    [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 2004

    [[Page 809]]

                         DEPARTMENT OF VETERANS AFFAIRS

        The 2004 budget provides $28,057 million in discretionary funding
    for veterans health, benefits, and other services, including $30,199
    million in gross discretionary budget authority and $2,141 million in
    anticipated discretionary medical collections.

        VA is submitting its 2004 budget request using a new account
    structure that focuses on nine major programs--medical care, research,
    compensation, pension, education, housing, vocational rehabilitation and
    employment, insurance and burial. The new budget account structure will
    better position VA to more readily determine the full cost of each of
    our programs. This will allow the Department to more effectively
    evaluate the program results we achieve with the total resources
    associated with each program. A feature of the revised budget structure
    is requesting both mandatory and discretionary funding within each
    program while ensuring the Department fully complies with all provisions
    of the Budget Enforcement Act.

                                MEDICAL PROGRAMS

                                  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;
    furnishing recreational facilities, supplies, equipment, and information
    technology hardware and software; funeral, burial, and other expenses
    incidental thereto for beneficiaries receiving care in the Department;
    aid to State homes as authorized by 38 U.S.C. 1741; reimbursements as
    authorized by 41 U.S.C. 612 for claims paid for contract disputes;
    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., $25,406,024,000, plus reimbursements, of which not to exceed
    $900,000,000 shall be available until September 30, 2005. Amounts
    appropriated herein shall be available as follows:
        (1) For construction, alteration and improvement of any facility
    under the jurisdiction or for the use of the Department for the
    provision of health-care services, or for any of the purposes set forth
    in 38 U.S.C. sections 8102-8103, 8106, 8108-8110, 8122 and 8162,
    including advance planning and design activities, offsite utility and
    storm drainage system construction costs, and site acquisition and
    disposition, $422,300,000, to remain available until expended, of which
    no less than $225,000,000 shall be for Capital Asset Realignment for
    Enhanced Services activities;
        (2) 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, not to exceed $102,100,000, to remain available until
    expended;
        (3) For Central Office executive direction, administration, and
    supervision of Department medical and construction programs, including
    development and implementation of policies, plans, and program
    objectives, not to exceed $87,459,000, of which $4,373,000 shall be
    available until September 30, 2005: Provided further, That technical and
    consulting services offered by the Facilities Management Field Service
    shall be provided to Department components only on a reimbursable basis.
        The Secretary shall conduct by contract a program of recovery audits
    for the fee basis and other medical services contracts with respect to
    payments for hospital care; and, notwithstanding 31 U.S.C. 3302(b),
    amounts collected, by setoff or otherwise, as the result of such audits
    shall be available, without fiscal year limitation, for the purposes for
    which funds are appropriated under this heading and the purposes of
    paying a contractor a percent of the amount collected as a result of an
    audit carried out by the contractor: Provided further, That all amounts
    so collected under the preceding proviso with respect to a designated
    health care region (as that term is defined in 38 U.S.C. 1729A(d)(2))
    shall be allocated, net of payments to the contractor, to that region.
        In addition, such sums as may be deposited to the Medical Care
    Collection 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.

        Note.--A regular 2003 appropriation for this account had not been
    enacted at the time the budget was prepared; therefore, this account is
    operating under a continuing resolution (P.L. 107-229, as amended). The
    amounts included for 2003 in this budget reflect the Administration's
    2003 policy proposals.

                  Unavailable Collections (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0160-0-1-703      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------
    01.99 Balance, start of year............          62         104         103
        Receipts:
    02.21 MCCF first party collections......         295         131         130
    02.22 MCCF third party collections......         690         760       1,109
    02.23 Pharmaceutical copayments.........         190         651         609
    02.24 Enhanced-use lease proceeds.......                       1           1
    02.25 Enrollment Fees...................                                 230
    02.26 Compensated work therapy..........                      36          37
    02.27 Long-term care copayments.........                      33          21
    02.28 Parking fees......................                       3           3
    02.42 Payments from compensation and
            pension.........................                       1           1
                                               ---------   ---------  ----------
    02.99   Total receipts and collections..       1,175       1,616       2,141
                                               ---------   ---------  ----------
    04.00 Total: Balances and collections...       1,237       1,720       2,244
        Appropriations:
    05.00 Medical care......................      -1,133      -1,617      -2,141
                                               ---------   ---------  ----------
    05.99   Total appropriations............      -1,133      -1,617      -2,141
                                               ---------   ---------  ----------
    07.99 Balance, end of year..............         104         103         103
    ---------------------------------------------------------------------------

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0160-0-1-703      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Direct program:

            Operating expenses:
              Provision of veterans health
                  care:
    00.01       Acute hospital care.........       5,122       5,476       5,835
    00.02       Rehabilitative care.........         453         477         509
    00.03       Psychiatric care............       1,119       1,216       1,317
    00.04       Nursing home care...........       2,076       1,986       1,800
    00.05       Subacute care...............         324         310         303
    00.06       Residential care............         415         445         486
    00.07       Outpatient care.............      10,541      11,917      14,114
    00.08       Miscellaneous benefits and
                  services..................       1,263       1,358       1,476
    00.09       National Program
                  Administration (NPA-MAMOE)          65          68          86
    00.10     CHAMPVA.......................         211         366         529
                                               ---------   ---------  ----------
    00.91       Total operating expenses....      21,589      23,619      26,455
            Capital investment:
              Provision of veterans health
                  care:
    01.01       Acute hospital care.........         257         269         217
    01.02       Rehabilitative care.........          29          30          24
    01.03       Psychiatric care............          52          54          43
    01.04       Nursing home care...........          58          60          48
    01.05       Subacute care...............          12          13          10
    01.06       Residential care............          17          18          15
    01.07       Outpatient care.............         495         519         415
    01.08       Miscellaneous benefits and
                  services..................          29          30          24
    01.09       National Program
                  Administration (NPA-MAMOE)           2           2           1
    01.11       Construction, major projects          38         128         225

    [[Page 810]]

    01.12       Construction, minor projects         154         175         190
    01.13     CHAMPVA.......................           4           4           3
                                               ---------   ---------  ----------
    01.91       Total capital investment....       1,147       1,302       1,215
          Grant Program:

    02.01   Grants to States................         102         211         102
                                               ---------   ---------  ----------
    02.93     Total direct program..........      22,838      25,132      27,772
    09.01 Reimbursable program..............         182         150         151
                                               ---------   ---------  ----------
    10.00   Total new obligations...........      23,020      25,282      27,923
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance carried
            forward, start of year..........       1,617       1,424         726
    22.00 New budget authority (gross)......      22,829      24,581      27,698
    22.10 Resources available from
            recoveries of prior year
            obligations.....................                       3           3
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......      24,446      26,008      28,427
    23.95 Total new obligations.............     -23,020     -25,282     -27,923
    23.98 Unobligated balance expiring or
            withdrawn.......................          -1
    24.40 Unobligated balance carried
            forward, end of year............       1,424         726         505
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Discretionary:

    40.00   Appropriation...................      21,528      22,811      25,406
    40.20   Appropriation (special fund)....         971       1,617       2,141
    40.76   Reduction pursuant to P.L. 107-
              206...........................         -16
    41.00   Transferred to other accounts...          -1
    42.00   Transferred from other accounts.           3           3
                                               ---------   ---------  ----------
    43.00     Appropriation (total
                discretionary)..............      22,485      24,431      27,547
          Mandatory:

    60.20   Appropriation (special fund)....         162
          Spending authority from offsetting
              collections:

            Discretionary:
    68.00     Offsetting collections (cash).         134         150         151
    68.10     Change in uncollected customer
                payments from Federal
                sources (unexpired).........          12
                                               ---------   ---------  ----------
    68.90       Spending authority from
                  offsetting collections
                  (total discretionary).....         146         150         151
          Mandatory:

            Mandatory:
    69.00     Offsetting collections (cash).          36
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................      22,829      24,581      27,698
    ----------------------------------------------------------------------------

        Change in obligated balances:
    72.40 Obligated balance, start of year..       3,073       3,192       4,123
    73.10 Total new obligations.............      23,020      25,282      27,923
    73.20 Total outlays (gross).............     -22,828     -24,348     -27,498
    73.40 Adjustments in expired accounts
            (net)...........................         -74
    73.45 Recoveries of prior year
            obligations.....................                      -3          -3
    74.00 Change in uncollected customer
            payments from Federal sources
            (unexpired).....................         -12
    74.10 Change in uncollected customer
            payments from Federal sources
            (expired).......................          12
    74.40 Obligated balance, end of year....       3,192       4,123       4,544
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new discretionary
            authority.......................      18,993      20,538      23,465
    86.93 Outlays from discretionary
            balances........................       3,799       3,810       4,033
    86.97 Outlays from new mandatory
            authority.......................          36
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........      22,828      24,348      27,498
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

            Offsetting collections (cash)
                from:
    88.00     Federal sources...............         -53         -55         -59
    88.40     Non-Federal sources...........        -123         -87         -92
    88.45     Offsetting governmental
                collections (from non-
                Federal sources)............          -8          -8
                                               ---------   ---------  ----------
    88.90       Total, offsetting
                  collections (cash)........        -184        -150        -151
          Against gross budget authority only:

    88.95   Change in uncollected customer
              payments from Federal sources
              (unexpired)...................         -12
    88.96   Portion of offsetting
              collections (cash) credited to
              expired accounts..............          14
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................      22,647      24,431      27,547
    90.00 Outlays...........................      22,644      24,198      27,347
    ----------------------------------------------------------------------------

    Additional net budget authority and outlays to cover cost of fully accruing
                                     retirement:
    99.00 Budget authority..................         681         687         821
    99.01 Outlays...........................         681         687         821
    ---------------------------------------------------------------------------

        For 2004, the budget requests total resources for the VA Medical
    Care Business Line of $27.5 billion, an increase of $3.1 billion ($2.6
    billion in appropriation and $0.5 billion in collections) over the 2003
    level. This includes $25.4 billion in appropriated budget authority,
    $2.1 billion to be collected in the Medical Care Collections Fund.

        The budget request also includes a comprehensive set of legislative
    and regulatory proposals that will refocus the VA health care system to
    better meet the needs of our highest priority core veterans--those with
    service-connected conditions, those with lower incomes, and veterans
    with special health care needs. These proposals are in response to the
    significant growth in enrollment and usage by priority level 7 veterans
    over the last 3 years, as well as anticipated future growth. To address
    the rapid growth in the number of health care users and ensure that VA
    continues to provide timely, high-quality health care to our core
    population, the proposals focus primarily on nonservice-connected
    veterans with comparatively higher incomes.

        There are several major components to the set of proposals. First,
    stop enrollment of new priority level 8 veterans. Second, establish an
    annual enrollment fee for nonservice-connected priority level 7 veterans
    and all priority level 8 veterans. Third, increase co-payments for
    outpatient care and pharmacy benefits for priority level 7 and 8
    veterans. Fourth, restrict institutional long-term care to veterans with
    service-connected conditions of 70 percent or greater and to veterans
    who require transitional, post-acute care. Fifth, reduce the pharmacy
    co-payment burden for priority level 2-5 veterans by raising the income
    threshold from the pension level of $9,690 to the aid and attendance
    level of $16,169. Sixth, require veterans to provide VA with health
    insurance information. The legislative proposals associated with these
    policy proposals are included in the general provisions of the
    appropriation request. Resource request estimates in this section
    reflect the net cost and revenue associated with these policy proposals.

        The Medical Care Business Line appropriation finances the
    maintenance, administration, construction, alteration, and operation of
    a comprehensive, integrated health care delivery system that addresses
    the needs of the Nation's veterans.

        Medical Care.--Provides for the health care system that supports
    eligible veterans; a national academic education and training program to
    enhance veterans' quality of care; responsibilities for assistance in
    natural emergencies and backup to the Department of Defense health care
    system; and administrative support for capital facilities.

        National Program Administration.--Provides corporate leadership and
    support to VA's comprehensive and integrated health care system with a
    Headquarters' staff that includes a capital facilities management and
    development process.

        Compensated Work Therapy Program (formerly Special Therapeutic and
    Rehabilitation Activities Fund).--This program provides a transition-
    working environment for veterans living in community assisted living
    arrangements under VA psychiatric care to help them become self-
    sufficient.

        Capital Investments.--Provides for capital investments, necessary to
    ensure VA's infrastructure is adequate to support the delivery of
    quality health care. The capital investment program finances the
    following activities:
            (1) Major and Minor Construction.--Provides for constructing,
        altering, extending, and improving any VA facil

    [[Page 811]]

        ity. This includes planning, architectural and engineering services,
        Capital Asset Realignment for Enhanced Services (CARES) activities,
        assessments, and site acquisition where the estimated cost of a
        project is $4,000,000 or over for major construction and less than
        $4,000,000 for minor construction.
            (2) Grants for Construction of State Extended Care Facilities.--
        Provides 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.

        Medical Care Collections Fund (MCCF).--VA estimates collections of
    more than $2.1 billion, representing 8 percent of available resources.
    The objective of consolidating all collections into the MCCF is to
    improve planning, simplify systems, enhance the recovery of funds, and
    focus on accountability for medical collections. This fund will consist
    of revenue derived from the following sources:
            (1) Medical Care Collections Fund.--VA has the authority to
        collect inpatient and outpatient co-payments, medication co-
        payments, and nursing home co-payments; authority for certain income
        verification; and authority to recover third-party insurance
        payments from veterans for nonservice-connected conditions.
            (2) Health Services Improvement Fund.--VA collects funds as a
        result of any increase in pharmacy co-payments; enhanced use lease
        authority; and VA's agreements with the Department of Defense for
        the proposed provision of care to eligible military retirees.
            (3) Long-Term Care Co-payments (formerly Veterans Extended
        Revolving Fund).--Long-term co-payments of $97 a day are collected
        from non-service connected veterans receiving extended care services
        such as geriatric evaluation; nursing home care; domiciliary
        services; adult day health care; other noninstitutional alternatives
        to nursing home care; and respite care.
            (4) Compensated Work Therapy Program (formerly Special
        Therapeutic and Rehabilitation Activities Fund).--These funds are
        derived from actual work performed by patients and members in VA
        health care facilities under contracts developed with private
        industry, non-profit organizations, and state and federal entities
        and are used to support the program.
            (5) Compensation and Pension Living Expenses Program (formerly
        Medical Facilities Revolving Fund).--Veterans who do not have either
        a spouse or child may have their monthly pension payments reduced to
        $90. The difference between the veteran's regular monthly pension
        payment and the $90 is transferred from the Compensation and Pension
        account to the Compensation and Pension Living Expenses Program.
            (6) Parking Program (formerly Parking Revolving Fund).--VA
        collects parking fees for the use of parking facilities at VA
        facilities.
            (7) Sale of Assets (formerly the Nursing Home Revolving Fund).--
        Provides for construction, alteration, and acquisition (including
        site acquisition) of medical care facilities through collections
        that may be realized from the transfer of any interest in real
        property that is owned by the United States and administered by the
        Department of Veterans Affairs.

                                    WORKLOAD

        Provision of Veterans Health Care--
            Acute hospital care.--Costs for 2004 are estimated to increase
        by $307 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:

                                         2002 actual  2003 est.   2004 est.
      Patients treated..................     461,307     493,991     533,805
      Average daily census..............       8,099       8,185       8,284
      Average employment................      48,807      48,363      47,998

            Rehabilitative care.--An increase of $26 million in 2004 is
        estimated for the provision of rehabilitative care, including spinal
        cord injury care.
            Estimated operating levels are:

                                         2002 actual  2003 est.   2004 est.
      Patients treated..................      15,174      15,629      16,098
      Average daily census..............       1,200       1,229       1,258
      Average employment................       5,155       5,593       6,096

            Psychiatric care.--An increase of $90 million is estimated in
        2004 for the inpatient care of veterans with problems related to
        mental illness, including alcohol and drug problems.
            Estimated operating levels are:

                                         2002 actual  2003 est.   2004 est.
      Patients treated..................     113,770     123,327     133,193
      Average daily census..............       4,863       5,349       5,884
      Average employment................      13,535      13,129      12,997

            Nursing home care.--In 2004, a decrease of $198 million is
        estimated for the care of residents in VA nursing homes, contract
        nursing homes and State nursing homes.
            Estimated operating levels are:

                                         2002 actual  2003 est.   2004 est.
      Patients treated..................      83,801      81,319      78,048
      Average daily census..............      31,636      32,429      29,981
      Average employment................      21,324      19,441      18,551

            Noninstitutional extended care.--Included in outpatient
        estimates in 2004 is an increase of $77 million estimated for
        noninstitutional extended care programs such as adult day care; home
        based primary care, skilled nursing and rehabilitation care; and
        home health aids.
            Estimated operating levels are:
                                         2002 actual  2003 est.   2004 est.
    Average daily census................      24,126      28,129      32,694

            Subacute care.--A decrease of $10 million is estimated in 2004
        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.
            Estimated operating levels are:

                                         2002 actual  2003 est.   2004 est.
    Patients treated....................      27,162      23,088      20,779
    Average daily census................       1,122         956         860
    Average employment..................       4,049       3,533       3,250

            Residential care.--An increase of $38 million is estimated in
        2004 for the care of veterans in locations other than their own
        homes, such as residential rehabilitation and domiciliary care
        programs.
            Estimated operating levels are:

                                         2002 actual  2003 est.   2004 est.
    Patients treated....................      44,598      45,102      45,405
    Average daily census................      10,605      11,329      11,569
    Average employment..................       4,976       5,167       5,479

            Outpatient care.--An increase of $2,093 million is estimated in
        2004 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.
            Estimated operating levels are:

                  NUMBER OF MEDICAL VISITS AND DENTAL WORKLOADS

                                         2002 actual  2003 est.   2004 est.
      Medical visits (in thousands):
      Staff visits......................      43,684      47,114      50,647
      Fee visits........................       2,734       2,972       3,233
      Readjustment counseling...........         974         975         980
                                        ------------------------------------
            Total.......................      47,392      51,061      54,860
                                        ====================================
      Dental:
        Staff:
          Examinations..................     514,860     500,000     500,000
          Treatments....................     134,808     140,000     140,000
                                        ------------------------------------

    [[Page 812]]

            Total.......................     649,668     640,000     640,000
                                        ====================================
        Fee: Cases completed............      12,460      13,000      13,000
                                        ====================================
      Average employment................      77,982      80,745      86,559
                                        ====================================

            Miscellaneous benefits and services.--An increase of $112
        million is estimated in 2004 for the cost of this activity which
        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.

                                         2002 actual  2003 est.   2004 est.
      Average employment................       7,589       7,518       7,449

        National program administration (NPA).--In 2004, an increase of $17
    million reflects two major changes. First, there is a realignment of $8
    million from direct medical care to NPA, which was previously reimbursed
    to NPA. As a result of the budget restructure, this $8 million is
    reflected as direct appropriation for NPA. Second, an increase of $9
    million is estimated to fund the Reorganization of the Office of the
    Under Secretary for Health to allow greater oversight of the Veterans
    Integrated Service Networks.

                                         2002 actual  2003 est.   2004 est.
    Average employment..................         534         545         588

        Construction, major.--In 2004, an increase of $97 million is
    estimated for the implementation of the Capital Asset Realignment for
    Enhanced Services (CARES) program that will right-size the health care
    infrastructure. CARES will assess veterans' health care needs across the
    country and guide the reallocation of capital assets to support the
    delivery of quality health care.

        Construction, minor.--In 2004, an increase of $15 million is
    estimated for construction projects costing less than $4 million. These
    projects will reduce risks to patient life and safety, correct code
    deficiencies, improve impatient care and ambulatory care settings, and
    implement CARES. CARES funding is $42 million, an increase of $7 million
    over the 2003 budget.

        Civilian health and medical program of the Department of Veterans
    Affairs (CHAMPVA).--An increase of $162 million is estimated in 2004 for
    private hospital and outpatient care for dependents and survivors of
    certain veterans.

        Estimated operating levels are:

        Grants to States.--In 2004, a decrease of $109 million is estimated
    for grants for construction of State extended care facilities. This
    decrease was due to an increase in obligations in 2003 because of a
    decrease in obligations funds in 2002. In 2003, VA will award additional
    grants to states to reduce the current inventory of grant request by
    using appropriated funds and drawing down unobligated balances. This is
    a very-cost effective program that helps meet veterans' nursing home
    care needs by providing grants to assist States in acquiring or
    construction State home facilities.
                                         2002 actual  2003 est.   2004 est.
      Average daily hospital census.....         170         334         358
      Outpatient (in thousands).........       1,807       3,631       4,018
      Average employment................         295         311         321

                              PERFORMANCE MEASURES

            Provide High Quality Health Care.--Investment in effective
        chronic disease management results in improved health of veterans
        and reduced use of services. The prevention index spotlights and
        summarizes a variety of evidenced based measures for high quality
        preventive health care. VHA's strategy to monitor satisfaction
        through patient surveys will identify areas of improvement in all
        medical services.

                                         2002 actual  2003 est.   2004 est.
      Chronic Disease Care Index II.....         80%         78%         78%
      Prevention Index II...............         82%         80%         80%
      Percent of patients rating VA
        health care service as very good
        or excellent:...................
        Inpatient.......................         70%         68%         68%
        Outpatient......................         71%         70%         70%

            Access to Medical Care.--VA's strategy is to improve access and
        timeliness of service by reducing waiting times in specialty and
        primary care clinics in medical centers nationwide, and nursing home
        and other alternative long term care.

                                         2002 actual  2003 est.   2004 est.
      Average waiting time for new
        patients seeking primary care
        clinic appointment (in days)....    Baseline     TBD \1\     TBD \1\
      Average waiting time for new
        patients seeking specialty care
        clinic appointment (in days)....    Baseline     TBD \1\     TBD \1\
      Increase the aggregate of VHA and
        community nursing home and home-
        based care as expressed by
        average daily census:...........
        Institutional...................      31,891      32,429      29,981
        Non-institutional...............      24,126      28,124      32,694
        \1\ To be determined pending final enactment of FY 2003 appropriations
    level.

            Providing Specialized Services.--VA will focus on improving
        functioning and enhancing outcomes for veterans with special needs
        and special disabilities.

                                         2002 actual  2003 est.   2004 est.
      Percent of veterans discharged
        from a Domiciliary Care for
        Veterans program, Health Care
        for Homeless Veterans Community-
        based Residential Care Program,
        or Grant Per Diem Program to an
        independent or a secure
        institutional living arrangement    Baseline         65%         67%

            VA DoD Sharing.--VA's strategy is to improve collaboration and
        exchange with DoD. There are two performance measures that VA
        developed to measure progress.

