[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 2005

[[Page 869]]

 
                     DEPARTMENT OF VETERANS AFFAIRS

    The 2005 budget provides $29,654 million in discretionary funding 
for veterans health, benefits, and other services, including $32,073 
million in gross discretionary budget authority and $2,419 million in 
anticipated discretionary medical collections.

    VA is submitting its 2005 budget request using a new account 
structure that focuses on nine major programs--medical care, research, 
disability 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.

                                


 
                            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., and such sums as necessary to fund cost comparison studies as 
referred to in 38 U.S.C. 8110(a)(5): $27,051,893,000, plus 
reimbursements, of which not to exceed $1,396,000,000 shall be available 
until September 30, 2006. Amounts appropriated herein shall be available 
as follows:
    (1) For construction, alteration and improvement of any facility 
        under the jurisdiction of 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, 
        $582,900,000, to remain available until expended, of which no 
        less than $523,900,000 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 $105,163,000, 
        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 $87,126,000, of which 
        $4,000,000 shall be available until September 30, 2006: 
        Provided, That technical and consulting services offered by the 
        Facilities Management Field Service shall be provided to 
        Department components only on a reimbursable basis;
    (4) For the DoD VA Health Care Sharing Incentive Fund, as authorized 
        by section 721 of Public Law 107-314, a minimum of $15,000,000, 
        to remain available until expended, for any purpose authorized 
        by 38 U.S.C. 8111.
    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.

                           [Medical Services]

    [For necessary expenses for furnishing, as authorized by law, 
inpatient and outpatient care and treatment to beneficiaries of the 
Department of Veterans Affairs and veterans described in paragraphs (1) 
through (8) of section 1705(a) of title 38, United States Code, 
including care and treatment in facilities not under the jurisdiction of 
the department and including medical supplies and equipment and salaries 
and expenses of health-care employees hired under title 38, United 
States Code, and aid to State homes as authorized by section 1741 of 
title 38, United States Code; $17,867,220,000, plus reimbursements: 
Provided, That of the funds made available under this heading, not to 
exceed $1,100,000,000 shall be available until September 30, 2005: 
Provided further, That, notwithstanding any other provision of law, the 
Secretary of Veterans Affairs shall establish a priority for treatment 
for veterans who are service-connected disabled, lower income, or have 
special needs: Provided further, That, notwithstanding any other 
provision of law, the Secretary of Veterans Affairs shall give priority 
funding for the provision of basic medical benefits to veterans in 
enrollment priority groups 1 through 6: Provided further, That of the 
funds made available under this heading, the Secretary may transfer up 
to $400,000,000 to ``Construction, major projects'' for purposes of 
implementing CARES subject to a determination by the Secretary that such 
funds will improve access and quality of veteran's health care needs: 
Provided further, That, notwithstanding any other provision of law, the 
Secretary of Veterans Affairs may authorize the dispensing of 
prescription drugs from Veterans Health Administration facilities to 
enrolled veterans with privately written prescriptions based on 
requirements established by the Secretary: Provided further, That the 
implementation of the program described in the previous proviso shall 
incur no additional cost to the Department of Veterans Affairs.]

                        [medical administration]

    [For necessary expenses in the administration of the medical, 
hospital, nursing home, domiciliary, construction, supply, and research 
activities, as authorized by law; administrative expenses in support of 
capital policy activities; information technology hardware and software; 
uniforms or allowances therefor, as authorized by sections 5901-5902 of 
title 5, United States Code; and administrative and legal expenses of 
the department for collecting and recovering amounts owed the department 
as authorized under chapter 17 of title 38, United States Code, and the 
Federal Medical Care Recovery Act (42 U.S.C. 2651 et seq.); 
$5,000,000,000, of which $150,000,000 shall be available until September 
30, 2005, plus reimbursements.]

                          [medical facilities]

    [For necessary expenses for the maintenance and operation of 
hospitals, nursing homes, and domiciliary facilities and other necessary 
facilities for the Veterans Health Administration; for administrative 
expenses in support of planning, design, project management, real 
property acquisition and disposition, construction and renovation of any 
facility under the jurisdiction or for the use of the department; for 
oversight, engineering and architectural activities not charged to 
project costs; for repairing, altering, improving or providing facili

[[Page 870]]

ties in the several hospitals and homes under the jurisdiction of the 
department, not otherwise provided for, either by contract or by the 
hire of temporary employees and purchase of materials; for leases of 
facilities; and for laundry and food services, $4,000,000,000, of which 
$150,000,000 shall be available until September 30, 2005.]

       [grants for construction of state extended care facilities]

    [For grants to assist States to acquire or construct State nursing 
home and domiciliary facilities and to remodel, modify or alter existing 
hospital, nursing home and domiciliary facilities in State homes, for 
furnishing care to veterans as authorized by 38 U.S.C. 8131-8137, 
$102,100,000, to remain available until expended.] (Division G, H.R. 
2673, Consolidated Appropriations Bill, FY 2004.)

                Unavailable Receipts (in millions of dollars)

----------------------------------------------------------------------------
Identification code 36-0160-0-1-703      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------
01.99 Balance, start of year............         104         115         106
    Receipts:
02.20 First party collections, MCCF.....         104         129         138
02.21 Third party collections, MCCF.....         804         917       1,037
02.22 Pharmaceutical copayments, 
        Veterans health services 
        improvement.....................         578         657         920
02.23 Enhanced-use lease proceeds, 
        veterans health services 
        improvemen......................                       1           1
02.24 Enrollment fee, MCCF..............                                 268
02.25 Compensated work therapy, MCCF....                      40          42
02.26 MCCF, Long-term care copayments...                       6           9
02.27 Parking fees, MCCF................                       3           3
02.40 Payments from compensation and 
        pension, MCCF...................
                                           ---------   ---------  ----------
02.99   Total receipts and collections..       1,486       1,753       2,418
                                           ---------   ---------  ----------
04.00 Total: Balances and collections...       1,590       1,868       2,524
    Appropriations:
05.00 Medical care......................      -1,475      -1,762      -2,419
                                           ---------   ---------  ----------
07.99 Balance, end of year..............         115         106         105
---------------------------------------------------------------------------

               Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 36-0160-0-1-703      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------

    Obligations by program activity:
      Direct program:

        Operating expenses:
          Provision of veterans health 
              care:
00.01       Acute hospital care.........       5,505       6,316       6,835
00.02       Rehabilitative care.........         468         451         494
00.03       Psychiatric care............       1,131       1,178       1,211
00.04       Nursing home care...........       2,313       2,213       1,914
00.05       Subacute care...............         273         247         216
00.06       Residential care............         449         496         546
00.07       Outpatient care.............      11,585      13,740      14,589
00.08       Miscellaneous benefits and 
              services..................       1,456       1,594       1,677
00.09       National Program 
              Administration (NPA-MAMOE)          70          86          84
00.10     CHAMPVA.......................         328         433         527
                                           ---------   ---------  ----------
00.91       Total operating expenses....      23,578      26,754      28,093
        Capital investment:
          Provision of veterans health 
              care:
01.01       Acute hospital care.........         444         287         426
01.02       Rehabilitative care.........          45          29          43
01.03       Psychiatric care............          78          51          75
01.04       Nursing home care...........          86          56          82
01.05       Subacute care...............          16          10          15
01.06       Residential care............          26          17          25
01.07       Outpatient care.............         812         526         774
01.08       Miscellaneous benefits and 
              services..................          43          28          41
01.09       National Program 
              Administration (NPA-MAMOE)           1           3           3
01.11       Construction, major projects         128         225         475
01.12       Construction, minor projects         156         256         186
01.13     CHAMPVA.......................           4           4           4
                                           ---------   ---------  ----------
01.91       Total capital investment....       1,839       1,492       2,149
      Grant Program:

02.01   Grants to States................         173         157         104
                                           ---------   ---------  ----------
02.93     Total direct program..........      25,590      28,403      30,346
09.01 Reimbursable program..............         221         463         222
                                           ---------   ---------  ----------
10.00   Total new obligations...........      25,811      28,866      30,568
    Budgetary resources available for obligation:
21.40 Unobligated balance carried 
        forward, start of year..........       1,428       1,261       1,156
22.00 New budget authority (gross)......      25,644      28,760      29,693
                                           ---------   ---------  ----------
23.90   Total budgetary resources 
          available for obligation......      27,072      30,021      30,849
23.95 Total new obligations.............     -25,811     -28,866     -30,568
24.40 Unobligated balance carried 
        forward, end of year............       1,261       1,156         280
    New budget authority (gross), detail:
      Discretionary:

40.00   Appropriation...................      23,860      26,705      27,052
40.20   Appropriation (special fund)....       1,475       1,762       2,419
40.35   Appropriation permanently 
          reduced (P.L. 108-7)..........          -3
40.35   Appropriation permanently 
          reduced (H.R. 2673)...........                    -160
40.35   Appropriation permanently 
          reduced (H.R. 2673)...........                     -10
42.00   Transferred from other accounts.           5
                                           ---------   ---------  ----------
43.00     Appropriation (total 
            discretionary)..............      25,337      28,297      29,471
      Spending authority from offsetting 
          collections:

68.00   Offsetting collections (cash)...         252         463         222
68.10   Change in uncollected customer 
          payments from Federal sources 
          (unexpired)...................          12
                                           ---------   ---------  ----------
68.90     Spending authority from 
            offsetting collections 
            (total discretionary).......         264         463         222
      Mandatory:

69.00   Offsetting collections (cash)...          43
                                           ---------   ---------  ----------
70.00   Total new budget authority 
          (gross).......................      25,644      28,760      29,693
    Change in obligated balances:
72.40 Obligated balance, start of year..       3,192       3,958       4,821
73.10 Total new obligations.............      25,811      28,866      30,568
73.20 Total outlays (gross).............     -25,030     -28,003     -28,667
73.40 Adjustments in expired accounts 
        (net)...........................         -14
74.00 Change in uncollected customer 
        payments from Federal sources 
        (unexpired).....................         -12
74.10 Change in uncollected customer 
        payments from Federal sources 
        (expired).......................          11
74.40 Obligated balance, end of year....       3,958       4,821       6,722
    Outlays (gross), detail:
86.90 Outlays from new discretionary 
        authority.......................      21,763      24,457      24,877
86.93 Outlays from discretionary 
        balances........................       3,228       3,546       3,790
86.97 Outlays from new mandatory 
        authority.......................          39
                                           ---------   ---------  ----------
87.00   Total outlays (gross)...........      25,030      28,003      28,667
    Offsets:
      Against gross budget authority and outlays:

        Offsetting collections (cash) 
            from:
88.00     Federal sources...............        -125        -227        -109
88.40     Non-Federal sources...........        -175        -236        -113
88.45     Offsetting governmental 
            collections (from non-
            Federal sources)............          -8
                                           ---------   ---------  ----------
88.90       Total, offsetting 
              collections (cash)........        -308        -463        -222
      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..............          13
    Net budget authority and outlays:
89.00 Budget authority..................      25,337      28,297      29,471
90.00 Outlays...........................      24,723      27,540      28,445
---------------------------------------------------------------------------

    For 2005, the budget requests total resources for the VA Medical 
Care Business Line of $29.5 billion, an increase of $1.2 billion ($0.5 
billion in appropriation and $0.7 billion in collections) over the 2004 
level. This includes $27.1 billion in appropriated budget authority, 
$2.4 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 continue to concentrate VA's health 
care resources to 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 
and 8 veterans over the last 4 years, as well as anticipated future 
growth. To address the rapid growth in

[[Page 871]]

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 two components to the set of proposals. First, establish 
an annual enrollment fee for all priority level 7 and 8 veterans. 
Second, increase copayments for outpatient care and pharmacy benefits 
for priority level 7 and 8 veterans. The legislative proposals 
associated with these policy proposals are included in the 
administrative 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; administrative support for capital facilities, and the DOD VA 
Health Care Sharing Incentive Fund.

    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 facility. 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 
    $7,000,000 or over for major construction and less than $7,000,000 
    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 $2.4 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; authority to recover third-party insurance payments 
    from veterans for nonservice-connected conditions; and authority to 
    collect revenue from enhanced use leases.
        (2) 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.
        (3) 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.
        (4) 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.
        (5) Parking Program (formerly Parking Revolving Fund).--VA 
    collects parking fees for the use of parking facilities at VA 
    facilities.
        (6) 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 2005 are estimated to increase 
    by $599 million for operating medical, neurological, surgical, 
    contract and State home hospital beds.
        Estimated operating levels are:

                                     2003 actual  2004 est.   2005 est.
  Patients treated..................     476,413     491,324     506,315
  Average daily census..............       8,150       8,112       8,084
  Average employment................      48,764      50,123      51,677

        Rehabilitative care.--An increase of $53 million in 2005 is 
    estimated for the provision of rehabilitative care, including spinal 
    cord injury care.
        Estimated operating levels are:

                                     2003 actual  2004 est.   2005 est.
  Patients treated..................      15,471      15,566      15,720
  Average daily census..............       1,197       1,199       1,197
  Average employment................       4,552       4,602       4,674

        Psychiatric care.--An increase of $46 million is estimated in 
    2005 for the inpatient care of veterans with problems related to 
    mental illness, including alcohol and drug problems.
        Estimated operating levels are:

                                     2003 actual  2004 est.   2005 est.
  Patients treated..................      95,026      90,640      86,638
  Average daily census..............       3,147       2,803       2,506
  Average employment................      12,216      12,220      12,258

        Nursing home care.--In 2005, a decrease of $294 million is 
    estimated for the care of residents in VA nursing homes, contract 
    nursing homes and State nursing homes.
        Estimated operating levels are:

                                     2003 actual  2004 est.   2005 est.
  Patients treated..................      92,516      87,954      79,820
  Average daily census..............      33,408      33,069      31,579
  Average employment................      22,192      22,193      19,382

        Noninstitutional extended care.--Included in outpatient 
    estimates in 2005 is an increase of $132 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:
                                     2003 actual  2004 est.   2005 est.
  Average daily census..............      24,413      29,631      36,524


[[Page 872]]


        Subacute care.--A decrease of $26 million is estimated in 2005 
    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:

                                     2003 actual  2004 est.   2005 est.
Patients treated....................      17,183      16,496      15,505
Average daily census................         595         613         686
Average employment..................       2,977       2,375       1,897

        Residential care.--An increase of $52 million is estimated in 
    2005 for the care of veterans in locations other than their own 
    homes, such as residential rehabilitation and domiciliary care 
    programs.
        Estimated operating levels are:

                                     2003 actual  2004 est.   2005 est.
Patients treated....................      45,207      44,165      42,992
Average daily census................      10,619      11,046      10,844
Average employment..................       4,908       4,920       4,935

        Outpatient care.--An increase of $966 million is estimated in 
    2005 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

                                     2003 actual  2004 est.   2005 est.
  Medical visits (in thousands):
  Staff visits......................      46,544      49,493      52,438
  Fee visits........................       3,216       3,622       4,043
  Readjustment counseling...........         996         998       1,000
                                    ------------------------------------
        Total.......................      50,756      54,113      57,481
                                    ====================================
  Dental:
    Staff:
      Examinations..................     458,361     490,000     490,000
      Treatments....................     134,073     140,000     140,000
                                    ------------------------------------
        Total.......................     592,434     630,000     630,000
                                    ====================================
    Fee: Cases completed............      16,420      17,000      17,000
                                    ====================================
  Average employment................      78,782      84,023      87,543
                                    ====================================

        Miscellaneous benefits and services.--An increase of $82 million 
    is estimated in 2005 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.

                                     2003 actual  2004 est.   2005 est.
  Average employment................       8,384       8,803       9,243

    National program administration (NPA).--In 2005, a decrease of $1 
million reflects a proposed move of 16 Research affiliated FTE currently 
under NPA into Medical and Prosthetic Research Business line.

                                     2003 actual  2004 est.   2005 est.
Average employment..................         551         575         556

    Construction, major.--In 2005, an increase of $250 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 2005, a decrease of $70 million is 
estimated for construction projects costing less than $7 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 $162 million and seismic funding is 
$20 million.

    Civilian health and medical program of the Department of Veterans 
Affairs (CHAMPVA).--An increase of $97 million is estimated in 2005 for 
private hospital and outpatient care for dependents and survivors of 
certain veterans.

    Estimated operating levels are:

                                     2003 actual  2004 est.   2005 est.
  Average daily hospital census.....         291         334         357
  Outpatient (in thousands).........       2,963       5,012       5,829
  Average employment................         420         420         420

    Grants to States.--In 2005, a decrease of $53 million in obligations 
is estimated for grants for the construction of State extended care 
facilities. This decrease is the result of an increase in 2003 
obligations due to several factors in 2002 such as States not meeting 
mandatory grant requirements, deferring projects until 2003, or 
canceling project requests. Additionally, a one-time adjustment in 
fiscal year 2002 grant processing procedures reflecting a 
Congressionally mandated priority methodology produced a backup in the 
grant application processes which delayed funding until 2003. This new 
methodology has since been fully implemented and all grant applications 
are being processed as funds are available and State matching funds are 
provided.

                          PERFORMANCE MEASURES

        Provide High Quality Health Care.--Use of clinical practice 
    guidelines in treating patients 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.

                                     2003 actual  2004 est.   2005 est.
  Clinical Practice Guidelines Index         70%         70%         71%
  Prevention Index II...............         83%         82%         84%
  Percent of patients rating VA 
    health care service as very good 
    or excellent:...................
    Inpatient.......................         74%         70%         71%
    Outpatient......................         73%         72%         73%

        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 by relying 
    more extensively on non-institutional forms of long-term care.

                                     2003 actual  2004 est.   2005 est.
  Percentage of primary care 
    appointments scheduled within 30 
    days of desired date............         93%         93%         93%
  Percentage of specialty care 
    appointments scheduled within 30 
    days of desired date............         89%         90%         90%
  Increase non-institutional long-
    term care as expressed by 
    average daily census............      24,413      29,631      36,524

        VA DoD Sharing.--VA's strategy is to improve collaboration and 
    exchange with DoD.

                                     2003 actual  2004 est.   2005 est.
  Dollar value of sharing agreements 
    with DoD ($ in millions)........         $92        $110        $150

        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.
                                     2003 actual  2004 est.   2005 est.
  Ratio of collections to billings..         41%         41%         41%


[[Page 873]]



                             Performance Metrics

----------------------------------------------------------------------------
Identification code 36-0160-0-1-703      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------
1000  Clinical Practice Guidelines Index 
        (%).............................          70          70          71
1000  Prevention Index II (%)...........          83          82          84
---------------------------------------------------------------------------

               Object Classification (in millions of dollars)

----------------------------------------------------------------------------
Identification code 36-0160-0-1-703      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------

      Direct obligations:

        Personnel compensation:
11.1      Full-time permanent...........       9,125      10,513      11,507
11.3      Other than full-time permanent         162         159         164
11.5      Other personnel compensation..       1,028       1,213       1,337
                                           ---------   ---------  ----------
11.9        Total personnel compensation      10,315      11,885      13,008
12.1    Civilian personnel benefits.....       2,677       2,870       3,126
13.0    Benefits for former personnel...          12          37          37
21.0    Employee travel.................          50          55          55
21.0    Beneficiary travel..............         156         160         160
21.0    Interagency motor pool payments.          18          20          20
21.0    All other.......................          36          50          50
22.0    Transportation of things........          32          36          36
23.1    Rental payments to GSA..........          14          12          11
23.2    Rental payments to others.......         101         108         113
23.3    Communications, utilities, and 
          miscellaneous charges.........         679         701         702
24.0    Printing and reproduction.......          11          11          11
25.2    Other contractual services......       2,584       2,645       2,704
25.2    Other construction services.....          33          54          41
25.6    Outpatient dental fees..........          18          16          17
25.6    Medical and nursing fees........         586         608         603
25.6    Community nursing homes.........         250         259         259
25.6    Contract hospitalization........         389         404         416
25.6    Civilian Health and Medical 
          Program of the Department of 
          Veterans Affairs..............         230         402         495
26.0    Medical supplies and materials..       4,987       5,439       5,682
26.0    Provisions......................          75          75          75
31.0    Equipment.......................       1,018       1,018       1,019
32.0    Medical land and structures.....         467         473         469
32.0    Construction, major projects, 
          land and structures...........         126         222         470
32.0    Construction, minor projects, 
          land and structures...........         122         200         145
41.0    Medical grants, subsidies, and 
          contributions.................         388         428         460
41.0    Medical Grants to private 
          organizations.................          42          56          56
41.0    Grants, subsidies, and 
          contributions for construction 
          of State extended care 
          facilities....................         173         157         104
43.0    Interest and dividends..........           1           2           2
                                           ---------   ---------  ----------
99.0      Direct obligations............      25,590      28,403      30,346
99.0  Reimbursable obligations..........         221         463         222
                                           ---------   ---------  ----------
99.9    Total new obligations...........      25,811      28,866      30,568
---------------------------------------------------------------------------

                              Personnel Summary

----------------------------------------------------------------------------
Identification code 36-0160-0-1-703      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------
    Direct:
1001  Total compensable workyears: 
        Civilian full-time equivalent 
        employment......................     182,532     187,176     191,242
    Reimbursable:
2001  Total compensable workyears: 
        Civilian full-time equivalent 
        employment......................       1,270       3,134       1,399
---------------------------------------------------------------------------

                                

                     Medical and Prosthetic Research

    For necessary expenses in carrying out programs of medical and 
prosthetic research and development as authorized by chapter 73 of title 
38, United States Code, to remain available until September 30, [2005, 
$408,000,000] 2006, $769,540,000, plus reimbursements. (Division G, H.R. 
2673, Consolidated Appropriations Bill, FY 2004.)

               Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 36-0161-0-1-703      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------

    Obligations by program activity:
      Direct program:

        Operating expenses:
00.01     Bio-medical laboratory science 
            research....................         401         433         385
00.02     Rehabilitation research.......          86          89          84
00.03     Health services research......         114         115         112
00.04     Clinical science research.....         120         136         119
                                           ---------   ---------  ----------
00.91       Total operating expenses....         721         773         700
        Capital investment:
01.01     Bio-medical laboratory science 
            research....................          47          48          47
01.02     Rehabilitation research.......          11          12          11
01.03     Health services research......           5           5           5
01.04     Clinical science research.....           7           9           7
                                           ---------   ---------  ----------
01.91       Total capital investment....          70          74          70
                                           ---------   ---------  ----------
01.92     Total direct program..........         791         847         770
09.01 Reimbursable program..............          57          44          50
                                           ---------   ---------  ----------
10.00   Total new obligations...........         848         891         820
    Budgetary resources available for obligation:
21.40 Unobligated balance carried 
        forward, start of year..........          21          47          21
22.00 New budget authority (gross)......         874         864         820
                                           ---------   ---------  ----------
23.90   Total budgetary resources 
          available for obligation......         895         911         841
23.95 Total new obligations.............        -848        -891        -820
24.40 Unobligated balance carried 
        forward, end of year............          47          21          21
    New budget authority (gross), detail:
      Discretionary:

40.00   Appropriation...................         825         822         770
40.35   Appropriation permanently 
          reduced.......................          -3          -2
41.00   Transferred to other accounts...          -5
                                           ---------   ---------  ----------
43.00     Appropriation (total 
            discretionary)..............         817         820         770
      Spending authority from offsetting 
          collections:

68.00   Offsetting collections (cash)...          51          44          50
68.10   Change in uncollected customer 
          payments from Federal sources 
          (unexpired)...................           6
                                           ---------   ---------  ----------
68.90     Spending authority from 
            offsetting collections 
            (total discretionary).......          57          44          50
                                           ---------   ---------  ----------
70.00   Total new budget authority 
          (gross).......................         874         864         820
    Change in obligated balances:
72.40 Obligated balance, start of year..         119         123         157
73.10 Total new obligations.............         848         891         820
73.20 Total outlays (gross).............        -837        -856        -820
73.40 Adjustments in expired accounts 
        (net)...........................          -4
74.00 Change in uncollected customer 
        payments from Federal sources 
        (unexpired).....................          -6
74.10 Change in uncollected customer 
        payments from Federal sources 
        (expired).......................           3
74.40 Obligated balance, end of year....         123         157         156
    Outlays (gross), detail:
86.90 Outlays from new discretionary 
        authority.......................         737         735         696
86.93 Outlays from discretionary 
        balances........................         100         121         124
                                           ---------   ---------  ----------
87.00   Total outlays (gross)...........         837         856         820
    Offsets:
      Against gross budget authority and outlays:

        Offsetting collections (cash) 
            from:
88.00     Federal sources...............          -7          -8         -13
88.40     Non-Federal sources...........         -47         -36         -37
                                           ---------   ---------  ----------
88.90       Total, offsetting 
              collections (cash)........         -54         -44         -50
      Against gross budget authority only:

88.95   Change in uncollected customer 
          payments from Federal sources 
          (unexpired)...................          -6
88.96   Portion of offsetting 
          collections (cash) credited to 
          expired accounts..............           3
    Net budget authority and outlays:
89.00 Budget authority..................         817         820         770
90.00 Outlays...........................         783         812         770
---------------------------------------------------------------------------

    For 2005, the total budgetary resources of $1.7 billion remain 
essentially unchanged. These resources are comprised of direct 
appropriations of $770 million and federal and private sector grants of 
$900 million, which represents 54 percent of the total resources.

