

    [[Page 867]]

        New budget authority (gross), detail:
          Current:

    40.00   Appropriation...................         890         848         844
          Permanent:

            Spending authority from
                offsetting collections:
    68.00     Offsetting collections (cash).         208         234         241
    68.10     Change in orders on hand from
                Federal sources.............          -6
                                               ---------   ---------  ----------

    68.90       Spending authority from
                  offsetting collections
                  (total)...................         202         234         241
                                               ---------   ---------  ----------

    70.00   Total new budget authority
              (gross).......................       1,092       1,082       1,085
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
          Unpaid obligations, start of year:

    72.40   Obligated balance: Appropriation          91         121          82
    72.95   Orders on hand from Federal
              sources.......................          10           4           4
                                               ---------   ---------  ----------

    72.99     Total unpaid obligations,
                start of year...............         101         126          86
    73.10 New obligations...................       1,066       1,107       1,085
    73.20 Total outlays (gross).............      -1,019      -1,147      -1,086
    73.40 Adjustments in expired accounts...         -22
          Unpaid obligations, end of year:

    74.40   Obligated balance: Appropriation         121          82          81
    74.95   Orders on hand from Federal
              sources.......................           4           4           4
                                               ---------   ---------  ----------

    74.99     Total unpaid obligations, end
                of year.....................         126          86          85
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority         765         763         760
    86.93 Outlays from current balances.....          58         150          85
    86.97 Outlays from new permanent
            authority.......................         196         234         241
                                               ---------   ---------  ----------

    87.00   Total outlays (gross)...........       1,019       1,147       1,086
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.00   Offsetting collections (cash)
              from: Federal sources.........        -202        -234        -241
    88.95 Change in orders on hand from
            Federal sources.................           6
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................         896         848         844
    90.00 Outlays...........................         817         913         845
    ---------------------------------------------------------------------------
        \1\ The program activity distribution in FY 1997 reflects the first
    phase of a long-term initiative to shift all VBA administrative and
    support costs to the five business programs (Compensation and Pensions;
    Education; Loan Guaranty; Vocational Rehabilitation; and Insurance).
        \2\ In FY 1996 and FY 1997, administrative costs of certain
    Insurance programs will be funded by reimbursements.

        This appropriation provides for the administration of nonmedical
    veterans benefits through the Veterans Benefits Administration (VBA) and
    the Department's top management direction and administrative support,
    including data processing, fiscal, personnel, and legal services. The
    1997 request includes funds to support restructuring initiatives which
    focus on improving service to veterans, increasing access points and
    reducing future operating costs.

        Veterans benefits.--Determines eligibility and adjudicates all
    claims for compensation, pensions, educational assistance, housing loan
    assistance, and insurance awards. Greater efficiencies will be achieved
    as a result of an initiative to modernize the data processing and
    telecommunications capabilities of VBA. A summary of VBA's program
    objectives and anticipated workload is included in the following
    paragraphs along with additional performance information for the
    compensation and pensions and loan guaranty programs. The measures for
    these programs address performance in the areas of: timeliness;
    accuracy; financial management; and customer satisfaction.
            Veterans assistance.--Provides information, advice, and
        assistance concerning veterans' benefits under the law to all
        veterans, their dependents, and survivors.

                                    WORKLOAD

                                 [In thousands]

                                         1995 actual  1996 est.   1997 est.
    Veterans assistance:
        Veterans assistance contacts and
        other...........................      11,313      10,755      10,744
        Fiduciary and field examinations          73          72          72
        Compliance surveys/liaison
        action..........................          32          34          35

            Compensation and pensions.--Provides timely and efficient
        processing of claims for veterans and dependents relating to
        compensation and pension benefits under the various laws enacted by
        Congress.

                                                     1993 actual 1994 actual 1995 actual  1996 est.   1997 est.
    Compensation and Pension Summary:
    Accomplished workload: (in thousands)
      Original claims...............................         444         462         440         418         423
      Adjustment/supplemental claims................       2,064       1,908       1,250       1,298       1,291
      Ancillary and special reviews.................         480         447         467         574         575
      Vocational rehabilitation.....................          70          76          78          74          66
    Average days to complete claim:
      Original compensation.........................         189         213         181         150         122
      Original pension..............................         119         123          98          89          84
      Original death pension........................          67          65          50          53          49
      Original death indemnity compensation.........         102         111          92          78          72
    Average direct labor hours to complete claim:
      Original compensation.........................        5.57        5.35        6.01         N/A         N/A
      Original pension..............................        2.77        2.82        3.06         N/A         N/A
      Original death pension........................        1.62        1.82        1.82         N/A         N/A
      Original death indemnity compensation.........        3.75        3.78        3.67         N/A         N/A
    Accuracy of claims processing:
      Service/control accuracy......................         N/A       97.0%       96.9%       97.3%       97.6%
      Payment accuracy..............................         N/A       97.5%       97.4%       97.7%       97.8%
      Notification accuracy.........................         N/A       94.5%       95.2%       95.2%       95.5%
    Standard adjudication productivity                     102.3        98.4        93.2         N/A         N/A

            Education.--Provides timely and efficient processing of claims
        for veterans and dependents relating to education benefits under the
        various laws enacted by Congress.