                                         2002 actual  2003 est.   2004 est.
      Percent of VA medical centers that
        provide electronic access to
        health information provided by
        DoD on separated service persons          0%         50%         90%
      Dollar value of sharing agreements
        with DoD ($ in millions)........       83.1M       $100M       $100M

            Revenue Cycle Improvement.--VHA is seeking to improve its
        performance in the area of medical care collections. The revenue
        cycle improvement plan includes initiatives that will improve
        efficiency and accuracy.
                                         2002 actual  2003 est.   2004 est.
      Ratio of collections to billings..         37%         40%         40%

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0160-0-1-703      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------

          Direct obligations:

            Personnel compensation:
    11.1      Full-time permanent...........       7,338       7,992       8,272
    11.3      Other than full-time permanent         787         884         889
    11.5      Other personnel compensation..       1,520       1,629       1,713
                                               ---------   ---------  ----------
    11.9        Total personnel compensation       9,645      10,505      10,874
    12.1    Civilian personnel benefits.....       2,480       2,674       2,915
    13.0    Benefits for former personnel...          23          35          37
            Travel and transportation of
                persons:
    21.0      Employee travel...............          49          50          50
    21.0      Beneficiary travel............         145         101         115
    21.0      Interagency motor pool
                payments....................          18          20          20
    21.0      All other.....................          32          55          55
    22.0    Transportation of things........          30          40          47
    23.1    Rental payments to GSA..........          13          15          18

    [[Page 813]]

    23.2    Rental payments to others.......          68          76          83
    23.3    Communications, utilities, and
              miscellaneous charges.........         600         630         742
    24.0    Printing and reproduction.......          11          12          13
            Other services:
    25.2      Other contractual services....       2,256       2,013       2,206
    25.2      Other construction services...           8           5           5
            Medical care:
    25.6      Outpatient dental fees........          15          17          17
    25.6      Medical and nursing fees......         492         566         679
    25.6      Community nursing homes.......         238         323         209
    25.6      Contract hospitalization......         321         336         349
    25.6      Civilian Health and Medical
                Program of the Department of
                Veterans Affairs............         182         327         479
            Supplies and materials:
    26.0      Medical supplies and materials       4,524       5,276       6,923
    26.0      Provisions....................          75          76          80
    31.0    Equipment.......................         665         643         430
            Land and structures:
    32.0      Medical land and structures...         290         365         395
    32.0      Construction, major projects,
                land and structures.........          37         128         210
    32.0      Construction, minor projects,
                land and structures.........         144         168         178
            Grants, subsidies, and
                contributions:
    41.0      Medical grants, subsidies, and
                contributions...............         345         408         470
    41.0      Medical Grants to private
                organizations...............          29          56          69
    41.0      Grants, subsidies, and
                contributions for
                construction of State
                extended care facilities....         102         211         102
    43.0    Interest and dividends..........           1           1           2
                                               ---------   ---------  ----------
    99.0      Direct obligations............      22,838      25,132      27,772
    99.0  Reimbursable obligations..........         182         150         151
                                               ---------   ---------  ----------
    99.9    Total new obligations...........      23,020      25,282      27,923
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 36-0160-0-1-703      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------
        Direct:
          Total compensable workyears:

    1001    Civilian full-time equivalent
              employment....................     179,775     179,547     184,369
        Reimbursable:
          Total compensable workyears:

    2001    Civilian full-time equivalent
              employment....................       1,153       1,354       1,561
    ---------------------------------------------------------------------------

                         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, 2005, $822,202,000, plus
    reimbursements, of which no more than $6,000,000 shall be available
    until expended for the construction, alteration, and improvement of any
    facility under the jurisdiction or for the use of the Department for the
    provision of medical research, or for any of the purposes set forth in
    sections 8102, 8103, 8106, 8108, 8110, 8122 and 8162 of title 38, United
    States Code, including advance planning and design activities, offsite
    utility and storm drainage system construction costs, and site
    acquisition and disposition.

        Note.--A regular 2003 appropriation for this account had not been
    enacted at the time the budget was prepared; therefore, this account is
    operating under a continuing resolution (P.L. 107-229, as amended). The
    amounts included for 2003 in this budget reflect the Administration's
    2003 policy proposals.

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0161-0-1-703      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Direct program:

            Operating expenses:
    00.01     Medical research..............         469         487         497
    00.02     Rehabilitation research.......          77          80          83
    00.03     Health services research......         100         104         109
    00.04     Cooperative studies research..          89          92          97
                                               ---------   ---------  ----------
    00.91       Total operating expenses....         735         763         786
            Capital investment:
    01.01     Medical research..............          21          17          21
    01.02     Rehabilitation research.......           7           7           7
    01.03     Health services research......           3           3           3
    01.04     Cooperative studies research..           5           4           5
                                               ---------   ---------  ----------
    01.91       Total capital investment....          36          31          36
                                               ---------   ---------  ----------
    01.92     Total direct program..........         771         794         822
    09.01 Reimbursable program..............          21          44          33
                                               ---------   ---------  ----------
    10.00   Total new obligations...........         792         838         855
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance carried
            forward, start of year..........          37          22          22
    22.00 New budget authority (gross)......         778         838         855
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......         815         860         877
    23.95 Total new obligations.............        -792        -838        -855
    23.98 Unobligated balance expiring or
            withdrawn.......................          -1
    24.40 Unobligated balance carried
            forward, end of year............          22          22          22
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Discretionary:

    40.00   Appropriation...................         759         797         822
    41.00   Transferred to other accounts...          -3          -3
                                               ---------   ---------  ----------
    43.00     Appropriation (total
                discretionary)..............         756         794         822
    68.00 Spending authority from offsetting
            collections: Offsetting
            collections (cash)..............          22          44          33
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................         778         838         855
    ----------------------------------------------------------------------------

        Change in obligated balances:
    72.40 Obligated balance, start of year..          98         119         123
    73.10 Total new obligations.............         792         838         855
    73.20 Total outlays (gross).............        -770        -834        -851
    73.40 Adjustments in expired accounts
            (net)...........................          -2
    74.40 Obligated balance, end of year....         119         123         127
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new discretionary
            authority.......................         574         615         628
    86.93 Outlays from discretionary
            balances........................         196         219         223
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........         770         834         851
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.00   Offsetting collections (cash)
              from: Federal sources.........         -22         -44         -33
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................         756         794         822
    90.00 Outlays...........................         748         790         818
    ----------------------------------------------------------------------------

    Additional net budget authority and outlays to cover cost of fully accruing
                                     retirement:
    99.00 Budget authority..................          24          30          31
    99.01 Outlays...........................          24          30          31
    ---------------------------------------------------------------------------

        For 2004, the budget process provides total resources for the VA
    Medical and Prosthetic Research Business Line of $822.2 million, an
    increase of $28 million over the 2003 level. This appropriation
    represents 54 percent of the total $1.5 billion research effort with the
    balance of $206 million provided from private contributions and $483
    million provided from federal programs support.

        The 2004 budget request reflects a new account structure that will
    better position VA to more readily determine the full cost of a
    comprehensive research program leading the Nation's efforts to promote
    the health care of veterans. The Medical and Prosthetic Research
    Business Line includes the consolidation of what was the Medical and
    Prosthetic Research appropriation and the medical care research support
    funding formerly appropriated in the Medical Care appropriation.

        This account is an intramural program whose mission is to acquire
    knowledge and create innovations that advance the health and care of
    veterans and the Nation. Veterans' health issues are addressed
    comprehensively in the following four program divisions and the medical
    care research support required for these programs:

        Medical Research.--Medical Research strives to understand the
    disease process so that efficient, rational interventions can be made to
    cure or alleviate the effects of disease. The program supports
    investigator-initiated research projects, the training of clinicians in
    basic and clinical research, and cen

    [[Page 814]]

    ters of excellence devoted to specific diseases. The research is done in
    areas particularly relevant to the veteran population--aging, chronic
    disease, mental illness, substance abuse, military occupations, and
    environmental exposures.

        Medical Research Support.--Provides the indirect costs of the VA
    Research and Development program which includes such costs as the
    facility utility costs associated with laboratory space; administrative
    costs of human resources support, fiscal service, and supply service
    attributable to research; research's portions of a medical center's
    hazardous waste disposal and nuclear medicine licenses; and, most
    importantly, the funding for the time clinicians devote to their
    research activities.

        Rehabilitation Research.--Rehabilitation Research is dedicated to
    the development and application of science and engineering to improve
    the care and quality of life for the physically disabled. The program
    supports investigator-initiated research projects, the training of
    clinicians and engineers in rehabilitation research, centers of
    excellence devoted to specific disabilities, and technology transfer.
    The research is done in areas particularly relevant to the disabled
    veteran population--aging, sensory loss, and trauma related illness.

        Health Services Research.--Health Services Research is directed
    toward improving the outcome effectiveness and cost efficiency of health
    care delivery for the veteran population. The program supports
    investigator-initiated research projects, the training of clinicians in
    applied clinical research, centers of excellence devoted to specific
    aspects of health care delivery, and service-directed projects
    addressing clinical management needs. The research focuses on the
    translation of research findings to clinical best practices for all
    veteran patients. Particular contributions are made in the areas of
    aging, substance abuse, health systems, and special populations.

        Cooperative Studies.--Cooperative Studies Research has recently been
    separated from the Medical Research and Health Services Research
    programs and is directed toward large multi-site clinical trials.
    Cooperative Studies supports the clinical trials with its own
    statistical support centers and its own FDA-approved pharmacy. The
    research determines the efficacy and cost effectiveness of new
    medications and new treatment strategies of direct benefit to the
    veteran population in the areas of aging, chronic disease, mental
    illness, special populations, and military occupations and environmental
    exposures.

        VA's Medical and Prosthetic Research programs are included in the
    Federal Science & Technology (FS&T) budget.

        Focus Medical Research Programs.--Designated Research Areas are
    focused on prevalent conditions within the veteran patient population.
    VA maintains this focus by monitoring and ensuring that the vast
    majority of resources are directed to these research areas.

                                         2002 actual  2003 est.   2004 est.
      Percent of research projects
        devoted to the Designated
        Research Areas..................         99%         99%         99%

                         SUMMARY OF BUDGETARY RESOURCES

                            [In millions of dollars]

                                         2002 actual  2003 est.   2004 est.
    Medical and prosthetic research
    appropriation.......................         756         794         822
    Federal grants (NIH)................         396         460         483
    Other grants (voluntary agencies,
    private proprietary)................         245         196         206
                                        ------------------------------------
          Total budgetary resources.....       1,397       1,450       1,511
                                        ====================================

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0161-0-1-703      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------

          Direct obligations:

            Personnel compensation:
    11.1      Full-time permanent...........         262         274         275
    11.3      Other than full-time permanent          86          93          91
    11.5      Other personnel compensation..          43          47          48
                                               ---------   ---------  ----------
    11.9        Total personnel compensation         391         414         414
    12.1    Civilian personnel benefits.....         100         106         107
    13.0    Benefits for former personnel...           1           1           1
    21.0    Employee travel.................           5           7           8
    22.0    Transportation of things........           1           1           1
    23.3    Communications, utilities, and
              miscellaneous charges.........           2           2           2
    24.0    Printing and reproduction.......                       1           1
    25.5    Research and development
              contracts.....................         172         176         192
    26.0    Supplies and materials..........          57          55          60
    31.0    Equipment.......................          41          31          36
    32.0    Land and structures.............           1
                                               ---------   ---------  ----------
    99.0      Direct obligations............         771         794         822
    99.0  Reimbursable obligations..........          21          44          33
                                               ---------   ---------  ----------
    99.9    Total new obligations...........         792         838         855
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 36-0161-0-1-703      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------
        Direct:
          Total compensable workyears:

    1001    Civilian full-time equivalent
              employment....................       6,310       6,341       6,268
        Reimbursable:
          Total compensable workyears:

    2001    Civilian full-time equivalent
              employment....................         160         260         260
    ---------------------------------------------------------------------------

                         Canteen Service Revolving Fund

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4014-0-3-705      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    09.01 Reimbursable operating expenses...         133         140         147
    09.02 Reimbursable direct operations....          89          93          98
    09.10 Reimbursable capital investment:
            Sales program: Purchase of
            equipment and leasehold.........           5           5           5
                                               ---------   ---------  ----------
    10.00   Total new obligations...........         227         238         250
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance carried
            forward, start of year..........          16          16          10
    22.00 New budget authority (gross)......         227         231         239
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......         243         247         249
    23.95 Total new obligations.............        -227        -238        -250
    24.40 Unobligated balance carried
            forward, end of year............          16          10
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Mandatory:

    69.00   Offsetting collections (cash)...         227         231         239
    ----------------------------------------------------------------------------

        Change in obligated balances:
    72.40 Obligated balance, start of year..          19          14          19
    73.10 Total new obligations.............         227         238         250
    73.20 Total outlays (gross).............        -232        -231        -239
    74.40 Obligated balance, end of year....          14          19          30
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new mandatory
            authority.......................         229         230         238
    86.98 Outlays from mandatory balances...           3           1           1
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........         232         231         239
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

            Offsetting collections (cash)
                from:
    88.00     Federal sources...............                      -1          -1
    88.20     Interest on Federal securities          -2          -2          -2
    88.40     Non-Federal sources...........        -225        -228        -236
                                               ---------   ---------  ----------

    [[Page 815]]

    88.90       Total, offsetting
                  collections (cash)........        -227        -231        -239
    ----------------------------------------------------------------------------

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

        Memorandum (non-add) entries:
    92.01 Total investments, start of year:
            Federal securities: Par value...          32          29          31
    92.02 Total investments, end of year:
            Federal securities: Par value...          29          31          29
    ----------------------------------------------------------------------------

    Additional net budget authority and outlays to cover cost of fully accruing
                                     retirement:
    99.00 Budget authority..................           6           7           7
    99.01 Outlays...........................           6           7           7
    ---------------------------------------------------------------------------

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

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

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4014-0-3-705      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------

          Personnel compensation:

    11.1    Full-time permanent.............          39          42          44
    11.3    Other than full-time permanent..          32          34          36
                                               ---------   ---------  ----------
    11.9      Total personnel compensation..          71          76          80
    12.1  Civilian personnel benefits.......          18          19          20
    21.0  Travel and transportation of
            persons.........................           1           1           1
    23.3  Communications, utilities, and
            miscellaneous charges...........           1
    25.2  Other services....................           3           2           2
    26.0  Supplies and materials............         128         135         142
    31.0  Equipment.........................           5           5           5
                                               ---------   ---------  ----------
    99.9    Total new obligations...........         227         238         250
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 36-4014-0-3-705      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------
        Reimbursable:
          Total compensable workyears:

    2001    Civilian full-time equivalent
              employment....................       2,899       2,930       2,930
    ---------------------------------------------------------------------------

                      Medical Center Research Organizations

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4026-0-3-703      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    09.01 Operating expenses................         153         156         159
    09.02 Capital investments...............          18          19          19
                                               ---------   ---------  ----------
    10.00   Total new obligations...........         171         175         178
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance carried
            forward, start of year..........          16          16          16
    22.00 New budget authority (gross)......         171         175         178
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......         187         191         194
    23.95 Total new obligations.............        -171        -175        -178
    24.40 Unobligated balance carried
            forward, end of year............          16          16          16
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Mandatory:

    69.00   Offsetting collections (cash)...         171         175         178
    ----------------------------------------------------------------------------

        Change in obligated balances:
    73.10 Total new obligations.............         171         175         178
    73.20 Total outlays (gross).............        -171        -175        -178
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new mandatory
            authority.......................         171         175         178
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.40   Offsetting collections (cash)
              from: Non-Federal sources.....        -171        -175        -178
    ----------------------------------------------------------------------------

        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      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------
    21.0  Travel and transportation of
            persons.........................           2           2           2
    25.2  Other services....................         107         109         111
    26.0  Supplies and materials............          44          45          46
    31.0  Equipment.........................          18          19          19
                                               ---------   ---------  ----------
    99.9    Total new obligations...........         171         175         178
    ---------------------------------------------------------------------------

                                   Trust Funds

                        General Post Fund, National Homes

                          (including transfer of funds)

                  Unavailable Collections (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-8180-0-7-705      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------
    01.99 Balance, start of year............                       1           2
        Receipts:
    02.00 General post fund, national homes,
            deposits........................          34          34          34
    02.40 General post fund, national homes,
            interest on investments.........           2           3           3
                                               ---------   ---------  ----------
    02.99   Total receipts and collections..          36          37          37
                                               ---------   ---------  ----------
    04.00 Total: Balances and collections...          36          38          39
        Appropriations:
    05.00 General post fund, national homes.         -35         -36         -37
                                               ---------   ---------  ----------
    07.99 Balance, end of year..............           1           2           2
    ---------------------------------------------------------------------------

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-8180-0-7-705      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Religious, recreational, and
            entertainment activities........          28          29          29
    00.02 Research activities...............           2           2           2
    00.03 Therapeutic residence maintenance.           1           1           2
                                               ---------   ---------  ----------
    10.00   Total new obligations...........          31          32          33
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance carried
            forward, start of year..........          54          58          63
    22.00 New budget authority (gross)......          35          36          37
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......          89          94         100
    23.95 Total new obligations.............         -31         -32         -33
    24.40 Unobligated balance carried
            forward, end of year............          58          63          67
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Mandatory:

    60.26   Appropriation (trust fund)......          35          36          37
    ----------------------------------------------------------------------------

        Change in obligated balances:
    72.40 Obligated balance, start of year..           5           5           5
    73.10 Total new obligations.............          31          32          33
    73.20 Total outlays (gross).............         -31         -32         -34
    74.40 Obligated balance, end of year....           5           5           5
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new mandatory
            authority.......................          28          29          31

    [[Page 816]]

    86.98 Outlays from mandatory balances...           3           3           3
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........          31          32          34
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................          35          36          37
    90.00 Outlays...........................          31          32          34
    ----------------------------------------------------------------------------

        Memorandum (non-add) entries:
    92.01 Total investments, start of year:
            Federal securities: Par value...          57          47          55
    92.02 Total investments, end of year:
            Federal securities: Par value...          47          55          55
    ---------------------------------------------------------------------------

        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.)

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-8180-0-7-705      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------
    21.0  Travel and transportation of
            persons.........................           1           2           2
    25.2  Other services....................          14          14          15
    26.0  Supplies and materials............          12          12          12
    31.0  Equipment.........................           3           3           3
    32.0  Land and structures...............           1           1           1
                                               ---------   ---------  ----------
    99.9    Total new obligations...........          31          32          33
    ---------------------------------------------------------------------------

                                BENEFITS PROGRAMS

                                  Federal Funds

    General and special funds:

                                  Compensation

                          (including transfer of funds)

        For the compensation program administered by the Department of
    Veterans Affairs, $26,956,797,000 which shall be available as follows:
        (1) For the payment of compensation benefits to or on behalf of
    veterans and a pilot program for disability examinations, emergency and
    other officers' retirement pay, adjusted-service credits and
    certificates, payment of premiums due on commercial life insurance
    policies and for other benefits as authorized by law $26,335,358,000; of
    which, not to exceed $1,179,000 of the amount appropriated for the
    compensation benefit programs shall be for the administrative expenses
    authorized by the Omnibus Budget Reconciliation Act of 1990 and the
    Veterans' Benefits Act of 1992. In addition, for making payments after
    June 30 for the compensation program administered by the Department,
    such sums as may be necessary;
        (2) For operating expenses associated with the provision of
    compensation benefits; reimbursement of the Department of Defense for
    the cost of overseas employee mail; and purchase of two passenger motor
    vehicles for use by the Veterans Benefits Administration in Manila,
    Philippines, $621,439,000, including no more than $11,775,000 for
    construction.
        (38 U.S.C. 107, 1312, 1977, and 2106, chapters 11, 13, 18, 23, 39,
    51, 53, 55, and 61; 50 U.S.C. App. 540-548; 43 Stat. 122, 123; 45 Stat.
    735; 76 Stat. 1198).

        Note.--A regular 2003 appropriation for this account had not been
    enacted at the time the budget was prepared; therefore, this account is
    operating under a continuing resolution (P.L. 107-229, as amended). The
    amounts included for 2003 in this budget reflect the Administration's
    2003 policy proposals.

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0102-0-1-701      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    01.01 Veterans..........................      18,546      21,121      22,830
    01.02 Survivors.........................       3,795       3,948       4,059
                                               ---------   ---------  ----------
    01.91   Direct Program by Activities--
              Subtotal (1 level)............      22,341      25,069      26,889
                                               ---------   ---------  ----------
    02.93   Total compensation..............      22,341      25,069      26,889
    03.01 Chapter 18........................          17          18          19
    03.02 Clothing allowance................          45          50          53
    03.03 Automobiles, adaptive equipment...          39          38          39
    03.04 Equal access to justice...........           2           3           3
    03.05 Medical exam pilot program........          37          50          51
    03.06 OBRA payment to VBA...............           1           1           1
    03.07 Return of REPS overpayments.......                       5
                                               ---------   ---------  ----------
    03.91   Total other compensation
              expenses......................         141         165         166
    04.03 Administrative expenses...........         592         606         609
    04.05 Construction, minor projects......           9          12          12
                                               ---------   ---------  ----------
    04.91   Total other direct expenses.....         601         618         621
    09.02 Reinstated Entitlement for
            Suvivors........................          10           9           9
    09.03 Administrative expense............           3           3           3
                                               ---------   ---------  ----------
    09.99   Total reimbursable program......          13          12          12
                                               ---------   ---------  ----------
    10.00   Total new obligations...........      23,096      25,864      27,688
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance carried
            forward, start of year..........         142         438         727
    22.00 New budget authority (gross)......      23,393      26,152      26,968
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......      23,535      26,590      27,695
    23.95 Total new obligations.............     -23,096     -25,864     -27,688
    23.98 Unobligated balance expiring or
            withdrawn.......................          -2
    24.40 Unobligated balance carried
            forward, end of year............         438         727           7
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Discretionary:

    40.00   Appropriation...................         604         610         621
    40.73   Reduction pursuant to P.L. 107-
              206...........................          -1
                                               ---------   ---------  ----------
    43.00     Appropriation (total
                discretionary)..............         603         610         621
          Mandatory:

            Appropriation:
    60.00     Appropriation.................      22,772      25,530      25,980
    60.00     Appropriation [COLA]..........                                 355
                                               ---------   ---------  ----------
    62.50     Appropriation (total
                mandatory)..................      22,772      25,530      26,335
          Discretionary:

    68.00   Spending authority from
              offsetting collections:
              Offsetting collections (cash).           3           3           3
          Mandatory:

    69.00   Offsetting collections (cash)
              REPS..........................          15           9           9
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................      23,393      26,152      26,968
    ----------------------------------------------------------------------------

        Change in obligated balances:
    72.40 Obligated balance, start of year..       1,861       1,951       2,189
    73.10 Total new obligations.............      23,096      25,864      27,688
    73.20 Total outlays (gross).............     -22,999     -25,626     -27,534
    73.40 Adjustments in expired accounts
            (net)...........................          -7
    74.40 Obligated balance, end of year....       1,951       2,189       2,343
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new discretionary
            authority.......................         472         492         502
    86.93 Outlays from discretionary
            balances........................          94         112         117
    86.97 Outlays from new mandatory
            authority.......................      20,661      23,181      24,863
    86.98 Outlays from mandatory balances...       1,772       1,841       2,052
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........      22,999      25,626      27,534
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.00   Offsetting collections (cash)
              from: Federal sources.........         -18         -12         -12
    ----------------------------------------------------------------------------

    [[Page 817]]

        Net budget authority and outlays:
    89.00 Budget authority..................      23,375      26,140      26,956
    90.00 Outlays...........................      22,982      25,614      27,522
    ----------------------------------------------------------------------------

    Additional net budget authority and outlays to cover cost of fully accruing
                                     retirement:
    99.00 Budget authority..................          31          31          34
    99.01 Outlays...........................          31          31          34
    ---------------------------------------------------------------------------

                     Summary of Budget Authority and Outlays

                            (in millions of dollars)

                                         2002 actual  2003 est.   2004 est.
    Enacted/requested:
      Budget Authority..................      23,375      26,140      26,956
      Outlays...........................      22,981      25,614      27,522
    Legislative proposal, subject to
        PAYGO:
      Budget Authority..................                                -124
      Outlays...........................                                -124
                                        ------------------------------------
    Total:
      Budget Authority..................      23,375      26,140      26,832
      Outlays...........................      22,981      25,614      27,398
                                        ====================================

        The mandatory request in this appropriation provides for the payment
    of compensation to veterans and survivors. Compensation is paid to
    veterans for disabilities incurred in or aggravated during active
    military service. Dependency and Indemnity Compensation is paid to
    survivors of servicepersons or veterans whose death occurred while on
    active duty or as a result of service-connected disabilities.
    Compensation and vocational rehabilitation is provided to the children
    of Vietnam veterans who were born with certain birth defects. 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.

        In addition, certain disabled veterans are provided with automobile
    grants with the associated approved adaptive equipment. An allowance, up
    to a maximum of $9,000, 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. Miscellaneous benefits provided for are:

        (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.