    The 2005 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.

[[Page 874]]

    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:

    Bio-Medical Laboratory Research.--This 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 centers 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.

    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.

    Clinical Science Research.--Clinical Science Research will encompass 
interventional and observational studies in humans, including 
pharmacological and surgical studies.

    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.

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

    Focus on Training New Clinical Researchers.--The objective of the 
Career Development program is to train an increasing number of VA 
clinicians who can conduct research in areas of high relevance to the 
health care of veterans.

                                     2003 actual  2004 est.   2005 est.
   Number of Career Development 
    Awardees........................         210         237         240

                      SUMMARY OF PROGRAM RESOURCES

                        [In millions of dollars]

                                     2003 actual  2004 est.   2005 est.
Medical and prosthetic research 
appropriation.......................         817         820         770
Federal resources...................         456         483         534
Other non-federal resources.........         306         307         366
                                    ------------------------------------
      Total program resources.......       1,579       1,610       1,670
                                    ====================================

               Object Classification (in millions of dollars)

----------------------------------------------------------------------------
Identification code 36-0161-0-1-703      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------

      Direct obligations:

        Personnel compensation:
11.1      Full-time permanent...........          98         143         131
11.3      Other than full-time permanent         191         198         188
11.5      Other personnel compensation..          57          64          59
                                           ---------   ---------  ----------
11.9        Total personnel compensation         346         405         378
12.1    Civilian personnel benefits.....         104         104          97
13.0    Benefits for former personnel...           1           1           1
21.0    Employee travel.................           6           7           6
22.0    Transportation of things........           1                       1
23.3    Communications, utilities, and 
          miscellaneous charges.........           5           4           2
24.0    Printing and reproduction.......           1           1           1
25.2    Other services..................         203         198         176
26.0    Supplies and materials..........          67          67          59
31.0    Equipment.......................          49          53          46
32.0    Land and structures.............           8           7           3
                                           ---------   ---------  ----------
99.0      Direct obligations............         791         847         770
99.0  Reimbursable obligations..........          57          44          50
                                           ---------   ---------  ----------
99.9    Total new obligations...........         848         891         820
---------------------------------------------------------------------------

                              Personnel Summary

----------------------------------------------------------------------------
Identification code 36-0161-0-1-703      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------
    Direct:
1001  Total compensable workyears: 
        Civilian full-time equivalent 
        employment......................       6,315       6,239       5,740
    Reimbursable:
2001  Total compensable workyears: 
        Civilian full-time equivalent 
        employment......................         260         260         260
---------------------------------------------------------------------------

                                

      

                     Canteen Service Revolving Fund

               Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 36-4014-0-3-705      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------

    Obligations by program activity:
09.01 Reimbursable operating expenses...         133         144         147
09.02 Reimbursable direct operations....          88          96          98
09.10 Reimbursable capital investment: 
        Sales program: Purchase of 
        equipment and leasehold.........           6           5           5
                                           ---------   ---------  ----------
10.00   Total new obligations...........         227         245         250
    Budgetary resources available for obligation:
21.40 Unobligated balance carried 
        forward, start of year..........          16          18          13
22.00 New budget authority (gross)......         229         240         245
                                           ---------   ---------  ----------
23.90   Total budgetary resources 
          available for obligation......         245         258         258
23.95 Total new obligations.............        -227        -245        -250
24.40 Unobligated balance carried 
        forward, end of year............          18          13           8
    New budget authority (gross), detail:
      Mandatory:

69.00   Offsetting collections (cash)...         229         240         245
    Change in obligated balances:
72.40 Obligated balance, start of year..          14          17          22
73.10 Total new obligations.............         227         245         250
73.20 Total outlays (gross).............        -224        -241        -246
74.40 Obligated balance, end of year....          17          22          26
    Outlays (gross), detail:
86.97 Outlays from new mandatory 
        authority.......................         229         239         244
86.98 Outlays from mandatory balances...          -5           2           2
                                           ---------   ---------  ----------
87.00   Total outlays (gross)...........         224         241         246
    Offsets:
      Against gross budget authority and outlays:

        Offsetting collections (cash) 
            from:
88.00     Federal sources...............                      -3          -2
88.20     Interest on Federal securities                      -2          -3
88.40     Non-Federal sources...........        -229        -235        -240
                                           ---------   ---------  ----------
88.90       Total, offsetting 
              collections (cash)........        -229        -240        -245
    Net budget authority and outlays:
89.00 Budget authority..................

[[Page 875]]

90.00 Outlays...........................          -5           1           1
    Memorandum (non-add) entries:
92.01 Total investments, start of year: 
        Federal securities: Par value...          29          31          28
92.02 Total investments, end of year: 
        Federal securities: Par value...          31          28          29
---------------------------------------------------------------------------

    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      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------

      Personnel compensation:

11.1    Full-time permanent.............          43          46          44
11.3    Other than full-time permanent..          28          36          36
                                           ---------   ---------  ----------
11.9      Total personnel compensation..          71          82          80
12.1  Civilian personnel benefits.......          17          20          20
21.0  Travel and transportation of 
        persons.........................           1           1           1
25.2  Other services....................           3           4           2
26.0  Supplies and materials............         131         133         142
31.0  Equipment.........................           4           5           5
                                           ---------   ---------  ----------
99.9    Total new obligations...........         227         245         250
---------------------------------------------------------------------------

                              Personnel Summary

----------------------------------------------------------------------------
Identification code 36-4014-0-3-705      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------
    Reimbursable:
2001  Total compensable workyears: 
        Civilian full-time equivalent 
        employment......................       2,837       2,850       2,850
---------------------------------------------------------------------------

                                

                  Medical Center Research Organizations

               Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 36-4026-0-3-703      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------

    Obligations by program activity:
09.01 Operating expenses................         162         159         168
09.02 Capital investments...............          12          19          13
                                           ---------   ---------  ----------
10.00   Total new obligations...........         174         178         181
    Budgetary resources available for obligation:
21.40 Unobligated balance carried 
        forward, start of year..........          16          16          16
22.00 New budget authority (gross)......         174         178         181
                                           ---------   ---------  ----------
23.90   Total budgetary resources 
          available for obligation......         190         194         197
23.95 Total new obligations.............        -174        -178        -181
24.40 Unobligated balance carried 
        forward, end of year............          16          16          16
    New budget authority (gross), detail:
      Mandatory:

69.00   Offsetting collections (cash)...         174         178         181
    Change in obligated balances:
73.10 Total new obligations.............         174         178         181
73.20 Total outlays (gross).............        -174        -178        -181
    Outlays (gross), detail:
86.97 Outlays from new mandatory 
        authority.......................         174         178         181
    Offsets:
      Against gross budget authority and outlays:

88.40   Offsetting collections (cash) 
          from: Non-Federal sources.....        -174        -178        -181
    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      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------
21.0  Travel and transportation of 
        persons.........................           2           2           2
25.2  Other services....................         108         111         113
26.0  Supplies and materials............          44          46          47
31.0  Equipment.........................          20          19          19
                                           ---------   ---------  ----------
99.9    Total new obligations...........         174         178         181
---------------------------------------------------------------------------

                                

  

                               Trust Funds

                    General Post Fund, National Homes

                      (including transfer of funds)

                Unavailable Receipts (in millions of dollars)

----------------------------------------------------------------------------
Identification code 36-8180-0-7-705      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------
01.99 Balance, start of year............           1           1
    Receipts:
02.00 General post fund, national homes, 
        Deposits........................          29          34          34
02.40 General post fund, national homes, 
        Interest on investments.........           2           3           3
                                           ---------   ---------  ----------
02.99   Total receipts and collections..          31          37          37
                                           ---------   ---------  ----------
04.00 Total: Balances and collections...          32          38          37
    Appropriations:
05.00 General post fund, national homes.         -31         -38         -37
                                           ---------   ---------  ----------
07.99 Balance, end of year..............           1
---------------------------------------------------------------------------

               Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 36-8180-0-7-705      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------

    Obligations by program activity:
00.01 Religious, recreational, and 
        entertainment activities........          27          28          27
00.02 Research activities...............           2           2           2
00.03 Therapeutic residence maintenance.           1           1           1
                                           ---------   ---------  ----------
10.00   Total new obligations...........          30          31          30
    Budgetary resources available for obligation:
21.40 Unobligated balance carried 
        forward, start of year..........          58          59          66
22.00 New budget authority (gross)......          31          38          37
                                           ---------   ---------  ----------
23.90   Total budgetary resources 
          available for obligation......          89          97         103
23.95 Total new obligations.............         -30         -31         -30
24.40 Unobligated balance carried 
        forward, end of year............          59          66          73
    New budget authority (gross), detail:
      Mandatory:

60.26   Appropriation (trust fund)......          31          38          37
    Change in obligated balances:
72.40 Obligated balance, start of year..           5           5           5
73.10 Total new obligations.............          30          31          30
73.20 Total outlays (gross).............         -30         -30         -31
74.40 Obligated balance, end of year....           5           5           5
    Outlays (gross), detail:
86.97 Outlays from new mandatory 
        authority.......................          30          27          28
86.98 Outlays from mandatory balances...                       3           3
                                           ---------   ---------  ----------
87.00   Total outlays (gross)...........          30          30          31
    Net budget authority and outlays:
89.00 Budget authority..................          31          38          37
90.00 Outlays...........................          30          30          31
    Memorandum (non-add) entries:
92.01 Total investments, start of year: 
        Federal securities: Par value...          47          62          63
92.02 Total investments, end of year: 
        Federal securities: Par value...          62          63          63
---------------------------------------------------------------------------

    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

[[Page 876]]

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      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------
21.0  Travel and transportation of 
        persons.........................           1           2           2
25.2  Other services....................          14          15          15
26.0  Supplies and materials............          10          10          10
31.0  Equipment.........................           4           3           2
32.0  Land and structures...............           1           1           1
                                           ---------   ---------  ----------
99.9    Total new obligations...........          30          31          30
---------------------------------------------------------------------------

                                


 
                            BENEFITS PROGRAMS

                              Federal Funds

General and special funds:

                    Disability Compensation Benefits

                      (including transfer of funds)

    For the payment of compensation benefits to or on behalf of veterans 
and a pilot program for disability examinations, adjusted-service 
credits and certificates, payment of premiums due on commercial life 
insurance policies and for other benefits as authorized by law 
$29,289,028,000; of which, not to exceed $1,615,000 may be transferred 
to ``Disability Compensation Administration'' and ``Medical Care'' 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, 2005 for the disability 
compensation program administered by the Department, such sums as may be 
necessary. (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).
    [For the payment of compensation benefits to or on behalf of 
veterans and a pilot program for disability examinations as authorized 
by law (38 U.S.C. 107, chapters 11, 13, 18, 51, 53, 55, and 61); pension 
benefits to or on behalf of veterans as authorized by law (38 U.S.C. 
chapters 15, 51, 53, 55, and 61; 92 Stat. 2508); and burial benefits, 
emergency and other officers' retirement pay, adjusted-service credits 
and certificates, payment of premiums due on commercial life insurance 
policies guaranteed under the provisions of article IV of the Soldiers' 
and Sailors' Civil Relief Act of 1940 (50 U.S.C. App. 540 et seq.) and 
for other benefits as authorized by law (38 U.S.C. 107, 1312, 1977, and 
2106, chapters 23, 51, 53, 55, and 61; 50 U.S.C. App. 540-548; 43 Stat. 
122, 123; 45 Stat. 735; 76 Stat. 1198), $29,845,127,000, to remain 
available until expended: Provided, That not to exceed $17,056,000 of 
the amount appropriated under this heading shall be reimbursed to 
``General operating expenses'' and ``Medical services'' for necessary 
expenses in implementing those provisions authorized in the Omnibus 
Budget Reconciliation Act of 1990, and in the Veterans' Benefits Act of 
1992 (38 U.S.C. chapters 51, 53, and 55), the funding source for which 
is specifically provided as the ``Compensation and pensions'' 
appropriation: Provided further, That such sums as may be earned on an 
actual qualifying patient basis, shall be reimbursed to ``Medical 
facilities revolving fund'' to augment the funding of individual medical 
facilities for nursing home care provided to pensioners as authorized.] 
(Division G, H.R. 2673, Consolidated Appropriations Bill, FY 2004.)

               Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 36-0102-0-1-701      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------

    Obligations by program activity:
01.01 Veterans..........................      20,796      23,008      24,929
01.02 Survivors.........................       3,890       4,108       4,318
                                           ---------   ---------  ----------
01.91   Direct Program by Activities--
          Subtotal (1 level)............      24,686      27,116      29,247
                                           ---------   ---------  ----------
02.93   Total compensation..............      24,686      27,116      29,247
03.01 Chapter 18........................          16          17          17
03.02 Clothing allowance................          47          50          51
03.03 Automobiles, adaptive equipment...          42          48          51
03.04 Misc Assistance (EAJ, SAFD).......           6           7           7
03.05 Medical exam pilot program........          57          62          61
03.06 OBRA payment to VBA...............           2           1           2
                                           ---------   ---------  ----------
03.91   Total other compensation 
          expenses......................         170         185         189
09.02 Reinstated Entitlement for 
        Suvivors........................           8           8           7
                                           ---------   ---------  ----------
09.99   Total reimbursable program......           8           8           7
                                           ---------   ---------  ----------
10.00   Total new obligations...........      24,865      27,309      29,443
    Budgetary resources available for obligation:
21.40 Unobligated balance carried 
        forward, start of year..........         420       1,112         147
22.00 New budget authority (gross)......      25,558      26,344      29,296
                                           ---------   ---------  ----------
23.90   Total budgetary resources 
          available for obligation......      25,978      27,456      29,443
23.95 Total new obligations.............     -24,865     -27,309     -29,443
23.98 Unobligated balance expiring or 
        withdrawn.......................          -2
24.40 Unobligated balance carried 
        forward, end of year............       1,112         147
    New budget authority (gross), detail:
      Mandatory:

60.00   Appropriation...................      25,549      26,336      29,047
60.00   Appropriation...................                                 242
                                           ---------   ---------  ----------
62.50     Appropriation (total 
            mandatory)..................      25,549      26,336      29,289
69.00 Offsetting collections (cash) REPS           9           8           7
                                           ---------   ---------  ----------
70.00   Total new budget authority 
          (gross).......................      25,558      26,344      29,296
    Change in obligated balances:
72.40 Obligated balance, start of year..       1,838       2,002       2,222
73.10 Total new obligations.............      24,865      27,309      29,443
73.20 Total outlays (gross).............     -24,704     -27,089     -31,615
73.40 Adjustments in expired accounts 
        (net)...........................           4
74.40 Obligated balance, end of year....       2,002       2,222          50
    Outlays (gross), detail:
86.97 Outlays from new mandatory 
        authority.......................      22,442      23,975      29,246
86.98 Outlays from mandatory balances...       2,263       3,114       2,369
                                           ---------   ---------  ----------
87.00   Total outlays (gross)...........      24,705      27,089      31,615
    Offsets:
      Against gross budget authority and outlays:

88.00   Offsetting collections (cash) 
          from: Federal sources.........          -9          -8          -7
    Net budget authority and outlays:
89.00 Budget authority..................      25,549      26,336      29,289
90.00 Outlays...........................      24,695      27,081      31,608
---------------------------------------------------------------------------

                 Summary of Budget Authority and Outlays

                        (in millions of dollars)

                                     2003 actual  2004 est.   2005 est.
Enacted/requested:
  Budget Authority..................      25,549      26,336      29,289
  Outlays...........................      24,696      27,081      31,608
Legislative proposal, subject to 
    PAYGO:
  Budget Authority..................                                -213
  Outlays...........................                     -51        -162
                                    ------------------------------------
Total:
  Budget Authority..................      25,549      26,336      29,076
  Outlays...........................      24,696      27,030      31,446
                                    ====================================

    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

[[Page 877]]

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 $11,000, 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 for claims made pursuant to the provision of the World 
War Adjusted Compensation Act of 1924, as amended;

    (b) 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

    (c) payments authorized by the Equal Access to Justice Act.

    The appropriation also provides for 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.

    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, 2005, is expected to be 1.3 percent.

            AVERAGE NUMBER OF COMPENSATION CASES AND PAYMENTS

                                     2003 actual  2004 est.   2005 est.
Veterans:
  Cases.............................   2,444,807   2,548,204   2,607,295
  Average payment per case, per year      $8,506      $9,029      $9,561
                                    ------------------------------------
      Total obligations (in 
        millions)...................     $20,796     $23,008     $24,929
                                    ====================================
Survivors:
  Total.............................     311,813     322,864     328,291
  Average payment per case, per year     $12,474     $12,722     $13,153
                                    ------------------------------------
      Total obligations (in 
        millions)...................      $3,890      $4,108      $4,318
                                    ====================================
Chapter 18:
  Children..........................       1,044       1,054       1,062
  Average payment per case, per year     $15,580     $16,086     $16,457
                                    ------------------------------------
      Total obligations (in 
        millions)...................         $16         $17         $17
                                    ====================================
Clothing allowance:
  Number of veterans................      80,641      83,406      84,398
  Average payment per case, per year        $588        $600        $608
                                    ------------------------------------
      Total obligations (in 
        millions)...................         $47         $50         $51
                                    ====================================
Automobiles or other conveyances:
  Number of conveyances.............       1,396       1,600       1,600
  Average benefit...................      $8,819     $10,500     $11,000
                                    ------------------------------------
      Obligations (in millions).....         $12         $17         $18
                                    ====================================
Adaptive equipment (including 
    maintenance, repair and 
    installation for automobiles):
  Number of items...................       7,968       7,968       7,968
  Average benefit...................      $3,767      $3,971      $4,185
                                    ------------------------------------
      Obligations (in millions).....         $30         $32         $33
                                    ====================================
Other compensation caseload:
  Special allowance dependents......          86          78          70
  Equal Access to Justice payments..       1,425       1,495       1,495
                                    ====================================
REPS:
  Spouses...........................          33          27          22
  Average benefit...................     $11,636     $13,385     $13,626
                                    ------------------------------------
  Children..........................         435         390         350
  Average benefit...................     $15,897     $18,537     $19,068
                                    ------------------------------------
      Obligations (in millions).....          $8          $8          $7
                                    ====================================

               Object Classification (in millions of dollars)

----------------------------------------------------------------------------
Identification code 36-0102-0-1-701      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------
42.0  Direct obligations: Insurance 
        claims and indemnities..........      24,857      27,301      29,437
99.0  Reimbursable obligations: 
        Reimbursable obligations........           8           8           7
                                           ---------   ---------  ----------
99.9    Total new obligations...........      24,865      27,309      29,444
---------------------------------------------------------------------------

                    Disability Compensation Benefits

                (Legislative proposal, subject to PAYGO)

    Legislation was proposed during the 1st session of the 108th 
Congress to restore the original interpretation of section 1110 of title 
38 U.S.C. prohibiting the granting of service-connected disability 
arising secondarily from an 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 $158 million in 2005.

               Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 36-0102-4-1-701      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------

    Obligations by program activity:
01.01 Allen reversal....................                     -55        -158
                                           ---------   ---------  ----------
02.93   Total compensation..............                     -55        -158
                                           ---------   ---------  ----------
10.00   Total new obligations (object 
          class 42.0)...................                     -55        -158
    Budgetary resources available for obligation:
21.40 Unobligated balance carried 
        forward, start of year..........                                  55
22.00 New budget authority (gross)......                                -213
                                           ---------   ---------  ----------
23.90   Total budgetary resources 
          available for obligation......                                -158
23.95 Total new obligations.............                      55         158
24.40 Unobligated balance carried 
        forward, end of year............                      55
    New budget authority (gross), detail:
      Mandatory:

60.00   Appropriation...................                                -213
    Change in obligated balances:
72.40 Obligated balance, start of year..                                  -4
73.10 Total new obligations.............                     -55        -158
73.20 Total outlays (gross).............                      51         162
74.40 Obligated balance, end of year....                      -4
    Outlays (gross), detail:
86.97 Outlays from new mandatory 
        authority.......................                     -51        -162
    Net budget authority and outlays:
89.00 Budget authority..................                                -213
90.00 Outlays...........................                     -51        -162
---------------------------------------------------------------------------

                                

                 Disability Compensation Administration

    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, 
$657,624,000, including no more than $11,775,000 for construction.

[[Page 878]]

               Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 36-0134-0-1-701      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------

    Obligations by program activity:
      Other direct expenses:

03.01   Administrative expenses.........         654         692         674
03.03   Construction, minor projects....          12          12          12
                                           ---------   ---------  ----------
03.92   Total other direct expenses.....         667         704         686
      Reimbursable compensation program:

09.02   Administrative expense..........          61          66          65
                                           ---------   ---------  ----------
09.99     Total reimbursable program....          61          66          65
                                           ---------   ---------  ----------
10.00   Total new obligations...........         728         770         751
    Budgetary resources available for obligation:
21.40 Unobligated balance carried 
        forward, start of year..........          18          40          32
22.00 New budget authority (gross)......         752         698         723
22.22 Unobligated balance of FY2003 
        emergency sup transferred from 
        Gen Ad..........................                      63
                                           ---------   ---------  ----------
23.90   Total budgetary resources 
          available for obligation......         770         801         755
23.95 Total new obligations.............        -728        -770        -751
24.40 Unobligated balance carried 
        forward, end of year............          40          32           4
    New budget authority (gross), detail:
      Discretionary:

40.00   Appropriation...................         694         636         658
40.35   Appropriation reduced pursuant 
          to P.L. 108-7.................          -4
40.35   Appropriation permanently 
          reduced pursuant to H.R. 2673.                      -4
                                           ---------   ---------  ----------
43.00     Appropriation (total 
            discretionary)..............         690         632         658
68.00 Spending authority from offsetting 
        collections: Offsetting 
        collections (cash)..............          61          66          65
                                           ---------   ---------  ----------
70.00   Total new budget authority 
          (gross).......................         751         698         723
    Change in obligated balances:
72.40 Obligated balance, start of year..         120         125         114
73.10 Total new obligations.............         728         770         751
73.20 Total outlays (gross).............        -713        -780        -733
73.40 Adjustments in expired accounts 
        (net)...........................         -10
74.40 Obligated balance, end of year....         125         114         132
    Outlays (gross), detail:
86.90 Outlays from new discretionary 
        authority.......................         585         567         586
86.93 Outlays from discretionary 
        balances........................         128         213         147
                                           ---------   ---------  ----------
87.00   Total outlays (gross)...........         713         780         733
    Offsets:
      Against gross budget authority and outlays:

88.00   Offsetting collections (cash) 
          from: Federal sources.........         -61         -66         -65
    Net budget authority and outlays:
89.00 Budget authority..................         690         632         658
90.00 Outlays...........................         652         714         668
---------------------------------------------------------------------------

    This appropriation provides for the corporate leadership and 
operational support to VA's Disability Compensation business line. 
Additionally, funding is provided for capital asset investments.

    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 congressional 
budget. The Disability Compensation business line provides processing of 
claims for veterans and dependents relating to compensation benefits 
under the various laws enacted by Congress.

                                WORKLOAD

                                     2003 actual  2004 est.   2005 est.

