[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.