                                    WORKLOAD

                                 [In thousands]

                                         1995 actual  1996 est.   1997 est.
      Education:
      Original claims...................         202         189         168
      Adjustments/supplemental claims...       1,009       1,122       1,143

             Loan guaranty.--Facilitates the extension of private capital,
        on more liberal terms than generally available to nonveterans, to:
        assist veterans and servicepersons in obtaining housing credits;
        provide grants to aid permanently and totally disabled veterans in
        acquiring specially adapted housing; and assist veterans in
        retaining their homes during periods of temporary economic
        difficulty through intensive supplemental mortgage loan servicing.

                                                     1993 actual 1994 actual 1995 actual  1996 est.   1997 est.
    Loan Guaranty Summary:
      Loan guaranties issued (in thousands).........         383         602         263         250         250
      Claims paid (in thousands)....................          31          27          23          35          33
      Properties disposed (in thousands)............          31          26          25          32          35
      Veteran satisfaction in obtaining a
        certificate of eligibility..................         N/A         N/A         N/A         N/A         87%
      Early foreclosure rate........................        0.7%        0.8%        1.2%        1.3%        1.3%
      Defaults reported as a % of guaranteed loans
        outstanding.................................        3.2%        3.2%        3.1%        3.1%        3.1%
    Administrative cost:
      Per guaranty issued...........................         N/A         N/A        $147        $156        $317
      Per default processed.........................         N/A         N/A        $188        $170        $284
      Per portfolio loan............................         N/A         N/A        $307        $257        $237
      Per property sold.............................         N/A         N/A        $616        $647        $911
    Property inventory level (in thousands).........          11          11           9          14          13
    Percent of customers satisfied..................         N/A         N/A         93%         94%         94%
    Percent of lenders satisfied....................         N/A         N/A         68%         70%         71%
    Foreclosure Avoidance Through Servicing (FATS)
    ratio...........................................        27.5        33.1        37.3        31.0        33.0
    Personal supplemental servicing contacts with
    homeowners (in thousands).......................         227         207         232         122         125
    Average time in months from default to
    termination.....................................         N/A         N/A        14.6        14.5        14.5

                                 OTHER WORKLOAD

                                 [In thousands]

                                         1995 actual  1996 est.   1997 est.
    Loan guaranty:
      Construction and valuation........         750         778         758
      Loan processing...................         760         775         793
      Loan service and claims...........         428         391         764
      Property management...............          59          57          55

    [[Page 868]]

            Vocational rehabilitation and counseling.--Provides counseling
        and assistance to enable veterans with service-connected
        disabilities to achieve maximum independence in daily living and, to
        the maximum extent feasible, obtain and maintain suitable
        employment.

                                    WORKLOAD

                                 [In thousands]

                                         1995 actual  1996 est.   1997 est.
    Vocational rehabilitation and
        counseling:
      Evaluation and planning...........          47          54          60
      Rehabilitation services...........          48          54          59
      Employment services status........           7           9          10
      Interrupted status................          18          19          19
      Vocational/educational counseling.          18          17          15

            Insurance.--Provides life insurance protection for
        servicepersons and veterans. The VA administers five life insurance
        programs and supervises three others through contractual agreements
        with commercial companies.

                                    WORKLOAD

                                 [In thousands]

                                         1995 actual  1996 est.   1997 est.
    Insurance:
      Policy service actions............       1,703       1,537       1,440
      Collections.......................       4,040       3,798       3,559
      Disability claims.................          52          50          47
      Insurance awards..................         478         660         698

        General administration.--Contains Department executive direction and
    supporting offices, the General Counsel, the Board of Veterans Appeals,
    and the Board of Contract Appeals.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0151-0-1-705      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------

          Direct obligations:

            Personnel compensation:
    11.1      Full-time permanent...........         483         483         467
    11.5      Other personnel compensation..          19          14          11
                                               ---------   ---------  ----------