        The mandatory request also includes a pilot program authorizing VA
    to contract out medical examinations to determine service-connected
    disabilities of veterans who are potential applicants of compensation
    benefits and a program to allow VA to perform income matches for certain
    compensation recipients.

        In accordance with Public Law 97-377, the Reinstated Entitlement
    Program for Survivors (REPS) 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.

        The discretionary request in this appropriation provides for the
    corporate leadership and operational support to VA's Compensation
    business line. Additionally, funding is provided for capital asset
    investments.

        Legislation is proposed to provide a cost-of-living adjustment
    comparable to the annual social security increase to recipients of
    disability compensation, dependency and indemnity compensation, and
    clothing allowances. The increase, effective with payments made on
    January 1, 2004, is expected to be 2.0 percent.

        Legislation is proposed to authorize the regional benefits office in
    Manila, Philippines for an additional five years. Under current law, the
    authority to maintain and operate this facility expires on December 31,
    2003. VA administers programs that provide compensation, pension,
    education, and burial benefits to veterans living in the Philippines.

                AVERAGE NUMBER OF COMPENSATION CASES AND PAYMENTS

                                         2002 actual  2003 est.   2004 est.
    Veterans:
      Cases.............................   2,356,592   2,466,212   2,543,600
      Average payment per case, per year      $7,870      $8,564      $8,975
                                        ------------------------------------
          Total obligations (in
            millions)...................     $18,546     $21,121     $22,830
                                        ====================================
    Survivors:
      Total.............................     308,024     312,109     316,747
      Average payment per case, per year     $12,320     $12,647     $12,819
                                        ------------------------------------
          Total obligations (in
            millions)...................      $3,795      $3,947      $4,060
                                        ====================================
    Chapter 18:
      Children..........................       1,035       1,088       1,115
      Average payment per case, per year     $16,330     $16,928     $17,189
                                        ------------------------------------
          Total obligations (in
            millions)...................         $17         $18         $19
                                        ====================================
    Clothing allowance:
      Number of veterans................      81,738      84,409      86,681
      Average payment per case, per year        $546        $588        $611
                                        ------------------------------------
          Total obligations (in
            millions)...................         $45         $50         $53
                                        ====================================
    Automobiles or other conveyances:
      Number of conveyances.............       1,093       1,093       1,093
      Average benefit...................      $8,609      $8,995      $8,995
                                        ------------------------------------
          Obligations (in millions).....          $9         $10         $10
                                        ====================================
    Adaptive equipment (including
        maintenance, repair and
        installation for automobiles):
      Number of items...................       8,539       8,700       8,700
      Average benefit...................      $3,506      $3,713      $3,900
                                        ------------------------------------
          Obligations (in millions).....         $30         $32         $34
                                        ====================================
    Other compensation caseload:
      Retired Officers..................           1           1           1
      Special allowance dependents......          94          90          80
      Equal Access to Justice payments..         519         715         715
                                        ====================================
    REPS:
      Spouses...........................          91          91          75
      Average benefit...................     $12,879     $18,533     $18,928
                                        ------------------------------------
          Obligations (in millions).....          $2          $2          $1
      Children..........................         525         520         466
      Average benefit...................     $16,840     $13,878     $14,183
                                        ------------------------------------
          Obligations (in millions).....          $9          $7          $7
                                        ====================================

        The Veterans Benefits Administration determines eligibility and
    adjudicates all claims for compensation awards. Workload data for this
    program are shown below. Specific performance goals relating to the
    processing of veterans benefits are contained in VA's annual performance
    plan. The Compensation business line provides processing of claims for
    veterans and dependents relating to compensation benefits under the
    various laws enacted by Congress.

    [[Page 818]]

                                    WORKLOAD

                         [Claims completed in thousands]

                                         2002 actual  2003 est.   2004 est.

    Compensation:
      Rating-Related Actions............         693         697         653
      Non Rating Actions................         141         151         130

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0102-0-1-701      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------

          Direct obligations:

            Personnel compensation:
    11.1      Full-time permanent...........         300         350         362
    11.5      Other personnel compensation..          12          10          10
                                               ---------   ---------  ----------
    11.9        Total personnel compensation         312         360         372
    12.1    Civilian personnel benefits.....          79          82          83
    21.0    Travel and transportation of
              persons.......................           5           6           6
    22.0    Transportation of things........           1           2           2
    23.2    Rental payments to others.......           5           3           3
    23.3    Communications, utilities, and
              miscellaneous charges.........          62          69          70
    24.0    Printing and reproduction.......           2           1           1
    25.2    Other services..................         104          64          53
    26.0    Supplies and materials..........           5           5           5
    31.0    Equipment.......................          17          15          13
    32.0    Land and structures.............           9          12          13
    42.0    Insurance claims and indemnities      22,482      25,233      27,056
                                               ---------   ---------  ----------
    99.0      Direct obligations............      23,083      25,852      27,677
    99.0  Reimbursable obligations..........          13          12          11
                                               ---------   ---------  ----------
    99.9    Total new obligations...........      23,096      25,864      27,688
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 36-0102-0-1-701      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------
        Direct:
          Total compensable workyears:

    1001    Civilian full-time equivalent
              employment....................       6,909       6,759       6,759
        Reimbursable:
          Total compensable workyears:

    2001    Civilian full-time equivalent
              employment....................          76          75          75
    ---------------------------------------------------------------------------

                                  Compensation

                    (Legislative proposal, subject to PAYGO)

        Legislation is proposed to restore the original interpretation of
    section 1110 of title 38 USC prohibiting the granting of service-
    connected disability arising secondarily from alcohol or drug-abuse. In
    February 2001, a three-judge panel of the US Court of Appeals
    interpreted section 1110 as not precluding compensation for an alcohol
    or drug-abuse-related disability arising secondarily from a service-
    connected disability. Enactment of this provision is estimated to save
    $127 million in 2004.

        Legislation is proposed to provide payment at the full rate of
    authorized benefits for World War II veterans of the New Philippine
    Scouts and for survivors of Filipino veterans, who reside in the United
    States. Enactment of this proposal will result in additional cost of $3
    million in 2004.

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0102-4-1-701      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    01.01 New Philippine Scouts and DIC.....                                   3
    01.02 Allen reversal....................                                -127
                                               ---------   ---------  ----------
    02.93   Total compensation..............                                -124
                                               ---------   ---------  ----------
    10.00   Total new obligations (object
              class 42.0)...................                                -124
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......                                -124
    23.95 Total new obligations.............                                 124
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Mandatory:

    60.00   Appropriation...................                                -124
    ----------------------------------------------------------------------------

        Change in obligated balances:
    73.10 Total new obligations.............                                -124
    73.20 Total outlays (gross).............                                 124
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new mandatory
            authority.......................                                -124
    ----------------------------------------------------------------------------

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

                                    Education

        For the education program administered by the Department of Veterans
    Affairs, $2,003,188, which shall be available as follows:
        (1) For the payment of education and training benefits to or on
    behalf of veterans as authorized by law including any payment for
    associated activities authorized by 38 U.S.C. 3034(e), 3674, 3684(C),
    and 3697, $1,904,665. In addition, for making payments after June 30 for
    the education program administered by the Department, such sums as may
    be necessary;
        (2) For operating expenses associated with the provision of
    education and training benefits; and reimbursement of the Department of
    Defense for the cost of overseas employee mail, $98,523,000, including
    no more than $757,000 for construction.
        (38 U.S.C. chapters 30, 31, 34, 35, 36, 51, 53, 55, and 61).

        Note.--A regular 2003 appropriation for this account had not been
    enacted at the time the budget was prepared; therefore, this account is
    operating under a continuing resolution (P.L. 107-229, as amended). The
    amounts included for 2003 in this budget reflect the Administration's
    2003 policy proposals.

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0137-0-1-702      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Direct program:

    01.01   Peacetime veterans/
              servicepersons................       1,150       1,592       1,749
    01.03   Dependents......................         234         249         267
    01.04   Tuition Assistance..............          25          59          69
    01.05   Licensing and Certification.....           1           3           5
    01.06   Work study......................          21          31          31
    01.07   Payments to states..............          14          14          18
    01.08   Reporting fees..................           3           3           3
                                               ---------   ---------  ----------
    01.91     Total special assistance to
                disabled veterans...........       1,448       1,951       2,142
          Other direct expenses:

    03.01   Administrative expenses.........          73         100          99
    03.03   Construction, minor construction           1           1           1
                                               ---------   ---------  ----------
    03.91     Total other direct expenses...          74         101         100
                                               ---------   ---------  ----------
    05.00   Total Direct Program............       1,522       2,052       2,242
          Reimbursable education program:

    09.01   Veterans' basic benefits........           9          11          12
    09.02   Veterans' supplementary benefits          77          95         174
    09.03   Reservists benefits.............         117         127         134
    09.04   Reservists supplementary
              benefits......................          32          35          37
    09.05   Reimbursement to GOE............                       1           1
                                               ---------   ---------  ----------
    09.09     Reimbursable program--subtotal
                line........................         235         269         358
                                               ---------   ---------  ----------
    10.00   Total new obligations...........       1,757       2,321       2,600
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance carried
            forward, start of year..........         385         522         239
    22.00 New budget authority (gross)......       1,894       2,037       2,362
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......       2,279       2,559       2,601
    23.95 Total new obligations.............      -1,757      -2,321      -2,600
    24.40 Unobligated balance carried
            forward, end of year............         522         239
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Discretionary:

            Discretionary:
    40.00     Appropriation.................          75          97          99

    [[Page 819]]

          Mandatory:

    60.00   Appropriation...................       1,584       1,672       1,905
          Discretionary:

    68.00   Spending authority from
              offsetting collections:
              Offsetting collections (cash).                       1           1
          Mandatory:

    69.00   Offsetting collections (cash)...         235         267         357
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................       1,894       2,037       2,362
    ----------------------------------------------------------------------------

        Change in obligated balances:
    72.40 Obligated balance, start of year..          50          62          64
    73.10 Total new obligations.............       1,757       2,321       2,600
    73.20 Total outlays (gross).............      -1,745      -2,318      -2,600
    73.40 Adjustments in expired accounts
            (net)...........................           1
    74.40 Obligated balance, end of year....          62          64          65
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new discretionary
            authority.......................          60          81          83
    86.93 Outlays from discretionary
            balances........................          10          13          17
    86.97 Outlays from new mandatory
            authority.......................       1,635       1,939       2,262
    86.98 Outlays from mandatory balances...          40         285         238
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........       1,745       2,318       2,600
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.00   Offsetting collections (cash)
              from: Federal sources.........        -235        -268        -358
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................       1,659       1,769       2,004
    90.00 Outlays...........................       1,509       2,050       2,242
    ----------------------------------------------------------------------------

    Additional net budget authority and outlays to cover cost of fully accruing
                                     retirement:
    99.00 Budget authority..................           4           5           5
    99.01 Outlays...........................           4           5           5
    ---------------------------------------------------------------------------

                     Summary of Budget Authority and Outlays

                            (in millions of dollars)

                                         2002 actual  2003 est.   2004 est.
    Enacted/requested:
      Budget Authority..................       1,659       1,769       2,004
      Outlays...........................       1,510       2,050       2,242
    Legislative proposal, subject to
        PAYGO:
      Budget Authority..................                                   1
      Outlays...........................                                   1
                                        ------------------------------------
    Total:
      Budget Authority..................       1,659       1,769       2,005
      Outlays...........................       1,510       2,050       2,243
                                        ====================================

        The mandatory request in this appropriation finances educational
    assistance allowances for certain service persons, 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. Voluntary contributions by eligible servicepersons
    and matching contributions provided by the Department of Defense are
    included in the Post-Vietnam Era Veterans Education Account.

        The discretionary request in this appropriation provides for the
    corporate leadership and operational support to VA's Education business
    line. Additionally, funding is provided for capital asset investments.

        In compliance with the Federal Credit Reform Act of 1990, the
    Education Loan Fund Program account is reported separately under the
    Vocational Rehabilitation and Education Loans Program account. The
    Education Loan program provides loans of up to $2,500 to dependents of
    veterans who are eligible for training benefits under chapter 35, title
    38, U.S.C. and who are without sufficient funds to meet their education
    related expenses.

        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
    Education 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

                                         2002 actual  2003 est.   2004 est.

    Veterans/Servicemembers:
      Number of trainees................     289,701     328,244     332,026
      Average cost per trainee..........      $4,266      $5,180      $5,831
                                        ------------------------------------
          Total cost (in millions)......      $1,236      $1,700      $1,936
                                        ====================================
    Reservists:
      Number of trainees................      85,934      91,090      94,734
      Average cost per trainee..........      $1,734      $1,770      $1,804
                                        ------------------------------------
          Total cost (in millions)......        $149        $161        $171
                                        ====================================

        Dependents' education and training.--This program provides benefits
    to children and spouses of veterans who died of a service-connected
    disability or whose service-connected disability is rated permanent and
    total. In addition, dependents of servicepersons missing in action or
    interned by a hostile foreign government for more than 90 days are also
    eligible. The following table provides a comparison of trainees and
    costs for the Dependents Educational Assistance program.

                           NUMBER OF TRAINEES AND COST

                                         2002 actual  2003 est.   2004 est.

    Sons and daughters:
      Number of trainees................      46,714      48,880      51,346
      Average cost per trainee (in
        dollars)........................      $4,458      $4,548      $4,639
                                        ------------------------------------
          Total cost (in millions)......        $208        $222        $238
                                        ====================================
    Spouses and widow(ers):
      Number of trainees................       7,265       7,434       7,781
      Average cost per trainee (in
        dollars)........................      $3,517      $3,587      $3,659
                                        ------------------------------------
          Total cost (in millions)......         $26         $27         $29
                                        ====================================

        Tuition Assistance.--Public Law 106-398, enacted October 30, 2000,
    allows the military services to pay up to 100 percent of tuition and
    expenses charged by a school for service members. If a service
    department pays less than 100 percent, a service member eligible for the
    Montgomery GI Bill--Active-duty (MGIB) can elect to receive MGIB
    benefits for all or a portion of the remaining expenses.

        Licensing and certification test payments.--Under Public Law 106-
    419, veterans and other eligible persons may receive up to $2,000 to pay
    fees required for civilian occupational licensing and certification
    examinations needed to enter, maintain, or advance in employment in a
    vocation or profession--effective March 1, 2001.

                         CASELOAD AND AVERAGE COST DATA

                                         2002 actual  2003 est.   2004 est.

    Tuition Assistance:
      Number of trainees................      60,264     120,000     140,000
      Average cost per trainee..........        $416        $494        $494
                                        ------------------------------------
          Total cost (in millions)......         $25         $59         $69
                                        ====================================
    Licensing and Certification:
      Number of individuals.............       5,111       7,500      15,000
      Average cost per trainee..........        $277        $305        $336
                                        ------------------------------------
          Total cost (in millions)......          $1          $3          $5
                                        ====================================

    [[Page 820]]

        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.

                                         2002 actual  2003 est.   2004 est.

      Number of contracts...............      16,977      17,000      17,000
                                        ------------------------------------
          Total cost (in millions)......         $21         $31         $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.

        Reporting fees.--Reporting fees are paid to education and training
    institutions to help defray the costs of certifying education enrollment
    for veterans enrolled in training during a calendar year.

                                    WORKLOAD

                                 [In thousands]

                                         2002 actual  2003 est.   2004 est.

    Original claims.....................         188         201         213
    Adjustments/supplemental claims.....       1,034       1,211       1,286

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0137-0-1-702      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------

          Direct obligations:

            Personnel compensation:
    11.1      Full-time permanent...........          46          46          48
    11.5      Other personnel compensation..           1           2           2
                                               ---------   ---------  ----------
    11.9        Total personnel compensation          47          48          50
    12.1    Civilian personnel benefits.....          14          11          11
    21.0    Travel and transportation of
              persons.......................                       2           2
    23.3    Communications, utilities, and
              miscellaneous charges.........           6          13          13
    24.0    Printing and reproduction.......                       1           1
    25.2    Other services..................           7          20          17
    25.3    Other purchases of goods and
              services from Government
              accounts......................                       2           2
    26.0    Supplies and materials..........                       2           2
    32.0    Land and structures.............           1           1           1
    41.0    Grants, subsidies, and
              contributions.................       1,447       1,952       2,143
                                               ---------   ---------  ----------
    99.0      Direct obligations............       1,522       2,052       2,242
    99.0  Reimbursable obligations..........         235         269         358
                                               ---------   ---------  ----------
    99.9    Total new obligations...........       1,757       2,321       2,600
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 36-0137-0-1-702      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------
        Direct:
    1001  Total compensable workyears:
            Civilian full-time equivalent
            employment......................         864         952         969
    ---------------------------------------------------------------------------

                                    Education

                    (Legislative proposal, subject to PAYGO)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0137-4-1-702      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Direct program:

    01.01   MGIB Revision for OJT in Self-
              Employment....................                                   1
    01.03   National Guard Delimiting Date
              Extension.....................
    01.05   Extension of the Education
              Advisory Committee............
                                               ---------   ---------  ----------
    05.00   Total Direct Program............                                   1
                                               ---------   ---------  ----------
    10.00   Total new obligations...........                                   1
    ----------------------------------------------------------------------------

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

        New budget authority (gross), detail:
          Mandatory:

    60.00   Appropriation...................                                   1
    ----------------------------------------------------------------------------

        Change in obligated balances:
    73.10 Total new obligations.............                                   1
    73.20 Total outlays (gross).............                                  -1
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new mandatory
            authority.......................                                   1
    ----------------------------------------------------------------------------

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

        The Administration will transmit legislation to extend the time for
    using education benefit for members of the National Guard activated
    after September 11, 2001, who qualify for chapter 35, regardless of
    whether they were called to active duty under title 10 or title 32 of
    the United States Code. The estimated cost in 2004 is $150,000 with an
    estimaed ten year cost of $5 million.

        The Administration will transmit legislation to modify the
    Montgomery G.I. Bill to enable veterans to be reimbursed for certain
    self-employment training programs. The estimated cost in 2004 is
    $360,000 with an estimated ten year cost of $4 million.

        Legislation is required to extend the Department of Veterans Affairs
    Education Advisory Committee. Under current law, authority to maintain
    the committee expires December 31, 2003.

        The Education Loan program has not issued a loan in over ten years.
    Since there is no longer a demand for the program, the Administration
    will transmit legislation to eliminate the program and waive all
    outstanding balances.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0137-4-1-702      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------

          Grants, subsidies, and contributions:

    41.0    Grants, subsidies, and
              contributions.................                                   1
    41.0    Grants, subsidies, and
              contributions.................
                                               ---------   ---------  ----------
    99.9    Total new obligations...........                                   1
    ---------------------------------------------------------------------------

                    Vocational Rehabilitation and Employment

        For the vocational rehabilitation and employment program
    administered by the Department of Veterans Affairs, $696,728,000, which
    shall be available as follows:
        (1) For the provision of vocational rehabilitation and employment
    benefits (including independent living services and assistance) to or on
    behalf of veterans as authorized by law, $561,337,000. In addition, for
    making payments after June 30 for the vocational rehabilitation and
    employment program administered by the Department, such sums as may be
    necessary;
        (2) For operating expenses associated with the provision of
    vocational rehabilitation and employment benefits (including
    administrative expenses incurred under section 3104(a) (1), (2), (5),
    and (11) of title 38, United States Code); and reimbursement of the
    Department of Defense for the cost of overseas employee mail,
    $135,391,000, including no more than $1,841,000 for construction;
        (3) For the cost of direct loans, $52,000, as authorized by 38
    U.S.C. chapter 31, as amended: Provided further, 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
    $3,938,000.
        (38 U.S.C. chapters 31, 36, 51, 53, 55, and 61).

        Note.--A regular 2003 appropriation for this account had not been
    enacted at the time the budget was prepared; therefore, this account is
    operating under a continuing resolution

    [[Page 821]]

    (P.L. 107-229, as amended). The amounts included for 2003 in this budget
    reflect the Administration's 2003 policy proposals.

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0135-0-1-702      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    01.01 Vocational rehabilitation training         269         293         319
    01.02 Subsistence allowance.............         207         216         226
    01.04 Work study........................          11          16          16
                                               ---------   ---------  ----------
    01.91   Direct Program by Activities--
              Subtotal (1 level)............         487         525         561
    03.01 Administrative expenses...........         118         132         134
    03.03 Construction, minor projects......           1           2           2
                                               ---------   ---------  ----------
    03.91   Direct Program by Activities--
              Subtotal (1 level)............         119         134         136
                                               ---------   ---------  ----------
    04.93   Total direct program............         119         134         136
                                               ---------   ---------  ----------
    10.00   Total new obligations...........         606         659         697
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance carried
            forward, start of year..........           2           2
    22.00 New budget authority (gross)......         607         657         696
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......         609         659         696
    23.95 Total new obligations.............        -606        -659        -697
    24.40 Unobligated balance carried
            forward, end of year............           2
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Discretionary:

    40.00   Appropriation...................         120         132         135
          Mandatory:

    60.00   Appropriation...................         487         525         561
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................         607         657         696
    ----------------------------------------------------------------------------

        Change in obligated balances:
    72.40 Obligated balance, start of year..          29          39          39
    73.10 Total new obligations.............         606         659         697
    73.20 Total outlays (gross).............        -597        -657        -695
    73.40 Adjustments in expired accounts
            (net)...........................          -1
    74.40 Obligated balance, end of year....          39          39          39
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new discretionary
            authority.......................          97         108         110
    86.93 Outlays from discretionary
            balances........................          16          20          24
    86.97 Outlays from new mandatory
            authority.......................         471         514         550
    86.98 Outlays from mandatory balances...          13          15          11
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........         597         657         695
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................         607         657         696
    90.00 Outlays...........................         596         657         695
    ----------------------------------------------------------------------------

    Additional net budget authority and outlays to cover cost of fully accruing
                                     retirement:
    99.00 Budget authority..................           5           6           6
    99.01 Outlays...........................           5           6           6
    ---------------------------------------------------------------------------

        The mandatory request in this appropriation finances assistance
    allowances for certain disabled veterans who are provided with
    vocational rehabilitation and employment services.

        The discretionary request in this appropriation provides for the
    corporate leadership and operational support to VA's VR&E business line
    as well as direct services. Additionally, funding is provided for
    capital asset investments.

        In compliance with the Federal Credit Reform Act of 1990, the
    Vocational Rehabilitation Loan Fund Program account is reported
    separately under the Vocational Rehabilitation and Educational Loans
    Program Account. The Vocational Rehabilitation Loans program provides
    loans (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.

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

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

                         CASELOAD AND AVERAGE COST DATA

                                         2002 actual  2003 est.   2004 est.

      Total number of participants......      69,634      71,549      73,517
      Average cost......................      $6,994      $7,338      $7,630
                                        ------------------------------------
          Total cost (in millions)......        $487        $525        $561
                                        ====================================

        The VBA VR&E service 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]

                                         2002 actual  2003 est.   2004 est.

