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

                         THE BUDGET FOR FISCAL YEAR 1998

    [[Page 889]]

                         DEPARTMENT OF VETERANS AFFAIRS

        The 1998 Budget provides $18,705 million in discretionary budget
    authority for veterans' health, benefits, and other services.

        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 better determine how well its
    programs are meeting their intended objectives.

        During FY 1996, VA made significant advancements toward the
    effective implementation of GPRA by reinvigorating the Department's
    strategic management process; enhancing the performance measures for all
    three of the major program offices; developing an initial set of goals,
    objectives, and performance measures for each of the staff offices;
    continuing its participation as a pilot agency in reports streamlining
    so as to consolidate various reporting requirements into two primary
    documents; and restructuring the annual budget submission so that it
    serves to satisfy the performance planning requirements of GPRA.

        Future GPRA efforts will focus on enhancing the relationship between
    goals of individual programs and goals of the Department; developing
    improved measures of program efficiency (unit cost) and program
    outcomes; modifying information systems to ensure that data are
    available on each measure; developing benchmark levels of performance
    that the organization is ultimately striving to achieve; and better
    linking organizational goals and performance with individual employee
    goals and performance. The ultimate aim is to develop and use a single
    set of performance goals and measures throughout the program planning,
    budget formulation, budget execution, and accountability processes.

                     NEW RESOURCES FOR VETERANS MEDICAL CARE

        The request in 1998 establishes a new course for veterans' health
    care that emphasizes and supports an emerging dynamic, business-like,
    healthcare system that is innovative and cost effective, and will
    improve the health and well-being of veterans throughout the Nation. The
    VA healthcare system will expand and improve with future budget
    increases provided by the proposed retention of all medical collections
    and user fees. The net total of these is an estimated $468 million in FY
    1998 ($591 million less $123 million in administrative expenses).

        The budget schedule includes a legislative proposal to retain
    earnings from Medical Care Cost Recovery (MCCR) program third party and
    user fee collections as reimbursements to Medical Care starting on
    October 1, 1997. VA also plans to begin a demonstration program in 1998
    to test the feasibility of ``Medicare subvention'', i.e. billing
    Medicare for healthcare provided to Medicare eligible Category C
    veterans. By 2002, assuming that Congress authorizes a Medicare
    subvention demonstration, and it is successful, and that Congress
    decides to allow VA to expand it nationwide, the combination of the
    Medicare reimbursements and allowing VA to retain medical collections
    and user fees would support a 30 percent lower unit cost and 20 percent
    more veterans served with 10 percent of the VA healthcare budget from
    non-appropriated revenues. It would also give veterans more healthcare
    provider choices.

        The schedule also includes appropriation adjustments to have
    Compensation and Pension exams directly funded from Veterans Benefit
    Administration (VBA) resources ($68 million reduced from Medical Care in
    1998), and to allow two-year spending availability for up to 8.3 percent
    (one month) of resources made available.

       Proposal to Supplement Budget Authority with Medical Care Receipts

                              [Dollars in millions]

                                         1996 actual  1997 est.   1998 est.
    Budget Authority (BA)...............      16,551      17,013      16,959
    Proposal to keep MCCR receipts:
      Gross collections.................                                 591
      Administration cost...............                                -123
      Net Supplement to BA..............                                 468
                                        ------------------------------------
    Total...............................      16,551      17,013      17,427
                                        ====================================

                         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,] $16,958,846,000, plus
    reimbursements: Provided, That [of the funds made available under this
    heading, $700,000,000 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.] not to exceed 8.3 percent of amounts made available
    herein shall remain available until September 30, 1999: Provided
    further, That funds under this heading shall be available for medical
    examinations required for benefits claims under title 38, United States
    Code. (Departments of Veterans Affairs and Housing and Urban
    Development, and Independent Agencies Appropriations Act, 1997.)

        Note: In addition to resources requested here, $468 million in net
    resources would be provided by an accompanying legislative proposal.

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0160-0-1-703      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Direct program:

            Operating expenses:
              Provision of veterans health
                  care:
    00.01       Acute hospital care.........       5,225       5,038       4,663
    00.02       Rehabilitative care.........         377         375         343
    00.03       Psychiatric care............       1,535       1,558       1,428
    00.04       Nursing home care...........       1,594       1,767       1,831

    [[Page 890]]

    00.05       Subacute care...............         544         495         453
    00.06       Residential care............         245         269         271
    00.07       Outpatient care.............       5,184       5,939       6,426
    00.08       Miscellaneous benefits and
                  services..................         692         699         727
    00.09     CHAMPVA.......................          91          92          92
                                               ---------   ---------  ----------
    00.91       Total operating expenses....      15,487      16,232      16,234
            Capital investment:
              Provision of veterans health
                  care:
    01.01       Acute hospital care.........         335         354         329
    01.02       Rehabilitative care.........          21          22          21
    01.03       Psychiatric care............          59          62          58
    01.04       Nursing home care...........          45          47          44
    01.05       Subacute care...............          21          22          21
    01.06       Residential care............          14          15          14
    01.07       Outpatient care.............         298         314         293
    01.08       Miscellaneous benefits and
                  services..................          26          27          26
    01.09     CHAMPVA.......................           1
                                               ---------   ---------  ----------
    01.91       Total capital investment....         820         863         806
                                               ---------   ---------  ----------
    01.92     Total direct program..........      16,307      17,095      17,040
    02.01 Reimbursable program..............          66          75         146
                                               ---------   ---------  ----------
    10.00   Total obligations...............      16,373      17,170      17,186
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested
            balance.........................         501         731         650
    22.00 New budget authority (gross)......      16,617      17,088      17,105
    22.30 Unobligated balance expiring......         -14
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......      17,104      17,819      17,755
    23.95 New obligations...................     -16,373     -17,170     -17,186
    24.40 Unobligated balance available, end
            of year: Uninvested balance.....         731         650         569
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Current:

    40.00   Appropriation...................      16,564      17,013      16,959
    40.75   Reduction pursuant to P.L. 104-
              134...........................         -21
                                               ---------   ---------  ----------
    43.00     Appropriation (total).........      16,543      17,013      16,959
          Permanent:

            Spending authority from
                offsetting collections:
    68.00     Offsetting collections (cash).          66          75         146
    68.26     Offsetting collections
                (unavailable balances)......           8
                                               ---------   ---------  ----------
    68.90       Spending authority from
                  offsetting collections
                  (total)...................          74          75         146
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................      16,617      17,088      17,105
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation       2,179       2,394       2,460
    73.10 New obligations...................      16,373      17,170      17,186
    73.20 Total outlays (gross).............     -16,114     -17,103     -16,848
    73.40 Adjustments in expired accounts...         -44
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation       2,394       2,460       2,798
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority      14,131      14,526      14,192
    86.93 Outlays from current balances.....       1,917       2,502       2,510
    86.97 Outlays from new permanent
            authority.......................          66          75         146
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........      16,114      17,103      16,848
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

            Offsetting collections (cash)
                from:
    88.00     Federal sources...............         -47         -53        -123
    88.40     Non-Federal sources...........         -19         -22         -23
                                               ---------   ---------  ----------
    88.90       Total, offsetting
                  collections (cash)........         -66         -75        -146
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................      16,551      17,013      16,959
    90.00 Outlays...........................      16,048      17,028      16,702
    ---------------------------------------------------------------------------

                     Summary of Budget Authority and Outlays

                            (in millions of dollars)

                                         1996 actual  1997 est.   1998 est.
    Enacted/requested:
      Budget Authority..................      16,551      17,013      16,959
      Outlays...........................      16,048      17,028      16,702
    Legislative proposal, not subject to
        PAYGO:
      Budget Authority..................                                 591
      Outlays...........................                                 591
                                        ------------------------------------
    Total:
      Budget Authority..................      16,551      17,013      17,550
      Outlays...........................      16,048      17,028      17,293
                                        ====================================
                                                PERFORMANCE MEASURES
                                                     1994 actual 1995 actual 1996 actual    1997        1998
                                                                                          projected   projected
    Medical Care Summary:
      Unique users (in millions)....................       2.811       2.890       2.937       2.937       3.072
      Chronic disease index.........................         N/A         N/A        0.46        0.92        0.95
      Prevention index..............................         N/A         N/A        0.34        0.68        0.95
      Percentage of inpatients receiving care in
        accordance with externally set and accepted
        standards...................................          98          96          96          97          98
      Percentage of patients reporting their care as
        very good or excellent:
        Inpatient...................................         N/A          60          65          70          75
        Outpatient..................................         N/A          60          61          70          75
      Percentage of networks improving performance
        on two-thirds of customer service standards.         N/A         N/A          86          91          95
      Bed-days of care per 1,000 unique users.......       3,523       3,183       2,525       2,275       2,025
      Percentage of appropriate surgical and
        invasive diagnostic procedures performed on
        ambulatory basis............................          35          39          52          58          65
      Percentage of patients enrolled in primary
        care........................................          20          66          72          75          80
      Percentage of medical care residents trained
        in primary care.............................        34.0        37.5        38.5        41.0        43.5

        The performance measures and workloads reported in this schedule
    represent the total estimated workloads for fiscal years 1996-1998.
    Fiscal year 1998 estimated performance measures and workload levels can
    only be fully accomplished with: (1) approval of resources in this
    schedule; (2) passage of proposed legislation referenced in the
    following schedule; and (3) achieving receipts estimated. The short
    narrative descriptions of net change by program sub-activity that
    introduces these workload levels also include obligations and the
    average employment estimates in total, the aggregate of both regular and
    proposed legislation schedules.

        Provision of Veterans Health Care--
            Acute hospital care.--Costs for 1998 are estimated to decrease
        by $194 million for operating medical, neurology, surgical, contract
        and State home hospital beds, reflecting the shift to increased use
        of ambulatory care.
            Estimated operating levels are:

                                         1996 actual  1997 est.   1998 est.
      Patients treated..................     621,495     575,334     560,377
      Average daily census..............      13,948      12,266      11,364
      Average employment................      67,902      61,175      57,364

            Rehabilitative care.--A decrease of $18 million in 1998 is
        estimated for providing rehabilitative care, including spinal cord
        injury care.
            Estimated operating levels are:

                                         1996 actual  1997 est.   1998 est.
      Patients treated..................      18,625      18,021      17,537
      Average daily census..............       1,642       1,516       1,399
      Average employment................       5,724       5,344       4,998

            Psychiatric care.--A decrease of $71 million is estimated in
        1998 for the inpatient care of veterans with problems related to
        mental illness, including alcohol and drug problems.

                                         1996 actual  I997 est.   1998 est.
      Patients treated..................     177,287     172,624     167,985

    [[Page 891]]

      Average daily census..............      11,037      10,357       9,558
      Average employment................      25,162      23,944      22,474

            Nursing home care.--In 1998, an increase of $116 million is
        estimated for the care of residents in VA nursing homes, contract
        nursing homes and State nursing homes.
            Estimated operating levels are:

                                         1996 actual  1997 est.   1998 est.
      Patients treated..................      82,390      86,091      87,446
      Average daily census..............      33,733      35,182      35,876
      Average employment................      19,567      20,494      20,806

            Subacute care.--A decrease of $22 million is estimated in 1998
        for the treatment of veterans who require a level of care between
        acute and long-term care, as provided in VA hospital intermediate
        bed sections.

                                         1996 actual  1997 est.   1998 est.
    Patients treated....................      32,691      28,605      27,836
    Average daily census................       5,085       4,369       4,032
    Average employment..................       9,634       8,399       7,832

            Residential care.--An increase of $12 million is estimated in
        1998 for the care of veterans in locations other than their own
        homes, such as residential rehabilitation and domiciliary care
        programs.

                                         1996 actual  1997 est.   1998 est.
    Patients treated....................      28,036      29,142      29,674
    Average daily census................       9,319       9,612       9,905
    Average employment..................       3,700       3,864       3,932

            Outpatient care.--An increase of $758 million is estimated in
        1998 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

                                         1996 actual  1997 est.   1998 est.
      Medical visits (in thousands):
      Outpatient clinic visits..........      28,360      29,209      31,504
      Community based visits............         935         935         935
      Readjustment counseling...........         760         767         774
                                        ------------------------------------
            Total.......................      30,055      30,911      33,213
                                        ====================================
      Dental:
        Staff:
          Examinations..................     234,968     235,000     235,000
          Treatments....................     152,373     150,000     150,000
                                        ------------------------------------
            Total.......................     387,341     385,000     385,000
                                        ====================================
        Fee: Cases completed............      16,647      16,500      16,500
                                        ====================================
      Average employment................      56,906      59,653      63,911
                                        ====================================

            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 $27 million is estimated for
        1998.

                                         1996 actual  1997 est.   1998 est.
      Average employment................       6,416       5,985       5,858

            Civilian health and medical program of the Department of
        Veterans Affairs (CHAMPVA).--No change is estimated in 1998 for
        private hospital and outpatient care for dependents and survivors of
        certain veterans.

                                         1996 actual  1997 est.   1998 est.
      Average daily hospital census.....         150         150         150
      Outpatient (in thousands).........     822,637     822,637     822,637
      Average employment................         142         142         142

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0160-0-1-703      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

          Direct obligations:

            Personnel compensation:
    11.1      Full-time permanent...........       6,506       6,689       6,548
    11.3      Other than full-time permanent         863         717         704
    11.5      Other personnel compensation..         783         801         763
                                               ---------   ---------  ----------
    11.9        Total personnel compensation       8,152       8,207       8,015
    12.1    Civilian personnel benefits.....       1,900       1,935       1,914
    13.0    Benefits for former personnel...          11         148          15
            Travel and transportation of
                persons:
    21.0      Employee travel...............          31          51          52
    21.0      Beneficiary travel............         108         118         123
    21.0      Interagency motor pool
                payments....................          12          12          12
    21.0      All other.....................          31          34          32
    22.0    Transportation of things........          25          30          30
    23.1    Rental payments to GSA..........          23          25          26
    23.2    Rental payments to others.......          55          63          66
    23.3    Communications, utilities, and
              miscellaneous charges.........         430         464         465
    24.0    Printing and reproduction.......          13          15          14
    25.2    Other contractual services......       1,221       1,363       1,528
            Medical care:
    25.6      Outpatient dental fees........          12          13          14
    25.6      Medical and nursing fees......         275         289         303
    25.6      Community nursing homes.......         338         325         364
    25.6      Contract hospitalization......         143         150         158
    25.6      Civilian Health and Medical
                Program of the Department of
                Veterans Affairs............          85          85          85
            Supplies and materials:
    26.0      Supplies and materials........       2,317       2,608       2,673
    26.0      Provisions....................          92          95          94
    31.0    Equipment.......................         632         567         545
    32.0    Land and structures.............         187         256         258
            Grants, subsidies, and
                contributions:
    41.0      Grants, subsidies, and
                contributions...............         207         232         245
    41.0      Grants to private
                organizations...............           6           8           7
    43.0    Interest and dividends..........           1           2           2
                                               ---------   ---------  ----------
    99.0      Subtotal, direct obligations..      16,307      17,095      17,040
    99.0  Reimbursable obligations..........          66          75         146
                                               ---------   ---------  ----------
    99.9    Total obligations...............      16,373      17,170      17,186
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 36-0160-0-1-703      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
        Direct:
          Total compensable workyears:

    1001    Full-time equivalent employment.     194,364     188,143     177,987
    1005    Full-time equivalent of overtime
              and holiday hours.............       3,470       3,395       3,141
        Reimbursable:
          Total compensable workyears:

    2001    Full-time equivalent employment.         789         857       1,666
    2005    Full-time equivalent of overtime
              and holiday hours.............          14          15          29
    ---------------------------------------------------------------------------
        Note: An additional 7,664 FTE are funded through the legislative
    proposal authorizing Medical Care to retain medical collections and user
    fees.

                                  Medical Care

                  (Legislative proposal, not subject to PAYGO)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0160-2-1-703      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Reimbursements:

            Operating expenses:
              Provision of veterans health
                  care:
    00.01       Acute hospital care.........                                 172
    00.02       Rehabilitative care.........                                  13
    00.03       Psychiatric care............                                  55
    00.04       Nursing home care...........                                  46
    00.05       Subacute care...............                                  17
    00.06       Residential care............                                   9
    00.07       Outpatient care.............                                 246
                                               ---------   ---------  ----------
    00.91       Total operating expenses....                                 558
            Capital investment:
              Provision of veterans health
                  care:
    01.01       Acute hospital care.........                                  14
    01.02       Rehabilitative care.........                                   1
    01.03       Psychiatric care............                                   2
    01.04       Nursing home care...........                                   2
    01.05       Subacute care...............                                   1
    01.06       Residential care............                                   1
    01.07       Outpatient care.............                                  12
                                               ---------   ---------  ----------
    01.91       Total capital investment....                                  33
                                               ---------   ---------  ----------

    [[Page 892]]

    01.92     Total reimbursement program...                                 591
                                               ---------   ---------  ----------
    10.00   Total obligations...............                                 591
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......                                 591
    23.95 New obligations...................                                -591
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................                                 591
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    73.10 New obligations...................                                 591
    73.20 Total outlays (gross).............                                -591
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority                                 591
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................                                 591
    90.00 Outlays...........................                                 591
    ---------------------------------------------------------------------------

        The request in 1998 establishes a new course for veterans' health
    care that emphasizes and supports an emerging dynamic, business-like
    healthcare system that is innovative and cost effective, and will
    improve the health and well being of veterans throughout the Nation. The
    VA healthcare system will expand and improve with future budget
    increases provided by the proposed retention of all medical collections
    and user fees. The net total of these is an estimated $468 million in FY
    1998 ($591 million less $123 million in administrative expenses).

        The budget schedule includes a legislative proposal to retain
    earnings from Medical Care Cost Recovery (MCCR) program third party and
    user fee collections as reimbursements to Medical Care starting on
    October 1, 1997. VA also plans to begin a demonstration program in 1998
    to test the feasibility of ``Medicare subvention'', i.e.--billing
    Medicare for healthcare provided to Medicare eligible Category C
    veterans. By FY 2002, assuming that the Congress authorizes a Medicare
    subvention demonstration and it is successful, and that Congress decides
    to allow VA to expand it nationwide, the combination of the Medicare
    reimbursements and allowing VA to retain medical collections and user
    fees would support a 30 percent lower unit cost and 20 percent more
    veterans served with 10 percent of the VA healthcare budget from non-
    appropriated revenues. It would also give veterans more healthcare
    provider choices.

        The MCCR legislation proposed for FY 1998 repeals Section 1729(g) of
    title 38, United States Code, and inserts language requiring all amounts
    recovered or collected (third party, medical fees and other receipts)
    for medical care and other services furnished to be deposited in the
    Department of Veterans Affairs' Medical Care account and be available
    until expended. At the same time, the existing Medical Care Cost
    Recovery (MCCR) Fund is proposed for termination. These additional
    expenditures within this discretionary account are being funded through
    offsetting receipts as the result of the merger of the MCCR activities
    with the Medical Care account.

        This is one of several proposals in the budget to charge fees to
    users directly availing themselves of, or subject to, a government
    service, program, or activity, in order to cover the government's costs.
    Legislation will be proposed to authorize the fees and, upon enactment
    of the authorization, a budget amendment to the current appropriations
    language will be proposed to make the fees available for expenditure.
    Because the current requirements of the Budget Enforcement Act of 1990
    make it difficult to fund discretionary programs with receipts that are
    not authorized in appropriations acts, the Administration is proposing a
    change in the requirements to facilitate the enactment of proposals such
    as this one.

        The additional expenditures described below include the
    administrative costs of collecting receipts and user fees for the
    medical services provided.

        Provision of Veterans Health Care--
            Acute hospital care--Medical collections and user fees provide
        an estimated $186 million in 1998 for operating medical, neurology,
        and surgical hospital beds.
                                                           1998 est.
    Patients treated..................................              15,835
    Average daily census..............................                 315
    Average employment................................               2,390

            Rehabilitative care.--Medical collections and user fees provide
        an estimated $14 million in 1998 for rehabilitative care, including
        spinal cord injury care.
                                                           1998 est.
    Patients treated..................................                 513
    Average daily census..............................                  41
    Average employment................................                 208

            Psychiatric care.--Medical collections and user fees provide an
        estimated $57 million in 1998 for inpatient care of veterans with
        problems related to mental illness, including alcohol and drug
        problems.
                                                           1998 est.
    Patients treated..................................               4,911
    Average daily census..............................                 279
    Average employment................................                 938

            Nursing home care.--Medical collections and user fees provide an
        estimated $48 million in 1998 for the care of residents in VA
        nursing homes.
                                                           1998 est.
    Patients treated..................................               1,128
    Average daily census..............................                 409
    Average employment................................                 839

            Subacute care.--Medical collections and user fees provide an
        estimated $18 million in 1998 for the treatment of veterans who
        require a level of care between acute and long-term care, as
        provided in VA hospital immediate bed sections.
                                                           1998 est.
    Patients treated..................................                 814
    Average daily census..............................                 118
    Average employment................................                 327

            Residential care.--Medical collections and user fees provide an
        estimated $10 million in 1998 for the care of veterans in locations
        other than their own homes, such as residential rehabilitation and
        domiciliary care programs.
                                                           1998 est.
    Patients treated..................................                 657
    Average daily census..............................                 174
    Average employment................................                 163

            Outpatient care.--Medical collections and user fees provide an
        estimated $258 million in 1998 for the cost of outpatient medical
        care provided by VA staff and other health professionals
        participating under a fee basis arrangement for certain eligible
        veterans.

                           NUMBER OF MEDICAL VISITS

                                                           1998 est.
    Medical visits (in thousands).....................
     Staff............................................                 921
     Fee..............................................                  27
                                                      --------------------

      Total...........................................                 948
    Average employment................................               2,799

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0160-2-1-703      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
    99.0  Reimbursable obligations:
            Subtotal, reimbursable
            obligations.....................                                 591
                                               ---------   ---------  ----------
    99.9    Total obligations...............                                 591
    ---------------------------------------------------------------------------

    [[Page 893]]

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 36-0160-2-1-703      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
        Total compensable workyears:
    2001  Full-time equivalent employment...                               7,664
    2005  Full-time equivalent of overtime
            and holiday hours...............                                  73
    ---------------------------------------------------------------------------

                         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, $262,000,000] 1999,
    $234,374,000, plus reimbursements. (Departments of Veterans Affairs and
    Housing and Urban Development, and Independent Agencies Appropriations
    Act, 1997.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0161-0-1-703      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Direct program:

            Operating expenses:
    00.01     Medical research..............         192         210         178
    00.02     Rehabilitation research.......          23          24          22
    00.03     Health services research......          30          32          33
                                               ---------   ---------  ----------
    00.91       Total operating expenses....         245         266         233
            Capital investment:
    01.01     Medical research..............           8           7           5
    01.02     Rehabilitation research.......           1           1           1
    01.03     Health services research......           2           2           1
                                               ---------   ---------  ----------
    01.91       Total capital investment....          11          10           7
                                               ---------   ---------  ----------
    01.92     Total direct program..........         256         276         240
    02.01 Reimbursable program..............          51          45          46
                                               ---------   ---------  ----------
    10.00   Total obligations...............         307         321         286
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested
            balance.........................          20          20           6
    22.00 New budget authority (gross)......         308         307         280
    22.30 Unobligated balance expiring......          -1
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......         327         327         286
    23.95 New obligations...................        -307        -321        -286
    24.40 Unobligated balance available, end
            of year: Uninvested balance.....          20           6
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Current:

    40.00   Appropriation...................         257         262         234
          Permanent:

    68.00   Spending authority from
              offsetting collections:
              Offsetting collections (cash).          51          45          46
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................         308         307         280
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation          52          79          94
    73.10 New obligations...................         307         321         286
    73.20 Total outlays (gross).............        -283        -305        -288
    73.40 Adjustments in expired accounts...           2
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation          79          94          93
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority         178         192         172
    86.93 Outlays from current balances.....          54          68          70
    86.97 Outlays from new permanent
            authority.......................          51          45          46
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........         283         305         288
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.00   Offsetting collections (cash)
              from: Federal sources.........         -51         -45         -46
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................         257         262         234
    90.00 Outlays...........................         232         260         242
    ---------------------------------------------------------------------------

        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 Department of
    Defense, 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]

                                         1996 actual  1997 est.   1998 est.
    Medical and prosthetic research
    appropriation.......................         257         262         234
    Medical care appropriation..........         335         328         325
    Federal grants (NIH)................         209         217         224
    Other grants (voluntary agencies,
    private proprietary)................         106         110         113
    DOD reimbursements..................          16          20           *
                                        ------------------------------------
          Total budgetary resources.....         923         937         896
                                        ====================================
        *DoD reimbursements for FY 1998 are unknown.
                                                PERFORMANCE MEASURES
                                                     1994 actual 1995 actual 1996 actual    1997        1998
                                                                                          projected   projected
    Research Summary:
    Total number of projects funded.................       1,870       1,771       1,666       1,644       1,469
    Total number of new projects funded.............         261         334         192         200         120
    Number of cooperative studies...................          28          31          35          37          37
    Number of VA-funded studies involving VA
    patients or VA data bases.......................         972         854         786         786         786
    Percentage of projects receiving total or
    partial funding from extra-VA sources...........          58          58          57          59          64
    Percentage of funds coming from extra-mural
    sources.........................................          54          54          59          61          64

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0161-0-1-703      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

          Direct obligations:

            Personnel compensation:
    11.1      Full-time permanent...........          34          41          39
    11.3      Other than full-time permanent          68          76          71
    11.5      Other personnel compensation..           4           4           4
                                               ---------   ---------  ----------
    11.9        Total personnel compensation         106         121         114
    12.1    Civilian personnel benefits.....          27          28          24
    21.0    Employee travel.................           2           2           2
    23.3    Communications, utilities, and
              miscellaneous charges.........           1           1           1
    24.0    Printing and reproduction.......           1           1           1
    25.5    Research and development
              contracts.....................          73          80          69
    26.0    Supplies and materials..........          22          32          22

    [[Page 894]]

    31.0    Equipment.......................          11          11           7
    41.0    Grants, subsidies, and
              contributions.................          13
                                               ---------   ---------  ----------
    99.0      Subtotal, direct obligations..         256         276         240
    99.0  Reimbursable obligations..........          51          45          46
                                               ---------   ---------  ----------
    99.9    Total obligations...............         307         321         286
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 36-0161-0-1-703      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
        Direct:
          Total compensable workyears:

    1001    Full-time equivalent employment.       2,595       2,833       2,522
    1005    Full-time equivalent of overtime
              and holiday hours.............          17          17          17
        Reimbursable:
    2001  Total compensable workyears: Full-
            time equivalent employment......         655         527         431
    ---------------------------------------------------------------------------

           Medical Administration and Miscellaneous Operating Expenses

        For necessary expenses in the administration of the medical,
    hospital, nursing home, domiciliary, construction, supply, and research
    activities, as authorized by law; 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; [$61,207,000]
    $60,160,000, plus reimbursements. (Departments of Veterans Affairs and
    Housing and Urban Development, and Independent Agencies Appropriations
    Act, 1997.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0152-0-1-703      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Operating expenses: Integrated
            health care system
            administration..................          63          61          60
                                               ---------   ---------  ----------
    10.00   Total obligations...............          63          61          60
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......          63          61          60
    23.95 New obligations...................         -63         -61         -60
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................          63          61          60
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation           6          13           6
    73.10 New obligations...................          63          61          60
    73.20 Total outlays (gross).............         -57         -68         -60
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation          13           6           6
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority          53          56          55
    86.93 Outlays from current balances.....           4          12           5
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........          57          68          60
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................          63          61          60
    90.00 Outlays...........................          57          68          60
    ---------------------------------------------------------------------------

        Supervision and administration of VA's comprehensive and integrated
    healthcare system.--Central office staff elements provide executive
    direction for all Department medical and construction programs through
    program development, implementation, and the administration of policies,
    plans, and objectives.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0152-0-1-703      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

          Personnel compensation:

    11.1    Full-time permanent.............          40          40          39
    11.3    Other than full-time permanent..           1           2           2
    11.5    Other personnel compensation....           2           2           2
                                               ---------   ---------  ----------
    11.9      Total personnel compensation..          43          44          43
    12.1  Civilian personnel benefits.......           6           7           6
    13.0  Benefits for former personnel.....           1
    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
    25.2  Other services....................           3           3           3
    26.0  Supplies and materials............           1           1           1
    31.0  Equipment.........................           3                       1
                                               ---------   ---------  ----------
    99.9    Total obligations...............          63          61          60
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 36-0152-0-1-703      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
        Total compensable workyears:
    1001  Full-time equivalent employment...         635         610         565
    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      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation          10           4           4
    73.20 Total outlays (gross).............          -6
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation           4           4           4
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.93 Outlays from current balances.....           6
    ----------------------------------------------------------------------------

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

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

        No appropriation for this account was requested in FY 1997 and none
    is requested for FY 1998.

