[Senate Hearing 107-392]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 107-392
 
NOMINATION OF ANTHONY J. PRINCIPI TO BE SECRETARY OF THE DEPARTMENT OF 
                            VETERANS AFFAIRS
=======================================================================



                                HEARING

                               BEFORE THE

                     COMMITTEE ON VETERANS' AFFAIRS
                          UNITED STATES SENATE

                      ONE HUNDRED SEVENTH CONGRESS

                             FIRST SESSION


                               __________

                            JANUARY 18, 2001
                               __________

      Printed for the use of the Committee on Veterans' Affairs 















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                     COMMITTEE ON VETERANS' AFFAIRS

            JOHN D. ROCKEFELLER IV, West Virginia, Chairman

BOB GRAHAM, Florida                  ARLEN SPECTER, Pennsylvania
DANIEL K. AKAKA, Hawaii              STROM THURMOND, South Carolina
PAUL WELLSTONE, Minnesota            FRANK H. MURKOWSKI, Alaska
PATTY MURRAY, Washington             JAMES M. JEFFORDS, Vermont
ZELL MILLER, Georgia                 BEN NIGHTHORSE CAMPBELL, Colorado
E. BENJAMIN NELSON, Nebraska         LARRY E. CRAIG, Idaho
                                     TIM HUTCHINSON, Arkansas

                     William E. Brew, Chief Counsel

      William F. Tuerk, Minority Chief Counsel and Staff Director

                                  (ii)

  














                            C O N T E N T S

                              ----------                              

                            January 18, 2001

                                SENATORS

                                                                   Page
Craig, Hon. Larry E., U.S. Senator from Idaho, prepared statement    12
Rockefeller, Hon. John D., IV, U.S. Senator from West Virginia, 
  prepared statement.............................................     4
Specter, Hon. Arlen., U.S. Senator from Pennsylvania, prepared 
  statement......................................................     5
Thurmond, Hon. Strom, U.S. Senator from South Carolina...........     8

                               WITNESSES

Boxer, Hon. Barbara, U.S. Senator from California, prepared 
  statement......................................................    15
    Letters from:
        Martin, Floyd, State Commander, The American Legion, 
          Department of California, dated January 3, 2001........    16
        Burke, Leo P., Past National Vice Commander, The American 
          Legion, Department of California, dated January 3, 2001    16
        Standard, Stan, Vice Chairman National Legislative 
          Council, The American Legion, Department of California, 
          dated January 4, 2001..................................    16
        Blecker, Michael, Executive Director, Swords to 
          Plowshares, dated January 17, 2001.....................    16
Dreier, Hon. David, a Representative in Congress from the State 
  of California, prepared statement..............................    18
Feinstein, Hon. Dianne, U.S. Senator from California, prepared 
  statement......................................................    13
Principi, Hon. Anthony J., designate for nomination as Secretary 
  of Veterans Affairs............................................    19
    Prepared statement...........................................    23
    Questionnaire for Presidential nominees......................    25
    Response to pre-hearing questions submitted by Hon. John D. 
      Rockefeller IV.............................................    27
    Response to post-hearing questions submitted by:
        Hon. John D. Rockefeller IV..............................    44
        Hon. Bob Graham..........................................    51
        Hon. Paul Wellstone......................................    52
        Hon. Zell Miller.........................................    54
        Hon. E. Benjamin Nelson..................................    55
        Hon. Arlen Specter.......................................    56
        Hon. Strom Thurmond......................................    62
        Hon. James M. Jeffords...................................    63
        Hon. Larry E. Craig......................................    64
        Hon. Jeff Sessions.......................................    65

                                APPENDIX

Akaka, Hon. Daniel K., U.S. Senator from Hawaii, prepared 
  statement......................................................    81
American Legion, prepared statement..............................    82
Burch, J. Thomas, Jr., Chairman, National Vietnam & Gulf War 
  Veterans Coalition, letter dated January 11, 2001, to Hon. 
  Arlen Specter..................................................    96
Campbell, Hon. Ben Nighthorse, U.S. Senator from Colorado, 
  prepared statement.............................................    81

                                 (iii)

Combs, Glen E., PA-C, MA, President, American Academy of 
  Physician Assistants, letter dated January 11, 2001, to Hon. 
  John D. Rockefeller IV and Hon. Arlen Specter..................    94
Dils, Diana, National Commandant, Marine Corps League, letter 
  dated January 22, 2001, to Hon. Arlen Specter..................    95
Donohue, Thomas J., President and Chief Executive Officer, 
  Chamber of Commerce of the United States of America, letter 
  dated January 17, 2001, to Hon. Arlen Specter..................    95
Gorman, David W., Executive Director, Washington Headquarters of 
  the Disabled American Veterans, prepared statement.............    91
Long, Almon J., Legislative Chairman, Veterans of Foreign Wars of 
  the United States, Department of Pennsylvania, letter dated 
  January 9, 2001, to Hon. Arlen Specter.........................    96
Miller, Thomas H., Executive Director, Blinded Veterans 
  Association (BVA), prepared statement..........................    90
Paralyzed Veterans of America, prepared statement................    92
Sommers, David W., President/CEO, Non Commissioned Officers 
  Association of the United States of America, letter dated 16 
  January 2001, to Hon. John D. ``Jay'' Rockefeller IV...........    96
Wallace, Robert E., Deputy Executive Director, Veterans of 
  Foreign Wars of the United States, prepared statement..........    93
Woodbury, David E., AMVETS National Executive Director, prepared 
  statement......................................................    89















NOMINATION OF ANTHONY J. PRINCIPI TO BE SECRETARY OF THE DEPARTMENT OF 
                            VETERANS AFFAIRS

                              ----------                              


                       THURSDAY, JANUARY 18, 2001

                                       U.S. Senate,
                            Committee on Veterans' Affairs,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 2 p.m. in room 
SR-418, Senate Russell Building, Hon. John D. Rockefeller IV 
(chairman of the committee) presiding.
    Present: Senators Rockefeller, Graham, Nelson, Specter, 
Thurmond, Murkowski, Jeffords, Craig, and Hutchinson.
    Also present: Senator Boxer and Representative Dreier.
    Chairman Rockefeller. The hearing will come to order.
    Senator Specter will be here in just a moment, as will 
Senator Murkowski, who obviously has a long-time relationship 
and has been chairman of this committee I don't know how many 
times, but whenever he chooses, basically. We are very pleased 
to welcome Senator Ben Nelson, a new member of the committee. 
That is an exciting thing. And one of the things that you will 
discover is that when we have Veterans' Affairs Committee 
hearings, there is always full attendance, and you get a sense 
of that as you look around today. That is one of the things 
that Frank and I worked on and Arlen and I work on--how, with 
something as important as veterans, people sometimes just don't 
manage to show up. It is not something I either appreciate, 
condone, or like, but we have to live with people as we have to 
live with them.
    I am very pleased, obviously, to welcome back Anthony 
Principi, who is President-elect Bush's choice to be Secretary 
of Veterans Affairs. Tony, I have met your wife Liz, and I have 
met your son Ryan, but did your other two children get here?
    Mr. Principi. No. Unfortunately, one is stationed overseas.
    Chairman Rockefeller. That would be difficult.
    Mr. Principi. And the other son is making his way here.
    Chairman Rockefeller. As you speak. OK. Their names are 
Anthony and John. We obviously appreciate them because you are 
having to move back from California if this nomination 
proceeds, as I hope it will.
    Zell Miller hopefully will be here, and I want to make very 
sure that he is equally welcomed, along with Ben Nelson. It is 
an honor to have him, as it is Ben, on the committee, both new 
members. I am going to introduce Senator Thurmond for a comment 
after I call on Senator Murkowski.
    The committee begins its 30th year. We have a lot of 
incredibly important work to do. The VA is an enormous 
bureaucracy. It has a lot of work to do. It does a lot of it 
very well, and some of it not so well. All of those things we 
need to talk about. But it is important to recognize the 30-
year commitment of Senator Thurmond to this Veterans' 
Committee.
    Senator Thurmond. I organized it. [Laughter.]
    Chairman Rockefeller. You organized it.
    Senator Thurmond. And you have done a good job with it.
    Chairman Rockefeller. Well, thank you, sir. [Laughter.]
    Here comes Chairman Specter, and so we will now all have a 
round of applause for Senator Thurmond.
    [Applause.]
    Chairman Rockefeller. Senator Nelson--for whatever vagaries 
the Democratic party is involved with--is not yet officially a 
member of the committee, although he is, and so I have to ask 
unanimous consent that he be permitted to sit in here in full 
participation. Knowing that there is no objection, he will do 
so.
    Tony, because of your years of service to veterans at VA, 
here in the Senate where we know you very well from both 
places, and from the Transition Commission, I know I don't have 
to impress upon you the importance of the leadership role. 
Anytime you have that many employees, leadership is everything, 
absolutely everything, and you recognize that. Your history is 
long, your experience is long, and because of that you will 
come with an advantage. But you will also come with a higher 
bar of expectation from me, from Chairman Specter, from all of 
us. And that is as it should be because you are not new to the 
job. You will not have a learning curve as others might.
    I will be looking to you, Tony--I think it is all right to 
call you Tony, if you don't mind--to define what you believe 
the VA's mission is today. Now, we all say that and yet we 
often do not get a very good answer. Usually, it comes to the 
engraving above the entrance to the building. The mission, in 
fact, is greatly more complex than that and it is changing 
drastically. As the needs of veterans change, as veterans grow 
older, long-term care, all kinds of other things become more 
important. So I think that the vision and the mission of the VA 
has become a bit more clouded recently. And we will want to 
talk about that.
    We have all heard the President-elect speak about the need 
to revamp the VA health care system. That sounds great and 
potentially is great, but what exactly does that mean? What 
does that mean to veterans who depend upon the VA? We need to 
talk about that. Yes, we have made many sweeping changes in the 
delivery of VA health care. Health care is now very often 
provided in different settings. Outpatient is the word in 
health care in general, and it is very much the word in the VA 
also. Outpatient clinics happily dot the VA landscape. We put 
one in a very remote county in West Virginia very recently that 
opened up just last week. The county is in ecstasy about it. It 
is not just the fact that veterans cannot get to other places, 
but there are a lot of veterans in the southern part of our 
State and so they are very happy to go there. I am sure all 
members have those stories.
    On the other hand, we also have to improve those so-called 
long-term care requirements. We have that on the books. It has 
passed. Chairman Specter and I were part of the conference 
committee that worked that out. But I would have to say that 
the VA has been embarrassingly slow in implementing what is, in 
fact, the law. And we need to talk about that.
    While the past decade has brought about a lot of change and 
transformation to the VA health care system, I think that we 
are entering a much more difficult period--for you, for all of 
us, and for veterans--a much more challenging, much more 
difficult time. The VA medical system is a health care system 
with enormous value, especially for veterans who are blind, 
have spinal cord injuries or prosthetic devices, need 
dependable mental health care, areas where other parts of the 
health care system in our country are weak. As you know, I put 
a very strong emphasis on research, and Chairman Specter does 
too.
    So we have to retain all which is great within the VA. If 
confirmed, as you will be, you have to protect this very 
special health care system, and I am sure you will. And I am 
sure that you will also do something else, and I am sure 
Chairman Specter would agree with me on this, and that is, 
accept the oversight role of this Committee without rancor or 
antagonism or defensiveness. It is our job to give vigorous 
oversight. Do we always look for the good things? No, probably 
not as much as we should. We look for how we can make things 
better. That is our job. So, I hope that you will be 
comfortable with, and I am sure you will, our oversight 
function and the kinds of questions and probings that we ask.
    The Veterans Benefit Administration is also in crisis. Last 
year, Chairman Specter chaired a hearing on the veterans 
adjudication system, and we were greatly disturbed by what we 
heard about the lack of quality and timeliness in VBA 
decisionmaking. At that hearing, there was a combat veteran 
from my State of West Virginia, who is suffering with PTSD, and 
he testified that it took 5 years for his VA disability claim 
to be approved. Stunning. An absolutely stunning example. He 
had the chronology of events. It was all documented. So it is 
clear, not just from him, but from the general situation, that 
a lot needs to be done. I have visited some of the new 
facilities where there is a lot of new technology. But the fact 
is that since we had our last hearing on this last July, we are 
50,000 claims more in backlog than we were last July. So 
technology does not solve all problems. It is how we do it. And 
it is not easy. It is easy to complain about, but not easy to 
fix. But we have to do that.
    Our aging veterans population obviously cannot afford to 
wait. We are looking for innovative approaches from you so that 
VBA can absorb changes in the law without going into a tailspin 
because it is new or because it is a directive from central 
headquarters or something and people are resentful of that. We 
cannot do business as usual, and everybody understands that.
    So, when you are confirmed, and in my judgment you should 
be and will be, our Nation's veterans will be depending on you. 
VA is standing at a crossroads. It is dealing with very, very 
serious issues right now. I look forward to working with you 
and to a serious debate on these issues.
    [The prepared statement of Senator Rockefeller follows:]

 Prepared Statement of Hon. John D. Rockefeller IV, U.S. Senator From 
                             West Virginia

    I am very pleased to welcome back a friend who is not new 
to this Committee--Mr. Anthony Principi, President-elect Bush's 
choice to be Secretary of Veterans Affairs. Tony, I would like 
to recognize your wife, Liz, and your three sons, Anthony, John 
and Ryan, and thank them for their contributions to this 
process, as well.
    I also welcome the two new members of the Veterans' Affairs 
Committee--Senator Zell Miller and Senator Ben Nelson. As the 
Committee begins its 30th year, I am confident that our new 
members will make important contributions as we work together, 
as we do on this committee, to fulfill our Nation's commitment 
to America's veterans. Speaking of commitment to veterans, I 
want to take a moment to acknowledge Senator Thurmond's 30 
years of service to veterans on this Committee, and ask that we 
all give him a warm round of thanks for his leadership.
    As Senator Nelson is not yet an official member of the 
Committee, I will ask unanimous consent that he be permitted to 
sit and participate fully with the Committee as if a member, 
pending his final naming to the Committee.
    Tony, because of your years of service to veterans--at VA, 
here in the Senate, and on the Transition Commission--I know I 
do not need to impress upon you the importance of the 
leadership role you will soon assume at the VA. As I think you 
realize, because of your long history and experience, the bar 
will be set higher for you. The honeymoon period others might 
enjoy in this new position may, in your case, be short lived.
    We will all expect you to hit the ground running to tackle 
VA's many challenges. And, of course, we will all be there to 
support you.
    I will be looking to you, Tony, to define what you believe 
VA's mission is today. In many ways I think that has become a 
bit clouded.
    We have all heard the President-elect speak about the need 
to revamp the VA health care system. That sounds great! But 
what exactly does that mean to veterans who depend upon the VA? 
Yes, we have made many sweeping changes in the delivery of VA 
health care. Health care is now very often provided in 
different settings, which are frequently not in a hospital. 
Outpatient clinics cover the VA landscape and provide new 
access points to many veterans. And veterans--unlike many other 
groups--now have improved coverage of their long-term care 
needs, although VA has been embarrassingly slow in implementing 
some of these programs.
    But while the past decade has brought tremendous change and 
transformation to the VA health care system, we may, actually, 
be approaching the most challenging period of all.
    Through it all, we must keep our eye on the ball. The VA 
medical system is a health care system with tremendous value, 
especially for veterans who are blind or have spinal cord 
injuries, who need prosthetic devices or dependable mental 
health care. We must retain what has made VA great.
    If confirmed, you will be expected to be a steward and 
protector of this very special health care system. We will 
accept no less.
    The Veterans Benefits Administration is also in crisis. 
Last year, Chairman Specter chaired a hearing on the benefits 
adjudication system, and we were greatly disturbed by what we 
heard about the lack of quality and timeliness in VBA 
decisionmaking. At that hearing, a Vietnam combat veteran from 
my state of West Virginia, suffering with post-traumatic stress 
disorder, testified that it took a full five years for his VA 
disability claim to be approved. The documented chronology of 
events over that five-year period paints a clear picture of a 
benefits system that needs a great deal of work.
    We continue to be dismayed by the delays in making 
eligibility determinations. And despite efforts by VBA 
employees, which have yielded some gains in customer service, 
the problems seem to be getting worse. In fact, the backlog has 
increased by 50,000 claims just since that hearing in July. We 
must do better than this.
    You know the old saying: ``Justice delayed is justice 
denied.'' Our aging veterans population cannot afford to wait. 
We are looking to you for innovative approaches so that VBA can 
absorb changes in law and new business processes without always 
going into a tailspin. We can no longer continue to do business 
as usual.
    Tony, if--no, when--you are confirmed, our Nation's 
veterans will be depending on you. VA is standing at a 
crossroads. It is dealing with very serious issues right now. I 
look forward to a serious debate about your approaches to these 
problems.

    Chairman Rockefeller. I now turn to Senator Specter for his 
opening comments.
    Senator Specter. Thank you very much, Mr. Chairman. It is a 
pleasure to see you in the presiding chair.
    Chairman Rockefeller. Two more days. [Laughter.]
    Senator Specter. Actually, a little less than that. 
[Laughter.]
    We have had a close working relationship, really a 
partnership in this committee. When they say they are going to 
divide the committee 50/50, that does not present any heartburn 
to me. We have not functioned on a partisan basis at all. So 
whether you have the gavel or I have the gavel, it is a lot 
like the positive relationship I have with Senator Harkin on 
the Labor-Health and Human Services Subcommittee of the 
Appropriations Committee. So with you in the chair, I feel 
very, very comfortable.
    I think we are fortunate to have the Secretary-designate 
Anthony J. Principi here today. He has had extensive 
experience, and he is a person we know and admire and trust. He 
comes to this job with experience and a great deal of 
enthusiasm. He has almost as much enthusiasm as he has ability, 
and he has a lot of enthusiasm. I have talked to Tony Principi 
about his ideas and we have talked about technology, we have 
talked about the claims backlog, talked about the health care 
system. There is no doubt that America owes a great deal to 
it's veterans.
    Senator Murkowski has a 2:30 commitment, as do I. I have to 
return to the Ashcroft hearing so I am going to have to excuse 
myself early. So I will not talk at length about the first 
veteran I knew, my father, Harry Specter. He was not treated 
right by the Federal Government. They promised him a bonus and 
they backed out on the bonus. They had that great veterans 
march. Today, they roll out the red carpet for demonstrators. 
In 1932, they rolled out the cavalry and Major George Patton 
rode down Pennsylvania Avenue with drawn saber and they shot 
and killed some of the veterans. One of the blackest days in 
American history. I say from time to time I have been on my way 
to Washington ever since to get my father's bonus. And I still 
have not gotten it for him.
    So service on this committee is really very important. This 
committee, I think, has done a good job for veterans as we have 
fashioned legislation. I think with Tony Principi as the new 
Secretary there will be a brighter day.
    My full remarks will be placed in the record, if they may, 
Mr. Chairman. Thank you.
    Chairman Rockefeller. Absolutely, Mr. Chairman.
    [The prepared statement of Senator Specter follows:]

      Prepared Statement of Hon. Arlen Specter, U.S. Senator From 
                              Pennsylvania

    Good afternoon to all. And welcome, Mr. Principi, to you 
and your family.
    Let me open by being the first to congratulate Senator 
Rockefeller on his ascension to the committee's chairmanship--
though only for this week. I know it is a fine job to have--and 
I look forward to returning to majority status next week.
    Just a thought or two, if I may, on how I expect to see 
this committee operate this year. As anyone who has observed 
this committee knows, we operate on a cooperative, bipartisan, 
consensus basis here--because we all share a common goal: 
honoring the Nation's commitment to those who have defended 
her. That being the case, whether Republicans or Democrats are 
in the majority--or whether, as will be the case this year, the 
committee has equal numbers from both parties--we will work 
together. And we will accomplish good things this Congress. 
Veterans expect that--and they can count on it.
    Since the committee last met, we have taken on two new 
members--Senator Zell Miller of Georgia (who, technically, 
joined us at the end of the last Congress), and Senator Ben 
Nelson of Nebraska (who, technically, will join us next week 
when a resolution to that effect is approved by the Senate as a 
whole). Welcome to both of you--I look forward to working with 
each of you.
    I do not want to take an excessive amount of time; we are 
all eager to hear from our witness. And I know that Senator 
Murkowski is anxious to speak on behalf of Mr. Principi since 
Senator Murkowski employed Tony Principi as Republican chief 
counsel and staff director when Senator Murkowski's was in 
charge of this committee on the Republican side in 1987-1988.

    Chairman Rockefeller. I want to call on Frank Murkowski 
because he also has to chair a confirmation hearing in the 
Energy Committee and will need to be leaving. So I would like 
to call on him now, and then Senator Thurmond, I will call on 
you, sir.
    Senator Murkowski. Thank you very much, Chairman 
Rockefeller and Senator Specter.
    I look upon the return of Tony Principi with a great deal 
of fondness and anticipation. I see his wife, Liz, and his son 
back there. Having been out to their home in San Diego, and 
recognizing that he has traversed back and forth between his 
State of California and Washington, DC, I assume torn between 
his love of California and his call to duty, I don't know, 
unless the lights have gone out, Tony, explain why you are back 
here----
    [Laughter.]
    Senator Murkowski [continuing]. Other than the reality of 
the call to arms your President has asked you to come and 
serve.
    You are no stranger to serving. I am very pleased to speak 
on your behalf. As many in this committee that have a memory 
would recall, you and I worked together several years ago when 
I was chairman of this committee. I might add that I was the 
first chairman of a full committee ever from the State of 
Alaska. That was before Dictator Stevens of the--I mean Senator 
Stevens, chairman of the Appropriations Committee, achieved his 
current status. [Laughter.]
    But enough of that. [Laughter.]
    In any event, what we have before us is a true veteran. 
Tony's combat record speaks for itself. He is highly decorated 
from his service in Vietnam. And I think it is interesting, 
after Tony came back to Washington in various capacities of 
service to the veterans and served me certainly during my 
chairmanship, he took the Deputy Secretary and Acting Secretary 
of Veterans Affairs, and then he went back in the private 
sector. I think that deserves consideration because I think 
Tony got a little different feel for what it is like to be 
outside Government. He was associated with Martin-Marietta in 
various aspects, and he serves currently, or until a short time 
ago, as president of the QTC Medical Services, Incorporation, a 
group of professionals providing independent medical 
examinations and medical administration throughout the Nation.
    So this kind of balance and this kind of background and 
this kind of expertise I think is going to be very beneficial 
in updating procedures and service in serving our veterans. I 
think that balance and recent experience in the private sector 
is going to serve you well, Tony.
    I would also like to acknowledge the reality that Mr. 
Principi was tapped by our senior member, Senator Thurmond, to 
chair the Commission on Servicemembers and Veterans Transition 
Assistance. And those recommendations on educational benefits 
served as a basis by which this committee made improvements in 
the Montgomery G.I. Bill during the last Congress. And given 
other findings of that report I know that our veterans are 
going to be extremely happy with Tony as Secretary of Veterans 
Affairs.
    Tony is the type of individual who will make a decision, 
and decisions have to be made relative to the changing needs of 
our veterans. Some of these decisions are not necessarily 
popular but they are going to have to be made because the needs 
do change. We have got more domiciliary requirements for our 
veterans. We are not necessarily meeting those requirements. 
There is question of how far does the hospital continue to 
build brick and mortar go on. These are decisions that Tony is 
going to have the background and expertise and the personality 
to address and resolve.
    I think your desire, Tony, to serve our Nation's veterans 
is stronger than ever. I think it is certainly evident in your 
family. Two of your three sons, Tony, Jr. and Ryan, are future 
veterans serving in the Air Force. So there is no doubt in my 
mind that you are going to serve President Bush in the very 
best possible manner on behalf of the veterans. I certainly am 
going to support your nomination. Our friendship goes back a 
long way and it is one that I value. America is very, very 
lucky to have you back as you have responded to the call of 
arms. I wish you well, my friend.
    Thank you again, Mr. Chairman.
    Chairman Rockefeller. Thank you, Senator Murkowski.
    Senator Thurmond.
    Senator Thurmond. Thank you. Mr. Chairman, it is a pleasure 
to be here this afternoon. I join you in extending a warm 
welcome to the Honorable Anthony J. Principi who will be 
nominated to be Secretary of Veterans Affairs. I also welcome 
members of his family, friends, and guests.
    I am pleased that President-elect Bush has selected a 
person of experience and ability for this important position. 
Mr. Principi has a strong background and association with the 
military community. He is a veteran of the U.S. Navy, a 
graduate of the U.S. Naval Academy, and a highly decorated 
Vietnam veteran. He also served in the Navy Judge Advocate 
General Corps. I know Mr. Principi is well qualified for this 
position, having previously served as Acting Secretary of 
Veterans Affairs and Deputy Secretary of the VA.
    I personally know Mr. Principi to be a capable and 
dedicated public servant. In 1993, I called upon Mr. Principi 
to be my staff director for the Senate Armed Services 
Committee. Later, as chairman, I appointed him to a 
Congressional Commission on Military Servicemembers and 
Veterans Transition. He subsequently was elected by his 
colleagues as chairman of that commission. In each of these 
instances his performance was exceptional.
    There are a number of important issues facing the 
Department of Veterans Affairs which affect veterans, their 
families, and employees of the Department. I mention a few of 
these issues to emphasize my own concern and to stress to Mr. 
Principi that he must aggressively address these matters.
    First is the issue of veterans benefits. It takes too long 
now to get initial decisions and the review process can take 
years. I hope Secretary Principi will work with the Under 
Secretary for Benefits to improve the VA benefit review 
process.
    Second is my concern with veterans health care. The 
Congress and the VA have enacted and implemented a number of 
reforms. The challenge now is to ensure that the availability, 
delivery, and quality of health care improves.
    A third issue is that of Veterans Equitable Resource 
Allocation, known as VERA, V-E-R-A. As you know, the Congress 
passed a bill that requires VA to allocate resources according 
to veteran population and use of VA medical facilities. This 
generally has meant a shift of some resources from the 
Northeast to the South and West. I trust Secretary Principi 
will continue to support this important reform despite 
political pressures to do otherwise.
    Mr. Chairman, again I congratulate Mr. Principi on his 
nomination. I look forward to working with you, members of the 
committee, and with the Secretary as we address the needs and 
concerns of the men and women who have given much for our 
Nation. Thank you.
    [The prepared statement of Senator Thurmond follows:]