Compensation:
  Rating-Related Actions............     731,930     703,444     733,423
  Non Rating Actions................     356,357     349,230     363,199

               Object Classification (in millions of dollars)

----------------------------------------------------------------------------
Identification code 36-0134-0-1-701      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------

      Direct obligations:

        Personnel compensation:
11.1      Full-time permanent...........         369         366         379
11.5      Other personnel compensation..          45          50          61
                                           ---------   ---------  ----------
11.9        Total personnel compensation         414         416         440
12.1    Civilian personnel benefits.....         101         101         112
21.0    Employee travel.................           7           6           7
22.0    Transportation of things........           2           2           2
23.1    Rental payments to GSA..........          49          50          43
23.2    Rental payments to others.......           4           4           4
23.3    Communications, utilities, and 
          miscellaneous charges.........          19          19          20
24.0    Printing and reproduction.......           1           2           1
25.2    Other services..................          42          78          32
26.0    Supplies and materials..........           5           5           4
31.0    Equipment.......................          10           9           9
32.0    Land and structures.............          13          12          12
                                           ---------   ---------  ----------
99.0      Direct obligations............         667         704         686
99.0  Reimbursable obligations..........          61          66          65
                                           ---------   ---------  ----------
99.9    Total new obligations...........         728         770         751
---------------------------------------------------------------------------

                              Personnel Summary

----------------------------------------------------------------------------
Identification code 36-0134-0-1-701      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------
    Direct:
1001  Total compensable workyears: 
        Civilian full-time equivalent 
        employment......................       7,264       7,021       6,989
    Reimbursable:
2001  Total compensable workyears: 
        Civilian full-time equivalent 
        employment......................          82          71          68
---------------------------------------------------------------------------

                                

                           Education Benefits

    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, 
$1,909,379,000. In addition, for making payments after June 30, 2005 for 
the education program administered by the Department, such sums as may 
be necessary. (38 U.S.C. chapters 30, 34, 35, 36, 51, 53, 55, and 61).
    [For the payment of readjustment and rehabilitation benefits to or 
on behalf of veterans as authorized by law (38 U.S.C. chapters 21, 30, 
31, 34, 35, 36, 39, 51, 53, 55, and 61), $2,529,734,000, to remain 
available until expended: Provided, That expenses for rehabilitation 
program services and assistance which the Secretary is authorized to 
provide under section 3104(a) of title 38, United States Code, other 
than under subsection (a)(1), (2), (5), and (11) of that section, shall 
be charged to this account.] (Division G, H.R. 2673, Consolidated 
Appropriations Bill, FY 2004.)

               Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 36-0137-0-1-702      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------

    Obligations by program activity:
      Direct program:

01.01   Veterans/servicepersons.........       1,466       1,638       1,726
01.03   Dependents......................         278         320         390
01.04   Tuition Assistance..............          13          14          14
01.05   Licensing and Certification.....           2           4           5
01.06   Work study......................          19          20          20
01.07   Payments to states..............          14          18          18
01.08   Reporting fees..................           3           3           3
                                           ---------   ---------  ----------
01.91     Direct Program by Activities--
            Subtotal....................       1,795       2,017       2,176
                                           ---------   ---------  ----------
01.92   Total education program.........       1,795       2,017       2,176
      Other Direct Expenses:

02.02   Administrative expenses.........           1           4           2
                                           ---------   ---------  ----------
03.93   Total Direct Program............       1,796       2,021       2,178
      Reimbursable education program:

09.01   Veterans' basic benefits........           9           9          10
09.02   Veterans' supplementary benefits          80          83          95
09.03   Reservists benefits.............         121         136         151
09.04   Reservists supplementary 
          benefits......................          46          52          58

[[Page 879]]

09.05   National Call to Service........                                   1
                                           ---------   ---------  ----------
09.09     Reimbursable program--subtotal 
            line........................         256         280         315
                                           ---------   ---------  ----------
10.00   Total new obligations...........       2,052       2,301       2,493
    Budgetary resources available for obligation:
21.40 Unobligated balance carried 
        forward, start of year..........         519         400         268
22.00 New budget authority (gross)......       1,932       2,170       2,224
                                           ---------   ---------  ----------
23.90   Total budgetary resources 
          available for obligation......       2,451       2,570       2,492
23.95 Total new obligations.............      -2,052      -2,301      -2,493
24.40 Unobligated balance carried 
        forward, end of year............         400         268
    New budget authority (gross), detail:
      Mandatory:

60.00   Appropriation...................       1,676       1,890       1,909
69.00 Offsetting collections (cash).....         256         280         315
                                           ---------   ---------  ----------
70.00   Total new budget authority 
          (gross).......................       1,932       2,170       2,224
    Change in obligated balances:
72.40 Obligated balance, start of year..          48          57          36
73.10 Total new obligations.............       2,052       2,301       2,493
73.20 Total outlays (gross).............      -2,042      -2,322      -2,490
74.40 Obligated balance, end of year....          57          36          39
    Outlays (gross), detail:
86.97 Outlays from new mandatory 
        authority.......................       1,475       1,865       2,185
86.98 Outlays from mandatory balances...         567         457         305
                                           ---------   ---------  ----------
87.00   Total outlays (gross)...........       2,042       2,322       2,490
    Offsets:
      Against gross budget authority and outlays:

88.00   Offsetting collections (cash) 
          from: Federal sources.........        -256        -280        -315
    Net budget authority and outlays:
89.00 Budget authority..................       1,676       1,890       1,909
90.00 Outlays...........................       1,787       2,042       2,175
---------------------------------------------------------------------------

    This appropriation finances educational assistance allowances for 
certain service persons, 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.

    All Volunteer Force educational assistance (Montgomery GI Bill).--
Public Law 98-525, enacted October 19, 1984, established two new 
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 veterans, except for 
certain Post-Vietnam Era Veterans Education participants who transferred 
to the Montgomery GI Bill program. Supplementary educational assistance, 
the basic benefit allowance for veterans, Post-Vietnam Era Veterans 
Education converters, reservists, and the National Call to Service 
Program are financed by payments from the Department of Defense and the 
Department of Homeland Security.

    The following table shows a caseload and cost comparison for these 
beneficiaries under existing legislation.

                     CASELOAD AND AVERAGE COST DATA

                                     2003 actual  2004 est.   2005 est.

Veterans/Servicemembers:
  Number of trainees................     305,935     313,952     327,736
  Average cost per trainee..........      $5,082      $5,489      $5,567
                                    ------------------------------------
      Total cost (in millions)......      $1,555      $1,723      $1,825
                                    ====================================
Reservists:
  Number of trainees................      89,961      98,900     107,738
  Average cost per trainee..........      $1,825      $1,865      $1,897
                                    ------------------------------------
      Total cost (in millions)......        $164        $184        $204
                                    ====================================

    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

                                     2003 actual  2004 est.   2005 est.

Sons and daughters:
  Number of trainees................      53,477      58,156      63,249
  Average cost per trainee (in 
    dollars)........................      $4,624      $4,880      $5,462
                                    ------------------------------------
      Total cost (in millions)......        $247        $284        $345
                                    ====================================
Spouses and widow(ers):
  Number of trainees................       8,481       9,245      10,103
  Average cost per trainee (in 
    dollars)........................      $3,684      $3,890      $4,357
                                    ------------------------------------
      Total cost (in millions)......         $31         $36         $44
                                    ====================================

    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.

    National Call to Service.--The 2003 National Defense Authorization 
Act directs the Department of Defense to offer an active duty enlistment 
option of 15 months plus training time to facilitate interest in 
National Service. Program participants will be given the opportunity to 
select one of the following incentives: a $5,000 enlistment bonus, 
repayment of student loans up to $18,000, or one of two education 
allowances.

                     CASELOAD AND AVERAGE COST DATA

                                     2003 actual  2004 est.   2005 est.

Tuition Assistance:
  Number of trainees................      24,527      25,000      25,000
  Average cost per trainee..........        $513        $562        $571
                                    ------------------------------------
      Total cost (in millions)......         $13         $14         $14
                                    ====================================
Licensing and Certification:
  Number of payments................       6,574      15,000      15,000
  Average cost per trainee..........        $265        $292        $321
                                    ------------------------------------
      Total cost (in millions)......          $2          $4          $5
National Call to Service:
  Number of trainees................           0           0         160
                                    ------------------------------------
      Total cost (in millions)......          $0          $0          $2
                                    ====================================

    Work-Study.--Certain veterans, reservists, and dependents pursuing a 
program of 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 September 1, 1997) or state minimum wage rate, whichever is 
higher.

                                     2003 actual  2004 est.   2005 est.

  Number of contracts...............      18,378      18,400      18,400
                                    ------------------------------------
      Total cost (in millions)......         $22         $23         $24
                                    ====================================

    Payments to States.--State approving agencies are reimbursed for the 
costs of inspecting, approving, and supervising programs of education 
and training offered by educational

[[Page 880]]

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.

               Object Classification (in millions of dollars)

----------------------------------------------------------------------------
Identification code 36-0137-0-1-702      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------
41.0  Direct obligations: Grants, 
        subsidies, and contributions....       1,796       2,021       2,178
99.0  Reimbursable obligations: 
        Reimbursable obligations........         256         280         315
                                           ---------   ---------  ----------
99.9    Total new obligations...........       2,052       2,301       2,493
---------------------------------------------------------------------------

                                

                        Education Administration

    For operating expenses of education and training benefits and 
reimbursement of the Department of Defense for the cost of overseas 
employee mail, $91,160,000, including no more than $768,000 for 
construction.

               Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 36-0133-0-1-702      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------

    Obligations by program activity:
      Other direct expenses:

03.01   Administrative expenses.........          68          85          90
03.03   Construction, minor projects....                       1           1
                                           ---------   ---------  ----------
03.92   Total other direct expenses.....          68          86          91
      Reimbursable education program:

09.02   Administrative expense..........           1           4           2
                                           ---------   ---------  ----------
09.99     Total reimbursable program....           1           4           2
                                           ---------   ---------  ----------
10.00   Total new obligations...........          69          90          93
    Budgetary resources available for obligation:
21.40 Unobligated balance carried 
        forward, start of year..........           2           4           1
22.00 New budget authority (gross)......          71          87          93
                                           ---------   ---------  ----------
23.90   Total budgetary resources 
          available for obligation......          73          91          94
23.95 Total new obligations.............         -69         -90         -93
24.40 Unobligated balance carried 
        forward, end of year............           4           1           1
    New budget authority (gross), detail:
      Discretionary:

40.00   Appropriation...................          71          84          91
40.35   Appropriation reduced pursuant 
          to P.L. 108-7.................          -1
40.35   Appropriation permanently 
          reduced pursuant to H.R. 2673.                      -1
                                           ---------   ---------  ----------
43.00     Appropriation (total 
            discretionary)..............          70          83          91
68.00 Spending authority from offsetting 
        collections: Offsetting 
        collections (cash)..............           1           4           2
                                           ---------   ---------  ----------
70.00   Total new budget authority 
          (gross).......................          71          87          93
    Change in obligated balances:
72.40 Obligated balance, start of year..          14          15          19
73.10 Total new obligations.............          69          90          93
73.20 Total outlays (gross).............         -67         -87         -90
74.40 Obligated balance, end of year....          15          19          22
    Outlays (gross), detail:
86.90 Outlays from new discretionary 
        authority.......................          53          70          75
86.93 Outlays from discretionary 
        balances........................          14          17          15
                                           ---------   ---------  ----------
87.00   Total outlays (gross)...........          67          87          90
    Offsets:
      Against gross budget authority and outlays:

88.00   Offsetting collections (cash) 
          from: Federal sources.........          -1          -4          -2
    Net budget authority and outlays:
89.00 Budget authority..................          70          83          91
90.00 Outlays...........................          67          83          88
---------------------------------------------------------------------------

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

                                WORKLOAD

                                     2003 actual  2004 est.   2005 est.

Original claims.....................     181,844     189,401     196,924
Adjustments/supplemental claims.....   1,049,279   1,181,903   1,231,879

               Object Classification (in millions of dollars)

----------------------------------------------------------------------------
Identification code 36-0133-0-1-702      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------

      Direct obligations:

        Personnel compensation:
11.1      Full-time permanent...........          37          42          42
11.5      Other personnel compensation..           5           6           7
                                           ---------   ---------  ----------
11.9        Total personnel compensation          42          48          49
12.1    Civilian personnel benefits.....          11          13          15
21.0    Employee travel.................           1           2           3
23.1    Rental payments to GSA..........           5           8           8
23.2    Rental payments to others.......                                   1
23.3    Communications, utilities, and 
          miscellaneous charges.........           2           3           2
25.2    Other services..................           5           8           8
26.0    Supplies and materials..........           1           1           1
31.0    Equipment.......................           1           2           3
32.0    Land and structures.............                       1           1
                                           ---------   ---------  ----------
99.0      Direct obligations............          68          86          91
99.0  Reimbursable obligations..........           1           4           2
                                           ---------   ---------  ----------
99.9    Total new obligations...........          69          90          93
---------------------------------------------------------------------------

                              Personnel Summary

----------------------------------------------------------------------------
Identification code 36-0133-0-1-702      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------
    Direct:
1001  Total compensable workyears: 
        Civilian full-time equivalent 
        employment......................         866         926         888
---------------------------------------------------------------------------

                                

            Vocational Rehabilitation and Employment Benefits

    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, $565,204,000. In addition, for 
making payments after June 30, 2005 for the vocational rehabilitation 
and employment program administered by the Department, such sums as may 
be necessary. (38 U.S.C. chapters 31, 36, 51, 53, 55, and 61).

               Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 36-0135-0-1-702      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------

    Obligations by program activity:
01.01 Vocational rehabilitation training         280         305         332
01.02 Subsistence allowance.............         224         234         244
01.04 Work study........................          11          11          11
                                           ---------   ---------  ----------
10.00   Total new obligations (object 
          class 41.0)...................         515         550         587
    Budgetary resources available for obligation:
21.40 Unobligated balance carried 
        forward, start of year..........                      11          22
22.00 New budget authority (gross)......         525         561         565
                                           ---------   ---------  ----------
23.90   Total budgetary resources 
          available for obligation......         525         572         587
23.95 Total new obligations.............        -515        -550        -587
24.40 Unobligated balance carried 
        forward, end of year............          11          22
    New budget authority (gross), detail:
      Mandatory:

60.00   Appropriation...................         525         561         565
    Change in obligated balances:
72.40 Obligated balance, start of year..          15          16          10
73.10 Total new obligations.............         515         550         587
73.20 Total outlays (gross).............        -514        -556        -587
74.40 Obligated balance, end of year....          16          10          10
    Outlays (gross), detail:
86.97 Outlays from new mandatory 
        authority.......................         499         530         555

[[Page 881]]

86.98 Outlays from mandatory balances...          15          26          32
                                           ---------   ---------  ----------
87.00   Total outlays (gross)...........         514         556         587
    Net budget authority and outlays:
89.00 Budget authority..................         525         561         565
90.00 Outlays...........................         514         556         587
---------------------------------------------------------------------------

    This appropriation finances assistance allowances for certain 
disabled veterans who are provided with vocational rehabilitation and 
employment services.

    In compliance with the Federal Credit Reform Act of 1990, the 
Vocational Rehabilitation Loan Fund Program account is reported 
separately under the Vocational Rehabilitation 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.

    Work-Study.--Certain veterans pursuing a program of rehabilitation, 
who are enrolled as a full-time student, can work up to 250 hours per 
semester, receiving the Federal ($5.15 on September 1, 1997) or state 
minimum wage rate, whichever is higher.

    The following table shows caseload for this program. We are now 
including individuals in the category of Rehabilitation Evaluation 
Planning and Service Delivery. Although these cases are receiving VR&E 
services, they are not receiving monetary benefits. Specific performance 
goals are contained in VA's congressional budget.

                     CASELOAD AND AVERAGE COST DATA

                                     2003 actual  2004 est.   2005 est.

Special assistance to disabled 
    veterans:
  Rehabilitation Evaluation Planning 
    and Service cases...............      22,395      22,999      23,631
  Number of participants............      71,587      73,517      75,538
  Average cost......................      $7,033      $7,328      $7,622
                                    ------------------------------------
    Total cost (in millions)........        $503        $539       $5576
Work-study:
  Number of contracts...............       8,908       8,900       8,900
    Total cost (in millions)........         $11         $11         $11
                                    ====================================

                                

         Vocational Rehabilitation and Employment Administration

    For operating expenses 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, $140,344,000, including no more than $1,867,000 for 
construction, and including no more than $311,000 for administering the 
direct loan program; for the cost of direct loans, $47,000, as 
authorized by 38 U.S.C. chapter 31, as amended: Provided, That such 
costs, including the cost of modifying such loans, shall be as defined 
in section 502 of the Congressional Budget Act of 1974, as amended: 
Provided further, That these funds are available to subsidize gross 
obligations for the principal amount of direct loans not to exceed 
$4,108,000.

               Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 36-0132-0-1-702      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------

    Obligations by program activity:
      Other direct expenses:

03.01   Administrative expenses.........         115         135         138
03.03   Construction, minor projects....           2           2           2
                                           ---------   ---------  ----------
03.92   Total other direct expenses.....         116         137         140
                                           ---------   ---------  ----------
10.00   Total new obligations...........         116         137         140
    Budgetary resources available for obligation:
21.40 Unobligated balance carried 
        forward, start of year..........           2           3           1
22.00 New budget authority (gross)......         118         134         140
                                           ---------   ---------  ----------
23.90   Total budgetary resources 
          available for obligation......         120         137         141
23.95 Total new obligations.............        -116        -137        -140
24.40 Unobligated balance carried 
        forward, end of year............           3           1           1
    New budget authority (gross), detail:
      Discretionary:

40.00   Appropriation...................         118         135         140
40.35   Appropriation reduced pursuant 
          to P.L. 108-7.................          -1
40.35   Appropriation permanently 
          reduced pursuant to H.R. 2673.                      -1
                                           ---------   ---------  ----------
43.00     Appropriation (total 
            discretionary)..............         117         134         140
    Change in obligated balances:
72.40 Obligated balance, start of year..          22          24          27
73.10 Total new obligations.............         116         137         140
73.20 Total outlays (gross).............        -114        -134        -135
74.40 Obligated balance, end of year....          24          27          33
    Outlays (gross), detail:
86.90 Outlays from new discretionary 
        authority.......................          91         107         112
86.93 Outlays from discretionary 
        balances........................          23          27          23
                                           ---------   ---------  ----------
87.00   Total outlays (gross)...........         114         134         135
    Net budget authority and outlays:
89.00 Budget authority..................         118         134         140
90.00 Outlays...........................         114         134         135
---------------------------------------------------------------------------

    This appropriation provides for the corporate leadership and 
operational support to VA's VR&E business line. Additionally, funding is 
provided for capital asset investments.

    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.

    As required by the Federal Credit Reform Act of 1990, this account 
records, for this program, the subsidy costs associated with the direct 
loans obligated in 1992 and beyond, as well as the administrative 
expenses of this program. The subsidy amounts are estimated on a net 
present value basis.

                              WORKLOAD \1\

                                     2003 actual  2004 est.   2005 est.

  Evaluation and planning...........      62,195      63,749      65,342
  Rehabilitation services...........      65,513      67,150      68,828
  Employment services status........      14,368      14,727      15,095
  Vocational/educational counseling.      19,054      19,550      20,018

  \1\ Veterans may be in more than 
    one category.

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

----------------------------------------------------------------------------
Identification code 36-0132-0-1-702      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------
    Direct loan levels supportable by subsidy 
                budget authority:
115001Vocational Rehabilitation.........           3           4           4
                                           ---------   ---------  ----------
115901Total direct loan levels..........           3           4           4
    Direct loan subsidy (in percent):
132001Vocational Rehabilitation.........        1.50        1.33        1.14
                                           ---------   ---------  ----------
132901Weighted average subsidy rate.....        1.50        1.33        1.14
    Direct loan subsidy budget authority:
133001Vocational Rehabilitation.........
                                           ---------   ---------  ----------
133901Total subsidy budget authority....
    Direct loan subsidy outlays:
134001Vocational Rehabilitation.........
                                           ---------   ---------  ----------
134901Total subsidy outlays.............
---------------------------------------------------------------------------

               Object Classification (in millions of dollars)

----------------------------------------------------------------------------
Identification code 36-0132-0-1-702      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------

      Personnel compensation:

11.1    Full-time permanent.............          57          62          59
11.5    Other personnel compensation....           8           9          10
                                           ---------   ---------  ----------
11.9      Total personnel compensation..          65          71          69

[[Page 882]]

12.1  Civilian personnel benefits.......          17          19          20
21.0  Employee travel...................           2           2           2
23.1  Rental payments to GSA............           7           8           8
23.2  Rental payments to others.........           1           1           1
23.3  Communications, utilities, and 
        miscellaneous charges...........           3           3           3
25.2  Other services....................          17          27          30
26.0  Supplies and materials............           1           1           1
31.0  Equipment.........................           1           3           4
32.0  Land and structures...............           2           2           2
                                           ---------   ---------  ----------
99.9    Total new obligations...........         116         137         140
---------------------------------------------------------------------------

                              Personnel Summary

----------------------------------------------------------------------------
Identification code 36-0132-0-1-702      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------
    Direct:
1001  Total compensable workyears: 
        Civilian full-time equivalent 
        employment......................       1,091       1,118       1,015
---------------------------------------------------------------------------

                                

                           Insurance Benefits

    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, 
$39,380,000, to remain available until expended. In addition, for making 
payments after June 30, 2005 for the insurance programs administered  by 
the Department, such sums as may be necessary. (38 U.S.C. chapter 19; 70 
Stat. 887; 72 Stat. 487).
    [For military and naval insurance, national service life insurance, 
servicemen's indemnities, service-disabled veterans insurance, and 
veterans mortgage life insurance as authorized by 38 U.S.C. chapter 19; 
70 Stat. 887; 72 Stat. 487, $29,017,000, to remain available until 
expended.] (Division G, H.R. 2673, Consolidated Appropriations Bill, FY 
2004.)

               Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 36-0120-0-1-701      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------

    Obligations by program activity:
00.01 Payment to NSLI...................           1           1           1
00.10 VMLI death claims.................           9           9           9
00.12 Payment to service-disabled 
        veterans insurance..............          20          22          31
                                           ---------   ---------  ----------
01.00   Total direct expenses...........          30          32          41
                                           ---------   ---------  ----------
10.00   Total new obligations...........          30          32          41
    Budgetary resources available for obligation:
21.40 Unobligated balance carried 
        forward, start of year..........           1           1
22.00 New budget authority (gross)......          30          31          41
                                           ---------   ---------  ----------
23.90   Total budgetary resources 
          available for obligation......          31          32          41
23.95 Total new obligations.............         -30         -32         -41
24.40 Unobligated balance carried 
        forward, end of year............           1
    New budget authority (gross), detail:
      Mandatory:

60.00   Appropriation...................          28          29          39
69.00 Offsetting collections (cash).....           2           2           2
                                           ---------   ---------  ----------
70.00   Total new budget authority 
          (gross).......................          30          31          41
    Change in obligated balances:
73.10 Total new obligations.............          30          32          41
73.20 Total outlays (gross).............         -30         -31         -41
    Outlays (gross), detail:
86.97 Outlays from new mandatory 
        authority.......................          30          31          41
    Offsets:
      Against gross budget authority and outlays:

88.40   Offsetting collections (cash) 
          from: VMLI premiums...........          -2          -2          -2
    Net budget authority and outlays:
89.00 Budget authority..................          28          29          39
90.00 Outlays...........................          28          29          39
---------------------------------------------------------------------------
    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 2005 as indicated in the following table.

                     POLICIES AND INSURANCE IN FORCE

                                     2003 actual  2004 est.   2005 est.

VMLI policies:
  Number of policies................       2,793       2,710       2,620
  Amount of insurance (dollars in 
    millions).......................        $175        $174        $173

               Object Classification (in millions of dollars)

----------------------------------------------------------------------------
Identification code 36-0120-0-1-701      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------
42.0  Direct obligations: Insurance 
        claims and indemnities..........          28          30          39
99.0  Reimbursable obligations: 
        Reimbursable obligations........           2           2           2
                                           ---------   ---------  ----------
99.9    Total new obligations...........          30          32          41
---------------------------------------------------------------------------

                                

                        Insurance Administration

    For operating expenses associated with the provision of insurance 
programs; and reimbursement of the Department of Defense for the cost of 
overseas employee mail, $4,190,000, including no more than $209,000 for 
construction.

               Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 36-0141-0-1-701      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------

    Obligations by program activity:
      Other direct expenses:

03.01   Administrative expenses.........           4           4           4
                                           ---------   ---------  ----------
03.92   Total other direct expenses.....           4           4           4
      Reimbursable insurance program:

09.02   Administrative expense..........          36          39          40
                                           ---------   ---------  ----------
09.99     Total reimbursable program....          36          39          40
                                           ---------   ---------  ----------

[[Page 883]]


10.00   Total new obligations...........          40          43          44
    Budgetary resources available for obligation:
21.40 Unobligated balance carried 
        forward, start of year..........                       1
22.00 New budget authority (gross)......          41          43          44
                                           ---------   ---------  ----------
23.90   Total budgetary resources 
          available for obligation......          41          44          44
23.95 Total new obligations.............         -40         -44         -44
24.40 Unobligated balance carried 
        forward, end of year............           1
    New budget authority (gross), detail:
      Discretionary:

40.00   Appropriation...................           4           4           4
40.35   Appropriation permanently 
          reduced by PL 108-7...........
40.35   Appropriation permanently 
          reduced by HR 2673............
                                           ---------   ---------  ----------
43.00     Appropriation (total 
            discretionary)..............           4           4           4
68.00 Spending authority from offsetting 
        collections: Offsetting 
        collections (cash)..............          36          39          40
                                           ---------   ---------  ----------
70.00   Total new budget authority 
          (gross).......................          40          43          44
    Change in obligated balances:
72.40 Obligated balance, start of year..           6           6           7
73.10 Total new obligations.............          40          43          44
73.20 Total outlays (gross).............         -40         -42         -43
74.40 Obligated balance, end of year....           6           7           8
    Outlays (gross), detail:
86.90 Outlays from new discretionary 
        authority.......................          35          36          37
86.93 Outlays from discretionary 
        balances........................           5           6           6
                                           ---------   ---------  ----------
87.00   Total outlays (gross)...........          40          42          43
    Offsets:
      Against gross budget authority and outlays:

88.00   Offsetting collections (cash) 
          from: Federal sources.........         -36         -39         -40
    Net budget authority and outlays:
89.00 Budget authority..................           5           4           4
90.00 Outlays...........................           3           4           4
---------------------------------------------------------------------------

    This appropriation provides for the corporate leadership and 
operational support to VA's Insurance business line. Additionally, 
funding is provided for capital asset investments.

                                WORKLOAD

                                     2003 actual  2004 est.   2005 est.

  Policy service actions............     783,874     767,000     719,000
  Collections.......................   2,160,280   2,035,000   1,908,000
  Disability claims.................      25,180      35,000      32,000
  Insurance awards..................     489,070     486,000     482,000
    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 36-0141-0-1-701      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------

      Direct obligations:

        Personnel compensation:
11.1      Full-time permanent...........           2           2           2
11.5      Other personnel compensation..           1           1           1
                                           ---------   ---------  ----------
11.9        Total personnel compensation           3           3           3
12.1    Civilian personnel benefits.....           1           1           1
                                           ---------   ---------  ----------
99.0      Direct obligations............           4           4           4
99.0  Reimbursable obligations..........          36          39          40
                                           ---------   ---------  ----------
99.9    Total new obligations...........          40          43          44
---------------------------------------------------------------------------

                              Personnel Summary

----------------------------------------------------------------------------
Identification code 36-0141-0-1-701      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------
    Direct:
1001  Total compensable workyears: 
        Civilian full-time equivalent 
        employment......................          49          45          45
    Reimbursable:
2001  Total compensable workyears: 
        Civilian full-time equivalent 
        employment......................         444         468         468
---------------------------------------------------------------------------

                                

                            Pensions Benefits

                      (including transfer of funds)

    For the payment of pension benefits to or on behalf of veterans, a 
pilot program for disability examinations, payment of premiums due on 
commercial life insurance policies, and for other benefits as authorized 
by law, $3,193,604,000; of which not to exceed $19,088,000 may be 
transferred to ``Pension Administration'' and ``Medical Care'' for the 
administrative expenses authorized by the Omnibus Budget Reconciliation 
Act of 1990 and the Veterans' Benefits Act of 1992: 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, 2005 for the 
pension programs administered by the Department, such sums as may be 
necessary. (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).

               Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 36-0154-0-1-701      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------

    Obligations by program activity:
01.03 Improved law......................       2,486       2,543       2,603
01.04 Prior law.........................          27          23          20
                                           ---------   ---------  ----------
01.91   Total veterans..................       2,513       2,566       2,624
02.01 Improved law......................         644         655         663
02.02 Prior law.........................          60          54          49
02.03 Old law...........................           1           1           1
                                           ---------   ---------  ----------
02.91   Total survivors.................         705         710         713
                                           ---------   ---------  ----------
02.92   Total pensions..................       3,218       3,276       3,337
03.01 OBRA payment to VBA...............           7           7           8
03.02 OBRA payment to VHA...............           9           9          11
03.03 Contract Medical exams............           1           1           1
                                           ---------   ---------  ----------
03.91   Direct Program by Activities....          17          17          20
                                           ---------   ---------  ----------
10.00   Total new obligations (object 
          class 42.0)...................       3,235       3,293       3,356
    Budgetary resources available for obligation:
21.40 Unobligated balance carried 
        forward, start of year..........                      65         163
22.00 New budget authority (gross)......       3,300       3,391       3,194
                                           ---------   ---------  ----------
23.90   Total budgetary resources 
          available for obligation......       3,300       3,456       3,357
23.95 Total new obligations.............      -3,235      -3,293      -3,356
24.40 Unobligated balance carried 
        forward, end of year............          65         163
    New budget authority (gross), detail:
      Mandatory:

60.00   Appropriation...................       3,300       3,391       3,194
    Change in obligated balances:
72.40 Obligated balance, start of year..         258         264         268
73.10 Total new obligations.............       3,235       3,293       3,356
73.20 Total outlays (gross).............      -3,229      -3,289      -3,619
74.40 Obligated balance, end of year....         264         268           6
    Outlays (gross), detail:
86.97 Outlays from new mandatory 
        authority.......................       2,971       2,960       3,188
86.98 Outlays from mandatory balances...         258         329         431
                                           ---------   ---------  ----------
87.00   Total outlays (gross)...........       3,229       3,289       3,619
    Net budget authority and outlays:
89.00 Budget authority..................       3,300       3,391       3,194
90.00 Outlays...........................       3,229       3,289       3,619
---------------------------------------------------------------------------

    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, 2005, is expected to be 1.3 
percent.


[[Page 884]]



              AVERAGE NUMBER OF PENSION CASES AND PAYMENTS

                                     2003 actual  2004 est.   2005 est.

Veterans:
  Improved law......................     329,660     330,851     332,008
  Prior law.........................      15,432      13,033      11,017
  Old law and service...............         205         171         143
                                    ------------------------------------
      Total.........................     345,297     344,055     343,168
  Average payment per case, per year 
    (in dollars)....................      $7,278      $7,460      $7,647
                                    ------------------------------------
      Total obligations (in 
        millions)...................      $2,513      $2,567      $2,624
                                    ====================================
Survivors:
  Improved law......................     167,865     165,508     161,576
  Prior law.........................      57,400      51,439      45,667
  Old law and service...............         736         575         445
                                    ------------------------------------
      Total.........................     226,001     217,522     207,688
  Average payment per case, per year 
    (in dollars)....................      $3,121      $3,264      $3,433
                                    ------------------------------------
      Total obligations (in 
        millions)...................        $705        $710        $713
                                    ====================================

    Legislation was proposed during the 1st session of the 108th 
Congress 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 $667 thousand in 2005.

                 Summary of Budget Authority and Outlays

                        (in millions of dollars)

                                     2003 actual  2004 est.   2005 est.
Enacted/requested:
  Budget Authority..................       3,300       3,391       3,194
  Outlays...........................       3,229       3,289       3,619
Legislative proposal, subject to 
    PAYGO:
  Budget Authority..................                                   1
  Outlays...........................                                   1
                                    ------------------------------------
Total:
  Budget Authority..................       3,300       3,391       3,195
  Outlays...........................       3,229       3,289       3,620
                                    ====================================
                                                              ----------

                            Pension Benefits

                (Legislative proposal, subject to PAYGO)

               Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 36-0154-4-1-701      2003 actual   2004 est.   2005 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
---------------------------------------------------------------------------

                                

                         Pensions Administration

    For operating expenses associated with the provision of pension 
benefits and reimbursement of the Department of Defense for the cost of 
overseas employee mail, $139,415,000, including no more than $3,062,000 
for construction.

               Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 36-0143-0-1-701      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------

    Obligations by program activity:
      Other direct expenses:

03.01   Administrative expenses.........         142         152         136
03.03   Construction, minor projects....           3           3           3
                                           ---------   ---------  ----------
03.92   Total other direct expenses.....         145         155         139
      Reimbursable pensions program:

09.02   Administrative expense..........           7           8           9
                                           ---------   ---------  ----------
09.99     Total reimbursable program....           7           8           9
                                           ---------   ---------  ----------
10.00   Total new obligations...........         152         163         148
    Budgetary resources available for obligation:
21.40 Unobligated balance carried 
        forward, start of year..........           3           4           1
22.00 New budget authority (gross)......         153         160         148
                                           ---------   ---------  ----------
23.90   Total budgetary resources 
          available for obligation......         156         164         149
23.95 Total new obligations.............        -152        -163        -148
24.40 Unobligated balance carried 
        forward, end of year............           4           1           1
    New budget authority (gross), detail:
      Discretionary:

40.00   Appropriation...................         147         154         139
40.35   Appropriation reduced pursuant 
          to P.L. 108-7.................          -1
40.35   Appropriation permanently 
          reduced pursuant to HR 2673...                      -1
                                           ---------   ---------  ----------
43.00     Appropriation (total 
            discretionary)..............         146         153         139
68.00 Spending authority from offsetting 
        collections: Offsetting 
        collections (cash)..............           7           7           9
                                           ---------   ---------  ----------
70.00   Total new budget authority 
          (gross).......................         153         160         148
    Change in obligated balances:
72.40 Obligated balance, start of year..          31          34          36
73.10 Total new obligations.............         152         163         148
73.20 Total outlays (gross).............        -149        -161        -147
74.40 Obligated balance, end of year....          34          36          37
    Outlays (gross), detail:
86.90 Outlays from new discretionary 
        authority.......................         117         128         119
86.93 Outlays from discretionary 
        balances........................          32          33          28
                                           ---------   ---------  ----------
87.00   Total outlays (gross)...........         149         161         147
    Offsets:
      Against gross budget authority and outlays:

88.00   Offsetting collections (cash) 
          from: Federal sources.........          -7          -7          -9
    Net budget authority and outlays:
89.00 Budget authority..................         146         153         139
90.00 Outlays...........................         142         154         138
---------------------------------------------------------------------------

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

    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 congressional 
budget. The Pension business line provides processing of claims for 
veterans and dependents relating to pension benefits under the various 
laws enacted by Congress.

                                WORKLOAD

                                     2003 actual  2004 est.   2005 est.

Pension:
  Rating-Related Actions............      95,264      91,556      95,458
  Non Rating Actions................     430,812     423,006     439,084


[[Page 885]]



               Object Classification (in millions of dollars)

----------------------------------------------------------------------------
Identification code 36-0143-0-1-701      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------

      Direct obligations:

        Personnel compensation:
11.1      Full-time permanent...........          73          84          73
11.5      Other personnel compensation..          10          11          11
                                           ---------   ---------  ----------
11.9        Total personnel compensation          83          95          84
12.1    Civilian personnel benefits.....          20          23          21
21.0    Employee travel.................           1           1           2
23.1    Rental payments to GSA..........          10          11          11
23.2    Rental payments to others.......           1           1           1
23.3    Communications, utilities, and 
          miscellaneous charges.........           4           4           5
25.2    Other services..................          20          13           9
26.0    Supplies and materials..........           1           1           1
31.0    Equipment.......................           2           3           2
32.0    Land and structures.............           3           3           3
                                           ---------   ---------  ----------
99.0      Direct obligations............         145         155         139
99.0  Reimbursable obligations..........           7           8           9
                                           ---------   ---------  ----------
99.9    Total new obligations...........         152         163         148
---------------------------------------------------------------------------

                              Personnel Summary

----------------------------------------------------------------------------
Identification code 36-0143-0-1-701      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------
    Direct:
1001  Total compensable workyears: 
        Civilian full-time equivalent 
        employment......................       1,729       1,602       1,344
    Reimbursable:
2001  Total compensable workyears: 
        Civilian full-time equivalent 
        employment......................          98          97         100
---------------------------------------------------------------------------

                                

                             Burial Benefits

                   [national cemetery administration]

    For the provision of burial benefits and payments as authorized by 
law, $180,956,000. In addition, for making payments after June 30, 2005 
for the burial benefits program administered by the Department, such 
sums as may be necessary. (38 U.S.C. 107, chapters 23, 51, 53, 55, and 
61).
    [For necessary expenses of the National Cemetery Administration for 
operations and maintenance, not otherwise provided for, including 
uniforms or allowances therefor; cemeterial expenses as authorized by 
law; purchase of one passenger motor vehicle for use in cemeterial 
operations; and hire of passenger motor vehicles, $144,203,000: 
Provided, That of the funds made available under this heading, not to 
exceed $7,200,000 shall be available until September 30, 2005.

        grants for the construction of state veterans cemeteries

    For grants to aid States in establishing, expanding, or improving 
State veterans cemeteries as authorized by 38 U.S.C. 2408, $32,000,000, 
to remain available until expended.] (Division G, H.R. 2673, 
Consolidated Appropriations Bill, FY 2004.)

               Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 36-0139-0-1-701      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------

    Obligations by program activity:
01.01 Burial allowance..................          33          35          36
01.02 Burial plots......................          19          21          21
01.03 Service-connected deaths..........          21          28          29
01.04 Burial flags......................          21          22          23
01.05 Headstones and markers............          33          35          36
01.06 Graveliners.......................          11           9           9
01.07 Pre-placed crypts.................           5          16          27
01.08 National Cemetery Gift Fund.......
                                           ---------   ---------  ----------
10.00   Total new obligations (object 
          class 42.0)...................         143         166         181
    Budgetary resources available for obligation:
22.00 New budget authority (gross)......         143         166         181
23.95 Total new obligations.............        -143        -166        -181
    New budget authority (gross), detail:
      Mandatory:

60.00   Appropriation...................         143         166         181
    Change in obligated balances:
73.10 Total new obligations.............         143         166         181
73.20 Total outlays (gross).............        -143        -166        -181
    Outlays (gross), detail:
86.97 Outlays from new mandatory 
        authority.......................         143         166         181
    Net budget authority and outlays:
89.00 Budget authority..................         143         166         181
90.00 Outlays...........................         143         166         181
---------------------------------------------------------------------------

    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 Benefits 
Appropriation and the National Cemetery Gift Fund.

    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.

                        NUMBER OF BURIAL BENEFITS

                                     2003 actual  2004 est.   2005 est.
Burial allowance....................      77,608      78,384      78,961
Burial plot.........................      63,522      65,355      67,034
Service-connected death.............      13,019      13,355      13,811
Burial flags........................     483,564     493,854     498,296
Headstone markers...................     341,033     338,000     341,000
Graveliners.........................      55,742      47,803      47,564
Preplaced crypts....................      15,618      48,532      81,000

                                

                          Burial Administration

    For operating expenses for burial benefits, for administrative 
expenses of the National Cemetery Administration, and for cemeterial 
expenses, including purchase of three passenger motor vehicles, 
$274,377,000; 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 $81,000,000 for construction.

               Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 36-0129-0-1-700      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------

    Obligations by program activity:
02.01 Administrative expenses...........         143         157         161
02.02 Construction, major projects......          17          86          56
02.03 Construction, minor projects......          19          31          25
02.04 Grants to states..................          27          32          20
                                           ---------   ---------  ----------
10.00   Total new obligations...........         206         306         262
    Budgetary resources available for obligation:
21.40 Unobligated balance carried 
        forward, start of year..........         127         175         134
22.00 New budget authority (gross)......         254         265         274
                                           ---------   ---------  ----------
23.90   Total budgetary resources 
          available for obligation......         381         440         408
23.95 Total new obligations.............        -206        -306        -262
24.40 Unobligated balance carried 
        forward, end of year............         175         134         146
    New budget authority (gross), detail:
      Discretionary:

40.00   Appropriation...................         256         267         274
40.35   Appropriation permanently 
          reduced pursuant to P.L. 108-7          -2
40.35   Appropriation permanently 
          reduced pursuant to H.R. 2673.                      -2
                                           ---------   ---------  ----------

[[Page 886]]


43.00     Appropriation (total 
            discretionary)..............         254         265         274
    Change in obligated balances:
72.40 Obligated balance, start of year..         131         129         197
73.10 Total new obligations.............         206         306         262
73.20 Total outlays (gross).............        -206        -238        -248
73.40 Adjustments in expired accounts 
        (net)...........................          -1
74.40 Obligated balance, end of year....         129         197         211
    Outlays (gross), detail:
86.90 Outlays from new discretionary 
        authority.......................         142         146         151
86.93 Outlays from discretionary 
        balances........................          64          92          97
                                           ---------   ---------  ----------
87.00   Total outlays (gross)...........         206         238         248
    Net budget authority and outlays:
89.00 Budget authority..................         254         265         274
90.00 Outlays...........................         206         238         248
---------------------------------------------------------------------------

    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.

    Specific performance goals relating to the Burial business line are 
contained in VA's congressional budget. 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      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------

      Personnel compensation:

11.1    Full-time permanent.............          57          71          74
11.3    Other than full-time permanent..           8          10          10
                                           ---------   ---------  ----------
11.9      Total personnel compensation..          65          81          84
12.1  Civilian personnel benefits.......          17          21          23
13.0  Benefits for former personnel.....           2           2           2
21.0  Travel and transportation of 
        persons.........................           2           2           3
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           5           6
25.2  Other services....................          39          28          26
26.0  Supplies and materials............           7           7           7
31.0  Equipment.........................           5           8           8
32.0  Land and structures...............          36         117          81
41.0  Grants, subsidies, and 
        contributions...................          26          33          20
                                           ---------   ---------  ----------
99.9    Total new obligations...........         206         306         262
---------------------------------------------------------------------------

                              Personnel Summary

----------------------------------------------------------------------------
Identification code 36-0129-0-1-700      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------
    Direct:
1001  Total compensable workyears: 
        Civilian full-time equivalent 
        employment......................       1,655       1,762       1,779
---------------------------------------------------------------------------

Public enterprise funds:

                Service-Disabled Veterans Insurance Fund

               Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 36-4012-0-3-701      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------

    Obligations by program activity:
09.01 Capital investment................          12          12          12
09.02 Death Claims......................          48          50          54
09.03 All Other.........................           7           7           8
                                           ---------   ---------  ----------
10.00   Total new obligations...........          67          69          74
    Budgetary resources available for obligation:
21.40 Unobligated balance carried 
        forward, start of year..........          15           9           3
22.00 New budget authority (gross)......          61          63          76
                                           ---------   ---------  ----------
23.90   Total budgetary resources 
          available for obligation......          76          72          79
23.95 Total new obligations.............         -67         -69         -74
24.40 Unobligated balance carried 
        forward, end of year............           9           3           5
    New budget authority (gross), detail:
      Mandatory:

69.00   Offsetting collections (cash)...          61          63          76
    Change in obligated balances:
72.40 Obligated balance, start of year..           8           9           7
73.10 Total new obligations.............          67          69          74
73.20 Total outlays (gross).............         -67         -70         -73
74.40 Obligated balance, end of year....           9           7           7
    Outlays (gross), detail:
86.97 Outlays from new mandatory 
        authority.......................          60          61          66
86.98 Outlays from mandatory balances...           7           9           7
                                           ---------   ---------  ----------
87.00   Total outlays (gross)...........          67          70          73
    Offsets:
      Against gross budget authority and outlays:

        Offsetting collections (cash) 
            from:
88.00     Federal sources: Insurance 
            account.....................         -20         -22         -31
88.40     Interest on loans.............          -3          -3          -3
88.40     Insurance premiums earned.....         -25         -26         -30
88.40     Repayments of loans...........         -12         -12         -12
88.40     Other income..................          -1
                                           ---------   ---------  ----------
88.90       Total, offsetting 
              collections (cash)........         -61         -63         -76
    Net budget authority and outlays:
89.00 Budget authority..................
90.00 Outlays...........................           6           7          -3
---------------------------------------------------------------------------

    This fund finances the payment of claims on nonparticipating life 
insurance policies issued and currently is open for new issues to 
veterans having service-connected disabilities. The program provides 
insurance coverage for service-disabled veterans at standard rates.

    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

                                     2003 actual  2004 est.   2005 est.
Number of policies..................     154,537     159,273     163,014
Insurance in force (dollars in 
millions)...........................      $1,484      $1,537      $1,574

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

[[Page 887]]

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 $552 million by September 30, 2005.

               Object Classification (in millions of dollars)

----------------------------------------------------------------------------
Identification code 36-4012-0-3-701      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------
33.0  Investments and loans.............          12          12          12
42.0  Insurance claims and indemnities..          55          57          62
                                           ---------   ---------  ----------
99.0      Reimbursable obligations......          67          69          74
                                           ---------   ---------  ----------
99.9    Total new obligations...........          67          69          74
---------------------------------------------------------------------------

                                

                    Veterans Reopened Insurance Fund

               Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 36-4010-0-3-701      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------

    Obligations by program activity:
09.01 Death claims......................          37          39          39
09.02 Dividends.........................          17          15          13
09.03 All other.........................           8           7           7
09.04 Capital investment: policy loans..           3           4           4
                                           ---------   ---------  ----------
10.00   Total new obligations...........          65          65          63
    Budgetary resources available for obligation:
21.40 Unobligated balance carried 
        forward, start of year..........         426         409         390
22.00 New budget authority (gross)......          49          45          41
                                           ---------   ---------  ----------
23.90   Total budgetary resources 
          available for obligation......         475         454         431
23.95 Total new obligations.............         -65         -65         -63
24.40 Unobligated balance carried 
        forward, end of year............         409         390         368
    New budget authority (gross), detail:
      Mandatory:

69.00   Offsetting collections (cash)...          49          45          41
    Change in obligated balances:
72.40 Obligated balance, start of year..          50          51          53
73.10 Total new obligations.............          65          65          63
73.20 Total outlays (gross).............         -63         -63         -62
74.40 Obligated balance, end of year....          51          53          53
    Outlays (gross), detail:
86.97 Outlays from new mandatory 
        authority.......................          48          45          41
86.98 Outlays from mandatory balances...          15          18          21
                                           ---------   ---------  ----------
87.00   Total outlays (gross)...........          63          63          62
    Offsets:
      Against gross budget authority and outlays:

        Offsetting collections (cash) 
            from:
88.20     Interest on Federal securities         -32         -30         -27
88.40     Interest on loans.............          -1          -1          -1
88.40     Insurance premiums earned.....         -10          -9          -8
88.40     Repayments of loans...........          -6          -5          -5
                                           ---------   ---------  ----------
88.90       Total, offsetting 
              collections (cash)........         -49         -45         -41
    Net budget authority and outlays:
89.00 Budget authority..................
90.00 Outlays...........................          15          18          21
    Memorandum (non-add) entries:
92.01 Total investments, start of year: 
        Federal securities: Par value...         475         460         442
92.02 Total investments, end of year: 
        Federal securities: Par value...         460         442         421
---------------------------------------------------------------------------
    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

                                     2003 actual  2004 est.   2005 est.
  Number of policies................      62,696      57,731      52,764
  Insurance in force (dollars in 
    millions).......................        $556        $521        $484

    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      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------
33.0  Investments and loans.............           4           4           4
42.0  Insurance claims and indemnities..          40          42          42
43.0  Interest and dividends............          21          19          17
                                           ---------   ---------  ----------
99.9    Total new obligations...........          65          65          63
---------------------------------------------------------------------------

                                

                Servicemembers' Group Life Insurance Fund

               Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 36-4009-0-3-701      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------

    Obligations by program activity:
09.01 Premium payments..................         647         531         530
09.02 Payments to carrier...............                      18
09.03 Payment to GOE....................           1          -4           1
                                           ---------   ---------  ----------
10.00   Total new obligations (object 
          class 41.0)...................         648         545         531
    Budgetary resources available for obligation:
21.40 Unobligated balance carried 
        forward, start of year..........           1
22.00 New budget authority (gross)......         648         545         531
                                           ---------   ---------  ----------
23.90   Total budgetary resources 
          available for obligation......         649         545         531
23.95 Total new obligations.............        -648        -545        -531
24.40 Unobligated balance carried 
        forward, end of year............
    New budget authority (gross), detail:
      Mandatory:

69.00   Offsetting collections (cash)...         648         545         531
    Change in obligated balances:
72.40 Obligated balance, start of year..           5           9           4
73.10 Total new obligations.............         648         545         531
73.20 Total outlays (gross).............        -643        -550        -531
74.40 Obligated balance, end of year....           9           4           4
    Outlays (gross), detail:
86.97 Outlays from new mandatory 
        authority.......................         638         545         527
86.98 Outlays from mandatory balances...           5           5           4
                                           ---------   ---------  ----------
87.00   Total outlays (gross)...........         643         550         531
    Offsets:
      Against gross budget authority and outlays:

88.40   Offsetting collections (cash) 
          from: Non-Federal sources: 
          Withholdings from serviceman's 
          pay...........................        -648        -545        -531
    Net budget authority and outlays:
89.00 Budget authority..................           1

[[Page 888]]

90.00 Outlays...........................          -3           5
    Memorandum (non-add) entries:
92.01 Total investments, start of year: 
        Federal securities: Par value...           5           9           4
92.02 Total investments, end of year: 
        Federal securities: Par value...           9           4           4
---------------------------------------------------------------------------

    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.