                        Medical Care Cost Recovery Fund

                  Unavailable Collections (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-5014-0-2-703      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
        Balance, start of year:
    01.99 Balance, start of year............       1,101       1,060       1,038
        Receipts:
    02.01 Medical cost recovery.............          93          97         176
    02.02 Medical cost recovery, legislative
            proposal, not subject to PAYGO..                                 176
    02.03 Medical cost recovery, legislative
            proposal, subject to PAYGO......                                -176
                                               ---------   ---------  ----------
    04.00 Total: Balances and collections...       1,194       1,157       1,214
        Appropriation:
    05.01 Medical care cost recovery fund...        -126        -119        -123
    05.03 Medical care cost recovery fund,
            legislative proposal subject to
            PAYGO...........................                                 123

    [[Page 895]]

    05.04 Medical care......................          -8
                                               ---------   ---------  ----------
    05.99 Subtotal appropriation............        -134        -119
    07.99 Total balance, end of year........       1,060       1,038       1,214
    ---------------------------------------------------------------------------

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-5014-0-2-703      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.09 Operating expenses................         103         114         118
    00.10 Capital investment................          16           5           5
                                               ---------   ---------  ----------
    10.00   Total obligations...............         119         119         123
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested
            balance.........................           6          14          13
    22.00 New budget authority (gross)......         126         119         123
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......         132         133         136
    23.95 New obligations...................        -119        -119        -123
    24.40 Unobligated balance available, end
            of year: Uninvested balance.....          14          13          13
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    60.25 Appropriation (special fund,
            indefinite).....................         126         119         123
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation          14          23          23
    73.10 New obligations...................         119         119         123
    73.20 Total outlays (gross).............        -109        -119        -123
    73.40 Adjustments in expired accounts...          -1
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation          23          23          24
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................         109         119         123
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................         126         119         123
    90.00 Outlays...........................         109         119         123
    ---------------------------------------------------------------------------

                     Summary of Budget Authority and Outlays

                            (in millions of dollars)

                                         1996 actual  1997 est.   1998 est.
    Enacted/requested:
      Budget Authority..................         126         119         123
      Outlays...........................         109         119         123
    Legislative proposal, subject to
        PAYGO:
      Budget Authority..................                                -123
      Outlays...........................                                -123
                                        ------------------------------------
    Total:
      Budget Authority..................         126         119
      Outlays...........................         109         119
                                        ====================================

        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 1998, 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.

                            [In millions of dollars]

                                             1996 actual   1997 est.   1998 est.
                Program activity

    Third-party recoveries..................         495         471         523
    Copayments and other collections........          62          62          68
                                               ---------   ---------  ----------
          Total collections.................         557         533         591
          Total program costs...............         119         120         123
    Ratio of costs to collections...........       21.3%       22.4%       20.8%

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-5014-0-2-703      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

          Personnel compensation:

    11.1    Full-time permanent.............          57          59          61
    11.5    Other personnel compensation....          15          16          16
                                               ---------   ---------  ----------
    11.9      Total personnel compensation..          72          75          77
    12.1  Civilian personnel benefits.......          16          17          17
    21.0  Travel and transportation of
            persons.........................           3           3           3
    23.3  Communications, utilities, and
            miscellaneous charges...........           4           5           5
    25.2  Other services....................           4           7           8
    26.0  Supplies and materials............           4           7           8
    31.0  Equipment.........................          16           5           5
                                               ---------   ---------  ----------
    99.9    Total obligations...............         119         119         123
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 36-5014-0-2-703      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
        Total compensable workyears:
    1005  Full-time equivalent of overtime
            and holiday hours...............          46          46          46
    1011  Exempt Full-time equivalent
            employment......................       2,269       2,295       2,295
    ---------------------------------------------------------------------------

                         Medical Care Cost Recovery Fund

                    (Legislative proposal, subject to PAYGO)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-5014-4-2-703      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.09 Operating expenses................                                -118
    00.10 Capital investment................                                  -5
                                               ---------   ---------  ----------
    10.00   Total obligations...............                                -123
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......                                -123
    23.95 New obligations...................                                 123
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    60.25 Appropriation (special fund,
            indefinite).....................                                -123
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    73.10 New obligations...................                                -123
    73.20 Total outlays (gross).............                                 123
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................                                -123
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................                                -123
    90.00 Outlays...........................                                -123
    ---------------------------------------------------------------------------

        Language is being proposed that would merge all medical related
    collections with the Medical Care account. VA is expected to receive a
    net increase of $468 million in funds to support the medical care of
    veterans through this concept.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-5014-4-2-703      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

          Personnel compensation:

    11.1    Full-time permanent.............                                 -61
    11.5    Other personnel compensation....                                 -16
                                               ---------   ---------  ----------
    11.9      Total personnel compensation..                                 -77

    [[Page 896]]

    12.1  Civilian personnel benefits.......                                 -17
    21.0  Travel and transportation of
            persons.........................                                  -3
    23.3  Communications, utilities, and
            miscellaneous charges...........                                  -5
    25.2  Other services....................                                  -8
    26.0  Supplies and materials............                                  -8
    31.0  Equipment.........................                                  -5
                                               ---------   ---------  ----------
    99.9    Total obligations...............                                -123
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 36-5014-4-2-703      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
        Total compensable workyears:
    1005  Full-time equivalent of overtime
            and holiday hours...............                                 -46
    1011  Exempt Full-time equivalent
            employment......................                              -2,295
    ---------------------------------------------------------------------------

    Public enterprise funds:

                        Medical Facilities Revolving Fund

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4138-0-3-703      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

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

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested
            balance.........................          17           6           6
    22.00 New budget authority (gross)......           2           2           2
    22.21 Unobligated balance transferred to
            other accounts..................         -12
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......           7           8           8
    23.95 New obligations...................          -1          -2          -2
    24.40 Unobligated balance available, end
            of year: Uninvested balance.....           6           6           5
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    68.00 Spending authority from offsetting
            collections (gross): Offsetting
            collections (cash)..............           2           2           2
    ----------------------------------------------------------------------------

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

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................           1           2           2
    86.98 Outlays from permanent balances...                       2           2
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........           1           4           4
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.00   Offsetting collections (cash)
              from: Federal sources.........          -2          -2          -2
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................
    90.00 Outlays...........................          -1           2           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      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
    26.0  Supplies and materials............                       1           1
    31.0  Equipment.........................           1           1           1
    99.0  Subtotal, reimbursable obligations           1           2           2
                                               ---------   ---------  ----------
    99.9    Total obligations...............           1           2           2
    ---------------------------------------------------------------------------

                         Canteen Service Revolving Fund

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4014-0-3-705      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Operating expenses:

    00.01   Acquisitions....................         117         131         132
    00.02   Direct operations...............          78          87          86
                                               ---------   ---------  ----------
    00.91     Total operating expenses......         195         218         218
    01.01 Capital investment: Sales program:
            Purchase of equipment and
            leasehold.......................           7           7           7
                                               ---------   ---------  ----------
    10.00   Total obligations...............         202         225         225
    ----------------------------------------------------------------------------

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

    21.90   Fund balance....................         -12         -14         -15
    21.91   U.S. Securities: Par value......          38          42          42
                                               ---------   ---------  ----------
    21.99     Total unobligated balance,
                start of year...............          26          28          27
    22.00 New budget authority (gross)......         204         225         226
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......         230         253         253
    23.95 New obligations...................        -202        -225        -225
          Unobligated balance available, end of year:

    24.90   Fund balance....................         -14         -15         -14
    24.91   U.S. Securities: Par value......          42          42          42
                                               ---------   ---------  ----------
    24.99   Total unobligated balance, end
              of year.......................          28          27          28
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    68.00 Spending authority from offsetting
            collections (gross): Offsetting
            collections (cash)..............         204         225         226
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.90 Unpaid obligations, start of year:
            Obligated balance: Fund balance.          15          14          15
    73.10 New obligations...................         202         225         225
    73.20 Total outlays (gross).............        -204        -225        -226
    74.90 Unpaid obligations, end of year:
            Obligated balance: Fund balance.          14          15          15
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................         202         225         226
    86.98 Outlays from permanent balances...           2
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........         204         225         226
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

            Offsetting collections (cash)
                from:
    88.00     Federal sources...............          -2          -2          -1
    88.40     Non-Federal sources...........        -202        -223        -225
                                               ---------   ---------  ----------
    88.90       Total, offsetting
                  collections (cash)........        -204        -225        -226
    ----------------------------------------------------------------------------

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

        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.

    [[Page 897]]

                            Statement of Operations (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   36-4014-0-3-705    1995 actual    1996 actual     1997 est.      1998 est.
    -----------------------------------------------------------------------------------------------
    0101  Revenue...........................         209            209           225            225
    0102  Expense...........................        -206           -206          -221           -222
                                            ------------ --------------  ------------  -------------
    0109  Net income or loss (-)............           3              3             4              3
    -----------------------------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   36-4014-0-3-705    1995 actual    1996 actual     1997 est.      1998 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
          Federal assets:

    1101    Fund balances with Treasury.....           3                            2              4
            Investments in US securities:
    1102      Treasury securities, par......          38             40            41             42
    1106      Receivables, net..............           2              1             2              2
    1107      Advances and prepayments......           2              2             2              1
    1206  Non-Federal assets: Receivables,
            net.............................                                                       1
          Other Federal assets:

    1802    Inventories and related
              properties....................          27             24            25             26
    1803    Property, plant and equipment,
              net...........................          25             28            28             28
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................          97             95           100            104
        LIABILITIES:
          Federal liabilities:

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

    2201    Accounts payable................          10              9             8              9
    2207    Other...........................           5              8             8              8
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............          18             18            19             19
        NET POSITION:
    3200  Invested capital..................          44             42            47             46
    3600  Other.............................          34             35            34             39
                                            ------------ --------------  ------------  -------------
    3999    Total net position..............          78             77            81             85
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position          96             95           100            104
    -----------------------------------------------------------------------------------------------

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4014-0-3-705      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

          Personnel compensation:

    11.1    Full-time permanent.............          40          41          40
    11.3    Other than full-time permanent..          14          18          18
                                               ---------   ---------  ----------
    11.9      Total personnel compensation..          54          59          58
    12.1  Civilian personnel benefits.......          15          18          18
    21.0  Travel and transportation of
            persons.........................           1           3           3
    22.0  Transportation of things..........                       1           1
    23.3  Communications, utilities, and
            miscellaneous charges...........                       1           1
    24.0  Printing and reproduction.........                       1           1
    25.2  Other services....................           3           6           6
    26.0  Supplies and materials............         123         128         129
    31.0  Equipment.........................           6           8           8
    99.0  Subtotal, reimbursable obligations         202         225         225
                                               ---------   ---------  ----------
    99.9    Total obligations...............         202         225         225
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 36-4014-0-3-705      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
    2011  Total compensable workyears:
            Exempt Full-time equivalent
            employment......................       3,065       3,200       3,200
    ---------------------------------------------------------------------------

             Special Therapeutic and Rehabilitation Activities Fund

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4048-0-3-703      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Reimbursable Program:

    00.01   Contracts.......................          18          22          23
    00.02   Education and training..........           1           1           2
    00.03   Operating expenses..............          10          12          12
                                               ---------   ---------  ----------
    10.00   Total obligations...............          29          35          37
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.90 Unobligated balance available,
            start of year: Fund balance.....           5           8           8
    22.00 New budget authority (gross)......          32          35          37
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......          37          43          45
    23.95 New obligations...................         -29         -35         -37
    24.90 Unobligated balance available, end
            of year: Fund balance...........           8           8           8
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    68.00 Spending authority from offsetting
            collections (gross): Offsetting
            collections (cash)..............          32          35          37
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation           2           1           4
    73.10 New obligations...................          29          35          37
    73.20 Total outlays (gross).............         -29         -32         -33
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation           1           4           8
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................          29          32          33
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.40   Offsetting collections (cash)
              from: Non-Federal sources.....         -32         -35         -37
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................
    90.00 Outlays...........................          -3          -3          -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    1995 actual    1996 actual     1997 est.      1998 est.
    -----------------------------------------------------------------------------------------------
    0101  Revenue...........................          27             32            35             37
    0102  Expense...........................         -23            -27           -35            -37
                                            ------------ --------------  ------------  -------------
    0109  Net income or loss (-)............           4              5
    -----------------------------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   36-4048-0-3-703    1995 actual    1996 actual     1997 est.      1998 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
          Federal assets:

    1101    Fund balances with Treasury.....           7             10            13             16
            Investments in US securities:
    1106      Receivables, net..............           2              1             1              1
    1206  Non-Federal assets: Receivables,
            net.............................           1              1             1              1
    1803  Other Federal assets: Property,
            plant and equipment, net........                          1             1              1
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................          10             13            16             19
        LIABILITIES:
    2101  Federal liabilities: Accounts
            payable.........................           1              1             4              7
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............           1              1             4              7
        NET POSITION:
    3200  Invested capital..................                          1
    3300  Cumulative results of operations..           8             11            11             11
                                            ------------ --------------  ------------  -------------
    3999    Total net position..............           8             12            11             11
                                            ------------ --------------  ------------  -------------

    [[Page 898]]

    4999  Total liabilities and net position           9             13            15             18
    -----------------------------------------------------------------------------------------------

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4048-0-3-703      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
    25.2  Other services....................          26          31          33
    26.0  Supplies and materials............           2           3           3
    31.0  Equipment.........................           1           1           1
                                               ---------   ---------  ----------
    99.9    Total obligations...............          29          35          37
    ---------------------------------------------------------------------------

                      Medical Center Research Organizations

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4026-0-3-703      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Operating expenses................          25          26          26
    00.02 Capital investment................           3           3           3
                                               ---------   ---------  ----------
    10.00   Total obligations...............          28          29          29
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.90 Unobligated balance available,
            start of year: Fund balance.....          18          18          18
    22.00 New budget authority (gross)......          28          29          29
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......          46          47          47
    23.95 New obligations...................         -28         -29         -29
    24.90 Unobligated balance available, end
            of year: Fund balance...........          18          18          18
    ----------------------------------------------------------------------------

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

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

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

        Offsets:
          Against gross budget authority and outlays:

            Offsetting collections (cash)
                from:
    88.00     Federal sources...............          -1          -1          -1
    88.40     Non-Federal sources...........         -27         -28         -28
                                               ---------   ---------  ----------
    88.90       Total, offsetting
                  collections (cash)........         -28         -29         -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      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
    25.2  Other services....................          17          18          18
    26.0  Supplies and materials............           8           8           8
    31.0  Equipment.........................           3           3           3
                                               ---------   ---------  ----------
    99.9    Total obligations...............          28          29          29
    ---------------------------------------------------------------------------

                                   Trust Funds

      [Transitional Housing Loan Program] General Post Fund, National Homes

                          (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. (Departments
    of Veterans Affairs and Housing and Urban Development, and Independent
    Agencies Appropriations Act, 1997.)

                  Unavailable Collections (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-8180-0-7-705      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
        Balance, start of year:
    01.99 Balance, start of year............           2           2           5
        Receipts:
    02.01 General post fund, national homes,
            deposits........................          24          28          29
    02.02 General post fund, national homes,
            interest on investments.........           3           3           3
                                               ---------   ---------  ----------
    02.99   Total receipts..................          27          31          32
                                               ---------   ---------  ----------
    04.00 Total: Balances and collections...          29          33          37
        Appropriation:
    05.01 General post fund, national homes.         -27         -28         -29
    07.99 Total balance, end of year........           2           5           8
    ---------------------------------------------------------------------------

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-8180-0-7-705      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Religious, recreational, and
            entertainment activities........          21          21          22
    00.02 Research activities...............           3           3           4
    00.03 Therapeutic residence maintenance.                       1           1
    00.04 Therapeutic residence purchase and
            renovation......................           1           1
                                               ---------   ---------  ----------
    10.00   Total obligations...............          25          26          27
    ----------------------------------------------------------------------------

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

    21.40   Uninvested balance..............          -1          -3          -1
    21.41   U.S. Securities: Par value......          36          40          40
                                               ---------   ---------  ----------
    21.99     Total unobligated balance,
                start of year...............          35          37          39
    22.00 New budget authority (gross)......          27          28          29
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......          62          65          68
    23.95 New obligations...................         -25         -26         -27
          Unobligated balance available, end of year:

    24.40   Uninvested balance..............          -3          -1          -1
    24.41   U.S. Securities: Par value......          40          40          42
                                               ---------   ---------  ----------
    24.99   Total unobligated balance, end
              of year.......................          37          39          41
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    60.27 Appropriation (trust fund,
            indefinite).....................          27          28          29
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation           3           5           6
    73.10 New obligations...................          25          26          27
    73.20 Total outlays (gross).............         -24         -25         -25
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation           5           6           7
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................          22          23          23
    86.98 Outlays from permanent balances...           2           2           2
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........          24          25          25
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................          27          28          29
    90.00 Outlays...........................          24          25          25
    ---------------------------------------------------------------------------

    [[Page 899]]

        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      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
    21.0  Travel and transportation of
            persons.........................           1           1           1
    25.2  Other services....................          11          12          12
    26.0  Supplies and materials............           6           6           6
    31.0  Equipment.........................           4           4           4
    32.0  Land and structures...............           3           3           4
                                               ---------   ---------  ----------
    99.9    Total obligations...............          25          26          27
    ---------------------------------------------------------------------------

                        VETERANS BENEFITS ADMINISTRATION

                                  Federal Funds

    General and special funds:

                           [Compensation and Pensions]

        [For the payment of compensation benefits to or on behalf of
    veterans as authorized by law (38 U.S.C. 107, chapters 11, 13, 51, 53,
    55, and 61); pension benefits to or on behalf of veterans as authorized
    by law (38 U.S.C. chapters 15, 51, 53, 55, and 61; 92 Stat. 2508); and
    burial benefits, emergency and other officers' retirement pay, adjusted-
    service credits and certificates, payment of premiums due on commercial
    life insurance policies guaranteed under the provisions of Article IV of
    the Soldiers' and Sailors' Civil Relief Act of 1940, as amended, and for
    other benefits as authorized by law (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); $18,671,259,000, to remain
    available until expended: Provided, That not to exceed $26,417,000 of
    the amount appropriated shall be reimbursed to ``General operating
    expenses'' and ``Medical care'' for necessary expenses in implementing
    those provisions authorized in the Omnibus Budget Reconciliation Act of
    1990, and in the Veterans' Benefits Act of 1992 (38 U.S.C. chapters 51,
    53, and 55), the funding source for which is specifically provided as
    the ``Compensation and pensions'' appropriation: Provided further, That
    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 the Veterans' Benefits Act of 1992 (38
    U.S.C. chapter 55).
        For an additional amount for ``Compensation and Pensions'',
    $100,000,000, to be made available upon enactment of this Act, to remain
    available until expended.]

        Activities formerly included in this account are proposed to be
    financed by three separate appropriation accounts in 1998 and are
    presented below in the ``Compensation'', ``Pensions'', and ``Burial
    benefits and miscellaneous assistance'' accounts. Amounts for 1996,
    1997, and 1998 are shown on a comparable basis. The following table
    shows the distribution of the amounts (dollars in millions) appropriated
    in 1996 and 1997 and requested in 1998.

                                         1996 actual  1997 est.   1998 est.
    Distribution of budget authority by
        account:
      Compensation......................      15,415      16,163      16,438
      Pensions..........................       3,074       3,145       3,184
      Burial benefits...................         114         117         119
    Distribution of outlays by account:
      Compensation......................      14,222      16,160      16,436
      Pensions..........................       2,834       3,141       3,177
      Burial benefits...................         114         117         119

                                  Compensation

        For the payment of compensation benefits to or on behalf of veterans
    and a pilot program for disability examinations as authorized by law,
    $16,437,688,000, to remain available until expended, of which not to
    exceed $2,083,000 shall be reimbursed to ``General operating expenses''
    for necessary expenses as authorized by chapters 11, 13, 18, 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.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0153-0-1-701      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Compensation:

            Veterans:
    00.02     World War I...................           3           2           2
    00.03     World War II..................       3,421       3,201       3,168
    00.04     Korean conflict...............       1,160       1,128       1,166
    00.05     Vietnam era...................       4,722       4,846       5,286
    00.06     Peacetime service.............       2,479       2,534       2,773
    00.07     Persian Gulf conflict.........         467         569         708
                                               ---------   ---------  ----------
    00.91       Total veterans..............      12,252      12,280      13,103
            Survivors:
    01.04     World War I...................          63          52          46
    01.05     World War II..................       1,279       1,232       1,274
    01.06     Korean conflict...............         382         374         393
    01.07     Vietnam era...................         928         951       1,043
    01.08     Peacetime service.............         452         432         442
    01.09     Persian Gulf conflict.........          45          51          60
                                               ---------   ---------  ----------
    01.91       Total survivors.............       3,149       3,092       3,258
    02.01   Clothing allowance..............          37          36          38
                                               ---------   ---------  ----------
    02.93     Total compensation............      15,437      15,409      16,399
          Children:

    03.02   Vietnam Era.....................                                  18
    03.03   Ch 18 Voc Rehab.................                                   3
                                               ---------   ---------  ----------
    03.91     Total Children................                                  21
    09.01 Payment to general operating
            expenses........................           2           2           2
    09.02 Medical Exam Pilot Program........                       8          16
                                               ---------   ---------  ----------
    09.91   Total other.....................           2          10          18
                                               ---------   ---------  ----------
    10.00   Total obligations (object class
              42.0).........................      15,440      15,418      16,438
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested
            balance.........................          33           8
    22.00 New budget authority (gross)......      15,415      15,410      16,438
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......      15,448      15,418      16,438
    23.95 New obligations...................     -15,440     -15,418     -16,438
    24.40 Unobligated balance available, end
            of year: Uninvested balance.....           8
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................      15,275      15,564      16,438
    41.00 Transferred to other accounts.....                    -154
    42.00 Transferred from other accounts...         140
                                               ---------   ---------  ----------
    43.00   Appropriation (total)...........      15,415      15,410      16,438
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................      15,415      15,410      16,438
    ----------------------------------------------------------------------------

    [[Page 900]]

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation          13       1,232       1,243
    73.10 New obligations...................      15,440      15,418      16,438
    73.20 Total outlays (gross).............     -14,222     -15,407     -16,436
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation       1,232       1,243       1,245
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority      14,176      14,175      15,193
    86.93 Outlays from current balances.....          46       1,232       1,243
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........      14,222      15,407      16,436
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................      15,415      15,410      16,438
    90.00 Outlays...........................      14,222      15,407      16,436
    ---------------------------------------------------------------------------

                     Summary of Budget Authority and Outlays

                            (in millions of dollars)

                                         1996 actual  1997 est.   1998 est.
    Enacted/requested:
      Budget Authority..................      15,415      15,410      16,438
      Outlays...........................      14,222      15,407      16,436
    Supplemental proposal:
      Budget Authority..................                     753
      Outlays...........................                     753
    Legislative proposal, not subject to
        PAYGO:
      Budget Authority..................                                 331
      Outlays...........................                                 298
    Legislative proposal, subject to
        PAYGO:
      Budget Authority..................                                 -17
      Outlays...........................                                 -17
                                        ------------------------------------
    Total:
      Budget Authority..................      15,415      16,163      16,752
      Outlays...........................      14,222      16,160      16,717
                                        ====================================

        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.
    Dependency 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. Compensation and
    vocational rehabilitation is provided to the children of Vietnam
    veterans who were born with the birth defect spina bifida.