  Prepared Statement of Hon. Strom Thurmond, U.S. Senator From South 
                                Carolina

    Mr. Chairman: It is a pleasure to be here this afternoon. I 
join you in extending a warm welcome to the Honorable Anthony 
J. Principi, who will be nominated to be Secretary of Veterans 
Affairs. I also welcome members of his family, friends, and 
guests. I am pleased that President-elect Bush has selected a 
person of experience and ability for this important position.
    Mr. Principi has a strong background and association with 
the military community. He is a veteran of the United States 
Navy--a graduate from the U.S. Naval Academy and a highly 
decorated Vietnam veteran. He also served in the Navy's Judge 
Advocate General Corps.
    I know Mr. Principi is well qualified for this position, 
having previously served as Acting Secretary of Veterans 
Affairs and Deputy Secretary of the VA.
    I personally know him to be a capable and dedicated public 
servant. In 1993, I called upon Mr. Principi to be my Staff 
Director for the Senate Armed Services Committee. Later, as 
Chairman I appointed him to a Congressional Commission on 
Military Servicemembers; and Veterans Transition. He 
subsequently was elected by his colleagues as Chairman of that 
Commission. In each of these instances, his performance was 
exceptional.
    There are a number of important issues facing the 
Department of Veterans Affairs which affect veterans, their 
families, and employees of the Department. I mention a few of 
these issues to emphasize my own concern and to stress to Mr. 
Principi that he must aggressively address these matters.
    First, is the issue of Veterans Benefits. It takes too long 
now to get initial decisions and the review process can take 
years. I hope Secretary Principi will work with the Under 
Secretary for Benefits to improve the VA benefit review 
process.
    Second, is my concern with veterans health care. The 
Congress and the VA have enacted and implemented a number of 
reforms. The challenge now is to ensure that the availability, 
delivery and quality of health care improves.
    A third issue is that of Veterans Equitable Resource 
Allocation (VERA). As you know, the Congress passed a bill that 
requires VA to allocate resources according to veteran 
population and use of VA medical facilities. This generally has 
meant a shift of some resources from the Northeast to the South 
and West. I trust Secretary Principi will continue to support 
this important reform despite political pressures to do 
otherwise.
    Mr. Chairman, again, I congratulate Mr. Principi on his 
nomination. I look forward to working with you, members of the 
Committee and with the Secretary as we address the needs and 
concerns of the men and women who have given much for our 
Nation.

    Chairman Rockefeller. Thank you very much, Senator 
Thurmond.
    Senator Boxer, I am very aware that you need to leave at 
2:45. We will try and make this work.
    Senator Nelson is the next.
    Senator Nelson. Thank you, Mr. Chairman. I appreciate very 
much the courtesy you have extended to me to be here today 
prior to my officially taking a position on this very important 
committee. I also want to thank Mr. Principi for reentering 
public service. As one who has done that on more than one 
occasion myself, I recognize it and highly respect individuals 
who do that. I will be very brief.
    As most people looking at veterans services today and the 
benefits and the delivery of those health care services, there 
is this continuing concern about the distance of traveling 
between hospitals, for example, in more sparsely populated 
States like Nebraska. I always point out that we are 
geographically challenged--a lot of area and more cattle than 
people. But the needs are very strong and we want to make sure 
that in the effort to streamline services we do not at the same 
time reduce the availability of those services by extending 
travel over greater distances, therefore creating unusual 
hardships.
    In Nebraska, two rural inpatient hospitals have been closed 
in the past several years and veterans from the western part of 
the State are now often forced to travel all the way to Omaha. 
That does not sound like it might be a long way, but going from 
western Nebraska to Omaha is like going from Omaha to Chicago. 
It does cover a lot of distance.
    So one of my first questions for you to ponder, and I know 
that you will, is: is there a way to continue to provide 
services that do not require that kind of travel. It is a 
tremendous hardship to the veteran, to the family of the 
veteran. We need to consolidate along the way but we must also 
make sure that we give veterans a fair shake.
    And on that subject of consolidation, I think we have moved 
a little prematurely in some of these areas because, for 
example, I do not have the figures for the year 2000, but in 
1999 29,500 veterans sought care in Nebraska, and that was a 17 
percent increase over previous years. So while we have an 
assumption that we are losing a veteran population, in fact we 
may see the need for increased services among those who remain. 
I am very concerned that we consider that in any future effort 
to consolidate services so that we do not start with the wrong 
assumption that fewer veterans mean lower needs. In fact, there 
may be fewer veterans, but because of advancing age and health 
conditions, we might be having just the opposite phenomenon.
    And finally, and this is something very specific to 
Nebraska, following a large number of complaints from 
Nebraska's veterans, the VA's Inspector General conducted an 
investigation of the Omaha Veterans Hospital. And while they 
found a lot of positive things about the facility, they also 
discovered an alarming number of problems, including: poor 
treatment of the post-traumatic stress syndrome clinic, 
inconsistent followup care for veterans with hepatitis C, 
failure to communicate about patient medical histories among 
hospital staff, poor monitoring of narcotics, prescriptions, 
and poor management and a backlog of the hospital's pain 
management program.
    These are management issues that involve the delivery of 
quality care. They are certainly something that you have not 
caused or been part of, but you will inherit them. I hope that 
you can ensure that the recommendations of the Inspector 
General will be followed up on with this facility, as well as 
taking into account what services are going to be required over 
the next several years.
    Chairman Rockefeller. Thank you, Senator Nelson.
    Senator Graham.
    Senator Graham. Thank you, Mr. Chairman, at least for 
another 21 hours and 30 minutes. I really should say 46 hours 
and 30 minutes.
    Chairman Rockefeller. It does not really make much 
difference what you say, Senator Graham. [Laughter.]
    Senator Graham. I want to announce the obvious, which is 
that America is very fortunate to have Mr. Principi come back 
in its service. I look forward to being an enthusiastic 
supporter for your confirmation. You bring a great deal of 
experience, confidence, both within the agency and among 
America's veterans and here on Capitol Hill.
    I will just briefly mention a few areas that will be of 
particular interest to me, several of which have already been 
covered. I share the comments that Senator Thurmond made about 
the importance of the VERA program, which to me has the 
objective of assuring that there will be a uniform level of 
health care services provided to all of our veterans wherever 
they might live in America. I think that is a fundamental 
principle of equity and one which we are now closer to 
realizing than we had been previously.
    Second, I also share the concern that has been expressed by 
Chairman Rockefeller and others relative to the disability 
claims processing system. We have had a particularly serious 
problem at one center in Florida which is charged with the 
responsibility of those claims determinations. Unfortunately, 
it has one of the longest times required to get a claim 
resolved. I have worked with your predecessor on this matter 
and look forward to working with you to deal with that specific 
issue in Florida but which is really illustrative of a larger 
national concern.
    Third is the issue that our new colleague, Senator Nelson, 
just raised; that is, some of the consequences of the 1995 
decision of no new starts of hospitals. In my State, the 
consequence has been that we are still growing in our veteran 
population and in areas like southwest Florida between Sarasota 
and Naples and in the panhandle area we have large numbers of 
veterans who are quite distant from any hospital. I think we 
need, if we are going to maintain a no new starts policy, to 
think through the implications of that and how we can assure 
that those veterans are not isolated from access to some 
veterans-supported health care.
    Finally, the old, old veteran. We know that the age of all 
Americans including American veterans has extended. In 1930 the 
average American male who reached the age of 65 had about 4 or 
5 years of life expectancy. Today they have 15 years of life 
expectancy. By the end of this century they will have close to 
25 years of life expectancy. And so the Veterans Administration 
will be dealing with much different demographics. And how the 
Veterans Administration organizes to do so will be critical to 
the well-being of millions of Americans now but particularly a 
decade from now.
    Those are just a few items on the agenda that I look 
forward to working with Tony Principi on during what I am 
confident will be a distinguished period of service to America 
and its veterans. Congratulations.
    Chairman Rockefeller. Thank you, Senator Graham.
    Senator Hutchinson.
    Senator Hutchinson. Thank you, Mr. Chairman. Let me first 
of all welcome Mr. Principi. Good to see you. Thanks for coming 
over. I want to applaud President-elect Bush for his choice. I 
think it sends an unmistakable signal that this administration 
is committed to the welfare of our Nation's veterans.
    I will, as did Senator Graham, just mention a few issues, 
some of which we had an opportunity to visit about in my 
office. But the accuracy and timeliness in the processing of 
veterans claims is obviously the foundation of the system. Many 
veterans have lost faith in that system and it is something 
that is going to need to be examined, reviewed, and improved. I 
hope you will make the commitment to make that a priority.
    We discussed a little bit about veterans health care and 
the medical care side of the veterans system. One of my 
particular interests is rural health care. I think one of the 
major strides that the VA has made is in the establishment of 
the community health clinics, the rural health clinics where 
veterans do not have to travel 200 miles to Little Rock in 
order to get the health care that they have been promised and 
that they deserve. We need to continue to expand that system 
where we are not just a brick and mortar based. We can be 
anchored to but not reliant upon that system entirely. Primary 
health care can be provided closer to home at less expense. I 
look forward to working with you on that issue.
    We discussed some about the concurrent receipt issue. It is 
time in this age of surplus that we address the inequity in the 
current system and that we come out with a fair concurrent 
receipt bill that will not bankrupt the VA but that will meet 
and honor the commitment that we have made to our Nation's 
veterans.
    And finally, we discussed also a little bit about the 
Montgomery G.I. Bill. I see in the audience today the author of 
that original bill, Sonny Montgomery. As times change, we need 
to enhance the Montgomery G.I. Bill. You in your commission 
report addressed the issue of portability. That is something, 
along with other enhancements, that we need to continue to work 
on. I see I have Sonny's attention back there. I think that is 
something that we will work together on.
    And the last thing, and this is a parochial issue but I 
think it speaks to a bigger problem in the VA that I hope that 
you will address. We have in Arkansas one State-run veterans 
home. We want to start a second one. We have a growing veterans 
population, an aging veterans population. In Fayetteville, AR, 
where we have a veterans hospital, adjacent to that a regional 
privately operated hospital is moving. They have offered to 
donate a portion of that building to establish a second State 
veterans home. We had VA architects look at the building to see 
if it was appropriate. And they said, yes, it was workable.
    The State applied for a grant a year ago. Our State 
Director of Veterans Affairs talked to me this past week and 
said they have never heard an answer. The State legislature is 
in session, the State is ready to make a commitment, but we do 
not know whether to put in a bill because we have never heard a 
response from the VA. I know that you are promptly going to 
take care of Fayetteville, AR. [Laughter.]
    But we should not take a year to make those kinds of 
decisions.
    But I have every confidence in your ability to serve and 
serve well. Your distinguished career is only going to be 
enhanced as Secretary of Veterans Affairs. I look forward to 
being able to support that nomination.
    Chairman Rockefeller. Thank you, Senator Hutchinson.
    Senator Thurmond. Mr. Chairman.
    Chairman Rockefeller. Yes, Senator Thurmond?
    Senator Thurmond. I ask unanimous consent that a statement 
by Senator Craig be entered in the record.
    Chairman Rockefeller. I was about to do that. It will be 
done, without objection.
    [The prepared statement of Senator Craig follows:]

   Prepared Statement of Hon. Larry E. Craig, U.S. Senator From Idaho

    Mr. Chairman, it is indeed a pleasure to be here at the 
confirmation hearing of Anthony J. Principi for Veterans 
Administration (VA) Secretary. The VA represents millions of 
men and women who have served our great nation, often at 
extreme sacrifice. Therefore, in gratitude it is important that 
we select a VA Secretary who will insure that our veterans 
receive the care and services they were promised and most 
certainly deserve.
    I believe that Anthony J. Principi is extremely qualified 
to serve as VA Secretary. A decorated Vietnam veteran, he has 
experience working with Congress and has a history of working 
on numerous veterans issues both in the private sector and in 
government service. Indeed, I have heard many endorsements from 
VA representatives in Boise. I look forward to working with Mr. 
Principi on continuing to improve access to services which 
recent legislation has provided. As a fiscal conservative, I 
understand how difficult it is to insure optimum commitment to 
our nations's heroes while balancing the budget. I believe that 
Mr. Principi's breadth of knowledge will enable him to ensure 
our government honors its commitments to our veterans and 
implements the most beneficial and cost effective programs.
    I look forward to working with Mr. Principi when 
addressing, expanding, and improving the delivery of services 
and benefits so that all veterans have equal access to, and 
quality of, medical care. In many areas of the country as in 
Idaho, the waiting lists are long and only getting longer. Of 
course, one of my major concerns is ensuring the necessary 
funding for primary care, but we must not forget to provide all 
the services and specialty care that many of our veterans' 
require as well as making the necessary investment into 
research and development into veteran unique medical problems. 
The Millennium Health Care Act has had some major impacts; 
however, the VA has not yet developed the policies necessary to 
deal with issues such as emergency care, Hepatitis ``C'', and 
Diabetes.
    On a brighter note is the veteran outpatient clinics. In 
rural Idaho we have two clinics in Twin Falls and Pocatello, 
but have the extensive waiting lists and problems with access 
that can justify a third in Lewiston. I would encourage the VA 
to continue exploring under serviced areas. Any time we can 
provide local as opposed to regional service, the veterans will 
be grateful and overall cost reduced.
    Veterans who are also military retirees are suffering 
greatly in Idaho as well as other rural areas. TRICARE, which 
was set up to provide medical services to active duty and 
retirees, is bad and getting worse in Idaho. I implore Mr 
Principi to work with the Department of Defense (DOD) in 
developing procedures for providing medical services to 
TRICARE-dependent military retirees in VA facilities.
    Another area of concern is the current policy on travel 
reimbursement rates. Reimbursing only eleven cents per mile is 
inadequate in today's environment, considering soaring gas 
prices and the impact of inflation since this policy was 
enacted. This has a tremendous impact on our veterans in rural 
states, where they may have to travel five hundred miles in a 
single round trip to obtain medical care.
    And finally, we must unfortunately deal with the increasing 
need for Veterans Cemeteries. We must work together to insure 
that all our veterans are given the proper and ultimate benefit 
of their honorable service.
    I believe that Mr. Principi is an excellent choice to help 
define our commitment to our nation's veterans, while 
recognizing the tough fiscal decisions that must be made. Let 
us never forget the important role that our veterans have made 
insuring our national security--the United States is a super 
power and enjoys such success because of the service and 
sacrifice of our veterans for whom we should be forever 
grateful.

    Chairman Rockefeller. Thank you, Senator Hutchinson, very 
much.
    I now call upon the distinguished Senator from California. 
I do know where you are from, yes. [Laughter.]
    We have known each other for a while. Barbara Boxer, we are 
very happy that you are here. We welcome your introductory 
comments.
    Senator Boxer. Thank you so much, Mr. Chairman. It is a 
pleasure to be here with you and the soon to be Secretary of 
Veterans Affairs. My friend, David Dreier and I are very proud 
of the Californians that have been nominated by President-elect 
Bush.
    I know that the Secretary-designate is aware of every issue 
raised here this morning. I am just feeling much better knowing 
you are looking after my veterans. Anything I can do to help, I 
will.
    We already know without my formal introduction that we have 
a ``prince'' of a guy--did you get that? I can tell you that 
Senator Feinstein very much wanted to be here, Mr. Chairman, 
but she is at another hearing. I ask unanimous consent that her 
statement be entered into the record at this time.
    Chairman Rockefeller. Without objection.
    Senator Boxer. Thank you very much.
    [The prepared statement of Senator Feinstein follows:]
    Prepared Statement of Hon. Dianne Feinstein, U.S. Senator From 
                               California
    Mr. Chairman, it is my pleasure to present my fellow Californian, 
Anthony Principi, President Bush's Nominee to head the Department of 
Veterans Affairs.
    A Vietnam veteran who served his country for more than 30 years, 
Mr. Principi will champion veterans' rights and ensure that those who 
have sacrificed so much for their country are treated with the dignity 
and respect that they deserve.
                           career highlights
    Mr. Principi has a built a distinguished career devoted to the U.S. 
military and the veterans who serve in it.
    After graduating from the U.S. Naval Academy in 1967, Mr. Principi 
served on the destroyer USS Joseph P. Kennedy, and then commanded a 
river patrol unit in the Mekong Delta.
    He was awarded several decorations for the tour I including a 
Bronze Star and the Navy Combat Action Medal.
    Subsequently, Mr. Principi earned his law degree from Seton Hall 
University and was assigned to the Navy's Judge Advocate General's 
corps where he served as a Navy liaison to Congress.
    Later, he served as Chief Counsel to the Senate Veterans' Affairs 
Committee (1984-1988) and staff director to the Senate Armed Services 
Committee (1993).
    In March 1989, Mr. Principi joined the Bush Administration as 
Deputy VA Secretary, and he was named acting secretary for the last 
four months of the administration.
    With a budget exceeding $34 billion, Mr. Principi was responsible 
for maintaining the nation's system of health-care services and benefit 
programs for America's 27 million veterans.
    In 1996, Mr. Principi served as Chairman of the Congressional 
Commission on Military Service Members and Veterans Transition 
Assistance.
    He oversaw the commission's inquiry, which determined that many 
veterans benefits and services are outdated, ineffective or wasteful.
    Now, he will have the chance to take the lead in implementing the 
recommendations of that commission and ensure that veterans' benefits 
are adequate and effective.
    In addition to his government service, Mr. Principi has also worked 
in the private sector, most recently as President of QTC Medical 
Services, Inc. a group of professional service companies providing 
independent medical examinations and administration throughout the 
nation.
                           future challenges
    The next Secretary of Veterans Affairs will need to continue the 
recent progress in correcting long-standing problems in providing 
health care to veterans and in getting adequate funding for VA 
operations.
    I am also hopeful Mr. Principi will fight to improve medical, 
education and housing benefits for service members and veterans.
    Thank you.

    Senator Boxer. I know Senator Feinstein is as excited and 
happy about this appointment as I am.
    Mr. Chairman, Anthony Principi is highly qualified for this 
position. As we all know, it is a very important position. The 
VA is the second largest agency in the U.S. Government; only 
the Department of Defense is larger.
    Our promise to America's veterans is a promise that must be 
met. I want to talk to you about something that I have talked 
to you about and I am going to spend just a minute on our 
conversation. Right now, the number of homeless male and female 
Vietnam-era veterans is greater than the number of 
servicepersons who died during that tragic war. I am going to 
say that one more time. The number of homeless male and female 
Vietnam-era veterans is greater than the number of 
servicepersons who died during that war. We cannot continue to 
turn our backs on these people.
    I would ask unanimous consent that my full statement be 
entered into the record.
    Chairman Rockefeller. Of course.
    Senator Boxer. I would also like to submit a letter from a 
good friend of mine who is executive director of ``Swords to 
Plowshares,'' Mr. Michael Blecker. This agency has served 
thousands of poor and homeless veterans in San Francisco. Mr. 
Blecker writes, ``Under his direction, the DVA will make 
enormous strides to address the needs of all veterans and 
particularly those veterans who are homeless and at risk for 
being homeless.'' I would like to put that in the record as 
well.
    Chairman Rockefeller. Without objection.
    Senator Boxer. So, Mr. Chairman, thank you for this honor.
    Thank you, Tony, and thanks to your family for allowing 
this to happen because I know they have started packing. And I 
want to say, perhaps just ending with a quote from our 
Secretary-to-be: ``I know of no mission more worthwhile than 
serving the men and women who have so honorably served this 
Nation.''
    Thank you very much.
    [The prepared statement of Senator Boxer follows:]
 Prepared Statement of Hon. Barbara Boxer, U.S. Senator From California
    Thank you Mr. Chairman. I appreciate having this opportunity to 
introduce Mr. Anthony Principi to your Committee this afternoon.
    Mr. Chairman, Anthony Principi is eminently qualified to be the 
next Secretary of Veterans Affairs.
    It is an important position. The Veterans Administration is the 
second largest agency in the U.S. government. Only the Department of 
Defense is larger. The VA's mission to serve our 24 million veterans by 
providing medical care, benefits, support and lasting memorials in a 
dignified and compassionate way is a difficult, but important one.
    I know Anthony is passionate about the veterans he has and will 
serve. Yesterday, in our brief meeting together, he spoke eloquently 
about the need to work harder to help homeless veterans. Right now, the 
number of homeless male and female Vietnam era veterans is greater than 
the number of service persons who died during that tragic war.
    And, on this tenth anniversary of the Gulf War, the VA is reporting 
that we are already seeing Desert Storm veterans in the homeless 
population. All told, nearly one-third of the adult homeless population 
has served in the U.S. Armed Forces.
    With his experience as the VA's first Deputy Secretary and later as 
acting-Secretary, I am confident that Mr. Principi understands these 
tragic facts and has the energy and intelligence to work in creative 
ways with this committee to find solutions.
    A review of Mr. Principi's past work shows his commitment to 
service to this nation.
    Mr. Principi began his distinguished career in the military by 
graduating from the U.S. Naval Academy in 1967.
    Shortly thereafter, he volunteered for duty in Vietnam and went on 
to become a highly decorated soldier, earning many combat decorations 
including a Bronze Star with a ``V'' for Valor.
    He went on to earn his law degree from Seton Hall University in 
1975 and was assigned to the Navy's JAG (Judge Advocate General's) 
Corps.
    In 1984, Mr. Principi joined this Committee as Staff Director and 
Chief Counsel, a position he held until 1988.
    One of the greatest indications of Mr. Pnincipi's devotion to 
America's veterans was his willingness to continue to work on these 
issues after the end of the Bush Administration.
    In 1996, he was appointed by Senator Thurmond to serve on a 
Congressional Commission on Military Servicemembers and Veterans 
Transition Assistance and was elected Chairman. This Commission worked 
hard to find ways to improve veteran benefits and services--now Mr. 
Principi will have a chance to implement those recommendations.
    Mr. Chairman, I have heard from the real experts on the matter of 
Mr. Principi's qualifications and ability to do this job--the veterans 
of California. They are always straight with me and tell it like it is. 
Today, they are telling me to support Mr. Principi.
    With your permission, Mr. Chairman, I would like to enter into the 
record three letters of support from the California American Legion. 
They are from the State Commander, the Vice Chairman of the National 
Legislative Council and the Past National Vice Commander. Just to read 
from one of them:
          ``[Mr. Principi] possesses the tools, skills, and experience 
        that will permit him to do a brilliant job meeting the needs of 
        our military veterans.''
    So, Mr. Chairman, I thank you for this opportunity to introduce Mr. 
Principi before this committee. I want to recognize his wife, Liz, and 
their three sons, Ryan, Anthony, and John. They know that serving in a 
Cabinet position can be extremely trying and time-consuming so I want 
to thank the entire family for again making this sacrifice.
    Please allow me to end by quoting Mr. Principi himself:
          ``America now reaps the fruit of service of 24 million 
        veterans. However, their service imposes upon us a reciprocal 
        obligation . . . I know of no mission more worthwhile than 
        serving the men and women who have so honorably served their 
        nation.''
    Thank you Mr. Chairman.
                                 ______
                                 
