    [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 1999

    [[Page 813]]

                         DEPARTMENT OF VETERANS AFFAIRS

        The 1999 Budget provides $18,895 million in discretionary budget
    authority for veterans' health, benefits, and other services.

        DEPARTMENT OF VETERANS AFFAIRS' IMPLEMENTATION OF THE GOVERNMENT
                           PERFORMANCE AND RESULTS ACT

        Fiscal Year 1999 will mark the first year of full implementation of
    the Government Performance and Results Act (GPRA). In preparing to meet
    this time line, in Fiscal Year 1997 the Department of Veterans Affairs
    (VA) completed a strategic plan covering Fiscal Years 1998 through 2003.
    The efforts required to prepare this plan helped strengthen VA's
    planning process. The Department's strategic plan was submitted to the
    Congress in September, 1997. In addition to providing general goals for
    each of VA's major programs, the plan looks across all VA programs to
    articulate department-wide cross-cutting goals. The strategic plan
    provides a comprehensive picture of what VA is striving to achieve and
    how progress will be measured.

        The 1999 Budget contains VA's initial annual performance plan, as
    required by GPRA. Performance information that was previously contained
    in the budget appendix is now contained in the VA performance plan. The
    performance plan contains specific performance goals within each program
    that support the broader general goals in the strategic plan. VA has
    integrated the annual performance plan requirements into its budget
    request to begin to draw a closer relationship between resources and
    performance. Resources to accomplish performance goals for a particular
    program may be provided through more than one appropriation account.

                         VETERANS HEALTH ADMINISTRATION

                                  Federal Funds

    General and special funds:

                                  Medical Care

                          (including transfer of funds)

        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;
    administrative and legal expenses of the Department for collecting and
    recovering amounts owed the Department as authorized under 38 U.S.C.
    chapter 17, and the Federal Medical Care Recovery Act, 42 U.S.C. 2651 et
    seq.; and not to exceed $8,000,000 to fund cost comparison studies as
    referred to in 38 U.S.C. 8110(a)(5); [$17,057,396,000] $17,027,975,000,
    plus reimbursements: Provided, That of the funds made available under
    this heading, [$570,000,000] $635,000,000 is for the equipment and land
    and structures object classifications only, which amount shall not
    become available for obligation until August 1, [1998] 1999, and shall
    remain available until September 30, [1999] 2000: Provided further, That
    [of the amount made available under this heading, not to exceed
    $5,000,000 shall be for a study on the cost-effectiveness of contracting
    with local hospitals in east central Florida for the provision of non-
    emergent inpatient health care needs of veterans] not to exceed 8.3
    percent of the funds available under this heading shall remain available
    until September 30, 2000.
         In addition, in conformance with Public Law 105-33 establishing the
    Department of Veterans Affairs Medical Care Collections Fund, such sums
    as may be deposited to such Fund pursuant to 38 U.S.C. 1729A may be
    transferred to this account, to remain available until expended for the
    purposes of this account. (Departments of Veterans Affairs and Housing
    and Urban Development, and Independent Agencies Appropriations Act,
    1998.)

                  Unavailable Collections (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0160-0-1-703      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
        Balance, start of year:
    01.99 Balance, start of year............                       1           1
        Receipts:
    02.01 Medical care collections..........                     688         677
                                               ---------   ---------  ----------
    03.00 Offsetting collections............           1
    04.00 Total: Balances and collections...           1         689         678
        Appropriation:
    05.01 Medical care......................                    -688        -677
    07.99 Total balance, end of year........           1           1           1
    ---------------------------------------------------------------------------

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0160-0-1-703      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Direct program:

            Operating expenses:
              Provision of veterans health
                  care:
    00.01       Acute hospital care.........       5,038       4,820       4,458
    00.02       Rehabilitative care.........         375         325         298
    00.03       Psychiatric care............       1,384       1,294       1,200
    00.04       Nursing home care...........       1,659       1,780       1,869
    00.05       Subacute care...............         470         413         382
    00.06       Residential care............         265         280         290
    00.07       Outpatient care.............       5,851       6,807       7,600
    00.08       Miscellaneous benefits and
                  services..................         707         714         725
    00.09     CHAMPVA.......................          94          97         100
                                               ---------   ---------  ----------
    00.91       Total operating expenses....      15,843      16,530      16,922
            Capital investment:
              Provision of veterans health
                  care:
    01.01       Acute hospital care.........         418         412         298
    01.02       Rehabilitative care.........          30          29          21
    01.03       Psychiatric care............         106         104          75
    01.04       Nursing home care...........          84          82          60
    01.05       Subacute care...............          43          42          31
    01.06       Residential care............          26          26          19
    01.07       Outpatient care.............         481         472         341
    01.08       Miscellaneous benefits and
                  services..................          40          39          28
    01.09     CHAMPVA.......................           3           3           2
                                               ---------   ---------  ----------
    01.91       Total capital investment....       1,231       1,209         875
                                               ---------   ---------  ----------
    01.92     Total direct program..........      17,074      17,739      17,797
    09.01 Reimbursable program..............          75         104         147
                                               ---------   ---------  ----------
    10.00   Total obligations...............      17,149      17,843      17,944
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested.......         731         664         673
    22.00 New budget authority (gross)......      17,088      17,849      17,852
    22.10 Resources available from
            recoveries of prior year
            obligations.....................           1           3           3
    22.30 Unobligated balance expiring......          -8
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......      17,812      18,516      18,528

    [[Page 814]]

    23.95 New obligations...................     -17,149     -17,843     -17,944
    24.40 Unobligated balance available, end
            of year: Uninvested.............         664         673         583
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Current:

    40.00   Appropriation...................      17,013      17,057      17,028
    40.25   Appropriation (special fund,
              indefinite)...................                     688         677
                                               ---------   ---------  ----------
    43.00     Appropriation (total).........      17,013      17,745      17,705
          Permanent:

            Spending authority from
                offsetting collections:
    68.00     Offsetting collections (cash).          76         104         147
    68.45     Portion not available for
                obligation (limitation on
                obligations)................          -1
                                               ---------   ---------  ----------
    68.90       Spending authority from
                  offsetting collections
                  (total)...................          75         104         147
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................      17,088      17,849      17,852
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Uninvested...       2,394       2,764       2,681
    73.10 New obligations...................      17,149      17,843      17,944
    73.20 Total outlays (gross).............     -16,677     -17,923     -17,822
    73.40 Adjustments in expired accounts...        -102
    73.45 Adjustments in unexpired accounts.          -1          -3          -3
    74.40 Unpaid obligations, end of year:
            Obligated balance: Uninvested...       2,764       2,681       2,800
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority      14,455      15,472      15,369
    86.93 Outlays from current balances.....       2,147       2,347       2,306
    86.97 Outlays from new permanent
            authority.......................          75         104         147
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........      16,677      17,923      17,822
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

            Offsetting collections (cash)
                from:
    88.00     Federal sources...............         -40         -53         -75
    88.40     Non-Federal sources...........         -36         -51         -72
                                               ---------   ---------  ----------
    88.90       Total, offsetting
                  collections (cash)........         -76        -104        -147
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................      17,012      17,745      17,705
    90.00 Outlays...........................      16,602      17,819      17,675
    ---------------------------------------------------------------------------

        In accordance with the Government Performance and Results Act, VA
    Medical Care measures its performance through associated domains of
    value including: cost; access; technical quality; customer satisfaction;
    and functional status. Detailed performance goals can be found in the
    annual performance plan in VA's Budget Submission.

        Public Law 105-33, the Balanced Budget Act of 1997, established the
    Department of Veterans Affairs Medical Care Collection Fund (MCCF) and
    allowed VA to retain all collections from third party insurance
    companies, other copayments and related medical fees. The ability for VA
    to retain these nonappropriated funds is critical to VA's success in
    providing care to veterans. As the collections are earned and deposited
    in the fund, they are transferred to this account, as provided for by
    the appropriation, and used to enhance medical care provided to
    veterans. For 1999, VA estimates that over $677 million will be
    collected through this effort with revenues growing to over $993 million
    by 2003. To accomplish this growth, VA will begin to bill usual and
    customary charges for inpatient and outpatient procedures, identify more
    patients having insurance, and improve its debt collection efforts. The
    1999 budget includes a legislative proposal which will permanently
    extend current legal provisions due to expire in FY 2003. 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, copayments, and income verification
    provisions.

                                    WORKLOAD

        Provision of Veterans Health Care--
            Acute hospital care.--Costs for 1999 are estimated to decrease
        by $464 million for operating medical, neurological, surgical,
        contract and State home hospital beds, reflecting the shift to
        increased use of ambulatory care.
            Estimated operating levels are:

                                         1997 actual  1998 est.   1999 est.
      Patients treated..................     497,547     440,985     399,409
      Average daily census..............      10,461       8,523       6,964
      Average employment................      61,756      55,913      50,858

            Rehabilitative care.--A decrease of $34 million in 1999 is
        estimated for the provision of rehabilitative care, including spinal
        cord injury care.
            Estimated operating levels are:

                                         1997 actual  1998 est.   1999 est.
      Patients treated..................      18,224      16,142      14,563
      Average daily census..............       1,423       1,154         933
      Average employment................       5,293       4,653       4,068

            Psychiatric care.--A decrease of $121 million is estimated in
        1999 for the inpatient care of veterans with problems related to
        mental illness, including alcohol and drug problems.

                                         1997 actual  I997 est.   1999 est.
      Patients treated..................     147,117      13,312     117,564
      Average daily census..............       7,919       6,424       5,192
      Average employment................      21,064      18,907      16,852

            Nursing home care.--In 1999, an increase of $70 million is
        estimated for the care of residents in VA nursing homes, contract
        nursing homes and State nursing homes.
            Estimated operating levels are:

                                         1997 actual  1998 est.   1999 est.
      Patients treated..................      88,657      92,370      93,935
      Average daily census..............      33,805      34,088      34,611
      Average employment................      19,708      19,636      19,911

            Subacute care.--A decrease of $41 million is estimated in 1999
        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.

                                         1997 actual  1998 est.   1999 est.
    Patients treated....................      36,651      32,464      29,288
    Average daily census................       3,844       3,118       2,520
    Average employment..................       7,736       6,705       5,690

            Residential care.--An increase of $3 million is estimated in
        1999 for the care of veterans in locations other than their own
        homes, such as residential rehabilitation and domiciliary care
        programs.

                                         1997 actual  1998 est.   1999 est.
    Patients treated....................      38,650      40,282      40,282
    Average daily census................       9,901      10,139      10,139
    Average employment..................       3,766       3,853       3,808

            Outpatient care.--An increase of $686 million is estimated in
        1999 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

                                         1997 actual  1998 est.   1999 est.
      Medical visits (in thousands):
      Staff visits......................      30,436      32,761      34,703
      Fee visits........................       1,483       1,550       1,550
      Readjustment counseling...........         729         767         774
                                        ------------------------------------
            Total.......................      32,648      35,078      37,027
                                        ====================================

    [[Page 815]]

      Dental:
        Staff:
          Examinations..................     270,743     275,000     275,000
          Treatments....................     152,955     155,000     155,000
                                        ------------------------------------
            Total.......................     423,698     430,000     430,000
                                        ====================================
        Fee: Cases completed............      17,577      18,000      18,000
                                        ====================================
      Average employment................      60,059      66,692      72,694
                                        ====================================

            Miscellaneous benefits and services.--This activity includes
        items of nondirect medical care and treatment such 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. No funding change is
        estimated for 1999.

                                         1997 actual  1998 est.   1999 est.
      Average employment................       6,607       6,495       6,384

            Civilian health and medical program of the Department of
        Veterans Affairs (CHAMPVA).--An increase of $2 million is estimated
        in 1999 for private hospital and outpatient care for dependents and
        survivors of certain veterans.

                                         1997 actual  1998 est.   1999 est.
      Average daily hospital census.....         154         150         150
      Outpatient (in thousands).........         838         840         840
      Average employment................         146         146         146

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0160-0-1-703      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

          Direct obligations:

            Personnel compensation:
    11.1      Full-time permanent...........       6,434       6,614       6,723
    11.3      Other than full-time permanent         832         704         717
    11.5      Other personnel compensation..         791         805         810
                                               ---------   ---------  ----------
    11.9        Total personnel compensation       8,057       8,123       8,250
    12.1    Civilian personnel benefits.....       1,894       1,958       2,006
    13.0    Benefits for former personnel...         140         106          18
            Travel and transportation of
                persons:
    21.0      Employee travel...............          41          55          56
    21.0      Beneficiary travel............         108         112         116
    21.0      Interagency motor pool
                payments....................          13          14          14
    21.0      All other.....................          31          31          32
    22.0    Transportation of things........          23          23          24
    23.1    Rental payments to GSA..........          12          13          20
    23.2    Rental payments to others.......          59          64          67
    23.3    Communications, utilities, and
              miscellaneous charges.........         469         509         528
    24.0    Printing and reproduction.......           9          10          10
    25.2    Other contractual services......       1,301       1,508       1,591
            Medical care:
    25.6      Outpatient dental fees........          12          13          14
    25.6      Medical and nursing fees......         285         297         309
    25.6      Community nursing homes.......         284         296         318
    25.6      Contract hospitalization......         145         151         157
    25.6      Civilian Health and Medical
                Program of the Department of
                Veterans Affairs............          90          93          95
            Supplies and materials:
    26.0      Supplies and materials........       2,551       2,817       2,929
    26.0      Provisions....................          84          87          89
    31.0    Equipment.......................         876         861         605
    32.0    Land and structures.............         355         348         270
            Grants, subsidies, and
                contributions:
    41.0      Grants, subsidies, and
                contributions...............         230         241         271
    41.0      Grants to private
                organizations...............           4           7           7
    43.0    Interest and dividends..........           1           2           1
                                               ---------   ---------  ----------
    99.0      Subtotal, direct obligations..      17,074      17,739      17,797
    99.0  Reimbursable obligations..........          75         104         147
                                               ---------   ---------  ----------
    99.9    Total obligations...............      17,149      17,843      17,944
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 36-0160-0-1-703      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
        Direct:
    1001  Total compensable workyears: Full-
            time equivalent employment......     185,260     181,791     178,744
        Reimbursable:
    2001  Total compensable workyears: Full-
            time equivalent employment......         875       1,209       1,667
    ---------------------------------------------------------------------------

                        Other Medical, Smoking Cessation

                  (Legislative proposal, not subject to PAYGO)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0166-2-1-703      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    10.00 Total obligations (object class
            25.2)...........................                                  87
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......                                  87
    23.95 New obligations...................                                 -87
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................                                  87
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    73.10 New obligations...................                                  87
    73.20 Total outlays (gross).............                                 -87
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority                                  87
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................                                  87
    90.00 Outlays...........................                                  87
    ---------------------------------------------------------------------------

        This legislative proposal would authorize a new smoking-cessation
    program for any honorably discharged veteran who began smoking in the
    military. The program would be delivered by private providers on a per
    capita basis. Any veteran who began smoking in the military would be
    eligible for this new program to the extent that resources are
    available.

        A legislative proposal to authorize this program will be transmitted
    with the FY 1999 budget. Once this program is authorized, the
    Administration will submit a budget amendment requesting an
    appropriation of $87 million for this new activity.

                         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, [1999, $272,000,000] 2000,
    $300,000,000, plus reimbursements. (Departments of Veterans Affairs and
    Housing and Urban Development, and Independent Agencies Appropriations
    Act, 1998.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0161-0-1-703      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Direct program:

            Operating expenses:
    00.01     Medical research..............         193         230         229
    00.02     Rehabilitation research.......          24          29          29
    00.03     Health services research......          26          30          31
                                               ---------   ---------  ----------
    00.91       Total operating expenses....         243         289         289
            Capital investment:
    01.01     Medical research..............           7           7           8
    01.02     Rehabilitation research.......           1           1           1
    01.03     Health services research......           2           2           2
                                               ---------   ---------  ----------
    01.91       Total capital investment....          10          10          11
                                               ---------   ---------  ----------

    [[Page 816]]

    01.92     Total direct program..........         253         299         300
    09.01 Reimbursable program..............          46          46          46
                                               ---------   ---------  ----------
    10.00   Total obligations...............         299         345         346
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested.......          20          28           1
    22.00 New budget authority (gross)......         309         318         346
    22.10 Resources available from
            recoveries of prior year
            obligations.....................           1
    22.30 Unobligated balance expiring......          -2
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......         328         346         347
    23.95 New obligations...................        -299        -345        -346
    24.40 Unobligated balance available, end
            of year: Uninvested.............          28           1           1
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Current:

    40.00   Appropriation...................         262         272         300
          Permanent:

    68.00   Spending authority from
              offsetting collections:
              Offsetting collections (cash).          47          46          46
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................         309         318         346
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Uninvested...          79          94         124
    73.10 New obligations...................         299         345         346
    73.20 Total outlays (gross).............        -282        -315        -338
    73.45 Adjustments in unexpired accounts.          -1
    74.40 Unpaid obligations, end of year:
            Obligated balance: Uninvested...          94         124         132
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority         183         200         220
    86.93 Outlays from current balances.....          52          69          72
    86.97 Outlays from new permanent
            authority.......................          47          46          46
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........         282         315         338
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.00   Offsetting collections (cash)
              from: Federal sources.........         -47         -46         -46
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................         262         272         300
    90.00 Outlays...........................         235         269         292
    ---------------------------------------------------------------------------

        Funding for Medical and Prosthetic Research is proposed as part of
    the Research Fund for America. This proposal highlights the
    Administration's priority of providing needed and sustained investments
    in important Federal research programs on a deficit neutral basis. A
    discussion of the Research Fund for America, and two other funds for the
    environment and transportation, can be found in Section II of the
    Budget.

        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 following table summarizes all
    budgetary resources for the Medical and Prosthetic Research account.
    Specific performance goals relating to Medical and Prosthetic Research
    are contained in VA's annual performance plan.

                         SUMMARY OF BUDGETARY RESOURCES

                            [In millions of dollars]

                                         1997 actual  1998 est.   1999 est.
    Medical and prosthetic research
    appropriation.......................         262         272         300
    Medical care appropriation..........         320         332         366
    Federal grants (NIH)................         226         234         258
    Other grants (voluntary agencies,
    private proprietary)................         156         162         179
    DOD reimbursements..................          15          15          0*
                                        ------------------------------------
          Total budgetary resources.....         979       1,015       1,103
                                        ====================================
        *DoD reimbursements for FY 1999 are unknown.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0161-0-1-703      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

          Direct obligations:

            Personnel compensation:
    11.1      Full-time permanent...........          34          36          39
    11.3      Other than full-time permanent          67          67          75
    11.5      Other personnel compensation..           4           4           4
                                               ---------   ---------  ----------
    11.9        Total personnel compensation         105         107         118
    12.1    Civilian personnel benefits.....          26          26          29
    13.0    Benefits for former personnel...           1           1           1
    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.....................          86         115         106
    26.0    Supplies and materials..........          21          34          31
    31.0    Equipment.......................          10          12          11
                                               ---------   ---------  ----------
    99.0      Subtotal, direct obligations..         253         299         300
    99.0  Reimbursable obligations..........          46          46          46
                                               ---------   ---------  ----------
    99.9    Total obligations...............         299         345         346
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 36-0161-0-1-703      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
        Direct:
    1001  Total compensable workyears: Full-
            time equivalent employment......       2,430       2,428       2,580
        Reimbursable:
    2001  Total compensable workyears: Full-
            time equivalent employment......         527         570         579
    ---------------------------------------------------------------------------

           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

    [[Page 817]]

    of Veterans Affairs, including site acquisition; engineering and
    architectural activities not charged to project cost; and research and
    development in building construction technology; [$59,860,000]
    $60,000,000, plus reimbursements. (Departments of Veterans Affairs and
    Housing and Urban Development, and Independent Agencies Appropriations
    Act, 1998.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0152-0-1-703      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

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

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

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

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Uninvested...          13          10          10
    73.10 New obligations...................          61          60          60
    73.20 Total outlays (gross).............         -63         -60         -60
    74.40 Unpaid obligations, end of year:
            Obligated balance: Uninvested...          10          10          10
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority          53          55          55
    86.93 Outlays from current balances.....          10           5           5
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........          63          60          60
    ----------------------------------------------------------------------------

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

        Supervision and administration of VA's comprehensive and integrated
    healthcare system.--Central office staff elements provide executive
    direction for all Departmental 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      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

          Personnel compensation:

    11.1    Full-time permanent.............          35          37          37
    11.3    Other than full-time permanent..           2           3           3
    11.5    Other personnel compensation....           2           2           2
                                               ---------   ---------  ----------
    11.9      Total personnel compensation..          39          42          42
    12.1  Civilian personnel benefits.......           8           6           7
    13.0  Benefits for former personnel.....           2
    21.0  Travel and transportation of
            persons: employee travel........           1           1           1
    23.1  Rental payments to GSA............           5           5           5
    23.3  Communications, utilities, and
            miscellaneous charges...........           1           1
    25.2  Other services....................           3           3           3
    26.0  Supplies and materials............           1           1           1
    31.0  Equipment.........................           1           1           1
                                               ---------   ---------  ----------
    99.9    Total obligations...............          61          60          60
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 36-0152-0-1-703      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
    1001  Total compensable workyears: Full-
            time equivalent employment......         569         556         540
    ---------------------------------------------------------------------------

                     Health Professional Scholarship Program

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0163-0-1-703      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

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

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

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

        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 1998 and none
    is requested for FY 1999.