        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

                                         1996 actual  1997 est.   1998 est.
    Veterans:
      Mexican border period.............          11          11           9
      World War I.......................         483         330         230
      World War II......................     671,110     634,900     595,700
      Korean conflict...................     188,427     184,700     180,700
      Vietnam era.......................     709,079     719,659     729,461
      Peacetime service.................     522,233     539,300     558,800
      Persian Gulf conflict.............     151,764     184,600     217,200
                                        ------------------------------------
          Total.........................   2,243,107   2,263,500   2,282,100
      Average payment per case, per year      $5,462      $5,692      $5,741
          Total obligations (in
            millions)...................     $12,252     $12,883     $13,102
                                        ====================================
    Children of Vietnam era veterans:
      Children..........................                               2,000
      Average payment per case, per year                              $9,219
          Total obligations (in
            millions)...................                                 $18
    Chapter 18 Vocational
        rehabilitations:
      Rehabilitations...................                                 860
      Average payment per case, per year                              $3,095
          Total obligations (in
            millions)...................                                  $3
    Survivors:
      Prior to Spanish-American War.....           1           1           1
      Spanish-American War..............          19          14          10
      Mexican border period.............           2           2           2
      World War I.......................       6,232       5,254       4,431
      World War II......................     124,731     122,057     119,530
      Korean conflict...................      37,250      37,093      36,967
      Vietnam era.......................      89,636      93,182      96,812
      Peacetime service.................      44,766      43,677      42,620
      Persian Gulf conflict.............       3,604       4,120       4,627
                                        ------------------------------------
          Total.........................     306,241     305,400     305,000
      Average payment per case, per year     $10,286      10,609      10,683
          Total obligations (in
            millions)...................      $3,150       3,240       3,258
                                        ====================================
    Clothing allowance:
      Number of veterans................      73,102      73,700      74,300
      Average payment per case, per year        $503         518         518
          Total obligations (in
            millions)...................         $37         $37         $38
                                        ====================================

                                  Compensation

                  (Legislative proposal, not subject to PAYGO)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0153-2-1-701      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Compensation:

            Veterans:
    00.03     World War II..................                                  63
    00.04     Korean conflict...............                                  23
    00.05     Vietnam era...................                                 106
    00.06     Peacetime service.............                                  56
    00.07     Persian Gulf conflict.........                                  14
                                               ---------   ---------  ----------
    00.91       Total veterans..............                                 262
            Survivors:
    01.04     World War I...................                                   1
    01.05     World War II..................                                  27
    01.06     Korean conflict...............                                   8
    01.07     Vietnam era...................                                  22
    01.08     Peacetime service.............                                   9
    01.09     Persian Gulf conflict.........                                   1
                                               ---------   ---------  ----------
    01.91       Total survivors.............                                  68
    02.01   Clothing allowance..............                                   1
                                               ---------   ---------  ----------
    02.93     Total compensation............                                 331
                                               ---------   ---------  ----------
    10.00   Total obligations (object class
              42.0).........................                                 331
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......                                 331
    23.95 New obligations...................                                -331
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................                                 331
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation
    73.10 New obligations...................                                 331
    73.20 Total outlays (gross).............                                -298
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation                                  33
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority                                 298
    86.93 Outlays from current balances.....
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........                                 298
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................                                 331
    90.00 Outlays...........................                                 298
    ---------------------------------------------------------------------------

        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,

    [[Page 901]]

    1997, is expected to be 2.7 percent and cost $331 million in fiscal year
    1998.

                                  Compensation

                    (Legislative proposal, subject to PAYGO)

    ----------------------------------------------------------------------------
    Identification code 36-0153-4-1-701      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Compensation:

            Veterans:
    00.03     COLA Round down...............                                 -17
                                               ---------   ---------  ----------
    02.93     Total compensation............                                 -17
                                               ---------   ---------  ----------
    10.00   Total obligations (object class
              42.0).........................                                 -17
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......                                 -17
    23.95 New obligations...................                                  17
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................                                 -17
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    73.10 New obligations...................                                 -17
    73.20 Total outlays (gross).............                                  17
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority                                 -17
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................                                 -17
    90.00 Outlays...........................                                 -17
    ---------------------------------------------------------------------------

        This legislative proposal would provide for a permanent round down
    of the annual COLA increase.

        Legislation will also be proposed to deny service connection for
    disability or death due to an injury or disease resulting from tobacco
    use while on active duty which becomes manifest after service discharge
    and beyond any applicable presumptive period.

                                    Pensions

        For the payment of pension benefits to or on behalf of veterans as
    authorized by law, $3,178,055,000, to remain available until expended;
    of which not to exceed $24,297,000 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.
        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.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0154-0-1-701      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Direct program:

            Pensions:
              Veterans:
    04.01       Improved law................       2,184       2,268       2,331
    04.02       Prior law...................          78          66          56
    04.03       Old law.....................           1           1
                                               ---------   ---------  ----------
    04.91         Total veterans............       2,263       2,335       2,387
              Survivors:
    05.01       Improved law................         673         666         659
    05.02       Prior law...................         127         115         104
    05.03       Old law.....................           2           2           2
                                               ---------   ---------  ----------
    05.91         Total survivors...........         802         783         765
                                               ---------   ---------  ----------
    06.93       Total pensions..............       3,065       3,118       3,152
            Other expenses:
    07.01     Medical facility expenses.....           2           2           2
    07.02     Reimbursement to GOE and VHA..          19          24          24
                                               ---------   ---------  ----------
    07.91       Total other expenses........          21          26          26
                                               ---------   ---------  ----------
    08.00     Total direct program..........       3,086       3,144       3,178
          Reimbursable program:

    09.01   Minimum income for widows
              program.......................                       1           6
                                               ---------   ---------  ----------
    10.00   Total obligations...............       3,086       3,145       3,184
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......       3,074       3,145       3,184
    22.22 Unobligated balance transferred
            from other accounts.............          12
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......       3,086       3,145       3,184
    23.95 New obligations...................      -3,086      -3,145      -3,184
    24.40 Unobligated balance available, end
            of year: Uninvested balance.....
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Current:

    40.00   Appropriation...................       3,044       2,989       3,178
    41.00   Transferred to other accounts...        -160
    42.00   Transferred from other accounts.         190         155
                                               ---------   ---------  ----------
    43.00     Appropriation (total).........       3,074       3,144       3,178
          Permanent:

    68.00   Spending authority from
              offsetting collections:
              Offsetting collections (cash).                       1           6
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................       3,074       3,145       3,184
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation           3         254         258
    73.10 New obligations...................       3,086       3,145       3,184
    73.20 Total outlays (gross).............      -2,834      -3,141      -3,183
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation         254         258         260
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority       2,831       2,886       2,919
    86.93 Outlays from current balances.....           3         254         258
    86.97 Outlays from new permanent
            authority.......................                       1           6
    86.98 Outlays from permanent balances...
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........       2,834       3,141       3,183
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.00   Offsetting collections (cash)
              from: Federal sources.........                      -1          -6
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................       3,074       3,144       3,178
    90.00 Outlays...........................       2,834       3,140       3,177
    ---------------------------------------------------------------------------

        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,
    1998, is expected to be 2.7 percent.

    [[Page 902]]

                  AVERAGE NUMBER OF PENSION CASES AND PAYMENTS

                                         1996 actual  1997 est.   1998 est.
    Veterans:
      Improved law......................     373,947     373,577     373,693
      Prior law.........................      49,134      41,892      35,758
      Old law and service...............         636         531         449
                                        ------------------------------------
          Total.........................     423,717     416,000     409,900
      Average payment per case, per year      $5,338      $5,610      $5,821
                                        ------------------------------------
          Total obligations (in
            millions)...................      $2,262      $2,334      $2,386
                                        ====================================
    Survivors:
      Improved law......................     209,467     203,349     197,865
      Prior law.........................     128,367     115,169     103,504
      Old law and service...............       3,855       3,182       2,631
                                        ------------------------------------
          Total.........................     341,689     321,700     304,000
      Average payment per case, per year      $2,349      $2,434      $2,517
                                        ------------------------------------
          Total obligations (in
            millions)...................         803         783         765
                                        ====================================
    Minimum Income for Widows Program:
      Widows............................                     800         793
    Average benefit per case, per year..                  $1,736      $7,133
                                        ------------------------------------
          Total obligations (in
            millions)...................                      $1          $6
    Vocational training:
      Trainees..........................         136         110          85
      Average benefit per year..........      $2,625      $2,700      $2,776
                                        ------------------------------------
          Total obligations (in
            millions) 1............
                                        ====================================
        1 Amounts round to less than $1 million.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0154-0-1-701      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
    42.0  Direct obligations: Insurance
            claims and indemnities..........       3,086       3,144       3,178
    99.0  Reimbursable obligations:
            Subtotal, reimbursable
            obligations.....................                       1           6
                                               ---------   ---------  ----------
    99.9    Total obligations...............       3,086       3,145       3,184
    ---------------------------------------------------------------------------

        The Administration is proposing legislation which will make
    permanent two provisions of the Omnibus Budget Reconciliation Act of
    1993 due to expire at the end of 1998: (1) authorization of VA access to
    certain Internal Revenue Service data for determining eligibility for
    veterans pension benefits; and (2) limiting pension benefits to
    Medicaid-eligible beneficiaries in nursing homes.

                  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, $119,300,000, 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; Stat. 76 Stat. 1198.) (Departments of Veterans
    Affairs and Housing and Urban Development, and Independent Agencies
    Appropriations Act, 1997.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0155-0-1-701      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Burial benefits:

    07.01   Burial allowances...............          35          35          35
    07.02   Burial plots....................          12          12          11
    07.03   Service-connected deaths........          12          12          12
    07.04   Burial flags....................          16          17          18
    07.05   Headstones and markers..........          29          30          31
    07.07   Outer burial receptacles........           8           9          10
                                               ---------   ---------  ----------
    07.91     Total burial benefits.........         112         115         117
    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).........................         114         117         119
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......         114         117         119
    23.95 New obligations...................        -114        -117        -119
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................         112         118         119
    41.00 Transferred to other accounts.....                      -1
    42.00 Transferred from other accounts...           2
                                               ---------   ---------  ----------
    43.00   Appropriation (total)...........         114         117         119
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................         114         117         119
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    73.10 New obligations...................         114         117         119
    73.20 Total outlays (gross).............        -114        -117        -119
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority         114         117         119
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................         114         117         119
    90.00 Outlays...........................         114         117         119
    ---------------------------------------------------------------------------

        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 outer burial receptacles in the National
    Cemetery System.

                            NUMBER OF BURIAL BENEFITS

                                         1996 actual  1997 est.   1998 est.
    Burial allowance....................      90,775      88,400      88,200
    Burial plot.........................      80,715      77,000      73,500
    Service-connected death.............       9,262       9,400       9,500
    Burial flags........................     439,752     448,800     457,200
    Headstone markers...................     319,758     326,000     332,000
    Headstone allowance.................          14          10
    Outer burial receptacles............      47,220      51,734      52,354

        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

                                         1996 actual  1997 est.   1998 est.
    Retired Officers....................           4           3           2
    Adjusted service and dependence pay.
    Special allowance dependents........         152         152         152
    Equal Access to Justice payments....         206         220         220

                              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,

    [[Page 903]]

    30, 31, 34, 35, 36, 39, 51, 53, 55, and 61, [$1,377,000,000]
    $1,366,000,000, 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.
    (Departments of Veterans Affairs and Housing and Urban Development, and
    Independent Agencies Appropriations Act, 1997.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0137-0-1-702      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Direct program:

            Education and training:
    00.01     Sons and daughters............          91          94          96
    00.02     Spouses.......................          10          11          12
                                               ---------   ---------  ----------
    00.91       Total education and training         101         105         108
            Special assistance to disabled
                veterans:
    01.01     Vocational rehabilitation.....         355         358         341
    01.02     Housing grants................          14          14          14
    01.03     Automobiles, adaptive
                equipment, maintenance and
                repair......................          27          27          28
                                               ---------   ---------  ----------
    01.91       Total special assistance to
                  disabled veterans.........         396         399         383
    02.01   Work study......................          26          26          28
    02.02   Payments to states..............          13          13          13
    02.03   All-volunteer assistance:
              Veterans' basic benefits......         689         805         880
                                               ---------   ---------  ----------
    02.91     All-volunteer assistance and
                other.......................         728         844         921
                                               ---------   ---------  ----------
    02.93     Total direct program..........       1,225       1,348       1,412
          Reimbursable program:

    03.01   Veterans' basic benefits........          14          14          11
    03.02   Veterans' supplementary benefits          74          72          70
    03.03   Reservists benefits.............          95          98          99
                                               ---------   ---------  ----------
    03.91     Total reimbursables...........         183         184         180
                                               ---------   ---------  ----------
    10.00   Total obligations...............       1,408       1,532       1,592
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested
            balance.........................          93          27          46
    22.00 New budget authority (gross)......       1,338       1,561       1,546
    22.10 Resources available from
            recoveries of prior year
            obligations.....................           9          10
    22.30 Unobligated balance expiring......          -5         -21
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......       1,435       1,577       1,592
    23.95 New obligations...................      -1,408      -1,532      -1,592
    24.40 Unobligated balance available, end
            of year: Uninvested balance.....          27          46
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Current:

    40.00   Appropriation...................       1,345       1,377       1,366
    41.00   Transferred to other accounts...        -190
                                               ---------   ---------  ----------
    43.00     Appropriation (total).........       1,155       1,377       1,366
          Permanent:

    68.00   Spending authority from
              offsetting collections:
              Offsetting collections (cash).         183         184         180
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................       1,338       1,561       1,546
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation          51          54          50
    73.10 New obligations...................       1,408       1,532       1,592
    73.20 Total outlays (gross).............      -1,396      -1,526      -1,589
    73.45 Adjustments in unexpired accounts.          -9         -10
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation          54          50          53
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority       1,104       1,342       1,366
    86.93 Outlays from current balances.....                                  43
    86.97 Outlays from new permanent
            authority.......................         183         184         180
    86.98 Outlays from permanent balances...         109
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........       1,396       1,526       1,589
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

            Offsetting collections (cash)
                from:
    88.00     Federal sources...............        -183        -184        -180
    88.40     Non-Federal sources...........
                                               ---------   ---------  ----------
    88.90       Total, offsetting
                  collections (cash)........        -183        -184        -180
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................       1,155       1,377       1,366
    90.00 Outlays...........................       1,212       1,342       1,409
    ---------------------------------------------------------------------------

        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 1998 will consist of
    appropriated funds of $1,366 million and available funds from 1997 of
    $46 million.

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

                           NUMBER OF TRAINEES AND COST

                                         1996 actual  1997 est.   1998 est.
    Sons and daughters:
      Number of trainees................      35,685      36,609      37,558
      Average cost per trainee..........      $2,559      $2,560      $2,560
                                        ------------------------------------
          Total cost (in millions)......         $91         $94         $96
                                        ====================================
    Spouses and widow(ers):
      Number of trainees................       4,969       5,273       5,597
      Average cost per trainee..........      $2,067      $2,068      $2,069
                                        ------------------------------------
          Total cost (in millions)......         $10         $11         $12
                                        ====================================

        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

                                         1996 actual  1997 est.   1998 est.
    Vocational Rehabilitation:
      Number of trainees:
        10% rated disabled..............       3,987       3,919       3,635
        rehabilitated...................         787         905       1,081
        20% rated disabled..............      15,056      14,800      13,728
        rehabilitated...................       2,182       2,508       2,995
        30% rated disabled..............      12,055      11,849      10,992
        rehabilitated...................       1,784       2,051       2,449
        40% rated disabled..............       7,270       7,146       6,630
        rehabilitated...................       1,102       1,267       1,513
        50% rated disabled..............       3,845       3,779       3,506
        rehabilitated...................         586         674         804
        60% rated disabled..............       2,746       2,699       2,504
        rehabilitated...................         404         465         555
        70% rated disabled..............       1,051       1,033         958
        rehabilitated...................         173         199         238
        80% rated disabled..............         485         477         442
        rehabilitated...................          97         111         133
        90% rated disabled..............         154         151         140

    [[Page 904]]

        rehabilitated...................          38          42          50
        100% rated disabled.............       5,072       4,986       4,625
        rehabilitated...................         242         278         332
          Total number of trainees......      51,721      50,839      47,160
          Total number rehabilitated....       7,395       8,500      10,150
          Percent of total rehabilitated       14.30       16.72       21.52
      Average cost per trainee..........      $6,856      $7,045      $7,238
                                        ------------------------------------
          Total cost (in millions)......        $355        $358        $341
                                        ====================================
    Housing grants:
      Number of housing grants..........         429         429         429
      Average cost per grant............     $33,535     $33,535     $33,535
                                        ------------------------------------
          Total cost (in millions)......         $14         $14         $14
                                        ====================================
    Automobiles or other conveyances:
      Number of conveyances.............         843         843         843
      Average cost per conveyance.......      $5,496      $5,496      $5,496
                                        ------------------------------------
          Total cost (in millions)......          $5          $5          $5
                                        ====================================
    Adaptive equipment (including
        maintenance, repair and
        installation for automobiles):
      Number of items...................       6,734       6,593       6,455
      Average cost......................      $3,318      $3,411      $3,500
                                        ------------------------------------
          Total cost (in millions)......         $22         $22         $23
                                        ====================================

        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 $1,187.50 per semester,
    paid at the rate of the Federal ($5.15 on 9/1/97) or State minimum wage,
    whichever is higher.

                                         1996 actual  1997 est.   1998 est.
      Number of contracts...............      30,887      27,864      28,687

        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.

                         CASELOAD AND AVERAGE COST DATA

                                         1996 actual  1997 est.   1998 est.
    Veterans:
      Number of trainees................     296,353     323,400     345,300
      Average cost per trainee..........      $2,623      $2,755      $2,784
                                        ------------------------------------
          Total cost (in millions)......     \1\$777    \2\ $891    \3\ $961
                                        ====================================
    Reservists:
      Number of trainees................      86,196      82,400      80,300
      Average cost per trainee..........      $1,101      $1,187      $1,235
                                        ------------------------------------
          Total cost (in millions)......         $95         $98         $99
                                        ====================================
        \1\ Includes $689 million of basic benefits (VA funded), $14 million
    of basic benefits (DOD funded), and $74 million of supplemental benefits
    (DOD funded).
        \2\ Includes $805 million of basic benefits (VA funded), $14 million
    of basic benefits, (DOD funded) and $72 million of supplemental benefits
    (DOD funded).
        \3\ Includes $880 million of basic benefits (VA funded), $11 million
    of basic benefits (DOD funded) and $70 million of supplemental benefits
    (DOD funded).

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0137-0-1-702      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
    41.0  Direct obligations: Grants,
            subsidies, and contributions....       1,225       1,348       1,412
    99.0  Reimbursable obligations:
            Subtotal, reimbursable
            obligations.....................         183         184         180
                                               ---------   ---------  ----------
    99.9    Total obligations...............       1,408       1,532       1,592
    ---------------------------------------------------------------------------

      Reinstated Entitlement Program for Survivors Under Public Law 97-377

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0200-0-1-701      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Direct program:

    00.01   Benefit payments................          21          19          18
    00.02   Administrative expenses, VA.....           1           1           1
    00.03   Cole v. Brown payments..........           1
                                               ---------   ---------  ----------
    00.91     Total direct program..........          23          20          19
                                               ---------   ---------  ----------
    10.00   Total obligations...............          23          20          19
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......          22          20          19
    23.95 New obligations...................         -23         -20         -19
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    68.00 Spending authority from offsetting
            collections (gross): Offsetting
            collections (cash)..............          22          20          19
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation          11          12          12
    73.10 New obligations...................          23          20          19
    73.20 Total outlays (gross).............         -20         -20         -19
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation          12          12          12
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................          10           8           7
    86.98 Outlays from permanent balances...          10          12          12
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........          20          20          19
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.00   Offsetting collections (cash)
              from: Federal sources.........         -22         -20         -19
    ----------------------------------------------------------------------------

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

        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

                                         1996 actual  1997 est.   1998 est.
    Spouses.............................         432         380         340
    Average benefit.....................     $10,334     $10,759     $11,190
    Obligations (in millions)...........      $4,464      $4,089      $3,805
    Children............................       1,729       1,580       1,440
    Average benefit.....................      $9,299      $9,543      $9,966
    Obligations (in millions)...........     $16,078     $15,078     $14,350

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0200-0-1-701      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
    99.0  Reimbursable obligations:
            Subtotal, reimbursable
            obligations.....................          23          20          19
                                               ---------   ---------  ----------

    [[Page 905]]

    99.9    Total obligations...............          23          20          19
    ---------------------------------------------------------------------------

                       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] $51,360,000, to remain
    available until expended. (Departments of Veterans Affairs and Housing
    and Urban Development, and Independent Agencies Appropriations Act,
    1997.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0120-0-1-701      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.04 Payment to National service life
            insurance fund..................           2           2           2
    00.05 Payment to Service-disabled
            veterans insurance fund.........          34          31          43
    00.06 Total operating expenses..........           9           9           9
                                               ---------   ---------  ----------
    10.00   Total obligations...............          45          42          54
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......          45          41          54
    23.95 New obligations...................         -45         -42         -54
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Current:

    40.00   Appropriation...................          25          39          51
    42.00   Transferred from other accounts.          18
                                               ---------   ---------  ----------
    43.00     Appropriation (total).........          43          39          51
          Permanent:

    68.00   Spending authority from
              offsetting collections:
              Offsetting collections (cash).           2           2           2
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................          45          41          53
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    73.10 New obligations...................          45          42          54
    73.20 Total outlays (gross).............         -45         -41         -53
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority          43          39          51
    86.97 Outlays from new permanent
            authority.......................           2           2           2
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........          45          41          53
    ----------------------------------------------------------------------------

        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..................          43          39          53
    90.00 Outlays...........................          43          39          53
    ---------------------------------------------------------------------------
        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 1998 as indicated in the
    following table (dollars in thousands).

                                         1996 actual  1997 est.   1998 est.
    National service life insurance
        policies:
      Number of policies................       1,514       1,383       1,260
      Amount of insurance...............      $7,692      $7,000      $6,350
    VMLI policies:
      Number of policies................       3,890       3,740       3,590
      Amount of insurance...............    $229,115    $228,400    $230,000

        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      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
    41.0  Grants, subsidies, and
            contributions...................          36          33          45
    42.0  Insurance claims and indemnities..           9           9           9
                                               ---------   ---------  ----------
    99.9    Total obligations...............          45          42          54
    ---------------------------------------------------------------------------

    Public enterprise funds:

                    Service-Disabled Veterans Insurance Fund

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4012-0-3-701      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Operating expenses:

    00.01   Death claims....................          39          43          48
    00.02   All other.......................          13          13          13
                                               ---------   ---------  ----------
    00.91     Total operating expenses......          52          56          61
    01.01 Capital investment................          14          14          14
                                               ---------   ---------  ----------
    10.00   Total obligations...............          66          70          75
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.90 Unobligated balance available,
            start of year: Fund balance.....           3           6           3
    22.00 New budget authority (gross)......          69          66          77
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......          72          72          80
    23.95 New obligations...................         -66         -70         -75
    24.90 Unobligated balance available, end
            of year: Fund balance...........           6           3           3
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    68.00 Spending authority from offsetting
            collections (gross): Offsetting
            collections (cash)..............          69          66          77
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.90 Unpaid obligations, start of year:
            Obligated balance: Fund balance.           5           5           4
    73.10 New obligations...................          66          70          75
    73.20 Total outlays (gross).............         -66         -71         -74
    74.90 Unpaid obligations, end of year:
            Obligated balance: Fund balance.           5           4           4
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................          61          66          70
    86.98 Outlays from permanent balances...           5           5           4
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........          66          71          74
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

            Offsetting collections (cash)
                from:
    88.00     Federal sources: Payments from
                VI and I....................         -34         -31         -43
              Non-Federal sources:
    88.40       Interest on loans...........          -3          -2          -2
    88.40       Insurance premiums earned...         -23         -23         -22
    88.40       Optional settlements........          -1          -1          -1
    88.40       Repayments of loans.........          -8          -9          -9
                                               ---------   ---------  ----------

    [[Page 906]]

    88.90       Total, offsetting
                  collections (cash)........         -69         -66         -77
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................
    90.00 Outlays...........................          -3           5          -3
    ---------------------------------------------------------------------------

        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):

                                         1996 actual  1997 est.   1998 est.
    Number of policies..................     163,053     158,833     156,723
    Insurance in force..................  $1,492,311  $1,464,200  $1,436,300

        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 $451 million by September 30, 1998.