      Evaluation and planning...........          61          62          63
      Rehabilitation services...........          64          66          67
      Employment services status........          14          14          15
      Vocational/educational counseling.           9           9           9

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0135-0-1-702      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------

          Personnel compensation:

    11.1    Full-time permanent.............          82          70          73
    11.5    Other personnel compensation....           3
                                               ---------   ---------  ----------
    11.9      Total personnel compensation..          85          70          73
    12.1  Civilian personnel benefits.......          20          16          16
    21.0  Employee Travel...................           1           2           2
    22.0  Transportation of things..........                       1           1
    23.3  Communications, utilities, and
            miscellaneous charges...........                      11          11
    25.2  Other services....................          11          28          27
    26.0  Supplies and materials............                       1           1
    31.0  Equipment.........................           1           3           3
    32.0  Land and structures...............           1           2           2
    41.0  Grants, subsidies, and
            contributions...................         487         525         561
                                               ---------   ---------  ----------
    99.9    Total new obligations...........         606         659         697
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 36-0135-0-1-702      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------
        Direct:
    1001  Total compensable workyears:
            Civilian full-time equivalent
            employment......................       1,057       1,205       1,204
    ---------------------------------------------------------------------------

                                    Insurance

        For the insurance program administered by the Department of Veterans
    Affairs, $33,011,000, which shall be available as follows:
        (1) For the payment of military and naval insurance, national
    service life insurance, servicemen's indemnities, service-disabled
    veterans insurance, and veterans mortgage life insurance as authorized
    by law, $29,017,000, to remain available until expended. In addition,
    for making payments after June 30 for the insurance programs
    administered by the Department, such sums as may be necessary;
        (2) For operating expenses associated with the provision of
    insurance programs; and reimbursement of the Department of Defense for
    the cost of overseas employee mail, $3,994,000, including no more than
    $206,000 for construction.
        (38 U.S.C. chapter 19; 70 Stat. 887; 72 Stat. 487).

        Note.--A regular 2003 appropriation for this account had not been
    enacted at the time the budget was prepared; therefore, this account is
    operating under a continuing resolution (P.L. 107-229, as amended). The
    amounts included for 2003 in this budget reflect the Administration's
    2003 policy proposals.

    [[Page 822]]

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0120-0-1-701      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Payment to NSLI...................           1           1           1
    00.10 VMLI death claims.................           8           9           9
    00.12 Payment to service-disabled
            veterans insurance..............          19          21          21
    00.13 Administrative Expenses...........           3           4           4
    00.15 Minor Construction................           1
                                               ---------   ---------  ----------
    01.00   Total direct expenses...........          32          35          35
    09.01 Administrative expenses...........          36          36          36
                                               ---------   ---------  ----------
    09.99   Total reimbursable program......          36          36          36
                                               ---------   ---------  ----------
    10.00   Total new obligations...........          68          71          71
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance carried
            forward, start of year..........           1           1
    22.00 New budget authority (gross)......          68          70          71
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......          69          71          71
    23.95 Total new obligations.............         -68         -71         -71
    24.40 Unobligated balance carried
            forward, end of year............           1
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Discretionary:

    40.00   Appropriation...................           4           4           4
          Mandatory:

    60.00   Appropriation...................          26          28          29
          Offsetting collections (cash):

    69.00   Offsetting collections (cash)...          36          36          36
    69.00   Offsetting collections (cash)...           2           2           2
                                               ---------   ---------  ----------
    69.90   Spending authority from
              offsetting collections (total
              mandatory)....................          38          38          38
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................          68          70          71
    ----------------------------------------------------------------------------

        Change in obligated balances:
    72.40 Obligated balance, start of year..           6           6           5
    73.10 Total new obligations.............          68          71          71
    73.20 Total outlays (gross).............         -68         -71         -72
    74.40 Obligated balance, end of year....           6           5           5
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new discretionary
            authority.......................           4           3           3
    86.93 Outlays from discretionary
            balances........................                       1           1
    86.97 Outlays from new mandatory
            authority.......................          59          61          63
    86.98 Outlays from mandatory balances...           5           6           5
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........          68          71          72
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

            Offsetting collections (cash)
                from:
    88.00     Federal sources
                [Administrative expenses]...         -36         -36         -36
    88.40     VMLI premiums.................          -2          -2          -2
                                               ---------   ---------  ----------
    88.90       Total, offsetting
                  collections (cash)........         -38         -38         -38
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................          30          32          33
    90.00 Outlays...........................          29          33          34
    ---------------------------------------------------------------------------
        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.

        The Insurance business line administers six life insurance programs,
    including two trust funds, two public enterprise funds, a trust
    revolving fund, and Veteran's Mortgage Life Insurance (VMLI), and
    supervises two additional programs for the benefit of servicepersons,
    veterans, and their beneficiaries through contracts with a commercial
    company. All programs are operated on a commercial basis, to the extent
    possible, consistent with all applicable statutes. The Insurance
    appropriation is the funding mechanism for the following administration
    of the Government life insurance activities: U.S. Government Life
    Insurance Fund (USGLI); National Service Life Insurance (NSLI); Service-
    Disabled Veterans Insurance Fund (S-DVI); and Veterans Mortgage Life
    Insurance (VMLI).

        Military and naval insurance.--Payments are made to the USGLI 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 (NSLI).--Payments are made to the
    NSLI 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.

        Payment to service-disabled veterans insurance fund (S-DVI).--
    Payments are made to the S-DVI 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.

        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 2004 as indicated in the following table.

                         POLICIES AND INSURANCE IN FORCE

                                         2002 actual  2003 est.   2004 est.

    VMLI policies:
      Number of policies................       3,060       2,940       2,810
      Amount of insurance (dollars in
        millions).......................        $186        $183        $178

        The discretionary request in this appropriation provides for the
    corporate leadership and operational support to VA's Insurance line.
    Additionally, funding is provided for capital asset investments.

                                    WORKLOAD

                                 [In thousands]

                                         2002 actual  2003 est.   2004 est.

      Policy service actions............         867         846         825
      Collections.......................       2,509       2,369       2,221
      Disability claims.................          16          16          16
      Insurance awards..................         493         496         499
        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.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0120-0-1-701      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------

          Direct obligations:

    11.1    Personnel compensation: Full-
              time permanent................           3           3           3
    32.0    Land and structures.............           1           1           1
    42.0    Insurance claims and indemnities          28          31          31
                                               ---------   ---------  ----------
    99.0      Direct obligations............          32          35          35
    99.0  Reimbursable obligations..........          36          36          36
                                               ---------   ---------  ----------
    99.9    Total new obligations...........          68          71          71
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 36-0120-0-1-701      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------
        Direct:
    1001  Total compensable workyears:
            Civilian full-time equivalent
            employment......................          36          39          45
        Reimbursable:
    2001  Total compensable workyears:
            Civilian full-time equivalent
            employment......................         443         480         470
    ---------------------------------------------------------------------------

    [[Page 823]]

                                    Pensions

                          (including transfer of funds)

        For the pension programs administered by the Department of Veterans
    Affairs, $3,542,742,000, which shall be available as follows:
        (1) For the payment of pension benefits to or on behalf of veterans,
    payment of premiums due on commercial life insurance policies, and for
    other benefits as authorized by law, $3,391,048,000; of which not to
    exceed $16,438,000 of the amount for pension benefits shall be for
    necessary expenses in implementing those provisions authorized by the
    Omnibus Budget Reconciliation Act of 1990 and the Veterans' Benefits Act
    of 1992, the funding source for which is specifically provided as the
    ``Pensions'' appropriation: Provided, That such sums as may be earned on
    an actual qualifying patient basis, shall be reimbursed to ``Medical
    Care'' to augment the funding of individual medical facilities for
    nursing home care provided to pensioners as authorized. In addition, for
    making payments after June 30 for the pension programs administered by
    the Department, such sums as may be necessary;
        (2) For operating expenses associated with the provision of pension
    benefits and reimbursement of the Department of Defense for the cost of
    overseas employee mail, $151,694,000, including no more than $3,265,000
    for construction.
        (38 U.S.C. chapters 15, 23, 51, 53, 55, 61, 107, 1312, 1977, and
    2106, 50 U.S.C. App. 540-548; 43 Stat. 122, 123; 45 Stat. 735; 76 Stat.
    1198; 92 Stat. 2508).

        Note.--A regular 2003 appropriation for this account had not been
    enacted at the time the budget was prepared; therefore, this account is
    operating under a continuing resolution (P.L. 107-229, as amended). The
    amounts included for 2003 in this budget reflect the Administration's
    2003 policy proposals.

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0154-0-1-701      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    01.03 Improved law......................       2,433       2,541       2,620
    01.04 Prior law.........................          31          27          23
                                               ---------   ---------  ----------
    01.91   Total veterans..................       2,464       2,568       2,643
    02.01 Improved law......................         632         654         676
    02.02 Prior law.........................          67          61          55
    02.03 Old law...........................           1           1           1
                                               ---------   ---------  ----------
    02.91   Total survivors.................         700         716         732
                                               ---------   ---------  ----------
    02.92   Total pensions..................       3,164       3,284       3,375
    03.01 OBRA payment to VBA...............          13          16          16
    03.02 Administrative expenses...........         153         154         148
    03.04 Construction, minor projects......           2           3           3
                                               ---------   ---------  ----------
    03.91   Total direct program............         168         173         167
                                               ---------   ---------  ----------
    10.00   Total new obligations...........       3,332       3,457       3,542
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance carried
            forward, start of year..........           2           3           1
    22.00 New budget authority (gross)......       3,333       3,455       3,543
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......       3,335       3,458       3,544
    23.95 Total new obligations.............      -3,332      -3,457      -3,542
    24.40 Unobligated balance carried
            forward, end of year............           3           1           2
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Discretionary:

    40.00   Appropriation...................         156         155         152
          Mandatory:

    60.00   Appropriation...................       3,177       3,300       3,391
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................       3,333       3,455       3,543
    ----------------------------------------------------------------------------

        Change in obligated balances:
    72.40 Obligated balance, start of year..         270         288         296
    73.10 Total new obligations.............       3,332       3,457       3,542
    73.20 Total outlays (gross).............      -3,312      -3,450      -3,534
    73.40 Adjustments in expired accounts
            (net)...........................          -2
    74.40 Obligated balance, end of year....         288         296         304
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new discretionary
            authority.......................         123         138         135
    86.93 Outlays from discretionary
            balances........................          23          22          16
    86.97 Outlays from new mandatory
            authority.......................       2,919       3,032       3,115
    86.98 Outlays from mandatory balances...         247         258         268
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........       3,312       3,450       3,534
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................       3,333       3,455       3,543
    90.00 Outlays...........................       3,312       3,450       3,534
    ----------------------------------------------------------------------------

    Additional net budget authority and outlays to cover cost of fully accruing
                                     retirement:
    99.00 Budget authority..................           8           8           9
    99.01 Outlays...........................           8           8           9
    ---------------------------------------------------------------------------

                     Summary of Budget Authority and Outlays

                            (in millions of dollars)

                                         2002 actual  2003 est.   2004 est.
    Enacted/requested:
      Budget Authority..................       3,333       3,455       3,543
      Outlays...........................       3,312       3,450       3,534
    Legislative proposal, subject to
        PAYGO:
      Budget Authority..................                                   1
      Outlays...........................                                   1
                                        ------------------------------------
    Total:
      Budget Authority..................       3,333       3,455       3,544
      Outlays...........................       3,312       3,450       3,535
                                        ====================================

        The mandatory request in this appropriation provides for the payment
    of pensions 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 or veterans age 65 or older.
    Income support is provided at established benefit levels. 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, 2004, is expected to be 2.0
    percent.

        The discretionary request in this appropriation provides for the
    corporate leadership and operational support to VA's Pension business
    line. Additionally, funding is provided for capital asset investments.

                  AVERAGE NUMBER OF PENSION CASES AND PAYMENTS

                                         2002 actual  2003 est.   2004 est.

    Veterans:
      Improved law......................     328,052     327,105     326,505
      Prior law.........................      18,196      15,494      13,209
      Old law and service...............         246         216         191
                                        ------------------------------------
          Total.........................     346,494     342,815     339,905
      Average payment per case, per year
        (in dollars)....................      $7,111      $7,491      $7,776
                                        ------------------------------------
          Total obligations (in
            millions)...................      $2,464      $2,568      $2,643
                                        ====================================
    Survivors:
      Improved law......................     169,828     165,292     161,274
      Prior law.........................      63,983      57,514      51,769
      Old law and service...............         944         754         605
                                        ------------------------------------
          Total.........................     234,755     223,560     213,648
      Average payment per case, per year
        (in dollars)....................      $2,982      $3,200      $3,424
                                        ------------------------------------
          Total obligations (in
            millions)...................        $700        $715        $732
                                        ====================================

        The Veterans Benefits Administration determines eligibility and
    adjudicates all claims for pensions awards. Workload data for this
    program are shown below. Specific performance goals relating to the
    processing of veterans benefits are contained in VA's annual performance
    plan. The Pension business line provides processing of claims for
    veterans and dependents relating to pension benefits under the various
    laws enacted by Congress.

    [[Page 824]]

                                    WORKLOAD

                         [Claims completed in thousands]

                                         2002 actual  2003 est.   2004 est.

    Pension:
      Rating-Related Actions............         104         104          97
      Non Rating Actions................         490         525         450

        Legislation is proposed to make death pension effective the first
    day of the month in which the death occurred if the claim is received
    within one year, eliminating the current 45-day rule for death pension.
    This proposal is anticipated to increase pension costs $649 thousand in
    2004.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0154-0-1-701      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------

          Personnel compensation:

    11.1    Full-time permanent.............          79          86          87
    11.5    Other personnel compensation....           3           2           2
                                               ---------   ---------  ----------
    11.9      Total personnel compensation..          82          88          89
    12.1  Civilian personnel benefits.......          20          19          19
    21.0  Travel and transportation of
            persons.........................           1           2           2
    23.2  Rental payments to others.........           1           1           1
    23.3  Communications, utilities, and
            miscellaneous charges...........          16          17          17
    24.0  Printing and reproduction.........           1
    25.2  Other services....................          26          22          16
    26.0  Supplies and materials............           2           2           1
    31.0  Equipment.........................           4           3           3
    32.0  Land and structures...............           2           3           3
    42.0  Insurance claims and indemnities..       3,177       3,300       3,391
                                               ---------   ---------  ----------
    99.9    Total new obligations...........       3,332       3,457       3,542
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 36-0154-0-1-701      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------
        Direct:
          Total compensable workyears:

    1001    Civilian full-time equivalent
              employment....................       1,791       1,752       1,752
    ---------------------------------------------------------------------------

                                    Pensions

                    (Legislative proposal, subject to PAYGO)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0154-4-1-701      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    01.01 Eliminate 45 day rule.............                                   1
                                               ---------   ---------  ----------
    02.92   Total pensions..................                                   1
                                               ---------   ---------  ----------
    10.00   Total new obligations (object
              class 42.0)...................                                   1
    ----------------------------------------------------------------------------

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

        New budget authority (gross), detail:
          Mandatory:

    60.00   Appropriation...................                                   1
    ----------------------------------------------------------------------------

        Change in obligated balances:
    73.10 Total new obligations.............                                   1
    73.20 Total outlays (gross).............                                  -1
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new mandatory
            authority.......................                                   1
    ----------------------------------------------------------------------------

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

                                 Burial Benefits

        For the burial benefits program administered by the Department of
    Veterans Affairs, $422,172,000, which shall be available as follows:
        (1) For the provision of burial benefits and payments as authorized
    by law, $157,253,000. In addition, for making payments after June 30 for
    the burial benefits program administered by the Department, such sums as
    may be necessary;
        (2) For operating expenses for the provision of burial benefits, for
    administrative expenses of the National Cemetery Administration, and for
    cemeterial expenses, including purchase of eight passenger motor
    vehicles, $264,919,000; of which no more than $32,000,000, to remain
    available until expended, is for grants to aid States in establishing,
    expanding, or improving State veterans cemeteries, as authorized by 38
    U.S.C. 2408; and of which no more than $76,857,000 for construction.
        (38 U.S.C. 107, chapters 23, 51, 53 55, and 61).

        Note.--A regular 2003 appropriation for this account had not been
    enacted at the time the budget was prepared; therefore, this account is
    operating under a continuing resolution (P.L. 107-229, as amended). The
    amounts included for 2003 in this budget reflect the Administration's
    2003 policy proposals.

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0129-0-1-700      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    01.01 Burial allowance..................          35          35          36
    01.02 Burial plots......................          15          20          20
    01.03 Service-connected deaths..........          17          21          21
    01.04 Burial flags......................          20          20          21
    01.05 Headstones and markers............          32          34          35
    01.06 Graveliners.......................          11          10          10
    01.07 Pre-placed crypts.................           4          17          14
                                               ---------   ---------  ----------
    01.91   Total burial benefits...........         134         157         157
    02.01 Administrative expenses...........         137         145         156
    02.02 Construction, major projects......          42          68          55
    02.03 Construction, minor projects......          19          25          16
    02.04 Grants to states..................          41          32          33
                                               ---------   ---------  ----------
    02.91   Total other direct expenses.....         239         270         260
                                               ---------   ---------  ----------
    10.00   Total new obligations...........         373         427         417
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance carried
            forward, start of year..........         116         129         112
    22.00 New budget authority (gross)......         386         410         422
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......         502         539         534
    23.95 Total new obligations.............        -373        -427        -417
    24.40 Unobligated balance carried
            forward, end of year............         129         112         117
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Discretionary:

    40.00   Appropriation...................         252         253         265
          Mandatory:

    60.00   Appropriation...................         134         157         157
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................         386         410         422
    ----------------------------------------------------------------------------

        Change in obligated balances:
    72.40 Obligated balance, start of year..         110         132         171
    73.10 Total new obligations.............         373         427         417
    73.20 Total outlays (gross).............        -348        -388        -414
    73.40 Adjustments in expired accounts
            (net)...........................          -2
    74.40 Obligated balance, end of year....         132         171         175
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new discretionary
            authority.......................         120         127         137
    86.93 Outlays from discretionary
            balances........................          94         104         120
    86.97 Outlays from new mandatory
            authority.......................         134         157         157
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........         348         388         414
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................         386         410         422
    90.00 Outlays...........................         349         388         414
    ----------------------------------------------------------------------------

    Additional net budget authority and outlays to cover cost of fully accruing
                                     retirement:
    99.00 Budget authority..................                       5           5
    99.01 Outlays...........................                       5           5
    ---------------------------------------------------------------------------

    [[Page 825]]

                     Summary of Budget Authority and Outlays

                            (in millions of dollars)

                                         2002 actual  2003 est.   2004 est.
    Enacted/requested:
      Budget Authority..................         386         410         422
      Outlays...........................         348         388         414
    Legislative proposal, subject to
        PAYGO:
      Budget Authority..................                                   5
      Outlays...........................                                   5
                                        ------------------------------------
    Total:
      Budget Authority..................         386         410         427
      Outlays...........................         348         388         419
                                        ====================================

        The Department of Veterans Affairs administers a range of burial
    programs to benefit eligible veterans and family members. The
    responsibility for these programs is divided between two VA
    organizations. Most monetary benefits and the burial flags program are
    administered by the Veterans Benefits Administration (VBA). Cemetery
    programs and other in-kind benefits are administered by the National
    Cemetery Administration (NCA). Funding for the provision of burial
    benefits and services in VA is provided from the Burial Appropriation
    and the National Cemetery Gift Fund.

        The mandatory request in this appropriation provides burial benefits
    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 $300 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 $2,000
    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 Administration.

        The discretionary request in this appropriation provides for the
    corporate leadership and support to VA's Burial business line and for
    four related programs managed by the National Cemetery Administration
    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 veterans 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. Additionally, funding is
    provided for capital asset investments.

                            NUMBER OF BURIAL BENEFITS

                                         2002 actual  2003 est.   2004 est.
    Burial allowance....................      82,798      83.713      84,346
    Burial plot.........................      67,027      67,768      68,281
    Service-connected death.............      11,978      10,425      10,631
    Burial flags........................     560,466     545,818     559,463
    Headstone markers...................     365,981     322,100     323,000
    Graveliners.........................      50,958      49,041      48,571
    Preplaced crypts....................      10,097      57,100      45,600

        Specific performance goals relating to the Burial business line are
    contained in VA's annual performance plan. The mission of the National
    Cemetery Administration is to honor veterans with a final resting place
    and lasting memorials that commemorate their service to our Nation. The
    National Cemetery Administration's vision is to provide a lasting
    tribute to our Nation's veterans by being mission-driven, results-
    oriented, and customer-focused. The National Cemetery Administration
    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 36-0129-0-1-700      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------

          Personnel compensation:

    11.1    Full-time permanent.............          55          59          64
    11.3    Other than full-time permanent..           5           5           5
                                               ---------   ---------  ----------
    11.9      Total personnel compensation..          60          64          69
    12.1  Civilian personnel benefits.......          16          17          18
    13.0  Benefits for former personnel.....           2           2           2
    21.0  Travel and transportation of
            persons.........................           2           2           2
    22.0  Transportation of things..........           1           1           1
    23.1  Rental payments to GSA............           1           1           1
    23.3  Communications, utilities, and
            miscellaneous charges...........           5           6           6
    25.2  Other services....................          42          38          41
    26.0  Supplies and materials............           6           7           8
    31.0  Equipment.........................           3           9          13
    32.0  Land and structures...............          60          91          66
    41.0  Grants, subsidies, and
            contributions...................          41          32          33
    42.0  Insurance claims and indemnities..         134         157         157
                                               ---------   ---------  ----------
    99.9    Total new obligations...........         373         427         417
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 36-0129-0-1-700      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------
        Direct:
          Total compensable workyears:

    1001    Civilian full-time equivalent
              employment....................       1,633       1,694       1,765
    ---------------------------------------------------------------------------

                                 Burial Benefits

                    (Legislative proposal, subject to PAYGO)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0129-4-1-700      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    01.05 Headstones and markers............                                   5
                                               ---------   ---------  ----------
    10.00   Total new obligations (object
              class 42.0)...................                                   5
    ----------------------------------------------------------------------------

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

        New budget authority (gross), detail:
          Mandatory:

    60.00   Appropriation...................                                   5
    ----------------------------------------------------------------------------

        Change in obligated balances:
    73.10 Total new obligations.............                                   5
    73.20 Total outlays (gross).............                                  -5
    ----------------------------------------------------------------------------

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

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

        The Administration will transmit legislation that would amend the
    effective date of eligibility for receiving a Government headstone or
    marker for a veteran's grave in a private cemetery regardless of whether
    or not it is already marked from September 11, 2001 to November 1, 1990.

        The Administration will transmit legislation that would allow states
    to receive a burial plot allowance for all veterans buried at no cost in
    a state veterans cemetery.

    [[Page 826]]

    Public enterprise funds:

                    Service-Disabled Veterans Insurance Fund

                  Unavailable Collections (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4012-0-3-701      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------
    01.99 Balance, start of year............          19          15          10
        Appropriations:
    05.00 Service-disabled veterans
            insurance fund..................          -4          -5          -6
                                               ---------   ---------  ----------
    07.99 Balance, end of year..............          15          10           4
    ---------------------------------------------------------------------------

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4012-0-3-701      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    09.01 Capital investment................          11          11          11
    09.02 Death Claims......................          44          45          47
    09.03 All Other.........................           8           9           8
                                               ---------   ---------  ----------
    10.00   Total new obligations...........          63          65          66
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......          63          65          66
    23.95 Total new obligations.............         -63         -65         -66
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Mandatory:

    69.00   Offsetting collections (cash)...          58          60          61
    69.26   From offsetting collections
              (unavailable balances)........           4           5           6
                                               ---------   ---------  ----------
    69.90     Spending authority from
                offsetting collections
                (total mandatory)...........          63          65          66
    ----------------------------------------------------------------------------

        Change in obligated balances:
    72.40 Obligated balance, start of year..           7           8           7
    73.10 Total new obligations.............          63          65          66
    73.20 Total outlays (gross).............         -62         -65         -66
    74.40 Obligated balance, end of year....           8           7           7
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new mandatory
            authority.......................          58          60          61
    86.98 Outlays from mandatory balances...           4           5           5
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........          62          65          66
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

            Offsetting collections (cash)
                from:
    88.00     Federal sources: Insurance
                account.....................         -19         -21         -21
              Non-Federal sources:
    88.40       Interest on loans...........          -3          -3          -3
    88.40       Insurance premiums earned...         -24         -24         -24
    88.40       Repayments of loans.........         -12         -12         -12
                                               ---------   ---------  ----------
    88.90       Total, offsetting
                  collections (cash)........         -58         -60         -61
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................           4           5           6
    90.00 Outlays...........................           3           6           6
    ---------------------------------------------------------------------------

        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.