                        Medical Care Cost Recovery Fund

                  Unavailable Collections (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-5014-0-2-703      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
        Balance, start of year:
    01.99 Balance, start of year............         528         486
        Receipts:
    02.01 Medical cost recovery.............          65        -486
                                               ---------   ---------  ----------
    04.00 Total: Balances and collections...         593
        Appropriation:
    05.01 Medical care cost recovery fund...        -107
    07.99 Total balance, end of year........         486
    ---------------------------------------------------------------------------

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-5014-0-2-703      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.09 Operating expenses................         111
    00.10 Capital investment................           2
                                               ---------   ---------  ----------
    10.00   Total obligations...............         113
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested.......          14           9
    22.00 New budget authority (gross)......         107
    22.40 Capital transfer to general fund..                      -9
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......         121
    23.95 New obligations...................        -113
    24.40 Unobligated balance available, end
            of year: Uninvested.............           9
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    60.25 Appropriation (special fund,
            indefinite).....................         107
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Uninvested...          23          13
    73.10 New obligations...................         113
    73.20 Total outlays (gross).............        -123
    73.40 Adjustments in expired accounts...          -1         -13
    74.40 Unpaid obligations, end of year:
            Obligated balance: Uninvested...          13
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.93 Outlays from current balances.....          16
    86.97 Outlays from new permanent
            authority.......................         107
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........         123
    ----------------------------------------------------------------------------

    [[Page 818]]

        Net budget authority and outlays:
    89.00 Budget authority..................         107
    90.00 Outlays...........................         123
    ---------------------------------------------------------------------------

        The Medical Care Cost Recovery (MCCR) Fund was established by the
    Omnibus Budget Reconciliation Act of 1990, P.L. 100-508. This Fund
    served as a depository for all third-party insurance collections. Of
    these funds, a portion was utilized to provide for FTE and other
    administrative costs associated with medical care cost recovery efforts.
    After providing the estimated cost of operations for the ensuing year,
    remaining funds were transferred to the Department of Treasury before
    January of the next year. Public Law 105-33, the Balanced Budget Act of
    1997, established the Medical Care Collections Fund (MCCF) and
    terminated MCCR and required that amounts collected or recovered after
    June 30, 1997 be deposited in the new fund. The amounts collected will
    be available only for: (1) furnishing VA medical care and services
    during any fiscal year, and (2) for VA expenses for identification,
    billing, auditing and collections of amounts owed the government.

        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 millions of dollars]

                                             1997 actual   1998 est.   1999 est.
                Program activity

    Third-party recoveries..................         450
    Copayments and other collections........          70
                                               ---------   ---------  ----------
          Total collections.................         520
          Total program costs...............         113
    Ratio of costs to collections (in
     percent)...............................        21.7

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-5014-0-2-703      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

          Personnel compensation:

    11.1    Full-time permanent.............          57
    11.5    Other personnel compensation....          15
                                               ---------   ---------  ----------
    11.9      Total personnel compensation..          72
    12.1  Civilian personnel benefits.......          17
    21.0  Travel and transportation of
            persons.........................           3
    23.3  Communications, utilities, and
            miscellaneous charges...........           3
    25.2  Other services....................           8
    26.0  Supplies and materials............           8
    31.0  Equipment.........................           2
                                               ---------   ---------  ----------
    99.9    Total obligations...............         113
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 36-5014-0-2-703      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
    1011  Total compensable workyears:
            Exempt Full-time equivalent
            employment......................       2,239
    ---------------------------------------------------------------------------

    Public enterprise funds:

                        Medical Facilities Revolving Fund

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4138-0-3-703      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    09.01 Reimbursable operating costs......           1           2           1
    09.02 Reimbursable capital expenses.....           1           2           2
                                               ---------   ---------  ----------
    09.09   Total reimbursable program......           2           4           3
                                               ---------   ---------  ----------
    10.00   Total obligations...............           2           4           3
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested.......           6           6           3
    22.00 New budget authority (gross)......           2
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......           8           6           3
    23.95 New obligations...................          -2          -4          -3
    24.40 Unobligated balance available, end
            of year: Uninvested.............           6           3
    ----------------------------------------------------------------------------

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

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

        Outlays (gross), detail:
    86.98 Outlays from permanent balances...           2           2           2
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

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

        Net budget authority and outlays:
    89.00 Budget authority..................
    90.00 Outlays...........................                       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 to assist in covering
    expenses at the facility furnishing the nursing care.

        Legislation authorizing the transfer of pension funds in excess of
    $90 per month from the Compensation and Pension (C&P) account, in
    accordance with the provisions of Title 38 U.S.C., Section
    5503(a)(1)(B), expired on September 30, 1997. Veterans' pensions will
    continue to be reduced in accordance with the law and those funds will
    remain in the C&P account. Funds cannot be transferred to the Medical
    Facilities Revolving Fund until Congress reauthorizes an extension.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4138-0-3-703      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
    26.0  Supplies and materials............           1           2           1
    31.0  Equipment.........................           1           2           2
                                               ---------   ---------  ----------
    99.9    Total obligations...............           2           4           3
    ---------------------------------------------------------------------------

    [[Page 819]]

                         Canteen Service Revolving Fund

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4014-0-3-705      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    09.01 Reimbursable operating expenses...         121         132         133
    09.02 Reimbursable direct operations....          81          88          88
                                               ---------   ---------  ----------
    09.09   Total reimbursable program......         202         220         221
    09.10 Reimbursable capital investment:
            Sales program: Purchase of
            equipment and leasehold.........           6           6           6
                                               ---------   ---------  ----------
    10.00   Total obligations...............         208         226         227
    ----------------------------------------------------------------------------

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

    21.40   Uninvested......................         -14         -22         -21
    21.41   U.S. Securities: Par value......          42          38          39
                                               ---------   ---------  ----------
    21.99     Total unobligated balance,
                start of year...............          28          16          18
    22.00 New budget authority (gross)......         195         228         229
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......         223         244         247
    23.95 New obligations...................        -208        -226        -227
          Unobligated balance available, end of year:

    24.40   Uninvested......................         -22         -21         -20
    24.41   U.S. Securities: Par value......          38          39          40
                                               ---------   ---------  ----------
    24.99   Total unobligated balance, end
              of year.......................          16          18          20
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    68.00 Spending authority from offsetting
            collections (gross): Offsetting
            collections (cash)..............         195         228         229
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Uninvested...          14          23          23
    73.10 New obligations...................         208         226         227
    73.20 Total outlays (gross).............        -198        -226        -226
    74.40 Unpaid obligations, end of year:
            Obligated balance: Uninvested...          23          23          24
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................         195         225         225
    86.98 Outlays from permanent balances...           3           1           1
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........         198         226         226
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

            Offsetting collections (cash)
                from:
    88.00     Federal sources...............          -2          -2          -2
    88.40     Non-Federal sources...........        -193        -226        -227
                                               ---------   ---------  ----------
    88.90       Total, offsetting
                  collections (cash)........        -195        -228        -229
    ----------------------------------------------------------------------------

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

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

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

                            Statement of Operations (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   36-4014-0-3-705    1996 actual    1997 actual     1998 est.      1999 est.
    -----------------------------------------------------------------------------------------------
    0101  Revenue...........................         209            195           226            225
    0102  Expense...........................        -206           -193          -222           -223
                                            ------------ --------------  ------------  -------------
    0109  Net income or loss (-)............           3              2             4              2
    -----------------------------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   36-4014-0-3-705    1996 actual    1997 actual     1998 est.      1999 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
          Federal assets:

    1101    Fund balances with Treasury.....                          1             5              4
            Investments in US securities:
    1102      Treasury securities, par......          40             38            39             40
    1106      Receivables, net..............           1              1             2              2
    1107      Advances and prepayments......           2              2             1              1
    1206  Non-Federal assets: Receivables,
            net.............................                          2             1              1
          Other Federal assets:

    1802    Inventories and related
              properties....................          24             25            26             27
    1803    Property, plant and equipment,
              net...........................          28             28            28             30
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................          95             97           102            105
        LIABILITIES:
          Federal liabilities:

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

    2201    Accounts payable................           9              9             8              9
    2207    Other...........................           8              7             7              7
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............          18             18            17             18
        NET POSITION:
    3200  Invested capital..................          42             47            48             48
    3600  Other.............................          35             32            37             39
                                            ------------ --------------  ------------  -------------
    3999    Total net position..............          77             79            85             87
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position          95             97           102            105
    -----------------------------------------------------------------------------------------------

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4014-0-3-705      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

          Personnel compensation:

    11.1    Full-time permanent.............          40          43          42
    11.3    Other than full-time permanent..          15          16          19
                                               ---------   ---------  ----------
    11.9      Total personnel compensation..          55          59          61
    12.1  Civilian personnel benefits.......          14          17          14
    21.0  Travel and transportation of
            persons.........................           1           1           1
    25.2  Other services....................           3           6           7
    26.0  Supplies and materials............         128         136         137
    31.0  Equipment.........................           7           7           7
                                               ---------   ---------  ----------
    99.9    Total obligations...............         208         226         227
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 36-4014-0-3-705      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
    2011  Total compensable workyears:
            Exempt Full-time equivalent
            employment......................       2,979       3,000       3,020
    ---------------------------------------------------------------------------

             Special Therapeutic and Rehabilitation Activities Fund

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4048-0-3-703      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    09.01 Contracts.........................          23          25          26
    09.02 Education and training............           1           2           2
    09.03 Operating expenses................          12          13          13
                                               ---------   ---------  ----------
    10.00   Total obligations...............          36          40          41
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested.......           8           9           9
    22.00 New budget authority (gross)......          37          40          41
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......          45          49          50
    23.95 New obligations...................         -36         -40         -41
    24.40 Unobligated balance available, end
            of year: Uninvested.............           9           9           9
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    68.00 Spending authority from offsetting
            collections (gross): Offsetting
            collections (cash)..............          37          40          41
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Uninvested...           1           2           4
    73.10 New obligations...................          36          40          41
    73.20 Total outlays (gross).............         -35         -38         -39
    74.40 Unpaid obligations, end of year:
            Obligated balance: Uninvested...           2           4           6
    ----------------------------------------------------------------------------

    [[Page 820]]

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................          35          38          39
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.40   Offsetting collections (cash)
              from: Non-Federal sources.....         -37         -40         -41
    ----------------------------------------------------------------------------

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

        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    1996 actual    1997 actual     1998 est.      1999 est.
    -----------------------------------------------------------------------------------------------
    0101  Revenue...........................          32             38            40             41
    0102  Expense...........................         -27            -36           -40            -41
                                            ------------ --------------  ------------  -------------
    0109  Net income or loss (-)............           5              2
    -----------------------------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   36-4048-0-3-703    1996 actual    1997 actual     1998 est.      1999 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
          Federal assets:

    1101    Fund balances with Treasury.....          10             11            14             16
            Investments in US securities:
    1106      Receivables, net..............           1              1             1              1
    1206  Non-Federal assets: Receivables,
            net.............................           1              2             2              2
    1803  Other Federal assets: Property,
            plant and equipment, net........           1              1             1              1
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................          13             15            18             20
        LIABILITIES:
    2101  Federal liabilities: Accounts
            payable.........................           1              1             1              1
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............           1              1             1              1
        NET POSITION:
    3200  Invested capital..................           1              1             1              1
    3300  Cumulative results of operations..          11             13            16             18
                                            ------------ --------------  ------------  -------------
    3999    Total net position..............          12             14            17             19
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position          13             15            18             20
    -----------------------------------------------------------------------------------------------

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4048-0-3-703      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
    25.2  Other services....................          32          36          37
    26.0  Supplies and materials............           3           3           3
    31.0  Equipment.........................           1           1           1
                                               ---------   ---------  ----------
    99.9    Total obligations...............          36          40          41
    ---------------------------------------------------------------------------

                      Medical Center Research Organizations

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4026-0-3-703      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    09.01 Operating expenses................          26          26          27
    09.02 Capital investments...............           3           3           3
                                               ---------   ---------  ----------
    10.00   Total obligations...............          29          29          30
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested.......          18          18          18
    22.00 New budget authority (gross)......          29          29          30
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......          47          47          48
    23.95 New obligations...................         -29         -29         -30
    24.40 Unobligated balance available, end
            of year: Uninvested.............          18          18          18
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    68.00 Spending authority from offsetting
            collections (gross): Offsetting
            collections (cash)..............          29          29          30
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    73.10 New obligations...................          29          29          30
    73.20 Total outlays (gross).............         -29         -29         -30
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................          29          29          30
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

            Offsetting collections (cash)
                from:
    88.00     Federal sources...............          -1          -1          -1
    88.40     Non-Federal sources...........         -28         -28         -29
                                               ---------   ---------  ----------
    88.90       Total, offsetting
                  collections (cash)........         -29         -29         -30
    ----------------------------------------------------------------------------

        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      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
    25.2  Other services....................          18          18          19
    26.0  Supplies and materials............           8           8           8
    31.0  Equipment.........................           3           3           3
                                               ---------   ---------  ----------
    99.9    Total obligations...............          29          29          30
    ---------------------------------------------------------------------------

                                   Trust Funds

                        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, 1998.)

    [[Page 821]]

                  Unavailable Collections (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-8180-0-7-705      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
        Balance, start of year:
    01.99 Balance, start of year............           2           2           2
        Receipts:
    02.01 General post fund, national homes,
            deposits........................          27          28          29
    02.02 General post fund, national homes,
            interest on investments.........           3           3           3
                                               ---------   ---------  ----------
    02.99   Total receipts..................          30          31          32
                                               ---------   ---------  ----------
    04.00 Total: Balances and collections...          32          33          34
        Appropriation:
    05.01 General post fund, national homes.         -30         -31         -32
    07.99 Total balance, end of year........           2           2           2
    ---------------------------------------------------------------------------

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-8180-0-7-705      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

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

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

    21.40   Uninvested......................          -3           4           3
    21.41   U.S. Securities: Par value......          40          37          42
                                               ---------   ---------  ----------
    21.99     Total unobligated balance,
                start of year...............          37          41          45
    22.00 New budget authority (gross)......          30          31          32
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......          67          72          77
    23.95 New obligations...................         -25         -26         -27
          Unobligated balance available, end of year:

    24.40   Uninvested......................           4           3           2
    24.41   U.S. Securities: Par value......          37          42          48
                                               ---------   ---------  ----------
    24.99   Total unobligated balance, end
              of year.......................          41          45          50
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    60.27 Appropriation (trust fund,
            indefinite).....................          30          31          32
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Uninvested...           5           4           4
    73.10 New obligations...................          25          26          27
    73.20 Total outlays (gross).............         -27         -26         -26
    74.40 Unpaid obligations, end of year:
            Obligated balance: Uninvested...           4           4           4
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................          24          23          24
    86.98 Outlays from permanent balances...           3           3           2
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........          27          26          26
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................          30          31          32
    90.00 Outlays...........................          27          26          26
    ---------------------------------------------------------------------------

        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      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
    21.0  Travel and transportation of
            persons.........................           1           1           1
    25.2  Other services....................          10          11          11
    26.0  Supplies and materials............          10          10          11
    31.0  Equipment.........................           3           3           3
    32.0  Land and structures...............           1           1           1
                                               ---------   ---------  ----------
    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 and a pilot program for disability examinations as authorized
    by law (38 U.S.C. 107, chapters 11, 13, 18, 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); $19,932,997,000, to remain available
    until expended: Provided, That not to exceed $26,380,000 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).] (Departments of Veterans Affairs and Housing and
    Urban Development, and Independent Agencies Appropriations Act, 1998.)

        Activities formerly included in this account are proposed to be
    financed by three separate appropriation accounts in 1999 and are
    presented below in the ``Compensation'', ``Pensions'', and ``Burial
    benefits and miscellaneous assistance'' accounts. Amounts for 1997,
    1998, and 1999 are shown on a comparable basis. The following table
    shows the distribution of the amounts (dollars in millions) appropriated
    in 1997 and 1998 and requested in 1999.