                            Statement of Operations (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   36-4012-0-3-701    1995 actual    1996 actual     1997 est.      1998 est.
    -----------------------------------------------------------------------------------------------
    0101  Revenue...........................          64             72            68             79
    0102  Expense...........................         -66            -67           -69            -71
                                            ------------ --------------  ------------  -------------
    0109  Net income or loss (-)............          -2              5            -1              8
    -----------------------------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   36-4012-0-3-701    1995 actual    1996 actual     1997 est.      1998 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
    1101  Federal assets: Fund balances with
            Treasury........................           8             11             7              9
    1206  Non-Federal assets: Receivables,
            net.............................           1              1             3              2
    1601  Net value of assets related to
            pre-1992 direct loans receivable
            and acquired defaulted
            guaranteed loans receivable:
            Direct loans, gross.............          49             55            59             65
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................          58             67            69             76
        LIABILITIES:
          Non-Federal liabilities:

    2201    Accounts payable................           4              4             5              5
    2206    Pension and other actuarial
              liabilities...................         516            520           522            522
    2207    Other...........................           1              1             1              1
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............         521            525           528            528
        NET POSITION:
    3100  Appropriated capital..............           3              6             3              5
    3200  Invested capital..................        -466           -463          -462           -456
                                            ------------ --------------  ------------  -------------
    3999    Total net position..............        -463           -457          -459           -451
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position          58             68            69             77
    -----------------------------------------------------------------------------------------------

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4012-0-3-701      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
    33.0  Investments and loans.............          14          14          14
    42.0  Insurance claims and indemnities..          52          56          61
                                               ---------   ---------  ----------
    99.9    Total obligations...............          66          70          75
    ---------------------------------------------------------------------------

                        Veterans Reopened Insurance Fund

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4010-0-3-701      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Operating expenses:

    00.01   Death claims....................          31          36          39
    00.02   Dividends.......................          30          31          27
    00.03   All other.......................           9           9           8
                                               ---------   ---------  ----------
    00.91     Total operating expenses......          71          76          74
    01.01 Capital investment: Policy loans..           7           7           7
                                               ---------   ---------  ----------
    10.00   Total obligations...............          78          83          81
    ----------------------------------------------------------------------------

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

    21.90   Fund balance....................                       1           1
    21.91   U.S. Securities: Par value......         498         492         480
                                               ---------   ---------  ----------
    21.99     Total unobligated balance,
                start of year...............         498         493         481
    22.00 New budget authority (gross)......          72          71          66
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......         570         564         547
    23.95 New obligations...................         -78         -83         -81
          Unobligated balance available, end of year:

    24.90   Fund balance....................           1           1           1
    24.91   U.S. Securities: Par value......         492         480         465
                                               ---------   ---------  ----------
    24.99   Total unobligated balance, end
              of year.......................         493         481         466
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    68.00 Spending authority from offsetting
            collections (gross): Offsetting
            collections (cash)..............          72          71          66
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.91 Unpaid obligations, start of year:
            Obligated balance: U.S.
            Securities: Par value...........          28          33          36
    73.10 New obligations...................          78          83          81
    73.20 Total outlays (gross).............         -73         -79         -78
    74.91 Unpaid obligations, end of year:
            Obligated balance: U.S.
            Securities: Par value...........          33          36          39
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................          69          71          66
    86.98 Outlays from permanent balances...           4           8          12
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........          73          79          78
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

            Offsetting collections (cash)
                from:
    88.00     Federal sources: Interest on
                U.S. securities.............         -48         -46         -43
              Non-Federal sources:
    88.40       Interest on loans...........          -1          -2          -2
    88.40       Insurance premiums earned...         -17         -17         -15
    88.40       Repayments of loans.........          -6          -6          -6
                                               ---------   ---------  ----------
    88.90       Total, offsetting
                  collections (cash)........         -72         -71         -66
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................
    90.00 Outlays...........................           1           9          12
    ---------------------------------------------------------------------------
        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 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 insur-

    [[Page 907]]

    ance 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):

                                         1996 actual  1997 est.   1998 est.
      Number of policies................      97,502      92,782      87,852
      Insurance in force................    $750,079    $730,000    $706,800

        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    1995 actual    1996 actual     1997 est.      1998 est.
    -----------------------------------------------------------------------------------------------
    0101  Revenue...........................          69             68            65             61
    0102  Expense...........................         -78            -62           -66            -62
                                            ------------ --------------  ------------  -------------
    0109  Net income or loss (-)............          -9              6            -1             -1
    -----------------------------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   36-4010-0-3-701    1995 actual    1996 actual     1997 est.      1998 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
          Federal assets:

            Investments in US securities:
    1102      Treasury securities, par......         526            525           516            504
    1106      Receivables, net..............          12             12            11             10
    1206  Non-Federal assets: Receivables,
            net.............................                                        1              1
    1601  Net value of assets related to
            pre-1992 direct loans receivable
            and acquired defaulted
            guaranteed loans receivable:
            Direct loans, gross.............          26             28            29             30
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................         565            565           557            545
        LIABILITIES:
          Non-Federal liabilities:

    2201    Accounts payable................          38             41            45             48
    2206    Pension and other actuarial
              liabilities...................         516            508           496            482
    2207    Other...........................           2              2             2              2
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............         557            551           543            532
        NET POSITION:
    3100  Appropriated capital..............         498            492           481            465
    3200  Invested capital..................        -489           -478          -467           -452
                                            ------------ --------------  ------------  -------------
    3999    Total net position..............           9             14            14             13
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position         566            565           557            545
    -----------------------------------------------------------------------------------------------

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4010-0-3-701      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
    33.0  Investments and loans.............           7           7           7
    42.0  Insurance claims and indemnities..          37          42          44
    43.0  Interest and dividends............          34          34          30
                                               ---------   ---------  ----------
    99.9    Total obligations...............          78          83          81
    ---------------------------------------------------------------------------

                    Servicemembers' Group Life Insurance Fund

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4009-0-3-701      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Premium payments..................         474         509         492
    00.03 Payment to GOE account............                       1           1
                                               ---------   ---------  ----------
    10.00   Total obligations (object class
              41.0).........................         474         510         493
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.91 Unobligated balance available,
            start of year: U.S. Securities:
            Par value.......................          15           7           1
    22.00 New budget authority (gross)......         467         504         492
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......         482         511         493
    23.95 New obligations...................        -474        -510        -493
    24.91 Unobligated balance available, end
            of year: U.S. Securities: Par
            value...........................           7           1           1
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    68.00 Spending authority from offsetting
            collections (gross): Offsetting
            collections (cash)..............         467         504         492
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: offsetting
            collections.....................           4           3           3
    73.10 New obligations...................         474         510         493
    73.20 Total outlays (gross).............        -476        -510        -492
    74.40 Unpaid obligations, end of year:
            Obligated balance: offsetting
            collections.....................           3           3           3
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................         461         503         491
    86.98 Outlays from permanent balances...          15           7           1
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........         476         510         492
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.40   Offsetting collections (cash)
              from: Non-Federal sources:
              Withholdings from serviceman's
              pay...........................        -467        -504        -492
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................
    90.00 Outlays...........................           8           6
    ---------------------------------------------------------------------------

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

                            Statement of Operations (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   36-4009-0-3-701    1995 actual    1996 actual     1997 est.      1998 est.
    -----------------------------------------------------------------------------------------------
    0101  Revenue...........................         461            467           504            493
    0102  Expense...........................        -489           -475          -510           -493
                                            ------------ --------------  ------------  -------------
    0109  Net income or loss (-)............         -28             -8            -6
    -----------------------------------------------------------------------------------------------

    Credit accounts:

              Veterans Housing Benefit Program Fund Program Account

                    [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 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 fiscal year 1998, 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 and
    guaranteed loan programs, [$105,226,000] $160,437,000, which may be
    transferred to and merged with the appropriation for ``General

    [[Page 908]]

    operating expenses''. (Departments of Veterans Affairs and Housing and
    Urban Development, and Independent Agencies Appropriations Act, 1997.)

                  Unavailable Collections (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0138-0-1-704      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
        Balance, start of year:
    01.99 Balance, start of year............         263         169         918
        Receipts:
    02.01 Guaranteed loan downward subsidy
            reestimate......................                     789
    02.02 Direct loan downward subsidy
            reestimate......................                     157
                                               ---------   ---------  ----------
    02.99   Total receipts..................                     946
                                               ---------   ---------  ----------
    03.00 Offsetting Collections............         169
    04.00 Total: Balances and collections...         432       1,115         918
        Appropriation:
    05.01 Veterans housing benefit fund.....        -263        -197        -192
                                               ---------   ---------  ----------
    05.99 Subtotal appropriation............        -263        -197        -192
    07.99 Total balance, end of year........         169         918         726
    ---------------------------------------------------------------------------

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0138-0-1-704      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Direct loan subsidy...............          30          49          50
    00.02 Guaranteed loan subsidy...........         447         148         142
    00.05 Reestimates of direct loan subsidy          63          73
    00.06 Interest on reestimates of the
            direct loan subsidy.............          13          12
    00.07 Reestimates of the guaranteed loan
            subsidy.........................         238          74
    00.08 Interest on reestimates of the
            guaranteed loan subsidy.........          11           9
    00.09 Administrative expenses...........         118         139         160
                                               ---------   ---------  ----------
    10.00   Total obligations...............         920         504         352
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......         920         504         352
    23.95 New obligations...................        -920        -504        -352
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Current:

    40.00   Appropriation...................         118         139         160
    40.25   Appropriation (special fund,
              indefinite)...................                     197         192
                                               ---------   ---------  ----------
    43.00     Appropriation (total).........         118         336         352
          Permanent:

    60.05   Appropriation (indefinite)......                     168
            Spending authority from
                offsetting collections:
    68.00     Offsetting collections (cash)
                Total downward reestimate...         708
    68.26     Offsetting collections
                (unavailable balances)......         263
    68.45     Portion not available for
                obligation (limitation on
                obligations)................        -169
                                               ---------   ---------  ----------
    68.90       Spending authority from
                  offsetting collections
                  (total)...................         802
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................         920         504         352
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    73.10 New obligations...................         920         504         352
    73.20 Total outlays (gross).............        -920        -504        -352
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority         118         336         352
    86.97 Outlays from new permanent
            authority.......................         802         168
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........         920         504         352
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.00   Offsetting collections (cash)
              from: Federal sources.........        -708
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................         212         504         352
    90.00 Outlays...........................         211         504         352
    ---------------------------------------------------------------------------

                     Summary of Budget Authority and Outlays

                            (in millions of dollars)

                                         1996 actual  1997 est.   1998 est.
    Enacted/requested:
      Budget Authority..................         212         504         352
      Outlays...........................         212         504         352
    Legislative proposal, subject to
        PAYGO:
      Budget Authority..................                                 -29
      Outlays...........................                                 -29
                                        ------------------------------------
    Total:
      Budget Authority..................         212         504         323
      Outlays...........................         212         504         323
                                        ====================================

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

    ----------------------------------------------------------------------------
    Identification code 36-0138-0-1-704      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
        Direct loan levels supportable by subsidy
                    budget authority:
    1150  Direct loan levels................       1,336       1,887       2,144
                                               ---------   ---------  ----------
    1159    Total direct loan levels........       1,336       1,887       2,144
        Direct loan subsidy (in percent):
    1320  Subsidy rate......................        1.76        2.61        2.36
                                               ---------   ---------  ----------
    1329    Weighted average subsidy rate...        1.76        2.61        2.36
        Direct loan subsidy budget authority:
    1330  Subsidy budget authority..........          29          49          50
                                               ---------   ---------  ----------
    1339    Total subsidy budget authority..          29          49          50
        Direct loan subsidy outlays:
    1340  Subsidy outlays...................         105         134          50
                                               ---------   ---------  ----------
    1349    Total subsidy outlays...........         105         134          50
    ----------------------------------------------------------------------------

        Guaranteed loan levels supportable by subsidy
                    budget authority:
    2150  Loan guarantee levels.............      28,676      30,230      28,945
                                               ---------   ---------  ----------
    2159    Total loan guarantee levels.....      28,676      30,230      28,945
        Guaranteed loan subsidy (in percent):
    2320  Subsidy rate......................        0.42        0.49        0.49
                                               ---------   ---------  ----------
    2329    Weighted average subsidy rate...        0.42        0.49        0.49
        Guaranteed loan subsidy budget authority:
    2330  Subsidy budget authority..........         697         231         142
                                               ---------   ---------  ----------
    2339    Total subsidy budget authority..         697         231         142
        Guaranteed loan subsidy outlays:
    2340  Subsidy outlays...................         120         148         142
                                               ---------   ---------  ----------
    2349    Total subsidy outlays...........         120         148         142
    ----------------------------------------------------------------------------

        Administrative expense data:
    3510  Budget authority..................         118         139         160
    3590  Outlays...........................         118         139         160
    ---------------------------------------------------------------------------

        The Administration is proposing to consolidate all information on
    Loan Guaranty, Guaranty and Indemnity, and Direct Loan housing programs
    into a single housing fund called the Veterans Housing Benefit Program
    Fund (VHBPF). All current year and prior year data are presented on a
    comparable basis to the budget year in the single account. A legislative
    proposal is being submitted with this budget that supports this budget
    presentation. Beginning October 1, 1997, all appropriations and income
    received from Loan Guaranty, Guaranty and Indemnity, and Direct Loan
    housing accounts would be deposited in this new fund (except the portion
    specifically designated for the Native American Pilot Program). No
    program changes result as an effect of this presentation.

        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 following Federal guaranty protects lenders against losses: (a)
    for loans of $45,000, or less, 50 percent of the

    [[Page 909]]

    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 the Omnibus Budget Reconciliation Act of
    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 36-0138-0-1-704      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
    25.3  Purchases of goods and services
            from Government accounts........         118         139         160
    41.0  Grants, subsidies, and
            contributions...................         802         365         192
                                               ---------   ---------  ----------
    99.9    Total obligations...............         920         504         352
    ---------------------------------------------------------------------------

              Veterans Housing Benefit Program Fund Program Account

                    (Legislative proposal, subject to PAYGO)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0138-4-1-704      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Direct loan subsidy...............                                 -29
                                               ---------   ---------  ----------
    10.00   Total obligations (object class
              41.0).........................                                 -29
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......                                 -29
    23.95 New obligations...................                                  29
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.05 Appropriation (indefinite)........                                 -29
    ----------------------------------------------------------------------------

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

        Outlays (gross), detail:
    86.90 Outlays from new current authority                                 -29
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................                                 -29
    90.00 Outlays...........................                                 -29
    ---------------------------------------------------------------------------

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

    ----------------------------------------------------------------------------
    Identification code 36-0138-4-1-704      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
        Direct loan levels supportable by subsidy
                    budget authority:
    1159  Total direct loan levels..........
        Direct loan subsidy (in percent):
    1320  Subsidy rate......................                               -1.36
                                               ---------   ---------  ----------
    1329    Weighted average subsidy rate...                               -1.36
        Direct loan subsidy budget authority:
    1330  Subsidy budget authority..........                                 -29
                                               ---------   ---------  ----------
    1339    Total subsidy budget authority..                                 -29
        Direct loan subsidy outlays:
    1340  Subsidy outlays...................                                 -29
                                               ---------   ---------  ----------
    1349    Total subsidy outlays...........                                 -29
    ---------------------------------------------------------------------------

        Legislation will be proposed to increase the funding fees in the
    vendee loan program to 2.25 percent, matching the FHA fee structure.
    This program offers financing of VA real estate obtained as a result of
    property foreclosures and is available to both veteran and non-veteran
    purchasers.

        Legislation will also be introduced to permanently extend loan asset
    sales enhancement authority. This allows VA to guarantee the
    certificates which securitize VA vendee loan sales. VA can then obtain
    the best pricing for these loans and receive a greater cash yield
    without any additional risk over previous loan sale procedures.

       Veterans Housing Benefit Program Fund Direct Loan Financing Account

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4256-0-3-704      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Direct loans......................       1,336       1,887       2,144
    00.02 Interest on Treasury borrowing....         238          87         121
    00.04 Property sales expense............           1           1           2
    00.05 Property improvement expense......                       1           1
    00.06 Property management/other expense.           3           2
    00.07 Payment of downward reestimate to
            program account.................         113         120
    00.08 Payment of excess interest earned
            to program account..............          12          37
                                               ---------   ---------  ----------
    10.00   Total obligations...............       1,703       2,135       2,268
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New financing authority (gross)...       1,703       2,135       2,268
    23.95 New obligations...................      -1,703      -2,135      -2,268
    ----------------------------------------------------------------------------

        New financing authority (gross), detail:
    67.15 Authority to borrow (indefinite)..       1,356       1,911       2,093
          Spending authority from offsetting
              collections:

    68.00   Offsetting collections (cash)...       1,512       1,449       1,860
    68.47   Portion applied to debt
              reduction.....................      -1,165      -1,225      -1,685
                                               ---------   ---------  ----------
    68.90     Spending authority from
                offsetting collections
                (total).....................         347         224         175
                                               ---------   ---------  ----------
    70.00   Total new financing authority
              (gross).......................       1,703       2,135       2,268
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.90 Unpaid obligations, start of year:
            Obligated balance: Obligated
            balance.........................           7           5           6
    73.10 New obligations...................       1,703       2,135       2,268
    73.20 Total financing disbursements
            (gross).........................      -1,705      -2,134      -2,268
    74.90 Unpaid obligations, end of year:
            Obligated balance: Obligated
            balance.........................           5           6           6
    87.00 Total financing disbursements
            (gross).........................       1,705       2,134       2,268
    ----------------------------------------------------------------------------

        Offsets:
          Against gross financing authority and
              financing disbursements:

            Offsetting collections (cash)
                from:
    88.00     Federal sources: Payments from
                program account.............        -105        -134         -51
              Non-Federal sources:
    88.40       Repayments of principal.....         -17         -28         -37
    88.40       Interest received on loans..         -48         -88        -115
    88.40       Fees........................         -11         -17         -20
    88.40       Interest from Treasury......        -126
    88.40       Loan sale proceeds, net.....      -1,196      -1,110      -1,548
    88.40       Cash sale of properties.....          -2         -18         -27
    88.40       Other revenue...............          -7         -54         -62
                                               ---------   ---------  ----------
    88.90       Total, offsetting
                  collections (cash)........      -1,512      -1,449      -1,860
    ----------------------------------------------------------------------------

        Net financing authority and financing
            disbursements:
    89.00 Financing authority...............         191         686         408
    90.00 Financing disbursements...........         193         685         408
    ---------------------------------------------------------------------------

                   Status of Direct Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4256-0-3-704      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
        Position with respect to appropriations act
                    limitation on obligations:
    1111  Limitation on direct loans........
    1131  Direct loan obligations exempt
            from limitation.................       1,336       1,887       2,144
                                               ---------   ---------  ----------
    1150    Total direct loan obligations...       1,336       1,887       2,144
    ----------------------------------------------------------------------------

        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........         722         723       1,398

    [[Page 910]]

    1231  Disbursements: Direct loan
            disbursements...................       1,396       1,887       2,144
          Repayments:

    1251    Repayments and prepayments......         -62         -27         -37
    1253    Proceeds from loan asset sales
              to the public with recourse...      -1,196      -1,111      -1,549
    1262  Adjustments: Discount on loan
            asset sales to the public or
            discounted......................         -38         -65         -92
          Write-offs for default:

    1263    Direct loans....................          -9          -9         -17
    1264    Other adjustments, net..........         -90
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........         723       1,398       1,847
    ---------------------------------------------------------------------------

        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   36-4256-0-3-704    1995 actual    1996 actual     1997 est.      1998 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
    1101  Federal assets: Fund balances with
            Treasury........................       1,018            954
    1206  Non-Federal assets: Receivables,
            net.............................          18             29
          Net value of assets related to
              post-1991 direct loans
              receivable:

    1401    Direct loans receivable, gross..         540            723         1,398          1,847
    1404    Foreclosed property.............           6             58
                                            ------------ --------------  ------------  -------------
    1499      Net present value of assets
                related to direct loans.....         546            781         1,398          1,847
    1603  Net value of assets related to
            pre-1992 direct loans receivable
            and acquired defaulted
            guaranteed loans receivable:
            Allowance for estimated
            uncollectible loans and interest
            (-).............................                         15            28             38
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................       1,582          1,779         1,426          1,885
        LIABILITIES:
          Federal liabilities:

    2102    Interest payable................           7              5
    2104    Resources payable to Treasury...       1,575          1,768         1,413          1,868
          Non-Federal liabilities:

    2201    Accounts payable................           7              7            13             17
    2204    Liabilities for loan guarantees.          -7             -1
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............       1,582          1,779         1,426          1,885
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position       1,582          1,779         1,426          1,885
    -----------------------------------------------------------------------------------------------

       Veterans Housing Benefit Program Fund Direct Loan Financing Account

                    (Legislative proposal, subject to PAYGO)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4256-4-3-704      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.02 Interest on Treasury borrowing....                                  -1
    00.06 Payment to liquidating account for
            debt collection.................                                 126
                                               ---------   ---------  ----------
    10.00   Total obligations...............                                 125
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New financing authority (gross)...                                 125
    23.95 New obligations...................                                -125
    ----------------------------------------------------------------------------

        New financing authority (gross), detail:
    67.15 Authority to borrow (indefinite)..                                 156
          Spending authority from offsetting
              collections:

    68.00   Offsetting collections (cash)...                                 -42
    68.47   Portion applied to debt
              reduction.....................                                  11
                                               ---------   ---------  ----------
    68.90     Spending authority from
                offsetting collections
                (total).....................                                 -31
                                               ---------   ---------  ----------
    70.00   Total new financing authority
              (gross).......................                                 125
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    73.10 New obligations...................                                 125
    73.20 Total financing disbursements
            (gross).........................                                -125
    87.00 Total financing disbursements
            (gross).........................                                 125
    ----------------------------------------------------------------------------

        Offsets:
          Against gross financing authority and
              financing disbursements:

            Offsetting collections (cash)
                from:
              Federal sources:
    88.00       Federal sources: Payments
                  from program account......                                 -29
    88.00       Repayment from liquidating
                  account for debt
                  collection................                                  43
              Non-Federal sources:
    88.40       Fees........................                                  25
    88.40       Loan sale proceeds, net.....                                   3
                                               ---------   ---------  ----------
    88.90       Total, offsetting
                  collections (cash)........                                  42
    ----------------------------------------------------------------------------

        Net financing authority and financing
            disbursements:
    89.00 Financing authority...............                                 167
    90.00 Financing disbursements...........                                 167
    ---------------------------------------------------------------------------

        This schedule shows the effects of the Administration's proposal to
    repeal restrictions on collection of loan guaranty debts by Federal
    salary offset or Federal income tax refund offset.

        Legislation will be proposed to increase the funding fees in the
    vendee loan program to 2.25 percent, matching the FHA fee structure.
    This program offers financing of VA real estate obtained as a result of
    property foreclosures and is available to both veteran and non-veteran
    purchasers.

        Legislation will also be proposed to permanently extend loan asset
    sales enhancement authority. This allows VA to guarantee the
    certificates which securitize VA vendee loan sales. VA can then obtain
    the best pricing for these loans and receive a greater cash yield
    without any additional risk over previous loan sale procedures.