     The American Legion, Department of California,
                            401 Van Ness Avenue, Suite 117,
                                San Francisco, CA, January 3, 2001.
Hon. Barbara Boxer,
U.S. Senate,
Washington, DC.
    Dear Senator Boxer: I write to you in support of Senate 
confirmation of W. Anthony J. Principi for the office of Secretary, 
Department of Veterans Affairs. Mr. Principi is steeped in the 
knowledge, skill, and experience previously acquired through serving in 
this very position.
    Our homeless and disabled veterans deserve the caring and 
compassionate service that has been the hallmark of Mr. Principi.
    Please give Mr. Principi your Senate vote when he comes up for 
confirmation in the 107th Congress.
            Respectfully,
                                              Floyd Martin,
                                                   State Commander.
                                 ______
                                 
     The American Legion, Department of California,
                            401 Van Ness Avenue, Suite 117,
                                San Francisco, CA, January 3, 2001.
Hon. Barbara Boxer,
U.S. Senate,
Washington, DC.
    Dear Senator Boxer: It is with great honor that I commend to you 
Mr. Anthony J. Principi, Secretary-Designate, Department of Veterans 
Affairs. The Veterans of The American Legion, Department of California 
strongly support Mr. Principi for this job. He was outstanding in the 
capacity of first Deputy Secretary of Veterans Affairs and later as 
Acting Secretary of Veterans Affairs. He showed great compassion in 
serving our military veterans.
    You could make California veterans happy by casting your senate 
vote for Mr. Principi when he comes up for confirmation early within 
the 107th Congress.
            Respectfully,
                                              Leo P. Burke,
                                      Past National Vice Commander.
                                 ______
                                 
     The American Legion, Department of California,
                            401 Van Ness Avenue, Suite 117,
                                San Francisco, CA, January 4, 2001.
Hon. Barbara Boxer,
U.S. Senate,
Washington, DC.
    Dear Senator Boxer: Mr. Anthony J. Principi has been designated to 
serve the next administration as Secretary, Department of Veterans 
Affairs. He is one of three Californians that have been selected to 
serve in positions, which must be confirmed by the Senate. He possesses 
the tools, skills, and experience that will permit him to do a 
brilliant job meeting the needs of our military veterans.
    It is anticipated that Mr. Principi will come up for confirmation 
early in the 107th Congress. I urge you to cast your vote to confirm W. 
Principi.
            Sincerely,
                                             Stan Standard,
                        Vice Chairman National Legislative Council.
                                 ______
                                 
                              Swords to Plowshares,
                                        1063 Market Street,
                         San Francisco, CA 94103, January 17, 2001.
Hon. Barbara Boxer,
U.S. Senate,
112 Hart Senate Office Building,
Washington, DC.
    RE: Letter of Support for Anthony J. Principi as Secretary of the 
Department of Veterans Affairs
    Dear Senator Boxer, I wish to express my enthusiastic support for 
the confirmation of Anthony J. Principi as Secretary of the Department 
of Veterans Affairs. As a fellow Vietnam combat veteran and as director 
of an agency that has served thousands of poor and homeless veterans in 
San Francisco over the past quarter century, I first became acquainted 
with Mr. Principi in 1990.
    In that year, as Deputy Secretary of Veterans Affairs, Mr Principi 
attended one of the very first Stand Down events, pioneered by Vietnam 
Veterans of San Diego. These respites from the streets were 
extraordinary community-building opportunities for veterans who needed 
help but remained distrustful of the Department of Veterans Affairs 
(DVA). Stand Downs also represented an effort by advocates and 
community providers to pressure the DVA to leave its institutional 
walls and join them ``in the field'' where the wounded were. Mr. 
Principi's presence at the 1990 Stand Down represented the DVA's first 
public endorsement of a community-led intervention on behalf of 
homeless veterans.
    I worked with Mr. Principi for several years beginning in 1997 when 
I was appointed to the Congressional Commission on Servicemembers and 
Veterans Transition Assistance. Mr. Principi was elected Chairman of 
the twelve-member Commission established by Congress to review programs 
that provide benefits and services to veterans and servicemembers 
transitioning to civilian life. This Commission's review became the 
most comprehensive since that of the Bradley Commission in 1956.
    The broad scope of the Commission's charge entailed massive levels 
of data collection and official presentations from such imposing 
bureaucracies as the Departments of Defense, Veterans Affairs, and 
Labor. Yet under Mr. Principi's leadership, the Commission made great 
efforts to understand the issues from the perspective of the average 
soldier completing his or her tour of duty, and of the ordinary 
veteran, whether early in their civilian career or years later. Many 
field visits were conducted to active military bases both stateside and 
abroad. In addition, Mr. Principi led visits to homeless veteran 
programs in order to examine what went wrong with those young soldiers 
whose transition was to a life of homelessness. I was continually 
impressed with the rapport he established with these men and women. Mr. 
Principi treated all who had served with dignity and respect whether he 
or she be a Commanding General, an enlisted servicemember, or a 
homeless veteran.
    The Commission's report reflects Mr. Principi's bold vision on 
issues ranging from a meaningful Montgomery GI Bill, to re-engineering 
employment and training benefits, to providing affordable and 
accessible health care.
    In closing, I would like to applaud your efforts and support of 
Swords to Plowshares' work to provide care for homeless and low-income 
veterans. During your term in public office, you have never forgotten 
the veterans who have remained wounded and on our streets. Your efforts 
drew congressional attention to the pressing health needs of homeless 
veterans, and led to the creation of a local task force to bring 
desperately needed resources to the Bay Area. Consequently, Swords to 
Plowshares was able to acquire and operate supportive housing programs 
for homeless veterans in San Francisco. We now house close to 200 
veterans at a time, creating meaningful opportunity for them to 
stabilize their lives and return to the community.
    I look forward to the vision and leadership Mr. Principi would 
bring to the DVA. I am confident that under his direction, the DVA 
would make enormous strides to address the needs of all veteran , and 
particularly those veterans who are homeless and at-risk for becoming 
homeless.
    Thank you.
            Sincerely yours,
                                           Michael Blecker,
                                                Executive Director.

    Chairman Rockefeller. Thank you, Senator Boxer, very much 
and thanks for your patience, which is going to be matched by 
the patience of Congressman Dreier----
    [Laughter.]
    Chairman Rockefeller [continuing]. Because a very senior 
and wonderful member of our committee, Jim Jeffords, has just 
arrived. So I would like to have Jim give his statement, if you 
don't mind, David.
    Senator Jeffords. Let me be very brief. I have had the 
opportunity to discuss fully Tony's rising to this level. I am 
enthusiastic about having you working with us and look forward 
to that, and I will allow us to go forward with questions.
    Chairman Rockefeller. After Congressman David Dreier, whom 
I have known for a number of years, also has a chance. I think 
you are from the 28th Congressional District, David?
    Mr. Dreier. I think so. [Laughter.]
    Chairman Rockefeller. Well you know so, but I am just doing 
the best I can. [Laughter.]
    Mr. Dreier. If you want to know the truth, I never say a 
number because we have got so many in California----
    Chairman Rockefeller. And they keep changing, right. I 
understand. Anyway, we welcome you here.
    Mr. Dreier. Thank you very much, Mr. Chairman, Senator 
Jeffords, Senator Nelson. I want to join in extending a welcome 
not only to Tony, but to Liz and Ryan, and to our former 
colleague who was chairman of the House Veterans' Affairs 
Committee, Sonny Montgomery.
    I think that when you look at this assignment, it is an 
extraordinarily important position, as has been pointed out. 
And as I look at the statements that have been made over the 
last several months by Governor George Bush, it is very clear 
that he has demonstrated a desire to strengthen the sense of 
pride and peace of mind among our Nation's veterans. He is 
very, very committed, as you pointed out, Mr. Chairman, to 
revamping the health care system and he is committed to the 
goal of returning to the VA, the principle that they are 
actually the advocate of the veterans of this country.
    I think that when we look at the work that he has done on 
this Committee, we see an extraordinary effort.
    I am proud as a Californian that Tony is among, as Barbara 
mentioned, a list of very distinguished people who will be 
members of the cabinet or at top level posts in this 
administration. Condoleeza Rice, from Stanford, is going to be 
our Nation's first female African-American National Security 
Advisor. Norm Mineta is going to move from his position as 
Secretary of Commerce to become Secretary of Transportation. We 
are very proud, as Barbara said, of Ann Veneman, who is going 
to be the first female Secretary of Agriculture, whom we 
introduced this morning. And of course I still call her a 
Californian even though she now lives next door to me here on 
Capitol Hill with our colleague, Senator Mitch McConnell, that 
being Elaine Chao, who is going to be our great Secretary of 
Labor. We are proud of these Californians, and Tony Principi is 
clearly among them.
    We all know that he is extraordinarily well equipped to 
provide first-rate service. I know that he will in fact listen 
very closely to the oversight provided by the Senate Veterans' 
Affairs Committee. Good luck to you.
    Thank you very much, Mr. Chairman.
    [The prepared statement of Mr. Dreier follows:]

 Prepared Statement of Hon. David Dreier, a Representative in Congress 
                      From the State of California

    Chairman Rockefeller and members of the Committee, I am 
pleased to be here today to say a few words of introduction for 
my friend and fellow Californian, Anthony Principi.
    Anthony Principi's ties to the military and his knowledge 
of veterans issues run deep. He is the son of a World War II 
veteran and a Naval Academy graduate he was highly decorated 
for his service in Vietnam, where he commanded a river patrol 
unit in the Mekong Delta, earning the Bronze Star.
    Along with his military service, Tony served as a staffer 
on both the Senate Committee on Armed Services and Veterans' 
Affairs Committee. Under President Bush, he was appointed to be 
the first Deputy Secretary of Veterans Affairs and eventually 
Acting Secretary of Veterans' Affairs. During his time at the 
Department of Veterans Affairs he was one of the first to call 
for the establishment of a registry to track the medical 
conditions of Persian Gulf War veterans.
    After he left government service, Tony continued to be 
active in veterans issues. He was appointed Chairman of the 
Congressional Commission on Servicemembers and Veterans 
Transition Assistance where he helped to develop 
recommendations to Congress on improvements for the services 
and benefits for active duty service members and veterans.
    During his campaign, President-elect Bush discussed the 
need to restore a sense of pride and peace of mind to our 
veterans. President-elect Bush has promised to improve the way 
veterans are treated. His plan includes; modernizing the 
veterans health care system, returning the principle of the VA 
to that of an advocate for veterans who seek service-related 
disability claims, and the establishment of a Veterans Health 
Care Task Force to ensure that laws regarding veterans are 
being fully implemented.
    I believe that Tony Principi has the experience required to 
implement President-elect Bush's plans to improve the care and 
treatment of our veterans. Mr. Chairman, I thank you for 
allowing me the opportunity to say a few words about my friend 
and the next Secretary of the Department of Veterans Affairs, 
Anthony J. Principi.

    Chairman Rockefeller. Congressman, thank you very much. 
Thank you for taking the time to be here with us. I am sure 
that Tony Principi is very happy that you did that.
    In closing for the moment, I note that the nominee has 
completed the Committee Questionnaire for Presidential Nominees 
and responded to my prehearing questions, all of which will 
appear in the hearing record. Also I have reviewed the letter 
from the Office of Government Ethics acknowledging that Mr. 
Principi is in compliance with laws and regulations governing 
conflicts of interest. As chairman of the committee, for the 
moment, I have reviewed Mr. Principi's FBI report and find no 
bar to his confirmation.
    At this point, before you give your testimony, Mr. 
Principi, I would ask that you stand and take the oath.
    Do you swear and affirm that the testimony that you will 
give at this hearing and any written answers or statements you 
provide in connection with this hearing will be the truth, the 
whole truth, and nothing but the truth?
    Mr. Principi. I do.
    Chairman Rockefeller. Thank you, sir. You may be seated. We 
look forward to your statement, which we hope will be about 10 
minutes or so long. [Laughter.]

STATEMENT OF HON. ANTHONY J. PRINCIPI, DESIGNATE FOR NOMINATION 
                AS SECRETARY OF VETERANS AFFAIRS

    Mr. Principi. Thank you, Mr. Chairman, Senator Specter, 
members of the committee. I thank you for inviting me to appear 
before you this afternoon. I am indeed honored. And I again 
wish to thank Senator Murkowski, Senator Boxer, Congressman 
Dreier for their very kind words of introduction. I also wish 
to acknowledge Congressman Sonny Montgomery, the former 
chairman of the House Committee on Veterans' Affairs, who has 
been an inspiration to me my whole professional life in this 
city. I know I would not be sitting here today were it not for 
his unyielding support for my candidacy. I am so very thankful 
to him for his friendship and his advice over the years.
    And, of course, I am deeply thankful for the support of my 
parents; my father, now gone, who came to this country as an 
immigrant, and who served his country so gallantly in World War 
II, and my mother, whose health prevents her from being here. 
To my wife, Elizabeth, a Navy nurse during the Vietnam war who 
also, she reminds me, served as a Navy JAG, who has always told 
me that there is no sacrifice too great for the opportunity to 
serve in this capacity to serve our Nation's veterans; my son, 
Ryan, coming from Vance Air Force Base. I wish my other 
children could be here. To my extended family who came from 
California, and of course the Moores, who have always been 
there for me.
    I am honored that President-elect Bush looked to me to 
embody his commitment to our veterans.
    I am honored that, if the Senate consents, I will assume 
leadership over 200,000 very dedicated VA employees who have 
chosen careers of public service. They are some of the most 
wonderful people I have ever known and have worked with in the 
past.
    I am honored by the prospect that, if the Senate is 
willing, I will work again in partnership with our country's 
veterans service organizations.
    And most of all, Mr. Chairman, I am honored and humbled by 
the prospect that 24 million men and women who answered our 
Nation's call to arms may soon look to me to answer their call 
for the benefits they earned in the service to our great 
Nation.
    I have accepted this challenge for one reason. I believe 
deeply in the mission of the Department of Veterans Affairs, 
and in the Department itself. I am fully committed to its 
mission of service to veterans. If I can just make a difference 
for America's veterans, then my rewards will far outweigh any 
sacrifice I may make.
    I do intend to make a difference. The Department of 
Veterans Affairs is at a critical juncture. Many veterans have 
lost faith in VA's ability to fairly and promptly decide their 
claims for benefits. Not without reason. It takes too long to 
decide a claim, and the error rate remains too high.
    I know that VBA's leadership has addressed these problems. 
I applaud their initiative and their innovation. But veterans 
do not care about process. Veterans are entitled to outcomes. 
It does not matter what VBA is doing. It matters what VBA does.
    President-elect Bush promised a top-to-bottom examination 
of VA benefits processing. If I am confirmed, I will commission 
a broad-based and inclusive task force to conduct that 
examination. Mr. Chairman, members of the committee, its 
charter will be narrow. I am not interested in abstract 
theories of veterans' benefits. I want hands-on practical 
solutions. I will not want to hear that problems can't be 
solved due to the language of the law. I will work within the 
law as the people's representatives in Congress write it.
    It will be given a short fuse. If I leave this town with 
VBA's problems still under study, I will count my tour here as 
a failure.
    Our history shows that America can solve just about any 
problem if we are united in a common cause and committed to a 
victory. And I use the word ``victory'' deliberately. The 
clearest example of our country's ability to achieve great ends 
while overcoming enormous challenges can be found in 
undertakings such as the Manhattan Project or the creation of 
entire shipyards out of bare ground in response to World War 
II's shipping shortage.
    It may be necessary for VA to declare its own war on claims 
processing and bring all of its resources to bear in the 
campaign to win that war. Success will certainly take bold 
steps. All of the participants must be willing to unite in the 
common cause.
    I do not want to suggest today that I have a preferred 
option for conducting this campaign. Nothing should be off the 
table. The members of the task force should be free to propose 
and discuss any idea, no matter how different it is from the 
way VBA operated in 1946 or 1972 or even 1999.
    VA's challenges are not limited to prompt and accurate 
decisions on disability claims.
    Some veterans are skeptical of VA's ability to provide them 
with quality health care. I believe that, over all, VHA does 
provide very high quality health care, some of the finest care 
in America. I commend VHA's leadership as well for their 
emphasis on patient safety and quality care. But quality health 
care requires constant attention at every level within the 
Department. I will keep my eye on that ball.
    VHA provides health care to the extent that resources are 
available. That means that inefficient or ineffective use of 
limited resources would come at the expense of health care for 
veterans. I will hold VHA's leadership accountable for their 
stewardship of the resources entrusted to them. I must also be 
held accountable, because sick veterans would pay the price for 
VHA inefficiency. And that would be unacceptable to me.
    As Secretary, my bottom line will be access to quality 
health care for veterans. This will be particularly true for 
veterans who do not have other options, either because they 
need specialized services, be it spinal cord injury, blind 
rehabilitation, mental health, prosthetics, whatever it might 
be, or because their circumstances call on them to look to VA 
as their only health care provider in America.
    President-elect Bush has promised a top-to-bottom review of 
VA's health care system, implementation of the Millennium 
Health Care Act, and modernization of barriers hindering 
veterans' access to health care. If the Senate confirms my 
nomination, the President's goals will be my goals.
    Again, I believe that a broad-based, inclusive, tightly 
focused, and short-fused task force, drawing on the knowledge 
and commitment of the VSOs, forward-looking VA employees, and 
VA's partners in health care delivery, our academic 
institutions, can help me deliver on that promise by 
identifying problems and proposing solutions.
    I believe new technology offers VA new opportunities. It 
also imposes great challenges. Technology is often expensive, 
and is almost always complex. Effective application of complex 
technology to already complex processes, such as VA's, 
frequently requires rethinking and rebuilding from the ground 
up. We can't just pave the cow path and expect to improve 
service.
    Information technology can offer a means to break down the 
bureaucratic boundaries that interfere with quick and efficient 
service to veterans as well as the walls now dividing VA from 
her sister departments in the Federal Government and, totally 
unacceptably to me, barriers that now exist within VA itself. I 
applaud outgoing Acting Secretary Hershel Gober for his 
commitment and his goals to create one VA. I intend to carry 
out his work.
    VA has absorbed billions of dollars allocated to improving 
its ability to collect, process, and communicate data. Frankly, 
I do not see improvements, Mr. Chairman, members of the 
committee, proportional to the resources consumed.
    I do not now have a solution to VA's information technology 
problems. I do know that I intend to find one. And in my search 
for a solution I will not be constrained by ``how we have 
always done it.'' That path is a dead end. It has not worked.
    I will not come before you and claim to have in my hip 
pocket an instant solution to all of the challenges faced by VA 
and by the veterans VA serves. If the solutions were easy, they 
would have been implemented long ago. And while I am blessed 
with many friends in the veterans community, and can draw on my 
experience on the Hill, in the Department, and on the 
Congressional Commission on Servicemembers and Veterans 
Transition Assistance, I am also aware that much has changed 
during the past 8 years. While I have a rich background of 
experience, I also have much to learn.
    If I am confirmed, I expect that my initial months in 
office will be spent building a foundation of knowledge from 
which I can create a blueprint for action.
    But I do not intend to come to Washington, sir, to conduct 
seminars. I intend to make decisions and to act on them. Those 
who know me know that I will be decisive, I will act boldly. 
But I assure you I will not act impulsively. I will work 
closely with you and with your colleagues in the House. I will 
ensure that VSOs are enlisted as partners in developing 
solutions as well as in identifying our problems. I will look 
to forward-thinking VA employees for their vast experience and 
their insightful knowledge.
    But study will not be an excuse for delay. If the Senate 
blesses me with confirmation, I will make decisions and I will 
see them implemented. I will hold the individuals entrusted 
with leadership within the Department accountable for their 
outcomes, just as I expect to be held accountable.
    In short, Mr. Chairman, members of the committee, I appear 
before you today not to make a commitment to a specific plan or 
programs. I have enough knowledge of the Department and its 
problems to know that I still have much to learn before I can 
unveil detailed plans or promise specific actions.
    Rather, I appear before you today to acknowledge my 
personal debt to the millions of Americans who have served our 
Nation in uniform in the past, and to the millions who stand 
watch today on the ramparts of freedom. I am certainly proud of 
my two sons in uniform. My debt to them can be satisfied only 
by a commitment to work with you and with our partners in the 
VSOs, as well as the Department's employees to identify and 
implement the solutions necessary to ensure that veterans 
obtain the benefits and health care they have earned.
    If the Senate consents to my nomination, I intend to do my 
part to satisfy that debt. I know that it will be a team 
effort. That is the only way it can work. Some of the team will 
be found in the veterans' advocates President-elect Bush has 
promised to name to his administration. Some will be found in 
the Congress, building on the example set by the members of 
this committee, under your leadership and that of Senator 
Specter, in obtaining successive $1.7 billion and $1.2 billion 
increases in VA's health care budget and, very importantly, 
last year's improvements in Montgomery G.I. Bill education 
rates so that more veterans can attend school. I look forward 
to working with you to build on that record of accomplishment.
    Thank you, Mr. Chairman, Senator Specter, members of the 
committee for this honor. I look forward to your questions.
    [The prepared statement of Mr. Principi follows:]
     Prepared Statement of Hon. Anthony J. Principi, Designate for 
              Nomination as Secretary of Veterans Affairs
    Mr. Chairman, Senator Specter, members of the Committee.
    Thank you for inviting me to appear before you this afternoon. I am 
honored.
    I am honored that President-elect Bush looked to me to embody his 
commitment to veterans.
    I am honored that, if the Senate consents, I will assume leadership 
over 200,000 VA employees who have chosen careers of service to 
veterans.
    I am honored by the prospect of working once again, if the Senate 
is willing, in partnership with our country's veterans service 
organizations (VSOs).
    And most of all, I am honored--and humbled, by the prospect that 24 
million men and women who answered our nation's call to arms may soon 
look to me to answer their call for the benefits and services they 
earned in the service of our country.
    I have accepted this challenge for one reason.
    I believe deeply in the Department of Veterans Affairs and am fully 
committed to its mission of service to veterans. If I can make a 
difference for America's veterans, then my rewards will far outweigh 
any sacrifice I may make.
    And I do intend to make a difference.
    The Department of Veterans Affairs is at a critical juncture.
    Many veterans have lost faith in VA's ability to fairly and 
promptly decide their claims for benefits.
    Not without reason. It takes too long to decide a claim. And the 
error rate remains too high.
    I know that the leadership of the Veterans Benefits Administration 
(VBA) has addressed these problems and I applaud their initiative and 
innovation. But veterans don't care about process. Veterans are 
entitled to outcomes.
    It doesn't matter what VBA is doing. It matters what VBA does. And 
what VBA now does remains unsatisfactory in the minds of many veterans.
    President-elect Bush promised a top to bottom examination of VA 
benefits processing. If I am confirmed, I will commission a broad-based 
and inclusive task force to conduct that examination.
    Its charter will be narrow. I am not interested in abstract 
theories of veterans' benefits. I want hands-on practical solutions. I 
will not want to hear that problems are intractable because of the 
language of the law. I will work within the law as the people's 
representatives in Congress write it.
    It will be given a short fuse. If I leave this town with VBA's 
problems still under study I will count my tour here a failure.
    Our history shows that America can solve just about any problem if 
we are united in a common cause and committed to a victory. I use the 
word ``victory'' deliberately. The clearest examples of our country's 
ability to achieve great ends while overcoming enormous challenges can 
be found in undertakings such as the Manhattan Project or the creation 
of entire shipyards out of bare ground in response to World War II's 
shipping shortage.
    It may be necessary for VA to declare its own war on claims 
processing and bring all of its resources to bear in the campaign to 
win that war. Success will certainly take bold steps. All of the 
participants must be willing to unite in the common cause.
    I don't want to suggest today that I have a ``preferred option'' 
for conducting this campaign. Nothing should be off the table. The 
members of the task force should be free to propose and discuss any 
idea, no matter how different it is from the way VBA operated in 1946 
or 1972 or even in 1999.
    VA's challenges are not limited to prompt and accurate decisions on 
disability claims.
    Many veterans are skeptical of VA's ability to provide them with 
quality healthcare. I believe that, over all, the Veterans Health 
Administration (VHA) does provide high quality healthcare. I commend 
VHA's leadership for their emphasis on patient safety and quality care. 
But quality healthcare requires constant attention at every level 
within the Department. I will keep my eye on that ball.
    VHA provides healthcare to the extent that resources are available. 
That means that the inefficient or ineffective use of limited resources 
comes at the expense of healthcare for veterans. I will hold VHA's 
leadership accountable for their stewardship of the resources entrusted 
to them--because sick veterans would pay the price for VHA 
inefficiency. That would be unacceptable to me.
    As Secretary, my bottom line will be access to quality healthcare 
for veterans. This will be particularly true for veterans who do not 
have other options, either because they need the specialized services 
provided by VA or because their circumstances call on them to look to 
VA as their only healthcare provider.
    President-elect Bush has promised a top to bottom review of VA's 
healthcare system, implementation of the Millennium Health Care Act, 
and modernization of barriers hindering veterans' access to health 
care.
    If the Senate confirms my nomination, the President's goals will be 
my goals.
    Again, I believe that a broad-based, inclusive, tightly-focused and 
short-fused task force, drawing on the commitment and knowledge of the 
VSOs, forward looking VA employees, and VA's partners in healthcare 
delivery, can help me deliver on that promise by identifying problems 
and proposing solutions.
    New technology offers VA new opportunities. It also imposes great 
challenges. Technology is often expensive, and is almost always 
complex. Effective application of complex technology to already complex 
processes, such as VAs, frequently requires rethinking and rebuilding 
from the ground up. We can't just ``pave the cow paths'' and expect to 
improve service.
    Information technology can offer a means to break down the 
bureaucratic barriers that interfere with quick and efficient service 
to veterans as well as the walls dividing VA from her sister 
departments in the Federal government and, totally unacceptably to me, 
barriers within VA itself.
    VA has absorbed billions of dollars allocated to improving its 
ability to collect, process and communicate data. Frankly, I do not see 
improvements proportional to the resources consumed.
    I do not now have a solution to VA's information technology 
problems. I do know that I intend to find one. And that in my search 
for a solution I will not be constrained by ``how we have always done 
it.'' That path is a dead end. It has not worked.
    I will not come before you and claim to have in my hip pocket an 
instant solution to all of the problems faced by VA and by the veterans 
VA serves.
    If the solutions were easy they would have been implemented long 
ago. And while I am blessed with many friends in the veterans 
community, and can draw on my experience on the Hill, in the Department 
and on the Congressional Commission on Veterans and Servicemembers 
Transition, I am also aware that much has changed over the last eight 
years. While I have a rich background of experience, I also have much 
to learn.
    If I am confirmed, I expect that my initial months in office will 
be spent building a foundation of knowledge from which I can create a 
blueprint for action.
    But I do not intend to come to Washington to conduct seminars.
    I intend to make decisions and to act on them. Those who know me 
know that I will be decisive. I will act boldly. But I will not act 
impulsively. I will work closely with you and with your colleagues in 
the House. I will ensure that VSOs are enlisted as partners in 
developing solutions as well as in identifying problems. I will look to 
forward-thinking VA employees for their experience and knowledge.
    But study will not be an excuse for delay.
    If the Senate blesses me with confirmation, I will make decisions 
and I will see them implemented. I will hold the individuals entrusted 
with leadership within the Department accountable for their outcomes, 
just I expect to be held accountable.
    In short, Mr. Chairman, members of the Committee, I appear before 
you today not to make a commitment to specific plans or programs. I 
have enough knowledge of the Department and its problems to know that I 
still have much to learn before I can unveil detailed plans or promise 
specific actions.
    Rather, I appear before you today to acknowledge my personal debt 
to the millions of Americans who have served our nation in uniform in 
the past, and to the millions who stand watch today on the ramparts of 
freedom.
    My debt to them can be satisfied only by a commitment to work with 
you, and with our partners in the VSOs, as well as the Department's 
employees, to identify and implement the solutions necessary to ensure 
that veterans obtain the benefits and healthcare they have earned.
    If the Senate consents to my nomination, I intend to satisfy that 
debt.
    Thank you, Mr. Chairman, Senator Specter and members of the 
Committee.
    I look forward to your questions.
                                 ______
                                 