                                         1997 actual  1998 est.   1999 est.
    Distribution of budget authority by
        account:
      Compensation......................      16,418      16,724      18,663
      Pensions..........................       3,066       3,075       3,070
      Burial benefits...................         115         133         123
    Distribution of outlays by account:
      Compensation......................      16,218      16,912      18,649
      Pensions..........................       3,055       3,087       3,073
      Burial benefits...................         116         133         123

                                  Compensation

        For the payment of compensation benefits to or on behalf of veterans
    and a pilot program for disability examinations as authorized by law,
    $18,663,401,000, to remain available until expended, of which not to
    exceed $1,472,000 shall be reimbursed to ``General operating

    [[Page 822]]

    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, 38
    U.S.C.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0153-0-1-701      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Compensation:

            Veterans:
    00.02     World War I...................           2           2           1
    00.03     World War II..................       3,356       3,290       3,389
    00.04     Korean conflict...............       1,190       1,192       1,258
    00.05     Vietnam era...................       5,148       5,481       6,333
    00.06     Peacetime service.............       2,672       2,797       3,295
    00.07     Persian Gulf conflict.........         636         798         994
                                               ---------   ---------  ----------
    00.91       Total veterans..............      13,004      13,560      15,270
            Survivors:
    01.04     World War I...................          55          48          42
    01.05     World War II..................       1,288       1,275       1,286
    01.06     Korean conflict...............         393         391         396
    01.07     Vietnam era...................         991       1,010       1,045
    01.08     Peacetime service.............         454         449         469
    01.09     Persian Gulf conflict.........          54          67          75
                                               ---------   ---------  ----------
    01.91       Total survivors.............       3,235       3,240       3,313
    02.01   Clothing allowance..............          38          39          40
                                               ---------   ---------  ----------
    02.93     Total compensation............      16,277      16,839      18,623
          Children:

    03.02   Vietnam era.....................                      19          19
    03.03   Ch. 18 vocational rehabilitation                       3           3
                                               ---------   ---------  ----------
    03.91     Total children................                      22          22
          Other expenses:

    07.01   Payment to general operating
              expense.......................           2           1           1
    07.02   Medical exam pilot program......                       8          17
                                               ---------   ---------  ----------
    07.91   Total other expenses............           2           9          18
                                               ---------   ---------  ----------
    10.00   Total obligations (object class
              42.0).........................      16,279      16,870      18,663
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested.......           8         146
    22.00 New budget authority (gross)......      16,418      16,724      18,663
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......      16,426      16,870      18,663
    23.95 New obligations...................     -16,279     -16,870     -18,663
    24.40 Unobligated balance available, end
            of year: Uninvested.............         146
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................      16,598      16,724      18,663
    41.00 Transferred to other accounts.....        -180
                                               ---------   ---------  ----------
    43.00   Appropriation (total)...........      16,418      16,724      18,663
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................      16,418      16,724      18,663
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Uninvested...       1,232       1,293       1,251
    73.10 New obligations...................      16,279      16,870      18,663
    73.20 Total outlays (gross).............     -16,218     -16,912     -18,649
    74.40 Unpaid obligations, end of year:
            Obligated balance: Uninvested...       1,293       1,251       1,265
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority      14,986      15,619      17,398
    86.93 Outlays from current balances.....       1,232       1,293       1,251
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........      16,218      16,912      18,649
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................      16,418      16,724      18,663
    90.00 Outlays...........................      16,218      16,912      18,649
    ---------------------------------------------------------------------------

                     Summary of Budget Authority and Outlays

                            (in millions of dollars)

                                         1997 actual  1998 est.   1999 est.
    Enacted/requested:
      Budget Authority..................      16,418      16,724      18,663
      Outlays...........................      16,218      16,912      18,649
    Supplemental proposal:
      Budget Authority..................                     550
      Outlays...........................                     550
    Legislative proposal, not subject to
        PAYGO:
      Budget Authority..................                                 287
      Outlays...........................                                 259
    Legislative proposal, subject to
        PAYGO:
      Budget Authority..................                                -736
      Outlays...........................                                -736
                                        ------------------------------------
    Total:
      Budget Authority..................      16,418      17,274      18,214
      Outlays...........................      16,218      17,462      18,172
                                        ====================================

        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.
    Total compensation costs are current law baseline amounts and include
    the effect of paying compensation benefits based solely on tobacco use
    during 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

                                         1997 actual  1998 est.   1999 est.
    Veterans:
      Mexican border period.............          10           9           7
      World War I.......................         296         208         150
      World War II......................     632,890     610,400     600,856
      Korean conflict...................     184,279     180,159     180,441
      Vietnam era.......................     718,912     729,680     758,465
      Peacetime service.................     534,080     546,921     579,199
      Persian Gulf conflict.............     185,378     216,384     242,744
                                        ------------------------------------
          Total.........................   2,255,845   2,283,761   2,361,862
      Average payment per case, per year      $5,765      $6,153      $6,465
          Total obligations (in
            millions)...................     $13,004     $14,052     $15,269
                                        ====================================
    Children of Vietnam era veterans:
      Children..........................                   2,000       2,000
      Average payment per case, per year                 $10,500      $9,500
          Total obligations (in
            millions)...................                     $21         $19
    Chapter 18 Vocational
        rehabilitations:
      Rehabilitations...................                     860         870
      Average payment per case, per year                  $3,095      $3,448
          Total obligations (in
            millions)...................                      $3          $3
    Survivors:
      Prior to Spanish-American War.....           1           1           1
      Spanish-American War..............          17          17          17
      Mexican border period.............           2           2           1
      World War I.......................       5,260       4,570       3,971
      World War II......................     121,924     120,144     118,470
      Korean conflict...................      36,963      36,565      36,198
      Vietnam era.......................      92,887      94,752      96,582
      Peacetime service.................      43,726      43,194      44,239
      Persian Gulf conflict.............       4,404       5,439       5,960
                                        ------------------------------------
          Total.........................     305,184     304,684     305,439
      Average payment per case, per year     $10,600     $10,824     $10,847
          Total obligations (in
            millions)...................      $3,235      $3,298      $3,313
                                        ====================================
    Clothing allowance:
      Number of veterans................      73,571      74,384      75,252
      Average payment per case, per year        $518        $528        $532
          Total obligations (in
            millions)...................         $38         $39         $40
                                        ====================================

    [[Page 823]]

                                  Compensation

                  (Legislative proposal, not subject to PAYGO)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0153-2-1-701      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 World War II......................                                  52
    00.02 Korean conflict...................                                  18
    00.03 Vietnam era.......................                                  96
    00.04 Peacetime service.................                                  49
    00.05 Persian Gulf......................                                  15
                                               ---------   ---------  ----------
    00.91   Total veterans..................                                 230
    01.04 World War 1.......................                                   1
    01.05 World War II......................                                  21
    01.06 Korean conflict...................                                   7
    01.07 Vietnam era.......................                                  18
    01.08 Peacetime service.................                                   8
    01.09 Persian Gulf......................                                   1
                                               ---------   ---------  ----------
    01.91   Total survivors.................                                  56
    02.01 Clothing allowance................                                   1
                                               ---------   ---------  ----------
    10.00   Total obligations (object class
              42.0).........................                                 287
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......                                 287
    23.95 New obligations...................                                -287
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................                                 287
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    73.10 New obligations...................                                 287
    73.20 Total outlays (gross).............                                -259
    74.40 Unpaid obligations, end of year:
            Obligated balance: Uninvested...                                  28
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority                                 259
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................                                 287
    90.00 Outlays...........................                                 259
    ---------------------------------------------------------------------------

        Legislation will be proposed to provided a cost-of-living adjustment
    (COLA) to all compensation beneficiaries, including spouses and
    children. This increase, effective December 1, 1998, is expected to be
    2.2 percent and cost $287 million in fiscal year 1999.

                                  Compensation

                    (Legislative proposal, subject to PAYGO)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0153-4-1-701      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Restrict tobacco-related
            compensation....................                                -741
    00.02 Extend full benefits to certain
            Filipino veterans...............                                   5
                                               ---------   ---------  ----------
    02.93   Total compensation..............                                -736
                                               ---------   ---------  ----------
    10.00   Total obligations...............                                -736
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......                                -736
    23.95 New obligations...................                                 736
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................                                -736
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    73.10 New obligations...................                                -736
    73.20 Total outlays (gross).............                                 736
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority                                -736
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................                                -736
    90.00 Outlays...........................                                -736
    ---------------------------------------------------------------------------

        Legislation will be proposed to restrict service-connected
    disability compensation benefits for tobacco-related conditions,
    becoming manifest after service discharge and beyond any applicable
    presumptive period, based solely on tobacco use during military service.

        Legislation will also be proposed to pay full disability
    compensation benefits to Filipino veterans and their survivors residing
    in the U.S. and currently receiving benefits at half the level that U.S.
    counterparts receive.

                                    Pensions

        For the payment of pension benefits to or on behalf of veterans as
    authorized by law, $3,070,612,000, to remain available until expended;
    of which not to exceed $23,062,000 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 of
    such title.
        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      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Direct program:

            Pensions:
              Veterans:
    04.01       Improved law................       2,207       2,249       2,277
    04.02       Prior law...................          67          57          49
    04.03       Old law.....................           1
                                               ---------   ---------  ----------
    04.91         Total veterans............       2,275       2,306       2,326
              Survivors:
    05.01       Improved law................         653         639         626
    05.02       Prior law...................         114         103          93
    05.03       Old law.....................           2           2           1
                                               ---------   ---------  ----------
    05.91         Total survivors...........         769         744         720
                                               ---------   ---------  ----------
    06.93       Total pensions..............       3,044       3,050       3,046
            Other expenses:
    07.01     Medical facility expenses.....           2
    07.02     Reimbursement to GOE and VHA..          20          25          24
                                               ---------   ---------  ----------
    07.91       Total other expenses........          22          25          24
                                               ---------   ---------  ----------
    08.00     Total direct program..........       3,066       3,075       3,070
          Reimbursable program:

    09.01   Minimum income for widows
              program.......................                       3           6
                                               ---------   ---------  ----------
    10.00   Total obligations...............       3,066       3,078       3,076
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......       3,066       3,078       3,076
    23.95 New obligations...................      -3,066      -3,078      -3,076
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Current:

    40.00   Appropriation...................       2,885       3,075       3,070
    42.00   Transferred from other accounts.         181
                                               ---------   ---------  ----------
    43.00     Appropriation (total).........       3,066       3,075       3,070
          Permanent:

    68.00   Spending authority from
              offsetting collections:
              Offsetting collections (cash).                       3           6
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................       3,066       3,078       3,076
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Uninvested...         254         265         254

    [[Page 824]]

    73.10 New obligations...................       3,066       3,078       3,076
    73.20 Total outlays (gross).............      -3,055      -3,087      -3,073
    74.40 Unpaid obligations, end of year:
            Obligated balance: Uninvested...         265         254         257
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority       2,801       2,819       2,813
    86.93 Outlays from current balances.....         254         265         254
    86.97 Outlays from new permanent
            authority.......................                       3           6
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........       3,055       3,087       3,073
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.00   Offsetting collections (cash)
              from: Federal sources.........                      -3          -6
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................       3,066       3,075       3,070
    90.00 Outlays...........................       3,055       3,084       3,067
    ---------------------------------------------------------------------------

        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,
    1999, is expected to be 2.2 percent.

                  AVERAGE NUMBER OF PENSION CASES AND PAYMENTS

                                         1997 actual  1998 est.   1999 est.
    Veterans:
      Improved law......................     367,586     363,231     359,875
      Prior law.........................      41,433      35,126      29,809
      Old law and service...............         526         445         379
                                        ------------------------------------
          Total.........................     409,545     398,802     390,063
      Average payment per case, per year
        (in dollars)....................      $5,556      $5,783      $5,964
                                        ------------------------------------
          Total obligations (in
            millions)...................      $2,275      $2,306      $2,326
                                        ====================================
    Survivors:
      Improved law......................     202,153     195,475     189,460
      Prior law.........................     114,024     101,988      91,388
      Old law and service...............       3,085       2,566       2,136
                                        ------------------------------------
          Total.........................     319,262     300,029     282,984
      Average payment per case, per year      $2,408      $2,479      $2,546
                                        ------------------------------------
          Total obligations (in
            millions)...................        $769        $744        $720
                                        ====================================
    Minimum Income for Widows Program:
      Widows............................                     397         782
    Average benefit per case, per year..                  $7,083      $7,248
                                        ------------------------------------
          Total obligations (in
            millions)...................                      $3          $6
                                        ====================================
    Vocational training:
      Trainees..........................          86          85
      Average benefit per year..........      $2,453      $2,753
                                        ------------------------------------
          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      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
    42.0  Direct obligations: Insurance
            claims and indemnities..........       3,066       3,075       3,070
    99.0  Reimbursable obligations:
            Subtotal, reimbursable
            obligations.....................                       3           6
                                               ---------   ---------  ----------
    99.9    Total obligations...............       3,066       3,078       3,076
    ---------------------------------------------------------------------------

                  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, $123,045,000, to
    remain available until expended. (38 U.S.C. 107, 1312, 1977, and 2106,
    chapters 23, 51, 53, 55, and 61, 38 U.S.C.; 50 U.S.C. App. 540-548; 43
    Stat. 122, 123; 45 Stat. 735; Stat. 76 Stat. 1198.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0155-0-1-701      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Burial benefits:

    07.01   Burial allowances...............          37          35          34
    07.02   Burial plots....................          12          11          11
    07.03   Service-connected deaths........          13          13          12
    07.04   Burial flags....................          16          17          18
    07.05   Headstones and markers..........          29          32          33
    07.07   Outer burial receptacles........           7          23          13
                                               ---------   ---------  ----------
    07.91     Total burial benefits.........         114         131         121
    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).........................         116         133         123
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......         116         133         123
    23.95 New obligations...................        -116        -133        -123
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................         117         133         123
    41.00 Transferred to other accounts.....          -1
                                               ---------   ---------  ----------
    43.00   Appropriation (total)...........         116         133         123
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................         116         133         123
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    73.10 New obligations...................         116         133         123
    73.20 Total outlays (gross).............        -116        -133        -123
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority         116         133         123
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................         116         133         123
    90.00 Outlays...........................         116         133         123
    ---------------------------------------------------------------------------

        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.

    [[Page 825]]

                            NUMBER OF BURIAL BENEFITS

                                         1997 actual  1998 est.   1999 est.
    Burial allowance....................      88,023      87,500      83,200
    Burial plot.........................      77,971      75,300      72,700
    Service-connected death.............       9,724       9,800       9,200
    Burial flags........................     457,809     457,200     465,000
    Headstone markers...................     331,832     332,000     336,540
    Headstone allowance.................           7
    Outer burial receptacles............      47,263      95,184      71,009

        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

                                         1997 actual  1998 est.   1999 est.
    Retired Officers....................           3           2           2
    Special allowance dependents........         138         138         138
    Equal Access to Justice payments....         357         357         357

                              Readjustment Benefits

        For the payment of readjustment and rehabilitation benefits to or on
    behalf of veterans as authorized by 38 U.S.C. chapters 21, 30, 31, 34,
    35, 36, 39, 51, 53, 55, and 61, [$1,366,000,000] $1,175,000,000, 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, 1998.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0137-0-1-702      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Direct program:

            Education and training:
    00.01     Sons and daughters............          94          95          97
    00.02     Spouses.......................          11          11          12
                                               ---------   ---------  ----------
    00.91       Total education and training         105         106         109
            Special assistance to disabled
                veterans:
    01.01     Vocational rehabilitation.....         401         403         403
    01.02     Housing grants................          15          15          15
    01.03     Automobiles, adaptive
                equipment, maintenance and
                repair......................          28          27          26
                                               ---------   ---------  ----------
    01.91       Total special assistance to
                  disabled veterans.........         444         445         444
    02.01   Work study......................          30          32          31
    02.02   Payments to states..............          13          13          13
    02.03   All-volunteer assistance:
              Veterans' basic benefits......         690         724         736
                                               ---------   ---------  ----------
    02.91     All-volunteer assistance and
                other.......................         733         769         780
                                               ---------   ---------  ----------
    02.93     Total direct program..........       1,282       1,320       1,333
    09.01 Veterans' basic benefits..........          12          10           7
    09.01 Veterans' supplementary benefits..          79          74          73
    09.01 Reservists benefits...............          83          91         101
                                               ---------   ---------  ----------
    10.00   Total obligations...............       1,456       1,495       1,514
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested.......          27         112         157
    22.00 New budget authority (gross)......       1,551       1,541       1,356
    22.10 Resources available from
            recoveries of prior year
            obligations.....................           1           1
    22.30 Unobligated balance expiring......         -12          -2
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......       1,567       1,652       1,513
    23.95 New obligations...................      -1,456      -1,495      -1,514
    24.40 Unobligated balance available, end
            of year: Uninvested.............         112         157
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Current:

    40.00   Appropriation...................       1,377       1,366       1,175
          Permanent:

    68.00   Spending authority from
              offsetting collections:
              Offsetting collections (cash).         174         175         181
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................       1,551       1,541       1,356
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Uninvested...          60          53          27
    73.10 New obligations...................       1,456       1,495       1,514
    73.20 Total outlays (gross).............      -1,462      -1,520      -1,511
    73.45 Adjustments in unexpired accounts.          -1          -1
    74.40 Unpaid obligations, end of year:
            Obligated balance: Uninvested...          53          27          30
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority       1,251       1,345       1,175
    86.93 Outlays from current balances.....                                 155
    86.97 Outlays from new permanent
            authority.......................         174         175         181
    86.98 Outlays from permanent balances...          37
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........       1,462       1,520       1,511
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.00   Offsetting collections (cash)
              from: Federal sources.........        -174        -175        -181
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................       1,377       1,366       1,175
    90.00 Outlays...........................       1,288       1,345       1,330
    ---------------------------------------------------------------------------

                     Summary of Budget Authority and Outlays

                            (in millions of dollars)

                                         1997 actual  1998 est.   1999 est.
    Enacted/requested:
      Budget Authority..................       1,377       1,366       1,175
      Outlays...........................       1,288       1,345       1,330
    Legislative proposal, subject to
        PAYGO:
      Budget Authority..................                                 291
      Outlays...........................                                 291
                                        ------------------------------------
    Total:
      Budget Authority..................       1,377       1,366       1,466
      Outlays...........................       1,288       1,345       1,621
                                        ====================================

        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 1999 will consist of
    appropriated funds of $1,175 million and available funds from 1998 of
    $157 million.

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

                           NUMBER OF TRAINEES AND COST

                                         1997 actual  1998 est.   1999 est.
    Sons and daughters:
      Number of trainees................      36,216      36,769      37,295
      Average cost per trainee (in
        dollars)........................      $2,593      $2,591      $2,591
                                        ------------------------------------
          Total cost (in millions)......         $94         $95         $97
                                        ====================================
    Spouses and widow(ers):
      Number of trainees................       5,232       5,484       5,748
      Average cost per trainee (in
        dollars)........................      $,2066      $2,070      $2,070
                                        ------------------------------------
          Total cost (in millions)......         $11         $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.

    [[Page 826]]

        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 caseload for this program. Specific
    performance goals are contained in VA's annual performance plan.

                         CASELOAD AND AVERAGE COST DATA

                                         1997 actual  1998 est.   1999 est.
          Total number of trainees......      54,352      53,269      52,190
      Average cost per trainee..........      $7,386      $7,561      $7,720
                                        ------------------------------------
          Total cost (in millions)......        $401        $403        $403
                                        ====================================
    Housing grants:
      Number of housing grants..........         458         458         458
      Average cost per grant............     $32,147     $32,147     $32,147
                                        ------------------------------------
          Total cost (in millions)......         $15         $15         $15
                                        ====================================
    Automobiles or other conveyances:
      Number of conveyances.............         855         855         855
      Average cost per conveyance.......      $5,450      $5,450      $5,450
                                        ------------------------------------
          Total cost (in millions)......          $5          $5          $5
                                        ====================================
    Adaptive equipment (including
        maintenance, repair and
        installation for automobiles):
      Number of items...................       6,435       6,100       5,800
      Average cost......................       3,551       3,623       3,707
                                        ------------------------------------
          Total cost (in millions)......         $23         $22         $22
                                        ====================================

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

                                         1997 actual  1998 est.   1999 est.
      Number of contracts...............      36,357      35,700      34,700
                                        ------------------------------------
          Total cost (in millions)......         $30         $32         $31
                                        ====================================

        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, except for certain Post-Vietnam Era Veterans
    Education participants who transferred to the Montgomery GI Bill
    program. Supplementary educational assistance and the basic benefit
    allowance for peacetime veterans, Post-Vietnam Era Veterans Education
    converters, and 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

                                         1997 actual  1998 est.   1999 est.
    Veterans:
      Number of trainees................     297,030     308,000     309,900
      Average cost per trainee..........      $2,629      $2,623      $2,636
                                        ------------------------------------
          Total cost (in millions)......    $781 \1\    $808 \2\    $817 \3\
                                        ====================================
    Reservists:
      Number of trainees................      78,000      76,800      76,400
      Average cost per trainee..........      $1,059      $1,188      $1,319
                                        ------------------------------------
          Total cost (in millions)......         $83         $91        $101
                                        ====================================
        \1\ Includes $690 million of basic benefits (VA funded), $12 million
    of basic benefits (DOD funded), and $79 million of supplemental benefits
    (DOD funded).
        \2\ Includes $724 million of basic benefits (VA funded), $10 million
    of basic benefits, (DOD funded) and $74 million of supplemental benefits
    (DOD funded).
        \3\ Includes $737 million of basic benefits (VA funded), $7 million
    of basic benefits (DOD funded) and $73 million of supplemental benefits
    (DOD funded).

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0137-0-1-702      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
    41.0  Direct obligations: Grants,
            subsidies, and contributions....       1,282       1,320       1,333
    99.0  Reimbursable obligations:
            Subtotal, reimbursable
            obligations.....................         174         175         181
                                               ---------   ---------  ----------
    99.9    Total obligations...............       1,456       1,495       1,514
    ---------------------------------------------------------------------------

                              Readjustment Benefits

                    (Legislative Proposal, subject to PAYGO)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0137-4-1-702      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Direct program:

            Education and training:
    00.01     Education rate increase.......                                 191
    00.02     Payment to Department of
                Labor: Veterans training
                programs....................                                 100
                                               ---------   ---------  ----------
    02.93     Total direct program..........                                 291
                                               ---------   ---------  ----------
    10.00   Total obligations (object class
              41.0).........................                                 291
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......                                 291
    23.95 New obligations...................                                -291
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................                                 291
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    73.10 New obligations...................                                 291
    73.20 Total outlays (gross).............                                -291
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority                                 291
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................                                 291
    90.00 Outlays...........................                                 291
    ---------------------------------------------------------------------------

        Legislation will be proposed to provide a 20 percent rate increase
    for Montgomery GI Bill Education programs (Chapters 30 and 1606), as
    well as for Survivors' and Dependents' Education programs (Chapter 35).
    This legislation will also propose additional funds in the amount of
    $100 million to be used for veterans training programs administered by
    the Department of Labor under Title IV-C of the Job Training Partnership
    Act.