     Veterans Housing Benefit Program Fund Guaranteed Loan Financing Account

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4257-0-3-704      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Acquisition of homes..............         737       1,412       1,682
    00.02 Losses on defaulted loans.........         215         309         385
    00.03 Property sales expense............          31          75         102
    00.04 Property management expense.......          19          27          36
    00.05 Property improvement expense......          16          27          33
    00.06 Loans acquired....................          84          86          88
    00.07 Payment of downward reestimate to
            program account.................         462         684
    00.08 Payment of excess interest to
            program account.................         121         105
                                               ---------   ---------  ----------
    10.00   Total obligations...............       1,685       2,725       2,326
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.90 Unobligated balance available,
            start of year: Fund balance.....       3,428       3,744       3,170
    22.00 New financing authority (gross)...       2,001       2,151       2,400
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......       5,429       5,895       5,570
    23.95 New obligations...................      -1,685      -2,725      -2,326
    24.90 Unobligated balance available, end
            of year: Fund balance...........       3,744       3,170       3,244
    ----------------------------------------------------------------------------

    [[Page 911]]

        New financing authority (gross), detail:
    68.00 Spending authority from offsetting
            collections (gross): Offsetting
            collections (cash)..............       2,001       2,151       2,400
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.90 Unpaid obligations, start of year:
            Obligated balance: Obligated
            balance.........................          18          40          65
    73.10 New obligations...................       1,685       2,725       2,326
    73.20 Total financing disbursements
            (gross).........................      -1,663      -2,700      -2,336
    74.90 Unpaid obligations, end of year:
            Obligated balance: Obligated
            balance.........................          40          65          56
    87.00 Total financing disbursements
            (gross).........................       1,663       2,700       2,336
    ----------------------------------------------------------------------------

        Offsets:
          Against gross financing authority and
              financing disbursements:

            Offsetting collections (cash)
                from:
              Federal sources:
    88.00       Payments from program
                  account...................        -697        -231        -142
    88.00       Recoveries from direct loans
                  conveyed to the direct
                  loan financing account....        -453        -958      -1,264
    88.25     Interest on uninvested funds..        -238        -173        -159
              Non-Federal sources:
    88.40       Funding fees................        -516        -572        -550
    88.40       Cash sale of properties.....         -74        -205        -271
    88.40       Other collections...........         -23         -12         -14
                                               ---------   ---------  ----------
    88.90       Total, offsetting
                  collections (cash)........      -2,001      -2,151      -2,400
    ----------------------------------------------------------------------------

        Net financing authority and financing
            disbursements:
    89.00 Financing authority...............
    90.00 Financing disbursements...........        -338         549         -64
    ---------------------------------------------------------------------------

                 Status of Guaranteed Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4257-0-3-704      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
        Position with respect to appropriations act
                    limitation on commitments:
    2111  Limitation on guaranteed loans
            made by private lenders.........
    2131  Guaranteed loan commitments exempt
            from limitation.................      28,676      30,230      28,948
                                               ---------   ---------  ----------
    2150    Total guaranteed loan
              commitments...................      28,676      30,230      28,948
    ----------------------------------------------------------------------------

        Cumulative balance of guaranteed loans
                    outstanding:
    2210  Outstanding, start of year........     121,310     130,031     138,044
    2231  Disbursements of new guaranteed
            loans...........................      28,676      30,230      28,948
    2232  Guarantees of loans sold to the
            public with recourse............       1,234         820       1,074
    2251  Repayments and prepayments........     -20,239     -21,694     -23,031
          Adjustments:

    2261    Terminations for default that
              result in loans receivable....         -84         309         385
    2262    Terminations for default that
              result in acquisition of
              property......................        -737      -1,412        -109
    2263    Terminations for default that
              result in claim payments......        -214        -240        -269
    2264    Other adjustments, net..........          85
                                               ---------   ---------  ----------
    2290    Outstanding, end of year........     130,031     138,044     145,042
    ----------------------------------------------------------------------------

        Memorandum:
    2299  Guaranteed amount of guaranteed
            loans outstanding, end of year..      42,289      53,415      56,335
    ----------------------------------------------------------------------------

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

    2310    Outstanding, start of year......          37          61          82
    2331    Disbursements for guaranteed
              loan claims...................         237         309         385
    2351    Repayments of loans receivable..          -5          -8         -11
    2361    Write-offs of loans receivable..        -208        -280        -353
                                               ---------   ---------  ----------
    2390      Outstanding, end of year......          61          82         103
    ---------------------------------------------------------------------------

        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   36-4257-0-3-704    1995 actual    1996 actual     1997 est.      1998 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
    1101  Federal assets: Fund balances with
            Treasury........................       4,004          3,785         3,235          3,300
    1206  Non-Federal assets: Receivables,
            net.............................          38             61            52             53
          Net value of assets related to
              post-1991 direct loans
              receivable:

    1403    Accounts receivable from
              foreclosed property...........          14
                                            ------------ --------------  ------------  -------------
    1499      Net present value of assets
                related to direct loans.....          14
          Net value of assets related to
              post-1991 acquired defaulted
              guaranteed loans receivable:

    1504    Foreclosed property.............         194            415           445            472
                                            ------------ --------------  ------------  -------------
    1599      Net present value of assets
                related to defaulted
                guaranteed loans............         194            415           445            472
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................       4,250          4,261         3,732          3,825
        LIABILITIES:
    2101  Federal liabilities: Accounts
            payable.........................          33
    2204  Non-Federal liabilities:
            Liabilities for loan guarantees.       4,217          4,261         3,732          3,825
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............       4,250          4,261         3,732          3,825
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position       4,250          4,261         3,732          3,825
    -----------------------------------------------------------------------------------------------

            Veterans Housing Benefit Program Fund Liquidating Account

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4258-0-3-704      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Capital investment:

    00.01   Acquisition of homes............         608         675         565
    00.02   Property improvements...........          24          26          21
    00.04   Cash advances...................          12           9           7
    00.05   Acquisition of defaulted
              guaranteed loans..............          66          64          62
                                               ---------   ---------  ----------
    00.91     Total capital investment......         710         774         655
          Operating expenses:

    01.01   Property management expense.....          39          39          36
    01.02   Sales expense...................          52          54          50
    01.03   Claims-Individual homes.........         216         203         170
    01.04   Other expenses..................          33          32          31
                                               ---------   ---------  ----------
    01.91     Total operating expenses......         340         328         287
                                               ---------   ---------  ----------
    02.93   Claims-Individual homes.........       1,050       1,102         942
                                               ---------   ---------  ----------
    10.00   Total obligations (object class
              33.0).........................       1,050       1,102         942
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.90 Unobligated balance available,
            start of year: Fund balance.....         842         192
    22.00 New budget authority (gross)......       1,204       1,174       1,078
    22.40 Capital transfer to general fund..        -804        -264        -136
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......       1,242       1,102         942
    23.95 New obligations...................      -1,050      -1,102        -942
    24.90 Unobligated balance available, end
            of year: Fund balance...........         192
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    68.00 Spending authority from offsetting
            collections (gross): Offsetting
            collections (cash)..............       1,204       1,174       1,078
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.90 Unpaid obligations, start of year:
            Obligated balance: Fund balance.          76          67          71
    73.10 New obligations...................       1,050       1,102         942
    73.20 Total outlays (gross).............      -1,058      -1,099        -952
    74.90 Unpaid obligations, end of year:
            Obligated balance: Fund balance.          67          71          60
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................       1,050       1,096         942

    [[Page 912]]

    86.98 Outlays from permanent balances...           8           3          10
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........       1,058       1,099         952
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

            Offsetting collections (cash)
                from:
    88.00     Federal Sources: Payments from
                Direct Loan Financing
                Account.....................        -873        -929        -870
              Non-Federal sources:
    88.40       Loan and other repayments...         -64         -51         -41
    88.40       Loan sale proceeds, net.....         -31
    88.40       Sale of homes, cash.........        -121        -104         -97
    88.40       Interest on loans...........         -63         -51         -41
    88.40       Collection of claims
                  (veteran indebtedness)....         -48         -36         -27
    88.40       Other revenue...............          -4          -3          -2
                                               ---------   ---------  ----------
    88.90       Total, offsetting
                  collections (cash)........      -1,204      -1,174      -1,078
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................
    90.00 Outlays...........................        -146         -75        -126
    ---------------------------------------------------------------------------

                     Summary of Budget Authority and Outlays

                            (in millions of dollars)

                                         1996 actual  1997 est.   1998 est.
    Enacted/requested:
      Budget Authority..................
      Outlays...........................        -146         -75        -126
    Legislative proposal, subject to
        PAYGO:
      Budget Authority..................
      Outlays...........................                                -127
                                        ------------------------------------
    Total:
      Budget Authority..................
      Outlays...........................        -146         -75        -253
                                        ====================================

                   Status of Direct Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4258-0-3-704      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........         555         449         413
    1231  Disbursements: Direct loan
            disbursements...................          38          31          28
          Repayments:

    1251    Repayments and prepayments......         -49         -40         -36
    1253    Proceeds from loan asset sales
              to the public with recourse...         -30         -24         -22
          Adjustments:

    1261    Capitalized interest............           5
    1262    Discount on loan asset sales to
              the public or discounted......          -2          -1          -1
          Write-offs for default:

    1263    Direct loans....................          -2          -2          -2
    1264    Other adjustments, net..........         -66
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........         449         413         380
    ---------------------------------------------------------------------------

                 Status of Guaranteed Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4258-0-3-704      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
        Cumulative balance of guaranteed loans
                    outstanding:
    2210  Outstanding, start of year........      32,345      24,731      18,659
    2251  Repayments and prepayments........      -6,793      -5,194      -3,919
          Adjustments:

    2262    Terminations for default that
              result in acquisition of
              property......................        -608        -675        -565
    2263    Terminations for default that
              result in claim payments......        -216        -203        -170
    2264    Other adjustments, net..........           3
                                               ---------   ---------  ----------
    2290    Outstanding, end of year........      24,731      18,659      14,005
    ----------------------------------------------------------------------------

        Memorandum:
    2299  Guaranteed amount of guaranteed
            loans outstanding, end of year..      13,886      10,476       7,864
    ----------------------------------------------------------------------------

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

    2310    Outstanding, start of year......       1,518       1,350       1,206
    2331    Disbursements for guaranteed
              loan claims...................         258         220         187
    2351    Repayments of loans receivable..         -87         -36         -27
    2361    Write-offs of loans receivable..        -339        -328        -141
                                               ---------   ---------  ----------
    2390      Outstanding, end of year......       1,350       1,206       1,225
    ---------------------------------------------------------------------------

                            Statement of Operations (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   36-4258-0-3-704    1995 actual    1996 actual     1997 est.      1998 est.
    -----------------------------------------------------------------------------------------------
    0101  Revenue...........................         563            869           695            556
    0102  Expense...........................        -446           -441          -353           -282
                                            ------------ --------------  ------------  -------------
    0109  Net income or loss (-)............         117            428           342            274
    -----------------------------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   36-4258-0-3-704    1995 actual    1996 actual     1997 est.      1998 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
    1101  Federal assets: Fund balances with
            Treasury........................         914            238           264            137
    1207  Non-Federal assets: Advances and
            prepayments.....................                          1
          Net value of assets related to
              post-1991 direct loans
              receivable:

    1402    Interest receivable.............                          7            51             41
    1403    Accounts receivable from
              foreclosed property...........         890            463           203            170
                                            ------------ --------------  ------------  -------------
    1499      Net present value of assets
                related to direct loans.....         890            470           254            211
    1706  Net value of assets related to
            pre-1992 direct loans receivable
            and acquired defaulted
            guaranteed loans receivable:
            Foreclosed property.............          40
          Other Federal assets:

    1803    Property, plant and equipment,
              net...........................         444            643           655            530
    1901    Other assets....................         -84
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................       2,204          1,352         1,173            878
        LIABILITIES:
    2101  Federal liabilities: Accounts
            payable.........................          93            293           249            211
    2207  Non-Federal liabilities: Other....         747             76            66             50
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............         840            369           315            261
        NET POSITION:
    3200  Invested capital..................       1,284          1,106           941            799
    3300  Cumulative results of operations..         827            169           -83           -183
    3500  Future funding requirements.......        -747           -292
                                            ------------ --------------  ------------  -------------
    3999    Total net position..............       1,364            983           858            616
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position       2,204          1,352         1,173            877
    -----------------------------------------------------------------------------------------------

            Veterans Housing Benefit Program Fund Liquidating Account

                    (Legislative proposals, subject to PAYGO)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4258-4-3-704      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Capital investment:

    00.04   Payment to DLFA due to debt
              collection....................                                  43
                                               ---------   ---------  ----------
    02.93   Claims-Individual Homes.........                                  43
                                               ---------   ---------  ----------
    10.00   Total obligations (object class
              33.0).........................                                  43
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......                                 170
    22.40 Capital transfer to general fund..                                -126
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......                                  44
    23.95 New obligations...................                                 -43
    ----------------------------------------------------------------------------

    [[Page 913]]

        New budget authority (gross), detail:
    68.00 Spending authority from offsetting
            collections (gross): Offsetting
            collections (cash)..............                                 170
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.90 Unpaid obligations, start of year:
            Obligated balance: Fund balance.
    73.10 New obligations...................                                  43
    73.20 Total outlays (gross).............                                 -43
    74.90 Unpaid obligations, end of year:
            Obligated balance: Fund balance.                                   2
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................                                  43
    86.98 Outlays from permanent balances...
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........                                  43
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

            Offsetting collections (cash)
                from:
              Non-Federal sources:
    88.40       Payment from DLFA due to
                  debt collection...........                                -127
    88.40       Collection of claims
                  (veteran indebtedness)....                                 -43
                                               ---------   ---------  ----------
    88.90       Total, offsetting
                  collections (cash)........                                -170
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................
    90.00 Outlays...........................                                -127
    ---------------------------------------------------------------------------

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

                         [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''.]
    (Departments of Veterans Affairs and Housing and Urban Development, and
    Independent Agencies Appropriations Act, 1997.)

                  [Loan Guaranty Direct Loan Financing Account]

                          [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''.] (Departments of
    Veterans Affairs and Housing and Urban Development, and Independent
    Agencies Appropriations Act, 1997.)

            Miscellaneous Veterans Programs Loan Fund Program Account

             [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, [$205,000]
    $515,000, which may be transferred to and merged with the appropriation
    for ``General operating expenses''. (Departments of Veterans Affairs and
    Housing and Urban Development, and Independent Agencies Appropriations
    Act, 1997.)

                [Vocational Rehabilitation Loans Program Account]

                         [(including transfer of funds)]

        For the cost of direct loans, [$49,000] $44,000,  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] $2,278,000.
        In addition, for administrative expenses necessary to carry out the
    direct loan program, [$377,000] $388,000, which may be transferred to
    and merged with the appropriation for ``General operating expenses''.
    (Departments of Veterans Affairs and Housing and Urban Development, and
    Independent Agencies Appropriations Act, 1997.)

                      [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, [$195,000] $200,000; which may be transferred to
    and merged with the appropriation for ``General operating expenses''.
    (Departments of Veterans Affairs and Housing and Urban Development, and
    Independent Agencies Appropriations Act, 1997.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0140-0-3-702      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Direct loan subsidy...............           1           1           1
    00.09 Administrative expenses...........           1           1           1
                                               ---------   ---------  ----------
    10.00   Total obligations...............           2           2           2
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested
            balance.........................           4           3           2
    22.00 New budget authority (gross)......           1           1           1
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......           5           4           3
    23.95 New obligations...................          -2          -2          -2
    24.40 Unobligated balance available, end
            of year: Uninvested balance.....           3           2
    ----------------------------------------------------------------------------

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

        Change in unpaid obligations:
    73.10 New obligations...................           2           2           2
    73.20 Total outlays (gross).............          -2          -2          -2
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority           1           1           1
    86.93 Outlays from current balances.....           1           1           1
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........           2           2           2
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................           1           1           1
    90.00 Outlays...........................           1           2           2
    ---------------------------------------------------------------------------

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

    ----------------------------------------------------------------------------
    Identification code 36-0140-0-3-702      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
        Direct loan levels supportable by subsidy
                    budget authority:
    1150  Direct loan levels, Vocational
            Rehabiliation...................           2           3           3
    1150  Direct loan levels, Native
            American Housing................           6          12          14
                                               ---------   ---------  ----------
    1159    Total direct loan levels........           8          15          17
        Direct loan subsidy (in percent):
    1320  Voc. Rehab. Loan Subsidy rate.....        2.78        2.03        1.94

    [[Page 914]]

    1320  Education Loan Subsidy rate.......        0.00       42.94       34.11
    1320  Native American Subsidy rate......        7.72        7.72        7.72
                                               ---------   ---------  ----------
    1329    Weighted average subsidy rate...        6.62        6.78        6.99
        Direct loan subsidy budget authority:
    1330  Subsidy budget authority, Native
            American........................           1           1           1
                                               ---------   ---------  ----------
    1339    Total subsidy budget authority..           1           1           1
        Direct loan subsidy outlays:
    1340  Subsidy outlays, Native American..           1           1           1
                                               ---------   ---------  ----------
    1349    Total subsidy outlays...........           1           1           1
    ----------------------------------------------------------------------------

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

        All information from the Native American Veterans Home Loan Fund,
    Vocational Rehabilitation Loan Program and Education Loan Fund is
    consolidated in a single housing fund called the Miscellaneous Veterans
    Programs Loan Fund.

        The Native American Veterans Housing Loan program provides direct
    loans to veterans living on trust lands under 38 U.S.C. chapter 37,
    section 3761. These loans are available to purchase, construct or
    improve homes to be occupied as the veteran's residence. The principal
    amount of a loan under this authority is generally limited to $80,000,
    except in areas where housing costs are significantly higher than
    average costs nationwide. The Native American Veterans Housing Loan
    Program is a five-year pilot program beginning in 1993. This submission
    assumes the enactment of the proposal to extend the Native American
    Program for two additional years through 1999.

        The Vocational Rehabilitation Loan Fund provides loans of up to $815
    (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.

        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 these programs, the subsidy costs associated with the
    direct loans obligated in 1992 and beyond, as well as the administrative
    expenses of these programs. The subsidy amounts are estimated on a
    present value basis; the administrative expenses are estimated on a cash
    basis.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0140-0-3-702      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
    25.3  Purchases of goods and services
            from Government accounts........           1           1           1
    41.0  Grants, subsidies, and
            contributions...................           1           1           1
                                               ---------   ---------  ----------
    99.9    Total obligations...............           2           2           2
    ---------------------------------------------------------------------------

     Miscellaneous Veterans Programs Loan Fund Direct Loan Financing Account

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4259-0-3-702      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Direct loans......................           8          15          17
    00.02 Interest on Treasury borrowing....           2           1           1
                                               ---------   ---------  ----------
    10.00   Total obligations...............          10          16          18
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested
            balance.........................           1           2
    22.00 New financing authority (gross)...          11          16          19
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......          12          18          19
    23.95 New obligations...................         -10         -16         -18
    24.40 Unobligated balance available, end
            of year: Uninvested balance.....           2
    ----------------------------------------------------------------------------

        New financing authority (gross), detail:
    67.15 Authority to borrow (indefinite)..           8          14          16
          Spending authority from offsetting
              collections:

    68.00   Offsetting collections (cash)...           5           6           6
    68.47   Portion applied to debt
              reduction.....................          -2          -4          -4
                                               ---------   ---------  ----------
    68.90     Spending authority from
                offsetting collections
                (total).....................           3           2           2
                                               ---------   ---------  ----------
    70.00   Total new financing authority
              (gross).......................          11          16          18
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation           1           1           1
    73.10 New obligations...................          10          16          18
    73.20 Total financing disbursements
            (gross).........................         -10         -16         -19
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation           1           1
    87.00 Total financing disbursements
            (gross).........................          10          16          19
    ----------------------------------------------------------------------------

        Offsets:
          Against gross financing authority and
              financing disbursements:

            Offsetting collections (cash)
                from:
    88.00     Federal sources...............          -1          -1          -1
              Non-Federal sources:
    88.40       Non-Federal sources.........          -2          -3          -2
    88.40       Interest on loans...........          -1          -2          -3
    88.40       Interest on uninvested funds          -1
                                               ---------   ---------  ----------
    88.90       Total, offsetting
                  collections (cash)........          -5          -6          -6
    ----------------------------------------------------------------------------

        Net financing authority and financing
            disbursements:
    89.00 Financing authority...............           6          10          13
    90.00 Financing disbursements...........           5          10          13
    ---------------------------------------------------------------------------

                   Status of Direct Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4259-0-3-702      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
        Position with respect to appropriations act
                    limitation on obligations:
    1111  Limitation on direct loans........           8          15          17
                                               ---------   ---------  ----------
    1150    Total direct loan obligations...           8          15          17
    ----------------------------------------------------------------------------

        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........           7          13          26
    1231  Disbursements: Direct loan
            disbursements...................           8          15          17
    1251  Repayments: Repayments and
            prepayments.....................          -3          -3          -2
    1264  Write-offs for default: Other
            adjustments, net................           1           1
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........          13          26          41
    ---------------------------------------------------------------------------

    [[Page 915]]

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   36-4259-0-3-702    1995 actual    1996 actual     1997 est.      1998 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
    1101  Federal assets: Fund balances with
            Treasury........................           4              3             1              1
          Net value of assets related to
              post-1991 direct loans
              receivable:

    1401    Direct loans receivable, gross..           1             13            26             41
                                            ------------ --------------  ------------  -------------
    1499      Net present value of assets
                related to direct loans.....           1             13            26             41
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................           5             16            27             42
        LIABILITIES:
          Federal liabilities:

    2101    Accounts payable................
    2103    Debt............................           2              3             2              2
    2104    Resources payable to Treasury...                                       10             23
    2203  Non-Federal liabilities: Debt.....           1             13
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............           3             16            12             25
        NET POSITION:
    3100  Appropriated capital..............                                       14             17
                                            ------------ --------------  ------------  -------------
    3999    Total net position..............                                       14             17
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position           3             16            26             42
    -----------------------------------------------------------------------------------------------

        This account contains all information on the Native American
    Veterans Home Loan Fund, Vocational Rehabilitation Loan Program
    Education Loan Fund, and Transitional Housing 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.

          Miscellaneous Veterans Programs Loan Fund Liquidating Account

                   Status of Direct Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4260-0-3-702      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........           3           3           2
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........           3           2           2
    ---------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   36-4260-0-3-702    1995 actual    1996 actual     1997 est.      1998 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
    1101  Federal assets: Fund balances with
            Treasury........................                          1
          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            -1
    1604    Direct loans and interest
              receivable, net...............           1              1             1              2
                                            ------------ --------------  ------------  -------------
    1699      Value of assets related to
                direct loans................           1              1             1              2
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................           1              2             1              2
        NET POSITION:
    3100  Appropriated capital..............           8              1
    3300  Cumulative results of operations..          -7              1             1              2
                                            ------------ --------------  ------------  -------------
    3999    Total net position..............           1              1             1
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position           1              2             1              2
    -----------------------------------------------------------------------------------------------

        This account contains all information on the Vocational
    Rehabilitation Loan Program and Education Loan Fund on loans prior to
    1992.

        As required by the Federal Credit Reform Act of 1990, this account
    records 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 acounts.

                       WORKLOAD, AMOUNT LOANED AND REPAID

                                         1996 actual  1997 est.   1998 est.
    Number of loans outstanding.........       3,142       2,700       2,340
    Average amount per loan outstanding.        $831        $849        $855

                                   Trust Funds

                   Post-Vietnam Era Veterans Education Account

                  Unavailable Collections (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-8133-0-7-702      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
        Balance, start of year:
    01.99 Balance, start of year............          64          64          64
        Receipts:
    02.01 Deductions from military pay......           4           4
    02.02 Contributions.....................          12          15          11
                                               ---------   ---------  ----------
    02.99   Total receipts..................          16          19          11
                                               ---------   ---------  ----------
    04.00 Total: Balances and collections...          80          83          75
        Appropriation:
    05.01 Post-Vietnam era veterans
            education account...............         -16         -19         -11
                                               ---------   ---------  ----------
    05.99 Subtotal appropriation............         -16         -19         -11
    07.99 Total balance, end of year........          64          64          64
    ---------------------------------------------------------------------------

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-8133-0-7-702      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Payment to post-Vietnam era
            trainees........................          28          18          14
    00.02 Payment to section 901 trainees...           1           1
    00.03 Participant disenrollments........          24          81          28
                                               ---------   ---------  ----------
    10.00   Total obligations...............          53         100          42
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested
            balance.........................         226         189         108
    22.00 New budget authority (gross)......          16          19          11
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......         242         208         108
    23.95 New obligations...................         -53        -100         -42
    24.40 Unobligated balance available, end
            of year: Uninvested balance.....         189         108          77
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    60.27 Appropriation (trust fund,
            indefinite).....................          20          23          11
    60.45 Portion precluded from obligation.          -4          -4
                                               ---------   ---------  ----------
    63.00   Appropriation (total)...........          16          19          11
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................          16          19          11
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation          -6           4           5
    73.10 New obligations...................          53         100          42
    73.20 Total outlays (gross).............         -43         -99         -44
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation           4           5           3
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................          16          19          11
    86.98 Outlays from permanent balances...          27          80          33
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........          43          99          44
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................          16          19          11
    90.00 Outlays...........................          43          99          44
    ---------------------------------------------------------------------------

        This account consists of voluntary contributions by eligible
    servicepersons and matching contributions provided by the

    [[Page 916]]

    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 millions of dollars]

                                         1996 actual  1997 est.   1998 est.