    11.9        Total personnel compensation         502         497         478
    12.1    Civilian personnel benefits.....         101         103         101
    13.0    Benefits for former personnel...           3           5           5
            Travel and transportation of
                persons:
    21.0      Employee travel...............          11          11          10
    21.0      Interagency motor pool
                payments....................           2           2           2
    22.0    Transportation of things........           2           2           2
    23.1    Rental payments to GSA..........          81          85          75
    23.2    Rental payments to others.......          10          10           9
    23.3    Communications, utilities, and
              miscellaneous charges.........          38          47          40
    24.0    Printing and reproduction.......           5           6           5
    25.2    Other services..................          70          70          84
    26.0    Supplies and materials..........          25          11          12
    31.0    Equipment.......................          14          24          21
                                               ---------   ---------  ----------

    99.0      Subtotal, direct obligations..         864         873         844
    99.0  Reimbursable obligations..........         202         234         241
    99.5  Below reporting threshold.........
                                               ---------   ---------  ----------

    99.9    Total obligations...............       1,066       1,107       1,085
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 36-0151-0-1-705      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------
        Direct:
          Total compensable workyears:

    1001    Full-time equivalent
              employment\1\.................      12,649      11,990      11,115
    1005    Full-time equivalent of overtime
              and holiday hours.............         230         173         124
        Reimbursable:
          Total compensable workyears:

    2001    Full-time equivalent employment.       3,336       3,547       3,267
    2005    Full-time equivalent of overtime
              and holiday hours.............         176         128          48
    ---------------------------------------------------------------------------
        \1\ Reflects common service FTE treated as reimbursements in all
    years and the effects of Credit Reform, per P.L. 101-508.

                           Office of Inspector General

        For necessary expenses of the Office of Inspector General in
    carrying out the Inspector General Act of 1978, as amended, $31,175,000.
        Note.--A regular 1996 appropriation for this account had not been
    enacted at the time this budget was prepared. The 1996 amounts included
    in this budget are based on the levels provided in three continuing
    resolutions: P.L. 104-91, P.L. 104-92, and P.L. 104-99.

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0170-0-1-705      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.10 Direct program....................          32          31          31
    01.01 Reimbursable program..............           1           1           1
                                               ---------   ---------  ----------

    10.00   Total obligations...............          33          32          32
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......          32          32          32
    23.95 New obligations...................         -33         -32         -32
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Current:

    40.00   Appropriation...................          32          31          31
          Permanent:

    68.00   Spending authority from
              offsetting collections:
              Offsetting collections (cash).           1           1           1
                                               ---------   ---------  ----------

    70.00   Total new budget authority
              (gross).......................          32          32          32
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation           6           7           7
    73.10 New obligations...................          33          32          32
    73.20 Total outlays (gross).............         -32         -32         -32
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation           7           7           7
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority          29          29          29
    86.93 Outlays from current balances.....           3           2           2
    86.97 Outlays from new permanent
            authority.......................           1           1           1
                                               ---------   ---------  ----------

    87.00   Total outlays (gross)...........          32          32          32
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.00   Offsetting collections (cash)
              from: Federal sources.........          -1          -1          -1
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................          31          31          31
    90.00 Outlays...........................          32          31          31
    ---------------------------------------------------------------------------

        This appropriation provides Department-wide audit, investigation,
    and essential inspection and support functions to identify and report
    weaknesses and deficiencies in VA programs and operations that create
    conditions for existing or potential instances of fraud, waste, and
    mismanagement. The audit function plans and conducts internal
    programmatic audits of all facets of VA operations. The investigative
    function conducts proactive and reactive investigations of improper and
    illegal activities involving VA programs, personnel, beneficiaries, and
    other third parties. The support function provides normal office
    administrative support as well as contract audit services for all
    applicable Department contracts, personnel, and information security for
    the VA, and legislatively mandated medical care quality assurance review
    and oversight.

        Public Law 100-527, the Department of Veterans Affairs Act,
    established a minimum level of full-time positions for the Office of
    Inspector General (IG) based on the number of full-time positions as of
    the date of enactment, plus an additional 40 positions. The minimum
    level for VA's IG office is 417 FTE. This budget request funds 358 FTE
    positions; 59 fewer than the Secretary is required to provide for under
    Public Law 100-527.