    [[Page 827]]

      Reinstated Entitlement Program for Survivors Under Public Law 97-377

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0200-0-1-701      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    09.00 Reimbursable program..............          17          18          17
    09.00 Reimbursable program..............           1           1           1
                                               ---------   ---------  ----------
    10.00   Total obligations...............          18          19          18
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......          18          19          18
    23.95 New obligations...................         -18         -19         -18
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    68.00 Spending authority from offsetting
            collections (gross): Offsetting
            collections (cash)..............          18          19          18
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Uninvested...          12          16          16
    73.10 New obligations...................          18          19          18
    73.20 Total outlays (gross).............         -14         -19         -18
    74.40 Unpaid obligations, end of year:
            Obligated balance: Uninvested...          16          16          16
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................          10          11          10
    86.98 Outlays from permanent balances...           4           8           8
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........          14          19          18
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.00   Offsetting collections (cash)
              from: Federal sources.........         -18         -19         -18
    ----------------------------------------------------------------------------

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

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

                         CASELOAD AND AVERAGE COST DATA

                                         1997 actual  1998 est.   1999 est.
    Spouses.............................         390         350         310
    Average benefit.....................     $10,925     $11,167     $11,628
    Obligations (in millions)...........          $4          $4          $4
    Children............................       1,537       1,400       1,270
    Average benefit.....................      $8,707      $9,986     $10,360
    Obligations (in millions)...........         $13         $14         $13

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0200-0-1-701      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
    99.0  Reimbursable obligations:
            Subtotal, reimbursable
            obligations.....................          18          19          18
                                               ---------   ---------  ----------
    99.9    Total obligations...............          18          19          18
    ---------------------------------------------------------------------------

                       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, [$51,360,000] $46,450,000, to remain
    available until expended. (Departments of Veterans Affairs and Housing
    and Urban Development, and Independent Agencies Appropriations Act,
    1998.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0120-0-1-701      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Operating expenses:

    00.04   Payment to national service life
              insurance fund................           2           2           2
    00.05   Payment to service-disabled
              veterans insurance fund.......          30          44          38
    00.06   Total operating expenses........           8           9           9
                                               ---------   ---------  ----------
    10.00   Total obligations...............          40          55          49
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested.......                       2
    22.00 New budget authority (gross)......          41          53          48
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......          41          55          48
    23.95 New obligations...................         -40         -55         -49
    24.40 Unobligated balance available, end
            of year: Uninvested.............           2
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Current:

    40.00   Appropriation...................          39          51          46
          Permanent:

    68.00   Spending authority from
              offsetting collections:
              Offsetting collections (cash).           2           2           2
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................          41          53          48
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    73.10 New obligations...................          40          55          49
    73.20 Total outlays (gross).............         -41         -53         -48
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority          39          51          46
    86.97 Outlays from new permanent
            authority.......................           1           2           2
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........          41          53          48
    ----------------------------------------------------------------------------

        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..................          39          51          46
    90.00 Outlays...........................          38          53          46
    ---------------------------------------------------------------------------

                     Summary of Budget Authority and Outlays

                            (in millions of dollars)

                                         1997 actual  1998 est.   1999 est.
    Enacted/requested:
      Budget Authority..................          39          51          46
      Outlays...........................          38          51          46
    Legislative proposal, subject to
        PAYGO:
      Budget Authority..................                                   5
      Outlays...........................                                   5
                                        ------------------------------------
    Total:
      Budget Authority..................          39          51          51
      Outlays...........................          38          51          51
                                        ====================================
        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.

    [[Page 828]]

        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 1999 as indicated in the
    following table.

                         POLICIES AND INSURANCE IN FORCE

                                         1997 actual  1998 est.   1999 est.
    National service life insurance
        policies:
      Number of policies................       1,370       1,230       1,098
      Amount of insurance (dollars in
        millions).......................          $7          $6          $5
    VMLI policies:
      Number of policies................       3,747       3,616       3,468
      Amount of insurance (dollars in
        millions).......................        $203        $203        $203

        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      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
    41.0  Grants, subsidies, and
            contributions...................          31          46          39
    42.0  Insurance claims and indemnities..           9           9          10
                                               ---------   ---------  ----------
    99.9    Total obligations...............          40          55          49
    ---------------------------------------------------------------------------

                       Veterans Insurance and Indemnities

                    (Legislative proposal, subject to PAYGO)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0120-4-1-701      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.04 Payment to national service life
            insurance fund..................                                   5
                                               ---------   ---------  ----------
    10.00   Total obligations (object class
              41.0).........................                                   5
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......                                   5
    23.95 New obligations...................                                  -5
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................                                   5
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    73.10 New obligations...................                                   5
    73.20 Total outlays (gross).............                                  -5
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority                                   5
    ----------------------------------------------------------------------------

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

        Legislation will be proposed to establish a reserve, from
    appropriated funds, to fully fund the ``H'' program and allow for the
    payments of future dividends. This legislation will require an initial
    transfer to the National Service Life Insurance fund of $4.5 million in
    1999. The $4.5 million estimated cost will be offset to the extent that
    annual appropriations to the VI&I fund to cover the costs associated
    with the ``H'' program will no longer be necessary.

    Public enterprise funds:

                    Service-Disabled Veterans Insurance Fund

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4012-0-3-701      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    09.01 Capital investment................          13          14          13
    09.01 Death claims......................          41          48          49
    09.01 All other.........................          12          13          13
                                               ---------   ---------  ----------
    10.00   Total obligations...............          66          75          75
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested.......           6           6           8
    22.00 New budget authority (gross)......          66          78          72
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......          72          84          80
    23.95 New obligations...................         -66         -75         -75
    24.40 Unobligated balance available, end
            of year: Uninvested.............           6           8           5
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    68.00 Spending authority from offsetting
            collections (gross): Offsetting
            collections (cash)..............          66          78          72
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Uninvested...           5           6           4
    73.10 New obligations...................          66          75          75
    73.20 Total outlays (gross).............         -66         -77         -75
    74.40 Unpaid obligations, end of year:
            Obligated balance: Uninvested...           6           4           4
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................          61          71          72
    86.98 Outlays from permanent balances...           5           6           3
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........          66          77          75
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

            Offsetting collections (cash)
                from:
    88.00     Federal sources: Payments from
                VI and I....................         -30         -44         -39
              Non-Federal sources:
    88.40       Interest on loans...........          -3          -3          -3
    88.40       Insurance premiums earned...         -23         -22         -21
    88.40       Repayments of loans.........         -10          -9          -9
                                               ---------   ---------  ----------
    88.90       Total, offsetting
                  collections (cash)........         -66         -78         -72
    ----------------------------------------------------------------------------

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

                         POLICIES AND INSURANCE IN FORCE

                                         1997 actual  1998 est.   1999 est.
    Number of policies..................     159,941     156,471     152,771
    Insurance in force (dollars in
    millions)...........................      $1,473      $1,448      $1,420

        Financing.--Operations are financed from premiums and other
    receipts. Additional funds are received by transfer from

    [[Page 829]]

    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 $379 million by September 30, 1999.

                            Statement of Operations (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   36-4012-0-3-701    1996 actual    1997 actual     1998 est.      1999 est.
    -----------------------------------------------------------------------------------------------
    0101  Revenue...........................          72             67            81             74
    0102  Expense...........................         -67             17           -83            -77
                                            ------------ --------------  ------------  -------------
    0109  Net income or loss (-)............           5             84            -2             -3
    -----------------------------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   36-4012-0-3-701    1996 actual    1997 actual     1998 est.      1999 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
    1101  Federal assets: Fund balances with
            Treasury........................          11             12            13              9
    1206  Non-Federal assets: Receivables,
            net.............................           1              1             3              3
    1601  Net value of assets related to
            pre-1992 direct loans receivable
            and acquired defaulted
            guaranteed loans receivable:
            Direct loans, gross.............          55             58            63             67
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................          67             71            79             79
        LIABILITIES:
          Non-Federal liabilities:

    2201    Accounts payable................           4              5             5              5
    2206    Pension and other actuarial
              liabilities...................         520            439           449            452
    2207    Other...........................           1              1             1              1
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............         525            445           455            458
        NET POSITION:
    3100  Appropriated capital..............           6              6             8              5
    3200  Invested capital..................        -463           -379          -384           -383
                                            ------------ --------------  ------------  -------------
    3999    Total net position..............        -457           -373          -376           -378
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position          68             72            79             80
    -----------------------------------------------------------------------------------------------

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4012-0-3-701      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
    33.0  Investments and loans.............          13          14          13
    42.0  Insurance claims and indemnities..          53          61          62
                                               ---------   ---------  ----------
    99.9    Total obligations...............          66          75          75
    ---------------------------------------------------------------------------

                        Veterans Reopened Insurance Fund

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4010-0-3-701      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    09.01 Death claims......................          33          39          42
    09.01 Dividends.........................          28          29          27
    09.01 All other.........................           9           9           8
    09.01 Capital investment: policy loans..           7           7           7
                                               ---------   ---------  ----------
    10.00   Total obligations...............          77          84          84
    ----------------------------------------------------------------------------

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

    21.40   Uninvested......................                       1           1
    21.41   U.S. Securities: Par value......         493         483         465
                                               ---------   ---------  ----------
    21.99     Total unobligated balance,
                start of year...............         493         484         466
    22.00 New budget authority (gross)......          68          67          63
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......         561         551         529
    23.95 New obligations...................         -77         -84         -84
          Unobligated balance available, end of year:

    24.40   Uninvested......................           1           1           1
    24.41   U.S. Securities: Par value......         483         465         445
                                               ---------   ---------  ----------
    24.99   Total unobligated balance, end
              of year.......................         484         466         446
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    68.00 Spending authority from offsetting
            collections (gross): Offsetting
            collections (cash)..............          68          67          63
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.41 Unpaid obligations, start of year:
            Obligated balance: U.S.
            Securities: Par value...........          33          38          40
    73.10 New obligations...................          77          84          84
    73.20 Total outlays (gross).............         -71         -82         -81
    74.41 Unpaid obligations, end of year:
            Obligated balance: U.S.
            Securities: Par value...........          38          40          43
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................          36          44          41
    86.98 Outlays from permanent balances...          35          38          40
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........          71          82          81
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

            Offsetting collections (cash)
                from:
    88.00     Federal sources: interest on
                U.S. securities.............         -44         -43         -39
              Non-Federal sources:
    88.40       Interest on loans...........          -2          -2          -2
    88.40       Insurance premiums earned...         -16         -16         -16
    88.40       Repayments of loans.........          -6          -6          -6
                                               ---------   ---------  ----------
    88.90       Total, offsetting
                  collections (cash)........         -68         -67         -63
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................
    90.00 Outlays...........................           3          15          18
    ---------------------------------------------------------------------------
        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- 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 account 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:

                         POLICIES AND INSURANCE IN FORCE

                                         1997 actual  1998 est.   1999 est.
      Number of policies................      92,582      87,392      81,962
      Insurance in force (dollars in
        millions).......................        $727        $705        $680

        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    1996 actual    1997 actual     1998 est.      1999 est.
    -----------------------------------------------------------------------------------------------
    0101  Revenue...........................          68             63            61             58
    0102  Expense...........................         -62            -64           -62            -59
                                            ------------ --------------  ------------  -------------

    [[Page 830]]

    0109  Net income or loss (-)............           6             -1            -1             -1
    -----------------------------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   36-4010-0-3-701    1996 actual    1997 actual     1998 est.      1999 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
          Federal assets:

    1101    Fund balances with Treasury.....                          1             1              1
            Investments in US securities:
    1102      Treasury securities, par......         525            521           506            488
    1106      Receivables, net..............          12             10             9              9
    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.............          28             28            29             30
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................         565            560           546            529
        LIABILITIES:
          Non-Federal liabilities:

    2201    Accounts payable................          41             46            49             51
    2206    Pension and other actuarial
              liabilities...................         508            499           483            464
    2207    Other...........................           2              2             2              2
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............         551            547           534            517
        NET POSITION:
    3100  Appropriated capital..............         492            484           466            446
    3200  Invested capital..................        -478           -470          -453           -433
                                            ------------ --------------  ------------  -------------
    3999    Total net position..............          14             14            13             12
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position         565            561           547            530
    -----------------------------------------------------------------------------------------------

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4010-0-3-701      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
    33.0  Investments and loans.............           7           7           7
    42.0  Insurance claims and indemnities..          38          44          47
    43.0  Interest and dividends............          32          33          30
                                               ---------   ---------  ----------
    99.9    Total obligations...............          77          84          84
    ---------------------------------------------------------------------------

                    Servicemembers' Group Life Insurance Fund

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4009-0-3-701      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    09.01 Premium payments..................         478         452         448
    09.01 Payment to GOE account............           1           1           1
                                               ---------   ---------  ----------
    10.00   Total obligations (object class
              41.0).........................         479         453         449
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.41 Unobligated balance available,
            start of year: U.S. Securities:
            Par value.......................           7           1           1
    22.00 New budget authority (gross)......         473         453         449
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......         480         454         450
    23.95 New obligations...................        -479        -453        -449
    24.41 Unobligated balance available, end
            of year: U.S. Securities: Par
            value...........................           1           1           1
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    68.00 Spending authority from offsetting
            collections (gross): Offsetting
            collections (cash)..............         473         453         449
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: offsetting
            collections.....................           3           4           5
    73.10 New obligations...................         479         453         449
    73.20 Total outlays (gross).............        -478        -453        -449
    74.40 Unpaid obligations, end of year:
            Obligated balance: offsetting
            collections.....................           4           5           5
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................         473         449         445
    86.98 Outlays from permanent balances...           5           4           4
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........         478         453         449
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.40   Offsetting collections (cash)
              from: Non-Federal sources:
              Withholdings from serviceman's
              pay...........................        -473        -453        -449
    ----------------------------------------------------------------------------

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

        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    1996 actual    1997 actual     1998 est.      1999 est.
    -----------------------------------------------------------------------------------------------
    0101  Revenue...........................         467            473           493            493
    0102  Expense...........................        -475           -479          -493           -493
                                            ------------ --------------  ------------  -------------
    0109  Net income or loss (-)............          -8             -6
    -----------------------------------------------------------------------------------------------

    Credit accounts:

              Veterans Housing Benefit Program Fund 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] 1999, within the resources available, not to
    exceed $300,000 in gross obligations for direct loans are authorized for
    specially adapted housing loans: Provided further, That during [1998]
    1999 any moneys that would be otherwise deposited into or paid from the
    Loan Guaranty Revolving Fund, the Guaranty and Indemnity Fund, or the
    Direct Loan Revolving Fund shall be deposited into or paid from the
    Veterans Housing Benefit Program Fund: Provided further, That any
    balances in the Loan Guaranty Revolving Fund, the Guaranty and Indemnity
    Fund, or the Direct Loan Revolving Fund on the effective date of this
    Act may be transferred to and merged with the Veterans Housing Benefit
    Program Fund.
         In addition, for administrative expenses to carry out the direct
    and guaranteed loan programs, [$160,437,000] $159,121,000, 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, 1998.)

                  Unavailable Collections (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-1119-0-1-704      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
        Balance, start of year:
    01.99 Balance, start of year............         170         867         907
        Receipts:
    02.01 Downward reestimate of subsidies,
            GIF direct loans................         838
    02.02 Downward reestimate of subsidies,
            guaranteed loans................                     206
    02.03 Downward reestimate of subsidies,
            loan guaranty direct loans......         109
                                               ---------   ---------  ----------
    02.99   Total receipts..................         947         206
                                               ---------   ---------  ----------
    04.00 Total: Balances and collections...       1,117       1,073         907
        Appropriation:
    05.01 Veterans Housing Benefit Program..        -250        -166        -264
    05.02 Legislative proposal subject to
            PAYGO...........................                                   2
                                               ---------   ---------  ----------
    05.99 Subtotal appropriation............        -250        -166        -262
    07.99 Total balance, end of year........         867         907         645
    ---------------------------------------------------------------------------

    [[Page 831]]

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-1119-0-1-704      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Direct loan subsidy...............          25          44         156
    00.02 Guaranteed loan subsidy...........         224         122         108
    00.05 Reestimates of direct loan subsidy          73         376
    00.06 Interest on reestimates of the
            direct loan subsidy.............          12          89
    00.07 Reestimates of guaranteed loan
            subsidy.........................          74         212
    00.08 Interest on reestimates of the
            guaranteed loan subsidy.........           9          32
    00.09 Administrative expenses...........         139         160         159
                                               ---------   ---------  ----------
    10.00   Total obligations...............         556       1,035         423
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......         556       1,035         423
    23.95 New obligations...................        -556      -1,035        -423
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Current:

    40.00   Appropriation (definite)........         139         160         159
    40.25   Appropriation (special fund,
              indefinite)...................         250         166         264
                                               ---------   ---------  ----------
    43.00     Appropriation (total).........         389         326         423
          Permanent:

    60.05   Appropriation (indefinite)......         167         709
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................         556       1,035         423
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    73.10 New obligations...................         556       1,035         423
    73.20 Total outlays (gross).............        -556      -1,035        -423
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority         389         326         423
    86.97 Outlays from new permanent
            authority.......................         167         709
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........         556       1,035         423
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................         556       1,035         423
    90.00 Outlays...........................         556       1,035         423
    ---------------------------------------------------------------------------

                     Summary of Budget Authority and Outlays

                            (in millions of dollars)

                                         1997 actual  1998 est.   1999 est.
    Enacted/requested:
      Budget Authority..................         556       1,035         423
      Outlays...........................         556       1,035         423
    Legislative proposal, subject to
        PAYGO:
      Budget Authority..................                                  -2
      Outlays...........................                                  -2
                                        ------------------------------------
    Total:
      Budget Authority..................         556       1,035         421
      Outlays...........................         556       1,035         421
                                        ====================================

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

    ----------------------------------------------------------------------------
    Identification code 36-1119-0-1-704      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
        Direct loan levels supportable by subsidy
                    budget authority:
    1150  Direct loan levels................       1,280       1,891       2,020
                                               ---------   ---------  ----------
    1159    Total direct loan levels........       1,280       1,891       2,020
        Direct loan subsidy (in percent):
    1320  Subsidy rate......................        1.97        2.36        7.71
                                               ---------   ---------  ----------
    1329    Weighted average subsidy rate...        1.97        2.36        7.71
        Direct loan subsidy budget authority:
    1330  Subsidy budget authority..........          25          44         156
                                               ---------   ---------  ----------
    1339    Total subsidy budget authority..          25          44         156
        Direct loan subsidy outlays:
    1340  Subsidy outlays...................         110         561         156
                                               ---------   ---------  ----------
    1349    Total subsidy outlays...........         110         561         156
    ----------------------------------------------------------------------------

        Guaranteed loan levels supportable by subsidy
                    budget authority:
    2150  Loan guarantee levels.............      24,287      24,844      23,440
                                               ---------   ---------  ----------
    2159    Total loan guarantee levels.....      24,287      24,844      23,440
        Guaranteed loan subsidy (in percent):
    2320  Subsidy rate......................        0.36        0.49        0.46
                                               ---------   ---------  ----------
    2329    Weighted average subsidy rate...        0.36        0.49        0.46
        Guaranteed loan subsidy budget authority:
    2330  Subsidy budget authority..........         307         365         108
                                               ---------   ---------  ----------
    2339    Total subsidy budget authority..         307         365         108
        Guaranteed loan subsidy outlays:
    2340  Subsidy outlays...................         307         122         108
                                               ---------   ---------  ----------
    2349    Total subsidy outlays...........         307         122         108
    ----------------------------------------------------------------------------

        Administrative expense data:
    3510  Budget authority..................         139         160         159
    3590  Outlays from new authority........         139         160         159
    ---------------------------------------------------------------------------

        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 Federal guaranty for this program protects lenders against the
    following types of losses: (a) for loans of $45,000, or less, 50 percent
    of the loan is guaranteed; (b) for loans greater than $45,000, but not
    more than $56,250, $22,500; (c) for loans more than $56,250 but less
    than $144,000, the lesser of $36,000 or 40 percent of the loan; or (d)
    for loans greater than $144,000, the lesser of $50,750 or 25 percent of
    the loan.