    Total budget authority..............         $15         $19         $11
      Servicepersons....................          $4          $4
      Transferred from Department of
        Defense (bonus).................                       7           5
      Transferred from Department of
        Defense (matching)..............          10           8           6
      Transferred from Department of
        Defense (Section 901)...........           1           1
      Transferred from Department of
        Defense (Section 903)...........
    Total participants (end of year)....     341,439     223,442     164,342
    Total contributors (end of year)....       3,611       4,300
    Average contribution per contributor
    (actual dollars)....................      $1,028      $1,028
    Number of disenrollments............      14,150     117,997      59,100
    Total refunds.......................         $24         $81         $28
    Total trainees......................      14,002       9,154       6,778
    Total trainee cost..................         $28         $18         $14
    Average cost per trainee (actual
    dollars)............................      $1,994      $1,994      $1,994
    Section 901 trainees................         183         144         113
    Section 901 trainee cost............          $1          $1

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-8133-0-7-702      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
    41.0  Grants, subsidies, and
            contributions...................          29          19          14
    44.0  Refunds...........................          24          81          28
                                               ---------   ---------  ----------
    99.9    Total obligations...............          53         100          42
    ---------------------------------------------------------------------------

                      National Service Life Insurance Fund

                  Unavailable Collections (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-8132-0-7-701      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
        Balance, start of year:
    01.99 Balance, start of year............                                  30
        Receipts:
    02.01 Premium and other receipts........         236         256         216
    02.02 Interest..........................       1,050       1,002         965
    02.03 Payments from general and special
            funds...........................           2           2           2
                                               ---------   ---------  ----------
    02.99   Total receipts..................       1,288       1,260       1,183
                                               ---------   ---------  ----------
    04.00 Total: Balances and collections...       1,288       1,260       1,213
        Appropriation:
    05.01 National Service Life Insurance
            fund............................      -1,288      -1,230      -1,182
    07.99 Total balance, end of year........                      30          31
    ---------------------------------------------------------------------------

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-8132-0-7-701      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Direct:

            Operating expenses:
    00.01     Death claims..................         546         591         622
    00.02     Disability claims.............          20          20          21
    00.03     Matured endowments............          25          20          13
    00.04     Cash surrenders...............          24          15          20
    00.05     Dividends.....................         535         509         493
    00.06     Interest paid on dividend
                credits and deposits........          55          57          59
    00.07     Payment to general operating
                expenses....................          19          20          22
                                               ---------   ---------  ----------
    00.91       Total operating expenses....       1,224       1,232       1,250
          Capital investment:

    02.01   Policy loans....................         132         128         131
                                               ---------   ---------  ----------
    02.93   Total direct obligations........       1,356       1,360       1,381
          Reimbursable program:

    03.01   Death claims....................         245         253         254
    03.02   Disability claims...............           9           9           8
    03.03   Matured endowments..............          11           9           6
    03.04   Cash surrenders.................          11           7           8
    03.05   Dividends.......................         240         218         202
    03.06   Interest paid on dividend
              credits and deposits..........          25          24          24
    03.07   Payment to general operating
              expenses......................           9           8           9
                                               ---------   ---------  ----------
    03.91     Total reimbursable............         550         528         511
                                               ---------   ---------  ----------
    10.00   Total obligations...............       1,906       1,888       1,892
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.91 Unobligated balance available,
            start of year: U.S. Securities:
            Par value.......................      10,854      10,824      10,729
    22.00 New budget authority (gross)......       1,877       1,794       1,727
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......      12,731      12,618      12,456
    23.95 New obligations...................      -1,906      -1,888      -1,892
    24.91 Unobligated balance available, end
            of year: U.S. Securities: Par
            value...........................      10,824      10,729      10,564
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    60.27 Appropriation (trust fund,
            indefinite).....................       1,288       1,230       1,182
    68.00 Spending authority from offsetting
            collections: Offsetting
            collections (cash)..............         589         564         545
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................       1,877       1,794       1,727
    ----------------------------------------------------------------------------

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

            Obligated balance:
    72.40     Appropriation.................          10           5           5
    72.41     U.S. Securities: Par value....       1,101       1,183       1,185
                                               ---------   ---------  ----------
    72.99     Total unpaid obligations,
                start of year...............       1,111       1,188       1,190
    73.10 New obligations...................       1,906       1,888       1,892
    73.20 Total outlays (gross).............      -1,829      -1,887      -1,849
          Unpaid obligations, end of year:

            Obligated balance:
    74.40     Appropriation.................           5           5           5
    74.41     U.S. Securities: Par value....       1,183       1,185       1,228
                                               ---------   ---------  ----------
    74.99     Total unpaid obligations, end
                of year.....................       1,188       1,190       1,233
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................         589         564         545
    86.98 Outlays from permanent balances...       1,240       1,323       1,304
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........       1,829       1,887       1,849
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

            Offsetting collections (cash)
                from:
              Non-Federal sources:
    88.40       Repayments of loans.........        -126        -120        -122
    88.40       Optional settlements........          -7          -6          -5
    88.40       Net income offsets
                  adjustments...............        -456        -438        -418
                                               ---------   ---------  ----------
    88.90       Total, offsetting
                  collections (cash)........        -589        -564        -545
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................       1,288       1,230       1,182
    90.00 Outlays...........................       1,240       1,323       1,304
    ---------------------------------------------------------------------------
        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......................   2,120,348   2,019,328   1,913,028
    Insurance in force......................     $19,365     $18,851     $18,299

        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

    [[Page 917]]

    expected to decrease from $12,947 million as of September 30, 1997 to
    $12,823 million as of September 30, 1998. The actuarial estimate of
    policy obligations as of September 30, 1998, total $12,730 million,
    leaving a balance of $93 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      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
        Unexpended balance, start of year:
    0100  Uninvested balance [unavailable
            collections]....................          10           5          35
    0101  U.S. Securities: Par value........      11,954      12,007      11,914
                                               ---------   ---------  ----------
    0199    Total balance, start of year....      11,964      12,012      11,949
        Cash income during the year:
          Proprietary receipts:

    0220    NSLI fund, Premium and other
              receipts......................         236         256         216
          Intragovernmental transactions:

    0240    NSLI fund, Interest.............       1,050       1,002         965
    0241    NSLI fund, Payments from general
              and special funds.............           2           2           2
          Offsetting collections:

    0289    Offsetting Collections..........         589         564         545
                                               ---------   ---------  ----------
    0299    Total cash income...............       1,877       1,824       1,728
        Cash outgo during year:
    0500  National Service Life Insurance
            fund............................      -1,829      -1,887      -1,849
        Unexpended balance, end of year:
          Uninvested balance:

    0700    Uninvested balance..............           5           5           5
    0700    Unavailable Collections.........                      30          31
    0701  U.S. Securities: Par value........      12,007      11,914      11,792
                                               ---------   ---------  ----------
    0799    Total balance, end of year......      12,012      11,949      11,828
    ---------------------------------------------------------------------------

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-8132-0-7-701      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

          Direct obligations:

    33.0    Investments and loans...........          91          90          93
    42.0    Insurance claims and indemnities         616         648         677
    43.0    Interest and dividends..........         610         586         577
                                               ---------   ---------  ----------
    99.0      Subtotal, direct obligations..       1,317       1,324       1,347
    99.0  Reimbursable obligations..........         589         564         545
                                               ---------   ---------  ----------
    99.9    Total obligations...............       1,906       1,888       1,892
    ---------------------------------------------------------------------------

                  United States Government Life Insurance Fund

                  Unavailable Collections (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-8150-0-7-701      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
        Balance, start of year:
    01.99 Balance, start of year............
        Receipts:
    02.01 Interest and profits on
            investments in public debt
            securities......................           7           7           6
        Appropriation:
    05.01 United States government life
            insurance fund..................          -7          -7          -6
    07.99 Total balance, end of year........
    ---------------------------------------------------------------------------

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-8150-0-7-701      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Operating expenses:

    00.01   Death claims....................           8           7           7
    00.03   Matured endowments..............           1           1
    00.05   Dividends.......................           6           5           4
    00.06   Interest paid on dividend
              credits and deposits..........           1           1           1
                                               ---------   ---------  ----------
    00.91     Total operating expenses......          16          14          12
                                               ---------   ---------  ----------
    10.00   Total obligations...............          16          14          12
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.91 Unobligated balance available,
            start of year: U.S. Securities:
            Par value.......................          87          79          72
    22.00 New budget authority (gross)......           9           8           7
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......          96          87          79
    23.95 New obligations...................         -16         -14         -12
    24.91 Unobligated balance available, end
            of year: U.S. Securities: Par
            value...........................          79          72          66
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    60.27 Appropriation (trust fund,
            indefinite).....................           7           7           6
    68.00 Spending authority from offsetting
            collections: Offsetting
            collections (cash)..............           2           1           1
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................           9           8           7
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.41 Unpaid obligations, start of year:
            Obligated balance: U.S.
            Securities: Par value...........          19          20          19
    73.10 New obligations...................          16          14          12
    73.20 Total outlays (gross).............         -17         -15         -14
    74.41 Unpaid obligations, end of year:
            Obligated balance: U.S.
            Securities: Par value...........          20          19          19
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................           2           1           1
    86.98 Outlays from permanent balances...          15          14          13
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........          17          15          14
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.40   Offsetting collections (cash)
              from: Repayments of loans.....          -2          -1          -1
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................           7           7           6
    90.00 Outlays...........................          15          14          12
    ---------------------------------------------------------------------------
        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):

                                         1996 actual  1997 est.   1998 est.
    Number of policies..................      23,130      21,424      19,838
    Insurance in force..................         $77         $71         $65

        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 $98 million
    as of September 30, 1997, to $91 million as of September 30, 1998, as an
    increasing number of policies mature through death or disability. The
    actuarial evaluation of policy obligations as of September 30, 1998,
    totals $89 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      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
        Unexpended balance, start of year:
    0101  U.S. Securities: Par value........         106          99          92
        Cash income during the year:
          Intragovernmental transactions:

    0240    Interest and profits on
              investments in public debt
              securities, USGLI, VA.........           7           7           6
          Offsetting collections:

    0289    Offsetting Collections..........           2           1           1
                                               ---------   ---------  ----------

    [[Page 918]]

    0299    Total cash income...............           9           8           7
        Cash outgo during year:
    0500  United States government life
            insurance fund..................         -17         -15         -14
        Unexpended balance, end of year:
    0701  U.S. Securities: Par value........          99          92          85
    ---------------------------------------------------------------------------

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-8150-0-7-701      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
    42.0  Insurance claims and indemnities..          10           9           8
    43.0  Interest and dividends............           6           5           4
                                               ---------   ---------  ----------
    99.9    Total obligations...............          16          14          12
    ---------------------------------------------------------------------------

                      Veterans Special Life Insurance Fund

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-8455-0-8-701      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Operating expenses:

    00.01   Death claims....................          43          49          53
    00.02   Cash surrenders.................           5           5           4
    00.03   Dividends.......................         105          99          98
    00.04   All other.......................          48          58          61
    00.05   Payment to general operating
              expenses account..............           4           4           5
                                               ---------   ---------  ----------
    00.91     Total operating expenses......         205         215         221
    01.01 Capital investment................          24          25          25
                                               ---------   ---------  ----------
    10.00   Total obligations...............         229         240         246
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.91 Unobligated balance available,
            start of year: U.S. Securities:
            Par value.......................       1,397       1,412       1,415
    22.00 New budget authority (gross)......         244         243         241
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......       1,641       1,655       1,656
    23.95 New obligations...................        -229        -240        -246
    24.91 Unobligated balance available, end
            of year: U.S. Securities: Par
            value...........................       1,412       1,415       1,410
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    68.00 Spending authority from offsetting
            collections (gross): Offsetting
            collections (cash)..............         244         243         241
    ----------------------------------------------------------------------------

        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....         150         168         179
                                               ---------   ---------  ----------
    72.99     Total unpaid obligations,
                start of year...............         151         169         180
    73.10 New obligations...................         229         240         246
    73.20 Total outlays (gross).............        -210        -229        -233
          Unpaid obligations, end of year:

            Obligated balance:
    74.90     Fund balance..................           1           1           1
    74.91     U.S. Securities: Par value....         168         179         192
                                               ---------   ---------  ----------
    74.99     Total unpaid obligations, end
                of year.....................         169         180         193
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................          75          68          40
    86.98 Outlays from permanent balances...         135         161         193
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........         210         229         233
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

            Offsetting collections (cash)
                from:
    88.20     Interest on U.S. securities...        -147        -145        -144
              Non-Federal sources:
    88.40       Interest on loans...........          -5          -6          -6
    88.40       Insurance premiums earned...         -75         -73         -71
    88.40       Optional settlements........          -2          -2          -2
    88.40       Repayments of loans.........         -15         -17         -18
                                               ---------   ---------  ----------
    88.90       Total, offsetting
                  collections (cash)........        -244        -243        -241
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................
    90.00 Outlays...........................         -34         -14          -8
    ---------------------------------------------------------------------------
        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.
            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):

                                         1996 actual  1997 est.   1998 est.
      Number of policies................     256,330     249,600     242,870
      Insurance in force................      $2,825      $2,789      $2,760

        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    1995 actual    1996 actual     1997 est.      1998 est.
    -----------------------------------------------------------------------------------------------
    0101  Revenue...........................         228            231           229            225
    0102  Expense...........................        -226           -223          -229           -225
                                            ------------ --------------  ------------  -------------
    0109  Net income or loss (-)............           2              8
    -----------------------------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   36-8455-0-8-701    1995 actual    1996 actual     1997 est.      1998 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
          Federal assets:

    1101    Fund balances with Treasury.....           1              1             1              1
            Investments in US securities:
    1102      Treasury securities, par......       1,546          1,580         1,594          1,602
    1106      Receivables, net..............          94             37            37             36
    1206  Non-Federal assets: Receivables,
            net.............................                                        3              3
    1601  Net value of assets related to
            pre-1992 direct loans receivable
            and acquired defaulted
            guaranteed loans receivable:
            Direct loans, gross.............          37            102           109            117
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................       1,678          1,720         1,744          1,759
        LIABILITIES:
          Non-Federal liabilities:

    2201    Accounts payable................         168            187           201            214
    2206    Pension and other actuarial
              liabilities...................       1,465          1,481         1,491          1,493
    2207    Other...........................          20             19            19             18
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............       1,652          1,687         1,711          1,725
        NET POSITION:
    3100  Appropriated capital..............       1,397          1,412         1,415          1,410

    [[Page 919]]

    3200  Invested capital..................      -1,370         -1,378        -1,382         -1,378
                                            ------------ --------------  ------------  -------------
    3999    Total net position..............          27             34            33             32
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position       1,680          1,721         1,744          1,757
    -----------------------------------------------------------------------------------------------

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-8455-0-8-701      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
    33.0  Investments and loans.............          24          25          25
    42.0  Insurance claims and indemnities..          85         100         105
    43.0  Interest and dividends............         120         115         116
                                               ---------   ---------  ----------
    99.9    Total obligations...............         229         240         246
    ---------------------------------------------------------------------------

                                  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
    [$3,000,000] $5,000,000 or more or where funds for a project were made
    available in a previous major project appropriation, [$250,858,000, of
    which $32,100,000 shall be for the replacement hospital at Travis Air
    Force Base, Fairfield, California, and shall not be released for
    obligation prior to January 1, 1998, unless action is taken by the
    Congress specifically making such funds available, and all funds
    appropriated under the above heading are] $79,500,000, 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 funds provided
    in this appropriation for fiscal year [1997] 1998, for each approved
    project shall be obligated (1) by the awarding of a construction
    documents contract by September 30, [1997] 1998, and (2) by the awarding
    of a construction contract by September 30, [1998] 1999: Provided
    further, That the Secretary shall promptly report in writing to the
    Comptroller General and to the Committees on Appropriations any approved
    major construction project in which obligations are not incurred within
    the time limitations established above; and the Comptroller General
    shall review the report in accordance with the procedures established by
    section 1015 of the Impoundment Control Act of 1974 (title X of Public
    Law 93-344): 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. (Departments of Veterans Affairs and Housing and Urban
    Development, and Independent Agencies Appropriations Act, 1997.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0110-0-1-703      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Replacement and modernization.....         102          39          61
    00.02 Nursing home care.................           1           1
    00.04 Research and education............                      28           1
    00.05 Outpatient improvements...........         123          96          49
    00.06 Other improvements................          72         135          88
    00.07 National cemeteries...............           3          50          16
    00.08 Replacement or renovation of
            regional offices................           1
                                               ---------   ---------  ----------
    10.00   Total obligations...............         302         349         215
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested
            balance.........................         768         595         465
    22.00 New budget authority (gross)......         136         219         112
    22.21 Unobligated balance transferred to
            other accounts..................          -7
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......         897         814         577
    23.95 New obligations...................        -302        -349        -215
    24.40 Unobligated balance available, end
            of year: Uninvested balance.....         595         465         362
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Current:

    40.00   Appropriation...................         136         219          80
          Permanent:

    65.00   Advance appropriation (definite)                                  32
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................         136         219         112
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation         826         650         681
    73.10 New obligations...................         302         349         215
    73.20 Total outlays (gross).............        -478        -318        -238
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation         650         681         656
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority           2          10           3
    86.93 Outlays from current balances.....         476         308         235
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........         478         318         238
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................         136         219         112
    90.00 Outlays...........................         478         318         238
    ---------------------------------------------------------------------------

        The major construction request improves access to VA health care for
    thousands of veterans and expands VA's national cemetery system. Funds
    are requested for one seismic project at Memphis, TN. One new cemetery
    will be constructed at Cleveland, OH, with two existing cemeteries (Fort
    Sam Houston, TX, and the National Memorial Cemetery of Arizona)
    expanding their gravesites. Additional funds are provided to remove
    asbestos from Department-owned buildings, and to support advanced
    planning and design activities.

                      Budget Authority by Program Activity

                            [In millions of dollars]

                                         1996 actual  1997 est.   1998 est.
    Replacement and modernization.......          33                      35
    Research and Education..............                      16
    Outpatient and improvements.........          33          64
    Safety deficiencies.................          18          11           6
    Patient environment.................          20          38
    General.............................          28          44          11
    Other departments...................           9          49          31
    Advance appropriation provided under
    P.L. 104-208........................                                  32
    Design fund offset..................          -5          -3          -3
                                        ------------------------------------
          Total budget authority........         136         219         112
                                        ====================================

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0110-0-1-703      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
    11.3  Personnel compensation: Other than
            full-time permanent.............           1           2           1
    25.2  Other services....................          23          25          14
    26.0  Supplies and materials............           2           2           2
    31.0  Equipment.........................           3           4           3
    32.0  Land and structures...............         273         316         195
                                               ---------   ---------  ----------
    99.9    Total obligations...............         302         349         215
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 36-0110-0-1-703      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
    1001  Total compensable workyears: Full-
            time equivalent employment......          25          50          50
    ---------------------------------------------------------------------------

    [[Page 920]]

                          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 [$3,000,000; $175,000,000] $5,000,000; $166,300,000, 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
    [$3,000,000] $5,000,000: 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,
    [and] (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. (Departments of Veterans Affairs and Housing and
    Urban Development, and Independent Agencies Appropriations Act, 1997.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0111-0-1-703      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Nursing home care.................          14           4          12
    00.02 Research and education............           4           1           4
    00.04 Other improvements................         123         152         128
    00.06 National cemeteries...............          12          19          14
    00.07 Computer centers, additions and
            alterations.....................           4           7           5
    00.08 Replacement or renovation of
            regional offices................           3          14          10
                                               ---------   ---------  ----------
    10.00   Total obligations...............         160         197         173
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested
            balance.........................          30          59          37
    22.00 New budget authority (gross)......         190         175         166
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......         220         234         203
    23.95 New obligations...................        -160        -197        -173
    24.40 Unobligated balance available, end
            of year: Uninvested balance.....          59          37          30
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................         190         175         166
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation         157         171         195
    73.10 New obligations...................         160         197         173
    73.20 Total outlays (gross).............        -147        -173        -175
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation         171         195         193
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority          33          46          43
    86.93 Outlays from current balances.....         114         127         132
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........         147         173         175
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................         190         175         166
    90.00 Outlays...........................         147         173         175
    ---------------------------------------------------------------------------

        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 $5 million.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0111-0-1-703      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
    11.3  Personnel compensation: Other than
            full-time permanent.............           5           5           5
    25.2  Other services....................          32          40          37
    26.0  Supplies and materials............           2           3           2
    31.0  Equipment.........................           2           5           4
    32.0  Land and structures...............         119         144         125
                                               ---------   ---------  ----------
    99.9    Total obligations...............         160         197         173
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 36-0111-0-1-703      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
    1001  Total compensable workyears: Full-
            time equivalent employment......          85          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,
    [$47,397,000] $41,000,000, to remain available until expended.
    (Departments of Veterans Affairs and Housing and Urban Development, and
    Independent Agencies Appropriations Act, 1997.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0181-0-1-703      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Grants to States..................          47          47          41
                                               ---------   ---------  ----------
    10.00   Total obligations (object class
              41.0).........................          47          47          41
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......          47          47          41
    23.95 New obligations...................         -47         -47         -41
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................          47          47          41
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation         134         124         127
    73.10 New obligations...................          47          47          41
    73.20 Total outlays (gross).............         -57         -44         -47
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation         124         127         121
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.93 Outlays from current balances.....          57          44          47
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................          47          47          41
    90.00 Outlays...........................          57          44          47
    ---------------------------------------------------------------------------

        In 1997, the Department plans to obligate $47.4 million to assist
    seven 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]
    $10,000,000, to remain available until expended. (Departments of
    Veterans Affairs and Housing and Urban Development, and Independent
    Agencies Appropriations Act, 1997.)

    [[Page 921]]

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0183-0-1-705      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Grants to States..................           8           5          10
                                               ---------   ---------  ----------
    10.00   Total obligations (object class
              41.0).........................           8           5          10
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested
            balance.........................          10           4
    22.00 New budget authority (gross)......           1           1          10
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......          11           5          10
    23.95 New obligations...................          -8          -5         -10
    24.40 Unobligated balance available, end
            of year: Uninvested balance.....           4
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................           1           1          10
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation           9          14          16
    73.10 New obligations...................           8           5          10
    73.20 Total outlays (gross).............          -2          -3          -2
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation          14          16          24
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.93 Outlays from current balances.....           2           3           2
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................           1           1          10
    90.00 Outlays...........................           2           3           2
    ---------------------------------------------------------------------------

        This program enables 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,
    [$12,300,000 together with] 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''. (Departments of Veterans Affairs and Housing and
    Urban Development, and Independent Agencies Appropriations Act, 1997.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4538-0-3-703      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Operating expenses: Parking leases                       2           2
    01.01 Capital investment: parking
            construction program............                      14
                                               ---------   ---------  ----------
    10.00   Total obligations...............                      16           2
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested
            balance.........................          26          35          34
    22.00 New budget authority (gross)......           2          15           3
    22.22 Unobligated balance transferred
            from other accounts.............           7
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......          35          50          37
    23.95 New obligations...................                     -16          -2
    24.40 Unobligated balance available, end
            of year: Uninvested balance.....          35          34          35
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Current:

    40.00   Appropriation...................                      12
          Permanent:

    68.00   Spending authority from
              offsetting collections:
              Offsetting collections (cash).           2           3           3
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................           2          15           3
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation          24           8           9
    73.10 New obligations...................                      16           2
    73.20 Total outlays (gross).............         -16         -15         -12
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation           8           9
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority
    86.93 Outlays from current balances.....          14          12           9
    86.97 Outlays from new permanent
            authority.......................           2           3           3
    86.98 Outlays from permanent balances...
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........          16          15          12
    ----------------------------------------------------------------------------

        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..................                      12
    90.00 Outlays...........................          14          12           9
    ---------------------------------------------------------------------------

        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      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
    23.2  Rental payments to others.........                       2           2
    32.0  Land and structures...............                      14
    99.0  Subtotal, reimbursable obligations                      16           2
                                               ---------   ---------  ----------
    99.9    Total obligations...............                      16           2
    ---------------------------------------------------------------------------

                          Pershing Hall Revolving Fund

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4018-0-3-705      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested
            balance.........................           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
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation           1           1           1
    ----------------------------------------------------------------------------

        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

    [[Page 922]]

    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

                           General Operating Expenses

        For necessary operating expenses of the Department of Veterans
    Affairs, not otherwise provided for, 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; [$827,584,000: Provided, That during fiscal year 1997,
    notwithstanding any other provision of law, the number of individuals
    employed by the Department of Veterans Affairs (1) in other than
    ``career appointee'' positions in the Senior Executive Service shall not
    exceed 6, and (2) in schedule C positions shall not exceed 11:]
    $846,385,000:  Provided [further], That funds under this heading shall
    be available to administer the Service Members Occupational Conversion
    and Training Act: Provided further, That funds under this heading shall
    be available for the conduct of medical examinations requested by the
    Veterans Benefits Administration in connection with claims for benefits
    under title 38, United States Code. (Departments of Veterans Affairs and
    Housing and Urban Development, and Independent Agencies Appropriations
    Act, 1997.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0151-0-1-705      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Direct program:

            Veterans benefits:
    00.02     Veterans assistance...........          56
    00.04     Compensation and Pensions.....         193         233         521
    00.05     Education.....................          25          43          69
    00.06     Vocational rehabilitation and
                counseling..................          39          47          69
    00.07     Support services..............         227         199
    00.08     Information Resources
                Management..................         117         103
    00.09     Insurance\1\..................           1           2           3
    00.11     General administration........         210         201         186
                                               ---------   ---------  ----------
    00.91     Subtotal, direct program\2\...         868         828         848
          Reimbursable program:

    01.01   Administration of housing
              programs......................          80         134         160
    01.02   Administration of insurance
              programs\1\...................          32          32          36
    01.03   Other...........................         130         105         116
                                               ---------   ---------  ----------
    01.91     Subtotal, reimbursable program         242         271         312
                                               ---------   ---------  ----------
    10.00   Total obligations...............       1,110       1,099       1,160
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested
            balance.........................          26
    22.00 New budget authority (gross)......       1,091       1,099       1,160
    22.30 Unobligated balance expiring\3\...          -7
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......       1,110       1,099       1,160
    23.95 New obligations...................      -1,110      -1,099      -1,160
    24.40 Unobligated balance available, end
            of year: Uninvested balance.....
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Current:

    40.00   Appropriation...................         847         828         847
          Permanent:

    68.00   Spending authority from
              offsetting collections:
              Offsetting collections
              (cash)\4\.....................         244         271         313
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................       1,091       1,099       1,160
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation         125         128          83
    73.10 New obligations...................       1,110       1,099       1,160
    73.20 Total outlays (gross).............      -1,105      -1,144      -1,158
    73.40 Adjustments in expired accounts...          -2
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation         128          83          85
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority         736         745         762
    86.93 Outlays from current balances.....         125         128          83
    86.97 Outlays from new permanent
            authority.......................         244         271         313
    86.98 Outlays from permanent balances...
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........       1,105       1,144       1,158
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.00   Offsetting collections (cash)
              from: Federal sources.........        -244        -271        -313
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................         847         828         847
    90.00 Outlays...........................         861         873         845
    ---------------------------------------------------------------------------
        \1\ The total cost of administering veterans insurance programs is
    funded through direct appropriations and reimbursements from the
    insurance trust fund.
        \2\ The program activity distribution beginning in 1996 reflects the
    first phase of an initiative to shift all VBA administrative and support
    costs to the five business lines (Compensation and Pensions, Education,
    Loan Guaranty, Vocational Rehabilitation and Insurance). The complete
    initiative is reflected in the 1998 budget numbers.
        \3\ After VA closed and reported its financial data for Fiscal Year
    1996, it was determined that reimbursements to the General Operating
    Expenses account were overstated by $5.4 million in Fiscal Year 1996. As
    a result, the $6.7 million end of year unobligated balance reported as
    expiring is overstated. The true lapse of budgetary resources is
    approximately $1.3 million. This accounting error will be corrected in
    Fiscal Year 1997.
        \4\ Due to the $5.4 million in overstated reimbursements explained
    in footnote 2, $2.7 million was recorded above the actual spending
    authority from collections in FY 1996. This was recorded as over-
    collected and unavailable for obligation on the VA's year end financial
    reports.

        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.

        Veterans benefits.--Determines eligibility and adjudicates all
    claims for compensation, pensions, educational assistance, housing loan
    assistance, and insurance awards. 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 and accuracy.
            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.

                                                PERFORMANCE MEASURES
                                                     1994 actual 1995 actual 1996 actual    1997        1998
                                                                                          projected   projected
    Compensation and Pension Summary:
      Average days to complete claim:
        Original compensation.......................         213         161         144         118         106
        Original pension............................         123          98          85          71          71
        Original death pension......................          65          50          45          24          20
        Original survivor compensation..............         111          92          75          66          73
      Accuracy rate for:
        Original claims.............................         N/A         N/A         90%         91%         92%
        Reopened from disallowance and new
          compensation claims.......................         N/A         N/A         93%         94%         95%
        Appeals and hearings........................         N/A         N/A         97%         97%         97%
        Original and reopened/new pension claims....         N/A         N/A         92%         93%         94%

                                                      WORKLOAD
    [in thousands]...................................1994 actual.1995 actual.1996 actual....1997 .......1998 ...
                                                                                          projected   projected
    Compensation and Pension:
      Original and reopened compensation............         438         518         497         481         473
      Original and reopened pension.................         253         196         172         167         171

            Education.--Provides timely and efficient processing of claims
        for veterans and dependents relating to education benefits under the
        various laws enacted by Congress.