                Questionnaire for Presidential Nominees
      part i--all the information in this part will be made public
    1. Name: Anthony Joseph Principi.
    2. Address: P.O. Box 9335, Rancho Santa Fe, CA 92067.
    3. Position to which nominated: Secretary of Veterans Affairs.
    4. Date of nomination: December 29, 2000.
    5. Date of birth: April 16, 1944.
    6. Place of birth: New York City, NY.
    7. Marital status: Married.
    8. Full name of spouse: Elizabeth Ahlering Principi.
    9. Names and ages of children: Anthony, 27; Ryan, 24; and John, 22.
    10. Education: Institution (including city, state), dates attended, 
degrees received, dates of degrees:
    Mt. St. Michaels; Bronx, NY; 1958-62; Diploma; 6/62.
    New Mexico Military Institute; Roswell, NM; 1962-63.
    U.S. Naval Academy; Annapolis, MD; 1972-75; BS; 6/67.
    Seton Hall University School of Law; Newark, NJ; 1972-75; JD; 5/75.
    11. Honors and awards: List all scholarships, fellowships, honorary 
degrees, military medals, honorary society memberships, and any other 
special recognitions for outstanding service or achievement:
    President Student Bar Assn., Seton Hall Law (Tuition Scholarship) 
1974-75.
    Bronze Star w/Combat V.
    2 Navy Commendation Medals w/Combat V.
    Vietnamese Combat Medal, Combat Action Medal; (2) Navy Commendation 
Medals.
    Several VA Special Recognition Awards.
    New Mexico Military Institute Scholarship.
    12. Memberships: List all memberships and offices held in 
professional, fraternal, business, scholarly, civic, charitable, and 
other organizations for the last 5 years and other prior memberships or 
offices you consider relevant:
    State Bar of California; 1978-Present.
    State Bar of Pennsylvania; 1975-Present.
    California Rea; Estate Broker; 1989-Present.
    ABA; Military Committee, Chairman Leg. Subcommittee; 1983-86.
    American Legion; 1985-Present.
    VFW; 1985-Present.
    DAV; 1985-Present.
    13. Employment record: List all employment (except military 
service) since your twenty-first birthday, including the title or 
description of job, name of employer, location of work, and inclusive 
dates of employment:
    U.S. Senate Armed Services; Counsel; Sen. John Tower; 1980-83.
    VA; Administrator Deputy for Congressional Affairs; Harry Walters; 
1983-84.
    U.S. Senate Veterans Affairs; Chief Counsel (R); Sen. Simpson/Sen. 
Murkowski; 1984-88.
    VA; Deputy Secretary; 1989-90.
    VA; Acting Secretary; Ed Derwinski; 1991-92.
    U.S. Senate Armed Services; Staff Director (R); Sen. Thurmond; 
1993.
    U.S. Navy Broadway Redevelopment Project, San Diego; General 
Counsel NAVYCO; 1988-89.
    Adams Duque Hazeltine, law firm, San Diego; partner; M. Cathrop; 5/
93-12/93.
    Luce Forward, law firm, San Diego; partner; M. Cathrop; 12/93-5/94.
    Lee, Principi, Reeder, Lajolla, law firm; partner; 5/94-5/95.
    Lockheed Martin IMS, Santa Clara, CA; COO Sr. VP; R. Hartling; 5/
95-5/96.
    O'Malley & Principi Properties, Del Mar, CA; partner in real estate 
management and sales; 5/94-5/96.
    Commission of Servicemembers and Veterans Transition Assistance, 
Washington, DC; Chairman; 2/99-7/99.
    The Jefferson Group, Washington, DC; consultant; 2/99-7/99.
    QTC Management, Inc., Diamond Bar, CA; President QTC Medical 
Services Inc.; 7/99-Present.
    14. Military service: List all military service (including reserve 
components and National Guard or Air National Guard), with inclusive 
dates of service, rank, permanent duty stations and units of 
assignment, titles, descriptions of assignments, and type of discharge:
    U.S. Navy; USN Naval Academy; 1963-67; USS Joseph P. Kennedy 
(DD850) 1967-69.
    Task Force 116, Republic of Vietnam; 1969-70.
    OCS, Newport, RI; 1970-72 (LCDR).
    Judge Advocate General's Corp; 1975-80:
          Naval Legal Service Office, San Diego Fleet Training Center, 
        San Diego; Commander, Training Center Pacific Fleet; Office of 
        Legislative Affairs, Washington, DC.
    U.S Naval Reserve, Capitol Hill Unit; 1980-88.
    15. Government experience: List any advisory, consultative, 
honorary, or other part-time service or positions with Federal, State, 
or local governments other than listed above:
    Chairman, Commission on Servicemembers and Veterans Transition 
Assistance.
    Member, NAPA Commission.
    16. Published writings: List titles, publishers, and dates of 
books, articles, reports or other published materials you have written: 
N/A.
    17. Political affiliations and activities
    (a) List all memberships and offices held in and financial 
contributions and services rendered to any political party or election 
committee during the last 10 years:
    CA State Chairman, Veterans for Bush/Cheney.
    Contributed annually to Republican Party and individual Republican 
and Democrat candidated for Federal office. Contribution to Republican 
Part 1989 $2,000 est.; 1990-Present $1,000/year maximum allowable by 
law est.
    (b) List all elective public offices for which you have been a 
candidate and the month and year of each election involved: N/A.
    18. Future employment relationships
    (a) State whether you will sever all connections with your present 
employer, business firm, association, or organization if you are 
confirmed by the Senate: Yes, I have resigned my position effective 
upon confirmation.
    (b) State whether you have any plans after completing Government 
service to resume employment, affiliation, or practice with your 
previous employer, business firm, association or organization: No.
    (c) What commitments, if any, have been made to you for employment 
after you leave Federal service? None.
    (d) (If appointed for a term of specified duration) Do you intend 
to serve the full term for which you have been appointed?
    (e) (If appointed for indefinite period) Do you intend to serve 
until the next Presidential election? Yes.
    19. Potential Conflicts of Interest
    (a) Describe any financial arrangements, deferred compensation 
agreements, or other continuing financial, business, or professional 
dealings which you have with business associates, clients, or customers 
who will be affected by policies which you will influence in the 
position to which you have been nominated: None.
    (b) List any investments, obligations, liabilities, or other 
financial relationships which constitute potential conflicts of 
interest with the position to which you have been nominated: None.
    (c) Describe any business relationship, dealing, or financial 
transaction which you have had during the last 5 years, whether for 
yourself, on behalf of a client, or acting as an agent, that 
constitutes as potential conflict of interest with the position to 
which you have been nominated:
    My current Corporation has a contract with the VA to conduct 
compensation and pension evaluations. QTC is the the 3rd year of a 5 yr 
contract. Additionally, QTC has contracts with DOL (5); DoD (1); and 
provides disability evaluations for Social Security in CA, TX, and NC.
    (d) Describe any lobbying activity during the past 10 years in 
which you have engaged for the purpose of directly or indirectly 
influencing the passage, defeat, or modification of any Federal 
legislation or for the purpose of affecting the administration and 
execution of Federal law or policy:
    As Chairman of the Commission on Servicemembers and Veterans 
Transition Assistance I testified on Commission recommendations.
    (e) Explain how you will resolve any potential conflicts of 
interest that may be disclosed by your responses to the above items. 
(Please provide a copy of any trust or other agreements involved.)
    I shall recuse myself from any and all decisions related to QTC and 
ask the General Counsel to moniter and report quarterly to the 
Inspector General.
    20. Testifying before the Congress
    (a) Do you agree to appear and testify before any duly constituted 
committee of the Congress upon the request of such committee? Yes.
    (b) Do you agree to provide such information as is requested by 
such a committee? Yes.
                                 ______
                                 
Response to Pre-Hearing Questions Submitted by Hon. John D. Rockefeller 
                       IV to Anthony J. Principi
    Question 1. You have been described as a VA insider--hands-on and 
behind the scenes--while Secretary Derwinski was the public face. If 
confirmed, will you maintain this hands-on approach? How would you 
define your management style or philosophy?
    Answer. I do have a ``hands-on'' management style and I expect to 
continue that style should the Senate confirm my nomination. I intend 
to make decisions and to act on them. I will act boldly, but I will not 
act impulsively. I will work closely with the Congress. I will ensure 
that VSOs are enlisted as partners in developing solutions as well as 
in identifying problems. I will look to forward-thinking VA employees 
for their experience and knowledge. But study will not be an excuse for 
delay. If the Senate blesses me with confirmation, I will make 
decisions and I will see them implemented. I will also hold the 
individuals entrusted with leadership within the Department accountable 
for their outcomes, just I expect to be held accountable.
    Question 2. What role will you play in selecting other nominees for 
VA positions?
    Answer. While ultimate responsibility for a Presidential nomination 
lies with the President, I am pleased that President-elect Bush has 
assured me that I will have a role in the selection of the officials 
whom he will nominate for VA positions.
    Question 3. For the past two years, Congress has approved buyout 
authority for VA to enable it to hire people with the right skills-mix 
to meet its changing mission, without resorting to reductions-in-force. 
However, it was Congress' intent to ensure that VA continues to meet 
the needs of veterans and not use buyout authority to reduce its 
overall staffing levels. Please provide information on the use of 
buyout authority so far this fiscal year. Include information on how 
functions have been eliminated or are being performed in another 
fashion. Do you intend to continue use of buyout authority and to seek 
an extension of authority for next year?
    Answer. My bottom line will be service to veterans. If ``buyouts'' 
will help improve service to veterans by providing a cost-effective 
mechanism to get the right people into the right jobs, while avoiding 
the disruption of reductions-in-force (RIFs), then I will support them.
    For example, I am advised that, consistent with the original plans 
submitted to Congress, VA's use of buyouts facilitates both the ongoing 
shift away from inpatient care and the organizational efficiencies that 
can be achieved through consolidations and restructuring. Resources 
freed up through this effort can and must be used to add new or 
restructured positions to improve quality and access to care and by 
increasing resources in the Veterans Service Centers. I understand that 
VA elements are developing amended operational plans, and progress 
reports, on this subject for submission to the Office of Management and 
Budget (OMB).
    I have been informed that 2,017 buyouts were used VA-wide, November 
30, 1999, through December 31, 2000 as follows:

 
 
 
By organization:
  VHA.....................................  1,741 (229 in Title 38)
  VBA.....................................  239
  NCA.....................................  10
  Staff Offices...........................  27
By grade:
  SES.....................................  3
  GS/GM-15................................  11
  GS/GM-14................................  50
  GS/GM-13................................  168
  GS-212 (include wage)...................  1,556
  Title 38................................  229
By gender:
  Men.....................................  51%
  Women...................................  49%
By race:
  Non-minority............................  66%
  African-American........................  25%
  Hispanic................................  4%
  Other...................................  5%
 