    [[Page 869]]

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0170-0-1-705      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------

          Personnel compensation:

    11.1    Full-time permanent.............          23          23          23
                                               ---------   ---------  ----------

    11.9      Total personnel compensation..          23          23          23
    12.1  Civilian personnel benefits.......           5           5           5
    21.0  Travel and transportation of
            persons.........................           2           2           2
    23.1  Rental payments to GSA............           2           2           2
    25.2  Other services....................           1
                                               ---------   ---------  ----------

    99.9    Total obligations...............          33          32          32
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 36-0170-0-1-705      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------
    1001  Total compensable workyears: Full-
            time equivalent employment......         389         371         358
    ---------------------------------------------------------------------------

                            National Cemetery System

        For necessary expenses for the maintenance and operation of the
    National Cemetery System, including uniforms or allowances; cemeterial
    expenses; purchase of passenger motor vehicles for use in cemeterial
    operations; and hire of passenger motor vehicles, $76,864,000.
        Note.--A regular 1996 appropriation for this account had not been
    enacted at the time this budget was prepared. The 1996 amounts included
    in this budget are based on the levels provided in three continuing
    resolutions: P.L. 104-91, P.L. 104-92, and P.L. 104-99.

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0129-0-1-705      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.10 Direct obligations................          72          73          77
                                               ---------   ---------  ----------

    10.00   Total obligations...............          72          73          77
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......          73          73          77
    23.95 New obligations...................         -72         -73         -77
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................          73          73          77
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation          11          10          10
    73.10 New obligations...................          72          73          77
    73.20 Total outlays (gross).............         -72         -73         -76
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation          10          10           9
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority          63          66          69
    86.93 Outlays from current balances.....           9           7           7
                                               ---------   ---------  ----------

    87.00   Total outlays (gross)...........          72          73          76
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................          73          73          77
    90.00 Outlays...........................          72          73          76
    ---------------------------------------------------------------------------

        The following table presents a summary of performance trends for the
    National Cemetery System. The measures address performance covering
    workload, productivity, and access.

                                                     1993 actual 1994 actual 1995 actual  1997 est.
    National Cemetery System Summary:
      Interments performed..........................      67,329      68,636      70,522      73,600
        Full-casket.................................      50,285      50,354      50,725      52,100
        In-ground cremain...........................      15,259      16,782      16,703      18,400
        Columbaria niches...........................       1,785       1,500       3,094       3,100
      Occupied graves maintained....................   1,986,719   2,039,379   2,091,683   2,204,500
        In-ground gravesites........................   1,970,166   2,020,946   2,070,673   2,179,500
        Columbaria niches...........................      16,553      18,433      21,010      25,000
      Developed acres maintained....................       5,038       5,355       5,410       5,803
      Headstone/marker applications processed.......     342,235     315,383     301,657     345,000
      Presidential Memorial Certificates issued.....     278,000     282,552     285,076     302,000
      Requests for interment taken by hub cemeteries
        on the weekends.............................       5,558       5,528       5,755       5,800
      Requests for interment taken on the weekend
        that result in final arrangements in the
        ensuing week................................         91%         90%         90%         90%
      Interments per FTE............................         250         250         248         250
      Veterans using a burial option................       10.0%        9.9%        9.7%       10.2%
      Veteran population served by the existence of
        a burial option within a reasonable distance
        of place of residence.......................       65.6%       66.5%       67.3%       68.8%

        The Office of Memorial Affairs provides monuments and other memorial
    benefits to veterans and their eligible family members, including
    receiving and processing applications for headstones and markers,
    ordering headstones and markers, determining the eligibility of
    decedent, type of headstone or marker to be furnished, authorizing
    inscriptions, and administering the Presidential Memorial Certificate
    Program.

        To facilitate account restructuring and consolidation, the National
    Cemetery System also reflects budget information for the National
    Cemetery Gift Fund. Through this Trust Fund, the Secretary is authorized
    to accept gifts and bequests which are made for the purpose of
    beautifying national cemeteries or are determined to be beneficial to
    such cemeteries, or are made for the purpose of the operation,
    maintenance, or improvement of the National Memorial Cemetery of
    Arizona.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0129-0-1-705      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------

          Personnel compensation:

    11.1    Full-time permanent.............          36          37          38
    11.3    Other than full-time permanent..           6           6           7
                                               ---------   ---------  ----------

    11.9      Total personnel compensation..          42          43          45
    12.1  Civilian personnel benefits.......          11          12          12
    21.0  Travel and transportation of
            persons.........................           1           1           1
    23.1  Rental payments to GSA............           1           1           1
    23.3  Communications, utilities, and
            miscellaneous charges...........           3           3           4
    25.2  Other services....................           6           6           6
    26.0  Supplies and materials............           5           5           5
    31.0  Equipment.........................           3           2           3
                                               ---------   ---------  ----------

    99.9    Total obligations...............          72          73          77
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 36-0129-0-1-705      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------
    1001  Total compensable workyears: Full-
            time equivalent employment......       1,315       1,321       1,355
    ---------------------------------------------------------------------------

    Intragovernmental funds:

                                   Supply Fund

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4537-0-4-705      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Operating expenses:

            Procurement, distribution, and
                services program:
    00.01     Cost of goods sold............         405         617         649
    00.02     Other.........................          30          36          34
            Publication and reproduction
                program:
    00.03     Cost of goods sold............          11          13          14
    00.04     Other.........................           7           8           9
                                               ---------   ---------  ----------

    00.91     Total operating expenses......         453         674         706
          Capital investment:

    01.01   Procurement, distribution, and
              services program: Purchase of
              equipment.....................           1          14           2
                                               ---------   ---------  ----------

    10.00   Total obligations...............         454         688         708
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.90 Unobligated balance available,
            start of year: Fund balance.....         106          62          60

    [[Page 870]]

    22.00 New budget authority (gross)......         477         686         710
    22.40 Capital transfer to general fund..         -67
                                               ---------   ---------  ----------

    23.90   Total budgetary resources
              available for obligation......         516         748         770
    23.95 New obligations...................        -454        -688        -708
    24.90 Unobligated balance available, end
            of year: Fund balance...........          62          60          62
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Spending authority from offsetting
              collections:

    68.00   Offsetting collections (cash)...         495         686         710
    68.10   Change in orders on hand from
              Federal sources...............         -18
                                               ---------   ---------  ----------

    68.90     Spending authority from
                offsetting collections
                (total).....................         477         686         710
                                               ---------   ---------  ----------

    70.00   Total new budget authority
              (gross).......................         477         686         710
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
          Unpaid obligations, start of year:

    72.90   Obligated balance: Fund balance.          95          40          38
    72.95   Orders on hand from Federal
              sources.......................         197         179         179
                                               ---------   ---------  ----------

    72.99     Total unpaid obligations,
                start of year...............         292         219         217
    73.10 New obligations...................         454         688         708
    73.20 Total outlays (gross).............        -527        -690        -710
          Unpaid obligations, end of year:

    74.90   Obligated balance: Fund balance.          40          38          36
    74.95   Orders on hand from Federal
              sources.......................         179         179         179
                                               ---------   ---------  ----------

    74.99     Total unpaid obligations, end
                of year.....................         219         217         215
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................         477         686         710
    86.98 Outlays from permanent balances...          50           4
                                               ---------   ---------  ----------

    87.00   Total outlays (gross)...........         527         690         710
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.00   Offsetting collections (cash)
              from: Federal sources.........        -495        -686        -710
    88.95 Change in orders on hand from
            Federal sources.................          18
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................
    90.00 Outlays...........................          32           4
    ---------------------------------------------------------------------------

        Under the provisions of 38 U.S.C. 8121, the Supply Fund is
    responsible for the operation and maintenance of a supply system for VA.
    The Supply Fund is an intragovernmental revolving fund without fiscal
    year limitations.

        Budget program.--The fund provides financial support for: (1) a
    National Acquisition Center or central contracting office; (2) the
    maintenance of field station inventories; (3) a service and distribution
    center; (4) a publications depot; (5) a service and reclamation program;
    (6) a national prosthetics distribution center; and (7) an asset
    management service.

        Costs for the administration of supply activities at VA field
    stations are not financed by the Supply Fund. These costs are charged
    directly to applicable appropriations.

        Financing.--Costs of supplies, equipment, and services acquired
    through the Supply Fund and Supply Fund operating costs are recovered
    through reimbursements from the VA appropriations and other Government
    agencies receiving goods and services. For 1997, Supply Fund sales are
    estimated to reach $535.0 million. Average inventory needed to support
    those sales will be $36.0 million.

        Operating results.--The Fund operated at a profit of $3.5 million in
    1995. The new total of retained earnings is $40.0 million, which has
    been used to finance inventory growth. Operating expense as related to
    sales was 8.4 percent.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4537-0-4-705      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------

          Personnel compensation:

    11.1    Full-time permanent.............          18          19          19
    11.5    Other personnel compensation....           1           1           1
                                               ---------   ---------  ----------

    11.9      Total personnel compensation..          19          20          20
    12.1  Civilian personnel benefits.......           3           4           5
    21.0  Travel and transportation of
            persons.........................           1           2           2
    22.0  Transportation of things..........           3           4           4
    23.1  Rental payments to GSA............           2           2           1
    23.3  Communications, utilities, and
            miscellaneous charges...........           1           2           2
    24.0  Printing and reproduction.........          11          14          14
    25.1  Advisory and assistance services..           8           8           9
    25.2  Other services....................
    26.0  Supplies and materials............         223         394         414
          Equipment:

    31.0    Equipment.......................           1          14           2
    31.0    Equipment.......................         182         225         237
    99.0  Subtotal, reimbursable obligations         454         689         710
    99.5  Below reporting threshold.........                      -1          -2
                                               ---------   ---------  ----------