    [[Page 923]]

                                                PERFORMANCE MEASURES
                                                     1994 actual 1995 actual 1996 actual    1997        1998
                                                                                          projected   projected
    Education Summary:
      Montgomery GI Bill usage rate *...............       34.1%       34.7%       36.7%       37.3%       41.9%
      Payment accuracy..............................       93.3%       92.8%       94.0%       94.0%       94.0%
      Service accuracy..............................       82.7%       79.7%       82.0%       82.0%       82.5%
      Average days to complete......................          14          15          20          24          33
        * Veterans have 10 years to use education benefits. The low usage rate
    may reflect a delay in beginning the program.

                                    WORKLOAD

                                 [In thousands]

                                         1996 actual  1997 est.   1998 est.
    Education:
      Original claims...................         152         154         161
      Adjustments/supplemental claims...       1,061       1,086       1,132

             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.

                                                PERFORMANCE MEASURES
                                                     1994 actual 1995 actual 1996 actual    1997        1998
                                                                                          projected   projected
    Loan Guaranty Summary:
      Property inventory level......................      10,973       9,319       8,624      12,866      13,644
      Loan guaranties issued........................     602,244     263,125     320,776     300,000     280,000
    Service to veterans:
      Customer satisfaction.........................         93%         94%         96%         93%         92%
      Loan processing expectations..................         83%         87%         85%         87%         85%
    Service to lenders:
      Lender satisfaction...........................         N/A         68%         67%         69%         68%
    Foreclosure avoidance through servicing (FATS)
    ratio...........................................        33.1        37.3        42.8        39.0        37.0
    Cost per loan guaranty issued...................         N/A        $147        $108        $248        $289

                                 OTHER WORKLOAD

                                 [In thousands]

                                         1996 actual  1997 est.   1998 est.
    Loan guaranty:
      Construction and valuation........         387         359         334
      Loan processing...................         847         787         732
      Loan service and claims...........         438         462         530
      Property management...............          48          53          58

            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.
                                                PERFORMANCE MEASURES
                                                     1994 actual 1995 actual 1996 actual    1997        1998
                                                                                          projected   projected
    Vocational Rehabilitation and Counseling
      Summary:
      Percent not participating in or completing an
        evaluation..................................         40%         35%         29%         31%         34%
      Rehabilitation effectiveness rate.............         78%         85%         87%         87%         86%

                                    WORKLOAD

                                 [In thousands]

                                         1996 actual  1997 est.   1998 est.
    Vocational rehabilitation and
        counseling:
      Evaluation and planning...........          54          53          51
      Rehabilitation services...........          52          51          47
      Employment services status........           9           9           9
      Interrupted status................          17          17          18
      Vocational/educational counseling.          16          16          14

            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.
                                                PERFORMANCE MEASURES
                                                     1994 actual 1995 actual 1996 actual    1997        1998
                                                                                          projected   projected
    Insurance Summary:
      Average days to pay disbursements.............         4.4         4.1         4.2         4.2         4.2
      Percentage of disbursements paid accurately...       99.3%       99.1%       99.0%       98.8%       98.8%

                                    WORKLOAD

                                 [In thousands]

                                         1996 actual  1997 est.   1998 est.
    Insurance:
      Policy service actions............       1,532       1,486       1,429
      Collections.......................       3,893       3,716       3,542
      Disability claims.................          45          42          39
      Insurance awards..................         538         631         637

        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      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

          Direct obligations:

            Personnel compensation:
    11.1      Full-time permanent...........         482         466         444
    11.5      Other personnel compensation..          10           7          13
                                               ---------   ---------  ----------
    11.9        Total personnel compensation         492         473         457
    12.1    Civilian personnel benefits.....         101         102          95
    13.0    Benefits for former personnel...           1          15
            Travel and transportation of
                persons:
    21.0      Employee travel...............           7           9           8
    21.0      Interagency motor pool
                payments....................           2           2           2
    22.0    Transportation of things........           2           2           2
    23.1    Rental payments to GSA..........          80          82          77
    23.2    Rental payments to others.......           8           6           7
    23.3    Communications, utilities, and
              miscellaneous charges.........          36          38          34
    24.0    Printing and reproduction.......           4           5           5
    25.2    Other services..................          72          73         149
    26.0    Supplies and materials..........          18           8           8
    31.0    Equipment.......................          45          13           3
                                               ---------   ---------  ----------
    99.0      Subtotal, direct obligations..         868         828         847
    99.0  Reimbursable obligations..........         242         271         313
                                               ---------   ---------  ----------
    99.9    Total obligations...............       1,110       1,099       1,160
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 36-0151-0-1-705      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
        Direct:
          Total compensable workyears:

    1001    Full-time equivalent employment.      11,797      11,088      10,207
    1005    Full-time equivalent of overtime
              and holiday hours.............         143          37          61
        Reimbursable:
          Total compensable workyears: \1\

    2001    Full-time equivalent employment.       3,547       3,245       3,488
    2005    Full-time equivalent of overtime
              and holiday hours.............         142          43          36
    ---------------------------------------------------------------------------
        \1\ Reflects 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,
    [$30,900,000] $31,013,000. (Departments of Veterans Affairs and Housing
    and Urban Development, and Independent Agencies Appropriations Act,
    1997.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0170-0-1-705      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.10 Direct program....................          31          31          31
    01.01 Reimbursable program..............           1           1           1
                                               ---------   ---------  ----------
    10.00   Total obligations...............          32          32          32
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......          32          32          32

    [[Page 924]]

    23.95 New obligations...................         -32         -32         -32
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Current:

    40.00   Appropriation...................          31          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           3           5           3
    73.10 New obligations...................          32          32          32
    73.20 Total outlays (gross).............         -30         -35         -32
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation           5           3           3
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority          26          29          29
    86.93 Outlays from current balances.....           3           5           2
    86.97 Outlays from new permanent
            authority.......................           1           1           1
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........          30          35          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...........................          29          34          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.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0170-0-1-705      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

          Direct obligations:

    11.1    Personnel compensation: Full-
              time permanent................          22          22          22
    12.1    Civilian personnel benefits.....           4           5           4
    21.0    Travel and transportation of
              persons.......................           2           1           2
    23.1    Rental payments to GSA..........           2           2           2
    25.2    Other services..................           1           1           1
                                               ---------   ---------  ----------
    99.0      Subtotal, direct obligations..          31          31          31
    99.0  Reimbursable obligations..........           1           1           1
                                               ---------   ---------  ----------
    99.9    Total obligations...............          32          32          32
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 36-0170-0-1-705      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
        Direct:
    1001  Total compensable workyears: Full-
            time equivalent employment......         348         332         318
        Reimbursable:
    2001  Total compensable workyears: Full-
            time equivalent employment......          17          17          17
    ---------------------------------------------------------------------------

                            National Cemetery System

        For necessary expenses for the maintenance and operation of the
    National Cemetery System, not otherwise provided for, including uniforms
    or allowances therefor; cemeterial expenses as authorized by law;
    purchase of [two] three passenger motor vehicles for use in cemeterial
    operations; and hire of passenger motor vehicles, [$76,864,000]
    $84,183,000. (Departments of Veterans Affairs and Housing and Urban
    Development, and Independent Agencies Appropriations Act, 1997.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0129-0-1-705      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.10 Direct obligations................          73          77          84
                                               ---------   ---------  ----------
    10.00   Total obligations...............          73          77          84
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......          73          77          84
    23.95 New obligations...................         -73         -77         -84
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................          73          77          84
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation          10          12          13
    73.10 New obligations...................          73          77          84
    73.20 Total outlays (gross).............         -71         -76         -84
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation          12          13          14
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority          63          69          76
    86.93 Outlays from current balances.....           8           7           8
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........          71          76          84
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................          73          77          84
    90.00 Outlays...........................          71          76          84
    ---------------------------------------------------------------------------

                                                PERFORMANCE MEASURES
                                                     1994 actual 1995 actual 1996 actual    1997        1998
                                                                                          projected   projected
    National Cemetery System Summary:
      Veteran population served by the existence of
        a burial option within a reasonable distance
        of place of residence.......................        65.2        65.2        65.4        66.8        69.2
      Percentage of survey respondents who rate the
        quality of service provided by the national
        cemeteries as excellent.....................         N/A         N/A          81          84          87
      Percentage of survey respondents who rate
        cemetery appearance as excellent............         N/A         N/A          73          75          80
    Interments performed:...........................      68,636      70,557      71,786      73,600      76,900
      Full-casket...................................      50,354      50,758      51,552      51,700      53,100
      In-ground cremain.............................      16,782      16,703      16,720      18,400      20,000
      Columbaria niches.............................       1,500       3,096       3,514       3,500       3,800
    Requests for interment taken by hub cemeteries
    on weekends.....................................       5,528       5,755       5,239       5,650       5,700
    Requests for interment taken on weekends that
    result in final arrangements in the ensuing week       90.0%       90.0%       92.5%       90.0%       90.0%
    Headstone/marker applications processed.........     315,383     301,657     327,284     345,000     351,000
    New headstones/markers ordered..................     300,754     284,786     319,758     326,000     332,000
    Occupied graves maintained:.....................   2,039,379   2,091,683   2,147,739   2,199,100   2,255,400
      In-ground.....................................   2,020,946   2,070,673   2,123,573   2,173,100   2,226,600
      Columbaria niches.............................      18,433      21,010      24,166      26,000      28,800
    Developed acres maintained......................       5,355       5,410       5,630       5,819       6,064

        The vision of the National Cemetery System is to provide a lasting
    tribute to our Nation's veterans. Its mission is to serve the Nation's
    veterans by meeting their final needs with compassion and dignity. There
    are four related programs managed by the National Cemetery System
    including: to bury eligible veterans and family members in national
    cemeteries

    [[Page 925]]

    and maintain the graves and their environs as national shrines; to
    provide aid to States in establishing, expanding, or improving State
    veteran cemeteries; to provide headstones and markers for the graves of
    eligible persons in national, State, and private cemeteries; and to
    provide certificates to family and friends of deceased veterans,
    recognizing the veteran's contribution and service to the Nation.

        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      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

          Personnel compensation:

    11.1    Full-time permanent.............          36          38          40
    11.3    Other than full-time permanent..           6           6           7
                                               ---------   ---------  ----------
    11.9      Total personnel compensation..          42          44          47
    12.1  Civilian personnel benefits.......          11          12          13
    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...........           4           4           4
    25.2  Other services....................           6           7           8
    26.0  Supplies and materials............           5           5           6
    31.0  Equipment.........................           3           3           4
                                               ---------   ---------  ----------
    99.9    Total obligations...............          73          77          84
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 36-0129-0-1-705      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
    1001  Total compensable workyears: Full-
            time equivalent employment......       1,287       1,323       1,375
    ---------------------------------------------------------------------------

    Intragovernmental funds:

                                   Supply Fund

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4537-0-4-705      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Operating expenses:

            Procurement, distribution, and
                services program:
    00.01     Cost of goods sold............         418         530         553
    00.02     Other.........................          36          41          44
            Publication and reproduction
                program:
    00.03     Cost of goods sold............           5           8           9
    00.04     Other.........................           5           1           2
                                               ---------   ---------  ----------
    00.91     Total operating expenses......         464         580         608
          Capital investment:

    01.01   Procurement, distribution, and
              services program: Purchase of
              equipment.....................          53           3           2
                                               ---------   ---------  ----------
    10.00   Total obligations...............         517         583         610
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.90 Unobligated balance available,
            start of year: Fund balance.....          62          58          58
    22.00 New budget authority (gross)......         513         583         607
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......         575         641         665
    23.95 New obligations...................        -517        -583        -610
    24.90 Unobligated balance available, end
            of year: Fund balance...........          58          58          55
    ----------------------------------------------------------------------------

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

    68.00   Offsetting collections (cash)...         488         583         610
    68.10   Change in orders on hand from
              Federal sources...............          25                      -3
                                               ---------   ---------  ----------
    68.90     Spending authority from
                offsetting collections
                (total).....................         513         583         607
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................         513         583         607
    ----------------------------------------------------------------------------

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

    72.90   Obligated balance: Fund balance.          40          57          57
    72.95   Orders on hand from Federal
              sources.......................         179         204         204
                                               ---------   ---------  ----------
    72.99     Total unpaid obligations,
                start of year...............         219         261         261
    73.10 New obligations...................         517         583         610
    73.20 Total outlays (gross).............        -474        -583        -610
          Unpaid obligations, end of year:

    74.90   Obligated balance: Fund balance.          57          57          59
    74.95   Orders on hand from Federal
              sources.......................         204         204         201
                                               ---------   ---------  ----------
    74.99     Total unpaid obligations, end
                of year.....................         261         261         260
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................         513         583         607
    86.98 Outlays from permanent balances...         -39                       3
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........         474         583         610
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.00   Offsetting collections (cash)
              from: Federal sources.........        -488        -583        -610
    88.95 Change in orders on hand from
            Federal sources.................         -25                       3
    ----------------------------------------------------------------------------

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

        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 1998, Supply Fund sales are
    estimated to reach $560.0 million. Average inventory needed to support
    those sales will be $35.0 million.

        Operating results.--The Fund operated at a profit of $16.0 million
    in 1996. The new total of retained earnings is $50.0 million, which has
    been used to finance inventory growth. Operating expense as related to
    sales was 11.2 percent.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4537-0-4-705      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

          Personnel compensation:

    11.1    Full-time permanent.............          18          20          20
    11.5    Other personnel compensation....           1           1           1
                                               ---------   ---------  ----------
    11.9      Total personnel compensation..          19          21          21
    12.1  Civilian personnel benefits.......           3           4           4
    21.0  Travel and transportation of
            persons.........................           2           2           2
    22.0  Transportation of things..........           2           2           2
    23.1  Rental payments to GSA............           2           1           1
    23.3  Communications, utilities, and
            miscellaneous charges...........           1           2           2
    24.0  Printing and reproduction.........           5           8           9
    25.1  Advisory and assistance services..           7           7           9
    26.0  Supplies and materials............         257         295         309
    31.0  Equipment.........................         218         240         251
    99.0  Subtotal, reimbursable obligations         516         582         610
    99.5  Below reporting threshold.........           1           1
                                               ---------   ---------  ----------
    99.9    Total obligations...............         517         583         610
    ---------------------------------------------------------------------------

    [[Page 926]]

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 36-4537-0-4-705      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
        Total compensable workyears:
    2001  Full-time equivalent employment...         378         406         399
    2005  Full-time equivalent of overtime
            and holiday hours...............           5           5           5
    ---------------------------------------------------------------------------

                                 Franchise Fund

                          (including transfer of funds)

        [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 expenses and equipment necessary for the
    maintenance and operation of such administrative services as the
    Secretary determines may be performed more advantageously as central
    services: 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 hereafter for the purpose of providing
    capital, shall be used to capitalize the franchise fund: Provided
    further, That the franchise fund 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 accrued leave, depreciation of fund
    plant and equipment, amortization of automated data processing (ADP)
    software and systems (either acquired or donated), and an amount
    necessary to maintain a reasonable operating reserve, as determined by
    the Secretary: Provided further, That the franchise fund shall provide
    services on a competitive basis: Provided further, That an amount not to
    exceed four percent of the total annual income to such fund may be
    retained in the fund for fiscal year 1997 and each fiscal year
    thereafter, to remain available until expended, to be used for the
    acquisition of capital equipment and for the improvement and
    implementation of Departmental financial management, ADP, and other
    support systems: 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.] (Departments of Veterans Affairs and Housing and
    Urban Development, and Independent Agencies Appropriations Act, 1997.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4539-0-4-705      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    10.00 Total obligations.................                      50          64
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......                      50          64
    23.95 New obligations...................                     -50         -64
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    68.00 Spending authority from offsetting
            collections (gross): Offsetting
            collections (cash)..............                      50          64
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    73.10 New obligations...................                      50          64
    73.20 Total outlays (gross).............                     -50         -64
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................                      50          64
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.00   Offsetting collections (cash)
              from: Federal sources.........                     -50         -64
    ----------------------------------------------------------------------------

        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. Established in FY
    1997, administrative services included in the Franchise Fund are
    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 net billings
    of about $63.5 million and employ 659 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      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
    11.1  Personnel compensation: Full-time
            permanent.......................                      21          27
    12.1  Civilian personnel benefits.......                       3           4
    21.0  Travel and transportation of
            persons.........................                       2           3
    23.1  Rental payments to GSA............                       2           3
    23.3  Communications, utilities, and
            miscellaneous charges...........                      18          22
    25.2  Other services....................                       3           4
    26.0  Supplies and materials............                       1           1
    99.0  Subtotal, reimbursable obligations                      50          64
                                               ---------   ---------  ----------
    99.9    Total obligations...............                      50          64
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 36-4539-0-4-705      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
    2001  Total compensable workyears: Full-
            time equivalent employment......                     453         659
    ---------------------------------------------------------------------------

                          GENERAL FUND RECEIPT ACCOUNTS

                               (in millions of dollars)

    ----------------------------------------------------------------------------
                                             1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
    Offsetting receipts from the public:
      36-243100  Fees and other charges for
        medical services, VA................         465         437         415
        Legislative proposal, not subject to
          PAYGO.............................                                 415
        Legislative proposal, subject to
          PAYGO.............................                                -415
      36-247300  Contributions from military
        personnel, Veteran's Educational
        Assistance Act of 1984..............         148         326         247
                                               ---------   ---------  ----------
    General Fund Offsetting receipts from
     the public.............................         613         763         662
    ---------------------------------------------------------------------------

                            Administrative Provisions

                          (including transfer of funds)

        Sec. 101. Any appropriation for [1997] 1998 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] 1998 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] 1998 for [``Compensation and pensions'',]
    ``Compensation,'' ``Pensions,'' ``Burial Benefits and Miscellaneous
    Assistance,'' ``Readjustment benefits'', and ``Veterans insurance and
    indemnities'' shall be available for payment of prior year accrued

    [[Page 927]]

    obligations required to be recorded by law against the corresponding
    prior year accounts within the last quarter of fiscal year [1996] 1997.
        Sec. 106. Appropriations accounts available to the Department of
    Veterans Affairs for fiscal year [1997] 1998  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] 1998, 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] 1998, 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] 1998, 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.
        [Sec. 108. (a) The Secretary of Veterans Affairs may convey, without
    consideration, to the City of Tuscaloosa, Alabama (in this section
    referred to as the ``City''), all right, title, and interest of the
    United States in and to a parcel of real property, including any
    improvements thereon, in the northwest quarter of section 28, township
    21 south, range 9 west, of Tuscaloosa County, Alabama, comprising a
    portion of the grounds of the Department of Veterans Affairs medical
    center, Tuscaloosa, Alabama, and consisting of approximately 9.42 acres,
    more or less.
         (b) The conveyance under subsection (a) shall be subject to the
    condition that the City use the real property conveyed under that
    subsection in perpetuity solely for public park or recreational
    purposes.
         (c) The exact acreage and legal description of the real property to
    be conveyed pursuant to this section shall be determined by a survey
    satisfactory to the Secretary of Veterans Affairs. The cost of such
    survey shall be borne by the City.
         (d) The Secretary of Veterans Affairs may require such additional
    terms and conditions in connection with the conveyance under this
    section as the Secretary considers appropriate to protect the interests
    of the United States.] (Departments of Veterans Affairs and Housing and
    Urban Development, and Independent Agencies Appropriations Act, 1997.)

                          TITLE IV--GENERAL PROVISIONS

        Sec. 401. Where appropriations in titles I, II, and III of this Act
    are expendable for travel expenses and no specific limitation has been
    placed thereon, the expenditures for such travel expenses may not exceed
    the amounts set forth therefore in the budget estimates submitted for
    the appropriations: Provided, That this provision does not apply to
    accounts that do not contain an object classification for travel:
    Provided further, That this section shall not apply to travel performed
    by uncompensated officials of local boards and appeal boards of the
    Selective Service System; to travel performed directly in connection
    with care and treatment of medical beneficiaries of the Department of
    Veterans Affairs; to travel performed in connection with major disasters
    or emergencies declared or determined by the President under the
    provisions of the Robert T. Stafford Disaster Relief and Emergency
    Assistance Act; to travel performed by the Offices of Inspector General
    in connection with audits and investigations; or to payments to
    interagency motor pools where separately set forth in the budget
    schedules: Provided further, That if appropriations in titles I, II, and
    III exceed the amounts set forth in budget estimates initially submitted
    for such appropriations, the expenditures for travel may correspondingly
    exceed the amounts therefore set forth in the estimates in the same
    proportion.
        Sec. 402. 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. 403. 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, 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. 404. 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. 405. No funds appropriated by this Act may be expended--
            (1) pursuant to a certification of an officer or employee of the
        United States unless--
                 (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. 406. 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. 407. 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. 408. 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. 409. 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. 410. 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. 411. 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

    [[Page 928]]

    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. 412. Except as otherwise provided in section 406, 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. 413. 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. 414. 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. 415. (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. 416. 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.
        Sec. 417. Such sums as may be necessary for fiscal year [1997] 1998
    pay raises for programs funded by this Act shall be absorbed within the
    levels appropriated in this Act.
        Sec. 418. None of the funds made available in this Act may be used
    for any program, project, or activity, when it is made known to the
    Federal entity or official to which the funds are made available that
    the program, project, or activity is not in compliance with any Federal
    law relating to risk assessment, the protection of private property
    rights, or unfunded mandates.
        [Sec. 419. Such funds as may be necessary to carry out the orderly
    termination of the Office of Consumer Affairs shall be made available
    from funds appropriated to the Department of Health and Human Services
    for fiscal year 1997.]
        Sec. [420] 419. Corporations and agencies of the Department of
    Housing and Urban Development which are subject to the Government
    Corporation Control Act, as amended, are hereby authorized to make such
    expenditures, within the limits of funds and borrowing authority
    available to each such corporation or agency and in accord with law, and
    to make such contracts and commitments without regard to fiscal year
    limitations as provided by section 104 of the Act as may be necessary in
    carrying out the programs set forth in the budget for [1997] 1998 for
    such corporation or agency except as hereinafter provided: Provided,
    That collections of these corporations and agencies may be used for new
    loan or mortgage purchase commitments only to the extent expressly
    provided for in this Act (unless such loans are in support of other
    forms of assistance provided for in this or prior appropriations Acts),
    except that this proviso shall not apply to the mortgage insurance or
    guaranty operations of these corporations, or where loans or mortgage
    purchases are necessary to protect the financial interest of the United
    States Government.
        [Sec. 421. (a) The purpose of this section is to provide for the
    special needs of certain children of Vietnam veterans who were born with
    the birth defect spina bifida, possibly as the result of the exposure of
    one or both parents to herbicides during active service in the Republic
    of Vietnam during the Vietnam era, through the provision of health care
    and monetary benefits.
        (b)(1) Part II of title 38, United States Code, is amended by
    inserting after chapter 17 the following new chapter:
         ``CHAPTER 18--BENEFITS FOR CHILDREN OF VIETNAM VETERANS WHO ARE
    BORN WITH SPINA BIFIDA
        ``Sec.
        ``1801. Definitions.
        ``1802. Spina bifida conditions covered.
        ``1803. Health care.
        ``1804. Vocational training and rehabilitation.
        ``1805. Monetary allowance.
        ``1806. Effective date of awards.
        ``Sec. 1801. Definitions
         ``For the purposes of this chapter--
             ``(1) The term `child', with respect to a Vietnam veteran,
        means a natural child of the Vietnam veteran, regardless of age or
        marital status, who was conceived after the date on which the
        veteran first entered the Republic of Vietnam during the Vietnam
        era.
             ``(2) The term `Vietnam veteran' means a veteran who performed
        active military, naval, or air service in the Republic of Vietnam
        during the Vietnam era.
        ``Sec. 1802. Spina bifida conditions covered
         ``This chapter applies with respect to all forms and manifestations
    of spina bifida except spina bifida occulta.
        ``Sec. 1803. Health care
             ``(a) In accordance with regulations which the Secretary shall
        prescribe, the Secretary shall provide a child of a Vietnam veteran
        who is suffering from spina bifida with such health care as the
        Secretary determines is needed by the child for the spina bifida or
        any disability that is associated with such condition.
             ``(b) The Secretary may provide health care under this section
        directly or by contract or other arrangement with any health care
        provider.
             ``(c) For the purposes of this section--
                 ``(1) The term `health care'--
                     ``(A) means home care, hospital care, nursing home
                care, outpatient care, preventive care, habilitative and
                rehabilitative care, case management, and respite care; and
                     ``(B) includes--
                      ``(i) the training of appropriate members of a child's
                family or household in the care of the child; and
                      ``(ii) the provision of such pharmaceuticals,
                supplies, equipment, devices, appliances, assistive
                technology, direct transportation costs to and from approved
                sources of health care, and other materials as the Secretary
                determines necessary.
                 ``(2) The term `health care provider' includes specialized
            spina bifida clinics, health care plans, insurers,
            organizations, institutions, and any other entity or individual
            who furnishes health care that the Secretary determines
            authorized under this section.
                 ``(3) The term `home care' means outpatient care,
            habilitative and rehabilitative care, preventive health
            services, and health-related services furnished to an individual
            in the individual's home or other place of residence.
                 ``(4) The term `hospital care' means care and treatment for
            a disability furnished to an individual who has been admitted to
            a hospital as a patient.
                 ``(5) The term `nursing home care' means care and treatment
            for a disability furnished to an individual who has been
            admitted to a nursing home as a resident.
                 ``(6) The term `outpatient care' means care and treatment
            of a disability, and preventive health services, furnished to an
            individual other than hospital care or nursing home care.
                 ``(7) The term `preventive care' means care and treatment
            furnished to prevent disability or illness, including periodic
            examinations, immunizations, patient health education, and such
            other services as the Secretary determines necessary to provide
            effective and economical preventive health care.
                 ``(8) The term `habilitative and rehabilitative care' means
            such professional, counseling, and guidance services and
            treatment programs (other than vocational training under section
            1804 of this title) as are necessary to develop, maintain, or
            restore, to the maximum extent practicable, the functioning of a
            disabled person.
                 ``(9) The term `respite care' means care furnished on an
            intermittent basis for a limited period to an individual who
            resides primarily in a private residence when such care will
            help the individual to continue residing in such private
            residence.
        ``Sec. 1804. Vocational training and rehabilitation
             ``(a) Pursuant to such regulations as the Secretary may
        prescribe, the Secretary may provide vocational training under this
        section to a child of a Vietnam veteran who is suffering from spina
        bifida if the Secretary determines that the achievement of a
        vocational goal by such child is reasonably feasible.
             ``(b) Any program of vocational training for a child under this
        section shall be designed in consultation with the child in order to
        meet the child's individual needs and shall be set forth in an
        individualized written plan of vocational rehabilitation.