        The Administration is proposing legislation to eliminate
    disbursements of vendee loans. VA will sell all foreclosed properties on
    a cash basis.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-1119-0-1-704      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
    25.3  Purchases of goods and services
            from Government accounts........         139         161         159
    41.0  Grants, subsidies, and
            contributions...................         417         874         264
                                               ---------   ---------  ----------
    99.9    Total obligations...............         556       1,035         423
    ---------------------------------------------------------------------------

              Veterans Housing Benefit Program Fund Program Account

                    (Legislative proposal, subject to PAYGO)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-1119-4-1-704      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Direct loan subsidy...............                                -100
    00.02 Guaranteed loan subsidy...........                                  98
                                               ---------   ---------  ----------
    10.00   Total obligations (object class
              41.0).........................                                  -2
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......                                  -2
    23.95 New obligations...................                                   2
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.25 Appropriation (special fund,
            indefinite).....................                                  -2
                                                                              -2
    ----------------------------------------------------------------------------

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

        Outlays (gross), detail:
    86.90 Outlays from new current authority                                  -2
    ----------------------------------------------------------------------------

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

    [[Page 832]]

    90.00 Outlays...........................                                  -2
    ---------------------------------------------------------------------------

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

    ----------------------------------------------------------------------------
    Identification code 36-1119-4-1-704      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
        Direct loan levels supportable by subsidy
                    budget authority:
    1150  Direct loan levels................                              -1,817
                                               ---------   ---------  ----------
    1159    Total direct loan levels........                              -1,817
        Direct loan subsidy (in percent):
    1320  Subsidy rate......................                               11.84
                                               ---------   ---------  ----------
    1329    Weighted average subsidy rate...                               11.84
        Direct loan subsidy budget authority:
    1330  Subsidy budget authority..........                                -100
                                               ---------   ---------  ----------
    1339    Total subsidy budget authority..                                -100
        Direct loan subsidy outlays:
    1340  Subsidy outlays...................                                -100
                                               ---------   ---------  ----------
    1349    Total subsidy outlays...........                                -100
        Guaranteed loan subsidy (in percent):
    2320  Subsidy rate......................                                0.42
                                               ---------   ---------  ----------
    2329    Weighted average subsidy rate...                                0.42
        Guaranteed loan subsidy budget authority:
    2330  Subsidy budget authority..........                                  98
                                               ---------   ---------  ----------
    2339    Total subsidy budget authority..                                  98
        Guaranteed loan subsidy outlays:
    2340  Subsidy outlays...................                                  98
                                               ---------   ---------  ----------
    2349    Total subsidy outlays...........                                  98
    ---------------------------------------------------------------------------

        The Administration is proposing legislation to eliminate
    disbursements of vendee loans. VA will sell all foreclosed properties on
    a cash basis.

       Veterans Housing Benefit Program Fund Direct Loan Financing Account

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4127-0-3-704      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Direct loans......................       1,280       1,891       2,020
    00.02 Interest on Treasury borrowing....         256          98         102
    00.03 Property sales expense............           1           2           2
    00.04 Property management/other expense.           4           5           4
    00.05 Property improvement expense......           1           1           1
    00.06 Reserve for losses on loan sales..          14          69          75
    00.07 Payment of downward reestimate to
            receipt account.................         120
    00.08 Payment of excess interest earned
            to receipt account..............          37
                                               ---------   ---------  ----------
    10.00   Total obligations...............       1,713       2,066       2,204
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New financing authority (gross)...       1,713       2,067       2,204
    23.95 New obligations...................      -1,713      -2,066      -2,204
    ----------------------------------------------------------------------------

        New financing authority (gross), detail:
    67.15 Authority to borrow (indefinite)..       1,328       1,382       1,865
          Spending authority from offsetting
              collections:

    68.00   Offsetting collections (cash)...       1,358       2,136       2,060
    68.47   Portion applied to debt
              reduction.....................        -973      -1,451      -1,721
                                               ---------   ---------  ----------
    68.90     Spending authority from
                offsetting collections
                (total).....................         385         685         339
                                               ---------   ---------  ----------
    70.00   Total new financing authority
              (gross).......................       1,713       2,067       2,204
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Uninvested...           1         -77         -93
    73.10 New obligations...................       1,713       2,066       2,204
    73.20 Total financing disbursements
            (gross).........................      -1,791      -2,083      -2,210
    74.40 Unpaid obligations, end of year:
            Obligated balance: Uninvested...         -77         -93        -100
    87.00 Total financing disbursements
            (gross).........................       1,791       2,083       2,210
    ----------------------------------------------------------------------------

        Offsets:
          Against gross financing authority and
              financing disbursements:

            Offsetting collections (cash)
                from:
    88.00     Federal sources:Payments from
                program account.............        -110        -510        -156
              Non-Federal sources:
                Non-Federal sources:

    88.40         Repayments of principal...         -25         -36         -38
    88.40         Interest received on loans         -62        -106        -122
    88.40         Fees......................          -9         -38         -41
    88.40         Interest from Treasury....        -126
    88.40         Loan sale proceeds, net...      -1,010      -1,359      -1,607
    88.40         Cash sale of properties...          -4         -35         -40
    88.40         Other revenue.............         -12         -52         -56
                                               ---------   ---------  ----------
    88.90       Total, offsetting
                  collections (cash)........      -1,358      -2,136      -2,060
    ----------------------------------------------------------------------------

        Net financing authority and financing
            disbursements:
    89.00 Financing authority...............         355         -69         144
    90.00 Financing disbursements...........         433         -53         150
    ---------------------------------------------------------------------------

                   Status of Direct Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4127-0-3-704      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
        Position with respect to appropriations act
                    limitation on obligations:
    1111  Limitation on direct loans........
    1131  Direct loan obligations exempt
            from limitation.................       1,280       1,891       2,020
                                               ---------   ---------  ----------
    1150    Total direct loan obligations...       1,280       1,891       2,020
    ----------------------------------------------------------------------------

        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........         723         992       1,405
    1231  Disbursements: Direct loan
            disbursements...................       1,280       1,891       2,020
          Repayments:

    1251    Repayments and prepayments......         -69         -32         -38
    1253    Proceeds from loan asset sales
              to the public with recourse...      -1,010      -1,359      -1,607
    1262  Adjustments: Discount on loan
            asset sales to the public or
            discounted......................          64         -77         -90
          Write-offs for default:

    1263    Direct loans....................          -8         -10         -15
    1264    Other adjustments, net..........          12
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........         992       1,405       1,675
    ---------------------------------------------------------------------------

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

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   36-4127-0-3-704    1996 actual    1997 actual     1998 est.      1999 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
    1101  Federal assets: Fund balances with
            Treasury........................         954          2,463         3,489          4,160
    1206  Non-Federal assets: Receivables,
            net.............................          29            160
          Net value of assets related to
              post-1991 direct loans
              receivable:

    1401    Direct loans receivable, net....         723            992         1,405          1,675
    1403    Accounts receivable from
              foreclosed property...........                        106
    1404    Foreclosed property.............          58              9
            Net present value of assets
                related to direct loans:
                                            ------------ --------------  ------------  -------------
    1499        Net present value of assets
                  related to direct loans...         781          1,107         1,405          1,675
                                            ------------ --------------  ------------  -------------

    [[Page 833]]

    1499        Net present value of assets
                  related to direct loans...
    1504  Net value of assets related to
            post-1991 acquired defaulted
            guaranteed loans receivable:
            Foreclosed property.............
    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
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................       1,779          3,730         4,894          5,835
        LIABILITIES:
          Federal liabilities:

    2102    Interest payable................           5              5
    2104    Resources payable to Treasury...       1,768          1,768         4,891          5,832
          Non-Federal liabilities:

    2201    Accounts payable................           7              7             3              3
    2204    Liabilities for loan guarantees.          -1             -1
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............       1,779          1,779         4,894          5,835
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position       1,779          1,779         4,894          5,835
    -----------------------------------------------------------------------------------------------

       Veterans Housing Benefit Program Fund Direct Loan Financing Account

                    (Legislative proposal, subject to PAYGO)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4127-4-3-704      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Direct loans......................                              -1,817
    00.02 Interest on Treasury borrowing....                                 -11
                                               ---------   ---------  ----------
    10.00   Total obligations...............                              -1,828
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New financing authority (gross)...                              -1,828
    23.95 New obligations...................                               1,828
    ----------------------------------------------------------------------------

        New financing authority (gross), detail:
    67.15 Authority to borrow (indefinite)..                              -1,716
          Spending authority from offsetting
              collections:

    68.00   Offsetting collections (cash)...                              -1,448
    68.47   Portion applied to debt
              reduction.....................                               1,336
                                               ---------   ---------  ----------
    68.90     Spending authority from
                offsetting collections
                (total).....................                                -112
                                               ---------   ---------  ----------
    70.00   Total new financing authority
              (gross).......................                              -1,828
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    73.10 New obligations...................                              -1,828
    73.20 Total financing disbursements
            (gross).........................                               1,911
    74.40 Unpaid obligations, end of year:
            Obligated balance: Uninvested...                                  83
    87.00 Total financing disbursements
            (gross).........................                              -1,911
    ----------------------------------------------------------------------------

        Offsets:
          Against gross financing authority and
              financing disbursements:

            Offsetting collections (cash)
                from:
    88.00     Federal sources:Payments from
                program account.............                                 100
              Non-Federal sources:
                Non-Federal sources:

    88.40         Repayments of principal...                                   7
    88.40         Interest received on loans                                  18
    88.40         Fees......................                                  41
    88.40         Loan sale proceeds, net...                               1,226
    88.40         Other revenue.............                                  56
                                               ---------   ---------  ----------
    88.90       Total, offsetting
                  collections (cash)........                               1,448
    ----------------------------------------------------------------------------

        Net financing authority and financing
            disbursements:
    89.00 Financing authority...............                                -380
    90.00 Financing disbursements...........                                -463
    ---------------------------------------------------------------------------

                   Status of Direct Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4127-4-3-704      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
        Position with respect to appropriations act
                    limitation on obligations:
    1111  Limitation on direct loans........
                                               ---------   ---------  ----------
    1150    Total direct loan obligations...
    ----------------------------------------------------------------------------

        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........
    1231  Disbursements: Direct loan
            disbursements...................                              -1,911
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........                              -1,911
    ---------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   36-4127-4-3-704    1996 actual    1997 actual     1998 est.      1999 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
          Net value of assets related to
              post-1991 direct loans
              receivable:

    1401    Direct loans receivable, gross..                                                  -1,911
                                            ------------ --------------  ------------  -------------
    1499      Net present value of assets
                related to direct loans.....                                                  -1,911
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................                                                  -1,911
    -----------------------------------------------------------------------------------------------

        This schedule shows the off-budget financing effects of the
    Administration's proposal to eliminate disbursements of vendee loans. VA
    will sell all foreclosed properties on a cash basis.

     Veterans Housing Benefit Program Fund Guaranteed Loan Financing Account

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4129-0-3-704      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Acquisition of homes..............       1,078       1,727       1,955
    00.02 Losses on defaulted loans.........         292         394         435
    00.03 Property sales expense............          46          99         121
    00.04 Property management expense.......          29          35          42
    00.05 Property improvement expense......          29          34          38
    00.06 Loans acquired....................         124         134         145
    00.07 Payment of downward reestimate to
            program account.................         684         172
    00.08 Payment of excess interest to
            program account.................         105          34
                                               ---------   ---------  ----------
    10.00   Total obligations...............       2,387       2,629       2,736
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested.......       3,744       3,316       3,244
    22.00 New financing authority (gross)...       1,959       2,557       2,601
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......       5,703       5,873       5,845
    23.95 New obligations...................      -2,387      -2,629      -2,736
    24.40 Unobligated balance available, end
            of year: Uninvested.............       3,316       3,244       3,110
    ----------------------------------------------------------------------------

        New financing authority (gross), detail:
    68.00 Spending authority from offsetting
            collections (gross): Offsetting
            collections (cash)..............       1,959       2,557       2,601
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Uninvested...          40        -165        -182
    73.10 New obligations...................       2,387       2,629       2,736
    73.20 Total financing disbursements
            (gross).........................      -2,592      -2,645      -2,743
    74.40 Unpaid obligations, end of year:
            Obligated balance: Uninvested...        -165        -182        -189
    87.00 Total financing disbursements
            (gross).........................       2,592       2,645       2,743
    ----------------------------------------------------------------------------

        Offsets:
          Against gross financing authority and
              financing disbursements:

            Offsetting collections (cash)
                from:
              Federal sources:
    88.00       Payments from program
                  account...................        -308        -365        -108
    88.25     Interest on uninvested funds..        -243        -157        -152

    [[Page 834]]

              Non-Federal sources:
                Non-Federal sources:

    88.40         Funding fees..............        -455        -472        -446
    88.40         Cash sale of properties...        -177        -262        -317
    88.40         Other collections.........         -13         -14         -16
    88.40         Recoveries from loans.....        -763      -1,287      -1,562
                                               ---------   ---------  ----------
    88.90       Total, offsetting
                  collections (cash)........      -1,959      -2,557      -2,601
    ----------------------------------------------------------------------------

        Net financing authority and financing
            disbursements:
    89.00 Financing authority...............
    90.00 Financing disbursements...........         633          88         142
    ---------------------------------------------------------------------------

                 Status of Guaranteed Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4129-0-3-704      1997 actual   1998 est.   1999 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.................      24,287      24,844      23,440
                                               ---------   ---------  ----------
    2150    Total guaranteed loan
              commitments...................      24,287      24,844      23,440
    ----------------------------------------------------------------------------

        Cumulative balance of guaranteed loans
                    outstanding:
    2210  Outstanding, start of year........     130,031     146,574     161,502
    2231  Disbursements of new guaranteed
            loans...........................      24,287      24,844      23,440
    2232  Guarantees of loans sold to the
            public with recourse............         979         820       1,074
    2251  Repayments and prepayments........      -7,352      -8,287      -9,131
          Adjustments:

    2261    Terminations for default that
              result in loans receivable....        -124        -395        -435
    2262    Terminations for default that
              result in acquisition of
              property......................      -1,079      -1,727      -1,955
    2263    Terminations for default that
              result in claim payments......        -292        -327        -366
    2264    Other adjustments, net..........         124
                                               ---------   ---------  ----------
    2290    Outstanding, end of year........     146,574     161,502     174,129
    ----------------------------------------------------------------------------

        Memorandum:
    2299  Guaranteed amount of guaranteed
            loans outstanding, end of year..      65,081      62,353      67,417
    ----------------------------------------------------------------------------

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

    2310    Outstanding, start of year......          61         103         127
    2331    Disbursements for guaranteed
              loan claims...................         339         395         435
    2351    Repayments of loans receivable..          -6         -11         -13
    2361    Write-offs of loans receivable..        -291        -360        -406
                                               ---------   ---------  ----------
    2390      Outstanding, end of year......         103         127         143
    ---------------------------------------------------------------------------

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

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   36-4129-0-3-704    1996 actual    1997 actual     1998 est.      1999 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
    1101  Federal assets: Fund balances with
            Treasury........................       3,785          3,151         3,063          2,921
    1206  Non-Federal assets: Receivables,
            net.............................          61            244           237            226
          Other Federal assets:

    1801    Cash and other monetary assets..                        102           133            136
    1803    Property, plant and equipment,
              net...........................         415            718           809            891
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................       4,261          4,215         4,242          4,174
        LIABILITIES:
    2204  Non-Federal liabilities:
            Liabilities for loan guarantees.       4,261          4,215         4,242          4,174
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............       4,261          4,215         4,242          4,174
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position       4,261          4,215         4,242          4,174
    -----------------------------------------------------------------------------------------------

     Veterans Housing Benefit Program Fund Guaranteed Loan Financing Account

                    (Legislative proposal, subject to PAYGO)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4129-4-3-704      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New financing authority (gross)...                                 101
    24.40 Unobligated balance available, end
            of year: Uninvested.............                                 101
    ----------------------------------------------------------------------------

        New financing authority (gross), detail:
    68.00 Spending authority from offsetting
            collections (gross): Offsetting
            collections (cash)..............                                 101
    ----------------------------------------------------------------------------

        Offsets:
          Against gross financing authority and
              financing disbursements:

            Offsetting collections (cash)
                from:
              Federal sources:
    88.00       Payments from Program
                  Account...................                                 -98
    88.25     Interest on uninvested funds..                                  -3
                                               ---------   ---------  ----------
    88.90       Total, offsetting
                  collections (cash)........                                -101
    ----------------------------------------------------------------------------

        Net financing authority and financing
            disbursements:
    89.00 Financing authority...............
    90.00 Financing disbursements...........                                -101
    ---------------------------------------------------------------------------

        This schedule shows the off-budget financing effects of the
    Administration's proposal to eliminate disbursements of vendee loans. VA
    will sell all foreclosed properties on a cash basis.

