[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)''.
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