    Question 4. VA has been studying various options in contracting out 
functions currently performed by VA employees, such as the A-76 study 
on loan guaranty property management and the lists created to comply 
with the Federal Activities Inventory Reform Act (FAIR). Are you aware 
of the problems that HUD has had with its property management contract? 
Do you support contracting out VA functions? If yes, do you have any 
concerns that it will erode VA's ability to meets its mission?
    Answer. I was not aware of the Department of Housing and Urban 
Development's (HUD) problems until I received your question. Thank you 
for bringing them to my attention.
    I am informed that HUD did not conduct a formal A-76 study prior to 
its decision to contract out this function. It is my understanding that 
HUD was forced to terminate one of its contracts in this area for poor 
performance in September 1999, and when they explored the possibility 
of bringing the function back within the Department, they discovered 
that their ability to perform the function had, in fact, eroded.
    Unlike HUD, VA is conducting a formal A-76 cost comparison study to 
determine the most cost-effective means of providing property 
management services. I am told VA met with HUD representatives to 
discuss lessons learned, and the project team has built in safeguards 
such as stringent selection criteria, performance requirements, and 
contingency plans to mitigate potential problems such as those 
experienced at HUD. Should VA eventually decide to contract out for any 
property management services, we must ensure a continuing ability to 
exercise appropriate oversight of the performance of this important 
function.
    I believe the private sector can play an important role in areas, 
such as information technology, where it is difficult to attract and 
retain skilled workers. A partnership between VA and the private sector 
can assist VA in meeting its mission. The VA has been a model 
throughout the Federal government in performance based contracting and 
it has served VA well.
    The ability to contract out for services is critical to VA's 
mission, particularly for scarce services not readily available within 
the VA. The FAIR Act has forced a government-wide analysis of the 
functions agencies perform internally to determine which of those 
services are available commercially. I am informed that VA constructed 
its FAIR Act inventory of Commercial Activities in both FY 1999 and FY 
2000 in compliance with this law. I expect VA to continue to meet the 
requirements of law and to apply sound business principles in 
determining when and where to contract for services. However, I will 
not deviate from VA's most important standard which is ``service to 
veterans''. In that context, I assure you that I am aware of the value 
of the Veterans Health Administration as a national asset. I do not 
intend to pursue a course of action that would reduce the value of that 
asset, either to veterans and to our country. Nor will I dismiss out of 
hand proposals for providing better or more cost-effective service.
    Question 5. During your tenure as Deputy Secretary, you and former 
Secretary Derwinski advocated reforming the VA system to create 
distinctions in eligibility for benefits between veterans' combat and 
noncombat disabilities. Do you still promote this policy?
    Answer. A 1990 review initially included a distinction between 
combat and non-combat disabilities among many options for possible 
discussion. Both Secretary Derwinski and I rejected that option and it 
was not further pursued. I have no intention of revisiting that issue.
    Question 6. Do you support unified IRM/IT funding control at the 
Department level or divided within each administration (i.e., Veterans 
Health Administration, Veterans Benefits Administration, etc.)? If at 
the sub-agency level, how do you plan to ensure that new systems will 
be compatible, fully leveraging VA's IT dollars? Please furnish a total 
figure for VA's IT expenditures last fiscal year across the entire 
Department, with a breakdown for each part of VA and denoting what were 
nonrecurring Y2K expenditures.
    Answer. As I noted in my opening statement, veterans have not 
received benefits proportionate to the information technology dollars 
absorbed by VA. VA has too many incompatible systems which do not 
interact with each other and which obscure rather than communicate data 
needed by veterans, by VA workers in the field and by VA managers. I do 
not now know how I will resolve the tension between the uniformity and 
compatibility benefits of centralization and the responsiveness 
benefits of decentralization. I do know that VA's IT must contribute to 
the effort to make VA effective and responsive to veterans and to the 
effort to make ``One VA'' a reality rather than a slogan.
    Managing information technology and resources devoted to IT are 
among the most critical issues confronting VA. Reviews conducted by the 
U. S. General Accounting Office, VA's Inspector General and others have 
repeatedly cited persistent IT problems as a leading management 
challenge for the Department.
    The first priority is that all IT funds must be spent effectively 
and intelligently. VA must be able to account for all IT funding and to 
ensure that all funds are being spent on the programs and 
infrastructure that return the best value for all of our stakeholders. 
VA has gone through a period of significant decentralization that has 
reaped significant benefits. However, decentralization has its own set 
of disadvantages. I think it would appropriate for me to review the 
current policies and processes very early on and adjust them as 
required.
    Clearly VA's IT systems must be compatible and function more as a 
single entity. In order to reach this goal, three things must be in 
place: (1) an overarching architecture for systems, data, and 
applications; (2) clear, comprehensive standards; and (3) a strict 
process of analysis, approval, and oversight of all IT initiatives 
undertaken.
    VA reports that during fiscal year (FY 2000) the department 
expended $1.07 billion for IT. This figure breaks down as follows:
     VHA--$0.88 billion
     VBA--$0.13 billion
     GOE (non-VBA)--$0.04 billion, which includes:
          $25.1 million for OI&T
          $14.7 million for HR-LINK$ expenditures
          $4.4 million for other GOE
     All Other--$0.02 billion (including $1 million for NCA)
    During FY 2000, VA expended $12.3 million on the Y2K issue. 
Overall, VA Y2K costs for the Department were $34.0 million (which 
include biomedical equipment and facility-related system costs). All 
costs were covered by redirected funds from within VA's existing 
budget.
    Question 7. Despite efforts to improve the timeliness and quality 
of determinations of eligibility for benefits for veterans and their 
families, VA is still facing huge delays and lagging quality levels. It 
is nowhere near meeting the goals that had been set for VBA as recently 
as the budget submission for fiscal year 2001. What are your plans to 
address the problems of the claims adjudication process?
    Answer. As I noted in my opening statement, I will make claims 
processing a major priority if I am confirmed by the Senate. I will 
convene a task force that will re-examine the process from top to 
bottom. I will charge them with the mission of identifying problems and 
proposing solutions. Nothing will be off the table. This task force 
will be a broad-based, inclusive, tightly-focused and short-fused. It 
will draw on the commitment and knowledge of the VSOs, forward looking 
VA employees and other experts.
    I will have to draw on the findings of this task force and on my 
own search for more information before I can formulate a plan for 
action,
    I can assure you that timely and accurate claims processing will be 
one of the measures of success to which I will hold VBA leadership 
accountable and to which I expect to be held accountable myself.
    Question 8. VBA has been restructuring the way it does business in 
the last several years. It has divided itself into ``Service Delivery 
Networks'' for budgetary and planning purposes. At the same time, it 
furthered consolidation of certain functions, such as loan guaranty, to 
fewer offices. It has shifted to a team approach to process disability 
claims, and it has implemented a ``Balanced Scorecard'' approach to 
measure its performance. Do you support these changes, along with the 
other measures implemented through Business Process Reengineering? What 
changes do you project in the near and far term?
    Answer. I will need more information before I reach conclusions on 
the effectiveness of the SDN reorganization, consolidation of VBA 
functions, the balanced scorecard as an accurate measure of performance 
and the effectiveness of process changes derived through ``business 
process reengineering. If I am confirmed, it will become my duty to 
obtain that information and then make judgments based upon the 
information I obtain.
    Question 9. Approximately 20 percent of current rating specialists 
(738) are eligible to retire within the next two years. Over 600 
employees have been hired or redirected from other areas of VBA and are 
in the process of being trained. I understand that it takes 
approximately 2-3 years to fully train a new adjudicator. What is the 
attrition rate of new hires? What will you do to address the 
approaching crisis as you lose your most experienced decision-makers?
    Answer. I am informed that VBA has a comprehensive plan for 
recruitment, training and employee development. They have engaged in a 
large scale hiring effort to ensure that, when these rating specialists 
do retire, there will be trained employees to step in and continue to 
provide uninterrupted service to veterans. The Opportunity Program, a 
focused effort to recruit and orient new employees to VBA and its 
mission, started in 1998 and continues to serve as a vehicle for new 
talent. The combined hiring and retraining efforts have allowed VBA to 
increase its C&P decision makers by 50%. VBA informs me that the 
attrition rate for new hires has been about 10% over the past three 
years.
    VBA informs me that they are training and developing new employees 
through use of electronic job aids and on-the-job training. New hires 
also receive formal training on the mission, vision and customer 
service values and practices. VA is also implementing a structured 
skills matrix that will assess the current and full performance skills 
and knowledge of employees throughout their careers.
    Question 10. All federal employers are having difficulty recruiting 
and retaining quality employees due to the nation's very low 
unemployment rate, particularly in the areas of the country with very 
expensive standards of living. Large VA regional offices in big cities 
seem to be less successful than smaller, more rural offices (as 
determined by both the current Balanced Scorecard measures, as well as 
the old methods of monitoring performance). Do you believe that VA can 
compete in the big cities for good employees? What can be done to 
enhance VA's ability to compete? Is there a problem created by the size 
of such offices, beyond just amplifying the typical problems that all 
offices have?
    Answer. I understand VBA is utilizing the hiring authorities 
provided by the Congress and the Office of Personnel Management. 
Through VBA's Opportunity Program, and other recruitment efforts, over 
2,000 employees have been hired in the last three years in cities all 
across the country. The Department tells me that it is also looking at 
more flexible and aggressive recruitment authority and retention 
options. I expect VA to work with the Office of Personnel Management in 
crafting the necessary methods and tools to allow greater flexibility 
in hiring, pay setting and incentive programs.
    Despite the recruitment and retention challenges experienced in 
large cities, I believe there are valid reasons for VA to maintain a 
presence in these locations. Large metropolitan areas offer a rich 
source of talent and access to a diversity of potential employees. In 
addition, big cities tend to have high concentrations of veterans who 
seek benefits and services from the VA. With flexible, aggressive 
hiring authorities and approaches, VA can be competitive in 
metropolitan areas.
    On the other hand, I will not rule out at this time any proposal 
that can be shown to improve service to veterans. I will state that I 
will not advance any proposal that is not informed by the views of the 
VSOs, the Congress, and VA's employees.
    Question 11. One of the stumbling blocks to more timely and 
accurate adjudication of claims is inadequate or delayed compensation 
and pension examinations (C&P exams). What will be VBA's future course 
of action: to contract out for these examinations, to have VHA perform 
the exams exclusively, or to implement a mix of the two models? Will 
you be involved in this determination: If all or a portion of the exams 
are performed outside of VHA, do you support reducing VHA's 
appropriations for C&P exams by a corresponding amount?
    Answer. In light of my prior involvement with a private sector 
organization providing C&P exams on a contractual basis, I will expect 
my Deputy Secretary, in consultation with other VA officials, to act as 
the principal Departmental decision maker on this issue.
    Question 12. I applaud VBA for being very proactive in the last 
several years in establishing its predischarge separation programs. 
Determining a service member's eligibility for compensation and 
developing vocational rehabilitation plans before she has left the 
service, rather than waiting until after separation is a great 
improvement in customer service. It allows these servicemembers to 
begin the next phase of their lives much sooner than under the 
traditional method of adjudicating claims. Further, it is easier for VA 
to develop a claim while the servicemember is still in the service and 
all the records are readily available. Do you intend to continue these 
programs? Will you be expanding the fledgling overseas operations?
    Answer. Yes. These sites have provided enormous performance 
improvements and I support continuation and expansion of predischarge 
of predischarge separation programs. I strongly concur with the points 
made in your question. I am informed that at this time, C&P decisions 
at these sites are completed in an average of 28 days. I am further 
informed that VA has established an overseas site in Korea and just 
recently selected its Director. They are currently working out the 
details of the MOU with Germany and hope to have an operational site 
located there by the end of the fiscal year.
    Question 13. The VA and veterans rely upon the U.S. Armed Services 
Center for Unit Records Research (CURR) to attempt to substantiate 
stressor incidents for post-traumatic stress disorder claims. I have 
long recognized the valuable service that this Center provides. 
However, I have also been very concerned that the Center's tenuous 
funding may affect its ability to carry out this critical assignment. 
On January 5, 2001, I wrote to the Secretaries of the Navy and Air 
Force seeking additional staffing resources for the Center. What are 
your plans for working with CURR to ensure more timely response to VA 
requests?
    Answer. I am informed that during the latter half of 2000, VA 
worked with CURR to begin improving not only the CURR response time, 
but the quality of VA's requests as well. For the period January to 
June 2000, CURR was receiving approximately 340 referrals per month 
with processing delays averaging more than one year.
    A VBA ``Help Team'' convened in Washington, D.C., in August 2000 to 
improve the quality of VA's research requests to the CURR and to 
streamline the process of communicating those requests. The Help Team 
made recommendations to improve the stressor verification process. 
Recommendations that have been implemented include assigning a CURR 
Coordinator at each Regional Office to ensure uniformity and designate 
a single point of contact for CURR-related issues and inquiries; issue 
interim guidance on CURR development procedures; and utilizing Help 
Team findings for feedback and training.
    VBA is considering longer term, system-based recommendations to 
develop a standardized template for information requests to the CURR. I 
hope to receive an early briefing on this matter, if confirmed.
    Question 14. Another major source of delays in adjudicating claims 
for VA benefits is the National Personnel Records Center (NPRC), which 
supplies VA with veterans' service personnel and medical records. These 
critical documents assist VA in establishing veteran's status, wartime 
service, incurrence of injuries or diseases, and other necessary 
information. VA increased the number of employees staffing NPRC 
requests, which has helped to reduce the backlog from over 62,000 
requests in October 1999 to 41,000 requests pending in November 2000. 
Currently, NPRC is only staffed to handle 20,000 requests. Do you 
intend to continue to devote VA employees to processing records 
requests? What other plans do you have for improving the turnaround 
time of requests? What coordination efforts can be made with NPRC to 
maximize both VA and NPRC resources?
    Answer. I intend to work closely with Secretary designate Rumsfeld 
to improve the co-operation and data exchange between VA and DoD. I 
will explore all means with the Secretary designate to break down the 
barriers between the Departments that create obstacles to the seamless 
provision of benefits and services to our men and women in uniform and 
to our veterans. In the interim, I intend to continue using VA 
personnel to process record requests. The Department successfully 
negotiated a Memorandum of Understanding with the NPRC in March of 
1999. Staffing levels have increased from seven to 28 in October of 
1999. The VA staff was subsequently increased to the current level of 
31 in June 2000.
    I am informed that VA has substantially reduced the number of 
pending requests over the past 12-14 months. VBA is reviewing funding 
and space requirements necessary to add 15 additional employees to the 
VA Liaison Unit at NPRC. To assure that VBA has a timely and responsive 
records request system, I will consider initiating discussions to 
develop service level agreements with NPRC as well as other critical 
information sources such as NARA and the CURR.
    VBA is establishing an electronic link (web site) that allows each 
regional office to make requests to VA's own Records Management Center 
and the NPRC. As advances in this type of technology continue, the 
volume of paper involved in the claims process can be reduced, ensuring 
tighter control of information exchange, and improvement in claims 
processing timeliness.
    Question 15. VBA has been working on its claims file-imaging 
project, Virtual VA, to eliminate its dependence on paper claims files. 
Do you support continuation of this project? If so, what other 
advantages will come from Virtual VA? Do you see it as ultimately 
leading to a different structure of VBA, where files are transmitted 
electronically to decision-makers who may be located far away from 
where the claim was initiated? Do we still need and is it appropriate 
to maintain a 57 regional office structure? How would you address the 
veterans service organizations' concerns regarding their access to the 
files and the decision-makers?
    Answer. Based on my current understanding of the process, I support 
continuation of the virtual VA project that would provide a significant 
degree of flexibility to move information throughout the VA, including 
VHA and BVA. Virtual VA holds the promise of reducing the Department's 
reliance on paper files while expediting the adjudication of claims.
    The questions you raise are exactly the kinds of questions that 
would be addressed by the task force I will convene to reexamine VA 
claims processing if I am confirmed. I will ensure that these questions 
are addressed and resolved with the participation of the VSOs, who play 
an essential advocacy and representation role in the evaluation of 
claims. I recognize that both veterans and VBA employees are 
constituents of members of both the Senate and House and I will ensure 
that the Congress is kept informed of proposals as they develop.
    Question 16. It has been the VA's position that the Secretary has 
the authority to add diseases to the presumptive list of conditions 
associated with exposure to ionizing radiation. As Secretary would you 
use this authority to add diseases to the veterans' list of compensible 
conditions to be comparable to benefits for civilian nuclear workers?
    Answer. I am aware that the Department of Veterans Affairs has 
drafted a new regulation concerning presumptive service connection for 
certain diseases for veterans who participated in radiation-risk 
activities during active service or while members of reserve components 
during active duty for training or inactive duty training. This 
proposed amendment would add cancers of the bone, brain, colon, lung, 
and ovaries to the list of diseases that may be presumptively service-
connected and would amend the definition of the term ``radiation-risk 
activity.'' In general, I support a policy that ensures that veterans 
who may have been exposed to radiation during military service have the 
same burden of proof as civilians exposed to ionizing radiation who may 
be entitled to compensation for these cancers under comparable Federal 
statutes. I understand that the Office of Management and Budget is 
holding this regulation until the new administration takes office, 
which is appropriate. If I am confirmed, one of my early tasks will be 
a review of the details of the proposed regulation.
    Question 17. In September 2000, the National Academy of Sciences 
released its first report on health consequences associated with 
environmental exposures consistent with service in the Gulf War. Public 
Law 105-277, requires the Secretary to determine whether to service-
connect such health consequences within 60 days of the NAS report. To 
date, the decision has not been made. When will such a determination be 
made?
    Answer. My understanding is that a preliminary determination by the 
Acting Secretary is undergoing review within the Administration.
    Question 18. During your previous tenure at VA, you favored paying 
full compensation to veterans with psychiatric conditions during the 
initial period in which they try to secure and maintain a job. Do you 
still support this initiative? If so, why is it limited to psychiatric 
patients?
    Answer. Yes, I continue to support this initiative. I am committed 
to improving veterans' benefits and services and I am not afraid to 
consider new ideas in this regard. During my service as Deputy 
Secretary, we discussed this particular proposal and my view at that 
time was that it could be beneficial to disabled veterans with physical 
or psychiatric disabilities. The current rules impose a financial 
disincentive on disabled veterans attempting to return to the 
workforce. I believe that both veterans and the country are better off 
when a disabled veteran successfully returns to the workforce.
    Question 19(a). Under the Veterans Judicial Review Act, veterans 
were allowed to hire attorneys to represent them after a final VA 
decision. The Act further authorizes the VA, with the veteran's 
permission, to withhold up to 20 percent of a past-due benefit award 
for direct payment of attorney's fees. The Social Security 
Administration has a similar provision for certain of its disability 
appeals.
    VA has proposed eliminating the VA withholding of past-due 
benefits. The pro se rate for appellants at the U.S. Court of Appeals 
for Veterans Claims (CAVC) is 81 percent at the time the appeal is 
filed and 55 percent at the time of decision. I believe that 
eliminating the VA withholding would have a chilling rate on the 
already small numbers of attorneys willing to represent these veterans. 
Do you intend to finalize this regulation?
    Answer. This is another matter regarding which I must be thoroughly 
briefed before I could prudently answer. Certainly, veterans benefit 
from the assistance of counsel during judicial review of their claims. 
I agree that the effect on the availability of counsel should be a 
major consideration in the Department's decision. I would want to 
carefully consider the available evidence regarding this, including the 
public comments the Department received in response to the proposal, 
before committing to a position.
    Question 19(b). The law does not currently allow attorneys to be 
paid a fee by veterans for representing them prior to a final VA 
decision. Former Chief Judge of the CAVC, Frank O. Nebeker, has 
advocated broadening a veteran's right to hire an attorney, stating 
that ``we certainly get a great deal of assistance from the volunteer 
lawyers that come before our court, and in any way that lawyers could 
help, and I think they can, at the administrative level, it would 
certainly make a more just system. . . .'' [U.S. House of 
Representatives Committee on Veterans' Affairs Budget hearing for FY 
99]. Do you support such a change? What impediments, if any, exist to 
greater attorney involvement?
    Answer. At the administrative level of claims processing, veterans 
can take advantage of the representational assistance provided without 
charge by veterans service organizations and state and county service 
officers. I know that permitting attorneys to charge fees for providing 
this same assistance was considered and rejected when the Veterans 
Judicial Review Act was debated. I also appreciate the need to keep the 
administrative process as non-adversarial and user friendly as 
possible. To date, I have not heard a persuasive case for changing the 
status quo, but I would listen carefully and be prepared to contribute 
to the debate if the issue were joined. Of course, in the end, this is 
a question that will be resolved by the Congress, not VA.
    Question 20. One of the Transition Commission's recommendations 
included limiting VA's home loan guaranties to a one-time use, while 
eliminating the funding fee. VA's 1997 customer survey results indicate 
that 70 percent of veterans reported they would not have been able to 
purchase their home without a VA-guaranteed loan. In FY 1997, 92 
percent of VA loans were made with no down payment. Do you support 
limiting the VA loan guaranty? If so, how would you avoid veteran 
borrowers being denied the opportunity to own their own home if forced 
to move or if they lost their homes in tough economic times or natural 
disasters? Would you make an exception for significantly disabled 
veterans or servicemembers still on active duty who are relocated every 
few years?
    Answer. The VA home loan program provides veterans with an 
important and valuable benefit that should be preserved. The primary 
goal of the Transition Commission was to eliminate a user fee paid to 
the Government for a benefit that was originally provided at no cost.
    However, the Commissioners were also aware that in considering 
their recommendations, Congress might require offsets to cover the cost 
of program enhancements. One of the offsets proposed by the Commission 
was to limit the benefit to one-time use, with the exception of 
interest rate reduction refinancing loans.
    Current law provides for restoration of the veteran's home loan 
entitlement in cases involving natural disasters and I support this 
provision. I also think it is appropriate for Congress to carefully 
consider the special needs of significantly disabled veterans and 
active duty personnel in formulating any program changes. The 
possibility of difficult economic circumstances should also be 
considered. During difficult economic times, when conventional sources 
of mortgage financing are harder to find, the no down payment VA loan 
becomes even more valuable to a veteran who is trying to purchase a 
home. However, even under current law a veteran whose loan was 
foreclosed cannot reuse that home loan entitlement until the 
Government's loss has been repaid. I would not support eliminating that 
requirement.
    Question 21. Another key recommendation of the Transition 
Commission was to fully pay veterans' education costs at the school of 
their choice. What level of enhancement to existing law do you plan to 
propose as Secretary? What plans do you have to ensure that the 
existing benefits are fully used by veterans?
    Answer. I am pleased that the Congress increased Montgomery GI Bill 
benefits by more than twenty percent. This is a step in the right 
direction. By increasing the full time monthly rate by almost $100 
(from $552 to $650), some of the Montgomery GI Bill's lost purchasing 
power has been restored. However, the new rate falls short of increases 
recommended by the Transition Commission and other interested parties.
    I believe that in America's information economy, education is the 
best benefit we can provide to veterans if we are to give them the 
foundation for a successful civilian life. In an ideal world, a 
veteran's educational opportunities would be limited only by his or her 
ambition, aspirations and ability. I recognize that, if I am confirmed 
as Secretary of Veterans Affairs, I will have to work within the 
realities of the Federal budget process, but I will continue to work 
towards the goal of improving veterans' education benefits so that our 
nation will receive the highest possible return from the highly capable 
veterans who return to our civilian economy each year.
    Question 22. Under VA's 1993 ``Veterans Service Area proposal,'' 
VA's four regional offices were replaced with an eventual total of 22 
networks. In your estimation, what are the strengths and weaknesses of 
this decentralized system of health care? Is there a need to reinstate 
centralized oversight of any of the VA program functions? How do you 
envision the VISN's working with you as Secretary?
    Answer. One of the first items on my ``to do'' list, if I am 
confirmed, will be an evaluation the effects of the VISN 
reorganization. It is too soon for me to predict the effect of that 
evaluation. I understand the benefits of giving leaders in the field, 
and close to the scene of the action, the authority to make decisions 
and then holding them accountable for the outcomes. However, I also 
believe that there can be only one VA and that veterans will not be 
well served if VA evolves into 22 separate systems with differing 
benefits packages and access to care.
    Question 23. VA continues to open community-based outpatient 
clinics (CBOCs) at a high rate on the basis that these clinics improve 
access to primary care for many veterans. However, in the current 
climate of fixed resources, how will VA ensure that the channeling of 
resources into CBOCs does not destroy VA's historical ability to offer 
excellent specialized services at its hospitals?
    Answer. I am advised that VHA health care facilities have been able 
to fund CBOC access points as an outgrowth of the efficiencies that 
have occurred through restructuring and realigning health care 
delivery. This has included shifting from inpatient to outpatient care, 
implementing managed care and reducing hospital lengths of stay. As a 
result over the past five years, Dr. Garthwaite believes that VHA has 
been able to enhance access to care through CBOCs, while continuing its 
significant accomplishments in providing specialized services to 
veterans. VHA's specialized services are one of the jewels in VA's 
crown and one of the primary justifications for sustaining VHA as a 
unique medical care system. I will not support decisions that threaten 
those services and I look forward to consulting with all interested 
parties as future decisions regarding specialized services evolve.
    Question 24. What is your view of the right mix of services that 
should be provided by VA? For example, some have advocated that VA 
focus only on specialized services and contract out all services 
already available in the community. Do you agree with that approach?
    Answer. I believe VA should continue to be a provider of 
comprehensive health care services to those veterans who choose to use 
the veterans' health care system. Although I think the specialized 
services and special disability programs are critical to the mission of 
VA, and in many cases unique in our country, I do not support the 
approach that VA should focus solely on these services. Spinal Cord 
Injury, Blind Rehabilitation, PTSD and Seriously Mentally Illness 
programs cannot be appropriately sustained in isolation. Veterans' 
health care must be approached holistically. The uniform benefits 
package, together with the long-term care services provided in the 
Millennium Health Care and Benefits Act, and VA's specialized services, 
provide the appropriate mix of services needed to meet the future 
health care needs of veterans. This does not mean that I will blindly 
endorse maintaining the status quo. VA must constantly be assessing 
means to improve the services it offers, or should offer, in light of 
the changing needs of veterans and changes in the delivery of health 
care. Having said all this, I believe that VA must work closely with 
private health care facilities, as well as other governmental health 
care providers, to meet the needs of our veterans and coordinate the 
delivery quality health care. I believe VA's future will be 
strengthened and enhanced by forging strong relationships with others, 
by providing a broad array of services, and by assuming a leadership 
position in areas of special expertise. I intend to maintain close 
communications and consultations with the Congress and our stakeholders 
as VA healthcare evolves in our changing times.
    Question 25. How will you ensure that the VA protects medical 
record privacy, given the widespread access to medical records within 
the VA? Will the VA's current practices for protecting patient records 
prove sufficient for the newly released Standards for Privacy of 
Individually Identifiable Health Information?
    Answer. The rapid growth in the use and dependence on technology 
has created new challenges concerning the security and privacy of 
medical records going beyond the traditional concerns of physical 
security. I am informed that VA has recently instituted a Department 
wide Accelerated Security Program to address the immediate need to 
close digital security vulnerabilities, raise the level of awareness 
within the VA to the digital security threat, and establish a corporate 
wide security program to manage and respond to tactical and strategic 
security requirements. I intend to monitor this program personally to 
insure its success.
    Section 264 of the Health Insurance Portability and Accountability 
Act of 1996 (HIPAA), required the Department of Health and Human 
Services to publish Standards for Privacy of Individually Identifiable 
Health Information. This is one of several statutes, such as, the 
Privacy Act of 1974, the Computer Security Act, the revised OMB 
Circular A-130, the Clinger-Cohen Act, and the Government Paperwork 
Elimination Act that have placed ever more stringent and detailed 
requirements for the security and privacy of medical records in 
particular and computerized records in general upon Federal Agencies. 
VA will be challenged to implement the new policies and practices 
necessary to meet all of our responsibilities under these acts. This is 
critical if we are to sustain the trust of America's veterans and other 
stakeholders. I appreciate your initiative in emphasizing, through your 
question, the importance of VA's compliance with these requirements.
    Question 26. I have long advocated strategies for recruitment and 
retaining highly trained medical professionals within VA health care 
systems, and I supported recently enacted legislation to allow 
competitive pay for VA nurses and recognize the role of VA physician 
assistants. What policies will you pursue, if confirmed, to improve 
recruitment and retention in VHA? What is your view of performance-
based pay for VA employees?
    Answer. I believe VA provides, and must continue to provide quality 
and compassionate health care. To achieve this, we must have the best 
possible health care, executive, and administrative workforce. Human 
resource planning must be an integral component of our strategic 
planning processes. I will have to obtain more information on specific 
proposals for improving recruitment and retention before I can comment 
on their merits.
    Question 27. Public Law 106-117 contains a provision mandating that 
VA provide non-institutional extended care services to enrollees. I 
have been informed that ``significant program development'' is needed 
to implement this provision. What is the status of this program, and 
what will you do to ensure its immediate implementation?
    Answer. VA informs me that the non-institutional extended-care 
programs envisioned by P. L. 106-117 (adult day health care, geriatric 
evaluation, and respite care) are already established in VA, and that 
specific programmatic development, other than expansion, will be 
minimal. I intend to assure myself of the accuracy of this assessment 
as soon as possible.
    I am also informed that the Department is publishing a Federal 
Regulation to identify and define these services. This expansion to the 
long-term care continuum will be added to home health and hospice care 
services already defined as part of the basic benefits package. This 
proposed final rule is under review in the Department. I expect to act 
on the proposed regulation in the very near future after being briefed 
on its implications.
    Further, I have been informed that VHA is in the process of 
developing a new strategic plan for the provision of all long-term care 
services that would integrate the P. L. 106-117 provisions with 
previous authorities as well as with VA's policy and budget initiatives 
for expanding home and community based care services. I understand that 
an integral part of this plan will be new performance measures that 
ensure full implementation of these important benefits for aging, 
frail, and chronically ill veterans.
    Question 28. Describe your strategies for encouraging VA health 
care providers to cooperate with state homes, affiliates, and community 
providers to offer veterans high quality long-term care in the most 
cost effective manner.
    Answer. I am advised that multiple approaches are being employed to 
encourage VA health care providers to partner with State homes, 
affiliates and community providers.
    State Veterans Homes (SVH) are an integral component of VA's long-
term care (LTC) strategy.
     Most SVHs are represented on the VISN level Management 
Advisory Councils (MACs).
     The SVH program has greatly expanded over the past 10 
years, from 63 homes in 1990 to 100 homes in 2000. Funding for 
construction and/or renovation of existing homes has been approved for 
23 additional projects for FY 2001. VA provides up to 65% of funding 
for the construction and/or renovation. Annual increases are provided 
in per them rates for ongoing VA assistance for care of veterans in 
SVHs.
     New regulations have expanded the program to include Adult 
Day Health Care program.
     Training of VA staff working directly with State homes has 
been enhanced and sharing of data sources (Vista access) is encouraged.
    New regional nursing home contracts promote partnership.
     On December 1, 2000, VHA awarded 11 regional contracts to 
organizations spanning 40 states and 900 facilities for quality 
community nursing home care.
     These new regional contracts (R-CNH) replace similar 
``multi-state'' contracts.
     The contracts were developed to reduce administrative and 
direct care costs while improving access to nursing home care for 
veterans. Administrative costs associated with maintaining 3,200 
separate local nursing home contracts and the annual inspection process 
will be reduced.
     Direct care costs are expected to be reduced by providing 
a more competitive rate for nursing home care.
     Access to community nursing homes will be improved by 
adding nursing homes and adding specialized services in selected 
nursing homes.
    I am also informed that VA has developed a national strategy for 
performance measures to improve and expand utilization of home and 
community based care (H&CBC), including specific budget initiatives to 
increase spending on home and community-based services.
     In general, veterans are more satisfied with their long-
term care when the location of care is shifted from institutional to 
non-institutional care delivered in the home and community. I am 
informed that VHA's strategies for encouraging this shift from 
institutional to non-institutional long-term care include:
           Performance measures with goals of increasing the 
        Average Daily Census (ADC) in Home & Community-Based Care 
        (H&CBC) by 53% from FY00 to FY02, and by 141% in FY06.
           The Federal Advisory Commission on Long-Term Care 
        recommended that VA increase the H&CBC proportion of Long-Term 
        Care budget from 17.5% to 35%.
    The Geriatrics & Extended Care Strategic Healthcare Group (SHG) is 
developing a strategic plan to address needs of older veterans that are 
not fully met through provisions in the Veterans Millennium Health Care 
and Benefits Act.
    The Geriatric Research, Education and Clinical Center (GRECC) has 
been expanded to promote further affiliations with the academic 
geriatrics community for the enhancement of care for older veterans as 
well as all older Americans.
     The number of GRECCs has expanded from 16 to 21 centers 
over the past 18 months. Foci of new GRECCs on important issues of 
aging such as end-of-life care, stroke, cardiovascular disease and 
mobility.
     All GRECC staff are university-affiliated and collaborate 
on research projects and educational programs in geriatric care for VA 
and community providers.
    VA is working to promote the application of enhanced use leasing 
(EAL) for access to community-provided long-term care and assisted 
living; several projects are in the planning stages.
    Four pilot projects for all-inclusive long-term care and assisted 
living, authorized under P. L. 106-117, have seen selected and funded. 
They will provide numerous opportunities for community collaboration 
for enhanced service delivery and will be thoroughly evaluated over the 
next three years.
    VA is an active participant and visible presence among stakeholders 
in key community healthcare community organizations.
     VA remains the only federal participant in the in the 
National Chronic Care Consortium (NCCC) and the National Alliance for 
Caregiving. Both organizations are important advocacy organizations for 
the improved provision of services in our communities.
    Question 29. Research on drug formularies and their effects on 
physician's ability to prescribe the most effective drug for a specific 
patient, have shown mixed results. However, all research on formularies 
shares one conclusion: good decision-making on product selection 
requires well-informed administrators and good clinical oversight. 
Please describe what changes you would implement, considering that the 
General Accounting Office recently found that better oversight is 
required.
    Answer. Although I have not read the pending GAO report, I have 
been informed that the GAO qualified their recommendation for better 
oversight by reporting that ``veterans are getting needed drugs''. My 
interpretation of the recommendation is that while VA's formulary 
management strategies have improved since the advent of the VA National 
Formulary and continue to evolve, enhancements are needed in the area 
of administrative oversight in order for progress to continue. 
Therefore, based on information provided to me by the Under Secretary 
for Health, and on the assurance that health care to veterans will not 
be compromised, VA will make such enhancements to ensure that field 
managers comply with existing formulary policy.
    Question 30. How would you alter, enhance, or improve the 
coordination of joint procurement of pharmaceuticals between DoD and 
VA? What advantages, savings realized by this joint procurement benefit 
VA specifically?
    Answer. Joint pharmaceutical contracting activities between VA and 
DoD have been an interest of mine since the early 1990s. This interest 
carried over into my capacity as Chairperson for the Congressional 
Commission on Service members and Veterans Transition Assistance. I 
fully support joint pharmaceutical contracting. Soon after taking 
office if I am confirmed, I plan to request a briefing on the status of 
such activities, and emphasize my support for continued progress. The 
primary advantage of joint procurement is that it increases VA's 
capability to treat more veterans within available resources. For 
example, in July 2000, a joint contract was awarded for the drug, 
terazosin, which is anticipated to reduce outlays $23 million annually.
    I believe saving approaching $500 million annually can be achieved 
through joint procurement, universal product numbers and a national 
formulary. These savings can be used to extend the reach of healthcare 
to our nation's veterans.
    Question 31. Please provide some examples of occasions where 
sharing between VA and DoD has been successful--both in terms of 
savings and improvements in the delivery of services.
    Answer. VA has provided me with the following examples where VA and 
DoD have worked together to identify, and attempt to remove barriers to 
sharing between the two Departments. VA would like to be DoD's first 
choice for supplemental care. Some examples of successful sharing 
initiatives include:
     VA, DoD and FOH (Division of Federal Occupational Health 
within the U.S. Department of Health and Human Services) are 
negotiating a contract to provide physical examinations (including 
dental screenings and immunizations) to the Army Reserve and the Army 
National Guard. The goal is to establish a standardized medical and 
dental readiness support system for the Guard and the Reserve while 
introducing the service members to VA's health care system.
     The Army established an infirmary service at the Richmond 
VA Medical Center. The medical center provides living quarters 
(infirmary) for those active duty soldiers who the Army determines to 
be too ill to return to their personal living area on base for 
recuperation. VA identified underutilized space within the medical 
center, where room and board as well as ``sick call'' re-evaluation for 
the soldiers assigned to the infirmary is made each morning. VA, under 
TRICARE, provides health care services required by a soldier beyond the 
scope of the Infirmary Service.
     The Military Medical Support Office (MMSO) in Great Lakes, 
IL, assumed responsibility for managing the Remote Dental Program (more 
than 50 miles from a military treatment facility (MTF)) for Air Force, 
Army, Army and Air National Guard, Navy and Marine Corps active duty 
personnel and authorized Reserve and National Guard personnel. MMSO 
also tracks all active duty members in non-MTFs and authorizes non-
emergency medical care and specialized medical/dental care.
     VA medical centers occupy clinic space provided by 
military facilities as a part of VA's CBOC program. For example, 
Louisville, KY, VA Medical Center manages three of Fort Knox's four 
primary care clinics. VA provides a broad range of services to support 
these clinics including: primary care, urology, orthopedics, women's 
clinic, podiatry, audiology, psychiatry, MRI and other radiology, 
medical library and orothotic laboratory. The Army provides space for 
the clinic, equipment and prescription services.
     The Walter Reed/U.S. Army Allergen Extract Laboratory in 
Washington, DC, provides delivery of diagnostic and therapeutic 
allergen extracts to 29 VA medical centers and outpatient allergy 
clinics. This agreement facilitates the treatment of 1,800 veterans per 
year with allergy injection therapy for allergic diseases such as 
insect venom anaphylaxis, asthma, and allergic rhinitis. In addition, 
it is estimated that over 18,000 veterans are evaluated for allergic 
diseases annually using these high quality diagnostic allergen 
extracts.
     Joint ventures are operating at six sites: Albuquerque, 
NM; El Paso, TX; Las Vegas, NV; Anchorage, AK; Key West, FL; and 
Honolulu, HI.
     There are many other areas in which VA and DoD share 
resources to provide cost effective services to veterans and service 
members, including health information management and technology, 
research, and the Military and Veterans Health Coordinating Board.
    As I stated, I am committed to finding or creating opportunities to 
share resources with DoD in order to expand quality services to 
veterans in a cost effective manner.
    Question 32. The relationship between VA medical centers and 
medical schools has endured for more than 50 years, and has been 
credited with improving quality of care for veterans. These 
affiliations draw the best and brightest physicians, and help VA 
fulfill its research and education missions. I am concerned, however, 
about the viability of the relationship. Please share your philosophy 
regarding the overall value of academic affiliations; including the 
role affiliates play in staffing VA facilities.
    Answer. I consider VA's academic affiliations to be an important 
and unique characteristic of the VA health care system that contributes 
substantially to high quality health care for veterans. A half-century 
ago, a radical strategy was proposed to achieve quality in health care: 
an academic partnership between the Veterans Administration--later to 
become the Department of Veterans Affairs (VA)--and academic medicine. 
This partnership has grown into the most comprehensive academic-health 
system partnership in history. As you are aware, these partnerships 
have expanded over some 50 years to formal affiliations with 107 of the 
nation's 125 medical schools. These affiliations provide the context 
for training that annually affects over one-third of the nation's 
medical resident trainees, including half the nation's third and fourth 
year medical students. In addition, over 54,000 associated health 
trainees in nursing, psychology, pharmacy, and over 40 other 
disciplines receive part or all of their clinical training in VA 
facilities.
    VA has a relationship with its academic partners that has benefited 
both VA and the nation. For example, 70 percent of our medical staff 
are members of a medical school faculty. The presence of teachers and 
learners in a health care setting creates an environment that questions 
and emphasizes current best practices. This benefits veterans' care by 
bringing critical thinking to the bedside and clinic on the one hand, 
and by contributing to the preparation of excellent health 
professionals for the VA and the nation on the other. Academic 
affiliations help VA recruit the best and brightest to care for 
America's veterans.
    Of course, VA exists to provide quality healthcare to veterans and 
that paramount goal must always remain the standard against which any 
decision, including decisions affecting VA's academic partners, is 
measured.
    Question 33. What plans do you have to maintain and improve support 
for the education and research missions at affiliated VAMCs and CBOCs?
    Answer. Since its inception, VA's missions of patient care, 
education, and research have been inextricably intertwined. This 
interrelationship is most pronounced at VA facilities that are actively 
affiliated with medical schools where staff physicians holding joint 
appointments as faculty at the affiliated institution customarily 
provide direct patient care, teach medical students and residents, and 
perform research.
    This close collaboration between VA and its academic affiliates at 
all levels makes a real contribution to improving care for veterans. 
These relationships have played an important part in assuring excellent 
care to the nation's veterans. This was true when the idea of academic 
affiliations was proposed at the end of World War II, and it continues 
to be true over 50 years later. VA's academic mission remains important 
during these times of dramatic change in healthcare. If I am confirmed, 
I will remain cognizant of the importance of this portion of VA's 
mission as I make decisions concerning VHA and veterans' healthcare.
    Question 34. If confirmed, what do you plan to do to strengthen VA 
affiliations? Would you advocate changes in the way VA contracts with 
academic affiliates in light of the financial pressures that health 
care reform places on both academic and VA medical centers?
    Answer. I am informed that VA maintains active dialogues with its 
affiliates regarding the affiliations contribution to improvement in 
many complex areas of change in health care. However, the rapidity of 
change requires extra efforts at communication and I understand that 
VHA is establishing a cadre of VA staff to lead a group to address VA-
academic relations. I support this effort. There are many issues to 
address including ambulatory care and education, primary care, 
specialty care, care for patients near the end of life, systematic 
approaches to improving quality of care, more effective inter-
professional care and education, and more efficient use of scarce 
health care resources. If I am confirmed, I will direct the Under 
Secretary for Health to keep me fully briefed on VA's relationships 
with its academic affiliations and on the opportunities those 
affiliations provide for VA to provide the best approaches for 
continuous improvement of health care for veterans.
    Question 35. Restructuring and downsizing in several facilities 
have led to contracting with community providers for care. Further, 
about half of all CBOCs are run by non-VA providers. How is care 
specifically monitored at these contracts? How will you ensure quality 
at all these contract sites?
    Answer. I am informed that the Department vigorously and completely 
supports the application of quality and safety initiatives related to 
contracted care. The National Center for Patient Safety and the Office 
of Quality and Performance, are completing a VHA directive that 
establishes mandated requirements for all contracted clinical services.
    Regarding the quality of care at CBOCs today, I am informed that a 
recent HSR&D study showed that care provided at CBOCs was substantially 
consistent with the quality of that provided by the parent VA medical 
center.
    VHA's External Peer Review Program (EPRP) is a contracted review of 
care specifically designed to collect data to assess and improve the 
quality of care delivered to veterans. I am informed that, beginning in 
3rd quarter FY 2001, EPRP will revise its sampling process to assure 
that a sufficient number of CBOC cases are included to allow for 
benchmarking to care provided at VHA facility-based clinics.
    I believe that veterans who look to VA as their healthcare provider 
should receive high quality healthcare, without regard to whether that 
care is provided directly by VA or by contract with a community 
provider. I will hold the Under Secretary for Health accountable for 
ensuring that quality remains a high priority no matter how VA care is 
delivered.
    Question 36. Has VA developed a coherent and consistent plan for 
quality management that systematically monitors, assesses, and 
documents the quality of care provided to veterans? In addition to 
programs, which mainly monitor structure and process, does the VA have 
a program that monitors and documents health improvement outcomes?
    Answer. It is my understanding that VHA's Performance Measurement 
Program (PMP) is the primary mechanism by which VHA assesses the 
quality of care provided to Veterans. PMP provides the critical linkage 
between clinical activities and VHA's strategic goals for 2006 through 
measures designed to assess actual clinical performance at the 
National, Network, and Medical Center level.
    I have been informed by VHA that each of its performance measures 
maps directly to VHA's six strategic goals for 2006 (known as ``6 for 
2006''):
     Put quality first until first in quality
     Provide easy access to medical knowledge, expertise, and 
care
     Enhance, preserve and restore patient function
     Exceed patients' expectations
     Maximize resource use to benefit veterans
     Build healthy communities.
    I am informed that PMP supports identification and system-wide 
adoption of best practices while providing managers and clinicians with 
reliable data from which they can assess their effectiveness in 
implementing those practices. PMP provides timely, internal and 
external comparative performance data--as well as longitudinal data, 
thereby creating a culture of sustained improvement.
    VHA reports that the measurement system is grounded in scientific 
methods of data measurement, which require precise data definitions, 
collection, and validation. Statistically valid sampling, and frequent 
feedback to accountable managers, is provided to assess progress toward 
goals. The Performance Measures Workgroup actively manages measures for 
achieving performance targets.
    In response to the question on outcome measures, the Under 
Secretary for Health advised me that VHA has made great progress in 
this area. PMP has evolved to include many measures that are standard, 
accepted proxies for patient outcomes. Additionally, VHA has 
incorporated measures of functional outcomes with special populations.
    I am advised that reliable and valid tools that measure and 
evaluate functional outcomes are now being used to assess the quality 
of care provided to patients with the diagnosis of traumatic brain 
injury, stroke, amputation, and blind rehabilitation. VHA recently 
implemented outcome measures for rehabilitation patients that assesses 
the change in functional status from admission to discharge. The 
instruments utilized for assessing function will allow future outcome 
comparison with the private sector. VHA continues to work closely 
internally to evaluate and develop measures for other special 
populations such as serious mental illness, PTSD, substance abuse, and 
homeless Veterans. VHA is implementing measures developed in the 
broader health services research community, and VHA is pioneering 
measures associated with better outcomes where none exist.
    Question 37. Do you believe that VA's current information systems 
are up to the task of collecting, storing, translating, and 
transporting timely and accurate care quality data in a way that is 
accessible to clinicians?
    Answer. No.
    Question 38. How will you involve senior VHA leadership, Congress, 
veterans service organizations, affiliates, and other stakeholders in 
decisions related to the CARES initiative?
    Answer. I need to be thoroughly briefed on the scope, process and 
goals of CARES before I can intelligently respond to this question. 
Conceptually, I have long believed that VA needs to align its capital 
assets to the needs of veterans and the changing dynamics of healthcare 
in America. CARES is ambitious and could be an important undertaking by 
the Department. I understand that, under the CARES plan, the draft 
conceptual options will be provided to veterans and their 
organizations, as well as other stakeholders for immediate input, when 
they are developed by the consultant.
    I am informed that during the development of the CARES process, 
every effort was made to incorporate a true ``One-VA'' approach. 
Departmental offices of Management and Strategic Planning, as well as 
VBA and NCA have been involved in the criteria and prioritization of 
criteria categories. A variety of departmental leadership will be 
members of the National CARES Steering Committee, the oversight 
leadership group for CARES. The CARES evaluation criteria were 
developed to acknowledge the interest of, and provide a quantifiable 
weighting factor for, affiliates, veterans and their representative 
organizations, communities, and other stakeholders. VHA has briefed 
Congressional Committees, staff, and GAO on the CARES process. Periodic 
briefings will continue throughout the process. The VA CARES team and 
consultant are developing a communications plan highlighting critical 
milestones for interactions with stakeholders, as well as identifying 
the most appropriate method for those interactions.
    Question 39. VA's long history of insufficient construction funding 
has resulted in an aging infrastructure with urgent maintenance needs. 
A 1998 Price Waterhouse study for the VA recommended that 2-4 percent 
of a facility asset's replacement value should be spent each year for 
facility improvement. In the face of steady decreases in the annual 
construction budget, especially during the implementation of CARES, how 
will VA ensure construction or renovation of facilities essential to 
new medical center missions and laboratory research?
    Answer. It is my understanding that the VA health care system's 
future construction budget requests will reflect the need to implement 
CARES decisions, as well as to correct seismic safety concerns, and 
provide for an orderly reinvestment in the system's infrastructure. 
These investment decisions will come after careful consideration of the 
health care needs of enrolled veterans and options available to meet 
those needs. A system as large as VHA's cannot maintain quality and 
productivity over time without appropriate recognition of the need to 
sustain appropriate infrastructure. The first CARES studies will be 
done in FY 2001 and are expected to identify options for reengineering 
VHA's physical infrastructure. Implementing these options may require 
construction funding. However, the absence of a completed CARES study 
should not prohibit consideration of a needed project if that project 
can be justified on the basis of careful analysis and prioritization.
    Question 40. As Chair of the Transition Commission, you advocated 
moving many of VA's fee-for-service programs into DoD's TRICARE 
program. Although this might provide purchasing leverage, I fear that 
difficulties in obtaining specialty care through TRICARE would be 
especially damaging to the veteran population, with its inherently 
specialized needs. What would you do to ensure that sharing of programs 
between VA and the Department of Defense preserved capacity and quality 
for specialized services such as mental health, long-term care, spinal 
cord injury rehabilitation, etc.?
    Answer. The Commission's recommendation to move VA's fee-for-
service programs into DoD's TRICARE program was directed to VA paid 
care for those VA patients whom VA had already determined that it could 
not economically provide appropriate direct care. I would not support 
such an approach if it would diminish VA's specialized services such as 
mental health, long-term care, spinal cord injury rehabilitation, etc.
    Question 41. What is the current legal status of agreements between 
DoD and VA hospitals previously found to violate contracts with TRICARE 
providers?
    Answer. I am informed that in May 2000, DoD's Office of Health 
Affairs issued a policy memorandum, ``Use of Health Care Facilities of 
the Department of Veterans Affairs under TRICARE and the Supplemental 
Health Care Program,'' to clarify relationships between VA medical 
facilities and military medical facilities. I am informed that the 
policy issue has been resolved and that VA is working with DoD to 
receive reimbursement for unpaid or underpaid claims.
    Question 42. What is VA's role in ensuring that men and women who 
serve in our nation's military are protected from toxic exposures that 
might ultimately harm them?
    Answer. I am informed that VA plays a key role in coordinating with 
DoD and HHS to address health consequences of military service. These 
programs are collaboratively managed through the Military and Veterans 
Health Coordinating Board. VA has health surveillance research and 
health risk communication programs to address these concerns and 
communicates its findings to veterans and their families, to VA health 
care providers, and to our counterparts in the Department of Defense 
(DoD). For example, VA conducts a health surveillance program for those 
Gulf War veterans wounded with depleted uranium (DU) munitions in 
``friendly fire'' incidents during the Gulf War. Findings from such 
programs can help to provide better health care for affected veterans, 
and in some cases may help DoD to identify approaches to minimize 
effects from toxic exposures in the first place.
    Question 43. A final action plan to implement the interagency VA/
DOD/HHS National Center for Military Health and Deployment Research 
project has finally been released. How would you assess the importance 
of this center to VA's mission, and how will you support continued 
interagency cooperation?
    Answer. Since the Gulf War, I believe that VA, HHS and DoD have 
actively collaborated on Gulf War veterans' health issues. Nowhere has 
the impact of this collaboration been greater than in establishing Gulf 
War research goals, and in identifying critical gaps in our knowledge. 
As a result, today, collectively, VA supports about 192 federally 
funded research projects with projected cumulative expenditures of $155 
million towards Gulf War illnesses research. The National Academy of 
Sciences proposed that this highly successful interagency collaboration 
be formalized as the interagency National Center for Military Health 
and Deployment Health Research. This collaboration has been enormously 
important to VA's mission to care for veterans, and as Secretary, I 
would provide continued encouragement and support for this effort.
    Question 44. Many veterans, especially vulnerable populations, rely 
upon the specialized services of the VHA. Many of these services, like 
spinal cord injury, blind rehabilitation, and prosthetics, are unique 
to the VA and are unmatched by the private sector. In an era of 
declining budgets and decentralization of funds, please describe for me 
your commitment to maintaining VA capacity in these programs. How will 
you ensure compliance in preserving the quality and capacity of these 
programs at the VISN level?
    Answer. I am, and have always been, strongly committed to VA's 
specialized programs such as spinal cord injury, mental health, blind 
rehabilitation, and prosthetics. VA policy decisions are made at the 
Secretarial level. I expect those policy decisions to be implemented 
accordingly throughout the VA. I will not accept any deviation from 
that policy at any level, including the VISNs. Decentralization of 
management authority and responsibility to VISN directors does not 
allow them to make individual decisions that would have the effect of 
negating my decisions. I intend to monitor compliance with this 
closely.
    Question 45. Please describe the priority that you believe VA 
should place on providing care to veterans with PTSD, and how would you 
ensure that priority is manifested in budget requests and programmatic 
planning?
    Answer. VA is a recognized leader in PTSD treatment. I support this 
leadership role. I am informed that VHA policy is to accord mental 
health programs, including those for treatment of PTSD, an equal 
priority for treatment as medical/surgical and all other health care 
services. Thus, veterans requiring care for PTSD have the same priority 
as other veterans for care. In addition, Public Law 104-262, requires 
VA to maintain its capacity to provide care for disabled veterans in 
specialized treatment programs including those with PTSD. VA reports to 
Congress annually on the maintenance of capacity for PTSD and other 
special emphasis populations. To ensure that this care is provided, 
Directive 99-030, published June 30, 1999, on ``Authority for Mental 
Health Program Changes'' requires that any major change to a mental 
health service or program proposed by a field unit shall require review 
and endorsements by the Mental Health Strategic Heath Care Group in 
Headquarters and approval from the Office of the Under Secretary for 
Health. Finally, Public Law 106-117, the Veterans Millennium Health 
Care and Benefits Act authorized additional funding for PTSD program 
development, resulting in over $5 Million directed to new programming.
    Question 46. Please give your general view of the Readjustment 
Counseling Service (RCS) and its role within VHA.
    Answer. I want to ensure that Vet Centers continue to provide 
effective and meaningful service to the changing veteran population. 
The Vet Center mission is to welcome veterans home with honor, 
clinically assist veterans to resolve war trauma, and to help them 
improve their post-military level of economic and family functioning. 
General hallmarks of the Vet Center program include accommodation of 
services to local veterans' needs, a full range of community-based 
service functions, trauma counseling for war trauma and military-
related sexual trauma, veteran consumer-oriented attitudes and other 
practices aimed at promoting ease of access and a holistic approach to 
improving veterans' functioning within the community.
    In 2000 the Vet Centers saw over 130,000 total veterans and 
provided over 890,000 visits to veterans and family members. 
Approximately 50,000 of the veterans served at Vet Centers were not 
seen in any other VHA facility. For many veterans who would not 
otherwise receive VA assistance, the Vet Centers are the community-
access point for VA health care. Vet Centers make over 100,000 
referrals annually to VA medical facilities. In addition, the Vet 
Centers make over 120,000 referrals annually to VA Regional Offices for 
claims work, and over 115,000 referrals annually to non-VA community 
service providers.
    The Readjustment Counseling Service Vet Center program can be an 
invaluable resource for responding to veterans' war-related 
readjustment and health care needs, and as an important component 
within VHA for addressing such needs of veterans within or close to 
their communities.
    Question 47. What efforts are being made by VA to ensure a seamless 
mental health care delivery system for veterans being treated for PTSD?
    Answer. Mental health services an integrated component of VA health 
care. VA's mental health programs are part of its uniform benefits 
package and treated on parity with medical services. VA has published 
evaluation reports on care in all specialized PTSD programs since 1990, 
and provides annual written evaluations to all VISN Directors and 
Medical Center Directors. The Mental Health Strategic Healthcare Group 
also provides process and outcome monitoring on all PTSD programs and 
consults with local facilities where significant changes in PTSD 
programming are contemplated and where PTSD programming appears to have 
gaps.
    Question 48. With regional centers being used for specialized care, 
especially for centers for the blind, do you see a need to review VHA's 
beneficiary travel policy?
    Answer. I have not had the opportunity to be briefed on current 
beneficiary travel issues. I am aware that VA has long had regional 
centers for providing specialized care, however, I will request that 
VHA brief me on the beneficiary travel program and any emerging issues.
    Question 49. Ten years after the Gulf War, the VHA still cannot 
tell us whether ill Gulf War veterans are getting any better as a 
result of their care at VA medical centers. What will you do to improve 
this situation and potential future post-deployment health care 
programs for veterans?
    Answer. The modern technological battleground presents new 
challenges for VA in both healthcare and adjudication of disability 
claims. I am not sure that VA's response has been adequate.
    VA's experience treating Gulf War, Vietnam and other veterans has 
taught us that new approaches are needed to address all veterans' 
health needs. Combat casualties are not always obvious wounds, and some 
veterans inevitably return with difficult to diagnose, yet 
debilitating, health problems. Unfortunately, we do not yet fully 
understand the causes of many of the illnesses suffered by veterans 
returning from wars and peacekeeping missions, and therefore we often 
have difficulty finding effective treatments. To respond to this need, 
VA is establishing national Centers for the study of war-related 
illnesses and post-deployment health issues. VA must become more 
proficient at responding to these challenges and I intend to take a 
leadership role in seeing that it does so.
    Question 50. Hepatitis C is a devastating disease with a 
disproportionately high incidence in the veteran population. Will you 
support VA's recent decision to enfold hepatitis C prevention and 
treatment programs into the existing HIV/AIDS program office? How do 
you envision that the VA can use its resources most effectively to 
educate veterans about prevention and provide the most appropriate 
treatment for these complex and chronic diseases?
    Answer. Although I have not reviewed VA's recent decision, it is my 
understanding that the Veterans Health Administration did not 
incorporate HCV into HIV programs but rather is creating a Public 
Health Strategic Health Care Group in which both the Hepatitis C, HIV 
programs and other programs will be managed. Both HIV and Hepatitis C 
represent very complex and challenging chronic illnesses sharing many 
of the same risk factors. While there is treatment available for both, 
this treatment is difficult for patients and only a minority of 
patients are able to tolerate therapy. Also, outreach for early testing 
and counseling plays a crucial role in management of both HCV and HIV 
and in the prevention of transmission to others. Both of these diseases 
are not only major public health threats to our veterans and our 
nation, they are also epidemic at an international level.
    Veteran populations may be at higher risk because of combat 
exposures to blood; blood transfusions that occurred prior to 1992; 
unprotected sex with sexual partners with hepatitis C; or exposures to 
shared needles, including those used for drug use or tattoos. Some 
initial data from small surveys suggest that approximately 6 to 10% of 
veterans may test positive for Hepatitis C. Over 69,000 veterans who 
are currently receiving care from the VA health care system have a 
diagnosis of Hepatitis C.
    I have not been fully briefed regarding VHA's Hepatitis C program, 
however, I will emphasize:
     Hepatitis C awareness programs to educate veterans about 
the risk factors for Hepatitis C and encourage them to get tested at 
their local VA medical center or outpatient clinic.
     Efforts to ensure that VA clinicians are provided with the 
most up-to-date scientific information about Hepatitis C in order to 
deliver the highest quality care to veterans with Hepatitis C, as well 
as to assist those at risk to prevent becoming infected with the virus 
that causes Hepatitis C.
     Providing multiple avenues of access to veterans who wish 
to be tested for Hepatitis C.
     Appropriate oversight and quality management activities to 
track the impact of Hepatitis C among veterans as well as continually 
improve Hepatitis C care and prevention in VHA.
    Question 51. VA Research not only makes a major contribution to our 
national effort to combat disease, but also serves to maintain a high 
quality of care for veterans through its impact on physician 
recruitment and retention. Does it make sense to limit the scope of 
research performed in VA facilities?
    Answer. I strongly believe that VA research is mission-driven. Its 
purpose is to serve the high priority health care needs of veterans, 
and it is appropriate to restrict the program to that mission. 
Nevertheless, VA research includes a very broad range of studies, from 
basic molecular biology and genetics to large-scale clinical trials, 
rehabilitation research, and health systems and outcomes research. 
Because VA research is nested within a health care system, it serves as 
a unique and very valuable national resource for improving health care 
for veterans and for all Americans.
    VA research is an intramural program. The Medical and Prosthetic 
Research appropriation is allocated to VA facilities to conduct 
research on veterans health care needs under the supervision of VA 
employees. Unlike NIH and some other federal agencies, VA does not make 
research grants to colleges and universities, cities and towns, or any 
other non-VA entity. This intramural program serves as a recruitment 
and retention tool that helps VA recruit the best and brightest 
clinicians to provide health care to veterans and conduct research. As 
an index of that quality, 70% of VA staff physicians have faculty 
appointments at affiliated medical schools. While the proportion of 
funded physician-scientists in the private sector has declined steadily 
over the past two decades, clinicians continue to constitute 70% of all 
VA investigators. In a recent national survey of VA scientists, more 
than 60% of respondents said they would not work for the VA if no 
research opportunities were available.
    Although there are some limitations on the scope of VA research, I 
am informed that 84% of respondents in the same survey were satisfied 
with their autonomy to choose the direction of their research.
    I will also work to make sure that VA gets credit for the findings 
of researchers who are funded by VA for their work. VA's research 
program is important to veterans and to the American people and over 
the long run support for that research program requires the American 
people to know what they are getting for their money.
    Question 52. What should be the role of the Secretary in guiding VA 
research?
    Answer. I believe the Secretary provides guidance to assure that VA 
research remains focused on such high priority health care needs of 
veterans and the VA health system as:
    The Secretary should encourage and, where possible, facilitate 
collaboration between the VA research program and other public and 
private sector sponsors of research. Collaborative relationships that 
already exist, such as those with NIH, DoD, the Juvenile Diabetes 
Foundation, and the pharmaceutical industry, have proven effective in 
leveraging the VA research appropriation to create a more efficient and 
effective research enterprise.
    The Secretary should continue to seek advice from Veterans Service 
Organizations, the affiliated academic community, the VA's National 
Research Advisory Council, the National Leadership Board, and the 
intramural research community represented by the Office of Research and 
Development in formulating guidance for the VA research program.
    Question 53. The 2001 DoD Appropriations bill allows retirees and 
dependents to keep CHAMPUS/TRICARE coverage after they turn 65 and 
change to Medicare coverage. CHAMPVA, however, has not been similarly 
reformed. Dependents of service-connected disabled veterans who receive 
enhanced compensation for such dependents, and survivors of service-
connected veterans who receive DIC payments, will be denied CHAMPVA 
(and its drug coverage) when they turn 65. Would you support a similar 
reform for CHAMPVA?
    Answer. Under 38 USC section 1713, the CHAMPVA program is required 
to provide benefits similar to that of the TRICARE/CHAMPUS program. VHA 
advises that a proposal to address these new benefits is currently 
being developed. While I am inclined to be supportive of these efforts, 
I want to be more fully briefed on the matter before coming to final 
conclusions.
    Question 54. Do you believe that the VA should contribute funds to 
assist the government's efforts to be indemnified for their medical 
expenses associated with tobacco-related diseases?
    Answer. Money appropriated to VA should be used for veterans 
benefits and services.
    Question 55. 1 understand you have visited several programs for 
homeless veterans over the last few years. Given that the findings of 
the National Survey of Homeless Providers and Clients indicated that 
one-third of homeless adult men and one-quarter of all homeless adults 
are veterans, do you believe that this problem has been adequately 
addressed by the Department of Veterans Affairs?
    Answer. I believe that VA has made significant progress in 
developing programs and services for homeless veterans. In 1992, when I 
was Deputy Secretary, Congress passed Public Law 102-590, the Homeless 
Veterans Comprehensive Services Program Act of 1992. This law 
authorized VA's Homeless Providers Grant and Per Diem Program, the 
further development of Comprehensive Homeless Centers and the placement 
of Veterans Benefits Counselors in Homeless Veterans Treatment Teams. I 
fully supported this legislation.
    Several years later, I served as Chair of the Congressional 
Commission on Servicemembers and Veterans Transition Assistance. Our 
report to Congress recommended that VA's Homeless Providers Grant and 
Per Diem Program be funded at $50 million per year beginning in FY 
2000. I understand this program is currently funded at approximately 
$32 million.
    I understand that VA's FY 2000 medical care appropriation included 
an additional $50 million for homeless veterans programs and those 
funds have been used to:
     Expand outreach, case management and contract residential 
treatment for homeless veterans across the country.
     Support Stand Downs for homeless veterans.
     Establish special demonstration programs for homeless 
women veterans, hospitalized homeless veterans and seriously mentally 
ill veterans.
     Establish special demonstration dental programs for 
homeless veterans in rehabilitation.
     Develop additional therapeutic employment programs for 
homeless veterans.
     Initiate the Loan Guaranty for Multifamily Transitional 
housing for Homeless Veterans Program.
     Enhance VA's monitoring and evaluation of VA's homeless 
veterans programs.
    These new and expanded initiatives clearly show VA's strong 
commitment to addressing the needs of homeless veterans. As the 
Secretary of the Department of Veterans Affairs, I will use VA's 
existing foundation of homeless veterans programs to strengthen VA's 
partnerships with community-based providers so that, together, we can 
better serve homeless veterans.
    Question 56. Public Law 106-377 funds the Interagency Council on 
Homeless and makes the Secretary of Veterans Affairs a rotating chair 
of the Council. What plans do you have to improve services for homeless 
veterans and their families in this leadership role?
    Answer. While I have not yet been briefed on the provisions of PL 
106-377, I support as a matter of principle coordination of services 
across all federal departments and agencies. I would like to see the 
Interagency Council play a more active role in developing guidance and 
establishing interagency goals to address the needs of the nation's 
homeless population, especially the population of homeless veterans.
                                 ______
                                 