        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

                                         2002 actual  2003 est.   2004 est.
    Number of policies..................     148,913     145,953     142,190
    Insurance in force (dollars in
    millions)...........................      $1,414      $1,385      $1,355

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

        Operating results and financial condition.--Since premium and other
    receipts are insufficient to cover operations, the fund continues to
    project liabilities in excess of assets. The deficit is expected to
    reach an estimated $463 million by September 30, 2004.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4012-0-3-701      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------
    33.0  Investments and loans.............          11          11          11
    42.0  Insurance claims and indemnities..          52          54          55
                                               ---------   ---------  ----------
    99.9    Total new obligations...........          63          65          66
    ---------------------------------------------------------------------------

                        Veterans Reopened Insurance Fund

                  Unavailable Collections (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4010-0-3-701      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------
    01.99 Balance, start of year............         440         425         407
        Appropriations:
    05.00 Veterans reopened insurance fund..         -15         -18         -21
                                               ---------   ---------  ----------
    07.99 Balance, end of year..............         425         407         386
    ---------------------------------------------------------------------------

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4010-0-3-701      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    09.01 Death claims......................          38          39          40
    09.02 Dividends.........................          19          17          15
    09.03 All other.........................           9           9           8
    09.04 Capital investment: policy loans..           2           2           3
                                               ---------   ---------  ----------
    10.00   Total new obligations...........          68          67          66
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......          68          67          66
    23.95 Total new obligations.............         -68         -67         -66
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Mandatory:

    69.00   Offsetting collections (cash)...          53          49          45
    69.26   From offsetting collections
              (unavailable balances)........          15          18          21
                                               ---------   ---------  ----------
    69.90     Spending authority from
                offsetting collections
                (total mandatory)...........          68          67          66
    ----------------------------------------------------------------------------

        Change in obligated balances:
    72.40 Obligated balance, start of year..          48          50          51
    73.10 Total new obligations.............          68          67          66
    73.20 Total outlays (gross).............         -66         -67         -66
    74.40 Obligated balance, end of year....          50          51          53
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new mandatory
            authority.......................          45          49          45
    86.98 Outlays from mandatory balances...          21          18          21
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........          66          67          66
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

            Offsetting collections (cash)
                from:
    88.00     Federal sources: interest on
                U.S. securities.............         -35         -32         -30
              Non-Federal sources:
    88.40       Interest on loans...........          -1          -1          -1
    88.40       Insurance premiums earned...         -11         -11         -10
    88.40       Repayments of loans.........          -6          -5          -4
                                               ---------   ---------  ----------
    88.90       Total, offsetting
                  collections (cash)........         -53         -49         -45
    ----------------------------------------------------------------------------

    [[Page 827]]

        Net budget authority and outlays:
    89.00 Budget authority..................          15          18          21
    90.00 Outlays...........................          13          18          21
    ----------------------------------------------------------------------------

        Memorandum (non-add) entries:
    92.01 Total investments, start of year:
            Federal securities: Par value...         488         475         450
    92.02 Total investments, end of year:
            Federal securities: Par value...         475         450         450
    ---------------------------------------------------------------------------
        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 resources 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

                                         2002 actual  2003 est.   2004 est.
      Number of policies................      67,531      62,500      57,450
      Insurance in force (dollars in
        millions).......................        $587        $556        $519

        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.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4010-0-3-701      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------
    33.0  Investments and loans.............           4           4           4
    42.0  Insurance claims and indemnities..          40          41          40
    43.0  Interest and dividends............          24          22          22
                                               ---------   ---------  ----------
    99.9    Total new obligations...........          68          67          66
    ---------------------------------------------------------------------------

                    Servicemembers' Group Life Insurance Fund

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4009-0-3-701      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    09.01 Premium payments..................         638         634         532
    09.02 Reimbursable program..............           1           1           1
                                               ---------   ---------  ----------
    10.00   Total new obligations (object
              class 41.0)...................         639         635         533
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance carried
            forward, start of year..........           1           1           1
    22.00 New budget authority (gross)......         639         634         532
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......         640         635         533
    23.95 Total new obligations.............        -639        -635        -533
    24.40 Unobligated balance carried
            forward, end of year............           1           1
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Mandatory:

    69.00   Offsetting collections (cash)...         639         634         532
    ----------------------------------------------------------------------------

        Change in obligated balances:
    72.40 Obligated balance, start of year..           5           5           5
    73.10 Total new obligations.............         639         635         533
    73.20 Total outlays (gross).............        -639        -634        -532
    74.40 Obligated balance, end of year....           5           5           5
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new mandatory
            authority.......................         634         629         527
    86.98 Outlays from mandatory balances...           5           5           5
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........         639         634         532
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.40   Offsetting collections (cash)
              from: Non-Federal sources:
              Withholdings from serviceman's
              pay...........................        -639        -634        -532
    ----------------------------------------------------------------------------

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

        Memorandum (non-add) entries:
    92.01 Total investments, start of year:
            Federal securities: Par value...           5           5           5
    92.02 Total investments, end of year:
            Federal securities: Par value...           5           5           5
    ---------------------------------------------------------------------------

        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.

    Credit accounts:

                             Housing 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, subchapters I-III, 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 2004, not to exceed $300,000 in gross obligations for
    direct loans for specially adapted housing loans, 38 U.S.C 3711(i).
        For the cost of the benefits authorized by 38 U.S.C. 2101, such sums
    as may be necessary.
        For operating expenses associated with the housing program as
    authorized by 38 U.S.C., chapters 21 and 37, $158,541,000 to carry out
    the grant program and direct and guaranteed loan programs, of which
    $4,746,000 may be transferred to and merged with the appropriation,
    ``General Administration'';` and of which no more than $1,728,000 is
    available for construction: Provided, That of the amount provided for
    housing operating expenses, (1) $1,400,000 is for administering the
    Transitional Housing program as authorized by 38 U.S.C. chapter 20,
    subchapter VI; and (2) $563,000 is for administering the Native American
    Housing program as authorized by 38 U.S.C. chapter 37, subchapter V, as
    amended.

        Note.--A regular 2003 appropriation for this account had not been
    enacted at the time the budget was prepared; therefore, this account is
    operating under a continuing resolution (P.L. 107-229, as amended). The
    amounts included for 2003 in this budget reflect the Administration's
    2003 policy proposals.

            General Fund Credit Receipt Accounts (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-1119-0-1-704      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------
    0101  GIF direct loans, downward
            reestimate of subsidies.........       1,798         878
    0102  Negative subsidies/subsidy
            reestimates.....................                       5
    ---------------------------------------------------------------------------

    [[Page 828]]

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-1119-0-1-704      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Direct loan subsidy...............          10          10          40
    00.02 Guaranteed loan subsidy...........         194         306         275
    00.05 Reestimates of direct loan subsidy          17         277
    00.06 Interest on reestimates of the
            direct loan subsidy.............           3         229
    00.07 Reestimates of guaranteed loan
            subsidy.........................         417         218
    00.08 Interest on reestimates of the
            guaranteed loan subsidy.........         114          27
    00.09 Specialty Adapted Housing Grant
            Program.........................          25          25          25
    00.10 Administrative expenses...........         165         169         157
                                               ---------   ---------  ----------
    00.91   Direct Program by Activities--
              Subtotal (1 level)............         945       1,261         497
    01.12 Construction, minor projects......           2           2           2
                                               ---------   ---------  ----------
    10.00   Total new obligations...........         947       1,263         499
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance carried
            forward, start of year..........          52          51          41
    22.00 New budget authority (gross)......         947       1,253         490
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......         999       1,304         531
    23.95 Total new obligations.............        -947      -1,263        -499
    24.40 Unobligated balance carried
            forward, end of year............          51          41          32
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Discretionary:

    40.00   Appropriation...................         168         171         159
          Mandatory:

    60.00   Appropriation...................         779       1,082         331
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................         947       1,253         490
    ----------------------------------------------------------------------------

        Change in obligated balances:
    72.40 Obligated balance, start of year..          22           3          40
    73.10 Total new obligations.............         947       1,263         499
    73.20 Total outlays (gross).............        -966      -1,227        -502
    74.40 Obligated balance, end of year....           3          40          38
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new discretionary
            authority.......................         165         140         130
    86.93 Outlays from discretionary
            balances........................          22                      31
    86.97 Outlays from new mandatory
            authority.......................         779       1,082         331
    86.98 Outlays from mandatory balances...                       5          10
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........         966       1,227         502
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................         947       1,253         490
    90.00 Outlays...........................         967       1,227         502
    ----------------------------------------------------------------------------

    Additional net budget authority and outlays to cover cost of fully accruing
                                     retirement:
    99.00 Budget authority..................           8           8           8
    99.01 Outlays...........................           8           8           8
    ---------------------------------------------------------------------------

                     Summary of Budget Authority and Outlays

                            (in millions of dollars)

                                         2002 actual  2003 est.   2004 est.
    Enacted/requested:
      Budget Authority..................         947       1,253         490
      Outlays...........................         966       1,227         502
    Legislative proposal, not subject to
        PAYGO:
      Budget Authority..................                                  48
      Outlays...........................                                  10
    Legislative proposal, subject to
        PAYGO:
      Budget Authority..................
      Outlays...........................                                  -5
                                        ------------------------------------
    Total:
      Budget Authority..................         947       1,253         538
      Outlays...........................         966       1,227         507
                                        ====================================

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

    ----------------------------------------------------------------------------
    Identification code 36-1119-0-1-704      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------
        Direct loan levels supportable by subsidy
                    budget authority:
    115001Acquired and Vendee Loans.........       1,051         311         284
    115002Native American Direct Loan Levels           5           3           3
    115003Transitional Housing Direct Loan
            Levels..........................                      20          20
                                               ---------   ---------  ----------
    115901Total direct loan levels..........       1,056         334         307
        Direct loan subsidy (in percent):
    132001Acquired and Vendee Loans.........        0.86       -1.39       10.88
    132002Native American Direct Loan Levels       -6.72       -8.96        0.28
    132003Transitional Housing Direct Loan
            Levels..........................        0.00       48.25       48.25
                                               ---------   ---------  ----------
    132901Weighted average subsidy rate.....        0.85        1.80       13.36
        Direct loan subsidy budget authority:
    133001Acquired and Vendee Loans.........           9          -4          31
    133002Native American Direct Loan Levels
    133003Transitional Housing Direct Loan
            Levels..........................                      10          10
                                               ---------   ---------  ----------
    133901Total subsidy budget authority....           9           6          41
        Direct loan subsidy outlays:
    134001Acquired and Vendee Loans.........          10          -4          31
    134002Native American Direct Loan Levels
    134003Transitional Housing Direct Loan
            Levels..........................                       5          10
                                               ---------   ---------  ----------
    134901Total subsidy outlays.............          10           1          41
        Direct loan upward reestimate subsidy budget
                    authority:
    135001Acquired and Vendee Loans.........          20         506
                                               ---------   ---------  ----------
    135901Total upward reestimate budget
            authority.......................          20         506
        Direct loan upward reestimate subsidy outlays:
    136001Acquired and Vendee Loans.........          20         506
                                               ---------   ---------  ----------
    136901Total upward reestimate outlays...          20         506
        Direct loan downward reestimate subsidy budget
                    authority:
    137001Acquired and Vendee Loans.........      -1,068        -308
    137002Native American Direct Loan Levels          -2          -4
                                               ---------   ---------  ----------
    137901Total downward reestimate budget
            authority.......................      -1,070        -312
        Direct loan downward reestimate subsidy
                    outlays:
    138001Acquired and Vendee Loans.........      -1,068        -308
    138002Native American Direct Loan Levels          -2          -4
                                               ---------   ---------  ----------
    138901Total downward reestimate subsidy
            outlays.........................      -1,070        -312
    ----------------------------------------------------------------------------

        Guaranteed loan levels supportable by subsidy
                    budget authority:
    215001Veterans Housing Benefit Program..      37,071      34,800      35,248
    215002Guaranteed Loan Sale Securities...         967         471
                                               ---------   ---------  ----------
    215901Total loan guarantee levels.......      38,038      35,271      35,248
        Guaranteed loan subsidy (in percent):
    232001Veterans Housing Benefit Program..        0.39        0.81        0.78
    232002Guaranteed Loan Sale Securities...        5.05        5.06        0.00
                                               ---------   ---------  ----------
    232901Weighted average subsidy rate.....        0.51        0.87        0.78
        Guaranteed loan subsidy budget authority:
    233001Veterans Housing Benefit Program..         145         282         275
    233002Guaranteed Loan Sale Securities...          49          24
                                               ---------   ---------  ----------
    233901Total subsidy budget authority....         194         306         275
        Guaranteed loan subsidy outlays:
    234001Veterans Housing Benefit Program..         145         282         275
    234002Guaranteed Loan Sale Securities...          49          24
                                               ---------   ---------  ----------
    234901Total subsidy outlays.............         194         306         275
        Guaranteed loan upward reestimate subsidy
                    budget authority:
    235001Veterans Housing Benefit Program..         532         245
                                               ---------   ---------  ----------
    235901Total upward reestimate budget
            authority.......................         532         245
        Guaranteed loan upward reestimate subsidy
                    outlays:
    236001Veterans Housing Benefit Program..         532         245
                                               ---------   ---------  ----------
    236901Total upward reestimate subsidy
            outlays.........................         532         245
        Guaranteed loan downward reestimate subsidy
                    budget authority:
    237001Veterans Housing Benefit Program..        -727        -568
                                               ---------   ---------  ----------
    237901Total downward reestimate subsidy
            budget authority................        -727        -568
        Guaranteed loan downward reestimate subsidy
                    outlays:
    238001Veterans Housing Benefit Program..        -727        -568
                                               ---------   ---------  ----------
    238901Total downward reestimate subsidy
            outlays.........................        -727        -568
    ----------------------------------------------------------------------------

    [[Page 829]]

        Administrative expense data:
    351001Budget authority..................         168         171         159
    359001Outlays from new authority........         168         171         159
    ---------------------------------------------------------------------------

        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 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.

        Veterans housing benefit program fund program account.--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 $60,000 or 25 percent of the
    loan.

        Native American veterans housing loan program account.--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. This is a pilot program that began in 1993 and is authorized
    through December 31, 2005.

        Guaranteed transitional housing loans for homeless veterans program
    account.--Public Law 105-368, the ``Veterans Benefits Improvement Act of
    1998,'' established a pilot project designed to expand the supply of
    transitional housing for homeless veterans and to guarantee up to 15
    investment loans with a maximum aggregate value of $100 million. The
    project must enforce sobriety standards and provide a wide range of
    supportive services such as counseling for substance abuse and job
    readiness skills. Residents will be required to pay a reasonable fee.
    The Administration will transmit legislation that will convert the
    program from a mandatory loan program to a discretionary grant program
    in order to improve service to veterans subject to Congressional
    authorization.

        Specially adapted housing grants.--Specially adapted housing grants,
    up to a maximum of $48,000, 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 $8,250. The
    following table shows caseload for this program. Specific performance
    goals are contained in VA's annual performance plan.

        Legislation is proposed to extend VA's authority to sell and/or
    lease acquired properties to government agencies, nonprofit
    organizations and veteran service organizations to use in providing
    services primarily to homeless veterans. The provision allowing VA to
    sell and/or lease these properties expires December 31, 2003.

                         CASELOAD AND AVERAGE COST DATA

                                         2002 actual  2003 est.   2004 est.

    Housing grants:
      Number of housing grants..........         575         600         600
      Average cost per grant............     $42,000     $42,000     $42,000
                                        ------------------------------------
          Total cost (in millions)......         $24         $25         $25
                                        ====================================

        The discretionary request in this appropriation provides for the
    corporate leadership and operational support to VA's housing business
    line. Additionally, funding is provided for capital asset investments.

        The Housing program 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]

                                         2002 actual  2003 est.   2004 est.

      Construction and valuation........         267         310         320
      Loan processing...................         832         750         750
      Loan service and claims...........         328         340         340
      Property management...............          39          41          42

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-1119-0-1-704      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------

          Personnel compensation:

    11.1    Full-time permanent.............          89          81          81
    11.5    Other personnel compensation....           1           1           1
                                               ---------   ---------  ----------
    11.9      Total personnel compensation..          90          82          82
    12.1  Civilian personnel benefits.......          24          20          20
    21.0  Travel and transportation of
            persons.........................           2           3           2
    23.1  Rental payments to GSA............           6
    23.2  Rental payments to others.........           1           3           3
    23.3  Communications, utilities, and
            miscellaneous charges...........           3          15          16
    24.0  Printing and reproduction.........                       1
    25.2  Other services....................          35          40          30
    26.0  Supplies and materials............           1           1           1
    31.0  Equipment.........................           3           4           3
    32.0  Land and structures...............           2           2           2
    41.0  Grants, subsidies, and
            contributions...................         780       1,092         340
                                               ---------   ---------  ----------
    99.9    Total new obligations...........         947       1,263         499
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 36-1119-0-1-704      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------
        Direct:
          Total compensable workyears:

    1001    Civilian full-time equivalent
              employment....................       1,718       1,519       1,446
        Reimbursable:
    2001  Total compensable workyears:
            Civilian full-time equivalent
            employment......................
    ---------------------------------------------------------------------------

                             Housing Program Account

                  (Legislative proposal, not subject to PAYGO)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-1119-2-1-704      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    08.89 Grants............................                                  48
                                               ---------   ---------  ----------
    10.00   Total new obligations (object
              class 41.0)...................                                  48
    ----------------------------------------------------------------------------

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

        New budget authority (gross), detail:
          Discretionary:

    40.00   Appropriation...................                                  48
    ----------------------------------------------------------------------------

        Change in obligated balances:
    73.10 Total new obligations.............                                  48
    73.20 Total outlays (gross).............                                 -10
    74.40 Obligated balance, end of year....                                  38
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new discretionary
            authority.......................                                  10
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................                                  48

    [[Page 830]]

    90.00 Outlays...........................                                  10
    ----------------------------------------------------------------------------

    Additional net budget authority and outlays to cover cost of fully accruing
                                     retirement:
    99.00 Budget authority..................
    99.01 Outlays...........................
    ---------------------------------------------------------------------------

                             Housing Program Account

                    (Legislative proposal, subject to PAYGO)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-1119-4-1-704      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Direct loan subsidy...............                                 -10
                                               ---------   ---------  ----------
    10.00   Total new obligations (object
              class 41.0)...................                                 -10
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    23.95 Total new obligations.............                                  10
    24.40 Unobligated balance carried
            forward, end of year............                                  10
    ----------------------------------------------------------------------------

        Change in obligated balances:
    73.10 Total new obligations.............                                 -10
    73.20 Total outlays (gross).............                                   5
    74.40 Obligated balance, end of year....                                  -5
    ----------------------------------------------------------------------------

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

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

    Additional net budget authority and outlays to cover cost of fully accruing
                                     retirement:
    99.00 Budget authority..................
    99.01 Outlays...........................
    ---------------------------------------------------------------------------

        The administration will transmit legislation that will convert the
    guaranteed transitional housing loans for homeless veterans program from
    a mandatory loan program to a discetionary grant program in order to
    improve service to veterans subject to Congressional authorization.

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

    ----------------------------------------------------------------------------
    Identification code 36-1119-4-1-704      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------
        Direct loan levels supportable by subsidy
                    budget authority:
    115003Transitional Housing for Homeless
            Veterans Direct Loans...........                                 -20
                                               ---------   ---------  ----------
    115901Total direct loan levels..........                                 -20
        Direct loan subsidy (in percent):
    132003Transitional Housing for Homeless
            Veterans Direct Loans...........                              -48.25
                                               ---------   ---------  ----------
    132901Weighted average subsidy rate.....                              -48.25
        Direct loan subsidy budget authority:
    133003Transitional Housing for Homeless
            Veterans Direct Loans...........                                 -10
                                               ---------   ---------  ----------
    133901Total subsidy budget authority....                                 -10
        Direct loan subsidy outlays:
    134003Transitional Housing for Homeless
            Veterans Direct Loans...........                                  -5
                                               ---------   ---------  ----------
    134901Total subsidy outlays.............                                  -5
    ---------------------------------------------------------------------------

                      Housing Direct Loan Financing Account

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4127-0-3-704      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Direct loans......................       1,051         311         284
    00.02 Interest on Treasury borrowing....         331         175         175
    00.03 Property sales expense............           3           3           3
    00.04 Property management/other expense.          -7           1           3
    00.05 Property improvement expense......           1           2           2
                                               ---------   ---------  ----------
    00.91   Direct Program by Activities--
              Subtotal (1 level)............       1,379         492         467
    08.01 Payment of negative subsidy to
            receipt account.................                       4
    08.02 Payment of downward reestimate to
            receipt account.................         714         260
    08.04 Payment of excess interest earned
            to receipt account..............         355          47
                                               ---------   ---------  ----------
    08.91   Direct Program by Activities--
              Subtotal (1 level)............       1,069         311
                                               ---------   ---------  ----------
    10.00   Total new obligations...........       2,448         803         467
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance carried
            forward, start of year..........          45         227         742
    22.00 New financing authority (gross)...       2,630       1,319         505
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......       2,675       1,546       1,247
    23.95 Total new obligations.............      -2,448        -803        -467
    24.40 Unobligated balance carried
            forward, end of year............         227         742         780
    ----------------------------------------------------------------------------

        New financing authority (gross), detail:
          Mandatory:

    67.10   Authority to borrow.............       3,738         628         292
    69.00 Offsetting collections (cash).....       1,524       1,368         378
    69.47 Portion applied to repay debt.....      -2,632        -677        -165
                                               ---------   ---------  ----------
    69.90   Spending authority from
              offsetting collections (total
              mandatory)....................      -1,108         691         213
                                               ---------   ---------  ----------
    70.00   Total new financing authority
              (gross).......................       2,630       1,319         505
    ----------------------------------------------------------------------------

        Change in obligated balances:
    72.40 Obligated balance, start of year..          52          78          27
    73.10 Total new obligations.............       2,448         803         467
    73.20 Total financing disbursements
            (gross).........................      -2,421        -855        -478
    74.40 Obligated balance, end of year....          78          27          16
    87.00 Total financing disbursements
            (gross).........................       2,421         855         478
    ----------------------------------------------------------------------------

        Offsets:
          Against gross financing authority and
              financing disbursements:

            Offsetting collections (cash)
                from:
              Federal sources:
    88.00       Federal sources:Payments
                  from program account......         -29        -506         -31
    88.00       Transfer of loan sales from
                  LSSA......................        -968        -470
              Non-Federal sources:
                Non-Federal sources:

    88.40         Repayments of principal...        -172        -223        -203
    88.40         Interest received on loans         -95        -150        -127
    88.40         Fees......................         -16          -1
    88.40         Downpayment on Vendee
                    loan/other..............         -26
    88.40         Cash sale of properties...         -21         -18         -17
    88.40         Interest income--Treasury.        -197
                                               ---------   ---------  ----------
    88.90       Total, offsetting
                  collections (cash)........      -1,524      -1,368        -378
    ----------------------------------------------------------------------------

        Net financing authority and financing
            disbursements:
    89.00 Financing authority...............       1,106         -49         127
    90.00 Financing disbursements...........         897        -513         100
    ---------------------------------------------------------------------------

                   Status of Direct Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4127-0-3-704      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------
        Position with respect to appropriations act
                    limitation on obligations:
    1111  Limitation on direct loans........
    1131  Direct loan obligations exempt
            from limitation.................       1,051         311         284
                                               ---------   ---------  ----------
    1150    Total direct loan obligations...       1,051         311         284
    ----------------------------------------------------------------------------

