[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.)