     Response to Post-Hearing Questions Submitted by Hon. John D. 
                 Rockefeller IV to Anthony J. Principi
    Question 1. What percentage of VA's community-based outpatient 
clinics (CBOC's) provide mental health services, and of those, what 
percentage provide more than minimal mental health services, such as 
assessments? What do you believe is the right mix of services for 
CBOC's to offer?
    Answer. A recent report from the VHA Committee for Severely 
Chronically Mentally Ill Veterans to the VA Policy Board states that 
nationally, in FY 2000, 55.2% of CBOCs provided mental health care to 
at least 2% of unique patients, varying among VISNs from 15.8% to 
94.1%. The national percentage. decreases to 21.9% of CBOCs at the 20% 
level and varied, depending upon the size of the CBOC (smaller clinics 
providing a lessor percentage of mental health care). In FY 1999, 62% 
of all VA primary care patients were screened for depression, an 18% 
increase from the previous year. Ideally, every enrolled veteran should 
have access to mental health services anywhere in the country, at 
parity with medical services. Practically, the right mix of mental 
health services depends upon the size of the clinic, driving distances 
to clinics, availability of mental health professionals in a given 
area, and local practice patterns. VHA is forming an expert panel to 
work with VISN representatives to come up with appropriate standards 
for providing mental health services in both rural and urban CBOCs.
    Question 2. The Veterans Millenium Health Care and Benefits Act 
(Public Law 106-117) mandates reimbursement for emergency treatment in 
non-VA facilities for certain veterans. If confirmed, what will you do 
to expedite the implementation of this provision?
    Answer. The timely implementation and provision of expanded veteran 
health benefits remains a high priority for the Department. I am 
advised that the regulations for the emergency care provision were 
completed and forwarded to OMB for review on November 22, 2000. A 
meeting was held with key VHA and OMB officials to discuss the 
Department's proposed regulation during January 2001. OMB requested 
additional information on the Department's financial impact and demand 
forecast, which was developed by an independent actuarial firm. OMB 
officials also requested additional information on the development of 
the OMB collection burden information. In addition, the Under Secretary 
has charged a workgroup to develop the business processes required for 
implementation of centralized emergency care claims processing to 
include handling of electronic claims. I will need to be fully briefed 
on these issues before authorizing publication of the final 
regulations. VA is currently collecting the claims, but cannot process 
them until the regulations are final.
    Question 3. Recent pilot programs to improve care delivery to 
elderly veterans have focused on Interdisciplinary care management 
teams. If confirmed, how will you continue to explore and expand this 
sort of case-based approach to long-term care?
    Answer. VHA advises that the Long-Term Care pilots that were 
authorized by the Veterans Millennium Health Care and Benefits Act will 
test three different models for all-inclusive care of the elderly. 
These programs will begin in February 2001 and will be evaluated over a 
three year period. These clinical demonstrations will provide data on 
the effectiveness of each model in improving the care delivery to 
elderly veterans.
    A decision has been made to adopt a standardized screening 
instrument to be used by the clinical team in determining a veteran's 
need for long-term care. It is anticipated that VA will continue to 
utilize interdisciplinary care management teams in its well-established 
geriatric evaluation and management programs and long-term care 
admission and discharge planning committees.
    Question 4. What is your view of the use of assisted living 
facilities as an alternative to nursing home care?
    Answer. VA's goal for patients needing Long Term Care has always 
been to utilize the least restrictive setting such as the Community 
Residential Care and the VA and State Domiciliary programs. VHA advises 
that the Assisted Living Pilot program authorized by the Millennium Act 
will begin in February 2001 and will be evaluated for a 3-year period. 
The evaluation data of this pilot will help us determine the 
feasibility of VA providing, either directly or by contract, for this 
level of care in the future.
    Question 5. In the last year, VA completed a Department-wide risk 
assessment of computer security vulnerability and initiated an 
accelerated security program to address weaknesses. How will you ensure 
that plans to protect patient privacy, such as controlling user access 
authority and monitoring network security, are implemented 
comprehensively across VISN's and throughout medical centers?
    Answer. I will ensure implementation of and compliance with 
security plans and privacy directives throughout the VA by first making 
it known to every VA employee and contractor that the privacy and 
security of medical records are as important as their accuracy. If 
veterans cannot trust that we will zealously guard their personal 
information, they will not entrust it to us. I will continue the 
recently initiated policy of making security a measured critical 
success factor in all senior managers' annual performance plans. I will 
see that the VA security program is adequately funded so that 
appropriate technology is available to allow for a single logon regime, 
role-based access, and stringent network intrusion detection. I will 
ensure that VA is fully compliant with all relevant laws and 
regulations, such as those contained in the Health Insurance 
Portability and Accountability Act (HIPAA). I will ensure that 
comprehensive policies and procedures are implemented to 
institutionalize the protection of medical records throughout VA.
    Question 6a. Although VA and DoD have made progress in joint 
procurement of medical supplies, a recent report from both departments 
suggests that optimal sharing will result in a smaller combined annual 
savings than the $295 million projected by the General Accounting 
Office, and will fall far short of the $500 million that you predict. I 
am concerned that focusing on shared programs before we have 
established good oversight of VA's efforts--such as its evolving drug 
formulary--might result in trading veterans' services for an uncertain 
economic benefit. How will you pursue combining VA and DoD efforts 
without endangering our abilities to provide veterans with the best 
possible health care?
    Answer. I would not pursue any sharing with DoD that would decrease 
VA's ability to deliver the best possible health care. Having said 
that, I do not believe that the two Departments are doing all they can 
to improve the mutual use of our respective resources. I believe that 
access and patient satisfaction can in fact be improved if we put our 
parochial differences aside and focus instead on the needs of the men 
and women we are pledged to serve. If we can reduce the expense of 
pharmacy purchasing, we can purchase more pharmaceuticals. Our focus 
should be on ``win-win'' opportunities, both large and small, that can 
benefit both Departments and our beneficiaries.
    Question 6b. Please describe the plan encompassed in your 
prehearing statement that NA would like to be DoD's first choice for 
supplemental care.''
    Answer. My prehearing statement did not refer to a specific plan. 
Rather, I was suggesting that VA and DoD would benefit from a mutual 
review of VA's role in providing care to DoD beneficiaries. At present, 
DoDs model is to first provide care in its own facilities, and second, 
to purchase care through the TRICARE networks. This model has led to 
uncertainty regarding DoDs policy regarding the use of VA facilities, 
and confusion with respect to VA's role. My prehearing statement simply 
reflected my belief that VA could in fact be DoD's first choice for 
care not provided in a DoD facility. Care that could not be delivered 
in either a DoD or a VA facility could then be purchased through the 
TRICARE networks. As I have indicated previously, in no event would 
care for DoD beneficiaries be undertaken without assurance that VA's 
beneficiaries would not suffer.
    Question 6c. Please describe how you would ensure that VA's 
formulary committees, Medical Advisory Panel, and the Pharmacy Benefit 
Management Group are kept well informed.
    Answer. VHA advises that all decisions regarding formulary 
management initiatives including national contracting and joint 
contracting are reviewed by VA's formulary committee, Medical Advisory 
Panel and Pharmacy Benefit Management Strategic Healthcare Group. All 
such efforts require their support and concurrence. All actions begin 
with a clinical review of the issues, assuring that the care of 
veterans is the first concern. If these organizational elements do not 
agree that joint procurement is in the best interest of veterans, VA 
does not participate in that action. VA will continue to consider all 
joint procurement actions from the clinical perspective and the care 
needs of veterans.
    Question 7. In your responses to my pre-hearing questions, you 
stated that VA's current information systems are unequal to the task of 
collecting and delivering care quality data to administrators and 
clinicians. Do you see this as an obstacle to systemwide quality 
monitoring? How would you approach this problem?
    Answer. I believe that timely availability of reliable data is 
essential to effective, system-wide quality monitoring. As I have 
stated in response to a previous question, I will not be able to 
provide a comprehensive answer until I have been more fully briefed on 
this matter by VHA officials and my Chief Information Officer. In the 
next several months, I will look forward to learning more about the 
existing system capabilities and developing plans for significant 
system improvement.
    Question 8. How would you ensure that VHA has a functional Quality 
Advisory Board, representative of the entire health care system, that 
meets regularly to evaluate program success?
    Answer. I am advised that late last year, the Under Secretary for 
Health recognized the need for the establishment of a new national 
level committee to provide oversight on quality and safety issues and 
policy. Membership is comprised of the Under Secretary for Health 
(Chair), the Chief Officer for Quality and Performance, the Chief 
Network Officer, the Medical Inspector, the Chief Officer for Patient 
Care Services, and the Senior Advisor for Quality for the Under 
Secretary for Health. It was determined at the initial meeting that the 
body would begin routine meetings, on a monthly basis, beginning in 
February 2001. I look forward to receiving a follow-up analysis from 
the Under Secretary for Health as to the results being achieved by this 
new oversight process.
    Question 9. In your view, are VA's quality management programs 
being routinely monitored to determine if they are attaining the 
desired results? What steps has VA taken to validate the data it 
currently uses in documenting its current quality of care structures, 
processes, and health outcome improvements?
    Answer. VHA reports that local quality management programs include 
performance improvement, risk management (including patient safety and 
infection control), utilization review, and credentialing and 
privileging. Structurally, these programs are monitored by dedicated 
staff and processes at the local, network, and headquarters level. 
External accreditation evaluations and the network performance plans 
(which include a broad array of structure, process, and outcome 
measures) provide mechanisms to routinely monitor these programs.
    VA uses highly credible external organizations, e.g., West Virginia 
Medical Institute, Inc. (WVMI), Joint Commission on Accreditation of 
Healthcare Organizations (JCAHO), and Commission on the Accreditation 
of Rehabilitation Facilities (CARF) for accreditation and data 
collection. For example, WVMI uses internal quality control processes 
that are capable of identifying unexplained variations in data. This 
process has successfully identified variance in performance by WVMI 
abstractor personnel and is capable of identifying unlikely practice 
patterns within a facility that, once identified, would trigger further 
review by VHA. VHA evaluates the validity of its data by trending 
performance measures over time, comparing data amongst facilities and 
networks, and when applicable, comparing data to similar data from non-
VHA facilities.
    Question 10. How will you ensure that the Office of the Medical 
Inspector maintains its independence and is included in the decision-
making processes that affect quality management programs?
    Answer. VHA advises that the Office of the Medical Inspector (OMI) 
reports directly to the Under Secretary for Health and makes 
assessments of the quality of patient care and quality assurance 
programs throughout the VA health care system. The OMI evaluates 
allegations of less than acceptable care; and when substantiated, 
assesses management controls designed to prevent and detect therapeutic 
misadventures, develops recommendations for corrective action to 
preclude reoccurrence, and reports evaluation results to the Under 
Secretary for Health. The Medical Inspector is a member of the new 
quality oversight committee established late last year--discussed in 
response to question 8.
    Also, Public Law 100-322 requires the Office of the Inspector 
General to oversee, evaluate, and report on the patient care and 
quality assurance activities of VHA, including the OMI. This provision 
was created specifically to ensure that the OMI is allowed to maintain 
its independence while organizationally placed within VHA.
    Question 11. Do you think VERA is a fair way to allocate funds? 
Does VERA sufficiently allow VA managers to sustain programs for high 
cost patients and patients in need of specialized services?
    Answer. I am told that the VERA methodology is still an equitable 
model for distributing funds to the 22 networks. As directed by the 
Senate, VA has contracted with a Federally Funded Research and 
Development Center to determine whether the VERA methodology leads to a 
distribution of funds that covers the special needs of some veterans, 
and also to investigate the progress of this funding allocation method. 
VA recently entered into a contract with the RAND Corporation to 
conduct this study and the results are due to Congress no later than 
August 15, 2001. I will give this study, along with the ongoing GAO 
VERA audit, careful consideration. If this study identifies problems in 
VERA resource allocations, VA will review and refine the VERA 
methodology and will act as quickly as possible to resolve any 
inequities. There are several VERA workgroups, comprising VHA field-
based and headquarters staff, that provide ongoing evaluation of the 
VERA methodology and input on policy issues to improve VERA. I assure 
you that VA is open to future adjustments, refinements, and 
improvements to the VERA methodology if problems are identified.
    Question 12. In October 1998, VA contracted with Price Waterhouse 
to evaluate VERA. The contractor recommended a series of refinements--
most notably, that VA implement a transfer pricing system. What effect 
have these recommendations had?
    Answer. I am advised that as a result of the study, VA has 
simplified data inputs, and has completed a three-year phase-in of 
revised methodologies for equipment and non-recurring maintenance 
components. The labor adjustment is now based on a single national 
market basket for labor. The patient classification system has been 
evaluated and revised. Classification of patients on the basis of 
diagnostic and functional data instead of utilization characteristics 
is being evaluated for a potential change in FY 2003. Review of data 
accuracy and accountability has been strengthened, and the allocation 
process timetable has been clarified and improved. Finally, a 
suggestion box has been established electronically and is accessible to 
all VA employees.
    The VERA Care Across Networks Workgroup studied the need for a 
transfer pricing system to account for patients that receive care in 
more than one network. Under a transfer pricing methodology, networks 
would receive an annual price for their ``enrolled'' patients and be 
required to compensate other networks that care for their enrolled 
patients. As part of a comprehensive review, the group conducted a 
transfer pricing pilot project to assess the impact of implementing a 
program within VA. As part of the pilot study, a software package was 
developed and National Medicare rates were used to price out of network 
care. The objective of the pilot project was to assess the financial 
and clinical impact of implementing a transfer pricing program. After 
extensive analysis, the workgroup concluded that the costs of 
implementing a transfer pricing system far outweighed the benefits of 
such a program. In addition, there was no clinical evidence that 
transfer pricing improved the coordination of clinical care for 
patients that receive care in more than one network. The workgroup 
recommended that the VA not implement transfer pricing and instead 
retain the existing pro-rated person (PRP) methodology to account for 
care across networks. The Under Secretary for Health approved that 
recommendation in March 2000. As a bi-product of the pilot project, all 
networks were provided the opportunity to use the pilot test software 
to review the volume and clinical care patterns of patients receiving 
care outside their enrolled network. The software was provided to all 
networks in FY 2000. I look forward to further discussions with the 
Under Secretary for Health on this issue.
    Question 13. What efforts are being made today to ensure that Gulf 
War veterans, still suffering from undiagnosed illnesses, are receiving 
the specialized care they need at their local VA medical centers? Are 
the efforts consistent among medical centers and across VISNs?
    Answer. VHA reports that most Gulf War veterans coming to VA 
medical centers have commonplace symptoms and receive conventional 
diagnoses and treatments. Nevertheless, some veterans have occasionally 
debilitating symptoms that cannot be diagnosed even after thorough 
medical work-ups at VA medical centers. To address this issue, in 
August 1992 VA established the Gulf War Referral Centers for Desert 
Storm veterans. The four referral centers at Houston, Texas, 
Washington, DC, West Los Angeles, California, and Birmingham, Alabama 
provide for inpatient stays for observation, multidisciplinary 
consultation, documentation of lengthy occupational and exposure 
histories, and an opportunity for frequent re-examination. The centers 
place an emphasis on specific symptom complexes, such as undiagnosed 
illnesses, chronic fatigue, memory loss and other neurologic 
conditions, unexplained weight loss and other adverse health conditions 
possibly associated with hazardous exposures in the Gulf War. About 700 
Gulf War veterans have been admitted to VA's referral centers.
    VHA also developed a standard protocol for assessing Gulf War 
veterans who are concerned about possible health effects of their 
wartime experience. If the veteran has an unexplained illness, VA 
facilities use a standardized protocol consisting of a set of clinical 
practice guidelines to evaluate and treat the veteran's illness. Since 
1992, VA facilities have provided over 4400 Uniform Case Assessments 
using this standardized protocol.
    VHA has also undertaken extensive educational and outreach efforts 
to improve conformity with established treatment guidelines and to 
communicate the latest information about unexplained illnesses to Gulf 
War veterans. These efforts include regularly scheduled and special 
purpose telephone conferences, satellite conferences, and Continuing 
Medical Education programs to keep medical personnel well informed 
regarding Gulf War veterans health issues and developments. VA's Gulf 
War Review Newsletter is regularly provided to all veterans on the Gulf 
War registry.
    VA's experience treating Gulf War, Vietnam and other veterans has 
taught us that current medical practices are not always adequate for 
addressing the health needs of veterans. We now appreciate that combat 
casualties do not always result in obvious wounds, and that some 
veterans inevitably return with difficult to diagnose, yet nevertheless 
debilitating, health problems. Unfortunately, we do not yet fully 
understand the causes of many of the illnesses suffered by veterans 
returning from wars and peacekeeping missions, and therefore we often 
have difficulty finding effective treatments. In response, VA intends 
to fund two new Centers for the Study of War-Related Illnesses. These 
centers will focus on developing superior methods for diagnosing and 
treating veterans with difficult to diagnose illnesses. Proposals have 
been peer reviewed, and VA expects to fund these centers by Spring 
2001. I look forward to sharing the results of these new centers as 
they become operational.
    Question 14. A GAO report released in September 2000 highlighted 
concerns about the protection of human research subjects in the VA 
system. Particularly troubling was the finding that medical centers 
often failed to comply with all regulations to inform and protect human 
subjects. What systemwide efforts would you implement to assure 
appropriate guidance, oversight, and funding of VA staff conducting 
research with human subjects? What internal guidelines and sanctions 
would you advocate?
    Answer. VHA advises that in late FY 1999 it established an Office 
of Research Compliance and Assurance (ORCA) reporting directly to the 
Under Secretary for Health to respond to the issues outlined in your 
question. ORCA places emphasis on education and proactive surveillance 
as well as sanctions for non-compliant programs and investigators, when 
necessary. Over the past year, ORCA has initiated bimonthly 
teleconferences and biweekly educational newsletters for all VA sites 
conducting research involving human subjects. These have provided 
guidance on the requirements to protect human subjects. ORCA continues 
to work with the HHS, Office of Human Research Protections and the Food 
and Drug Administration along with other federal agencies implementing 
the Common Rule to achieve harmonization of the regulatory 
requirements.
    ORCA conducts ``for cause'' inspections (Special Inquiry Force Team 
[SIFT] reviews) of research activities at VAMCs. ORCA will pilot this 
month the new proactive surveillance review, the Multi-Assessment 
Program (MAP). This is a systematic ``preventative'' oversight 
compliance program. Depending on the severity of violations of internal 
guidelines, various restrictions and sanctions have been invoked 
ranging from various compliance requirements to the temporary or 
permanent suspension of investigators and the suspension or termination 
of research programs. These actions will continue and be enforced, 
depending on the seriousness of the violations. A new accreditation of 
human subjects programs is under development, which will provide an 
added external scrutiny to ensure additional protection of human 
subjects enrolled in VA research protocols. This accreditation program 
and the new initiatives through ORCA will be systematically implemented 
this year.
    I am pleased that VHA has initiated these efforts to assure 
compliance with the highest standards when veteran patients are 
involved in research studies. I will insist on VA compliance with these 
standards and will work with the Under Secretary for Health to assure 
any deficiencies are promptly corrected.
    Question 15. How do you view the balance between funding VA 
research and supporting clinical services? What should the goals of 
VA's research program be, and how should the VA allocate its limited 
research funds among the general areas of basic, applied clinical, and 
health services research?
    Answer. Funding for clinical services to veterans and for VA 
research should be viewed as complementary, not competitive. Patient 
care is the primary mission of the Veterans Health Administration. VA 
research supports that mission by discovering new knowledge about 
illnesses that affect veterans, new treatments, and enhancements in 
health care delivery. The availability of research opportunities also 
helps VA recruit the ``best and brightest'' clinicians to conduct 
research and provide clinical services to veterans. In turn, new 
research problems are identified on the basis of the health care needs 
of veterans, which drive the VA research agenda.
    The following goals have been established for the VA research 
program:
    1. Sustain a superior environment of inquiry conducive to the 
highest quality research, education, and patient care.
    2. Effectively integrate basic, clinical, and applied research to 
best meet veterans' health care needs.
    3. Effectively transfer research results to advance veterans' 
health care.
    4. Capitalize on VHA's value as a national research asset.
    5. Lead and manage an effective and efficient research enterprise.
    6. Increase awareness and understanding of the value of VHA's 
research contributions for veterans and all Americans.
    VA research appropriately covers a very broad spectrum, from the 
most basic to the most applied studies. The majority of VA's research 
funds should continue to be focused on clinical research. Basic science 
research that is pertinent to veterans' health care needs should also 
be supported. All research funds should continue to be allocated to VA 
facilities on the basis of nationally competitive scientific merit 
review.
    Question 16. I know you agree that specialized services are one of 
the jewels of the VA health care system. Yet for years, we have 
received complaints that VA managers are foregoing their responsibility 
to maintain a high level of specialized services. For example, 
maintaining the level of spinal cord injury care has remained a 
problem. Please describe what efforts you intend to make to maintain 
VA's specialized services under your administration.
    Answer. I am committed to maintaining VA's capacity to respond to 
the specialized needs of veterans, and will ask the Under Secretary for 
Health to brief me regularly on this matter. VHA reports that plans are 
underway to improve information collection and verification of data 
used in assessing capacity levels. Notable progress is being made in 
the development of outcome measures that evaluate functional 
improvements in each of the special programs.
    In order to improve integration of activities for monitoring 
capacity, VHA has created a position to serve as the coordinator for 
special disability programs. This person will work with field and 
Headquarters offices responsible for service delivery, data, quality 
and resource reporting activities for the special disability programs 
to monitor capacity and maintain specialized services. To provide 
additional emphasis for improving coordination for these services, VISN 
Clinical Managers will serve as coordinators for special disability 
programs in the field.
    Oversight of the quality of these special programs is the 
responsibility of providers and managers in the field, with appropriate 
guidance from the respective Strategic Health Groups and Chief 
Consultants in the Central Office. In addition, it is my understanding 
that the performance plans for each of the Network Directors has been 
modified to clearly indicate that their performance evaluation will be 
based in part on the level of services provided to special populations.
    Question 17. More than 20 percent of veterans who use VA services 
annually receive psychiatric care from the VA, yet VA mental health 
services have seen severe cutbacks in capacity. As a result, many 
veterans who relied on VA have fallen through the cracks and are no 
longer receiving needed care. In light of these facts, what is your 
vision for turning this situation around?
    Answer. VHA reports that the number of veterans receiving mental 
health care in VHA has actually increased since 1996 with the exception 
of a drop of 4000 receiving specialty substance abuse treatment. We 
have already begun to address this issue with regard to PTSD and 
Substance abuse treatment as a result of provisions in the Veterans 
Millennium Health Care Act. Decreased use of hospital beds has been 
more than compensated for by greatly increased availability of 
residential care, outpatient services, and community-based care. We 
plan to work closely with the Mental Health Strategic Health Care Group 
to assess the further need, and then develop strategies to remedy the 
situation. Because there is considerable variation among VISNs, VHA 
plans to continue to monitor care and work with networks individually 
to improve and maintain capacity and quality of care for all veterans 
with serious mental illness and substance abuse. Recent initiatives to 
increase mental health treatment in community based outpatient clinics, 
increase use of assertive community treatment for the most seriously 
mentally ill veterans, and increased use of opiate substitution clinics 
in major urban centers are examples.
    Question 18. In my prehearing questions, I asked if you believed 
that the VA should contribute funds to assist the government's efforts 
to be indemnified for their medical expenses associated with tobacco-
related diseases. You answered that ``money appropriated to VA should 
be used for veterans benefits and services.'' Please expand on your 
answer, given that transfer from non-Medical Care accounts are not 
prohibited by law.
    Answer. By my earlier answer I meant only to indicate I would 
prefer that sufficient appropriations be made available to the 
Department of Justice to permit it to cover its costs of prosecuting 
all litigation on behalf of the United States. If that were the case, 
VA funds, needed as they are for veterans programs, would not have to 
be diverted to DoJ.
    Question 19. During your tenure as a panel member on the review 
conducted by the National Academy of Public Administration (NAPA) of VA 
compensation and pension claims processing, you submitted dissenting 
views from the panel. One of the areas you mention is VBA's need to 
restructure and consolidate its regional offices, due to advancements 
in telecommunications and ``paperless office'' work processes. Is this 
something you still advocate? If so, what criteria would you use in 
this restructuring?
    Answer. I advocate the expansion of the technology that would 
support the ``paperless office''. Imaging and telecommunication 
technology would ensure VBA has the greatest flexibility in meeting the 
needs of the veterans. Upon full evaluation of the paperless 
environment, I believe that there may be changes warranted in VBA's 
organizational structure. Until that full evaluation occurs, I cannot 
say how I would structure the organization. The most important criteria 
would be ensuring quality and timely service to veterans. This is one 
area where I will be requesting additional views from the task force I 
have proposed to take a top to bottom review of VA's benefits claims 
processing system.
    Question 21. During the last session of Congress, we authorized 
construction of new national cemeteries. The aging veteran population 
makes creating a resting place of honor an even more important 
priority. What will you do to expedite construction of these and other 
new facilities?
    Answer. The process of site selection is underway for new national 
cemetery locations to serve veterans in the areas of Atlanta, Miami, 
Pittsburgh, Sacramento, and Detroit. An offer to donate 776 acres of 
land near Atlanta has been accepted by VA, the environmental assessment 
has been favorably completed, and a contract for master planning of the 
site should be awarded soon. An environmental assessment (EA) is 
underway for a site north of Miami and will be completed within 60 
days. Following completion of the EA, action will be initiated to 
purchase the site, and a contract for master planning is anticipated 
later this fiscal year. A contract for performing environmental reviews 
is in place for the preferred site near Pittsburgh and for two sites 
near Sacramento. Potential sites have been identified near Detroit, and 
a site evaluation team from VA will visit these sites within the next 
month to identify the most favorable location for a new national 
cemetery. Acquisition of land near Pittsburgh, Sacramento, and Detroit 
is dependent upon future appropriations.
    The urgency of providing additional burial space for veterans has 
led VA to develop rapid activation plans to expedite availability of 
interment areas. At the new Oklahoma City area national cemetery 
currently under design at Fort Sill, Oklahoma, we will be preparing a 
``fast track'' section for burials. This section will be available up 
to two years before the full cemetery is completed and dedicated. This 
``fast track'' section will be created and operated as a national 
shrine, and will be incorporated into the broader master plan of the 
cemetery so that it will fully blend with the cemetery as it is 
developed. Using this innovative method, we hope to develop ``fast 
tracks'' in each of our new national cemeteries in order to more 
quickly meet the needs of our Nation's veterans.
    Question 23. What is your view on changing current VA disability 
compensation law to allow veterans to choose a lump sum payment, rather 
than monthly payments?
    Answer. I am aware that last month the General Accounting Office 
issued a report on this issue, 'Veterans Have Mixed Views on a Lump Sum 
Disability Payment Option.'' That report indicates that veterans are 
about evenly split as to whether they would support a program offering 
a one-time lump sum payment in lieu of future monthly disability 
payments. In addition, in 1996 the Veterans Claims Adjudication 
Commission asked Congress to consider creating a lump sum option for 
veterans. It is possible that the lump sum option might be more useful 
to some disabled veterans as they transition from military to civilian 
life. it might also allow VA to process claims more quickly for all 
veterans. However, before taking a position on any new lump sum 
program, a more thorough review of the proposal would be needed
                                 ______
                                 