        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........       1,782       1,601       1,217
    1231  Disbursements: Direct loan
            disbursements...................       1,051         311         284
          Repayments:

    1251    Repayments and prepayments......        -172        -223        -204

    [[Page 831]]

    1253    Proceeds from loan asset sales
              to the public with recourse...        -968        -471
          Write-offs for default:

    1263    Direct loans....................          -5          -1          -1
    1264    Other adjustments, net..........         -87
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........       1,601       1,217       1,296
    ---------------------------------------------------------------------------

        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    2001 actual    2002 actual     2003 est.      2004 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
          Federal assets:

    1101    Fund balances with Treasury.....         133            305           270            292
            Investments in US securities:
    1106      Receivables, net..............                        506           140
          Net value of assets related to
              post-1991 direct loans
              receivable:

    1401    Direct loans receivable, gross..       1,782          1,601         1,217          1,296
    1402    Interest receivable.............                         48            36             38
    1403    Accounts receivable from
              foreclosed property...........           1              1
    1404    Foreclosed property.............                         64
    1405    Other assets....................       1,102            847           432            519
                                            ------------ --------------  ------------  -------------
    1499      Net present value of assets
                related to direct loans.....       2,885          2,561         1,685          1,853
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................       3,018          3,372         2,095          2,145
        LIABILITIES:
          Federal liabilities:

    2101    Accounts payable................
    2103    Debt............................       1,878          2,984         2,095          2,145
    2104    Resources payable to Treasury...
    2105    Other...........................       1,140            388
    2204  Non-Federal liabilities:
            Liabilities for loan guarantees.
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............       3,018          3,372         2,095          2,145
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position       3,018          3,372         2,095          2,145
    -----------------------------------------------------------------------------------------------

                    Housing Guaranteed Loan Financing Account

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4129-0-3-704      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Acquisition of homes..............       1,144       2,482       2,509
    00.02 Losses on defaulted loans.........         299         356         398
    00.03 Interest on Treasury borrowing....           1           1           1
    00.04 Reimburse DLFA for loan sales.....         970         471
    00.05 Payment to trustee reserve........          48           3
    00.06 Reimburse Liquidating for
            subordination certificate.......          33          30          25
    00.07 Loan Sale Closing Costs...........           2           1
    00.09 Property sales expense............          79         188         192
    00.10 Property management expense.......          60         135         138
    00.11 Property improvement expense......          16          72          74
    00.12 Loans acquired....................         272         270         273
                                               ---------   ---------  ----------
    00.91   Direct Program by Activities--
              Subtotal (1 level)............       2,924       4,009       3,610
    08.02 Payment of downward reestimate to
            receipt account.................         580         401
    08.04 Payment of excess interest to
            receipt account.................         147         166
                                               ---------   ---------  ----------
    08.91   Direct Program by Activities--
              Subtotal (1 level)............         727         567
                                               ---------   ---------  ----------
    10.00   Total new obligations...........       3,651       4,576       3,610
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance carried
            forward, start of year..........       4,634       5,090       5,356
    22.00 New financing authority (gross)...       4,107       4,842       4,166
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......       8,741       9,932       9,522
    23.95 Total new obligations.............      -3,651      -4,576      -3,610
    24.40 Unobligated balance carried
            forward, end of year............       5,090       5,356       5,912
    ----------------------------------------------------------------------------

        New financing authority (gross), detail:
          Mandatory:

    69.00   Offsetting collections (cash)...       4,107       4,842       4,166
    ----------------------------------------------------------------------------

        Change in obligated balances:
    72.40 Obligated balance, start of year..          62          25          85
    73.10 Total new obligations.............       3,651       4,576       3,610
    73.20 Total financing disbursements
            (gross).........................      -3,688      -4,516      -3,539
    74.40 Obligated balance, end of year....          25          85         156
    87.00 Total financing disbursements
            (gross).........................       3,688       4,516       3,539
    ----------------------------------------------------------------------------

        Offsets:
          Against gross financing authority and
              financing disbursements:

            Offsetting collections (cash)
                from:
              Federal sources:
                Federal sources:

    88.00         Payments from program
                    account.................        -724        -551        -275
    88.00         Recoveries from DLFA......        -945        -270        -295
    88.25     Interest on uninvested funds..        -295        -269        -300
              Non-Federal sources:
                Non-Federal sources:

    88.40         Funding fees..............        -512        -589        -593
    88.40         Cash sale of properties...        -536      -2,638      -2,679
    88.40         Redemption of properties
                    and other...............         -18
    88.40         Refunds from Trust........         -37
    88.40         Subordinate certificate
                    deposits................         -33         -30         -24
    88.45     Loan sale proceeds............      -1,007        -495
                                               ---------   ---------  ----------
    88.90       Total, offsetting
                  collections (cash)........      -4,107      -4,842      -4,166
    ----------------------------------------------------------------------------

        Net financing authority and financing
            disbursements:
    89.00 Financing authority...............
    90.00 Financing disbursements...........        -419        -326        -627
    ---------------------------------------------------------------------------

                 Status of Guaranteed Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4129-0-3-704      2002 actual   2003 est.   2004 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.................      37,071      34,800      35,248
    2132  Guaranteed loan commitments for
            loan asset sales with recourse..         970         471
                                               ---------   ---------  ----------
    2150    Total guaranteed loan
              commitments...................      38,041      35,271      35,248
    2199  Guaranteed amount of guaranteed
            loan commitments................      12,868      11,640      11,312
    ----------------------------------------------------------------------------

        Cumulative balance of guaranteed loans
                    outstanding:
    2210  Outstanding, start of year........     227,705     257,828     284,664
    2231  Disbursements of new guaranteed
            loans...........................      37,071      34,800      35,247
    2232  Guarantees of loans sold to the
            public with recourse............         970         471
    2251  Repayments and prepayments........      -6,153      -5,596      -6,152
          Adjustments:

    2261    Terminations for default that
              result in loans receivable....        -296        -355        -396
    2262    Terminations for default that
              result in acquisition of
              property......................      -1,144      -2,482      -2,509
    2263    Terminations for default that
              result in claim payments......         -52          -2          -4
    2264    Other adjustments, net..........        -273
                                               ---------   ---------  ----------
    2290    Outstanding, end of year........     257,828     284,664     310,850
    ----------------------------------------------------------------------------

        Memorandum:
    2299  Guaranteed amount of guaranteed
            loans outstanding, end of year..      87,734      96,580     104,895
    ----------------------------------------------------------------------------

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

    2310    Outstanding, start of year......         344         872       1,087
    2331    Disbursements for guaranteed
              loan claims...................         296         355         396
    2351    Repayments of loans receivable..         -21         -54         -67
    2361    Write-offs of loans receivable..         -45         -86        -104
    2364    Other adjustments, net..........         298
                                               ---------   ---------  ----------
    2390      Outstanding, end of year......         872       1,087       1,312
    ---------------------------------------------------------------------------

        As required by the Federal Credit Reform Act of 1990, this non-
    budgetary account records all cash flows to and from

    [[Page 832]]

    the Government resulting from loan guarantees committed in 1992 and
    beyond, including modifications of guaranteed loans that resulted from
    commitments in any year, and from the guarantee of loans sold through
    the securitization programs. 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    2001 actual    2002 actual     2003 est.      2004 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
          Federal assets:

    1101    Fund balances with Treasury.....       4,696          5,113         5,355          5,973
            Investments in US securities:
    1106      Receivables, net..............         594            255           272            301
          Net value of assets related to
              post-1991 acquired defaulted
              guaranteed loans receivable:

    1501    Defaulted guaranteed loans
              receivable, gross.............         344            872         1,086          1,310
    1502    Interest receivable.............           9
    1504    Accounts receivable from
              foreclosed property...........         830              9            10             11
    1505    Other assets....................          43             34            26             35
                                            ------------ --------------  ------------  -------------
    1599      Net present value of assets
                related to defaulted
                guaranteed loans............       1,226            915         1,122          1,356
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................       6,516          6,283         6,749          7,630
        LIABILITIES:
          Federal liabilities:

    2101    Federal liabilities: Debt.......          26             19
    2105    Other liabilities...............                        410           384            389
          Non-Federal liabilities:

    2201    Accounts payable................       1,129             14            16             18
    2204    Non-federal liabilities.........       5,361          5,840         6,349          7,223
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............       6,516          6,283         6,749          7,630
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position       6,516          6,283         6,749          7,630
    -----------------------------------------------------------------------------------------------

                           Housing Liquidating Account

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4025-0-3-704      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Capital investments:

    00.01   Acquisition of homes............          53          42          38
    00.02   Property improvements...........           3           3           3
    00.03   Cash advances...................           2           2           2
    00.04   Acquisition of defaulted
              guaranteed loans..............          12          14          11
    00.05   Repurchase of loans sold........           7
                                               ---------   ---------  ----------
    00.91     Total capital investments.....          77          61          54
                                               ---------   ---------  ----------
    01.00   Total capital investments.......          77          61          54
          Operating expenses:

    01.02   Property management expense.....           9           8           7
    01.03   Sales expense...................           9           8           7
    01.04   Claims processed................                      26          23
    01.05   Other operating expenses........          -1
                                               ---------   ---------  ----------
    01.91     Total operating expenses......          17          42          37
                                               ---------   ---------  ----------
    10.00   Total new obligations (object
              class 33.0)...................          94         103          91
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance carried
            forward, start of year..........         115          26
    22.00 New budget authority (gross)......         194         174         134
    22.40 Capital transfer to general fund..        -189         -96         -42
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......         120         104          92
    23.95 Total new obligations.............         -94        -103         -91
    24.40 Unobligated balance carried
            forward, end of year............          26
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Mandatory:

    69.00   Offsetting collections (cash)...         224         174         134
    69.10   Change in uncollected customer
              payments from Federal sources
              (unexpired)...................         -30
                                               ---------   ---------  ----------
    69.90     Spending authority from
                offsetting collections
                (total mandatory)...........         194         174         134
    ----------------------------------------------------------------------------

        Change in obligated balances:
    72.40 Obligated balance, start of year..         -23           4
    73.10 Total new obligations.............          94         103          91
    73.20 Total outlays (gross).............         -97        -107         -91
    74.00 Change in uncollected customer
            payments from Federal sources
            (unexpired).....................          30
    74.40 Obligated balance, end of year....           4
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new mandatory
            authority.......................          97         107          91
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

            Offsetting collections (cash)
                from:
    88.00     Federal sources: Payments from
                direct loan financing
                account.....................         -55         -40         -11
              Non-Federal sources:
                Non-Federal sources:

    88.40         Loan and other repayments.         -34         -30         -27
    88.40         Sale of homes, cash.......         -52         -47         -42
    88.40         Interest on loans.........         -29         -26         -24
    88.40         Collection of claims......                      -7          -2
    88.40         Other revenues............         -54         -24         -28
                                               ---------   ---------  ----------
    88.90       Total, offsetting
                  collections (cash)........        -224        -174        -134
          Against gross budget authority only:

    88.95   Change in uncollected customer
              payments from Federal sources
              (unexpired)...................          30
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................
    90.00 Outlays...........................        -127         -67         -43
    ---------------------------------------------------------------------------

                   Status of Direct Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4025-0-3-704      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------
        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........         128         149         119
    1232  Disbursements: Purchase of loans
            assets from the public..........           7
    1251  Repayments: Repayments and
            prepayments.....................         -34         -30         -27
    1264  Write-offs for default: Other
            adjustments, net................          48
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........         149         119          92
    ---------------------------------------------------------------------------

                 Status of Guaranteed Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4025-0-3-704      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------
        Cumulative balance of guaranteed loans
                    outstanding:
    2210  Outstanding, start of year........       9,182       6,704       4,859
    2251  Repayments and prepayments........      -2,413      -1,762      -1,277
          Adjustments:

    2261    Terminations for default that
              result in loans receivable....         -12         -14         -11
    2262    Terminations for default that
              result in acquisition of
              property......................         -53         -43         -38
    2263    Terminations for default that
              result in claim payments......                     -26         -24
    2264    Other adjustments, net..........
                                               ---------   ---------  ----------
    2290    Outstanding, end of year........       6,704       4,859       3,509
    ----------------------------------------------------------------------------

        Memorandum:
    2299  Guaranteed amount of guaranteed
            loans outstanding, end of year..       3,012       2,155       1,526
    ----------------------------------------------------------------------------

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

    2310    Outstanding, start of year......         274         282         286
    2331    Disbursements for guaranteed
              loan claims...................          12          14          11
    2361    Write-offs of loans receivable..          -4         -10          -8
    2364    Other adjustments, net..........
                                               ---------   ---------  ----------
    2390      Outstanding, end of year......         282         286         289
    ---------------------------------------------------------------------------

    [[Page 833]]

                            Statement of Operations (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   36-4025-0-3-704    2001 actual    2002 actual     2003 est.      2004 est.
    -----------------------------------------------------------------------------------------------
    0101  Revenue...........................         140            112            89             72
    0102  Expense...........................        -140            -82           -90            -87
                                            ------------ --------------  ------------  -------------
    0105  Net income or loss (-)............                         30            -1            -15
    -----------------------------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   36-4025-0-3-704    2001 actual    2002 actual     2003 est.      2004 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
          Federal assets:

    1101    Fund balances with Treasury.....                         29            26             24
            Investments in US securities:
    1106      Receivables, net..............         128              6             5              4
    1201  Non-Federal assets: Investments in
            non-Federal securities, net.....         452            203           182            164
          Net value of assets related to
              post-1991 direct loans
              receivable:

    1401    Direct loans receivable, gross..                        149           119             92
    1402    Interest receivable.............                         92            83             75
                                            ------------ --------------  ------------  -------------
    1499      Net present value of assets
                related to direct loans.....                        241           202            167
    1901  Other Federal assets: Other assets                         -3            13             26
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................         580            476           428            385
        LIABILITIES:
    2103  Federal liabilities: Debt.........         567            466           419            377
    2207  Non-Federal liabilities: Other....          13             10             9              8
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............         580            476           428            385
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position         580            476           428            385
    -----------------------------------------------------------------------------------------------

        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 and loan guarantees committed prior to 1992. All new
    activity in this program in 1992 and beyond is recorded in the
    corresponding program and financing accounts.

     Native American and Transitional Housing Direct Loan Financing Account

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4130-0-3-704      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Direct loans......................           6          13          23
    00.03 Interest on Treasury borrowing....           1           1           2
                                               ---------   ---------  ----------
    00.91   Direct Program by Activities--
              Subtotal (1 level)............           7          14          25
    08.02 Payment of downward reestimate to
            receipt account.................           2           4
                                               ---------   ---------  ----------
    10.00   Total new obligations...........           9          18          25
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance carried
            forward, start of year..........                       2
    22.00 New financing authority (gross)...          11          16          25
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......          11          18          25
    23.95 Total new obligations.............          -9         -18         -25
    24.40 Unobligated balance carried
            forward, end of year............           2
    ----------------------------------------------------------------------------

        New financing authority (gross), detail:
          Mandatory:

    67.10   Authority to borrow.............           9          10          13
          Spending authority from offsetting
              collections:

            Discretionary:
    68.00     Offsetting collections (cash).           6           8          15
    68.47     Portion applied to repay debt.          -4          -2          -3
                                               ---------   ---------  ----------
    68.90       Spending authority from
                  offsetting collections
                  (total discretionary).....           2           6          12
                                               ---------   ---------  ----------
    70.00   Total new financing authority
              (gross).......................          11          16          25
    ----------------------------------------------------------------------------

        Change in obligated balances:
    72.40 Obligated balance, start of year..                                   1
    73.10 Total new obligations.............           9          18          25
    73.20 Total financing disbursements
            (gross).........................          -9         -17         -24
    74.40 Obligated balance, end of year....                       1           2
    87.00 Total financing disbursements
            (gross).........................           9          17          24
    ----------------------------------------------------------------------------

        Offsets:
          Against gross financing authority and
              financing disbursements:

            Offsetting collections (cash)
                from:
    88.00     Federal sources...............                      -5         -10
    88.25     Interest on uninvested funds..          -1
              Non-Federal sources:
    88.40       Non-federal sources--
                  Repayments and prepayments
                  of principal..............                      -1          -1
    88.40       Non-Federal sources--
                  Interest received on loans          -1          -2          -4
    88.40       Non-Federal sources--Fees...
    88.40       Non-Federal sources--Other
                  income....................          -4
                                               ---------   ---------  ----------
    88.90       Total, offsetting
                  collections (cash)........          -6          -8         -15
    ----------------------------------------------------------------------------

        Net financing authority and financing
            disbursements:
    89.00 Financing authority...............           5           8          10
    90.00 Financing disbursements...........           3           9           9
    ---------------------------------------------------------------------------

                   Status of Direct Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4130-0-3-704      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------
        Position with respect to appropriations act
                    limitation on obligations:
    1111  Limitation on direct loans........
    1121  Limitation available from carry-
            forward.........................         100         100          90
    1131  Direct loan obligations exempt
            from limitation.................           6           3           3
    1143  Unobligated limitation carried
            forward (P.L. 105-368)..........        -100         -90         -70
                                               ---------   ---------  ----------
    1150    Total direct loan obligations...           6          13          23
    ----------------------------------------------------------------------------

        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........          19          18          30
    1231  Disbursements: Direct loan
            disbursements...................           6          13          23
    1251  Repayments: Repayments and
            prepayments.....................          -1          -1          -2
    1264  Write-offs for default: Other
            adjustments, net................          -6
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........          18          30          51
    ---------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   36-4130-0-3-704    2001 actual    2002 actual     2003 est.      2004 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
          Federal assets:

            Investments in US securities:
    1106      Receivables, net..............                                        1              2
    1107      Advances and prepayments......                          2             1              1
          Net value of assets related to
              post-1991 direct loans
              receivable:

    1401    Direct loans receivable, gross..          19             18            30             51
    1402    Interest receivable.............                          5             6              7
                                            ------------ --------------  ------------  -------------
    1499      Net present value of assets
                related to direct loans.....          19             23            36             58
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................          19             25            38             61
        LIABILITIES:
          Federal liabilities:

    2101    Accounts payable................
    2103    Federal liabilities debt........          19             21            29             41
    2105    Other liabilities...............                          4             9             20
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............          19             25            38             61
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position          19             25            38             61
    -----------------------------------------------------------------------------------------------

        This account contains information on the Native American Veterans
    Housing Loan program and the Guaranteed Transitional Housing Loans for
    Homeless Veterans program. The Transitional Housing loans are 100%
    guaranteed and use the Federal Financing Bank (FFB) as the lending
    institution. For budget purposes, all FFB loans shall be treated as
    direct loans.

        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 obligation in 1992

    [[Page 834]]

    and beyond. The amounts in the account are means of financing and are
    not included in the budget totals.

     Native American and Transitional Housing Direct Loan Financing Account

                    (Legislative proposal, subject to PAYGO)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4130-4-3-704      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Direct loans......................                                 -10
                                               ---------   ---------  ----------
    10.00   Total new obligations...........                                 -10
    ----------------------------------------------------------------------------

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

        New financing authority (gross), detail:
          Mandatory:

    67.10   Authority to borrow.............                                  -5
          Discretionary:

    68.00   Spending authority from
              offsetting collections:
              Offsetting collections (cash).                                  -5
                                               ---------   ---------  ----------
    70.00   Total new financing authority
              (gross).......................                                 -10
    ----------------------------------------------------------------------------

        Change in obligated balances:
    73.10 Total new obligations.............                                 -10
    73.20 Total financing disbursements
            (gross).........................                                   9
    74.40 Obligated balance, end of year....                                  -1
    87.00 Total financing disbursements
            (gross).........................                                  -9
    ----------------------------------------------------------------------------

        Offsets:
          Against gross financing authority and
              financing disbursements:

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

        Net financing authority and financing
            disbursements:
    89.00 Financing authority...............                                  -5
    90.00 Financing disbursements...........                                  -4
    ---------------------------------------------------------------------------

        The administration will transmit legislation that will convert the
    guaranteed transitional housing loans for homeless veterans program from
    a mandatory loan program to a discretionary grant program in order to
    improve service to veterans subject to Congressional authorization.

                   Status of Direct Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4130-4-3-704      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------
        Position with respect to appropriations act
                    limitation on obligations:
    1111  Limitation on direct loans........
    1121  Limitation available from carry-
            forward.........................
    1131  Direct loan obligations exempt
            from limitation.................
    1143  Unobligated limitation carried
            forward (P.L. 105-368)..........                                 -10
                                               ---------   ---------  ----------
    1150    Total direct loan obligations...                                 -10
    ----------------------------------------------------------------------------

        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........
    1231  Disbursements: Direct loan
            disbursements...................                                 -10
    1251  Repayments: Repayments and
            prepayments.....................
          Write-offs for default:

    1263    Direct loans....................
    1264    Other adjustments, net..........
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........                                 -10
    ---------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   36-4130-4-3-704    2001 actual    2002 actual     2003 est.      2004 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
          Federal assets:

            Investments in US securities:
    1106      Receivables, net..............                                                      -1
    1107      Advances and prepayments......
          Net value of assets related to
              post-1991 direct loans
              receivable:

    1401    Direct loans receivable, gross..                                                     -10
    1402    Interest receivable.............
                                            ------------ --------------  ------------  -------------
    1499      Net present value of assets
                related to direct loans.....                                                     -10
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................                                                     -11
        LIABILITIES:
          Federal liabilities:

    2101    Accounts payable................                                                      -5
    2103    Federal liabilities debt........                                                      -6
    2105    Other liabilities...............
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............                                                     -11
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position                                                     -11
    -----------------------------------------------------------------------------------------------

          Vocational Rehabilitation and Education Loans Program Account

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

    ----------------------------------------------------------------------------
    Identification code 36-0140-0-1-702      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------
        Direct loan levels supportable by subsidy
                    budget authority:
    115001Vocational Rehabiliation..........           3           3           4
    115002Education Loans...................
                                               ---------   ---------  ----------
    115901Total direct loan levels..........           3           3           4
        Direct loan subsidy (in percent):
    132001Vocational Rehabiliation..........        2.18        1.50        1.33
    132002Education Loans...................        0.00        6.49        0.00
                                               ---------   ---------  ----------
    132901Weighted average subsidy rate.....        0.00        0.00        0.00
        Direct loan subsidy budget authority:
    133001Vocational Rehabiliation..........
    133002Education Loans...................
                                               ---------   ---------  ----------
    133901Total subsidy budget authority....
        Direct loan subsidy outlays:
    134001Vocational Rehabiliation..........
    134002Education Loans...................
                                               ---------   ---------  ----------
    134901Total subsidy outlays.............
    ----------------------------------------------------------------------------

        Administrative expense data:
    351001Budget authority..................
    358001Outlays from balances.............
    ---------------------------------------------------------------------------

        The Vocational Rehabilitation Loan program's administrative and
    subsidy costs are appropriated under ``Vocational Rehabilitation and
    Employment.'' The Education Loan program's administrative and subsidy
    costs are approriated under ``Education.''

        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.