            Veterans Housing Benefit Program Fund Liquidating Account

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4025-0-3-704      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Capital investments:

    00.01   Acquisition of homes............         415         404         339
    00.02   Property improvements...........          21          19          16
    00.03   Cash advances...................          23          18          13
    00.04   Acquisition of defaulted
              guaranteed loans..............          62          60          59
                                               ---------   ---------  ----------
    00.91     Total capital investments.....         521         501         427
                                               ---------   ---------  ----------
    01.00   Total capital investments.......         521         501         427
          Operating expenses:

    01.02   Property management expense.....          29          28          21
    01.03   Sales expense...................          36          43          31
    01.04   Claims processed................         192         131         110
    01.05   Other expenses..................          18          17          15
                                               ---------   ---------  ----------
    01.91     Total operating expenses......         275         219         177
                                               ---------   ---------  ----------
    10.00   Total obligations (object class
              33.0).........................         796         720         604
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested.......         192          57
    22.00 New budget authority (gross)......         873         840         638
    22.40 Capital transfer to general fund..        -212        -177         -34
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......         853         720         604
    23.95 New obligations...................        -796        -720        -604
    24.40 Unobligated balance available, end
            of year: Uninvested.............          57
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Current:

    40.00   Appropriation...................         100

    [[Page 835]]

          Permanent:

    68.00   Spending authority from
              offsetting collections:
              Offsetting collections (cash).         773         840         638
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................         873         840         638
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Uninvested...          67          42          38
    73.10 New obligations...................         796         720         604
    73.20 Total outlays (gross).............        -822        -724        -610
    74.40 Unpaid obligations, end of year:
            Obligated balance: Uninvested...          42          38          32
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................         773         720         604
    86.98 Outlays from permanent balances...          49           4           6
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........         822         724         610
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

            Offsetting collections (cash)
                from:
    88.00     Federal sources: Payments from
                direct loan financing
                account.....................        -499        -604        -458
              Non-Federal sources:
                Non-Federal sources:

    88.40         Loan and other repayments.         -50         -40         -32
    88.40         Loan sale proceeds, net...          -1
    88.40         Sale of homes, cash.......        -119        -117         -86
    88.40         Interest on loans.........         -67         -53         -43
    88.40         Collection of claims
                    (veteran indebtedness)..         -51         -38         -29
    88.40         Other revenue.............          14          12          10
                                               ---------   ---------  ----------
    88.90       Total, offsetting
                  collections (cash)........        -773        -840        -638
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................         100
    90.00 Outlays...........................          49        -116         -28
    ---------------------------------------------------------------------------

                   Status of Direct Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4025-0-3-704      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........         449         420         432
    1231  Disbursements: Direct loan
            disbursements...................          56          52          54
          Repayments:

    1251    Repayments and prepayments......         -40         -37         -38
    1253    Proceeds from loan asset sales
              to the public with recourse...          -1          -1          -1
    1261  Adjustments: Capitalized interest.          19
          Write-offs for default:

    1263    Direct loans....................          -1          -1          -1
    1264    Other adjustments, net..........         -62          -1          -1
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........         420         432         445
    ---------------------------------------------------------------------------

                 Status of Guaranteed Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4025-0-3-704      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
        Cumulative balance of guaranteed loans
                    outstanding:
    2210  Outstanding, start of year........      24,731      23,896      23,058
    2251  Repayments and prepayments........        -313        -303        -292
          Adjustments:

    2262    Terminations for default that
              result in acquisition of
              property......................        -415        -404        -339
    2263    Terminations for default that
              result in claim payments......        -192        -131        -110
    2264    Other adjustments, net..........          85
                                               ---------   ---------  ----------
    2290    Outstanding, end of year........      23,896      23,058      22,317
    ----------------------------------------------------------------------------

        Memorandum:
    2299  Guaranteed amount of guaranteed
            loans outstanding, end of year..      12,505      12,066      11,678
    ----------------------------------------------------------------------------

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

    2310    Outstanding, start of year......       1,350         665         633
    2331    Disbursements for guaranteed
              loan claims...................         228         194         165
    2351    Repayments of loans receivable..         -84         -38         -29
    2361    Write-offs of loans receivable..        -829        -188        -159
                                               ---------   ---------  ----------
    2390      Outstanding, end of year......         665         633         610
    ---------------------------------------------------------------------------

                            Statement of Operations (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   36-4025-0-3-704    1996 actual    1997 actual     1998 est.      1999 est.
    -----------------------------------------------------------------------------------------------
    0101  Revenue...........................         869            571           457            366
    0102  Expense...........................        -441           -514          -411           -329
                                            ------------ --------------  ------------  -------------
    0109  Net income or loss (-)............         428             57            46             37
    -----------------------------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   36-4025-0-3-704    1996 actual    1997 actual     1998 est.      1999 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
    1101  Federal assets: Fund balances with
            Treasury........................         238             99           177             34
    1207  Non-Federal assets: Advances and
            prepayments.....................           1             12
          Net value of assets related to
              post-1991 direct loans
              receivable:

    1402    Interest receivable.............           7              4            53             42
    1403    Credit program receivables and
              related forclosed property,
              net...........................         463            377           132            110
                                            ------------ --------------  ------------  -------------
    1499      Net present value of assets
                related to direct loans.....         470            381           185            152
    1706  Net value of assets related to
            pre-1992 direct loans receivable
            and acquired defaulted
            guaranteed loans receivable:
            Foreclosed property.............
          Other Federal assets:

    1803    Property, plant and equipment,
              net...........................         643            539           348            290
    1901    Other assets....................
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................       1,352          1,031           710            476
        LIABILITIES:
    2101  Federal liabilities: Accounts
            payable.........................         293             73            50             34
    2207  Non-Federal liabilities: Other....          76            115            98             83
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............         369            188           148            117
        NET POSITION:
    3200  Invested capital..................       1,106            917           779            662
    3300  Cumulative results of operations..         169            -74          -217           -303
    3500  Future funding requirements.......        -292
                                            ------------ --------------  ------------  -------------
    3999    Total net position..............         983            843           562            359
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position       1,352          1,031           710            476
    -----------------------------------------------------------------------------------------------

        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 the corresponding program and financing
    accounts.

            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, $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, 1998.)

                 Vocational Rehabilitation Loans Program Account

                          (including transfer of funds)

        For the cost of direct loans, [$44,000] $55,000, 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 [$2,278,000] $2,401,000.
        In addition, for administrative expenses necessary to carry out the
    direct loan program, [$388,000] $400,000, which may be transferred to
    and merged with the appropriation for ``General operating

    [[Page 836]]

    expenses''. (Departments of Veterans Affairs and Housing and Urban
    Development, and Independent Agencies Appropriations Act, 1998.)

                       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, [$200,000] $206,000; 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, 1998.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0140-0-3-702      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

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

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

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

        Change in unpaid obligations:
    73.10 New obligations...................           1           1           2
    73.20 Total outlays (gross).............          -1          -1          -2
    ----------------------------------------------------------------------------

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

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

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

    ----------------------------------------------------------------------------
    Identification code 36-0140-0-3-702      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
        Direct loan levels supportable by subsidy
                    budget authority:
    1150  Direct loan levels, vocational
            rehabiliation...................           2           2           2
    1150  Direct loan levels, education.....
    1150  Direct loan levels, Native
            American housing................           2           5           9
                                               ---------   ---------  ----------
    1159    Total direct loan levels........           4           7          11
        Direct loan subsidy (in percent):
    1320  Voc. Rehab. Loan subsidy rate.....        1.74        1.94        2.27
    1320  Education Loan subsidy rate.......        0.00       34.11       32.75
    1320  Native American subsidy rate......        7.72        7.72        7.72
                                               ---------   ---------  ----------
    1329    Weighted average subsidy rate...        4.52        5.97        6.73
        Direct loan subsidy budget authority:
    1330  Subsidy budget authority,
            vocational rehabilitation.......                                   1
                                               ---------   ---------  ----------
    1339    Total subsidy budget authority..                                   1
        Direct loan subsidy outlays:
    1340  Subsidy outlays, vocational
            rehabilitation..................
    1340  Subsidy outlays, education........
    1340  Subsidy outlays, Native American..                                   1
                                               ---------   ---------  ----------
    1349    Total subsidy outlays...........                                   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 pilot program that began in 1993 and is authorized through
    December 31, 2001.

        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      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
    25.3  Purchases of goods and services
            from Government accounts........           1           1           1
    41.0  Grants, subsidies, and
            contributions...................                                   1
                                               ---------   ---------  ----------
    99.9    Total obligations...............           1           1           2
    ---------------------------------------------------------------------------

     Miscellaneous Veterans Programs Loan Fund Direct Loan Financing Account

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4259-0-3-702      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Direct loans......................           5           7          11
    00.02 Interest on Treasury borrowing....           2           1           1
                                               ---------   ---------  ----------
    10.00   Total obligations...............           7           8          12
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested.......           2
    22.00 New financing authority (gross)...           7           9          12
    22.60 Redemption of debt................          -3
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......           6           9          12
    23.95 New obligations...................          -7          -8         -12
    ----------------------------------------------------------------------------

        New financing authority (gross), detail:
    67.15 Authority to borrow (indefinite)..           5           7          10
          Spending authority from offsetting
              collections:

    68.00   Offsetting collections (cash)...           5           5           5
    68.47   Portion applied to debt
              reduction.....................          -3          -3          -3
                                               ---------   ---------  ----------

    [[Page 837]]

    68.90     Spending authority from
                offsetting collections
                (total).....................           2           2           2
                                               ---------   ---------  ----------
    70.00   Total new financing authority
              (gross).......................           7           9          12
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Uninvested...           1           1           1
    73.10 New obligations...................           7           8          12
    73.20 Total financing disbursements
            (gross).........................          -7          -8         -13
    74.40 Unpaid obligations, end of year:
            Obligated balance: Uninvested...           1           1
    87.00 Total financing disbursements
            (gross).........................           7           8          13
    ----------------------------------------------------------------------------

        Offsets:
          Against gross financing authority and
              financing disbursements:

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

        Net financing authority and financing
            disbursements:
    89.00 Financing authority...............           2           4           7
    90.00 Financing disbursements...........           3           3           8
    ---------------------------------------------------------------------------

                   Status of Direct Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4259-0-3-702      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
        Position with respect to appropriations act
                    limitation on obligations:
    1111  Limitation on direct loans........
    1131  Direct loan obligations exempt
            from limitation.................           5           7          11
                                               ---------   ---------  ----------
    1150    Total direct loan obligations...           5           7          11
    ----------------------------------------------------------------------------

        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........          13          15          19
    1231  Disbursements: Direct loan
            disbursements...................           5           7          11
    1251  Repayments: Repayments and
            prepayments.....................          -3          -3          -2
    1264  Write-offs for default: Other
            adjustments, net................
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........          15          19          28
    ---------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   36-4259-0-3-702    1996 actual    1997 actual     1998 est.      1999 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
          Federal assets:

    1101    Fund balances with Treasury.....           3
            Investments in US securities:
    1106      Receivables, net..............                         10
          Net value of assets related to
              post-1991 direct loans
              receivable:

    1401    Direct loans receivable, gross..          13             15            19             28
                                            ------------ --------------  ------------  -------------
    1499      Net present value of assets
                related to direct loans.....          13             15            19             28
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................          16             25            19             28
        LIABILITIES:
          Federal liabilities:

    2101    Accounts payable................
    2103    Debt............................           3             24
    2104    Resources payable to Treasury...                                        4             11
    2203  Non-Federal liabilities: Debt.....          13
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............          16             24             4             11
        NET POSITION:
    3100  Appropriated capital..............                                       15             17
                                            ------------ --------------  ------------  -------------
    3999    Total net position..............                                       15             17
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position          16             24            19             28
    -----------------------------------------------------------------------------------------------

        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      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........           3           1           1
    1263  Write-offs for default: Direct
            loans...........................          -2                      -1
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........           1           1
    ---------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   36-4260-0-3-702    1996 actual    1997 actual     1998 est.      1999 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
    1101  Federal assets: Fund balances with
            Treasury........................           1              1
          Net value of assets related to
              pre-1992 direct loans
              receivable and acquired
              defaulted guaranteed loans
              receivable:

    1601    Direct loans, gross.............           3              1             2              2
    1603    Allowance for estimated
              uncollectible loans and
              interest (-)..................          -2
    1604    Direct loans and interest
              receivable, net...............           1              1             2              2
                                            ------------ --------------  ------------  -------------
    1699      Value of assets related to
                direct loans................           1              1             2              2
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................           2              2             2              2
        NET POSITION:
    3100  Appropriated capital..............           1
    3300  Cumulative results of operations..           1              1             2              2
                                            ------------ --------------  ------------  -------------
    3999    Total net position..............           2              1             2              2
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position           2              1             2              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

                                         1997 actual  1998 est.   1999 est.
    Number of loans outstanding.........         991         870         680
    Average amount per loan outstanding.        $772        $675        $679

                                   Trust Funds

                   Post-Vietnam Era Veterans Education Account

                  Unavailable Collections (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-8133-0-7-702      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
        Balance, start of year:
    01.99 Balance, start of year............          64          64          64
        Receipts:
    02.01 Deductions from military pay......           3           3           2
    02.02 Contributions.....................          14           9           6
                                               ---------   ---------  ----------
    02.99   Total receipts..................          17          12           8
                                               ---------   ---------  ----------
    04.00 Total: Balances and collections...          81          76          72
        Appropriation:
    05.01 Post-Vietnam era veterans
            education account...............         -17         -12          -9
                                               ---------   ---------  ----------

    [[Page 838]]

    05.99 Subtotal appropriation............         -17         -12          -9
    07.99 Total balance, end of year........          64          64          63
    ---------------------------------------------------------------------------

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-8133-0-7-702      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Payment to post-Vietnam era
            trainees........................          16          12           9
    00.02 Payment to section 901 trainees...           1
    00.03 Participant disenrollments........          70          33          46
                                               ---------   ---------  ----------
    10.00   Total obligations...............          87          45          55
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested.......         189         119          86
    22.00 New budget authority (gross)......          17          12           9
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......         206         131          95
    23.95 New obligations...................         -87         -45         -55
    24.40 Unobligated balance available, end
            of year: Uninvested.............         119          86          40
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    60.27 Appropriation (trust fund,
            indefinite).....................          20          15          11
    60.45 Portion precluded from obligation.          -3          -3          -2
                                               ---------   ---------  ----------
    63.00   Appropriation (total)...........          17          12           9
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................          17          12           9
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Uninvested...           4           5           4
    73.10 New obligations...................          87          45          55
    73.20 Total outlays (gross).............         -86         -46         -55
    74.40 Unpaid obligations, end of year:
            Obligated balance: Uninvested...           5           4           4
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................          17          12           9
    86.98 Outlays from permanent balances...          69          34          46
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........          86          46          55
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................          17          12           9
    90.00 Outlays...........................          86          46          55
    ---------------------------------------------------------------------------

        This account consists of voluntary contributions by eligible
    servicepersons and matching contributions provided by the Department of
    Defense. The fund provides educational assistance payments to
    participants who entered the service after December 31, 1976, and are
    pursuing training under chapter 32, title 38, U.S.C. Section 901 is a
    non-contributory program with educational assistance provided by the
    Department of Defense. Public Law 99-576, enacted October 28, 1986,
    closed the program permanently for new enrollments effective March 31,
    1987. The estimated activity in the fund follows:

        CONTRIBUTIONS, PARTICIPANTS, DISENROLLMENTS, REFUNDS AND TRAINEES

                            [In millions of dollars]

                                         1997 actual  1998 est.   1999 est.

    Total budget authority..............         $17         $12          $9
      Servicepersons....................          $3          $3          $2
      Transferred from Department of
        Defense (bonus).................          $8          $4          $3
      Transferred from Department of
        Defense (matching)..............          $5          $5          $4
      Transferred from Department of
        Defense (Section 901)...........          $1           0           0
      Transferred from Department of
        Defense (Section 903)...........          $4           0           0
    Total participants (end of year)....     284,676     259,660     222,969
    Total contributors (end of year)....       2,995       2,484       1,709
    Average contribution per contributor
    (actual dollars)....................      $1,138      $1,140      $1,140
    Number of disenrollments............      60,751      27,500      38,400
    Total refunds.......................         $70         $33         $46
    Total trainees......................       9,653       6,700       4,700
    Total trainee cost..................         $16         $12          $9
    Average cost per trainee (actual
    dollars)............................      $1,639      $1,745      $1,746
    Section 901 trainees................         215         180         151
    Section 901 trainee cost............          $1

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-8133-0-7-702      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
    41.0  Grants, subsidies, and
            contributions...................          17          12           9
    44.0  Refunds...........................          70          33          46
                                               ---------   ---------  ----------
    99.9    Total obligations...............          87          45          55
    ---------------------------------------------------------------------------

                      National Service Life Insurance Fund

                  Unavailable Collections (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-8132-0-7-701      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
        Balance, start of year:
    01.99 Balance, start of year............
        Receipts:
    02.01 Premium and other receipts........         231         224         210
    02.02 Interest..........................       1,015         977         922
    02.03 Payments from general and special
            funds...........................           2           2           2
    02.04 Payments from general and special
            funds, legislative proposal
            subject to PAYGO................                                   5
                                               ---------   ---------  ----------
    02.99   Total receipts..................       1,248       1,203       1,139
        Appropriation:
    05.01 National Service Life Insurance
            fund............................      -1,248      -1,203      -1,134
    07.99 Total balance, end of year........                                   5
    ---------------------------------------------------------------------------

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-8132-0-7-701      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Direct:

            Operating expenses:
    00.01     Death claims..................         560         608         631
    00.02     Disability claims.............          18          19          19
    00.03     Matured endowments............           7          13          15
    00.04     Cash surrenders...............          30          30          31
    00.05     Dividends.....................         523         512         478
    00.06     Interest paid on dividend
                credits and deposits........          56          62          57
    00.07     Payment to general operating
                expenses....................          21          22          25
                                               ---------   ---------  ----------
    00.91       Total operating expenses....       1,215       1,266       1,256
    02.01 Capital investment: Policy loans..         127         127         126
                                               ---------   ---------  ----------
    02.93   Total direct obligations........       1,342       1,393       1,382
    09.01 Death claims......................         253         254         254
    09.01 Disability claims.................           9           8           8
    09.01 Matured endowments................           9           6           6
    09.01 Cash surrenders...................           7           8           8
    09.01 Dividends.........................         218         202         202
    09.01 Interest paid on dividend credits
            and deposits....................          24          24          24
    09.01 Payment to general operating
            expenses........................           8           9           9
                                               ---------   ---------  ----------
    09.09   Reimbursable program--subtotal
              line..........................         528         511         511
                                               ---------   ---------  ----------
    10.00   Total obligations...............       1,870       1,904       1,893
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.41 Unobligated balance available,
            start of year: U.S. Securities:
            Par value.......................      10,824      10,783      10,650
    22.00 New budget authority (gross)......       1,829       1,771       1,678
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......      12,653      12,554      12,328
    23.95 New obligations...................      -1,870      -1,904      -1,893
    24.41 Unobligated balance available, end
            of year: U.S. Securities: Par
            value...........................      10,783      10,650      10,436
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    60.27 Appropriation (trust fund,
            indefinite).....................       1,248       1,203       1,134
    68.00 Spending authority from offsetting
            collections: Offsetting
            collections (cash)..............         581         568         544
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................       1,829       1,771       1,678
    ----------------------------------------------------------------------------

    [[Page 839]]

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

            Obligated balance:
    72.40     Uninvested....................           4          10           5
    72.41     U.S. Securities: Par value....       1,184       1,240       1,285
                                               ---------   ---------  ----------
    72.99     Total unpaid obligations,
                start of year...............       1,188       1,250       1,290
    73.10 New obligations...................       1,870       1,904       1,893
    73.20 Total outlays (gross).............      -1,808      -1,864      -1,854
          Unpaid obligations, end of year:

            Obligated balance:
    74.40     Uninvested....................          10           5           5
    74.41     U.S. Securities: Par value....       1,240       1,285       1,323
                                               ---------   ---------  ----------
    74.99     Total unpaid obligations, end
                of year.....................       1,250       1,290       1,328
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................         581         568         544
    86.98 Outlays from permanent balances...       1,227       1,296       1,310
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........       1,808       1,864       1,854
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

            Offsetting collections (cash)
                from:
              Non-Federal sources:
    88.40       Repayments of loans.........        -130        -130        -130
    88.40       Optional settlements........          -5          -5          -4
    88.40       Net income offsets
                  adjustments...............        -446        -433        -410
                                               ---------   ---------  ----------
    88.90       Total, offsetting
                  collections (cash)........        -581        -568        -544
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................       1,248       1,203       1,134
    90.00 Outlays...........................       1,227       1,296       1,310
    ---------------------------------------------------------------------------
        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:

                         POLICIES AND INSURANCE IN FORCE

                                         1995 actual  1996 est.   1997 est.

    Number of policies..................   2,013,221   1,901,641   1,785,131
    Insurance in force (dollars in
    millions)...........................     $18,826     $18,212     $17,557

        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 interest-
    bearing Treasury securities and in policy loans, are expected to
    decrease from $12,946 million as of September 30, 1998 to $12,754
    million as of September 30, 1999. The actuarial estimate of policy
    obligations as of September 30, 1999, total $12,669 million, leaving a
    balance of $84 million for contingency reserves.