  Response to Post-Hearing Questions Submitted by Hon. Bob Graham to 
                          Anthony J. Principi
    Question 1. Mr. Principi, as Secretary of the VA, would you support 
the closing of under utilized hospitals, or would you have other 
suggestions for restructuring the Veteran Health Care System?
    Answer. I am aware that the Veterans Health Administration (VHA) 
has initiated a comprehensive review of its infrastructure needs to 
support modern health care delivery requirements. This review will 
first estimate health care needs out to the year 2010, then assess 
whether the current infrastructure optimally supports those needs. This 
initiative, called Capital Asset Realignment for Enhanced Services 
(CARES), will identify and objectively assess options for changing the 
current infrastructure to better meet those future needs. I expect that 
we will see proposals to reduce infrastructure in some areas; expand 
infrastructure in areas experiencing significant patient workload 
growth; and proposals to re-configure infrastructure to better meet 
current needs. The first phase of this effort is underway in the 
Chicago area, following that CARES studies will be initiated in up to 7 
VISNs in phase II, and all the remaining VISNs will conduct studies in 
phase III.
    I will support proposals to modify VA's current infrastructure if 
it is shown that such proposals would better meet veteran's healthcare 
needs.
    Question 2. Mr. Principi, one issue of particular importance to 
Florida is the Veterans Equitable Resource Allocation (VERA) program. I 
would encourage you to continue to support this successful program 
which was implemented in 1997. Florida, in particular, has received 
some much needed budget increases to Veterans Integrated Service 
Networks (VISNs) to help support the large number of veterans who 
migrated to the South.
    Answer. I understand that in 1997, VA implemented VERA to comply 
with the requirements in Public Law 104-204 to develop an equitable 
resource allocation system. VERA has been used for the FY 1997 to FY 
2001 network budget allocations to shift funding from networks that 
were relatively inefficient to networks that were historically 
underfunded. Over the past four and one-half years, VERA has undergone 
extensive scrutiny. Its effectiveness has been assessed by both the 
private sector through the PricewaterhouseCoopers study (1998) and two 
government sponsored GAO reviews (1997, 1998). All three of these 
studies viewed the success of VERA in positive terms and as meeting the 
intent of Congress. Currently, as a result of the FY 2001 Medical Care 
Appropriations process, the House has asked GAO to conduct a follow-up 
VERA evaluation. At the same time that GAO is assessing VERA for the 
Congress, as directed by language in the FY 2001 Senate Appropriations 
Report, VA has contracted with a Federally Funded Research and 
Development Center to conduct a VERA study. The RAND Corporation will 
conduct this study and a report to Congress is due by August 15, 2001.
    VHA also has an ongoing process to continually review and refine 
the VERA methodology. There are several VERA workgroups, comprising VHA 
field-based and Headquarters staff, that provide ongoing evaluation of 
the VERA methodology and input on policy issues to improve VERA.
    In conjunction with these external studies and internal review 
activities, I assure you that VA is committed to continue to review the 
VERA methodology for its ongoing relevance and improvement and ensure 
that the allocation of taxpayer dollars for veterans' health care is 
equitable.
    Question 3. Another priority for Florida is completion of a new 
cemetery in South Florida. In FY 01 the VA was appropriated $15 million 
to purchase 500 acres in Palm Beach County to establish a full-service 
National Cemetery. For the past 13 years, South Florida has been on the 
U.S. Department of Veterans Affairs' priority list for a new National 
cemetery, yet one has never been built. There are nearly 500,000 
veterans in the ten counties of south Florida who will potentially be 
served by this new National Cemetery. This year we will seek to secure 
the actual construction funds for the cemetery and ask for your 
support.
    Answer. Efforts are well underway to select and acquire a site to 
serve the burial needs of south Florida's veterans. More than a dozen 
sites have been evaluated and compared in our efforts to find the best 
location. The top site, located in Palm Beach County, is currently 
undergoing an environmental assessment that should be completed within 
the next 60 days. I strongly support the need for a new national 
cemetery to meet the needs of Florida's veterans, and appreciate the 
need for additional appropriations for both design funding and 
construction funding in order to help this critical project become a 
reality.
    Question 4. Finally, an issue which is not only adversely affecting 
Florida's veterans, but all veterans is claims adjudication. This issue 
needs to be addressed expeditiously. Implementation of new technology 
for rating disability claims and the recent decision to add Type II 
diabetes as an Agent Orange disability has increased the already huge 
backlog of pending claims. I am eager to hear how you plan to improve 
the disability claims adjudication process.
    Answer. As I mentioned in my confirmation hearing before the 
Committee, I will create a broad-based and inclusive task force to 
conduct an examination of VA benefits processing. After I have 
considered their recommendations I will be in position to more fully 
answer your question.
                                 ______
                                 