               Object Classification (in millions of dollars)

----------------------------------------------------------------------------
Identification code 36-4009-0-3-701      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------
41.0  Grants, subsidies, and 
        contributions...................         648         545         531
                                           ---------   ---------  ----------
99.0      Reimbursable obligations......         648         545         531
---------------------------------------------------------------------------

                                

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 through 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 2005, not to exceed $500,000 in gross 
obligations for direct loans for specially adapted housing loans, 38 
U.S.C. 3711(i): Provided further, That no new Native American housing 
loans in excess of $30,000,000 may be made in 2005, including interest 
rate refinancing, 38 U.S.C. 3762(h).
    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, $157,149,000 to carry out 
the grant program and the 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 $1,753,000 is 
available for construction: Provided, That of the amount provided for 
housing operating expenses, (1) $750,000 is for administering the 
Transitional Housing program as authorized by 38 U.S.C. chapter 20, 
subchapter VI; and (2) $571,000 is for administering the Native American 
housing program as authorized by 38 U.S.C. chapter 37, subchapter V, as 
amended.
    [For the cost of direct and guaranteed loans, such sums as may be 
necessary to carry out the program, as authorized by 38 U.S.C. chapter 
37, as amended: Provided, That such costs, including the cost of 
modifying such loans, shall be as defined in section 502 of the 
Congressional Budget Act of 1974, as amended: Provided further, That 
during fiscal year 2004, within the resources available, not to exceed 
$300,000 in gross obligations for direct loans are authorized for 
specially adapted housing loans.]
    [In addition, for administrative expenses to carry out the direct 
and guaranteed loan programs, $154,850,000, which may be transferred to 
and merged with the appropriation for ``General operating expenses''.]

         [native american veteran housing loan program account]

                     [(including transfer of funds)]

    [For administrative expenses to carry out the direct loan program 
authorized by 38 U.S.C. chapter 37, subchapter V, as amended, $571,000, 
which may be transferred to and merged with the appropriation for 
``General operating expenses'': Provided, That no new loans in excess of 
$50,000,000 may be made in fiscal year 2004.]

  [guaranteed transitional housing loans for homeless veterans program 
                                account]

    [For the administrative expenses to carry out the guaranteed 
transitional housing loan program authorized by 38 U.S.C. chapter 37, 
subchapter VI, not to exceed $600,000 of the amounts appropriated by 
this Act for ``General operating expenses'' and ``Medical services'' may 
be expended.] (Division G, H.R. 2673, Consolidated Appropriations Bill, 
FY 2004.)

               Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 36-1119-0-1-704      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------

    Obligations by program activity:
00.01 Direct loan subsidy...............                      13          10
00.02 Guaranteed loan subsidy...........         547         275          44
00.05 Reestimates of direct loan subsidy         277           1
00.06 Interest on reestimates of the 
        direct loan subsidy.............         229
00.07 Reestimates of guaranteed loan 
        subsidy.........................         217
00.08 Interest on reestimates of the 
        guaranteed loan subsidy.........          27
00.09 Administrative expenses...........         168         155         155
00.10 Specialty Adapted Housing Grant 
        Program.........................          21          30          31
                                           ---------   ---------  ----------
00.91   Direct Program by Activities--
          Subtotal (1 level)............       1,488         474         240
01.12 Construction, minor projects......           1           2           2
                                           ---------   ---------  ----------
10.00   Total new obligations...........       1,489         476         242
    Budgetary resources available for obligation:
21.40 Unobligated balance carried 
        forward, start of year..........          51          52          42
22.00 New budget authority (gross)......       1,489         466         232
                                           ---------   ---------  ----------
23.90   Total budgetary resources 
          available for obligation......       1,540         518         274
23.95 Total new obligations.............      -1,489        -476        -242
24.40 Unobligated balance carried 
        forward, end of year............          52          42          32
    New budget authority (gross), detail:
      Discretionary:

40.00   Appropriation...................         171         158         157
40.35   Appropriation reduced pursuant 
          to P.L. 108-7.................          -1
40.35   Appropriation permanently 
          reduced pursuant to H.R. 2673.                      -1
                                           ---------   ---------  ----------
43.00     Appropriation (total 
            discretionary)..............         170         157         157
      Mandatory:

60.00   Appropriation...................         568         308          75
60.20   Appropriation (special fund)....         751           1
                                           ---------   ---------  ----------
62.50     Appropriation (total 
            mandatory)..................       1,319         309          75
                                           ---------   ---------  ----------
70.00   Total new budget authority 
          (gross).......................       1,489         466         232
    Change in obligated balances:
72.40 Obligated balance, start of year..          32          49          41
73.10 Total new obligations.............       1,489         476         242
73.20 Total outlays (gross).............      -1,471        -484        -238
74.40 Obligated balance, end of year....          49          41          45
    Outlays (gross), detail:
86.90 Outlays from new discretionary 
        authority.......................         136         131         131
86.93 Outlays from discretionary 
        balances........................          30          25          22
86.97 Outlays from new mandatory 
        authority.......................       1,305         309          75
86.98 Outlays from mandatory balances...                      19          10
                                           ---------   ---------  ----------
87.00   Total outlays (gross)...........       1,471         484         238
    Net budget authority and outlays:
89.00 Budget authority..................       1,489         466         232
90.00 Outlays...........................       1,471         484         238
---------------------------------------------------------------------------

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

----------------------------------------------------------------------------
Identification code 36-1119-0-1-704      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------
    Direct loan levels supportable by subsidy 
                budget authority:
115001Acquired and Vendee Loans.........         555       1,090       1,692
115002Native American Direct Loan Levels          11          25           3
115003Transitional Housing Direct Loan 
        Levels..........................                      20          20
                                           ---------   ---------  ----------
115901Total direct loan levels..........         566       1,135       1,715
    Direct loan subsidy (in percent):
132001Acquired and Vendee Loans.........       -1.39       -1.36       -5.12
132002Native American Direct Loan Levels       -8.96        0.28       -7.75
132003Transitional Housing Direct Loan 
        Levels..........................        0.00       48.25       48.25
                                           ---------   ---------  ----------
132901Weighted average subsidy rate.....       -1.54       -0.44       -4.49

[[Page 889]]

    Direct loan subsidy budget authority:
133001Acquired and Vendee Loans.........          -7         -15         -87
133002Native American Direct Loan Levels
133003Transitional Housing Direct Loan 
        Levels..........................                      10          10
                                           ---------   ---------  ----------
133901Total subsidy budget authority....          -7          -5         -77
    Direct loan subsidy outlays:
134001Acquired and Vendee Loans.........          -7         -15         -87
134002Native American Direct Loan Levels
134003Transitional Housing Direct Loan 
        Levels..........................                       5          10
                                           ---------   ---------  ----------
134901Total subsidy outlays.............          -7         -10         -77
    Direct loan upward reestimate subsidy budget 
                authority:
135001Acquired and Vendee Loans.........         506
135002Native American Direct Loan Levels                       1
                                           ---------   ---------  ----------
135901Total upward reestimate budget 
        authority.......................         506           1
    Direct loan downward reestimate subsidy budget 
                authority:
137001Acquired and Vendee Loans.........        -307        -222
137002Native American Direct Loan Levels          -4          -1
                                           ---------   ---------  ----------
137901Total downward reestimate budget 
        authority.......................        -311        -223
----------------------------------------------------------------------------

    Guaranteed loan levels supportable by subsidy 
                budget authority:
215001Veterans Housing Benefit Program..      65,791      46,591      40,642
215002Guaranteed Loan Sale Securities...         283         721       1,187
                                           ---------   ---------  ----------
215901Total loan guarantee levels.......      66,074      47,312      41,829
    Guaranteed loan subsidy (in percent):
232001Veterans Housing Benefit Program..        0.81        0.50       -0.32
232002Guaranteed Loan Sale Securities...        5.06        5.65        3.69
                                           ---------   ---------  ----------
232901Weighted average subsidy rate.....        0.83        0.58       -0.21
    Guaranteed loan subsidy budget authority:
233001Veterans Housing Benefit Program..         533         234        -130
233002Guaranteed Loan Sale Securities...          14          41          44
                                           ---------   ---------  ----------
233901Total subsidy budget authority....         547         275         -86
    Guaranteed loan subsidy outlays:
234001Veterans Housing Benefit Program..         519         249        -130
234002Guaranteed Loan Sale Securities...          14          41          44
                                           ---------   ---------  ----------
234901Total subsidy outlays.............         533         290         -86
    Guaranteed loan upward reestimate subsidy 
                budget authority:
235001Veterans Housing Benefit Program..         184
235002Guaranteed Loan Sale Securities...          61
                                           ---------   ---------  ----------
235901Total upward reestimate budget 
        authority.......................         245
    Guaranteed loan downward reestimate subsidy 
                budget authority:
237001Veterans Housing Benefit Program..        -354      -1,930
237002Guaranteed Loan Sale Securities...        -214        -159
                                           ---------   ---------  ----------
237901Total downward reestimate subsidy 
        budget authority................        -568      -2,089
----------------------------------------------------------------------------

    Administrative expense data:
351001Budget authority..................         170         157         157
359001Outlays from new authority........         166         157         155
---------------------------------------------------------------------------

    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 these programs. 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. Direct loans include foreclosed guaranteed loans in the inventory 
that are sold with vendee financing which was reinstated during fiscal 
year 2004.

    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.

    Specially adapted housing grants.--Specially adapted housing grants, 
up to a maximum of $50,000, 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 $10,000. The 
following table shows caseload for this program. Specific performance 
goals are contained in VA's congressional budget.

    Legislation is proposed to change eligibility for use of the 
veterans housing benefit loan program. Service members who separate 
after the legislation is passed will be limited to one-time use. Five 
years after enactment, current veterans would be limited to one-time use 
of the loan program. Active duty military personnel will retain the 
ability to use the benefit as many times as needed. There are no costs 
associated with this proposal in 2005. Ten year costs are projected to 
be $91 million.

                     CASELOAD AND AVERAGE COST DATA

                                     2003 actual  2004 est.   2005 est.

Housing grants:
  Number of housing grants..........         515         615         615
  Average cost per grant............     $40,781     $49,500     $50,000
                                    ------------------------------------
      Total cost (in millions)......         $21         $30         $31
                                    ====================================

    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]

                                     2003 actual  2004 est.   2005 est.

  Construction and valuation........         244         230         230
  Loan processing...................         922         730         725
  Loan service and claims...........         335         340         355
  Property management...............          36          38          39

               Object Classification (in millions of dollars)

----------------------------------------------------------------------------
Identification code 36-1119-0-1-704      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------

      Personnel compensation:

11.1    Full-time permanent.............          62          66          63
11.5    Other personnel compensation....           9          10          11
                                           ---------   ---------  ----------
11.9      Total personnel compensation..          71          76          74
12.1  Civilian personnel benefits.......          19          21          21
21.0  Employee travel...................           3           2           3

[[Page 890]]

22.0  Transportation of things..........           1                       1
23.1  Rental payments to GSA............           9           8           9
23.2  Rental payments to others.........           1           1           1
23.3  Communications, utilities, and 
        miscellaneous charges...........           5           5           5
24.0  Printing and reproduction.........           1           1           1
25.2  Other services....................          55          39          38
26.0  Supplies and materials............           1           1           1
31.0  Equipment.........................           3           1           2
32.0  Land and structures...............           1           2           2
41.0  Grants, subsidies, and 
        contributions...................       1,319         319          84
                                           ---------   ---------  ----------
99.9    Total new obligations...........       1,489         476         242
---------------------------------------------------------------------------

                              Personnel Summary

----------------------------------------------------------------------------
Identification code 36-1119-0-1-704      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------
    Direct:
1001  Total compensable workyears: 
        Civilian full-time equivalent 
        employment......................       1,404       1,390       1,281
---------------------------------------------------------------------------

                         Housing Program Account

                (Legislative proposal, subject to PAYGO)

    In order to refocus VA's housing loan program toward its original 
intent of serving as a readjustment benefit from military to civilian 
life, the Administration will be transmitting legislation that would 
limit eligibility for veterans' housing loans to one-time use--in lieu 
of the lifetime multi-use entitlement it has become. For those who are 
already veterans upon enactment of this bill, the proposal allows 
unlimited usage for the next five years, and then only once thereafter. 
The proposal would not limit use by active duty members, and would 
become immediately effective after passage of legislation for newly 
separating servicepersons. This proposal is estimated to cost $91 
million over ten years, and affects the Direct Loan Financing, 
Guaranteed Loan Financing, Negative Subsidy and Housing Program Accounts 
beginning in 2010.

                                

                  Housing Direct Loan Financing Account

               Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 36-4127-0-3-704      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------

    Obligations by program activity:
00.01 Direct loans......................         555       1,090       1,692
00.02 Interest on Treasury borrowing....         245         188         208
00.03 Property sales expense............           4           3           3
00.04 Property management/other expense.           9           6           5
00.05 Property improvement expense......           2           2           2
                                           ---------   ---------  ----------
00.91   Direct Program by Activities--
          Subtotal (1 level)............         815       1,289       1,910
08.01 Payment of negative subsidy to 
        receipt account.................           8          18          87
08.02 Payment of downward reestimate to 
        receipt account.................         260         178
08.04 Payment of excess interest earned 
        to receipt account..............          47          43
                                           ---------   ---------  ----------
08.91   Direct Program by Activities--
          Subtotal (1 level)............         315         239          87
                                           ---------   ---------  ----------
10.00   Total new obligations...........       1,131       1,528       1,997
    Budgetary resources available for obligation:
21.40 Unobligated balance carried 
        forward, start of year..........         227         220
22.00 New financing authority (gross)...       1,125       1,307       1,996
                                           ---------   ---------  ----------
23.90   Total budgetary resources 
          available for obligation......       1,352       1,527       1,996
23.95 Total new obligations.............      -1,131      -1,528      -1,997
24.40 Unobligated balance carried 
        forward, end of year............         220
    New financing authority (gross), detail:
      Mandatory:

67.10   Authority to borrow.............       1,322       1,091       1,692
69.00 Offsetting collections (cash).....       1,298       1,116       1,641
69.47 Portion applied to repay debt.....      -1,495        -900      -1,337
                                           ---------   ---------  ----------
69.90   Spending authority from 
          offsetting collections (total 
          mandatory)....................        -197         216         304
                                           ---------   ---------  ----------
70.00   Total new financing authority 
          (gross).......................       1,125       1,307       1,996
    Change in obligated balances:
72.40 Obligated balance, start of year..          78          78         106
73.10 Total new obligations.............       1,131       1,528       1,997
73.20 Total financing disbursements 
        (gross).........................      -1,130      -1,501      -1,964
74.40 Obligated balance, end of year....          78         106         138
87.00 Total financing disbursements 
        (gross).........................       1,130       1,501       1,964
    Offsets:
      Against gross financing authority and 
          financing disbursements:

        Offsetting collections (cash) 
            from:
88.00     Federal sources:Payments from 
            program account.............        -506          -3
88.00     Transfer of loan sales from 
            LSSA........................        -283        -721      -1,186
88.00     Reimbursements from DLFA......         -23          -3          -3
88.25     Interest on uninvested funds..         -88
          Non-Federal sources:
88.40       Repayments of principal.....        -244        -249        -288
88.40       Interest received on loans..         -94         -96        -111
88.40       Fees........................          -9         -15         -26
88.40       Cash sale of properties.....         -49         -29         -27
88.40       Other.......................          -2
                                           ---------   ---------  ----------
88.90       Total, offsetting 
              collections (cash)........      -1,298      -1,116      -1,641
    Net financing authority and financing 
        disbursements:
89.00 Financing authority...............        -173         191         355
90.00 Financing disbursements...........        -167         384         323
---------------------------------------------------------------------------

               Status of Direct Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 36-4127-0-3-704      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------
    Position with respect to appropriations act 
                limitation on obligations:
1111  Limitation on direct loans........
1131  Direct loan obligations exempt 
        from limitation.................         555       1,090       1,692
                                           ---------   ---------  ----------
1150    Total direct loan obligations...         555       1,090       1,692
----------------------------------------------------------------------------

    Cumulative balance of direct loans 
                outstanding:
1210  Outstanding, start of year........       1,601       1,567       1,682
1231  Disbursements: Direct loan 
        disbursements...................         555       1,090       1,692
      Repayments:

1251    Repayments and prepayments......        -244        -249        -288
1253    Proceeds from loan asset sales 
          to the public with recourse...        -283        -721      -1,187
      Write-offs for default:

1263    Direct loans....................          -5          -5          -5
1264    Other adjustments, net..........         -57
                                           ---------   ---------  ----------
1290    Outstanding, end of year........       1,567       1,682       1,894
---------------------------------------------------------------------------

    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    2002 actual    2003 actual     2004 est.      2005 est.
-----------------------------------------------------------------------------------------------
    ASSETS:
      Federal assets:

1101    Fund balances with Treasury.....         305            299
        Investments in US securities:
1106      Receivables, net..............         506
      Net value of assets related to 
          post-1991 direct loans 
          receivable:

1401    Direct loans receivable, gross..       1,601          1,567
1402    Interest receivable.............          48             29
1403    Accounts receivable from 
          foreclosed property...........           1
1404    Foreclosed property.............          64
1405    Other assets....................         847          1,216
                                        ------------ --------------  ------------  -------------

[[Page 891]]


1499      Net present value of assets 
            related to direct loans.....       2,561          2,812
                                        ------------ --------------  ------------  -------------
1999    Total assets....................       3,372          3,111
    LIABILITIES:
      Federal liabilities:

2101    Accounts payable................
2103    Debt............................       2,984          2,811
2104    Resources payable to Treasury...                        300
2105    Other...........................         388
2204  Non-Federal liabilities: 
        Liabilities for loan guarantees.
                                        ------------ --------------  ------------  -------------
2999    Total liabilities...............       3,372          3,111
                                        ------------ --------------  ------------  -------------
4999  Total liabilities and net position       3,372          3,111
-----------------------------------------------------------------------------------------------
    Note: Consistent with Government-wide practice, information for 2004 
and 2005 was not required to be collected.

                  Housing Direct Loan Financing Account

                (Legislative proposal, subject to PAYGO)

    In order to refocus VA's housing loan program toward its original 
intent of serving as a readjustment benefit from military to civilian 
life, the Administration will be transmitting legislation that would 
limit eligibility for veterans' housing loans to one-time use--in lieu 
of the lifetime multi-use entitlement it has become. For those who are 
already veterans upon enactment of this bill, the proposal allows 
unlimited usage for the next five years, and then only once thereafter. 
The proposal would not limit use by active duty members, and would 
become immediately effective after passage of legislation for newly 
separating servicepersons. This proposal is estimated to cost $91 
million over ten years, and affects the Direct Loan Financing, 
Guaranteed Loan Financing, Negative Subsidy and Housing Program Accounts 
beginning in 2010.

                                

                Housing Guaranteed Loan Financing Account

               Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 36-4129-0-3-704      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------

    Obligations by program activity:
00.01 Acquisition of homes..............       1,020       2,543       2,647
00.02 Losses on defaulted loans.........         291         299         299
00.03 Interest on Treasury borrowing....           1
00.04 Reimburse DLFA for loan sales.....         283         721       1,187
00.05 Payment to trustee reserve........          14          38          39
00.06 Reimburse Liquidating for 
        subordination certificate.......          25
00.07 Loan Sale Closing Costs...........           1           1           2
00.09 Property sales expense............          73         154         160
00.10 Property management expense.......          49         104         108
00.11 Property improvement expense......          27          59          61
00.12 Loans acquired....................         158         275         309
                                           ---------   ---------  ----------
00.91   Direct Program by Activities--
          Subtotal (1 level)............       1,943       4,194       4,812
08.01 Payment of negative subsidy to 
        receipt account.................                                 130
08.02 Payment of downward reestimate to 
        receipt account.................         401       1,547
08.04 Payment of excess interest to 
        receipt account.................         166         542
                                           ---------   ---------  ----------
08.91   Direct Program by Activities--
          Subtotal (1 level)............         568       2,089         130
                                           ---------   ---------  ----------
10.00   Total new obligations...........       2,510       6,283       4,942
    Budgetary resources available for obligation:
21.40 Unobligated balance carried 
        forward, start of year..........       5,088       5,912       4,193
22.00 New financing authority (gross)...       3,334       4,564       4,789
                                           ---------   ---------  ----------
23.90   Total budgetary resources 
          available for obligation......       8,422      10,476       8,982
23.95 Total new obligations.............      -2,510      -6,283      -4,942
24.40 Unobligated balance carried 
        forward, end of year............       5,912       4,193       4,040
    New financing authority (gross), detail:
      Mandatory:

69.00   Offsetting collections (cash)...       3,316       4,550       4,789
69.10   Change in uncollected customer 
          payments from Federal sources 
          (unexpired)...................          37          14
69.26   From offsetting collections 
          (unavailable balances)........         -14
69.47   Portion applied to repay debt...          -5
                                           ---------   ---------  ----------
69.90     Spending authority from 
            offsetting collections 
            (total mandatory)...........       3,334       4,564       4,789
    Change in obligated balances:
72.40 Obligated balance, start of year..          25          -3          41
73.10 Total new obligations.............       2,510       6,283       4,942
73.20 Total financing disbursements 
        (gross).........................      -2,500      -6,225      -4,958
74.00 Change in uncollected customer 
        payments from Federal sources 
        (unexpired).....................         -37         -14
74.40 Obligated balance, end of year....          -3          41          25
87.00 Total financing disbursements 
        (gross).........................       2,500       6,225       4,958
    Offsets:
      Against gross financing authority and 
          financing disbursements:

        Offsetting collections (cash) 
            from:
          Federal sources:
88.00       Payments from program 
              account...................        -778        -290         -44
88.00       Recoveries from DLFA........        -504      -1,614      -1,674
88.25     Interest on uninvested funds..        -315        -267        -237
          Non-Federal sources:
88.40       Funding fees................        -639        -775        -708
88.40       Cash sale of properties.....        -782        -837        -899
88.40       Refunds from Trust..........         -19         -26         -24
88.40       Redemption of properties and 
              other.....................          -2
88.45     Loan sale proceeds............        -277        -741      -1,203
                                           ---------   ---------  ----------
88.90       Total, offsetting 
              collections (cash)........      -3,316      -4,550      -4,789
      Against gross financing authority only:

88.95   Change in receivables from 
          program accounts..............         -37         -14
    Net financing authority and financing 
        disbursements:
89.00 Financing authority...............         -19
90.00 Financing disbursements...........        -816       1,675         169
---------------------------------------------------------------------------

             Status of Guaranteed Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 36-4129-0-3-704      2003 actual   2004 est.   2005 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.................      65,791      46,591      40,642
2132  Guaranteed loan commitments for 
        loan asset sales with recourse..         283         721       1,187
                                           ---------   ---------  ----------
2150    Total guaranteed loan 
          commitments...................      66,074      47,312      41,829
2199  Guaranteed amount of guaranteed 
        loan commitments................      21,398      15,841      14,364
----------------------------------------------------------------------------

    Cumulative balance of guaranteed loans 
                outstanding:
2210  Outstanding, start of year........     257,828     318,222     358,671
2231  Disbursements of new guaranteed 
        loans...........................      65,791      46,591      40,642
2232  Guarantees of loans sold to the 
        public with recourse............         283         721       1,187
2251  Repayments and prepayments........      -4,211      -3,707      -3,963
      Adjustments:

2261    Terminations for default that 
          result in loans receivable....        -289        -297        -297
2262    Terminations for default that 
          result in acquisition of 
          property......................      -1,020      -2,543      -2,646
2263    Terminations for default that 
          result in claim payments......          -2         -41         -41
2264    Other adjustments, net..........        -158        -275        -308
                                           ---------   ---------  ----------
2290    Outstanding, end of year........     318,222     358,671     393,245
----------------------------------------------------------------------------

    Memorandum:
2299  Guaranteed amount of guaranteed 
        loans outstanding, end of year..     107,889     121,320     133,183
----------------------------------------------------------------------------

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

2310    Outstanding, start of year......         872         841       1,006
2331    Disbursements for guaranteed 
          loan claims...................         289         297         297
2351    Repayments of loans receivable..         -54         -52         -62
2361    Write-offs of loans receivable..         -82         -80         -92
2364    Other adjustments, net..........        -184
                                           ---------   ---------  ----------
2390      Outstanding, end of year......         841       1,006       1,149
---------------------------------------------------------------------------

    As required by the Federal Credit Reform Act of 1990, this non-
budgetary account records all cash flows to and from the Government 
resulting from loan guarantees committed in 1992 and beyond, including 
modifications of guaranteed loans that resulted from commitments in any 
year, 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.