        The status of the fund, excluding noncash transactions, is as
    follows:

                      Status of Funds (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-8132-0-7-701      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
        Unexpended balance, start of year:
    0100  Uninvested balance [unavailable
            collections]....................           5          10           5
    0101  U.S. Securities: Par value........      12,007      12,023      11,935
                                               ---------   ---------  ----------
    0199    Total balance, start of year....      12,012      12,033      11,940
        Cash income during the year:
          Proprietary receipts:

    0220    NSLI fund, premium and other
              receipts......................         231         224         210
          Intragovernmental transactions:

    0240    NSLI fund,interest..............       1,015         977         922
    0241    NSLI fund, payments from general
              and special funds.............           2           2           2
    0242    Intragovernmental transactions..                                   5
          Offsetting collections:

    0289    Offsetting collections..........         581         568         544
    0297  Income under present law..........       1,829       1,771       1,678
    0298  Income under proposed legislation.                                   5
                                               ---------   ---------  ----------
    0299    Total cash income...............       1,829       1,771       1,683
        Cash outgo during year:
    0500  National service life insurance
            fund............................      -1,808      -1,864      -1,854
        Unexpended balance, end of year:
    0700  Uninvested balance................          10           5           5
    0701  U.S. Securities: Par value........      12,023      11,935      11,764
                                               ---------   ---------  ----------
    0799    Total balance, end of year......      12,033      11,940      11,769
    ---------------------------------------------------------------------------

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-8132-0-7-701      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

          Direct obligations:

    33.0    Investments and loans...........          88          89          88
    42.0    Insurance claims and indemnities         654         706         731
    43.0    Interest and dividends..........         600         598         563
                                               ---------   ---------  ----------
    99.0      Subtotal, direct obligations..       1,342       1,393       1,382
    99.0  Reimbursable obligations..........         528         511         511
                                               ---------   ---------  ----------
    99.9    Total obligations...............       1,870       1,904       1,893
    ---------------------------------------------------------------------------

                  United States Government Life Insurance Fund

                  Unavailable Collections (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-8150-0-7-701      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
        Balance, start of year:
    01.99 Balance, start of year............
        Receipts:
    02.01 Interest and profits on
            investments in public debt
            securities......................           6           6           6
        Appropriation:
    05.01 United States government life
            insurance fund..................          -6          -6          -6
    07.99 Total balance, end of year........
    ---------------------------------------------------------------------------

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-8150-0-7-701      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Operating expenses:

    00.01   Death claims....................           7           7           7
    00.02   Cash surrenders.................           1           1           1
    00.05   Dividends.......................           5           4           4
    00.06   Interest paid on dividend
              credits and deposits..........           1           1           1
                                               ---------   ---------  ----------
    00.91     Total operating expenses......          14          13          13
                                               ---------   ---------  ----------
    10.00   Total obligations...............          14          13          13
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.41 Unobligated balance available,
            start of year: U.S. Securities:
            Par value.......................          79          72          66
    22.00 New budget authority (gross)......           8           7           7
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......          87          79          73
    23.95 New obligations...................         -14         -13         -13
    24.41 Unobligated balance available, end
            of year: U.S. Securities: Par
            value...........................          72          66          60
    ----------------------------------------------------------------------------

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

        Change in unpaid obligations:
    72.41 Unpaid obligations, start of year:
            Obligated balance: U.S.
            Securities: Par value...........          20          20          19
    73.10 New obligations...................          14          13          13
    73.20 Total outlays (gross).............         -13         -15         -13
    74.41 Unpaid obligations, end of year:
            Obligated balance: U.S.
            Securities: Par value...........          20          19          19
    ----------------------------------------------------------------------------

    [[Page 840]]

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................           1           1           1
    86.98 Outlays from permanent balances...          12          14          12
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........          13          15          13
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

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

        Net budget authority and outlays:
    89.00 Budget authority..................           8           7           7
    90.00 Outlays...........................          13          15          13
    ---------------------------------------------------------------------------
        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:

                         POLICIES AND INSURANCE IN FORCE

                                         1997 actual  1998 est.   1999 est.
    Number of policies..................      21,343      19,625      18,017
    Insurance in force (dollars in
    millions)...........................         $71         $65         $59

        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 $91 million
    as of September 30, 1998, to $84 million as of September 30, 1999, as an
    increasing number of policies mature through death or disability. The
    actuarial evaluation of policy obligations as of September 30, 1999,
    totals $82 million, leaving a balance of $2 million for contingency
    reserves.

        The status of the fund, excluding noncash transactions, is as
    follows:

                      Status of Funds (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-8150-0-7-701      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
        Unexpended balance, start of year:
    0101  U.S. Securities: Par value........          99          92          84
        Cash income during the year:
          Intragovernmental transactions:

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

    0289    Offsetting Collections..........           1           1           1
                                               ---------   ---------  ----------
    0299    Total cash income...............           7           7           7
        Cash outgo during year:
    0500  United States government life
            insurance fund..................         -13         -15         -13
        Unexpended balance, end of year:
    0701  U.S. Securities: Par value........          92          84          78
    ---------------------------------------------------------------------------

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-8150-0-7-701      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
    42.0  Insurance claims and indemnities..           8           8           7
    43.0  Interest and dividends............           6           5           6
                                               ---------   ---------  ----------
    99.9    Total obligations...............          14          13          13
    ---------------------------------------------------------------------------

                      Veterans Special Life Insurance Fund

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-8455-0-8-701      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    09.01 Death claims......................          45          54          57
    09.01 Cash surrenders...................           6           7           7
    09.01 Dividends.........................         104         104         101
    09.01 All other.........................          50          65          55
    09.01 Payment to general operating
            expenses account................           4           5           5
    09.02 Capital investment................          23          25          25
                                               ---------   ---------  ----------
    10.00   Total obligations...............         232         260         250
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.41 Unobligated balance available,
            start of year: U.S. Securities:
            Par value.......................       1,412       1,425       1,409
    22.00 New budget authority (gross)......         246         244         240
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......       1,658       1,669       1,649
    23.95 New obligations...................        -232        -260        -250
    24.41 Unobligated balance available, end
            of year: U.S. Securities: Par
            value...........................       1,425       1,409       1,399
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    68.00 Spending authority from offsetting
            collections (gross): Offsetting
            collections (cash)..............         246         244         240
    ----------------------------------------------------------------------------

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

            Obligated balance:
    72.40     Uninvested....................           1           2           2
    72.41     U.S. Securities: Par value....         168         185         196
                                               ---------   ---------  ----------
    72.99     Total unpaid obligations,
                start of year...............         169         187         198
    73.10 New obligations...................         232         260         250
    73.20 Total outlays (gross).............        -216        -249        -239
          Unpaid obligations, end of year:

            Obligated balance:
    74.40     Uninvested....................           2           2           2
    74.41     U.S. Securities: Par value....         185         196         207
                                               ---------   ---------  ----------
    74.99     Total unpaid obligations, end
                of year.....................         187         198         209
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................          47          62          41
    86.98 Outlays from permanent balances...         169         187         198
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........         216         249         239
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

            Offsetting collections (cash)
                from:
              Non-Federal sources:
    88.40       Interest on loans...........          -6          -7          -7
    88.40       Insurance premiums earned...         -74         -72         -70
    88.40       Optional settlements........          -2          -2          -3
    88.40       Repayments of loans.........         -17         -18         -19
    88.45     Offsetting governmental
                collections.................        -147        -145        -141
                                               ---------   ---------  ----------
    88.90       Total, offsetting
                  collections (cash)........        -246        -244        -240
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................
    90.00 Outlays...........................         -30           5          -1
    ---------------------------------------------------------------------------
        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.

    [[Page 841]]

            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:

                         POLICIES AND INSURANCE IN FORCE

                                         1997 actual  1998 est.   1999 est.
    Number of policies..................     248,997     240,777     233,347
    Insurance in force (dollars in
    millions)...........................          $3          $3          $3

        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    1996 actual    1997 actual     1998 est.      1999 est.
    -----------------------------------------------------------------------------------------------
    0101  Revenue...........................         231            231           229            224
    0102  Expense...........................        -223           -225          -233           -226
                                            ------------ --------------  ------------  -------------
    0109  Net income or loss (-)............           8              6            -4             -2
    -----------------------------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   36-8455-0-8-701    1996 actual    1997 actual     1998 est.      1999 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
          Federal assets:

    1101    Fund balances with Treasury.....           1              2             2              2
            Investments in US securities:
    1102      Treasury securities, par......       1,580          1,610         1,605          1,606
    1106      Receivables, net..............          37             36            36             35
    1206  Non-Federal assets: Receivables,
            net.............................                                        4              4
    1601  Net value of assets related to
            pre-1992 direct loans receivable
            and acquired defaulted
            guaranteed loans receivable:
            Direct loans, gross.............         102            108           115            121
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................       1,720          1,756         1,762          1,768
        LIABILITIES:
          Non-Federal liabilities:

    2201    Accounts payable................         187            204           219            230
    2206    Pension and other actuarial
              liabilities...................       1,481          1,494         1,488          1,487
    2207    Other...........................          19             19            18             17
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............       1,687          1,717         1,725          1,734
        NET POSITION:
    3100  Appropriated capital..............       1,412          1,425         1,409          1,399
    3200  Invested capital..................      -1,378         -1,385        -1,373         -1,365
                                            ------------ --------------  ------------  -------------
    3999    Total net position..............          34             40            36             34
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position       1,721          1,757         1,761          1,768
    -----------------------------------------------------------------------------------------------

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-8455-0-8-701      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
    33.0  Investments and loans.............          23          25          25
    42.0  Insurance claims and indemnities..          89         112         105
    43.0  Interest and dividends............         120         123         120
                                               ---------   ---------  ----------
    99.9    Total obligations...............         232         260         250
    ---------------------------------------------------------------------------

                                  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] U.S.C., 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 $4,000,000 or more or where funds for a project were made
    available in a previous major project appropriation, [$177,900,000]
    $97,000,000, to remain available until expended: Provided, [That the
    $32,100,000 provided under this heading in Public Law 104-204 for the
    replacement hospital at Travis Air Force Base, Fairfield, California,
    shall not be obligated for that purpose but shall be available for any
    project approved by the Congress in the budgetary process: Provided
    further,] 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 [1998] 1999, for each approved project shall be obligated:
    (1) by the awarding of a construction documents contract by September
    30, [1998] 1999; and (2) by the awarding of a construction contract by
    September 30, [1999] 2000: Provided further, That the Secretary shall
    promptly report in writing to the Committees on Appropriations any
    approved major construction project in which obligations are not
    incurred within the time limitations established above: 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, 1998.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0110-0-1-703      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Replacement and modernization.....          36          19          48
    00.02 Nursing home care.................           1           1           1
    00.06 Other improvements................         183         213         157
    00.07 National cemeteries...............           4          78          19
    00.08 Replacement or renovation of
            regional offices................           1           1
                                               ---------   ---------  ----------
    10.00   Total obligations...............         225         312         225
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested.......         595         588         485
    22.00 New budget authority (gross)......         219         209          97
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......         814         797         582
    23.95 New obligations...................        -225        -312        -225
    24.40 Unobligated balance available, end
            of year: Uninvested.............         588         485         357
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Current:

    40.00   Appropriation...................         219         178          97
    40.79   Line item veto cancellation.....                      -1
                                               ---------   ---------  ----------
    43.00     Appropriation (total).........         219         177          97
          Permanent:

    65.00   Advance appropriation (definite)                      32
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................         219         209          97
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Uninvested...         650         479         547

    [[Page 842]]

    73.10 New obligations...................         225         312         225
    73.20 Total outlays (gross).............        -396        -244        -206
    74.40 Unpaid obligations, end of year:
            Obligated balance: Uninvested...         479         547         566
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority          10           8           4
    86.93 Outlays from current balances.....         386         236         193
    86.98 Outlays from permanent balances...                                   9
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........         396         244         206
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................         219         209          97
    90.00 Outlays...........................         396         244         206
    ---------------------------------------------------------------------------

        Funds are requested for columbarium units at the Ft. Rosecrans and
    Florida National Cemeteries, seismic corrections project at San Juan,
    PR, and a clinical consolidation/seismic corrections project at Long
    beach, CA.

        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]

                                         1997 actual  1998 est.   1999 est.
    Replacement and modernization.......                      35
    Research and Education..............          16
    Outpatient and improvements.........          85          47
    Seismic corrections.................                                  73
    Patient environment.................          40          46
    General.............................          32          14
    Other departments...................          49          36          26
    Advance appropriation provided under
    P.L. 104-204........................                      32
    Design fund offset..................         (3)         (1)         (2)
                                        ------------------------------------
          Total budget authority........         219         209          97
                                        ====================================

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0110-0-1-703      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
    11.3  Personnel compensation: Other than
            full-time permanent.............           1           1           1
    25.2  Other services....................          24          25          25
    26.0  Supplies and materials............           2           2           2
    31.0  Equipment.........................           2           3           3
    32.0  Land and structures...............         196         281         194
                                               ---------   ---------  ----------
    99.9    Total obligations...............         225         312         225
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 36-0110-0-1-703      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
    1001  Total compensable workyears: Full-
            time equivalent employment......          25          50          50
    ---------------------------------------------------------------------------

                          Construction, Minor Projects

        For constructing, altering, extending, and improving any of the
    facilities under the jurisdiction or for the use of the Department of
    Veterans Affairs, including planning, architectural and engineering
    services, maintenance or guarantee period services costs associated with
    equipment guarantees provided under the project, services of claims
    analysts, offsite utility and storm drainage system construction costs,
    and site acquisition, or for any of the purposes set forth in sections
    316, 2404, 2406, 8102, 8103, 8106, 8108, 8109, 8110, and 8122 of [title]
    38, [United States Code] U.S.C., where the estimated cost of a project
    is less than $4,000,000; [$175,000,000] $141,000,000, 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
    $4,000,000: 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. (Departments of Veterans Affairs and Housing and Urban
    Development, and Independent Agencies Appropriations Act, 1998.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0111-0-1-703      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Medical programs..................         144         156         136
    00.06 National cemeteries...............          15          20          15
    00.07 Computer centers, additions and
            alterations.....................           3           9           3
    00.08 Replacement or renovation of
            regional offices................           5           9           6
                                               ---------   ---------  ----------
    10.00   Total obligations...............         167         194         160
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested.......          59          67          48
    22.00 New budget authority (gross)......         175         175         141
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......         234         242         189
    23.95 New obligations...................        -167        -194        -160
    24.40 Unobligated balance available, end
            of year: Uninvested.............          67          48          29
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................         175         175         141
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Uninvested...         171         189         206
    73.10 New obligations...................         167         194         160
    73.20 Total outlays (gross).............        -149        -177        -167
    74.40 Unpaid obligations, end of year:
            Obligated balance: Uninvested...         189         206         199
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority          18          46          37
    86.93 Outlays from current balances.....         131         131         130
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........         149         177         167
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................         175         175         141
    90.00 Outlays...........................         149         177         167
    ---------------------------------------------------------------------------

        The Construction, Minor Projects appropriation, which funds
    construction projects costing less than $4 million, is used to reduce
    risks to patient life and safety, correct code deficiencies, improve
    ambulatory care settings, and improve national cemeteries.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0111-0-1-703      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
    11.3  Personnel compensation: Other than
            full-time permanent.............           3           4           3
    25.2  Other services....................          32          37          26
    26.0  Supplies and materials............           1           1           1
    32.0  Land and structures...............         131         152         130
                                               ---------   ---------  ----------
    99.9    Total obligations...............         167         194         160
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 36-0111-0-1-703      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
    1001  Total compensable workyears: Full-
            time equivalent employment......          50          80          80
    ---------------------------------------------------------------------------

    [[Page 843]]

            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,
    [$80,000,000] $37,000,000, to remain available until expended.
    (Departments of Veterans Affairs and Housing and Urban Development, and
    Independent Agencies Appropriations Act, 1998.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0181-0-1-703      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Grants to States..................          37          90          37
                                               ---------   ---------  ----------
    10.00   Total obligations (object class
              41.0).........................          37          90          37
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested.......                      10
    22.00 New budget authority (gross)......          47          80          37
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......          47          90          37
    23.95 New obligations...................         -37         -90         -37
    24.40 Unobligated balance available, end
            of year: Uninvested.............          10
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................          47          80          37
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Uninvested...         124         120         163
    73.10 New obligations...................          37          90          37
    73.20 Total outlays (gross).............         -41         -47         -52
    74.40 Unpaid obligations, end of year:
            Obligated balance: Uninvested...         120         163         148
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.93 Outlays from current balances.....          41          47          52
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................          47          80          37
    90.00 Outlays...........................          41          47          52
    ---------------------------------------------------------------------------

        In 1998, the Department plans to obligate $80 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, $10,000,000,
    to remain available until expended. (Departments of Veterans Affairs and
    Housing and Urban Development, and Independent Agencies Appropriations
    Act, 1998.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0183-0-1-705      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

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

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

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

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Uninvested...          14          13          21
    73.10 New obligations...................           5          10          10
    73.20 Total outlays (gross).............          -6          -2          -5
    74.40 Unpaid obligations, end of year:
            Obligated balance: Uninvested...          13          21          27
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.93 Outlays from current balances.....           6           2           5
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................           1          10          10
    90.00 Outlays...........................           6           2           5
    ---------------------------------------------------------------------------

        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,
    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, 1998.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4538-0-3-703      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Operating expenses: parking leases           1           1           1
    09.01 Capital Investment: parking
            construction program............          19          11           9
                                               ---------   ---------  ----------
    10.00   Total obligations...............          20          12          10
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested.......          35          30          21
    22.00 New budget authority (gross)......          15           3           3
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......          50          33          24
    23.95 New obligations...................         -20         -12         -10
    24.40 Unobligated balance available, end
            of year: Uninvested.............          30          21          14
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Current:

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

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

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Uninvested...           8          20          21
    73.10 New obligations...................          20          12          10
    73.20 Total outlays (gross).............          -8         -11         -10
    74.40 Unpaid obligations, end of year:
            Obligated balance: Uninvested...          20          21          21
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.93 Outlays from current balances.....           5           8           7
    86.97 Outlays from new permanent
            authority.......................           3           3           3
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........           8          11          10
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.40   Offsetting collections (cash)
              from: Non-Federal sources.....          -3          -3          -3
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................          12
    90.00 Outlays...........................           5           8           7
    ---------------------------------------------------------------------------

    [[Page 844]]

        The Parking Revolving Fund provides funding for the construction and
    lease of parking facilities at various medical centers. Existing
    resources will be used to construct a parking garage at the Denver VA
    Medical Center.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4538-0-3-703      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
    23.2  Direct obligations: Rental
            payments to others..............           1           1           1
    32.0  Reimbursable obligations: Land and
            structures......................          19          11           9
                                               ---------   ---------  ----------
    99.9    Total obligations...............          20          12          10
    ---------------------------------------------------------------------------

                          Pershing Hall Revolving Fund

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4018-0-3-705      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested.......           1           1           1
    24.40 Unobligated balance available, end
            of year: Uninvested.............           1           1           1
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Uninvested...           1           1           1
    74.40 Unpaid obligations, end of year:
            Obligated balance: Uninvested...           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 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; [$786,135,000] $849,661,000: Provided, That funds under
    this heading shall be available to administer the Service Members
    Occupational Conversion and Training Act[: Provided further, That none
    of the funds made available under this heading may be used for the
    relocation of the loan guaranty divisions of the Department of Veterans
    Affairs Regional Office in St. Petersburg, Florida to the Department of
    Veterans Affairs Regional Office in Atlanta, Georgia]. (Departments of
    Veterans Affairs and Housing and Urban Development, and Independent
    Agencies Appropriations Act, 1998.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0151-0-1-705      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Direct program:

            Veterans benefits:
    00.04     Compensation and pensions.....         476         456         504
    00.05     Education.....................          71          68          71
    00.06     Vocational rehabilitation and
                counseling..................          77          69          73
    00.09     Insurance\1\..................           2           3           3
    00.11     General administration........         201         190         199
    09.01 Administration of housing credit
            programs........................         139         161         160
    09.02 Administration of other credit
            programs........................           1           1           1
    09.03 Administration of insurance
            programs........................          34          36          39
    09.04 Other reimbursable programs.......          77         136         174
                                               ---------   ---------  ----------
    09.99   Total reimbursable program......         251         334         374
                                               ---------   ---------  ----------
    10.00   Total obligations...............       1,078       1,120       1,224
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......       1,079       1,120       1,224
    22.30 Unobligated balance expiring......          -1
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......       1,078       1,120       1,224
    23.95 New obligations...................      -1,078      -1,120      -1,224
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Current:

    40.00   Appropriation...................         828         786         850
          Permanent:

    68.00   Spending authority from
              offsetting collections:
              Offsetting collections (cash).         251         334         374
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................       1,079       1,120       1,224
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Uninvested...         128         138          79
    73.10 New obligations...................       1,078       1,120       1,224
    73.20 Total outlays (gross).............      -1,067      -1,179      -1,217
    73.40 Adjustments in expired accounts...          -2
    74.40 Unpaid obligations, end of year:
            Obligated balance: Uninvested...         138          79          85
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority         715         707         765
    86.93 Outlays from current balances.....         101         138          79
    86.97 Outlays from new permanent
            authority.......................         251         334         374
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........       1,067       1,179       1,217
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.00   Offsetting collections (cash)
              from: Federal sources.........        -251        -334        -374
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................         828         786         850
    90.00 Outlays...........................         816         845         843
    ---------------------------------------------------------------------------
        \1\ The total cost of administering veterans insurance programs is
    funded through direct appropriations to this account, and through
    reimbursements from the insurance trust fund.