    99.9    Total obligations...............         454         688         708
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 36-4537-0-4-705      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------
        Total compensable workyears:
    2001  Full-time equivalent employment...         404         418         408
    2005  Full-time equivalent of overtime
            and holiday hours...............           6           6           6
    ---------------------------------------------------------------------------

                                 Franchise Fund

        There is hereby established in the Treasury a franchise fund pilot,
    as authorized by section 403 of Public Law 103-356, to be available as
    provided in such section for costs of capitalizing and operating the
    following services to be included in the franchise fund: data processing
    services, payroll services, law enforcement training, security and
    investigations, records management and storage, and specialized adaptive
    training: Provided, That any inventories, equipment, and other assets
    pertaining to the services to be provided by the franchise fund, either
    on hand or on order, less the related liabilities or unpaid obligations,
    and any appropriations made prior to the current year for the purpose of
    providing capital, shall be transferred from the General Operating
    Expense account and merged with the fund: Provided further, That fees
    charged fund customers may be paid in advance from funds available to
    the Department and other federal agencies for which such centralized
    services are performed, at rates which will return in full all expenses
    of operation, including terminal leave liabilities, depreciation of
    plant and equipment, and amortization of software: Provided further,
    That amounts charged fund customers for terminal leave liabilities,
    depreciation, and amortization of software, and any amounts attributable
    to operational efficiencies may be retained by the fund for the purposes
    of liquidating fund terminal leave liabilities and for investments in
    capital equipment or other enhancements to financial management or data
    processing systems used to provide franchise fund services: Provided
    further, That any amounts resulting from operational efficiencies may be
    retained in the fund up to an amount which, when added to other such
    amounts retained from each fiscal year, does not exceed, at the end of
    the fiscal year, ten percent of the gross annual customer billings for
    the latest fiscal year ended: Provided further, That no later than
    thirty days after the end of each fiscal year amounts in excess of this
    reserve limitation shall be transferred to the Treasury: Provided
    further, That such franchise fund pilot shall terminate pursuant to
    section 403(f) of Public Law 103-356.

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4539-0-4-705      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    10.00 Total obligations.................                                  50
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......                                  50
    23.95 New obligations...................                                 -50
    ----------------------------------------------------------------------------

    [[Page 871]]

        New budget authority (gross), detail:
    68.00 Spending authority from offsetting
            collections (gross): Offsetting
            collections (cash)..............                                  50
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    73.10 New obligations...................                                  50
    73.20 Total outlays (gross).............                                 -50
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................                                  50
                                               ---------   ---------  ----------

    87.00   Total outlays (gross)...........                                  50
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.00   Offsetting collections (cash)
              from: Federal sources.........                                 -50
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................
    90.00 Outlays...........................
    ---------------------------------------------------------------------------

        The VA was chosen as a pilot Franchise Fund agency under P.L. 103-
    356, the Government Management and Reform Act of 1994. Beginning in FY
    1997, administrative services included in the Franchise Fund will be
    financed on a fee-for-service basis rather than through VA's General
    Operating Expenses Appropriation. The VA's Franchise Fund is a revolving
    fund used to supply common administrative services on the basis of
    services supplied. Service Activities are expected to have billings of
    about $55 million and employ 445 people, who were transferred from their
    parent organizations.

        The Franchise Fund concept is intended to increase competition for
    government administrative services resulting in lower costs and higher
    quality.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4539-0-4-705      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------
    11.1  Personnel compensation: Full-time
            permanent.......................                                  21
    12.1  Civilian personnel benefits.......                                   3
    21.0  Travel and transportation of
            persons.........................                                   2
    23.1  Rental payments to GSA............                                   2
    23.3  Communications, utilities, and
            miscellaneous charges...........                                  18
    25.2  Other services....................                                   3
    26.0  Supplies and materials............                                   1
    99.0  Subtotal, reimbursable obligations                                  50
                                               ---------   ---------  ----------

    99.9    Total obligations...............                                  50
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 36-4539-0-4-705      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------
    2001  Total compensable workyears: Full-
            time equivalent employment......                                 445
    ---------------------------------------------------------------------------

                          GENERAL FUND RECEIPT ACCOUNTS

                               (in millions of dollars)

    ----------------------------------------------------------------------------
                                             1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------
    Offsetting receipts from the public:
      36-243100  Fees and other charges for
        medical services, VA................         440         466         525
      36-247300  Contributions from military
        personnel, Veteran's Educational
        Assistance Act of 1984..............         166         243         253
                                               ---------   ---------  ----------

    General Fund Offsetting receipts from
     the public.............................         606         709         778
    ---------------------------------------------------------------------------