[[Page 892]]

                             Balance Sheet (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code   36-4129-0-3-704    2002 actual    2003 actual     2004 est.      2005 est.
-----------------------------------------------------------------------------------------------
    ASSETS:
      Federal assets:

1101    Fund balances with Treasury.....       5,113          5,947
        Investments in US securities:
1106      Receivables, net..............         255             87
      Net value of assets related to 
          post-1991 acquired defaulted 
          guaranteed loans receivable:

1501    Defaulted guaranteed loans 
          receivable, gross.............         872            841
1502    Interest receivable.............
1504    Accounts receivable from 
          foreclosed property...........           9              5
1505    Other assets....................          34             35
                                        ------------ --------------  ------------  -------------
1599      Net present value of assets 
            related to defaulted 
            guaranteed loans............         915            881
                                        ------------ --------------  ------------  -------------
1999    Total assets....................       6,283          6,915
    LIABILITIES:
      Federal liabilities:

2101    Federal liabilities: Debt.......          19             14
2105    Other liabilities...............         410             27
      Non-Federal liabilities:

2201    Accounts payable................          14          2,118
2204    Non-federal liabilities.........       5,840          4,756
                                        ------------ --------------  ------------  -------------
2999    Total liabilities...............       6,283          6,915
                                        ------------ --------------  ------------  -------------
4999  Total liabilities and net position       6,283          6,915
-----------------------------------------------------------------------------------------------
    Note: Consistent with Government-wide practice, information for 2004 
and 2005 was not required to be collected.

                Housing Guaranteed Loan Financing Account

                (Legislative proposal, subject to PAYGO)

    In order to refocus VA's housing loan program toward its original 
intent of serving as a readjustment benefit from military to civilian 
life, the Administration will be transmitting legislation that would 
limit eligibility for veterans' housing loans to one-time use--in lieu 
of the lifetime multi-use entitlement it has become. For those who are 
already veterans upon enactment of this bill, the proposal allows 
unlimited usage for the next five years, and then only once thereafter. 
The proposal would not limit use by active duty members, and would 
become immediately effective after passage of legislation for newly 
separating servicepersons. This proposal is estimated to cost $91 
million over ten years, and affects the Direct Loan Financing, 
Guaranteed Loan Financing, Negative Subsidy and Housing Program Accounts 
beginning in 2010.

                                

                       Housing Liquidating Account

               Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 36-4025-0-3-704      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------

    Obligations by program activity:
      Capital investments:

00.01   Acquisition of homes............          28          25          21
00.02   Property improvements...........           2           2           2
00.04   Acquisition of defaulted 
          guaranteed loans..............           7           4           4
00.05   Repurchase of loans sold........           4           3           3
                                           ---------   ---------  ----------
00.91     Total capital investments.....          41          34          30
                                           ---------   ---------  ----------
01.00   Total capital investments.......          41          34          30
      Operating expenses:

01.02   Property management expense.....           6           6           5
01.03   Sales expense...................           5           5           4
01.04   Claims processed................                       8           7
                                           ---------   ---------  ----------
01.91     Total operating expenses......          11          19          16
                                           ---------   ---------  ----------
10.00   Total new obligations (object 
          class 33.0)...................          53          53          46
    Budgetary resources available for obligation:
21.40 Unobligated balance carried 
        forward, start of year..........          26          28
22.00 New budget authority (gross)......          81          53          46
22.40 Capital transfer to general fund..         -26         -28
                                           ---------   ---------  ----------
23.90   Total budgetary resources 
          available for obligation......          81          53          46
23.95 Total new obligations.............         -53         -53         -46
24.40 Unobligated balance carried 
        forward, end of year............          28
    New budget authority (gross), detail:
      Mandatory:

69.00   Offsetting collections (cash)...         116         106          89
69.10   Change in uncollected customer 
          payments from Federal sources 
          (unexpired)...................          25
69.27   Capital transfer to general fund         -60         -53         -43
                                           ---------   ---------  ----------
69.90     Spending authority from 
            offsetting collections 
            (total mandatory)...........          81          53          46
    Change in obligated balances:
72.40 Obligated balance, start of year..           4         -23
73.10 Total new obligations.............          53          53          46
73.20 Total outlays (gross).............         -55         -30         -46
74.00 Change in uncollected customer 
        payments from Federal sources 
        (unexpired).....................         -25
74.40 Obligated balance, end of year....         -23
    Outlays (gross), detail:
86.97 Outlays from new mandatory 
        authority.......................          55           8          46
86.98 Outlays from mandatory balances...                      22
                                           ---------   ---------  ----------
87.00   Total outlays (gross)...........          55          30          46
    Offsets:
      Against gross budget authority and outlays:

        Offsetting collections (cash) 
            from:
88.00     Federal sources: Payments from 
            direct loan financing 
            account.....................         -23         -10         -15
          Non-Federal sources:
88.40       Loan and other repayments...         -29         -28         -21
88.40       Sale of homes, cash.........         -40         -42         -31
88.40       Interest on loans...........         -20         -18         -16
88.40       Collection of claims........
88.40       Other revenues..............          -4          -8          -6
                                           ---------   ---------  ----------
88.90       Total, offsetting 
              collections (cash)........        -116        -106         -89
      Against gross budget authority only:

88.95   Change in uncollected customer 
          payments from Federal sources 
          (unexpired)...................         -25
    Net budget authority and outlays:
89.00 Budget authority..................         -60         -53         -43
90.00 Outlays...........................         -61         -76         -43
---------------------------------------------------------------------------

               Status of Direct Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 36-4025-0-3-704      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------
    Cumulative balance of direct loans 
                outstanding:
1210  Outstanding, start of year........         149         113          80
1232  Disbursements: Purchase of loans 
        assets from the public..........           4           3           3
1251  Repayments: Repayments and 
        prepayments.....................         -29         -28         -21
      Write-offs for default:

1263    Direct loans....................         -10          -8          -6
1264    Other adjustments, net..........          -1
                                           ---------   ---------  ----------
1290    Outstanding, end of year........         113          80          56
---------------------------------------------------------------------------

             Status of Guaranteed Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 36-4025-0-3-704      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------
    Cumulative balance of guaranteed loans 
                outstanding:
2210  Outstanding, start of year........       6,704       4,908       3,582
2251  Repayments and prepayments........      -1,762      -1,290        -941
      Adjustments:

2261    Terminations for default that 
          result in loans receivable....          -6          -4          -4
2262    Terminations for default that 
          result in acquisition of 
          property......................         -28         -24         -21
2263    Terminations for default that 
          result in claim payments......                      -8          -7
2264    Other adjustments, net..........
                                           ---------   ---------  ----------
2290    Outstanding, end of year........       4,908       3,582       2,609
----------------------------------------------------------------------------

    Memorandum:
2299  Guaranteed amount of guaranteed 
        loans outstanding, end of year..       2,220       1,621       1,180
----------------------------------------------------------------------------

[[Page 893]]


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

2310    Outstanding, start of year......         282         284         285
2331    Disbursements for guaranteed 
          loan claims...................           7           4           4
2361    Write-offs of loans receivable..          -5          -3          -3
2364    Other adjustments, net..........
                                           ---------   ---------  ----------
2390      Outstanding, end of year......         284         285         286
---------------------------------------------------------------------------

                             Balance Sheet (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code   36-4025-0-3-704    2002 actual    2003 actual     2004 est.      2005 est.
-----------------------------------------------------------------------------------------------
    ASSETS:
      Federal assets:

1101    Fund balances with Treasury.....          29              5
        Investments in US securities:
1106      Receivables, net..............           6             27
1201  Non-Federal assets: Investments in 
        non-Federal securities, net.....         203            191
      Net value of assets related to 
          post-1991 direct loans 
          receivable:

1401    Direct loans receivable, gross..         149            184
1402    Interest receivable.............          92              5
                                        ------------ --------------  ------------  -------------
1499      Net present value of assets 
            related to direct loans.....         241            189
1901  Other Federal assets: Other assets          -3
                                        ------------ --------------  ------------  -------------
1999    Total assets....................         476            412
    LIABILITIES:
2103  Federal liabilities: Debt.........         466            405
2207  Non-Federal liabilities: Other....          10              7
                                        ------------ --------------  ------------  -------------
2999    Total liabilities...............         476            412
                                        ------------ --------------  ------------  -------------
4999  Total liabilities and net position         476            412
-----------------------------------------------------------------------------------------------
    Note: Consistent with Government-wide practice, information for 2004 
and 2005 was not required to be collected.

    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      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------

    Obligations by program activity:
00.01 Direct loans......................          10          45          23
00.03 Interest on Treasury borrowing....           2           2           3
                                           ---------   ---------  ----------
00.91   Direct Program by Activities--
          Subtotal......................          12          47          26
08.02 Payment of downward reestimate to 
        receipt account.................           3           1
08.04 Payment of excess interest earned 
        to receipt account..............           1
                                           ---------   ---------  ----------
08.91   Direct Program by Activities--
          Subtotal (1 level)............           4           1
                                           ---------   ---------  ----------
10.00   Total new obligations...........          16          48          26
    Budgetary resources available for obligation:
21.40 Unobligated balance carried 
        forward, start of year..........           2
22.00 New financing authority (gross)...          15          49          26
                                           ---------   ---------  ----------
23.90   Total budgetary resources 
          available for obligation......          17          49          26
23.95 Total new obligations.............         -16         -48         -26
    New financing authority (gross), detail:
      Mandatory:

67.10   Authority to borrow.............           9          41          13
      Spending authority from offsetting 
          collections:

        Discretionary:
68.00     Offsetting collections (cash).          11          12          17
68.47     Portion applied to repay debt.          -5          -4          -4
                                           ---------   ---------  ----------
68.90       Spending authority from 
              offsetting collections 
              (total discretionary).....           6           8          13
                                           ---------   ---------  ----------
70.00   Total new financing authority 
          (gross).......................          15          49          26
    Change in obligated balances:
72.40 Obligated balance, start of year..                                   5
73.10 Total new obligations.............          16          48          26
73.20 Total financing disbursements 
        (gross).........................         -15         -44         -26
74.40 Obligated balance, end of year....                       5           5
87.00 Total financing disbursements 
        (gross).........................          15          44          26
    Offsets:
      Against gross financing authority and 
          financing disbursements:

        Offsetting collections (cash) 
            from:
88.00     Federal sources: 
            Reimbursements from NADL....          -8          -6         -10
88.25     Interest on uninvested funds..          -1
88.40     Non-federal sources--
            Repayments and prepayments 
            of principal................          -1          -2          -3
88.40     Non-Federal sources--Interest 
            received on loans...........          -1          -4          -6
88.40     Cash sale of property.........                                   2
                                           ---------   ---------  ----------
88.90       Total, offsetting 
              collections (cash)........         -11         -12         -17
    Net financing authority and financing 
        disbursements:
89.00 Financing authority...............           4          37           9
90.00 Financing disbursements...........           5          32           9
---------------------------------------------------------------------------

               Status of Direct Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 36-4130-0-3-704      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------
    Position with respect to appropriations act 
                limitation on obligations:
1111  Limitation on direct loans........                      50          30
1121  Limitation available from carry-
        forward.........................         100         100          80
1131  Direct loan obligations exempt 
        from limitation.................          10
1142  Unobligated direct loan limitation 
        (-).............................                     -25         -27
1143  Unobligated limitation carried 
        forward (P.L. 105-368)..........        -100         -80         -60
                                           ---------   ---------  ----------
1150    Total direct loan obligations...                      20          20
                                           ---------   ---------  ----------
1150    Total direct loan obligations...          10          25           3
----------------------------------------------------------------------------

    Cumulative balance of direct loans 
                outstanding:
1210  Outstanding, start of year........          18          25          58
      Disbursements:

1231    Direct loan disbursements.......                      10          20
1231    Direct loan disbursements.......          10          25           3
      Repayments:

1251    Repayments and prepayments......
1251    Repayments and prepayments......          -1          -2          -3
1264  Write-offs for default: Other 
        adjustments, net................          -2
                                           ---------   ---------  ----------
1290    Outstanding, end of year........          25          58          78
---------------------------------------------------------------------------

                             Balance Sheet (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code   36-4130-0-3-704    2002 actual    2003 actual     2004 est.      2005 est.
-----------------------------------------------------------------------------------------------
    ASSETS:
      Federal assets:

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

1401    Direct loans receivable, gross..          18             25
1402    Interest receivable.............           5
                                        ------------ --------------  ------------  -------------
1499      Net present value of assets 
            related to direct loans.....          23             25
1901  Other Federal assets: Other assets                          1
                                        ------------ --------------  ------------  -------------
1999    Total assets....................          25             27
    LIABILITIES:
      Federal liabilities:

2101    Accounts payable................                          1
2103    Federal liabilities debt........          21             25
2105    Other liabilities...............           4              1
                                        ------------ --------------  ------------  -------------
2999    Total liabilities...............          25             27
                                        ------------ --------------  ------------  -------------
4999  Total liabilities and net position          25             27
-----------------------------------------------------------------------------------------------
    Note: Consistent with Government-wide practice, information for 2004 
and 2005 was not required to be collected.

    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

[[Page 894]]

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 obligated in 1992 and beyond (including 
modifications of direct loans that resulted from obligations in any 
year). The amounts in the account are means of financing and are not 
included in the budget totals.

                                

  Vocational Rehabilitation and Education Direct Loan Financing Account

                     [(including transfer of funds)]

    [For the cost of direct loans, $1,000, as authorized by 38 U.S.C. 
3698, as amended: Provided, That such costs, including the cost of 
modifying such loans, shall be as defined in section 502 of the 
Congressional Budget Act of 1974, as amended: Provided further, That 
these funds are available to subsidize gross obligations for the 
principal amount of direct loans not to exceed $3,400.]
    [In addition, for administrative expenses necessary to carry out the 
direct loan program, $70,000, which may be transferred to and merged 
with the appropriation for ``General operating expenses''.] (Division G, 
H.R. 2673, Consolidated Appropriations Bill, FY 2004.)

                                

               Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 36-4259-0-3-702      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------

    Obligations by program activity:
00.01 Direct loans......................           3           4           4
                                           ---------   ---------  ----------
10.00   Total new obligations...........           3           4           4
    Budgetary resources available for obligation:
21.40 Unobligated balance carried 
        forward, start of year..........                       4
22.00 New financing authority (gross)...           6           4           4
22.60 Portion applied to repay debt.....                      -4
                                           ---------   ---------  ----------
23.90   Total budgetary resources 
          available for obligation......           6           4           4
23.95 Total new obligations.............          -3          -4          -4
24.40 Unobligated balance carried 
        forward, end of year............           4
    New financing authority (gross), detail:
      Mandatory:

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

        Discretionary:
68.00     Offsetting collections (cash).           3           4           4
68.47     Portion applied to repay debt.                      -4          -4
                                           ---------   ---------  ----------
68.90       Spending authority from 
              offsetting collections 
              (total discretionary).....           3
                                           ---------   ---------  ----------
70.00   Total new financing authority 
          (gross).......................           6           4           4
    Change in obligated balances:
73.10 Total new obligations.............           3           4           4
73.20 Total financing disbursements 
        (gross).........................          -3          -4          -4
87.00 Total financing disbursements 
        (gross).........................           3           4           4
    Offsets:
      Against gross financing authority and 
          financing disbursements:

88.40   Offsetting collections (cash) 
          from: Repayments and 
          prepayments of principal......          -3          -4          -4
    Net financing authority and financing 
        disbursements:
89.00 Financing authority...............           3
90.00 Financing disbursements...........
---------------------------------------------------------------------------

               Status of Direct Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 36-4259-0-3-702      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------
    Position with respect to appropriations act 
                limitation on obligations:
1111  Limitation on direct loans........           3           4           4
                                           ---------   ---------  ----------
1150    Total direct loan obligations...           3           4           4
----------------------------------------------------------------------------

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

                             Balance Sheet (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code   36-4259-0-3-702    2002 actual    2003 actual     2004 est.      2005 est.
-----------------------------------------------------------------------------------------------
    ASSETS:
      Investments in US securities:

1106    Federal assets: Fund assets: 
          Fund Balance with Treasury....                          4
      Net value of assets related to 
          post-1991 direct loans 
          receivable:

1401    Direct loans receivable, gross..           1              1
                                        ------------ --------------  ------------  -------------
1499      Net present value of assets 
            related to direct loans.....           1              1
                                        ------------ --------------  ------------  -------------
1999    Total assets....................           1              5
    LIABILITIES:
2103  Federal liabilities: Debt.........           1              5
                                        ------------ --------------  ------------  -------------
2999    Total liabilities...............           1              5
                                        ------------ --------------  ------------  -------------
4999  Total liabilities and net position           1              5
-----------------------------------------------------------------------------------------------
    Note: Consistent with Government-wide practice, information for 2004 
and 2005 was not required to be collected.

    This account contains information on the Vocational Rehabilitation 
loan program. The Education Loan Program is no longer authorized 
pursuant to P.L. 108-183, effective December 16, 2003.

    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 the account are a means of financing and are not 
included in the budget totals.

                                

  

                               Trust Funds

               Post-Vietnam Era Veterans Education Account

                Unavailable Receipts (in millions of dollars)

----------------------------------------------------------------------------
Identification code 36-8133-0-7-702      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------
01.99 Balance, start of year............                       1           1
    Receipts:
02.20 Deductions from military pay, 
        Post-Vietnam era veterans 
        educatio........................           1           1           1
02.40 Contributions, Post-Vietnam era 
        veterans education account......           1           1
                                           ---------   ---------  ----------
02.99   Total receipts and collections..           2           2           1
                                           ---------   ---------  ----------
04.00 Total: Balances and collections...           2           3           2
    Appropriations:
05.00 Post-Vietnam era veterans 
        education account...............          -1          -2          -2
                                           ---------   ---------  ----------
07.99 Balance, end of year..............           1           1
---------------------------------------------------------------------------

               Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 36-8133-0-7-702      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------

    Obligations by program activity:
00.01 Payment to post-Vietnam era 
        trainees........................           1           2           2
00.03 Participant disenrollments........           3           9           3
                                           ---------   ---------  ----------
10.00   Total new obligations...........           4          11           5
    Budgetary resources available for obligation:
21.40 Unobligated balance carried 
        forward, start of year..........          79          76          67
22.00 New budget authority (gross)......           1           2           2
                                           ---------   ---------  ----------

[[Page 895]]


23.90   Total budgetary resources 
          available for obligation......          80          78          69
23.95 Total new obligations.............          -4         -11          -5
24.40 Unobligated balance carried 
        forward, end of year............          76          67          64
    New budget authority (gross), detail:
      Mandatory:

60.26   Appropriation (trust fund)......           1           2           2
    Change in obligated balances:
72.40 Obligated balance, start of year..           1           1           2
73.10 Total new obligations.............           4          11           5
73.20 Total outlays (gross).............          -4         -10          -6
74.40 Obligated balance, end of year....           1           2           2
    Outlays (gross), detail:
86.97 Outlays from new mandatory 
        authority.......................           1           2           2
86.98 Outlays from mandatory balances...           3           8           4
                                           ---------   ---------  ----------
87.00   Total outlays (gross)...........           4          10           6
    Net budget authority and outlays:
89.00 Budget authority..................           1           2           2
90.00 Outlays...........................           5          10           6
---------------------------------------------------------------------------

    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:

    CONTRIBUTIONS, PARTICIPANTS, DISENROLLMENTS, REFUNDS AND TRAINEES

                        [In millions of dollars]

                                     2003 actual  2004 est.   2005 est.

Total budget authority..............          $1          $2          $2
  Servicepersons contributions......          $1          $1          $0
  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)....     199,158     198,658     198,046
Total contributors (end of year)....         552         700         488
Average contribution per contributor 
(actual dollars)....................      $1,288        $923        $989
Number of disenrollments............       3,530       1,200         400
Total refunds.......................          $3          $9          $3
Total trainees......................         740         880         700
Total trainee cost..................          $1          $2          $2
Average cost per trainee (actual 
dollars)............................      $1,584      $2,273      $2,757
Section 901 trainees................          28          20          24

               Object Classification (in millions of dollars)

----------------------------------------------------------------------------
Identification code 36-8133-0-7-702      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------
41.0  Grants, subsidies, and 
        contributions...................           1           2           2
44.0  Refunds...........................           3           9           3
                                           ---------   ---------  ----------
99.9    Total new obligations...........           4          11           5
---------------------------------------------------------------------------

                                

                  National Service Life Insurance Fund

                Unavailable Receipts (in millions of dollars)

----------------------------------------------------------------------------
Identification code 36-8132-0-7-701      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------
01.99 Balance, start of year............      10,027       9,795       9,487
    Receipts:
02.20 NSLI fund, Premium and other 
        receipts........................         176         166         156
02.40 NSLI fund, Interest...............         783         735         683
02.41 NSLI fund, Payments from general 
        and special funds...............           1           1           1
                                           ---------   ---------  ----------
02.99   Total receipts and collections..         960         902         840
                                           ---------   ---------  ----------
04.00 Total: Balances and collections...      10,987      10,697      10,327
    Appropriations:
05.00 National service life insurance 
        fund............................        -960        -902        -840
05.01 National service life insurance 
        fund............................        -232        -308        -362
                                           ---------   ---------  ----------
05.99   Total appropriations............      -1,192      -1,210      -1,202
                                           ---------   ---------  ----------
07.99 Balance, end of year..............       9,795       9,487       9,125
---------------------------------------------------------------------------

               Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 36-8132-0-7-701      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------

    Obligations by program activity:
      Direct:

        Operating expenses:
00.01     Death claims..................         629         653         669
00.02     Disability claims.............          12          11          10
00.03     Matured endowments............           6           8           9
00.04     Cash surrenders...............          27          30          28
00.05     Dividends.....................         322         287         253
00.06     Interest paid on dividend 
            credits and deposits........          54          56          52
00.07     Payment to Insurance account..          20          22          22
                                           ---------   ---------  ----------
00.91       Total operating expenses....       1,070       1,067       1,043
02.01 Capital investment: Policy loans..          72          68          68
                                           ---------   ---------  ----------
02.93   Total direct obligations........       1,142       1,135       1,111
      Reimbursable program:

09.01   Death claims....................         285         292         301
09.02   Disability Claims...............           5           5           4
09.03   Matured Endowments..............           3           4           4
09.04   Cash Surrenders.................          13          13          13
09.05   Dividends.......................         146         129         114
09.06   Interest paid on dividend 
          credits and deposits..........          24          25          23
09.07   Payment to Insurance account....           9          10          10
                                           ---------   ---------  ----------
09.09     Reimbursable program..........         485         478         469
                                           ---------   ---------  ----------
10.00   Total new obligations...........       1,627       1,613       1,580
    Budgetary resources available for obligation:
22.00 New budget authority (gross)......       1,627       1,613       1,580
23.95 Total new obligations.............      -1,627      -1,613      -1,580
    New budget authority (gross), detail:
      Mandatory:

60.26   Appropriation (trust fund)......         960         902         840
69.00 Offsetting collections (cash).....         435         403         378
69.26 From offsetting collections 
        (unavailable balances)..........         232         308         362
                                           ---------   ---------  ----------
69.90   Spending authority from 
          offsetting collections (total 
          mandatory)....................         667         711         740
                                           ---------   ---------  ----------
70.00   Total new budget authority 
          (gross).......................       1,627       1,613       1,580
    Change in obligated balances:
72.40 Obligated balance, start of year..       1,447       1,461       1,470
73.10 Total new obligations.............       1,627       1,613       1,580
73.20 Total outlays (gross).............      -1,613      -1,604      -1,576
74.40 Obligated balance, end of year....       1,461       1,470       1,474
    Outlays (gross), detail:
86.97 Outlays from new mandatory 
        authority.......................       1,395       1,305       1,218
86.98 Outlays from mandatory balances...         218         299         358
                                           ---------   ---------  ----------
87.00   Total outlays (gross)...........       1,613       1,604       1,576
    Offsets:
      Against gross budget authority and outlays:

        Offsetting collections (cash) 
            from:
88.40     Repayments of loans...........        -124        -115        -107
88.40     Optional settlements..........          -2          -2          -2
88.40     Net income offsets adjustments        -309        -286        -269
                                           ---------   ---------  ----------
88.90       Total, offsetting 
              collections (cash)........        -435        -403        -378
    Net budget authority and outlays:
89.00 Budget authority..................       1,192       1,210       1,202
90.00 Outlays...........................       1,178       1,201       1,198
    Memorandum (non-add) entries:
92.01 Total investments, start of year: 
        Federal securities: Par value...      11,465      11,246      10,947
92.02 Total investments, end of year: 
        Federal securities: Par value...      11,246      10,947      10,588
---------------------------------------------------------------------------
    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

[[Page 896]]

in the number and amount of policies in force is shown as follows:

                     POLICIES AND INSURANCE IN FORCE

                                     2003 actual  2004 est.   2005 est.