        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. Administrative resources are based on
    the Presidential policy of not paying compensation benefits for tobacco-
    related claims based solely on tobacco use during military service. A
    summary of VBA's program objectives and anticipated workload is included
    in the following paragraphs. Workload data for this program is shown
    below. Specific performance goals relating

    [[Page 845]]

    to the processing of veterans benefits are contained in VA's annual
    performance plan.

        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.

                                    WORKLOAD

                         [Claims completed in thousands]

                                         1997 actual    1998
                                                      projected     1999
                                                                  projected
    Compensation and Pension:
      Original and reopened compensation
        claims..........................         510         571         600
      Original and reopened pension
        claims..........................         166         170         176

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

                                    WORKLOAD

                                 [In thousands]

                                         1997 actual  1998 est.   1999 est.
    Education:
      Original claims...................         146         144         144
      Adjustments/supplemental claims...       1,045       1,002       1,003

         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.

                                    WORKLOAD

                                 [In thousands]

                                         1997 actual  1998 est.   1999 est.
    Loan guaranty:
      Construction and valuation........         342         340         316
      Loan processing...................         725         720         670
      Loan service and claims...........         365         370         375
      Property management...............          50          55          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.

                                    WORKLOAD

                                 [In thousands]

                                         1997 actual  1998 est.   1999 est.
    Vocational rehabilitation and
        counseling:
      Evaluation and planning...........          51          50          50
      Rehabilitation services...........          48          53          53
      Employment services status........          10           9           9
      Vocational/educational counseling.          15          14          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.

                                    WORKLOAD

                                 [In thousands]

                                         1997 actual  1998 est.   1999 est.
    Insurance:
      Policy service actions............       1,413       1,721       1,798
      Collections.......................       3,694       3,471       3,263
      Disability claims.................          40          12          10
      Insurance awards..................         573         608       1,260

        General administration.--Includes Departmental 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      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

          Direct obligations:

            Personnel compensation:
    11.1      Full-time permanent...........         472         460         468
    11.5      Other personnel compensation..          11           8          19
                                               ---------   ---------  ----------
    11.9        Total personnel compensation         483         468         487
    12.1    Civilian personnel benefits.....         100         100         104
    13.0    Benefits for former personnel...          12          10           1
            Travel and transportation of
                persons:
    21.0      Employee travel...............           8           7           8
    21.0      Interagency motor pool
                payments....................           2           2           2
    22.0    Transportation of things........           1           2           2
    23.1    Rental payments to GSA..........          75          69          72
    23.2    Rental payments to others.......           6           7           7
    23.3    Communications, utilities, and
              miscellaneous charges.........          32          28          47
    24.0    Printing and reproduction.......           2           2           2
    25.1    Advisory and assistance services           2           1
    25.2    Other services..................          74          77          97
    26.0    Supplies and materials..........          12           8          10
    31.0    Equipment.......................          18           5          11
                                               ---------   ---------  ----------
    99.0      Subtotal, direct obligations..         827         786         850
    99.0  Reimbursable obligations..........         251         334         374
                                               ---------   ---------  ----------
    99.9    Total obligations...............       1,078       1,120       1,224
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 36-0151-0-1-705      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
        Direct:
    1001  Total compensable workyears: Full-
            time equivalent employment\1\...      10,931      10,326      10,283
        Reimbursable:
    2001  Total compensable workyears: Full-
            time equivalent employment......       3,228       3,250       3,515
    ---------------------------------------------------------------------------
        \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,
    [$31,013,000] $32,702,000. (Departments of Veterans Affairs and Housing
    and Urban Development, and Independent Agencies Appropriations Act,
    1998.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0170-0-1-705      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.10 Direct program....................          31          31          33
    01.01 Reimbursable program..............           1           2           2
                                               ---------   ---------  ----------
    10.00   Total obligations...............          32          33          35
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......          33          33          35
    23.95 New obligations...................         -32         -33         -35
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Current:

    40.00   Appropriation...................          31          31          33
          Permanent:

    68.00   Spending authority from
              offsetting collections:
              Offsetting collections (cash).           2           2           2
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................          33          33          35
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Uninvested...           5           5           7
    73.10 New obligations...................          32          33          35
    73.20 Total outlays (gross).............         -32         -31         -33
    74.40 Unpaid obligations, end of year:
            Obligated balance: Uninvested...           5           7           9
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority          27          29          31

    [[Page 846]]

    86.93 Outlays from current balances.....           3           2           2
    86.97 Outlays from new permanent
            authority.......................           2           2           2
    86.98 Outlays from permanent balances...           2
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........          32          31          33
    ----------------------------------------------------------------------------

        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..................          31          31          33
    90.00 Outlays...........................          31          29          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      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

          Direct obligations:

    11.1    Personnel compensation: Full-
              time permanent................          22          22          24
    12.1    Civilian personnel benefits.....           4           5           5
    21.0    Travel and transportation of
              persons.......................           2           2           2
    23.1    Rental payments to GSA..........           2           1           1
    25.2    Other services..................           1           1           1
    31.0    Equipment.......................           1
                                               ---------   ---------  ----------
    99.0      Subtotal, direct obligations..          32          31          33
    99.0  Reimbursable obligations..........                       2           2
                                               ---------   ---------  ----------
    99.9    Total obligations...............          32          33          35
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 36-0170-0-1-705      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
        Direct:
    1001  Total compensable workyears: Full-
            time equivalent employment......         322         323         317
        Reimbursable:
    2001  Total compensable workyears: Full-
            time equivalent employment......          17          20          23
    ---------------------------------------------------------------------------

                            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 [three] six passenger motor vehicles for use in cemeterial
    operations; and hire of passenger motor vehicles, [$84,183,000]
    $92,006,000. (Departments of Veterans Affairs and Housing and Urban
    Development, and Independent Agencies Appropriations Act, 1998.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0129-0-1-705      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.10 Direct obligations................          77          84          92
                                               ---------   ---------  ----------
    10.00   Total obligations...............          77          84          92
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......          77          84          92
    23.95 New obligations...................         -77         -84         -92
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    40.00 Appropriation.....................          77          84          92
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Uninvested...          12          10          11
    73.10 New obligations...................          77          84          92
    73.20 Total outlays (gross).............         -78         -83         -91
    74.40 Unpaid obligations, end of year:
            Obligated balance: Uninvested...          10          11          12
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new current authority          69          76          83
    86.93 Outlays from current balances.....           9           7           8
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........          78          83          91
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................          77          84          92
    90.00 Outlays...........................          77          83          91
    ---------------------------------------------------------------------------

        Specific performance goals relating to the National Cemetery System
    are contained in VA's annual performance plan.

        The mission of the National Cemetary System is to honor the military
    service of our Nation's veterans. The National Cemetery System provides
    a dignified burial and lasting memorial for veterans and their eligible
    family members and it maintains all veterans' cemeteries as national
    shrines. The National Cemetery System's vision is to provide a lasting
    tribute to our national veterans by being mission-driven, results-
    oriented, and customer-focused. There are four related programs managed
    by the National Cemetery System including: (1) burying eligible veterans
    and family members in national cemeteries and maintaining the graves and
    their environs as national shrines; (2) providing aid to States in
    establishing, expanding, or improving State veteran cemeteries; (3)
    providing headstones and markers for the graves of eligible persons in
    national, State, and private cemeteries; and (4) providing presidential
    memorial 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      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

          Personnel compensation:

    11.1    Full-time permanent.............          38          40          42
    11.3    Other than full-time permanent..           5           6           6
                                               ---------   ---------  ----------
    11.9      Total personnel compensation..          43          46          48
    12.1  Civilian personnel benefits.......          12          13          14
    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           5
    25.2  Other services....................           7           9          11
    26.0  Supplies and materials............           6           6           7

    [[Page 847]]

    31.0  Equipment.........................           3           4           5
                                               ---------   ---------  ----------
    99.9    Total obligations...............          77          84          92
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 36-0129-0-1-705      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
    1001  Total compensable workyears: Full-
            time equivalent employment......       1,283       1,348       1,369
    ---------------------------------------------------------------------------

    Intragovernmental funds:

                                   Supply Fund

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4537-0-4-705      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    09.01 Cost of goods sold................         443         554         578
    09.01 Other.............................          40          47          47
    09.02 Cost of goods sold................          10          10          10
    09.02 Other.............................           1           1           1
    09.03 Procurement, distribution, and
            services program: Purchase of
            equipment.......................          11           3           3
                                               ---------   ---------  ----------
    10.00   Total obligations...............         505         615         639
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested.......          58          83          83
    22.00 New budget authority (gross)......         530         615         639
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......         588         698         722
    23.95 New obligations...................        -505        -615        -639
    24.40 Unobligated balance available, end
            of year: Uninvested.............          83          83          83
    ----------------------------------------------------------------------------

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

    68.00   Offsetting collections (cash)...         501         615         639
    68.10   Change in orders on hand from
              Federal sources...............          29
                                               ---------   ---------  ----------
    68.90     Spending authority from
                offsetting collections
                (total).....................         530         615         639
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................         530         615         639
    ----------------------------------------------------------------------------

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

    72.40   Obligated balance: Uninvested...          57          33          33
    72.95   Orders on hand from Federal
              sources.......................         203         232         232
                                               ---------   ---------  ----------
    72.99     Total unpaid obligations,
                start of year...............         260         265         265
    73.10 New obligations...................         505         615         639
    73.20 Total outlays (gross).............        -500        -615        -639
          Unpaid obligations, end of year:

    74.40   Obligated balance: Uninvested...          33          33          33
    74.95   Orders on hand from Federal
              sources.......................         232         232         232
                                               ---------   ---------  ----------
    74.99     Total unpaid obligations, end
                of year.....................         265         265         265
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................         500         615         639
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.00   Offsetting collections (cash)
              from: Federal sources.........        -501        -615        -639
    88.95 Change in orders on hand from
            Federal sources.................         -29
    ----------------------------------------------------------------------------

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

                     Summary of Budget Authority and Outlays

                            (in millions of dollars)

                                         1997 actual  1998 est.   1999 est.
    Enacted/requested:
      Budget Authority..................
      Outlays...........................          -1
    Legislative proposal, subject to
        PAYGO:
      Budget Authority..................
      Outlays...........................
                                        ------------------------------------
    Total:
      Budget Authority..................
      Outlays...........................          -1
                                        ====================================

        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 service and reclamation program; (5) a national
    prosthetics distribution center; and (6) 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 accounts.

        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 1999, Supply Fund sales are
    estimated to reach $618 million. Average inventory needed to support
    those sales will be $39 million.

        Operating results.--The Fund operated at a profit of $9 million in
    1997. The new total of retained earnings is $61 million, which has been
    used to finance inventory growth. Operating expense as related to sales
    was 11 percent.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4537-0-4-705      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

          Personnel compensation:

    11.1    Full-time permanent.............          17          19          21
    11.5    Other personnel compensation....           1           1           1
                                               ---------   ---------  ----------
    11.9      Total personnel compensation..          18          20          22
    12.1  Civilian personnel benefits.......           3           4           4
    21.0  Travel and transportation of
            persons.........................           2           4           4
    22.0  Transportation of things..........           1           1           1
    23.1  Rental payments to GSA............           1           1           1
    23.3  Communications, utilities, and
            miscellaneous charges...........           1           2           2
    24.0  Printing and reproduction.........          10          10          10
    25.1  Advisory and assistance services..          14          13          13
    26.0  Supplies and materials............         235         308         322
    31.0  Equipment.........................         220         252         260
                                               ---------   ---------  ----------
    99.9    Total obligations...............         505         615         639
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 36-4537-0-4-705      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
    2001  Total compensable workyears: Full-
            time equivalent employment......         350         375         399
    ---------------------------------------------------------------------------

                                   Supply Fund

                    (Legislative proposal, subject to PAYGO)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4537-4-4-705      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    09.03 Procurement, distribution, and
            services program: Purchase of
            equipment.......................                                   5
                                               ---------   ---------  ----------
    10.00   Total obligations (object class
              31.0).........................                                   5
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......                                   5
    23.95 New obligations...................                                  -5
    ----------------------------------------------------------------------------

    [[Page 848]]

        New budget authority (gross), detail:
    68.00 Spending authority from offsetting
            collections (gross): Offsetting
            collections (cash)..............                                   5
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    73.10 New obligations...................                                   5
    73.20 Total outlays (gross).............                                  -5
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................                                   5
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.00   Offsetting collections (cash)
              from: Federal sources.........                                  -5
    ----------------------------------------------------------------------------

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

        In 1999, the budget proposes that VA be given the authority to
    charge lenders a fee of $25 for each VA loan that is guaranteed. VA will
    charge this fee for 3 years, and all fees collected would be earmarked
    for use in developing, maintaining, and enhancing a VA Loan Information
    System (VALIS) that would interact with the information systems used by
    lenders to make VA guaranteed loans. Collections would be deposited into
    the Supply Fund and be available solely for the VALIS system. VA may
    spend up to $15 million of its collections on this information system.
    After September 30, 2003, any unobligated collections would be
    transferred as miscellaneous receipts to the Treasury.

                                 Franchise Fund

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4539-0-4-705      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    09.01 Reimbursable program..............          56          68          74
                                               ---------   ---------  ----------
    10.00   Total obligations...............          56          68          74
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested.......                       3           3
    22.00 New budget authority (gross)......          59          68          74
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......          59          71          77
    23.95 New obligations...................         -56         -68         -74
    24.40 Unobligated balance available, end
            of year: Uninvested.............           3           3           3
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    68.00 Spending authority from offsetting
            collections (gross): Offsetting
            collections (cash)..............          59          68          74
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Uninvested...                       8          12
    73.10 New obligations...................          56          68          74
    73.20 Total outlays (gross).............         -47         -64         -73
    74.40 Unpaid obligations, end of year:
            Obligated balance: Uninvested...           8          12          13
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................          47          56          61
    86.98 Outlays from permanent balances...                       8          12
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........          47          64          73
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.00   Offsetting collections (cash)
              from: Federal sources.........         -59         -68         -74
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................
    90.00 Outlays...........................         -11          -4          -1
    ---------------------------------------------------------------------------

        VA was chosen as a pilot Franchise Fund agency under the Government
    Management and Reform Act, P.L. 103-356, 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. 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 $73.8 million and employ 749 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      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
    11.1  Personnel compensation: Full-time
            permanent.......................          21          30          30
    12.1  Civilian personnel benefits.......           4           7           8
    21.0  Travel and transportation of
            persons.........................           1           1           1
    23.1  Rental payments to GSA............           2           2           2
    23.3  Communications, utilities, and
            miscellaneous charges...........          19          23          23
    25.2  Other services....................           6           4           8
    26.0  Supplies and materials............           1           1           2
    31.0  Equipment.........................           2
                                               ---------   ---------  ----------
    99.9    Total obligations...............          56          68          74
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 36-4539-0-4-705      1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
    2001  Total compensable workyears: Full-
            time equivalent employment......         422         664         742
    ---------------------------------------------------------------------------

                          GENERAL FUND RECEIPT ACCOUNTS

                               (in millions of dollars)

    ----------------------------------------------------------------------------
                                             1997 actual   1998 est.   1999 est.
    ----------------------------------------------------------------------------
    Offsetting receipts from the public:
      36-243100  Fees and other charges for
        medical services, VA................         455           9
      36-247300  Contributions from military
        personnel, Veteran's Educational
        Assistance Act of 1984..............         185         248         249
                                               ---------   ---------  ----------
    General Fund Offsetting receipts from
     the public.............................         640         257         249
    ---------------------------------------------------------------------------

                            Administrative Provisions

                          (including transfer of funds)

        Sec. 101. Any appropriation for fiscal year [1998] 1999 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 fiscal year [1998] 1999  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

    [[Page 849]]

    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 [1998] 1999 for ``Compensation and pensions'',
    ``Readjustment benefits'', and ``Veterans insurance and indemnities''
    shall be available for payment of prior year accrued obligations
    required to be recorded by law against the corresponding prior year
    accounts within the last quarter of fiscal year [1997] 1998.
        Sec. 106. Appropriations accounts available to the Department of
    Veterans Affairs for fiscal year [1998] 1999  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 [1998] 1999, 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 [1998] 1999, 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 [1998] 1999, 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. Section 214(l)(1)(D) of the Immigration and Nationality
    Act (8 U.S.C. 1184(l)(1)(D)) (as added by section 220 of the Immigration
    and Nationality Technical Corrections Act of 1994 and redesignated as
    subsection (l) by section 671(a)(3)(A) of the Illegal Immigration Reform
    and Immigrant Responsibility Act of 1996) is amended by inserting before
    the period at the end the following: ``, except that, in the case of a
    request by the Department of Veterans Affairs, the alien shall not be
    required to practice medicine in a geographic area designated by the
    Secretary''.]
        [Sec. 109. In accordance with section 1557 of title 31, United
    States Code, the following obligated balance shall be exempt from
    subchapter IV of chapter 15 of such title and shall remain available for
    expenditure without fiscal year limitation: Funds obligated by the
    Department of Veterans Affairs for lease number 757-084B-001-91 from
    funds made available in the Departments of Veterans Affairs and Housing
    and Urban Development, and Independent Agencies Appropriations Act, 1993
    (Public Law 102-389) under the heading ``Medical care''.]
        Sec. 108. In accordance with section 1557 of title 31, United States
    Code, the following obligated balances shall be exempt from subchapter
    IV of chapter 15 of such title and shall remain available for
    expenditure without fiscal year limitation: (1) funds obligated by the
    Department of Veterans Affairs for lease numbers 084B-05-94, 084B-07-94,
    and 084B-027-94 from funds made available in the Department of Veterans
    Affairs and Housing and Urban Development, and Independent Agencies
    Appropriations Act, 1994 (Public Law 103-124) under the heading
    ``Medical care''; and (2) funds obligated by the Department of Veterans
    Affairs for lease number 084B-002-96 from funds made available in the
    Department of Veterans Affairs and Housing and Urban Development, and
    Independent Agencies Appropriations Act, 1995 (Public Law 103-327) under
    the heading ``Medical care''.
        Sec. 109. Beginning in fiscal year 1999, and thereafter, funds
    available in any Department of Veterans Affairs appropriation or fund
    for salaries and other administrative expenses shall also be available
    to reimburse the Office of Resolution Management and the Office of
    Employment Discrimination Complaint Adjudication for all services
    provided at rates which will recover actual costs. Payments may be made
    in advance for services to be furnished based on estimated costs.
    Amounts received shall be credited to the General Operating Expenses
    account for use by the office that provided the service. (Departments of
    Veterans Affairs and Housing and Urban Development, and Independent
    Agencies Appropriations Act, 1998.)

                          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.

    [[Page 850]]

        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 24 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 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) 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) 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 [1998] 1999
    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. 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 [1998] 1999 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. 420. 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 [1998] 1999 and
    prior fiscal years may be used for implementing comprehensive
    conservation and management plans.
        [Sec. 421. 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 1998.]
        Sec. [422] 421. Notwithstanding any other provision of law, the term
    ``qualified student loan'' with respect to national service education
    awards shall mean any loan made directly to a student by the Alaska
    Commission on Postsecondary Education, in addition to other meanings
    under section 148(b)(7) of the National and Community Service Act.
    (Departments of Veterans Affairs and Housing and Urban Development, and
    Independent Agencies Appropriations Act, 1998.)