    [[Page 835]]

      Vocational Rehabilitation and Education Direct Loan Financing Account

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4259-0-3-702      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Direct loans......................           3           3           4
                                               ---------   ---------  ----------
    10.00   Total new obligations (object
              class 33.0)...................           3           3           4
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New financing authority (gross)...           3           3           4
    23.95 Total new obligations.............          -3          -3          -4
    ----------------------------------------------------------------------------

        New financing authority (gross), detail:
          Mandatory:

    67.10   Authority to borrow (indefinite)           3           3           4
          Spending authority from offsetting
              collections:

            Discretionary:
    68.00     Spending Authority from
                Offsetting collections
                (cash)......................           3           3           4
    68.47     Portion applied to repay debt
                (-).........................          -3          -3          -4
                                               ---------   ---------  ----------
    68.90       Spending authority from
                  offsetting collections
                  (total discretionary).....
                                               ---------   ---------  ----------
    70.00   Total new financing authority
              (gross).......................           3           3           4
    ----------------------------------------------------------------------------

        Change in obligated balances:
    73.10 Total new obligations.............           3           3           4
    73.20 Total financing disbursements
            (gross).........................          -3          -3          -4
    87.00 Total financing disbursements
            (gross).........................           3           3           4
    ----------------------------------------------------------------------------

        Offsets:
          Against gross financing authority and
              financing disbursements:

            Offsetting collections (cash)
                from:
              Non-Federal sources:
    88.40       Repayments and prepayments
                  of principal..............
    88.40       Repayments and prepayments
                  of principal..............          -3          -3          -4
                                               ---------   ---------  ----------
    88.90       Total, offsetting
                  collections (cash)........          -3          -3          -4
    ----------------------------------------------------------------------------

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

                   Status of Direct Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4259-0-3-702      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------
        Position with respect to appropriations act
                    limitation on obligations:
    1111  Limitation on direct loans........           3           3           4
                                               ---------   ---------  ----------
    1150    Total direct loan obligations...           3           3           4
    ----------------------------------------------------------------------------

        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........           1           1           1
    1231  Disbursements: Direct loan
            disbursements...................           3           3           4
    1251  Repayments: Repayments and
            prepayments (-).................          -3          -3          -4
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........           1           1           1
    ---------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   36-4259-0-3-702    2001 actual    2002 actual     2003 est.      2004 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
          Net value of assets related to
              post-1991 direct loans
              receivable:

    1401    Direct loans receivable, gross..                          1             1              1
                                            ------------ --------------  ------------  -------------
    1499      Net present value of assets
                related to direct loans.....                          1             1              1
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................                          1             1              1
        LIABILITIES:
    2103  Federal liabilities: Debt.........                          1             1              1
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............                          1             1              1
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position                          1             1              1
    -----------------------------------------------------------------------------------------------

        This account contains information on the Vocational Rehabilitation
    Loan Program and Education Loan Program.

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

                                   Trust Funds

                   Post-Vietnam Era Veterans Education Account

                  Unavailable Collections (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-8133-0-7-702      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------
    01.99 Balance, start of year............
        Receipts:
    02.20 Deductions from military pay......           1           1           1
    02.40 Contributions.....................           1           2           1
                                               ---------   ---------  ----------
    02.99   Total receipts and collections..           2           3           2
        Appropriations:
    05.00 Post-Vietnam era veterans
            education account...............          -2          -3          -2
                                               ---------   ---------  ----------
    07.99 Balance, end of year..............
    ---------------------------------------------------------------------------

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-8133-0-7-702      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Payment to post-Vietnam era
            trainees........................           2           3           2
    00.03 Participant disenrollments........           7           9           9
                                               ---------   ---------  ----------
    10.00   Total new obligations...........           9          12          11
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance carried
            forward, start of year..........          86          79          70
    22.00 New budget authority (gross)......           2           3           2
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......          88          82          72
    23.95 Total new obligations.............          -9         -12         -11
    24.40 Unobligated balance carried
            forward, end of year............          79          70          62
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Mandatory:

    60.26   Appropriation (trust fund)......           2           3           2
    ----------------------------------------------------------------------------

        Change in obligated balances:
    72.40 Obligated balance, start of year..           2           1           2
    73.10 Total new obligations.............           9          12          11
    73.20 Total outlays (gross).............          -8         -12         -11
    74.40 Obligated balance, end of year....           1           2           2
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new mandatory
            authority.......................           2           3           2
    86.98 Outlays from mandatory balances...           6           9           9
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........           8          12          11
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................           2           3           2
    90.00 Outlays...........................           9          12          11
    ---------------------------------------------------------------------------

        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. Public Law 106-419, enacted November 1, 2000, provides qualified
    participants in this program another opportunity (through October 31,
    2001) to convert to the All-Volunteer Force Educational Assistance
    program (Montgomery GI Bill). The estimated activity in the fund
    follows:

    [[Page 836]]

        CONTRIBUTIONS, PARTICIPANTS, DISENROLLMENTS, REFUNDS AND TRAINEES

                            [In millions of dollars]

                                         2002 actual  2003 est.   2004 est.

    Total budget authority..............          $2          $3          $2
      Servicepersons....................          $1          $1          $1
      Transferred from Department of
        Defense (bonus).................          $1          $1          $1
      Transferred from Department of
        Defense (matching)..............          $0          $1          $1
      Transferred from Department of
        Defense (section 901)...........          $0          $0          $0
    Total participants (end of year)....     202,909     192,909     183,109
    Total contributors (end of year)....         912         800         800
    Average contribution per contributor
    (actual dollars)....................        $923        $923        $923
    Number of disenrollments............      10,700      10,800      10,600
    Total refunds.......................          $6          $9          $9
    Total trainees......................       1,145         980         880
    Total trainee cost..................          $2          $3          $2
    Average cost per trainee (actual
    dollars)............................      $1,772      $3,122      $2,375
    Section 901 trainees................          34          20          20

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-8133-0-7-702      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------
    41.0  Grants, subsidies, and
            contributions...................           2           3           2
    44.0  Refunds...........................           7           9           9
                                               ---------   ---------  ----------
    99.9    Total new obligations...........           9          12          11
    ---------------------------------------------------------------------------

                      National Service Life Insurance Fund

                  Unavailable Collections (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-8132-0-7-701      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------
    01.99 Balance, start of year............      10,237      10,027       9,741
        Receipts:
    02.20 Premium and other receipts........         185         183         171
    02.40 Interest..........................         823         766         719
    02.41 Payments from general and special
            funds...........................           1           1           1
    02.80 National Service Life Insurance
            fund, offsetting collections....         475         450         423
                                               ---------   ---------  ----------
    02.99   Total receipts and collections..       1,484       1,400       1,314
                                               ---------   ---------  ----------
    04.00 Total: Balances and collections...      11,721      11,427      11,055
        Appropriations:
    05.00 National Service Life Insurance
            fund............................      -1,694      -1,686      -1,658
                                               ---------   ---------  ----------
    05.99   Total appropriations............      -1,694      -1,686      -1,658
                                               ---------   ---------  ----------
    07.99 Balance, end of year..............      10,027       9,741       9,397
    ---------------------------------------------------------------------------

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-8132-0-7-701      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Direct:

            Operating expenses:
    00.01     Death claims..................         621         635         652
    00.02     Disability claims.............          13          12          11
    00.03     Matured endowments............           5           7           9
    00.04     Cash surrenders...............          31          32          32
    00.05     Dividends.....................         346         323         286
    00.06     Interest paid on dividend
                credits and deposits........          58          57          56
    00.07     Payment to Insurance account..          20          22          22
                                               ---------   ---------  ----------
    00.91       Total operating expenses....       1,094       1,088       1,068
    02.01 Capital investment: Policy loans..          85          83          85
                                               ---------   ---------  ----------
    02.93   Total direct obligations........       1,179       1,171       1,153
          Reimbursable program:

    09.01   Death claims....................         293         301         309
    09.02   Disability Claims...............           6           6           5
    09.03   Matured Endowments..............           3           3           4
    09.04   Cash Surrenders.................          14          15          15
    09.05   Dividends.......................         163         153         136
    09.06   Interest paid on dividend
              credits and deposits..........          27          27          26
    09.07   Payment to Insurance account....           9          10          10
                                               ---------   ---------  ----------
    09.09     Reimbursable program..........         515         515         505
                                               ---------   ---------  ----------
    10.00   Total new obligations...........       1,694       1,686       1,658
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......       1,694       1,686       1,658
    23.95 Total new obligations.............      -1,694      -1,686      -1,658
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Mandatory:

    60.26   Appropriation (trust fund)......       1,008         950         892
    69.00 Offsetting collections (cash).....         475         450         423
    69.26 From offsetting collections
            (unavailable balances)..........         211         286         343
                                               ---------   ---------  ----------
    69.90   Spending authority from
              offsetting collections (total
              mandatory)....................         686         736         766
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................       1,694       1,686       1,658
    ----------------------------------------------------------------------------

        Change in obligated balances:
    72.40 Obligated balance, start of year..       1,403       1,446       1,488
    73.10 Total new obligations.............       1,694       1,686       1,658
    73.20 Total outlays (gross).............      -1,651      -1,644      -1,620
    74.40 Obligated balance, end of year....       1,446       1,488       1,526
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new mandatory
            authority.......................       1,483       1,400       1,315
    86.98 Outlays from mandatory balances...         168         244         305
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........       1,651       1,644       1,620
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

            Offsetting collections (cash)
                from:
              Non-Federal sources:
    88.40       Repayments of loans.........        -131        -122        -114
    88.40       Optional settlements........          -1          -1          -1
    88.40       Net income offsets
                  adjustments...............        -343        -327        -308
                                               ---------   ---------  ----------
    88.90       Total, offsetting
                  collections (cash)........        -475        -450        -423
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................       1,219       1,236       1,235
    90.00 Outlays...........................       1,176       1,194       1,197
    ----------------------------------------------------------------------------

        Memorandum (non-add) entries:
    92.01 Total investments, start of year:
            Federal securities: Par value...      11,639      11,465      11,229
    92.02 Total investments, end of year:
            Federal securities: Par value...      11,465      11,229      10,923
    ---------------------------------------------------------------------------
        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. It is 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

                                         2002 actual  2003 est.   2004 est.

    Number of policies..................   1,502,463   1,396,960   1,291,620
    Insurance in force (dollars in
    millions)...........................     $15,550     $14,809     $14,005

        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 $11,991 million as of September 30, 2003 to $11,587
    million as of September 30, 2004. The actuarial estimate of policy
    obligations as of September 30, 2003, total $11,315 million, leaving a
    balance of $272 million for contingency reserves.

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

    [[Page 837]]

                      Status of Funds (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-8132-0-7-701      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------
        Unexpended balance, start of year:
    0100  Uninvested balance [unavailable
            collections]....................           1           8
    0101  Federal securities: Par value.....      11,639      11,465      11,229
                                               ---------   ---------  ----------
    0199    Total balance, start of year....      11,640      11,473      11,229
        Cash income during the year:
          Current law:

            Offsetting receipts
                (proprietary):
    1220      NSLI fund, premium and other
                receipts....................         185         183         171
            Offsetting receipts
                (intragovernmental):
    1240      NSLI fund,interest............         823         766         719
    1241      NSLI fund, payments from
                general and special funds...           1           1           1
            Offsetting collections:
    1280      NSLI fund, offsetting
                collections.................         475         450         423
                                               ---------   ---------  ----------
    1299      Income under present law......       1,484       1,400       1,314
        Cash outgo during year:
          Current law:

    4500    National service life insurance
              fund..........................      -1,651      -1,644      -1,620
        Unexpended balance, end of year:
    8700  Uninvested balance................           8
    8701  Federal securities: Par value.....      11,465      11,229      10,923
                                               ---------   ---------  ----------
    8799    Total balance, end of year......      11,473      11,229      10,923
    ---------------------------------------------------------------------------

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-8132-0-7-701      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------

          Direct obligations:

    33.0    Investments and loans...........          85          83          85
    42.0    Insurance claims and indemnities         670         686         704
    43.0    Interest and dividends..........         425         401         364
                                               ---------   ---------  ----------
    99.0      Direct obligations............       1,180       1,170       1,153
    99.0  Reimbursable obligations..........         514         516         505
                                               ---------   ---------  ----------
    99.9    Total new obligations...........       1,694       1,686       1,658
    ---------------------------------------------------------------------------

        Legislation will be proposed to authorize payment of NSLI and USGLI
    proceeds to an alternate beneficiary when the proceeds have not been
    claimed by the named beneficiary within two years following the death of
    the policyholder or within two years of enactment, whichever is later.
    There are no anticipated costs in 2004, since the first payment would
    not be made until two years after enactment.

                  United States Government Life Insurance Fund

                  Unavailable Collections (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-8150-0-7-701      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------
    01.99 Balance, start of year............          50          44          39
        Receipts:
    02.40 Interest and profits on
            investments in public debt
            securities......................           4           4           3
    02.80 United States government life
            insurance fund, offsetting
            collections.....................           1           1           1
                                               ---------   ---------  ----------
    02.99   Total receipts and collections..           5           5           4
                                               ---------   ---------  ----------
    04.00 Total: Balances and collections...          55          49          43
        Appropriations:
    05.00 United States government life
            insurance fund..................         -11         -10          -9
                                               ---------   ---------  ----------
    05.99   Total appropriations............         -11         -10          -9
                                               ---------   ---------  ----------
    07.99 Balance, end of year..............          44          39          34
    ---------------------------------------------------------------------------

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-8150-0-7-701      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Operating expenses:

    00.01   Death claims....................           2           2           1
    00.05   Dividends.......................           1
    00.06   Interest paid on dividend
              credits and deposits..........           1           1           1
    00.07   Other Costs.....................           1           1           1
    09.01 Death Claims......................           4           4           4
    09.02 Dividends.........................           2           2           2
                                               ---------   ---------  ----------
    09.09   Reimbursable program............           6           6           6
                                               ---------   ---------  ----------
    10.00   Total new obligations...........          11          10           9
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......          11          10           9
    23.95 Total new obligations.............         -11         -10          -9
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Mandatory:

    60.26   Appropriation (trust fund)......           5           4           3
    69.00 Offsetting collections (cash).....           1           1           1
    69.26 From offsetting collections
            (unavailable balances)..........           5           5           5
                                               ---------   ---------  ----------
    69.90   Spending authority from
              offsetting collections (total
              mandatory)....................           6           6           6
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................          11          10           9
    ----------------------------------------------------------------------------

        Change in obligated balances:
    72.40 Obligated balance, start of year..          19          18          17
    73.10 Total new obligations.............          11          10           9
    73.20 Total outlays (gross).............         -11         -11         -11
    74.40 Obligated balance, end of year....          18          17          15
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new mandatory
            authority.......................           5           4           4
    86.98 Outlays from mandatory balances...           6           7           7
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........          11          11          11
    ----------------------------------------------------------------------------

        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..................          10           9           9
    90.00 Outlays...........................          10          11          10
    ----------------------------------------------------------------------------

        Memorandum (non-add) entries:
    92.01 Total investments, start of year:
            Federal securities: Par value...          67          62          55
    92.02 Total investments, end of year:
            Federal securities: Par value...          62          55          48
    ---------------------------------------------------------------------------
        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

                                         2002 actual  2003 est.   2004 est.
    Number of policies..................      13,217      11,700      10,240
    Insurance in force (dollars in
    millions)...........................         $42         $37         $32

        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 because 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 $59 million
    as of September 30, 2003, to $52 million as of September 30, 2004, as an
    increasing number of policies mature through death or disability. The
    actuarial evaluation of policy obligations as of September 30, 2004,
    totals $51 million, leaving a balance of $1 million for contingency
    reserves.

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

    [[Page 838]]

                      Status of Funds (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-8150-0-7-701      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------
        Unexpended balance, start of year:
    0101  Federal securities: Par value.....          67          62          55
                                               ---------   ---------  ----------
    0199    Total balance, start of year....          69          62          56
        Cash income during the year:
          Current law:

            Offsetting receipts
                (intragovernmental):
    1240      Interest and profits on
                investments in public debt
                securities, USGLI, VA.......           4           4           3
            Offsetting collections:
    1280      Offsetting collections, USGLI.           1           1           1
                                               ---------   ---------  ----------
    1299      Income under present law......           5           5           4
        Cash outgo during year:
          Current law:

    4500    United States government life
              insurance fund................         -11         -11         -11
        Unexpended balance, end of year:
    8701  Federal securities: Par value.....          62          55          48
                                               ---------   ---------  ----------
    8799    Total balance, end of year......          62          56          49
    ---------------------------------------------------------------------------

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-8150-0-7-701      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------

          Direct obligations:

    42.0    Insurance claims and indemnities           2           2           1
    43.0    Interest and dividends..........           3           2           2
                                               ---------   ---------  ----------
    99.0      Direct obligations............           5           4           3
    99.0  Reimbursable obligations..........           6           6           6
                                               ---------   ---------  ----------
    99.9    Total new obligations...........          11          10           9
    ---------------------------------------------------------------------------

                      Veterans Special Life Insurance Fund

                  Unavailable Collections (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-8455-0-8-701      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------
    01.99 Balance, start of year............       1,488       1,516       1,530
        Receipts:
    02.80 Veterans special life insurance
            fund, offsetting collections....         236         231         226
                                               ---------   ---------  ----------
    04.00 Total: Balances and collections...       1,724       1,747       1,756
        Appropriations:
    05.00 Veterans special life insurance
            fund............................        -208        -217        -219
                                               ---------   ---------  ----------
    05.99   Total appropriations............        -208        -217        -219
                                               ---------   ---------  ----------
    07.99 Balance, end of year..............       1,516       1,530       1,537
    ---------------------------------------------------------------------------

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-8455-0-8-701      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    09.01 Death claims......................          59          65          71
    09.02 Cash surrenders...................           4           5           5
    09.03 Dividends.........................          93          88          85
    09.04 All other.........................          31          38          37
    09.05 Payments to Insurance account.....           5           5           5
    09.06 Capital investment................          16          16          16
                                               ---------   ---------  ----------
    10.00   Total new obligations...........         208         217         219
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......         208         217         219
    23.95 Total new obligations.............        -208        -217        -219
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Mandatory:

    69.00   Offsetting collections (cash)...         236         231         226
    69.26   From offsetting collections
              (unavailable balances)........         -28         -14          -7
                                               ---------   ---------  ----------
    69.90     Spending authority from
                offsetting collections
                (total mandatory)...........         208         217         219
    ----------------------------------------------------------------------------

        Change in obligated balances:
    72.40 Obligated balance, start of year..         269         292         315
    73.10 Total new obligations.............         208         217         219
    73.20 Total outlays (gross).............        -184        -194        -198
    74.40 Obligated balance, end of year....         292         315         336
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new mandatory
            authority.......................          20          21          21
    86.98 Outlays from mandatory balances...         164         173         177
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........         184         194         198
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

            Offsetting collections (cash)
                from:
    88.20     Interest on Federal securities        -143        -141        -139
              Non-Federal sources:
    88.40       Interest on loans...........          -6          -6          -6
    88.40       Insurance premiums earned...         -69         -66         -64
    88.40       Repayments of loans.........         -18         -18         -17
                                               ---------   ---------  ----------
    88.90       Total, offsetting
                  collections (cash)........        -236        -231        -226
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................         -28         -14          -7
    90.00 Outlays...........................         -52         -37         -28
    ----------------------------------------------------------------------------

        Memorandum (non-add) entries:
    92.01 Total investments, start of year:
            Federal securities: Par value...       1,756       1,807       1,816
    92.02 Total investments, end of year:
            Federal securities: Par value...       1,807       1,816       1,816
    ---------------------------------------------------------------------------
        Note.--The Department of Veterans Affairs insurance policy loans are
    not an extension of Federal credit. Credit schedules previously shown
    for this account have been discontinued.

        This fund finances the payment of claims on life insurance policies
    issued before January 3, 1957, to veterans who served in the Armed
    Forces subsequent to April 1, 1951. No new policies can be issued.
    Policyholders may elect to purchase total disability income coverage
    with the payment of additional premiums.

        Budget program--
            Death claims.--Represents payments to designated beneficiaries.
            Cash surrenders.--A policyholder may terminate his or her
        insurance by cashing in the policy for its cash value.
            Dividends.--Policyholders participate in the distribution of
        annual dividends.
            All other.--Classified in this category are payments to
        policyholders who: (a) hold endowment policies which have matured;
        (b) have purchased total disability income coverage and subsequently
        become disabled; and (c) are paid interest on dividend credits and
        deposits.
            The following table reflects the decrease in the number of
        policies and the amounts of insurance in force:

                         POLICIES AND INSURANCE IN FORCE

                                         2002 actual  2003 est.   2004 est.
    Number of policies..................     227,341     220,340     212,650
    Insurance in force (dollars in
    millions)...........................      $2,604      $2,564      $2,514

        Financing.--Payments from this fund are financed primarily  from
    premium  receipts  and  interest  on investments.

        Operating results and financial condition.--Lower than expected
    death rates 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.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-8455-0-8-701      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------
    33.0  Investments and loans.............          17          18          19
    42.0  Insurance claims and indemnities..          84          93          93
    43.0  Interest and dividends............         107         106         107
                                               ---------   ---------  ----------

    [[Page 839]]

    99.9    Total new obligations...........         208         217         219
    ---------------------------------------------------------------------------

                           DEPARTMENTAL ADMINISTRATION

                             General Administration

        For necessary operating expenses of the Department of Veterans
    Affairs, not otherwise provided for, including administrative expenses
    in support of Department-wide capital planning, management and policy
    activities, not to exceed $25,000 for official reception and
    representation expenses, and reimbursement of the General Services
    Administration for security guard services, $283,973,000, including no
    more than $5,405,000 for construction.

        Note.--A regular 2003 appropriation for this account had not been
    enacted at the time the budget was prepared; therefore, this account is
    operating under a continuing resolution (P.L. 107-229, as amended). The
    amounts included for 2003 in this budget reflect the Administration's
    2003 policy proposals.

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0151-0-1-705      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Direct program:

    00.11   General administration..........         235         274         279
    00.12   Major Construction..............           4           1           3
    00.30   Minor Construction..............           3          10           4
                                               ---------   ---------  ----------
    01.00   Total Direct Program............         242         285         286
          Reimbursable program:

    09.01   Administration of housing credit
              programs......................           4           4           4
    09.04   Other reimbursable programs.....         180         154         136
                                               ---------   ---------  ----------
    09.99     Total reimbursable program....         184         158         140
                                               ---------   ---------  ----------
    10.00   Total new obligations...........         426         443         426
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance carried
            forward, start of year..........           9          16           3
    22.00 New budget authority (gross)......         436         429         424
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......         445         445         427
    23.95 Total new obligations.............        -426        -443        -426
    23.98 Unobligated balance expiring or
            withdrawn.......................          -2
    24.40 Unobligated balance carried
            forward, end of year............          16           3           1
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Discretionary:

    40.00   Appropriation...................         251         271         284
    42.00   Transferred from other accounts.           1
                                               ---------   ---------  ----------
    43.00     Appropriation (total
                discretionary)..............         252         271         284
    68.00 Spending authority from offsetting
            collections: Offsetting
            collections (cash)..............         184         158         140
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................         436         429         424
    ----------------------------------------------------------------------------

        Change in obligated balances:
    72.40 Obligated balance, start of year..          59          59          70
    73.10 Total new obligations.............         426         443         426
    73.20 Total outlays (gross).............        -419        -432        -423
    73.40 Adjustments in expired accounts
            (net)...........................          -7
    74.40 Obligated balance, end of year....          59          70          74
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new discretionary
            authority.......................         363         376         369
    86.93 Outlays from discretionary
            balances........................          56          56          54
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........         419         432         423
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.00   Offsetting collections (cash)
              from: Federal sources.........        -184        -158        -140
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................         252         271         284
    90.00 Outlays...........................         235         274         283
    ----------------------------------------------------------------------------

    Additional net budget authority and outlays to cover cost of fully accruing
                                     retirement:
    99.00 Budget authority..................          11          12          14
    99.01 Outlays...........................          11          12          14
    ---------------------------------------------------------------------------
        \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 Department's top management
    direction and administrative support, including data processing, fiscal,
    personnel, and legal services.

        General administration.--Includes Departmental executive direction,
    Departmental Support offices, the General Counsel, the Board of Veterans
    Appeals, and the Board of Contract Appeals.

        Additionally, funding is provided for capital asset investments.