Number of policies..................   1,401,357   1,299,784   1,197,522
Insurance in force (dollars in 
millions)...........................     $14,802     $14,006     $13,154

    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 $11,612 million as of September 30, 2004 to $11,164 
million as of September 30, 2005. The actuarial estimate of policy 
obligations as of September 30, 2005, totals $10,900 million, leaving a 
balance of $264 million for contingency reserves.

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

                  Status of Funds (in millions of dollars)

----------------------------------------------------------------------------
Identification code 36-8132-0-7-701      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------
    Unexpended balance, start of year:
0100  Uninvested balance................           8           9           9
0101  U.S. Securities: Par value........      11,465      11,246      10,947
                                           ---------   ---------  ----------
0199    Total balance, start of year....      11,474      11,256      10,957
    Cash income during the year:
      Current law:

        Offsetting receipts 
            (proprietary):
1220      NSLI fund, premium and other 
            receipts....................         176         166         156
        Offsetting receipts 
            (intragovernmental):
1240      NSLI fund,interest............         783         735         683
1241      NSLI fund, payments from 
            general and special funds...           1           1           1
        Offsetting collections:
1280      NSLI fund, offsetting 
            collections.................         435         403         378
1299    Income under present law........       1,395       1,305       1,218
    Cash outgo during year:
      Current law:

4500    National service life insurance 
          fund..........................      -1,613      -1,604      -1,576
    Unexpended balance, end of year:
8700  Uninvested balance................           9           9           9
8701  Federal securities: Par value.....      11,246      10,947      10,588
                                           ---------   ---------  ----------
8799    Total balance, end of year......      11,256      10,957      10,599
---------------------------------------------------------------------------

               Object Classification (in millions of dollars)

----------------------------------------------------------------------------
Identification code 36-8132-0-7-701      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------

      Direct obligations:

33.0    Investments and loans...........          72          68          68
42.0    Insurance claims and indemnities         674         702         716
43.0    Interest and dividends..........         396         365         327
                                           ---------   ---------  ----------
99.0      Direct obligations............       1,142       1,135       1,111
99.0  Reimbursable obligations..........         485         478         469
                                           ---------   ---------  ----------
99.9    Total new obligations...........       1,627       1,613       1,580
---------------------------------------------------------------------------

                                

              United States Government Life Insurance Fund

                Unavailable Receipts (in millions of dollars)

----------------------------------------------------------------------------
Identification code 36-8150-0-7-701      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------
01.99 Balance, start of year............          44          39          34
    Receipts:
02.40 Interest and profits on 
        investments in public debt 
        securities, U...................           4           3           3
                                           ---------   ---------  ----------
04.00 Total: Balances and collections...          48          42          37
    Appropriations:
05.00 United States Government life 
        insurance fund..................          -4          -3          -3
05.01 United States Government Life 
        Insurance Fund..................          -5          -5          -4
                                           ---------   ---------  ----------
05.99   Total appropriations............          -9          -8          -7
                                           ---------   ---------  ----------
07.99 Balance, end of year..............          39          34          30
---------------------------------------------------------------------------

               Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 36-8150-0-7-701      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------

    Obligations by program activity:
      Operating expenses:

00.01   Death claims....................           2           2           2
00.06   Interest paid on dividend 
          credits and deposits..........           1           1           1
00.07   Other Costs.....................           1           1           1
09.01 Death Claims......................           3           3           2
09.02 Dividends.........................           2           2           2
                                           ---------   ---------  ----------
09.09   Reimbursable program............           5           5           4
                                           ---------   ---------  ----------
10.00   Total new obligations...........           9           9           8
    Budgetary resources available for obligation:
22.00 New budget authority (gross)......           9           9           8
23.95 Total new obligations.............          -9          -9          -8
    New budget authority (gross), detail:
      Mandatory:

60.26   Appropriation (trust fund)......           4           3           3
69.00 Offsetting collections (cash).....           1           1           1
69.26 From offsetting collections 
        (unavailable balances)..........           5           5           4
                                           ---------   ---------  ----------
69.90   Spending authority from 
          offsetting collections (total 
          mandatory)....................           6           6           5
                                           ---------   ---------  ----------
70.00   Total new budget authority 
          (gross).......................          10           9           8
    Change in obligated balances:
72.40 Obligated balance, start of year..          18          17          16
73.10 Total new obligations.............           9           9           8
73.20 Total outlays (gross).............         -10         -10          -9
74.40 Obligated balance, end of year....          17          16          14
    Outlays (gross), detail:
86.97 Outlays from new mandatory 
        authority.......................           5           4           4
86.98 Outlays from mandatory balances...           6           6           6
                                           ---------   ---------  ----------
87.00   Total outlays (gross)...........          11          10          10
    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..................           9           8           7
90.00 Outlays...........................          10           9           9
    Memorandum (non-add) entries:
92.01 Total investments, start of year: 
        Federal securities: Par value...          62          56          50
92.02 Total investments, end of year: 
        Federal securities: Par value...          56          50          44
---------------------------------------------------------------------------
    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

                                     2003 actual  2004 est.   2005 est.
Number of policies..................      11,770      10,370       9,050
Insurance in force (dollars in 
millions)...........................         $37         $32         $28

    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 $52 million 
as of September 30, 2004, to $46 million

[[Page 897]]

as of September 30, 2005, as an increasing number of policies mature 
through death or disability. The actuarial evaluation of policy 
obligations as of September 30, 2005, totals $45 million, leaving a 
balance of $1 million for contingency reserves.

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

                  Status of Funds (in millions of dollars)

----------------------------------------------------------------------------
Identification code 36-8150-0-7-701      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------
    Unexpended balance, start of year:
0101  U.S. Securities: Par value........          62          56          50
                                           ---------   ---------  ----------
0199    Total balance, start of year....          62          56          50
    Cash income during the year:
      Current law:

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

4500    United States government life 
          insurance fund................         -10         -10          -9
    Unexpended balance, end of year:
8701  Federal securities: Par value.....          56          50          44
                                           ---------   ---------  ----------
8799    Total balance, end of year......          56          50          44
---------------------------------------------------------------------------

               Object Classification (in millions of dollars)

----------------------------------------------------------------------------
Identification code 36-8150-0-7-701      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------

      Direct obligations:

42.0    Insurance claims and indemnities           2           2           2
43.0    Interest and dividends..........           2           2           2
                                           ---------   ---------  ----------
99.0      Direct obligations............           4           4           4
99.0  Reimbursable obligations..........           5           5           4
                                           ---------   ---------  ----------
99.9    Total new obligations...........           9           9           8
---------------------------------------------------------------------------

                                

                  Veterans Special Life Insurance Fund

               Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 36-8455-0-8-701      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------

    Obligations by program activity:
09.01 Death claims......................          61          70          76
09.02 Cash surrenders...................           4           4           5
09.03 Dividends.........................          88          87          83
09.04 All other.........................          36          36          28
09.05 Payments to Insurance account.....           5           6           6
09.06 Capital investment................          15          16          16
                                           ---------   ---------  ----------
10.00   Total new obligations...........         209         219         214
    Budgetary resources available for obligation:
21.40 Unobligated balance carried 
        forward, start of year..........       1,516       1,540       1,548
22.00 New budget authority (gross)......         233         227         222
                                           ---------   ---------  ----------
23.90   Total budgetary resources 
          available for obligation......       1,749       1,767       1,770
23.95 Total new obligations.............        -209        -219        -214
24.40 Unobligated balance carried 
        forward, end of year............       1,540       1,548       1,556
    New budget authority (gross), detail:
      Mandatory:

69.00   Offsetting collections (cash)...         233         227         222
    Change in obligated balances:
72.40 Obligated balance, start of year..         292         312         333
73.10 Total new obligations.............         209         219         214
73.20 Total outlays (gross).............        -189        -198        -199
74.40 Obligated balance, end of year....         312         333         348
    Outlays (gross), detail:
86.97 Outlays from new mandatory 
        authority.......................         189         198         199
    Offsets:
      Against gross budget authority and outlays:

        Offsetting collections (cash) 
            from:
88.20     Interest on Federal securities        -143        -140        -138
88.40     Interest on loans.............          -6          -6          -6
88.40     Insurance premiums earned.....         -66         -64         -61
88.40     Repayments of loans...........         -18         -17         -17
                                           ---------   ---------  ----------
88.90       Total, offsetting 
              collections (cash)........        -233        -227        -222
    Net budget authority and outlays:
89.00 Budget authority..................
90.00 Outlays...........................         -43         -29         -23
    Memorandum (non-add) entries:
92.01 Total investments, start of year: 
        Federal securities: Par value...       1,807       1,850       1,879
92.02 Total investments, end of year: 
        Federal securities: Par value...       1,850       1,879       1,902
---------------------------------------------------------------------------
    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

                                     2003 actual  2004 est.   2005 est.
Number of policies..................     220,719     213,513     206,167
Insurance in force (dollars in 
millions)...........................      $2,566      $2,516      $2,459

    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      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------
33.0  Investments and loans.............          15          15          16
42.0  Insurance claims and indemnities..          83          92          91
43.0  Interest and dividends............         111         112         107
                                           ---------   ---------  ----------
99.9    Total new obligations...........         209         219         214
---------------------------------------------------------------------------

                                


 
                       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, $303,084,000, including no 
more than $5,524,000 for construction.

[[Page 898]]

                      [general operating expenses]

    [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, uniforms or allowances therefor; not to exceed $25,000 for 
official reception and representation expenses; hire of passenger motor 
vehicles; and reimbursement of the General Services Administration for 
security guard services, and the Department of Defense for the cost of 
overseas employee mail, $1,283,272,000: Provided, That expenses for 
services and assistance authorized under 38 U.S.C. 3104(a)(1), (2), (5), 
and (11) that the Secretary determines are necessary to enable entitled 
veterans: (1) to the maximum extent feasible, to become employable and 
to obtain and maintain suitable employment; or (2) to achieve maximum 
independence in daily living, shall be charged to this account: Provided 
further, That the Veterans Benefits Administration shall be funded at 
not less than $1,005,000,000: Provided further, That of the funds made 
available under this heading, not to exceed $66,000,000 shall be 
available for obligation until September 30, 2005: Provided further, 
That from the funds made available under this heading, the Veterans 
Benefits Administration may purchase up to two passenger motor vehicles 
for use in operations of that Administration in Manila, Philippines.]

                     [construction, major projects]

    [For constructing, altering, extending and improving any of the 
facilities including parking projects under the jurisdiction or for the 
use of the Department of Veterans Affairs, or for any of the purposes 
set forth in sections 316, 2404, 2406, 8102, 8103, 8106, 8108, 8109, 
8110, and 8122 of title 38, United States Code, including planning, 
architectural and engineering services, maintenance or guarantee period 
services costs associated with equipment guarantees provided under the 
project, services of claims analysts, offsite utility and storm drainage 
system construction costs, and site acquisition, where the estimated 
cost of a project is more than the amount set forth in 38 U.S.C. 
8104(a)(3)(A) or where funds for a project were made available in a 
previous major project appropriation, $272,690,000, to remain available 
until expended, of which $181,000,000 shall be for Capital Asset 
Realignment for Enhanced Services (CARES) activities; and of which 
$10,000,000 shall be to make reimbursements as provided in 41 U.S.C. 612 
for claims paid for contract disputes: Provided, That 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 and 
the planning and design activities funded through the design fund and 
CARES funds, including needs assessments which may or may not lead to 
capital investments, none of the funds appropriated under this heading 
shall be used for any project which has not been approved by the 
Congress in the budgetary process: Provided further, That funds provided 
in this appropriation for fiscal year 2004, for each approved project 
(except those for CARES activities referenced above) shall be obligated: 
(1) by the awarding of a construction documents contract by September 
30, 2004; and (2) by the awarding of a construction contract by 
September 30, 2005: Provided further, That the Secretary of Veterans 
Affairs shall promptly report in writing to the Committees on 
Appropriations any approved major construction project in which 
obligations are not incurred within the time limitations established 
above.]

                     [construction, minor projects]

    [For constructing, altering, extending, and improving any of the 
facilities including parking projects under the jurisdiction or for the 
use of the Department of Veterans Affairs, including planning and 
assessments of needs which may lead to capital investments, 
architectural and engineering services, maintenance or guarantee period 
services costs associated with equipment guarantees provided under the 
project, services of claims analysts, offsite utility and storm drainage 
system construction costs, and site acquisition, or for any of the 
purposes set forth in sections 316, 2404, 2406, 8102, 8103, 8106, 8108, 
8109, 8110, 8122, and 8162 of title 38, United States Code, where the 
estimated cost of a project is equal to or less than the amount set 
forth in 38 U.S.C. 8104(a)(3)(A), $252,144,000, to remain available 
until expended, along with unobligated balances of previous 
``Construction, minor projects'' appropriations which are hereby made 
available for any project where the estimated cost is equal to or less 
than the amount set forth in 38 U.S.C. 8104(a)(3)(A), of which 
$40,000,000 shall be for Capital Asset Realignment for Enhanced Services 
(CARES) activities: Provided, That from amounts appropriated under this 
heading, additional amounts may be used for CARES activities upon 
notification of and approval by the Committees on Appropriations: 
Provided further, That funds in this account shall be available for: (1) 
repairs to any of the nonmedical facilities under the jurisdiction or 
for the use of the department which are necessary because of loss or 
damage caused by any natural disaster or catastrophe; and (2) temporary 
measures necessary to prevent or to minimize further loss by such 
causes.] (Division G, H.R. 2673, Consolidated Appropriations Bill, FY 
2004.)

               Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 36-0151-0-1-700      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------

    Obligations by program activity:
      Direct program:

00.11   General administration..........         255         288         300
00.12   Major Construction..............           2           2           2
00.30   Minor Construction..............           8           3           4
                                           ---------   ---------  ----------
01.00   Total Direct Program............         265         293         306
      Reimbursable program:

09.01   Administration of housing credit 
          programs......................           4           4           4
09.04   Other reimbursable programs.....         201         278         336
                                           ---------   ---------  ----------
09.99     Total reimbursable program....         205         282         340
                                           ---------   ---------  ----------
10.00   Total new obligations...........         470         575         646
    Budgetary resources available for obligation:
21.40 Unobligated balance carried 
        forward, start of year..........          18          79           3
22.00 New budget authority (gross)......         534         562         643
22.21 Unobligated balance of FY 2003 
        emergency supp transferred to 
        Compensation....................                     -63
                                           ---------   ---------  ----------
23.90   Total budgetary resources 
          available for obligation......         552         578         646
23.95 Total new obligations.............        -470        -575        -646
23.98 Unobligated balance expiring or 
        withdrawn.......................          -3
24.40 Unobligated balance carried 
        forward, end of year............          79           3
    New budget authority (gross), detail:
      Discretionary:

40.00   Appropriation...................         331         282         303
40.35   Appropriation permanently 
          reduced pursuant to P.L. 108-7          -2
40.35   Appropriation permanently 
          reduced pursuant to H.R. 2673.                      -2
                                           ---------   ---------  ----------
43.00     Appropriation (total 
            discretionary)..............         329         280         303
      Spending authority from offsetting 
          collections:

68.00   Offsetting collections (cash)...         200         282         340
68.10   Change in uncollected customer 
          payments from Federal sources 
          (unexpired)...................           5
                                           ---------   ---------  ----------
68.90     Spending authority from 
            offsetting collections 
            (total discretionary).......         205         282         340
                                           ---------   ---------  ----------
70.00   Total new budget authority 
          (gross).......................         534         562         643
    Change in obligated balances:
72.40 Obligated balance, start of year..          29          41          65
73.10 Total new obligations.............         470         575         646
73.20 Total outlays (gross).............        -451        -552        -632
73.40 Adjustments in expired accounts 
        (net)...........................          -2
74.00 Change in uncollected customer 
        payments from Federal sources 
        (unexpired).....................          -5
74.40 Obligated balance, end of year....          41          65          79
    Outlays (gross), detail:
86.90 Outlays from new discretionary 
        authority.......................         415         504         580
86.93 Outlays from discretionary 
        balances........................          36          48          52
                                           ---------   ---------  ----------
87.00   Total outlays (gross)...........         451         552         632
    Offsets:
      Against gross budget authority and outlays:

88.00   Offsetting collections (cash) 
          from: Federal sources.........        -200        -282        -340
      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..................         329         280         303
90.00 Outlays...........................         251         270         292
---------------------------------------------------------------------------
    \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.


[[Page 899]]



    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 36-0151-0-1-700      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------

      Direct obligations:

        Personnel compensation:
11.1      Full-time permanent...........         130         143         148
11.5      Other personnel compensation..          22          24          24
                                           ---------   ---------  ----------
11.9        Total personnel compensation         152         167         172
12.1    Civilian personnel benefits.....          38          54          55
21.0    Employee travel.................           3           4           4
23.1    Rental payments to GSA..........          17          18          19
23.3    Communications, utilities, and 
          miscellaneous charges.........           3           4           4
24.0    Printing and reproduction.......           1           1           1
25.2    Other services..................          34          34          36
26.0    Supplies and materials..........           2           3           3
31.0    Equipment.......................           5           3           4
32.0    Land and structures.............          10           5           8
                                           ---------   ---------  ----------
99.0      Direct obligations............         265         293         306
99.0  Reimbursable obligations..........         205         282         340
                                           ---------   ---------  ----------
99.9    Total new obligations...........         470         575         646
---------------------------------------------------------------------------

                              Personnel Summary

----------------------------------------------------------------------------
Identification code 36-0151-0-1-700      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------
    Direct:
1001  Total compensable workyears: 
        Civilian full-time equivalent 
        employment\1\...................       1,918       2,034       2,140
    Reimbursable:
2001  Total compensable workyears: 
        Civilian full-time equivalent 
        employment......................         467         553         492
---------------------------------------------------------------------------
    \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 provisions of the Inspector General Act of 1978, as 
amended, $65,432,000, including no more than $721,000 for construction. 
(Division G, H.R. 2673, Consolidated Appropriations Bill, FY 2004.)

               Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 36-0170-0-1-705      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------

    Obligations by program activity:
01.01 Direct program....................          54          65          65
01.03 Construction, minor projects......           1           1           1
                                           ---------   ---------  ----------
01.92   Total direct program............          55          66          66
09.01 Reimbursable program..............           3           3           3
                                           ---------   ---------  ----------
10.00   Total new obligations...........          58          69          69
    Budgetary resources available for obligation:
21.40 Unobligated balance carried 
        forward, start of year..........           1           4           1
22.00 New budget authority (gross)......          61          65          68
                                           ---------   ---------  ----------
23.90   Total budgetary resources 
          available for obligation......          62          69          69
23.95 Total new obligations.............         -58         -69         -69
24.40 Unobligated balance carried 
        forward, end of year............           4           1           1
    New budget authority (gross), detail:
      Discretionary:

40.00   Appropriation...................          59          63          65
40.35   Appropriation permanently 
          reduced (Pursuant to PL 108-7)          -1
40.35   Appropriation permanently 
          reduced (Pursuant to HR 2673).                      -1
                                           ---------   ---------  ----------
43.00     Appropriation (total 
            discretionary)..............          58          62          65
68.00 Spending authority from offsetting 
        collections: Offsetting 
        collections (cash)..............           3           3           3
                                           ---------   ---------  ----------
70.00   Total new budget authority 
          (gross).......................          61          65          68
    Change in obligated balances:
72.40 Obligated balance, start of year..          10          10          12
73.10 Total new obligations.............          58          69          69
73.20 Total outlays (gross).............         -57         -67         -66
73.40 Adjustments in expired accounts 
        (net)...........................          -1
74.40 Obligated balance, end of year....          10          12          15
    Outlays (gross), detail:
86.90 Outlays from new discretionary 
        authority.......................          51          54          56
86.93 Outlays from discretionary 
        balances........................           6          13          10
                                           ---------   ---------  ----------
87.00   Total outlays (gross)...........          57          67          66
    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..................          58          62          65
90.00 Outlays...........................          54          64          63
---------------------------------------------------------------------------

    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      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------

      Direct obligations:

11.1    Personnel compensation: Full-
          time permanent................          32          37          37
12.1    Civilian personnel benefits.....           9          10          10
21.0    Employee Travel.................           3           3           3
23.1    Rental payments to GSA..........           3           3           4
25.2    Other services..................           6          10           9
31.0    Equipment.......................           1           2           1
32.0    Land and structures.............           1           1           1
                                           ---------   ---------  ----------
99.0      Direct obligations............          55          66          65
99.0  Reimbursable obligations..........           3           3           3
                                           ---------   ---------  ----------
99.9    Total new obligations...........          58          69          68
---------------------------------------------------------------------------

                              Personnel Summary

----------------------------------------------------------------------------
Identification code 36-0170-0-1-705      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------
    Direct:
1001  Total compensable workyears: 
        Civilian full-time equivalent 
        employment......................         378         417         417
    Reimbursable:
2001  Total compensable workyears: 
        Civilian full-time equivalent 
        employment......................          21          25          25
---------------------------------------------------------------------------

[[Page 900]]



                                

                               Supply Fund

               Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 36-4537-0-4-705      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------

    Obligations by program activity:
09.01 Reimbursable program-COGS-
        Merchandizing...................       1,504       1,616       1,672
09.02 Reimbursable program-Other-
        Operations......................          65          65          65
09.03 Reimbursable program-COGS-Printing 
        and Publications................           5           5           5
09.04 Reimbursable program-Other........           2           2           2
09.05 Reimbursable program-Equipment-
        Procurement Services and 
        Distribution....................           2           3           3
                                           ---------   ---------  ----------
10.00   Total new obligations...........       1,578       1,691       1,747
    Budgetary resources available for obligation:
21.40 Unobligated balance carried 
        forward, start of year..........         274         477         477
22.00 New budget authority (gross)......       1,781       1,691       1,747
                                           ---------   ---------  ----------
23.90   Total budgetary resources 
          available for obligation......       2,055       2,168       2,224
23.95 Total new obligations.............      -1,578      -1,691      -1,747
24.40 Unobligated balance carried 
        forward, end of year............         477         477         477
    New budget authority (gross), detail:
      Mandatory:

69.00   Offsetting collections (cash)...       1,529       1,691       1,747
69.10   Change in uncollected customer 
          payments from Federal sources 
          (unexpired)...................         252
                                           ---------   ---------  ----------
69.90     Spending authority from 
            offsetting collections 
            (total mandatory)...........       1,781       1,691       1,747
    Change in obligated balances:
72.40 Obligated balance, start of year..         188         298         298
73.10 Total new obligations.............       1,578       1,691       1,747
73.20 Total outlays (gross).............      -1,216      -1,691      -1,747
74.00 Change in uncollected customer 
        payments from Federal sources 
        (unexpired).....................        -252
74.40 Obligated balance, end of year....         298         298         298
    Outlays (gross), detail:
86.97 Outlays from new mandatory 
        authority.......................       1,216       1,691       1,747
    Offsets:
      Against gross budget authority and outlays:

88.00   Offsetting collections (cash) 
          from: Federal sources.........      -1,529      -1,691      -1,747
      Against gross budget authority only:

88.95   Change in uncollected customer 
          payments from Federal sources 
          (unexpired)...................        -252
    Net budget authority and outlays:
89.00 Budget authority..................
90.00 Outlays...........................        -313
---------------------------------------------------------------------------

    Under the provisions of 38 U.S.C. 8121, the Supply Fund is 
responsible for the operation and maintenance of a supply system for VA. 
The Supply Fund is an intragovernmental revolving fund without fiscal 
year limitations.

    Budget program.--The fund provides financial support for: (1) a 
National Acquisition Center or central contracting office; (2) the 
maintenance of field station inventories; (3) a service and distribution 
center; (4) a service and reclamation program; (5) a national 
prosthetics distribution center; and (6) an asset management service.

    Costs for the administration of supply activities at VA field 
stations are not financed by the Supply Fund. These costs are charged 
directly to applicable appropriations accounts.

    Financing.--Costs of supplies, equipment, and services acquired 
through the Supply Fund and Supply Fund operating costs are recovered 
through reimbursements from the VA appropriations and other Government 
agencies receiving goods and services. For 2005, Supply Fund sales are 
estimated to reach $1.5 billion. Average inventory needed to support 
those sales will be $32 million.

    Operating results.--The Fund operated at a profit of $19 million in 
2003. The new total of retained earnings is $97 million. Operating 
expense as related to sales was 6 percent.