                            Administrative Provisions

                          (including transfer of funds)

        Sec. 101. Any appropriation for 1997 for ``Compensation and
    pensions'', ``Readjustment benefits'', and ``Veterans insurance and
    indemnities'' may be transferred to any other of the mentioned
    appropriations.
        Sec. 102. Appropriations available to the Department of Veterans
    Affairs for 1997 for salaries and expenses shall be available for
    services authorized by 5 U.S.C. 3109.
        Sec. 103. No appropriations in this Act for the Department of
    Veterans Affairs (except the appropriations for ``Construction, major
    projects'', ``Construction, minor projects'', and the ``Parking
    revolving fund'') shall be available for the purchase of any site for or
    toward the construction of any new hospital or home.
        Sec. 104. No appropriations in this Act for the Department of
    Veterans Affairs shall be available for hospitalization or examination
    of any persons (except beneficiaries entitled under the laws bestowing
    such benefits to veterans, and persons receiving such treatment under 5
    U.S.C. 7901-7904 or 42 U.S.C. 5141-5204), unless reimbursement of cost
    is made to the ``Medical Care'' account at such rates as may be fixed by
    the Secretary of Veterans Affairs.
        Sec. 105. Appropriations available to the Department of Veterans
    Affairs for fiscal year 1997 for ``Compensation and pensions'',
    ``Readjustment benefits'', and ``Veterans insurance and indemnities''
    shall be available for payment of prior year accrued obligations
    required to be recorded by law against the corresponding prior year
    accounts within the last quarter of fiscal year 1996.
        Sec. 106. Appropriations accounts available to the Department of
    Veterans Affairs for fiscal year 1997 shall be available to pay prior
    year obligations of corresponding prior year appropriations accounts
    resulting from title X of the Competitive Equality Banking Act, Public
    Law 100-86, except that if such obligations are from trust fund accounts
    they shall be payable from ``Compensation and pensions''.
        Sec. 107. Notwithstanding any other provision of law, during fiscal
    year 1997, the Secretary of Veterans Affairs shall, from the National
    Service Life Insurance Fund (38 U.S.C. 1920), the Veterans' Special Life
    Insurance Fund, (38 U.S.C. 1923), and the United States Government Life
    Insurance Fund (38 U.S.C. 1955), reimburse the ``General operating
    expenses'' account for the cost of administration of the insurance
    programs financed through those accounts: Provided, That reimbursement
    shall be made only from the surplus earnings accumulated in an insurance
    program in fiscal year 1997, that are available for dividends in that
    program after claims have been paid and actuarially determined reserves
    have been set aside: Provided further, That if the cost of
    administration of an insurance program exceeds the amount of surplus
    earnings accumulated in that program, reimbursement shall be made only
    to the extent of such surplus earnings: Provided further, That the
    Secretary shall determine the cost of administration for fiscal year
    1997, which is properly allocable to the provision of each insurance
    program and to the provision of any total disability income insurance
    included in such insurance program.
        Note.--A regular 1996 appropriation for this account had not been
    enacted at the time this budget was prepared. The 1996 amounts included
    in this budget are based on the levels provided in three continuing
    resolutions: P.L. 104-91, P.L. 104-92, and P.L. 104-99.

                           TITLE V--GENERAL PROVISIONS

        Sec. 501. Appropriations and funds available for the administrative
    expenses of the Department of Housing and Urban Development and the
    Selective Service System shall be available in the current fiscal year
    for purchase of uniforms, or allowances therefor, as authorized by 5
    U.S.C. 5901-5902; hire of passenger motor vehicles; and services as
    authorized by 5 U.S.C. 3109.
        Sec. 502. Funds of the Department of Housing and Urban Development
    subject to the Government Corporation Control Act or section 402 of the
    Housing Act of 1950 shall be available, without regard to the
    limitations on administrative expenses, for legal services on a contract
    or fee basis, and for utilizing and making payment for services and
    facilities of Federal National Mortgage Association, Government National
    Mortgage Association, Federal Home Loan Mortgage Corporation, Federal
    Financing Bank, Resolution Trust Corporation, Federal Reserve banks or
    any member thereof, Federal Home Loan banks, and any insured bank within
    the meaning of the Federal Deposit Insurance Corporation Act, as amended
    (12 U.S.C. 1811-1831).
        Sec. 503. No part of any appropriation contained in this Act shall
    remain available for obligation beyond the current fiscal year unless
    expressly so provided herein.
        Sec. 504. No funds appropriated by this Act may be expended--
            (1) pursuant to a certification of an officer or employee of the
        United States unless--

    [[Page 872]]