        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.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0151-0-1-705      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------

          Direct obligations:

            Personnel compensation:
    11.1      Full-time permanent...........         136         152         159
    11.5      Other personnel compensation..           5           5           5
                                               ---------   ---------  ----------
    11.9        Total personnel compensation         141         157         164
    12.1    Civilian personnel benefits.....          33          45          48
    21.0    Employee travel.................           3           4           4
    23.1    Rental payments to GSA..........          17          18          19
    23.2    Rental payments to others.......           1           1           1
    23.3    Communications, utilities, and
              miscellaneous charges.........           3           4           4
    24.0    Printing and reproduction.......           1           1           1
    25.2    Other services..................          28          40          33
    26.0    Supplies and materials..........           3           2           3
    31.0    Equipment.......................           6           2           2
    32.0    Land and structures.............           6          11           7
                                               ---------   ---------  ----------
    99.0      Direct obligations............         242         285         286
    99.0  Reimbursable obligations..........         184         158         140
                                               ---------   ---------  ----------
    99.9    Total new obligations...........         426         443         426
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 36-0151-0-1-705      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------
        Direct:
          Total compensable workyears:

    1001    Civilian full-time equivalent
              employment....................       1,863       1,980       2,031
        Reimbursable:
          Total compensable workyears:

    2001    Civilian full-time equivalent
              employment \1\................         740         499         450
    ---------------------------------------------------------------------------
        \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, $62,450,000,
    including no more than $700,000 for construction.

        Note.--A regular 2003 appropriation for this account had not been
    enacted at the time the budget was prepared; therefore, this account is
    operating under a continuing resolution (P.L. 107-229, as amended). The
    amounts included for 2003 in this budget reflect the Administration's
    2003 policy proposals.

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0170-0-1-705      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    01.01 Direct program....................          52          55          61
    01.03 Construction, minor projects......           1           2           1
                                               ---------   ---------  ----------
    01.92   Total direct program............          53          57          62
    09.01 Reimbursable program..............           3           3           3
                                               ---------   ---------  ----------
    10.00   Total new obligations...........          56          60          65
    ----------------------------------------------------------------------------

    [[Page 840]]

        Budgetary resources available for obligation:
    21.40 Unobligated balance carried
            forward, start of year..........                       1
    22.00 New budget authority (gross)......          57          59          65
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......          57          60          65
    23.95 Total new obligations.............         -56         -60         -65
    24.40 Unobligated balance carried
            forward, end of year............           1
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Discretionary:

    40.00   Appropriation...................          54          56          62
    68.00 Spending authority from offsetting
            collections: Offsetting
            collections (cash)..............           3           3           3
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................          57          59          65
    ----------------------------------------------------------------------------

        Change in obligated balances:
    72.40 Obligated balance, start of year..          11          10          12
    73.10 Total new obligations.............          56          60          65
    73.20 Total outlays (gross).............         -56         -58         -64
    73.40 Adjustments in expired accounts
            (net)...........................          -1
    74.40 Obligated balance, end of year....          10          12          12
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new discretionary
            authority.......................          46          55          61
    86.93 Outlays from discretionary
            balances........................          10           3           3
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........          56          58          64
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

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

        Net budget authority and outlays:
    89.00 Budget authority..................          54          56          62
    90.00 Outlays...........................          53          55          61
    ----------------------------------------------------------------------------

    Additional net budget authority and outlays to cover cost of fully accruing
                                     retirement:
    99.00 Budget authority..................           2           3           3
    99.01 Outlays...........................           2           3           3
    ---------------------------------------------------------------------------

        This appropriation provides Department-wide audit, investigation,
    and healthcare 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 criminal activity,
    fraud, waste, and mismanagement. The audit function plans and conducts
    internal programmatic audits of all facets of VA operations as well as
    contract audit services for all applicable Department contracts. The
    investigative function conducts criminal and administrative
    investigations of improper and illegal activities involving VA programs,
    personnel, beneficiaries, and other third parties. The healthcare
    inspection function performs legislatively mandated medical care quality
    assurance reviews and oversight. The support function provides office
    administration.

        Additionally, funding is provided for capital asset investments.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-0170-0-1-705      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------

          Direct obligations:

            Personnel compensation:
    11.1      Full-time permanent...........          30          31          34
    11.5      Other personnel compensation..           2           2           2
                                               ---------   ---------  ----------
    11.9        Total personnel compensation          32          33          36
    12.1    Civilian personnel benefits.....           8           8          10
    21.0    Employee Travel.................           3           3           3
    23.1    Rental payments to GSA..........           2           3           3
    25.2    Other services..................           6           7           8
    31.0    Equipment.......................           1           1           1
    32.0    Land and structures.............           1           2           1
                                               ---------   ---------  ----------
    99.0      Direct obligations............          53          57          62
    99.0  Reimbursable obligations..........           3           3           3
                                               ---------   ---------  ----------
    99.9    Total new obligations...........          56          60          65
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 36-0170-0-1-705      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------
        Direct:
          Total compensable workyears:

    1001    Civilian full-time equivalent
              employment....................         370         386         417
        Reimbursable:
          Total compensable workyears:

    2001    Civilian full-time equivalent
              employment....................          23          25          25
    ---------------------------------------------------------------------------

    Intragovernmental funds:

                                   Supply Fund

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4537-0-4-705      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    09.01 Reimbursable program-COGS-
            Merchandizing...................       1,020       1,196       1,243
    09.02 Reimbursable program-Other-
            Operations......................          56          65          65
    09.03 Reimbursable program-COGS-Printing
            and Publications................           6           5           5
    09.04 Reimbursable program-Other........           2           2           2
    09.05 Reimbursable program-Equipment-
            Procurement Services and
            Distribution....................           1           2           3
                                               ---------   ---------  ----------
    10.00   Total new obligations...........       1,085       1,270       1,318
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance carried
            forward, start of year..........         151         274         274
    22.00 New budget authority (gross)......       1,208       1,270       1,318
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......       1,359       1,544       1,592
    23.95 Total new obligations.............      -1,085      -1,270      -1,318
    24.40 Unobligated balance carried
            forward, end of year............         274         274         274
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Mandatory:

    69.00   Offsetting collections (cash)...       1,213       1,270       1,318
    69.10   Change in uncollected customer
              payments from Federal sources
              (unexpired)...................          -5
                                               ---------   ---------  ----------
    69.90     Spending authority from
                offsetting collections
                (total mandatory)...........       1,208       1,270       1,318
    ----------------------------------------------------------------------------

        Change in obligated balances:
    72.40 Obligated balance, start of year..         118         188         188
    73.10 Total new obligations.............       1,085       1,270       1,318
    73.20 Total outlays (gross).............      -1,020      -1,270      -1,318
    74.00 Change in uncollected customer
            payments from Federal sources
            (unexpired).....................           5
    74.40 Obligated balance, end of year....         188         188         188
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new mandatory
            authority.......................       1,020       1,270       1,318
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.00   Offsetting collections (cash)
              from: Federal sources.........      -1,213      -1,270      -1,318
          Against gross budget authority only:

    88.95   Change in uncollected customer
              payments from Federal sources
              (unexpired)...................           5
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................
    90.00 Outlays...........................        -193
    ----------------------------------------------------------------------------

    Additional net budget authority and outlays to cover cost of fully accruing
                                     retirement:
    99.00 Budget authority..................           2           2           2
    99.01 Outlays...........................           2           2           2
    ---------------------------------------------------------------------------

        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.

    [[Page 841]]

        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 2004, Supply Fund sales are
    estimated to reach $1.26 billion. Average inventory needed to support
    those sales will be $34 million.

        Operating results.--The Fund operated at a profit of $25 million in
    2002. The new total of retained earnings is $77 million. Operating
    expense as related to sales was 6 percent.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4537-0-4-705      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------

          Personnel compensation:

    11.1    Full-time permanent.............          24          29          30
    11.5    Other personnel compensation....           1           1           1
                                               ---------   ---------  ----------
    11.9      Total personnel compensation..          25          30          31
    12.1  Civilian personnel benefits.......           6           6           6
    21.0  Travel and transportation of
            persons.........................           3           3           3
    22.0  Transportation of things..........           3           5           6
    23.1  Rental payments to GSA............           2           2           2
    23.3  Communications, utilities, and
            miscellaneous charges...........           2           3           2
    24.0  Printing and reproduction.........           6           6           6
    25.1  Advisory and assistance services..         468         431         437
    26.0  Supplies and materials............         287         406         428
    31.0  Equipment.........................         283         378         397
                                               ---------   ---------  ----------
    99.9    Total new obligations...........       1,085       1,270       1,318
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 36-4537-0-4-705      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------
        Reimbursable:
    2001  Total compensable workyears:
            Civilian full-time equivalent
            employment......................         382         436         440
    ---------------------------------------------------------------------------

                                 Franchise Fund

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 36-4539-0-4-705      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    09.01 Reimbursable program..............         130         152         163
                                               ---------   ---------  ----------
    10.00   Total new obligations...........         130         152         163
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance carried
            forward, start of year..........          38          53          54
    22.00 New budget authority (gross)......         145         152         163
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......         183         205         217
    23.95 Total new obligations.............        -130        -152        -163
    24.40 Unobligated balance carried
            forward, end of year............          53          54          54
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Mandatory:

    69.00   Offsetting collections (cash)...         149         150         150
    69.10   Change in uncollected customer
              payments from Federal sources
              (unexpired)...................          -4           2          13
                                               ---------   ---------  ----------
    69.90     Spending authority from
                offsetting collections
                (total mandatory)...........         145         152         163
    ----------------------------------------------------------------------------

        Change in obligated balances:
    72.40 Obligated balance, start of year..          14          20          24
    73.10 Total new obligations.............         130         152         163
    73.20 Total outlays (gross).............        -128        -146        -163
    74.00 Change in uncollected customer
            payments from Federal sources
            (unexpired).....................           4          -2         -13
    74.40 Obligated balance, end of year....          20          24          11
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new mandatory
            authority.......................         128         146         163
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.00   Offsetting collections (cash)
              from: Federal sources.........        -149        -150        -150
          Against gross budget authority only:

    88.95   Change in uncollected customer
              payments from Federal sources
              (unexpired)...................           4          -2         -13
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................
    90.00 Outlays...........................         -21          -4          13
    ----------------------------------------------------------------------------

    Additional net budget authority and outlays to cover cost of fully accruing
                                     retirement:
    99.00 Budget authority..................
    99.01 Outlays...........................
    ---------------------------------------------------------------------------

        VA was chosen as a pilot Franchise Fund agency under the Government
    Management and Reform Act, P.L. 103-356, of 1994. This budget's general
    provisions extends the authority under that Act. Established in 1997,
    administrative services included in the Franchise Fund are financed on a
    fee-for-service basis rather than through VA's General Administration
    appropriation. VA Enterprise Centers are the lines of business within
    the VA Franchise Fund and are expected to have net billings of about
    $164 million and employ 762 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      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------
    11.1  Personnel compensation: Full-time
            permanent.......................          38          47          50
    12.1  Civilian personnel benefits.......           9          10          11
    21.0  Travel and transportation of
            persons.........................           1           2           2
    23.1  Rental payments to GSA............           4           6           6
    23.3  Communications, utilities, and
            miscellaneous charges...........          24          32          34
    24.0  Printing and reproduction.........           2           2           2
    25.2  Other services....................          35          38          43
    26.0  Supplies and materials............           2           2           2
    31.0  Equipment.........................          15          10          10
    32.0  Land and structures...............                       3           3
                                               ---------   ---------  ----------
    99.9    Total new obligations...........         130         152         163
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 36-4539-0-4-705      2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------
        Reimbursable:
    2001  Total compensable workyears:
            Civilian full-time equivalent
            employment......................         670         740         762
    ---------------------------------------------------------------------------

                          GENERAL FUND RECEIPT ACCOUNTS

                               (in millions of dollars)

    ----------------------------------------------------------------------------
                                             2002 actual   2003 est.   2004 est.
    ----------------------------------------------------------------------------
    Offsetting receipts from the public:
      36-247300  Contributions from military
        personnel, Veteran's Educational
        Assistance Act of 1984..............         233         267         357
      36-273330  Housing downward
        reestimates.........................       1,798         878
      36-275510  Housing negative subsidies.                       5
                                               ---------   ---------  ----------
    General Fund Offsetting receipts from
     the public.............................       2,031       1,150         357
    ---------------------------------------------------------------------------

    [[Page 842]]

                            Administrative Provisions

                          (including transfer of funds)

        Sec.  101. (a) Appropriations available for fiscal years 2004 and
    2005 for operating expenses in the Compensation, Pension, Burial,
    Insurance, Education, and Vocational Rehabilitation and Employment
    accounts may be transferred to any other of the mentioned accounts for
    operating expense purposes to correct for assumptions used to
    restructure the VA's budget request: Provided, That the total amount
    transferred from or into any single account for operating expenses may
    not exceed the schedule in subsection (c).
        (b) Appropriations available for fiscal years 2004 and 2005 for
    purposes of construction (non-grants) in the Compensation, Pension,
    Insurance, Education, Vocational Rehabilitation and Employment, and
    Housing accounts may be transferred to any other of the mentioned
    accounts for construction expense purposes to correct for assumptions
    used to restructure the VA's budget request: Provided, That the total
    amount transferred from or into any single account for construction may
    not exceed the schedule in subsection (c).
        (c) The limitation on transfers is ten percent in 2004, five percent
    in 2005, and zero percent thereafter.
        (d) Appropriations available for operating expenses in the Medical
    Care and Medical and Prosthetic Research accounts may be transferred to
    each other for operating expense purposes to correct for assumptions
    used to restructure the VA's budget request: Provided, That the total
    amount transferred from or into any single account for operating
    expenses may not exceed ten percent in 2004, two-and-a-half percent in
    2005, and zero percent thereafter.
        (e) Transfers pursuant to this section shall be effective five days
    after notice thereof is transmitted to the appropriations committees of
    the House and Senate.
        Sec.  102. Of the amounts provided for operating expenses in the
    Department's appropriations accounts, except for the Medical Care and
    Medical and Prosthetic Research accounts, five percent is available
    until September 30, 2005.
        Sec.  103. Appropriations available to the Department of Veterans
    Affairs for construction are available until expended.
        Sec.  104. Appropriations available to the Department of Veterans
    Affairs for salaries and expenses shall be available for services
    authorized by 5 U.S.C. 3109 hire of passenger motor vehicles; lease of a
    facility or land or both; and uniforms or allowances therefore, as
    authorized by 5 U.S.C. 5901-5902.
        Sec.  105. Construction funds (non-grants) provided in several of
    the accounts are available 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 (excluding lease of a facility or land
    or both), 8103, 8106, 8108, 8109, 8110, 8122, and 8162 of title 38,
    United States Code, as appropriate to each account, 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.
        Such construction funds are also 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.
        Except for advance planning activities, including needs assessments
    which may or may not lead to capital investments, and other capital
    asset management related activities, such as portfolio development and
    management activities, and investment strategy studies funded through
    the advance planning fund, design of projects funded through the design
    fund, and planning and design activities funded through the design fund
    and CARES fund, including needs assessments which may or may not lead to
    capital investments; none of the funds appropriated for construction
    shall be used for any project where the estimated cost is $4,000,000 or
    more, unless the project has been approved by the Congress in the
    budgetary process. Construction funds provided in each account for
    fiscal year 2004 for projects where the estimated cost is $4,000,000 or
    more, shall be obligated: (1) by the awarding of a construction
    documents contract by September 30, 2004; and (2) by the awarding of a
    design-build or construction contract by September 30, 2005. The
    Secretary shall promptly report in writing to the Committees on
    Appropriations any approved construction project of $4,000,000 or more
    in which obligations are not incurred within the time limitations
    established above.
        Sec.  106. No appropriations in this Act for the Department of
    Veterans Affairs shall be available for hospitalization or examination
    of any persons (except beneficiaries entitled under the laws bestowing
    such benefits to veterans, and persons receiving such treatment under 5
    U.S.C. 7901-7904 or 42 U.S.C. 5141-5204), unless reimbursement of cost
    is made to the ``Medical Care'' account at such rates as may be fixed by
    the Secretary of Veterans Affairs.
        Sec.  107. Appropriations accounts available to the Department of
    Veterans Affairs 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'' accounts.
        Sec.  108. Notwithstanding any other provision of law, the Secretary
    of Veterans Affairs shall, from the National Service Life Insurance Fund
    (38 U.S.C. 1920), the Veteran's Special Life Insurance Fund (38 U.S.C.
    1923), and the United States Government Life Insurance Fund (38 U.S.C.
    1955), reimburse the ``Insurance'' and ``General Administration''
    accounts on a pro-rata basis 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 2004 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
    2004 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.  109. Amounts deducted from enhanced-use lease proceeds to
    reimburse an account for expenses incurred by that account during a
    prior fiscal year for providing enhanced-use lease services, may be
    obligated during the fiscal year in which the proceeds are received.
        Sec.  110. Funds available in any Department of Veterans Affairs
    appropriation 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 but not
    exceed $29,318,000 for the Office of Resolution Management and
    $3,010,000 for the Office of Employment and Discrimination Complaint
    Adjudication: Provided, That payments may be made in advance for
    services to be furnished based on estimated costs: Provided further,
    That amounts received shall be credited to ``General Administration''
    for use by the office that provided the service.
        Sec.  111. (a) Receipts that would otherwise be credited to the
    accounts listed in subsection (c) shall be deposited into the Medical
    Care Collections Fund, and shall be transferred to the Medical Care
    account, to remain available until expended, to carry out the purposes
    of the Medical Care account.
        (b) The unobligated balances in the accounts listed in subsection
    (c), plus those in the Grants for Construction of State Extended Care
    Facilities account, shall be transferred to and merged with the Medical
    Care account and remain available until expended, to carry out the
    purposes of the Medical Care account: Provided, That the obligated
    balances in these accounts may be transferred to and merged with the
    Medical Care account at the discretion of the Secretary of Veterans
    Affairs and shall remain available until expended.
        (c) Veterans Extended Care Revolving Fund; Medical Facilities
    Revolving Fund; Special Therapeutic and Rehabilitation Fund; Nursing
    Home Revolving Fund; Veterans Health Services Improvement Fund; and
    Parking Revolving Fund.
        Sec.  112. Notwithstanding any other provision of law, the
    unobligated balances in the Construction, Major Projects and
    Construction, Minor Projects shall be transferred to and merged with
    each appropriation provided in this Act as appropriate, and shall remain
    available under the terms under which originally appropriated.
        Sec.  113. The Department of Veterans Affairs is authorized to
    continue the Franchise Fund pilot authorized by section 403 of P.L. 103-
    356 and title 1 of P.L. 104-204 until October 1, 2004.

    [[Page 843]]

                          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 therefor 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; to travel performed by the
    U.S. Consumer Product Safety Commission in connection with litigations;
    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 therefor set forth in the
    estimates only to the extent notice of such an increase is transmitted
    to the Committees on Appropriations.
        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 the 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 Officer 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 the domicile and the place
    of employment of the officer or employee, with the exception of an
    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 provided in this Act may be used,
    directly or through grants, to pay or to provide reimbursement for
    payment of the salary of a consultant (whether retained by the Federal
    Government or a grantee) at more than the daily equivalent of the rate
    paid for level IV of the Executive Schedule, unless specifically
    authorized by law.
        Sec. 409. None of the funds provided in this Act may 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 a report which the Committees on Appropriations of the Congress
    approve within 30 days following the date on which the report is
    received.
        Sec. 415. 1(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 2004 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 such Act as may be necessary
    in carrying out the programs set forth in the budget for 2004 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 extend expressly provided
    for in this Act (unless such loans are in support of other forms of
    assistance provided for in this or prior

    [[Page 844]]

    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 any other provision of law, the term
    ``qualified student loan'' with respect to national service education
    awards shall mean any loan determined by an institution of higher
    education to be necessary to cover a student's cost of attendance at
    such institution and made directly to a student by a State agency, in
    addition to other meanings under section 148(b)(7) of the National and
    Community Service Act.
        Sec. 421. Except in the case of entities that are funded solely with
    Federal funds or any natural persons that are funded under this Act,
    none of the funds in this Act shall be used for the planning or
    execution of any program to pay the expenses of, or otherwise
    compensate, non-Federal parties to lobby or litigate in respect to
    adjudicatory proceedings funded in this Act. A chief executive officer
    of any entity receiving funds under this Act shall certify that none of
    these funds have been used to engage in the lobbying of the Federal
    Government or in litigation against the United States unless authorized
    under existing law.
        Sec. 422. No part of any funds appropriated in this Act shall be
    used by an agency of the executive branch, other than for normal and
    recognized executive-legislative relationships, for publicity or
    propaganda purposes, and for the preparation, distribution or use of any
    kit, pamphlet, booklet, publication, radio, television or film
    presentation designed to support or defeat legislation pending before
    the Congress, except in presentation to the Congress itself.
        Sec. 423. Section 312 of the National Aeronautics and Space
    Administration of 1958, as amended, is further amended by--
            (a) Striking the second Sec. ``312'' and inserting ``313'';
            (b) inserting the title, ``Full Cost Appropriations Account
        Structure'', before Sec. 313;
            (c) in subsection (a)
                (1) striking ``Human space flight'' and inserting ``Space
            flight capabilities'';
                (2) striking ``technology'' and inserting ``exploration'';
            and
                (3) striking ``2002'' and inserting ``2004'';
            (d) striking subsection (c), and inserting the following new
        subsection: ``(c) The unexpired balances of prior appropriations to-
        the Administration for activities authorized under this Act may be
        transferred to the new account established for such activity in
        subsection (a). Balances so transferred may be merged with funds in
        the newly established account and thereafter may be accounted for as
        one fund under the same terms and conditions''.
        Sec. 424. Chapter 17 of title 38, United States Code, is amended--
            (1) in section 1705 by adding at the end the following new
        subsection:
            ``(d) The Secretary may not enroll a veteran under paragraph
        (a)(7) (Except for a veteran with a service-connected disability) or
        under paragraph (a)(8) unless the veteran pays to the United States
        an annual enrollment fee of $250.''
            (2) in section 1729A(b) by redesignating paragraphs (1) through
        (8) as paragraphs (2) through (9) and by adding at the beginning the
        following new paragraph (1):
            ``(1) Section 1705(d) of this title.''.
        Sec. 425. Notwithstanding 38 U.S.C. 1722A, the Secretary shall
    require a veteran enrolled in priority category 7 or 8 to pay the United
    States $15 for each 30-day supply of medication furnished such veteran
    under chapter 17 of title 38, United States Code, on an outpatient basis
    for the treatment of a non-service-connected disability or condition.
        Sec. 426. Section 1710B(b) of title 38, United States Code, is
    amended to read as follows:
        ``(b) The Secretary shall ensure that the average daily census in
    nursing homes, domiciliaries, home care programs, and noninstitutional
    extended care services programs over which the Secretary has direct
    jurisdiction and for which the Secretary contracts, plus the average
    daily census of veterans for which the Secretary pays per diem to States
    for services in State homes, is not less in total than in fiscal year
    1998.''
        Sec. 427. Section 1722A of title 38, United States Code, is amended
    by striking subsection (d).
        Sec. 428. No funds of the Department of Veterans Affairs shall be
    available for hospital care or nursing home care or medical services
    provided to any person under chapter 17 of title 38, United States Code,
    for a non-service-connected disability described in section 1729(a)(2)
    of such title, unless that person has disclosed to the Secretary of
    Veterans Affairs, in such form as the Secretary may require, current,
    accurate third-party reimbursement information for purposes of section
    1729 of such title; Provided, That the Secretary may recover, in the
    same manner as any other debt due the United States, the reasonable
    charges for such care or services from any person who does not make such
    disclosure as required; Provided further, That any amounts so recovered
    for care or services provided in a prior fiscal year may be obligated by
    the Secretary during the fiscal year in which amounts is received.
        Sec. 429. Section 1722A(a)(3)(B) of title 38, United States Code, is
    amended by striking out ``such veteran if such veteran were eligible for
    pension under section 1521'' and inserting in lieu thereof ``a veteran
    with no dependents under section 1521(d)''.