    [[Page 929]]

             ``(c)(1) A vocational training program for a child under this
        section--
                 ``(A) shall consist of such vocationally oriented services
            and assistance, including such placement and post-placement
            services and personal and work adjustment training, as the
            Secretary determines are necessary to enable the child to
            prepare for and participate in vocational training or
            employment; and
                 ``(B) may include a program of education at an institution
            of higher education if the Secretary determines that the program
            of education is predominantly vocational in content.
             ``(2) A vocational training program under this subsection may
        not include the provision of any loan or subsistence allowance or
        any automobile adaptive equipment.
             ``(d)(1) Except as provided in paragraph (2) and subject to
        subsection (e)(2), a vocational training program under this section
        may not exceed 24 months.
             ``(2) The Secretary may grant an extension of a vocational
        training program for a child under this section for up to 24
        additional months if the Secretary determines that the extension is
        necessary in order for the child to achieve a vocational goal
        identified (before the end of the first 24 months of such program)
        in the written plan of vocational rehabilitation formulated for the
        child pursuant to subsection (b).
             ``(e)(1) A child who is pursuing a program of vocational
        training under this section and is also eligible for assistance
        under a program under chapter 35 of this title may not receive
        assistance under both such programs concurrently. The child shall
        elect (in such form and manner as the Secretary may prescribe) the
        program under which the child is to receive assistance.
             ``(2) The aggregate period for which a child may receive
        assistance under this section and chapter 35 of this title may not
        exceed 48 months (or the part-time equivalent thereof).
        ``Sec. 1805. Monetary allowance
             ``(a) The Secretary shall pay a monthly allowance under this
        chapter to any child of a Vietnam veteran for any disability
        resulting from spina bifida suffered by such child.
             ``(b)(1) The amount of the allowance paid to a child under this
        section shall be based on the degree of disability suffered by the
        child, as determined in accordance with such schedule for rating
        disabilities resulting from spina bifida as the Secretary may
        prescribe.
             ``(2) The Secretary shall, in prescribing the rating schedule
        for the purposes of this section, establish three levels of
        disability upon which the amount of the allowance provided by this
        section shall be based.
             ``(3) The amounts of the allowance shall be $200 per month for
        the lowest level of disability prescribed, $700 per month for the
        intermediate level of disability prescribed, and $1,200 per month
        for the highest level of disability prescribed. Such amounts are
        subject to adjustment under section 5312 of this title.
             ``(c) Notwithstanding any other provision of law, receipt by a
        child of an allowance under this section shall not impair, infringe,
        or otherwise affect the right of the child to receive any other
        benefit to which the child may otherwise be entitled under any law
        administered by the Secretary, nor shall receipt of such an
        allowance impair, infringe, or otherwise affect the right of any
        individual to receive any benefit to which the individual is
        entitled under any law administered by the Secretary that is based
        on the child's relationship to the individual.
             ``(d) Notwithstanding any other provision of law, the allowance
        paid to a child under this section shall not be considered income or
        resources in determining eligibility for or the amount of benefits
        under any Federal or federally assisted program.
        ``Sec. 1806. Effective date of awards
         ``The effective date for an award of benefits under this chapter
    shall be fixed in accordance with the facts found, but shall not be
    earlier than the date of receipt of application for the benefits.''.
         (2) The tables of chapters before part I and at the beginning of
    part II of such title are each amended by inserting after the item
    referring to chapter 17 the following new item:

    ``18. Benefits for Children of Vietnam Veterans Who Are Born
     With Spina Bifida............................................   1801''.

             (c) Section 5312 of title 38, United States Code, is amended--
                 (1) in subsection (a)--
                     (A) by striking out ``and the rate of increased
                pension'' and inserting in lieu thereof ``, the rate of
                increased pension''; and
                     (B) by inserting after ``on account of children,'' the
                following: ``and each rate of monthly allowance paid under
                section 1805 of this title,''; and
                 (2) in subsection (c)(1), by striking out ``and 1542'' and
            inserting in lieu thereof ``1542, and 1805''.
             (d) This section and the amendments made by this section shall
        take effect on January 1, 1997.]
        [Sec. 422. (a) Section 1151 of title 38, United States Code, is
    amended--
             (1) by striking out the first sentence and inserting in lieu
        thereof the following:
             ``(a) Compensation under this chapter and dependency and
        indemnity compensation under chapter 13 of this title shall be
        awarded for a qualifying additional disability or a qualifying death
        of a veteran in the same manner as if such additional disability or
        death were service-connected. For purposes of this section, a
        disability or death is a qualifying additional disability or
        qualifying death if the disability or death was not the result of
        the veteran's willful misconduct and--
                 ``(1) the disability or death was caused by hospital care,
            medical or surgical treatment, or examination furnished the
            veteran under any law administered by the Secretary, either by a
            Department employee or in a Department facility as defined in
            section 1701(3)(A) of this title, and the proximate cause of the
            disability or death was--
                     ``(A) carelessness, negligence, lack of proper skill,
                error in judgment, or similar instance of fault on the part
                of the Department in furnishing the hospital care, medical
                or surgical treatment, or examination; or
                     ``(B) an event not reasonably foreseeable; or ``(2) the
                disability or death was proximately caused by the provision
                of training and rehabilitation services by the Secretary
                (including by a service-provider used by the Secretary for
                such purpose under section 3115 of this title) as part of an
                approved rehabilitation program under chapter 31 of this
                title.''; and
             (2) in the second sentence--
                 (A) by redesignating that sentence as subsection (b);
                 (B) by striking out ``, aggravation,'' both places it
            appears; and
                 (C) by striking out ``sentence'' and substituting in lieu
            thereof ``subsection''.
             (b)(1) The amendments made by subsection (a) shall take effect
        on October 1, 1996.
             (2) Section 1151 of title 38, United States Code (as amended by
        subsection (a)), shall govern all administrative and judicial
        determinations of eligibility for benefits under such section that
        are made with respect to claims filed on or after the effective date
        set forth in paragraph (1), including those based on original
        applications and applications seeking to reopen, revise, reconsider,
        or otherwise readjudicate on any basis claims for benefits under
        such section 1151 or any provision of law that is a predecessor of
        such section.
             (c) Nothwithstanding subsection (b)(1), section 421(d), or any
        other provision of this Act, section 421 and this section shall not
        take effect until October 1, 1997, unless legislation other than
        this Act is enacted to provide for an earlier effective date.]
        [Sec. 423. The amount provided in title I for ``Veterans Health
    Administration--Medical Care'' is hereby increased by $5,000,000.]
        [Sec. 424. FHA Mortgage Insurance Premiums.--Section 203(c)(2)(A) of
    the National Housing Act (12 U.S.C. 1709(c)(2)(A)) is amended by
    inserting after the first sentence the following new sentence: ``In the
    case of a mortgage for which the mortgagor is a first-time homebuyer who
    completes a program of counseling with respect to the responsibilities
    and financial management involved in homeownership that is approved by
    the Secretary, the premium payment under this subparagraph shall not
    exceed 2.0 percent of the amount of the original insured principal
    obligation of the mortgage.''.]
        [Sec. 425. (a) Authority To Use Amounts Borrowed From Family Members
    for Downpayments on FHA-Insured Loans.--Section 203(b)(9) of the
    National Housing Act (12 U.S.C. 1709(b)(9)) is amended by inserting
    before the period at the end the following: ``: Provided further, That
    for purposes of this paragraph, the Secretary shall consider as cash or
    its equivalent any amounts borrowed from a family member (as such term
    is defined in section 201), subject only to the requirements that, in
    any case in which the repayment of

    [[Page 930]]

    such borrowed amounts is secured by a lien against the property, such
    lien shall be subordinate to the mortgage and the sum of the principal
    obligation of the mortgage and the obligation secured by such lien may
    not exceed 100 percent of the appraised value of the property plus any
    initial service charges, appraisal, inspection, and other fees in
    connection with the mortgage''. ]
        [(b) Definition of Family Member.--Section 201 of the National
    Housing Act (12 U.S.C. 1707) is amended by adding at the end the
    following new subsections:
         ``(e) The term `family member' means, with respect to a mortgagor
    under such section, a child, parent, or grandparent of the mortgagor (or
    the mortgagor's spouse). In determining whether any of the relationships
    referred to in the preceding sentence exist, a legally adopted son or
    daughter of an individual (and a child who is a member of an
    individual's household, if placed with such individual by an authorized
    placement agency for legal adoption by such individual), and a foster
    child of an individual, shall be treated as a child of such individual
    by blood.
         ``(f) The term `child' means, with respect to a mortgagor under
    such section, a son, stepson, daughter, or stepdaughter of such
    mortgagor.''.]
        [Sec. 426. Calculation of Downpayment.--Section 203(b) of the
    National Housing Act (12 U.S.C. 1709(b)) is amended by adding at the end
    the following new paragraph:
             ``(10) Alaska and Hawaii.--
                 ``(A) In General.--Notwithstanding any other provision of
            this subsection, with respect to a mortgage originated in the
            State of Alaska or the State of Hawaii and endorsed for
            insurance in fiscal year 1997, involving a principal obligation
            not in excess of the sum of--
                     ``(i) the amount of the mortgage insurance premium paid
                at the time the mortgage is insured; and
                     ``(ii)(I) in the case of a mortgage for a property with
                an appraised value equal to or less than $50,000, 98.75
                percent of the appraised value of the property;
                     ``(II) in the case of a mortgage for a property with an
                appraised value in excess of $50,000 but not in excess of
                $125,000, 97.65 percent of the appraised value of the
                property;
                     ``(III) in the case of a mortgage for a property with
                an appraised value in excess of $125,000, 97.15 percent of
                the appraised value of the property; or
                     ``(IV) notwithstanding subclauses (II) and (III), in
                the case of a mortgage for a property with an appraised
                value in excess of $50,000 that is located in an area of the
                State for which the average closing cost exceeds 2.10
                percent of the average, for the State, of the sale price of
                properties located in the State for which mortgages have
                been executed, 97.75 percent of the appraised value of the
                property.
                 ``(B) Average Closing Cost.--For purposes of this
            paragraph, the term `average closing cost' means, with respect
            to a State, the average, for mortgages executed for properties
            that are located within the State, of the total amounts (as
            determined by the Secretary) of initial service charges,
            appraisal, inspection, and other fees (as the Secretary shall
            approve) that are paid in connection with such mortgages.''.]
        [Sec. 427. Delegation of Single Family Mortgage Insuring Authority
    to Direct Endorsement Mortgagees.--Title II of the National Housing Act
    (12 U.S.C. 1707 et seq.) is amended by adding at the end the following
    new section:
         ``delegation of insuring authority to direct endorsement mortgagees
         ``Sec. 256.(a) Authority.--The Secretary may delegate, to one or
    more mortgagees approved by the Secretary under the direct endorsement
    program, the authority of the Secretary under this Act to insure
    mortgages involving property upon which there is located a dwelling
    designed principally for occupancy by 1 to 4 families.
         ``(b) Considerations.--In determining whether to delegate authority
    to a mortgagee under this section, the Secretary shall consider the
    experience and performance of the mortgagee compared to the default rate
    of all insured mortgages in comparable markets, and such other factors
    as the Secretary determines appropriate to minimize risk of loss to the
    insurance funds under this Act.
         ``(c) Enforcement of Insurance Requirements.--
             ``(1) In General.--If the Secretary determines that a mortgage
        insured by a mortgagee pursuant to delegation of authority under
        this section was not originated in accordance with the requirements
        established by the Secretary, and the Secretary pays an insurance
        claim with respect to the mortgage within a reasonable period
        specified by the Secretary, the Secretary may require the mortgagee
        approved under this section to indemnify the Secretary for the loss.
             ``(2) Fraud or Misrepresentation.--If fraud or
        misrepresentation was involved in connection with the origination,
        the Secretary may require the mortgagee approved under this section
        to indemnify the Secretary for the loss regardless of when an
        insurance claim is paid.
         ``(d) Termination of Mortgagee's Authority.--If a mortgagee to
    which the Secretary has made a delegation under this section violates
    the requirements and procedures established by the Secretary or the
    Secretary determines that other good cause exists, the Secretary may
    cancel a delegation of authority under this section to the mortgagee by
    giving notice to the mortgagee. Such a cancellation shall be effective
    upon receipt of the notice by the mortgagee or at a later date specified
    by the Secretary. A decision by the Secretary to cancel a delegation
    shall be final and conclusive and shall not be subject to judicial
    review.
         ``(e) Requirements and Procedures.--Before approving a delegation
    under this section, the Secretary shall issue regulations establishing
    appropriate requirements and procedures, including requirements and
    procedures governing the indemnification of the Secretary by the
    mortgagee.''.]
        Sec. [428] 420. Implementation of Comprehensive Conservation and
    Management Plans.--Notwithstanding section 320(g) of the Federal Water
    Pollution Control Act (33 U.S.C. 1330(g)), funds made available pursuant
    to authorization under such section for fiscal year [1997] 1998 and
    prior fiscal years may be used for implementing comprehensive
    conservation and management plans.
        [Sec. 429. (a) Plan.--(1) The Secretary of Veterans Affairs shall
    develop a plan for the allocation of health care resources (including
    personnel and funds) of the Department of Veterans Affairs among the
    health care Networks of the Department so as to ensure that veterans who
    have similar economic status and eligibility priority and who are
    eligible for medical care have similar access to such care regardless of
    the region of the United States in which such veterans reside.
         (2) The plan shall--
             (A) reflect, to the maximum extent possible, the Veterans
        Integrated Service Network developed by the Department to account
        for forecasts in expected workload and to ensure fairness to
        facilities that provide cost-efficient health care; and
             (B) include--
                 (i) procedures to identify reasons for variations in
            operating costs among similar facilities where Network
            allocations are based on similar unit costs for similar services
            and workload;
                 (ii) ways to improve the allocation of resources so as to
            promote efficient use of resources and provision of quality
            health care;
                 (iii) adjustments to unit costs in subsection (a) to
            reflect factors which directly influence the cost of health care
            delivery within each Network and where such factors are not
            under the control of Network or Department management; and
                 (iv) include forecasts in expected workload and
            consideration of the demand for Veterans Administration health
            care that may not be reflected in current workload projections.
         (3) The Secretary shall prepare the plan in consultation with the
    Under Secretary of Health of the Department of Veterans Affairs.
         (b) Plan Elements.--The plan under subsection (a) shall set forth--
             (1) milestones for achieving the goal referred to in paragraph
        (1) of that subsection; and
             (2) a means of evaluating the success of the Secretary in
        meeting the goal.
         (c) Submittal to Congress.--The Secretary shall submit to Congress
    the plan developed under subsection (a) not later than 180 days after
    the date of the enactment of this Act.
         (d) Implementation.--The Secretary shall implement the plan
    developed under subsection (a) not later than 60 days after submitting
    the plan to Congress under subsection (c), unless within that time the
    Secretary notifies Congress that the plan will not be implemented in
    that time and includes with the notification an explanation why the plan
    will not be implemented in that time.]
        [Sec. 430. GAO Audit on Staffing and Contracting.--The Comptroller
    General shall audit the operations of the Office of Federal Housing
    Enterprise Oversight concerning staff organization, expertise, capacity,
    and contracting authority to ensure that the office resources and
    contract authority are adequate and that they are being used
    appropriately to ensure that the Federal National Mort-

    [[Page 931]]

    gage Association and the Federal Home Loan Mortgage Corporation are
    adequately capitalized and operating safely.]
        [Sec. 431. None of the funds appropriated or otherwise made
    available to the National Aeronautics and Space Administration by this
    Act, or any other Act enacted before the date of enactment of this Act,
    may be used by the Administrator of the National Aeronautics and Space
    Administration to relocate aircraft of the National Aeronautics and
    Space Administration based east of the Mississippi River to the Dryden
    Flight Research Center in California for the purpose of the
    consolidation of such aircraft.]
        [Sec. 432. To Promote and Support Management Reorganization of the
    National Aeronautics and Space Administration.--(a) Short Title.--This
    section may be cited as the ``National Aeronautics and Space
    Administration Federal Employment Reduction Assistance Act of 1996.''.
         (b) Definitions.--For the purpose of this section--
             (1) the term ``Administrator'' means the Administrator of the
        National Aeronautics and Space Administration; and
             (2) the term ``employee'' means an employee of the National
        Aeronautics and Space Administration serving under an appointment
        without time limitation, who has been currently employed with NASA
        for a continuous period of at least twelve months, except that such
        term does not include--
                 (A) a reemployed annuitant under subchapter III of chapter
            83 or chapter 84 of title 5, United States Code, or another
            retirement system for employees of the Government;
                 (B) an employee who is in receipt of a specific notice of
            involuntary separation for misconduct or unacceptable
            performance;
                 (C) an employee who, upon completing an additional period
            of service as referred to in section 3(b)(2)(B)(ii) of the
            Federal Workforce Restructuring Act of 1994 (Public Law 103-226;
            108 Stat. 111), would qualify for a voluntary separation
            incentive payment under section 3 of such Act; or
                 (D) an employee who has previously received any voluntary
            separation incentive payment by the Federal Government under
            this Act or any other authority and has not repaid such payment.
         (c) Incentive Payment Program.--In order to avoid or minimize the
    need for involuntary separations due to a reduction in force,
    installation closure, reorganization, transfer of function, or other
    similar action affecting the National Aeronautics and Space
    Administration, the Administrator shall establish a program under which
    separation pay, subject to the availability of appropriated funds, may
    be offered to encourage eligible employees to separate from service
    voluntarily (whether by retirement or resignation).
         (d) Incentive Payments.--In order to receive a voluntary separation
    incentive payment, an employee must separate voluntarily (whether by
    retirement or resignation) during the period of time for which the
    payment of incentives has been authorized for the employee under the
    agency plan. Such separation payments--
             (1) shall be paid in a lump sum after the employee's
        separation, and
             (2) shall be equal to the lesser of--
                 (A) an amount equal to the amount the employee would be
            entitled to receive under section 5595(c) of title 5, United
            States Code, if the employee were entitled to payment under such
            section; or
                 (B) an amount that shall not exceed $25,000;
             (3) shall not be a basis for payment, and shall not be included
        in the computation, of any other type of Government benefit;
             (4) shall not be taken into account for purposes of determining
        the amount of any severance pay to which an individual may be
        entitled under section 5595 of title 5, United States Code, based on
        any other separation;
             (5) shall be considered payment for a voluntary separation; and
             (6) shall be paid from the appropriations or funds available
        for payment of the basic pay of the employee.
         (e) Effect of Subsequent Employment With the Government.--
             (1) An individual who has received a voluntary separation
        incentive payment under this section and accepts any employment with
        the Government of the United States within five years after the date
        of the separation on which the payment is based shall be required to
        repay, prior to the individual's first day of employment, the entire
        amount of the incentive payment to NASA.
             (2) If the employment under paragraph (1) above is with an
        executive agency (as defined by section 105 of title 5, United
        States Code), the United States Postal Service, or the Postal Rate
        Commission, the Director of the Office of Personnel Management may,
        at the request of the head of the agency, waive the repayment if the
        individual involved possesses unique abilities and is the only
        qualified applicant available for the position.
             (3) If the employment under paragraph (1) above is with an
        entity in the legislative branch, the head of the entity or the
        appointing official may waive the repayment if the individual
        involved possesses unique abilities and is the only qualified
        applicant available for the position.
             (4) If the employment under paragraph (1) above is with the
        judicial branch, the Director of the Administrative Office of the
        United States Courts may waive the repayment if the individual
        involved possesses unique abilities and is the only qualified
        applicant available for the position.
             (5) For the purpose of this section, the term ``employment''--
                 (A) includes employment of any length or under any type of
            appointment, but does not include employment that is without
            compensation; and
                 (B) includes employment under a personal services contract.
         (f) Effect of Subsequent Disability Retirement.--An employee who
    has received an incentive payment is ineligible to receive an annuity
    for reasons of disability under applicable regulations, unless the
    incentive payment is repaid.
         (g) Additional Agency Contributions to the Retirement Fund.--
             (1) In addition to any other payments which it is required to
        make under subchapter III of chapter 83 or chapter 84 of title 5,
        United States Code, NASA shall remit to the Office of Personnel
        Management for deposit in the Treasury of the United States to the
        credit of the Civil Service Retirement and Disability Fund an amount
        equal to 15 percent of the final basic pay of each employee who is
        covered under subchapter III of chapter 83 or chapter 84 of title 5
        to whom a voluntary separation incentive has been paid under this
        Act.
             (2) For the purpose of this section, the term ``final basic
        pay'', with respect to an employee, means the total amount of basic
        pay which would be payable for a year of service by such employee,
        computed using the employee's final rate of basic pay, and, if last
        serving on other than a full-time basis, with appropriate adjustment
        therefor.
         (h) Reduction of Agency Employment Levels.--
             (1) Total full-time-equivalent employment in NASA shall be
        reduced by one for each separation of an employee who receives a
        voluntary separation incentive payment under this Act. The reduction
        will be calculated by comparing the agency's full-time-equivalent
        employment for the fiscal year in which the voluntary separation
        payments are made with the authorized full-time-equivalent
        employment for the prior fiscal year.
             (2) The Office of Management and Budget shall monitor and take
        appropriate action necessary to ensure that the requirements of this
        section are met.
             (3) The President shall take appropriate action to ensure that
        functions involving more than 10 full time equivalent employees are
        not converted to contracts by reason of the enactment of this
        section, except in cases in which a cost comparison demonstrates
        such contracts would be to the advantage of the Government.
             (4) The provisions of subsections (1) and (3) of this section
        may be waived upon a determination by the President that--
                 (A) the existence of a state of war or other national
            emergency so requires; or
                 (B) the existence of an extraordinary emergency which
            threatens life, health, safety, property, or the environment so
            requires.
         (i) Reports.--No later than March 31 of each fiscal year, NASA
    shall submit to the Office of Personnel Management, who will
    subsequently report to the Committee on Governmental Affairs of the
    Senate and the Committee on Government Reform and Oversight of the House
    of Representatives a report which, with respect to the preceding fiscal
    year, shall include--
             (1) the number of employees who received voluntary separation
        incentives;
             (2) the average amount of such incentives; and
             (3) the average grade or pay level of the employees who
        received incentives.
         (j) Effective Date.--
             (1) The provisions of this section shall take effect on the
        date of enactment of this Act.
             (2) No voluntary separation incentive under this section may be
        paid based on the separation of an employee after September 30,
        2000.]

    [[Page 932]]

        [Sec. 433. (a) Subject to the concurrence of the Administrator of
    the General Services Administration (GSA) and notwithstanding section
    707 of Public Law 103-433, the Administrator of the National Aeronautics
    and Space Administration may convey to the city of Downey, California,
    all right, title, and interest of the United States in and to a parcel
    of real property, including improvements thereon, consisting of
    approximately 60 acres and known as Parcels III, IV, V, and VI of the
    NASA Industrial Plant, Downey, California.
         (b)(1) Delay in Payment of Consideration.--After the end of the 20-
    year period beginning on the date on which the conveyance under
    subsection (a) is completed, the City of Downey shall pay to the United
    States an amount equal to fair market value of the conveyed property as
    of the date of the Federal conveyance.
         (2) Effect of Reconveyance by the City.--If the City of Downey
    reconveys all or any part of the conveyed property during such 20-year
    period, the City shall pay to the United States an amount equal to the
    fair market value of the reconveyed property as of the time of the
    reconveyance, excluding the value of any improvements made to the
    property by the City.
         (3) Determination of Fair Market Value.--The Administrator of GSA
    shall determine fair market value in accordance with Federal appraisal
    standards and procedures.
         (4) Treatment of Leases.--The Administrator of GSA may treat a
    lease of the property within such 20-year period as a reconveyance if
    the Administrator determines that the lease is being used to avoid
    application of paragraph (b)(2).
         (5) Deposit of Proceeds.--The Administrator of GSA shall deposit
    any proceeds received under this subsection in the special account
    established pursuant to section 204(h)(2) of the Federal Property and
    Administrative Services Act of 1949 (40 U.S.C. 485(h)(2)).
         (c) The exact acreage and legal description of the real property to
    be conveyed under subsection (a) shall be determined by a survey
    satisfactory to the Administrator of GSA. The cost of the survey shall
    be borne by the City of Downey, California.
         (d) The Administrator of GSA may require such additional terms and
    conditions in connection with the conveyance under subsection (a) as the
    Administrator of GSA considers appropriate to protect the interests of
    the United States.
         (e) If the City at any time after the conveyance of the property
    under subsection (a) notifies the Administrator of GSA that the City no
    longer wishes to retain the property, it may convey the property under
    the terms of subsection (b), or, it may revert all right, title, and
    interest in and to the property (including any facilities, equipment, or
    fixtures conveyed, but excluding the value of any improvements made to
    the property by the City) to the United States, and the United States
    shall have the right of immediate entry onto the property.] (Departments
    of Veterans Affairs and Housing and Urban Development, and Independent
    Agencies Appropriations Act, 1997.)