                (A) such certification is accompanied by, or is part of, a
            voucher or abstract which describes the payee or payees and the
            items or services for which such expenditure is being made, or
                (B) the expenditure of funds pursuant to such certification,
            and without such a voucher or abstract, is specifically
            authorized by law; and
            (2) unless such expenditure is subject to audit by the General
        Accounting Office or is specifically exempt by law from such audit.
        Sec. 505. None of the funds provided in this Act to any department
    or agency may be expended for the transportation of any officer or
    employee of such department or agency between his domicile and his place
    of employment, with the exception of any officer or employee authorized
    such transportation under 31 U.S.C. 1344 or 5 U.S.C. 7905.
        Sec. 506. None of the funds provided in this Act may be used for
    payment, through grants or contracts, to recipients that do not share in
    the cost of conducting research resulting from proposals not
    specifically solicited by the Government: Provided, That the extent of
    cost sharing by the recipient shall reflect the mutuality of interest of
    the grantee or contractor and the Government in the research.
        Sec. 507. None of the funds in this Act may be used, directly or
    through grants, to pay or to provide reimbursement for payment of the
    salary of a consultant (whether retained by the Federal Government or a
    grantee) at more than the daily equivalent of the rate paid for Level IV
    of the Executive Schedule, unless specifically authorized by law.
        Sec. 508. None of the funds provided in this Act shall be used to
    pay the expenses of, or otherwise compensate, non-Federal parties
    intervening in regulatory or adjudicatory proceedings. Nothing herein
    affects the authority of the Consumer Product Safety Commission pursuant
    to section 7 of the Consumer Product Safety Act (15 U.S.C. 2056 et
    seq.).
        Sec. 509. Except as otherwise provided under existing law or under
    an existing Executive order issued pursuant to an existing law, the
    obligation or expenditure of any appropriation under this Act for
    contracts for any consulting service shall be limited to contracts which
    are (1) a matter of public record and available for public inspection,
    and (2) thereafter included in a publicly available list of all
    contracts entered into within twenty-four months prior to the date on
    which the list is made available to the public and of all contracts on
    which performance has not been completed by such date. The list required
    by the preceding sentence shall be updated quarterly and shall include a
    narrative description of the work to be performed under each such
    contract.
        Sec. 510. Except as otherwise provided by law, no part of any
    appropriation contained in this Act shall be obligated or expended by
    any executive agency, as referred to in the Office of Federal
    Procurement Policy Act (41 U.S.C. 401 et seq.), for a contract for
    services unless such executive agency (1) has awarded and entered into
    such contract in full compliance with such Act and the regulations
    promulgated thereunder, and (2) requires any report prepared pursuant to
    such contract, including plans, evaluations, studies, analyses and
    manuals, and any report prepared by the agency which is substantially
    derived from or substantially includes any report prepared pursuant to
    such contract, to contain information concerning (A) the contract
    pursuant to which the report was prepared, and (B) the contractor who
    prepared the report pursuant to such contract.
        Sec. 511. Except as otherwise provided in section 505, none of the
    funds provided in this Act to any department or agency shall be
    obligated or expended to provide a personal cook, chauffeur, or other
    personal servants to any officer or employee of such department or
    agency.
        Sec. 512. None of the funds provided in this Act to any department
    or agency shall be obligated or expended to procure passenger
    automobiles as defined in 15 U.S.C. 2001 with an EPA estimated miles per
    gallon average of less than 22 miles per gallon.
        Sec. 513. None of the funds appropriated in title I of this Act
    shall be used to enter into any new lease of real property if the
    estimated annual rental is more than $300,000 unless the Secretary
    submits, in writing, a report to the Committees on Appropriations of the
    Congress and a period of 30 days has expired following the date on which
    the report is received by the Committees on Appropriations.
        Sec. 514. (a) Purchase of American-Made Equipment and Products.--It
    is the sense of the Congress that, to the greatest extent practicable,
    all equipment and products purchased with funds made available in this
    Act should be American-made.
        (b) Notice Requirement.--In providing financial assistance to, or
    entering into any contract with, any entity using funds made available
    in this Act, the head of each Federal agency, to the greatest extent
    practicable, shall provide to such entity a notice describing the
    statement made in subsection (a) by the Congress.
        Sec. 515. None of the funds appropriated in this Act may be used to
    implement any cap on reimbursements to grantees for indirect costs,
    except as published in Office of Management and Budget Circular A-21.
        Note.--A regular 1996 appropriation for this account had not been
    enacted at the time this budget was prepared. The 1996 amounts included
    in this budget are based on the levels provided in three continuing
    resolutions: P.L. 104-91, P.L. 104-92, and P.L. 104-99.