               Object Classification (in millions of dollars)

----------------------------------------------------------------------------
Identification code 36-4537-0-4-705      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------

      Personnel compensation:

11.1    Full-time permanent.............          27          30          30
11.5    Other personnel compensation....           1           1           1
                                           ---------   ---------  ----------
11.9      Total personnel compensation..          28          31          31
12.1  Civilian personnel benefits.......           6           6           7
21.0  Travel and transportation of 
        persons.........................           3           3           4
22.0  Transportation of things..........           6           4           4
23.1  Rental payments to GSA............           2           2           2
23.3  Communications, utilities, and 
        miscellaneous charges...........           3           3           3
24.0  Printing and reproduction.........           5           6           6
25.1  Advisory and assistance services..         653         624         640
26.0  Supplies and materials............         390         528         548
31.0  Equipment.........................         482         484         502
                                           ---------   ---------  ----------
99.9    Total new obligations...........       1,578       1,691       1,747
---------------------------------------------------------------------------

                              Personnel Summary

----------------------------------------------------------------------------
Identification code 36-4537-0-4-705      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------
    Reimbursable:
2001  Total compensable workyears: 
        Civilian full-time equivalent 
        employment......................         410         433         433
---------------------------------------------------------------------------

                                

                             Franchise Fund

               Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 36-4539-0-4-705      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------

    Obligations by program activity:
09.01 Reimbursable program..............         194         222         235
                                           ---------   ---------  ----------
10.00   Total new obligations...........         194         222         235
    Budgetary resources available for obligation:
21.40 Unobligated balance carried 
        forward, start of year..........          53          73          73
22.00 New budget authority (gross)......         214         222         235
                                           ---------   ---------  ----------
23.90   Total budgetary resources 
          available for obligation......         267         295         308
23.95 Total new obligations.............        -194        -222        -235
24.40 Unobligated balance carried 
        forward, end of year............          73          73          73
    New budget authority (gross), detail:
      Mandatory:

69.00   Offsetting collections (cash)...         200         209         222
69.10   Change in uncollected customer 
          payments from Federal sources 
          (unexpired)...................          14          13          13
                                           ---------   ---------  ----------
69.90     Spending authority from 
            offsetting collections 
            (total mandatory)...........         214         222         235
    Change in obligated balances:
72.40 Obligated balance, start of year..          20          17           4
73.10 Total new obligations.............         194         222         235
73.20 Total outlays (gross).............        -183        -222        -235
74.00 Change in uncollected customer 
        payments from Federal sources 
        (unexpired).....................         -14         -13         -13
74.40 Obligated balance, end of year....          17           4          -9
    Outlays (gross), detail:
86.97 Outlays from new mandatory 
        authority.......................         183         222         235
    Offsets:
      Against gross budget authority and outlays:

88.00   Offsetting collections (cash) 
          from: Federal sources.........        -200        -209        -222
      Against gross budget authority only:

88.95   Change in uncollected customer 
          payments from Federal sources 
          (unexpired)...................         -14         -13         -13
    Net budget authority and outlays:
89.00 Budget authority..................
90.00 Outlays...........................         -17          13          13
---------------------------------------------------------------------------

    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 
$235 million and employ 705.

    The Franchise Fund concept is intended to increase competition for 
government administrative services resulting in lower costs and higher 
quality.

[[Page 901]]

               Object Classification (in millions of dollars)

----------------------------------------------------------------------------
Identification code 36-4539-0-4-705      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------
11.1  Personnel compensation: Full-time 
        permanent.......................          53          45          46
12.1  Civilian personnel benefits.......           9          10          10
21.0  Travel and transportation of 
        persons.........................           2           3           3
23.1  Rental payments to GSA............           1           6           6
23.3  Communications, utilities, and 
        miscellaneous charges...........          24          32          36
24.0  Printing and reproduction.........           3           5           8
25.2  Other services....................          80         103         110
26.0  Supplies and materials............           2           2           2
31.0  Equipment.........................          18          16          14
32.0  Land and structures...............           2
                                           ---------   ---------  ----------
99.9    Total new obligations...........         194         222         235
---------------------------------------------------------------------------

                              Personnel Summary

----------------------------------------------------------------------------
Identification code 36-4539-0-4-705      2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------
    Reimbursable:
2001  Total compensable workyears: 
        Civilian full-time equivalent 
        employment......................         662         702         705
---------------------------------------------------------------------------

                                


 
                      GENERAL FUND RECEIPT ACCOUNTS

                           (in millions of dollars)

----------------------------------------------------------------------------
                                         2003 actual   2004 est.   2005 est.
----------------------------------------------------------------------------
Offsetting receipts from the public:
  36-247300  Contributions from military 
    personnel, Veteran's Educational 
    Assistance Act of 1984..............         220         228         239
  36-273330  Housing downward 
    reestimates.........................         878       2,311
  36-275510  Housing negative subsidies.           8          18         217
                                           ---------   ---------  ----------
General Fund Offsetting receipts from 
 the public.............................       1,106       2,557         456
---------------------------------------------------------------------------

                                

                        Administrative Provisions

                      (including transfer of funds)

    [Sec. 101. Any appropriation for fiscal year 2004 for ``Compensation 
and pensions'', ``Readjustment benefits'', and ``Veterans insurance and 
indemnities'' may be transferred to any other of the mentioned 
appropriations.]
    Sec. 101. (a) Appropriations available for fiscal years 2005 and 
2006 for operating expenses in the Disability Compensation 
Administration, Pensions Administration, Burial Administration, 
Insurance Administration, Education Administration, and Vocational 
Rehabilitation and Employment Administration 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 2005 and 2006 for 
purposes of construction (non-grants) in the Disability Compensation 
Administration, Pensions Administration, Insurance Administration, 
Education Administration, Vocational Rehabilitation and Employment 
Administration, 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 2005, five percent 
in 2006, 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 2005, two-and-a-half percent in 
2006, 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, 2006.
    Sec. 103. Appropriations available to the Department of Veterans 
Affairs for construction are available until expended.
    Sec. [102] 104. Appropriations available to the Department of 
Veterans Affairs for fiscal year [2004] 2005 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. 103. No appropriations in this Act for the Department of 
Veterans Affairs (except the appropriations for ``Construction, major 
projects'', ``Construction, minor projects'', and the ``Parking 
revolving fund'') shall be available for the purchase of any site for or 
toward the construction of any new hospital or home.]
    Sec. 105. Construction funds (non-grants) provided in this title 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,  other capital asset management 
related activities,  investment strategy studies, design of projects  
and planning and design activities, including needs assessments, none of 
the funds appropriated for construction shall be used for any project 
where the estimated cost is $7,000,000 or more, pursuant to section 8104 
of title 38, U.S.C. Construction funds provided in each account for 
fiscal year 2005 for projects where the estimated cost is $7,000,000 or 
more, shall be obligated: (1) by the awarding of construction documents 
contract by September 30, 2005; and (2) by the awarding of a design-
build or construction contract by September 30, 2006. The Secretary 
shall promptly report in writing to the Committees on Appropriations any 
approved construction project of $7,000,000 or more in which obligations 
are not incurred within the time limitations established above.
    Sec. [104] 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 [services''] care'' account at such rates as 
may be fixed by the Secretary of Veterans Affairs.
    Sec. 107. Appropriations available to the Department of Veterans 
Affairs for fiscal year 2005 for ``Disability Compensation Benefits,'' 
``Pensions Benefits,'' ``Education Benefits,'' ``Vocational 
Rehabilitation and Employment Benefits,'' and ``Insurance Benefits'' 
shall be available for payment of prior year accrued obligations 
required to be recorded by law against the corresponding prior year 
accounts within the last quarter of fiscal year 2004.
    Sec. [106] 108. Appropriations accounts available to the Department 
of Veterans Affairs for fiscal year [2004] 2005 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 ``Disability Compensation 
Benefits.''
    Sec. [107] 109. Notwithstanding any other provision of law, during 
fiscal year [2004] 2005, the Secretary of Veterans Affairs shall, from 
the National Service Life Insurance Fund (38 U.S.C. 1920), the Veterans' 
Special Life Insurance Fund (38 U.S.C. 1923), and the United States 
Government Life Insurance Fund (38 U.S.C. 1955), reimburse the 
``Insurance [operating expenses''] Administration'' account for the cost 
of administration of the insurance programs financed through those 
accounts: Provided, That reimbursement shall be made only from the 
surplus earnings accumulated in an insurance program in fiscal year 
[2004] 2005 that are available for dividends in that program after 
claims have been paid and actuarially determined reserves

[[Page 902]]

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] 2005 which is properly allocable to the provision of each 
insurance program and to the provision of any total disability income 
insurance included in such insurance program.
    Sec. [108] 110. Notwithstanding any other provision of law, the 
Department of Veterans Affairs shall continue the Franchise Fund pilot 
program authorized to be established by section 403 of Public Law 103-
356 until October 1, [2004] 2005: Provided, That the Franchise Fund, 
established by title I of Public Law 104-204 to finance the operations 
of the Franchise Fund pilot program, shall continue until October 1, 
[2004] 2005.
    Sec. [109] 111. 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] 112. Funds available in any Department of Veterans 
Affairs appropriation for fiscal year [2004] 2005 or funds 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 $3,059,000 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 [operating expenses''] Administration'' for use by 
the office that provided the service.
    [Sec. 111. No appropriations in this Act for the Department of 
Veterans Affairs shall be available 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. 113. No appropriations in this Act for the Department of 
Veterans Affairs shall be available for hospitalization or treatment of 
any person by reason of eligibility under section 1710(a)(3) of title 
38, United States Code, unless that person has disclosed to the 
Secretary of Veterans Affairs, in such form as the Secretary may 
require--
        (1) current, accurate third-party reimbursement information for 
    purposes of section 1729 of such title; and
        (2) annual income information for purposes of section 1722 of 
    such title.
    [Sec. 113. Of the amounts provided in this Act, $25,000,000 shall be 
for information technology initiatives to support the enterprise 
architecture of the Department of Veterans Affairs.]
    Sec. 114. None of the funds in this Act may be used to implement 
sections 2 and 5 of Public Law 107-287.
    [Sec. 115. Receipts that would otherwise be credited to the Veterans 
Extended Care Revolving Fund, the Medical Facilities Revolving Fund, the 
Special Therapeutic and Rehabilitation Fund, the Nursing Home Revolving 
Fund, the Veterans Health Services Improvement Fund, and the Parking 
Revolving Fund shall be deposited into the Medical Care Collections 
Fund, and shall be transferred to ``Medical services'', to remain 
available until expended, to carry out the purposes of ``Medical 
services''.]
    Sec. 115. (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 and merged with 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 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. 116. (a) The Secretary of Veterans Affairs 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. 
Notwithstanding section 3302(b) of title 31, United States Code, 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 ``Medical Care'' and the purposes of paying 
a contractor a percent of the amount collected as a result of an audit 
carried out by the contractor.
    (b) All amounts so collected under subsection (a) with respect to a 
designated health care region (as that term is defined in section 
1729A(d)(2) of title 38, United States Code) shall be allocated, net of 
payments to the contractor, to that region.]
    Sec. [117] 116. Notwithstanding any other provision of law, at the 
discretion of the Secretary of Veterans Affairs, proceeds or revenues 
derived from enhanced-use leasing activities (including disposal) that 
are deposited into the Medical Care Collections Fund may be transferred 
to and merged with [``Construction, major projects'' and ``Construction, 
minor projects'' accounts] the ``Medical Care'' account and be used for 
construction (including site acquisition and disposition), alterations 
and improvements of any medical facility under the jurisdiction or for 
the use of the Department of Veterans Affairs. Such sums as realized are 
in addition to the amount provided for in [``Construction, major 
projects'' and ``Construction, minor projects''] such account.
    Sec. 117. Notwithstanding any other provision of law, the 
unobligated balances in the Construction, Major Projects and 
Construction, Minor Projects shall be transferred to with each 
appropriation provided in this Act as appropriate, and shall remain 
available under the terms under which originally appropriated.
    Sec. 118. Any discretionary appropriation for fiscal year 2005 for 
``Disability Compensation Administration'', ``Pensions Administration'', 
``Education Administration'' or ``Vocational Rehabilitation and 
Employment Administration'' may be transferred to the ``Housing Program 
Account'' for the purpose of providing funds for the nationwide property 
management contract if the administrative costs of such contract exceed 
$8,800,000 in the budget year.
    Sec. 119. The Department of Veterans Affairs is authorized to expend 
such sums as are available in the unobligated balances of the funds 
originally appropriated to Medical Care for emergency expenses resulting 
from the January 1994 earthquake in Southern California in Public Law 
103-211, Emergency Supplemental Appropriations Act of 1994, for the same 
purposes of the Medical Care account, to remain available until 
expended.
    Sec. 120. 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) and (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 
(10) as paragraphs (2) through (11) and by adding at the beginning the 
following new paragraph (1): ``(1) Section 1705(d) of this title.''
    Sec. 121. 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. 122. 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. 123. No funds of the Department of Veterans Affairs shall be 
available for hospital care,  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,

[[Page 903]]

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 are 
received.
    Sec. 124. 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)''.
    [Sec. 118. Amounts made available under ``Medical services'' are 
available--
        (1) for furnishing recreational facilities, supplies, and 
    equipment; and
        (2) for funeral expenses, burial expenses, and other expenses 
    incidental to funerals and burials for beneficiaries receiving care 
    in the department.]
    [Sec. 119. That such sums as may be deposited to the Medical Care 
Collections Fund pursuant to 38 U.S.C. 1729A may be transferred to 
``Medical services'', to remain available until expended for the 
purposes of this account.]
    [Sec. 120. Amounts made available for fiscal year 2004 under the 
``Medical services'', ``Medical administration'', and ``Medical 
facilities'' accounts may be transferred between the accounts to the 
extent necessary to implement the restructuring of the Veterans Health 
Administration accounts after notice of the amount and purpose of the 
transfer is provided to the Committees on Appropriations of the Senate 
and House of Representatives and a period of 30 days has elapsed: 
Provided, That the limitation on transfers is 20 percent in fiscal year 
2004.]
    [Sec. 121. The Department of Veterans Affairs shall implement the 
Veterans Health Administration account structure described under this 
Act by no later than 90 days after the date of enactment of this Act and 
shall submit its fiscal year 2005 budget justifications using the 
identical structure provided under this Act.]
    [Sec. 122. That of the unobligated balances remaining from prior 
year recoveries under the heading ``Medical care'', $270,000,000 are 
rescinded.] (Division G, H.R. 2673, Consolidated Appropriations Bill, FY 
2004.)

                                


 
                      TITLE IV--GENERAL PROVISIONS

    Sec. 401. 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. 402. 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. 403. None of the funds provided in this Act to any department 
or agency may be obligated or expended for: (1) 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 or (2) to provide a cook, 
chauffeur, or other personal servants to any officer or employee of such 
department or agency.
    Sec. 404. 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. 405. 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. 406. 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. 407. 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. 408. 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. 409. Such sums as may be necessary for fiscal year [2004] 2005 
pay raises for programs funded by this Act shall be absorbed within the 
levels appropriated in this Act.
    Sec. 410. (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. 411. 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. 412. 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. 413. 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. 414. All departments and agencies funded under this Act are 
encouraged, within the limits of the existing statutory authorities and 
funding, to expand their use of ``E-Commerce'' technologies and 
procedures in the conduct of their business practices and public service 
activities.
    Sec. 415. None of the funds made available in this Act may be 
transferred to any department, agency, or instrumentality of the United 
States Government except pursuant to a transfer made by, or transfer 
authority provided in, this Act or any other appropriation Act.
    Sec. 416. 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. 417. Section 312 of the National Aeronautics and Space 
Administration Act of 1958, as amended, is further amended--
        (1) by striking the second Sec. ``312'' and inserting ``313'';
        (2) by inserting the title, ``Full Cost Appropriations Account 
    Structure'', before Sec. 313;
        (3) in subsection (a)--

[[Page 904]]

                (A) by striking ``Human space flight'' and inserting 
            [``Space flight capabilities''] ``Exploration 
            capabilities'';
                (B) by striking ``Science, aeronautics, and technology'' 
            and inserting [``exploration''] ``Exploration, science and 
            aeronautics''; and
                (C) by striking ``2002'' and inserting ``2004''; and
        (4) by 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. 418. None of the funds made available in this Act may be used 
to implement any policy prohibiting the Directors of the Veterans 
Integrated Service Networks from conducting outreach or marketing to 
enroll new veterans within their respective Networks.
    [Sec. 419. None of the funds provided in this Act may be expended to 
apply, in a numerical estimate of the benefits of an agency action 
prepared pursuant to Executive Order No. 12866 or section 312 of the 
Clean Air Act (42 U.S.C. 7612), monetary values for adult premature 
mortality that differ based on the age of the adult.]
    Sec. 419. It is the sense of Congress that no veteran should wait 
more than 30 days for an initial doctor's appointment.
    [Sec. 421. It is the sense of the Congress that human dosing studies 
of pesticides raises ethical and health questions.]
    [Sec. 422. None of the funds made available to NASA in this Act may 
be used for voluntary separation incentive payments as provided for in 
subchapter II of chapter 35 of title 5, United States Code, unless the 
Administrator of NASA has first certified to Congress that such payments 
would not result in the loss of skills related to the safety of the 
Space Shuttle or the International Space Station or to the conduct of 
independent safety oversight in the National Aeronautics and Space 
Administration.]
    [Sec. 423. Section 106(d) of the Housing and Community Development 
Act of 1974 (42 U.S.C. 5306(d)) is amended--
        (1) in paragraph (3)(A), by striking ``shall not exceed 2 
    percent'' and inserting ``shall not, subject to paragraph (6), 
    exceed 3 percent'';
        (2) in paragraph (5), by striking ``not to exceed 1 percent'' 
    and inserting ``subject to paragraph (6), not to exceed 3 percent'';
        (3) by redesignating the second paragraph (5) and paragraph (6) 
    as paragraphs (7) and (8), respectively; and
        (4) by inserting after paragraph (5) the following:
        ``(6) Of the amounts received under paragraph (1), the State may 
    deduct not more than an aggregate total of 3 percent of such amounts 
    for--
                ``(A) administrative expenses under paragraph (3)(A); 
            and
                ``(B) technical assistance under paragraph (5).''.]
    [Sec. 424. National Academy of Sciences Study. The matter under the 
heading ``administrative provisions'' under the heading ``Environmental 
Protection Agency'' in title III of division K of the Consolidated 
Appropriations Resolution, 2003 (117 Stat. 513), is amended--
        (1) in the first sentence of the fifth undesignated paragraph 
    (beginning ``As soon as''), by inserting before the period at the 
    end the following: ``, and the impact of the final rule entitled 
    `Prevention of Significant Deterioration (PSD) and Nonattainment New 
    Source Review (NSR): Equipment Replacement Provision of the Routine 
    Maintenance, Repair and Replacement Exclusion', amending parts 51 
    and 52 of title 40, Code of Federal Regulations, and published in 
    electronic docket OAR-2002-0068 on August 27, 2003''; and
        (2) in the sixth undesignated paragraph (beginning ``The 
    National Academy of Sciences''), by striking ``March 3, 2004'' and 
    inserting ``January 1, 2005''.]
    [Sec. 425. Designations of Areas for PM2.5 and Submission 
of Implementation Plans for Regional Haze. (a) In General.--Section 
107(d) of the Clean Air Act (42 U.S.C. 7407(d)) is amended by adding at 
the end the following:
        ``(6) Designations.--
                ``(A) Submission.--Notwithstanding any other provision 
            of law, not later than February 15, 2004, the Governor of 
            each State shall submit designations referred to in 
            paragraph (1) for the July 1997 PM2.5 national 
            ambient air quality standards for each area within the 
            State, based on air quality monitoring data collected in 
            accordance with any applicable Federal reference methods for 
            the relevant areas.
                ``(B) Promulgation.--Notwithstanding any other provision 
            of law, not later than December 31, 2004, the Administrator 
            shall, consistent with paragraph (1), promulgate the 
            designations referred to in subparagraph (A) for each area 
            of each State for the July 1997 PM2.5 national 
            ambient air quality standards.
        ``(7) Implementation plan for regional haze.--
                ``(A) In general.--Notwithstanding any other provision 
            of law, not later than 3 years after the date on which the 
            Administrator promulgates the designations referred to in 
            paragraph (6)(B) for a State, the State shall submit, for 
            the entire State, the State implementation plan revisions to 
            meet the requirements promulgated by the Administrator under 
            section 169B(e)(1) (referred to in this paragraph as 
            `regional haze requirements').
                ``(B) No preclusion of other provisions.--Nothing in 
            this paragraph precludes the implementation of the 
            agreements and recommendations stemming from the Grand 
            Canyon Visibility Transport Commission Report dated June 
            1996, including the submission of State implementation plan 
            revisions by the States of Arizona, California, Colorado, 
            Idaho, Nevada, New Mexico, Oregon, Utah, or Wyoming by 
            December 31, 2003, for implementation of regional haze 
            requirements applicable to those States.''.
    (b) Relationship to Transportation Equity Act for the 21st 
Century.--Except as provided in paragraphs (6) and (7) of section 107(d) 
of the Clean Air Act (as added by subsection (a)), section 6101, 
subsections (a) and (b) of section 6102, and section 6103 of the 
Transportation Equity Act for the 21st Century (42 U.S.C. 7407 note; 112 
Stat. 463), as in effect on the day before the date of enactment of this 
Act, shall remain in effect.]
    [Sec. 426. (a) Treatment of Pioneer Homes in Alaska as State Home 
for Veterans.--The Secretary of Veterans Affairs may--
        (1) treat the Pioneer Homes in the State of Alaska collectively 
    as a single State home for veterans for purposes of section 1741 of 
    title 38, United States Code; and
        (2) make per diem payments to the State of Alaska for care 
    provided to veterans in the Pioneer Homes in accordance with the 
    provisions of that section.
    (b) Treatment Notwithstanding Non-Veteran Residency.--The Secretary 
may treat the Pioneer Homes as a State home under subsection (a) 
notwithstanding the residency of non-veterans in one or more of the 
Pioneer Homes.
    (c) Pioneer Homes Defined.--In this section, the term ``Pioneer 
Homes'' means the six regional homes in the State of Alaska known as 
Pioneer Homes, which are located in the following:
        (1) Anchorage, Alaska.
        (2) Fairbanks, Alaska.
        (3) Juneau, Alaska.
        (4) Ketchikan, Alaska.
        (5) Palmer, Alaska.
        (6) Sitka, Alaska.
    (d) Limitation.--The number of beds occupied by veterans 
collectively in the six Pioneer Homes listed under subsection (c) for 
which per diem would be paid under this authority shall not exceed the 
number of veterans in state beds that otherwise would be permitted in 
Alaska under the Department of Veterans Affairs state home regulations 
governing the number of beds per veteran population.]
    Sec. 420. Of the amounts available to the National Aeronautics and 
Space Administration, such sums as maybe necessary for the benefit of 
the families of the astronauts who died on board the Space Shuttle 
Columbia on February 1, 2003, are available under the terms of section 
203(c)(13) of the National Aeronautics and Space Act of 1958, as 
amended, independent of the limitations established therein.
    [Sec. 428. Regulation of Small Engines. (a) In considering any 
request from California to authorize the state to adopt or enforce 
standards of other requirements relating to the control of emissions 
from new non-road spark-ignition engines smaller than 50 horsepower, the 
Administrator shall give appropriate consideration to safety factors 
(including the potential increased risk of burn or fire) associated with 
compliance with the California standard.
    (b) Not later than December 1, 2004, the Administrator of the 
Environmental Protection Agency shall propose regulations under the 
Clean Air Act that shall contain standards to reduce emissions from new 
nonroad spark-ignition engines smaller than 50 horsepower. Not later 
than December 31, 2005, the Administrator shall publish in the Federal 
Register final regulations containing such standards.

[[Page 905]]

    (c) No State or any political subdivision thereof may adopt or 
attempt to enforce any standard or other requirement applicable to spark 
ignition engines smaller than 50 horsepower.
    (d) Exception for California.--The prohibition in subsection (e) 
does not apply to or restrict in any way the authority granted to 
California under Section 209(e) of the Clean Air Act (42 U.S.C. 
7543(e)).
    (e) Exception for Other States.--The prohibition in subsection (c) 
does not apply to or restrict the authority of any state under Section 
209(e)(2)(B) of the Clean Air Act (42 U.S.C. 7543(e)(2)(B)) to enforce 
standards or other requirements that were adopted by that state before 
September 1, 2003.] (Division G, H.R. 2673, Consolidated Appropriations 
Bill, FY 2004.)