Response to Post-Hearing Questions Submitted by Hon. Paul Wellstone to 
                          Anthony J. Principi
    Question 1. As Secretary for Veterans Affairs you will clearly play 
a key role in the drafting of the VA's budget request to OMB. How do 
you view the current level of funding being provided to the VA?
    Answer. Congress' $3.2 billion appropriation increase for 
discretionary programs over the two-year period FY 2000-2001 was 
certainly appropriate and helpful. I will be a strong advocate for 
maintaining appropriate funding levels for all VA accounts.
    Question 2. Can you assure this Committee that you will be a 
forceful advocate for full funding of veterans health care within the 
administration?
    Answer. As I noted in my response to the previous question, I will 
be a strong advocate for maintaining appropriate funding levels for all 
VA accounts, including the accounts supporting VA's health care system.
    Question 3. I have been told by VA staff that they view the 
Independent Budget produced by the major veterans service organizations 
as a better indicator of the VA's needs than OMB's numbers. What is 
your view, generally, of the Independent Budget?
    Answer. Recommendations presented in the Independent Budget 
highlight important concerns of the veterans' community and help to 
define our national sense of duty to those who have served this 
country. I welcome this input by the veterans service organizations.
    Question 4. On December 27th, Acting Secretary of Veterans Affairs 
Hershel Gober proposed adding bone, brain, colon, lung, and ovary 
cancers to the list of illnesses presumed to be connected to the 
military service of veterans exposed to radiation during their military 
service. These diseases are currently on the VA's list of non-
presumptive radiogenic conditions, the effect of which has been that 
atomic veterans have a negligible chance of obtaining compensation. The 
denials of claims filed by individual atomic veterans for service 
connection for these diseases are essentially based on arbitrary 
decisions and assumptions. This regulation would correct a decades-long 
injustice. The proposed regulation is currently being reviewed by OMB. 
If the regulation did not get final approval before the end of the 
Clinton administration, will you support and push for its enactment by 
the new administration?
    Answer. I am aware of the rulemaking proposal, which I understand 
did not receive OMB approval during the prior Administration. If I am 
confirmed, one of my early tasks will be a review of the details of the 
proposed regulation.
    Question 5. More than 20 percent of veterans who use VA services 
receive psychiatric services annually from the VA, yet VA mental health 
services have seen cutbacks in needed capacity. As a result, the 
National Mental Health Association reports that many veterans who 
relied on VA have fallen through the cracks and are no longer receiving 
needed care. In light of these points, what is your vision for turning 
this situation around?
    Answer. VHA reports that the number of veterans receiving mental 
health care in VHA has actually increased since 1996 with the exception 
of a drop of 4000 receiving specialty substance abuse treatment. VHA 
has recently distributed $15 million to fund the creation of additional 
PTSD and substance abuse treatment capacity as a result of provisions 
in the Veterans Millennium Health Care Act. Decreased use of hospital 
beds has been more than compensated for by greatly increased 
availability of residential care, outpatient services, and community-
based care. Because there is considerable variation among VISNs, VHA 
will continue to monitor care at the national level and work with 
networks individually to improve and maintain capacity and quality of 
care for all veterans with serious mental illness and substance abuse. 
Recent initiatives to increase mental health treatment in community 
based outpatient clinics, increase use of assertive community treatment 
for the most seriously mentally ill veterans, and increased use of 
opiate substitution clinics in major urban centers are examples.
    Question 6. By some estimates, as many as one third of all homeless 
males are veterans. Seventy-six percent of these veterans have a mental 
illness and/or a substance abuse disorder. Yet it is my understanding 
that-some VISNs do not have any inpatient substance abuse care and very 
little psychiatric inpatient care. Is this the case? And if so, which 
VISNs currently do not offer these services? Further, what steps would 
you take to provide adequate services to these at-risk veterans?
    Answer. As of the end of fiscal year 2000, VISNs 2, 8, 19, and 22 
reported no inpatient substance abuse workload. All VISNs have 
developed some residential treatment capability to address the need for 
residential treatment for substance abuse. The additional funding 
discussed in response to question 5 above will improve availability of 
these services this year and beyond. In FY 2000, all VISNs have 
maintained inpatient psychiatric capability and only 18 of 138 medical 
centers offer only outpatient mental health treatments.
    Over the past 7 years VA has offered over $50 million in grants to 
state and local governments and non-profit organizations to develop 
supported housing and supported services centers for homeless veterans 
under VA's Homeless Providers Grant and Per Diem Program. Currently, 
over 2,000 community-based beds have become operational through the use 
of grants and another 900 beds are available to homeless veterans under 
``per diem only'' awards. Over the next few years, another 2,800 beds 
will be activated. In summary, a total of approximately 6,000 
community-based beds for homeless veterans have been supported under 
the Grant and Per Diem Program. I will continue to support VA 
partnerships with community based service providers to enhance services 
for homeless veterans.
    I also understand that VA is making progress in implementing the 
Loan Guarantee for Multifamily Transitional Housing for Homeless 
Veterans Program which was authorized by P. L. 105-368. Under this 
pilot program, VA will be able to guarantee up to 15 loans with an 
aggregate value of $100 million to non-VA organizations to assist with 
the development of large-scale transitional housing for homeless 
veterans. It is expected that 5,000 community-based beds will be 
supported through this new initiative.
    Question 7. The Department of Veterans Affairs has a highly 
regarded research program. But while over 20 percent of its patients 
use mental health services, only about 10 percent of the research 
budget supports mental health research. Do you think this is an 
appropriate ratio? If not, what steps will you take to bolster the 
investment in mental health research?
    Answer. VHA advises that the VA research program has identified 
mental health and substance abuse as two of nine Designated Research 
Areas (DRAs) that drive the VA research agenda. The DRAs represent the 
high-priority health care needs of veterans. The VA investment in 
mental health and substance abuse research has been growing steadily, 
from $26.6 million in FY 1990 to $54.2 million (about 17% of all VA-
funded research) in FY 1999. VA is investing in the future growth of 
mental. health research by providing mentored research experiences for 
young investigators. Awardees conducting research in mental health and 
substance abuse constitute 26% of Associate Investigators, 17% of Merit 
Review Entry Program investigators, and 14% and 20% respectively of the 
Medical Research and Health Services Research Career Development 
Program awardees.
    In FY 1999, VA funded almost 350 individual research projects in 
mental health and substance abuse. In addition, the research program 
supports Research Centers of Excellence in Schizophrenia (2 Centers), 
Alcoholism (2 Centers), Mental Health Care, and Substance Abuse, as 
well as pilot research projects in VHA's Mental Illness Research, 
Education, and Clinical Centers (MIRECCs). Two of the eight projects 
(25% of those funded thus far) in VHA's Quality Enhancement Research 
Initiative (QuERI) focus on depression/schizophrenia and substance 
abuse.
    The Cooperative Studies Program has completed landmark studies in 
schizophrenia, bipolar disorder, PTSD, and substance abuse over the 
past decade, and currently has additional ongoing multi-center clinical 
trials and open program solicitations in the mental health field. VA's 
research portfolio in mental illness and substance abuse thus covers a 
broad spectrum, including basic mechanisms of disease, large-scale 
treatment trials, health services use, and quality of care. This 
investment reflects VA's concern for veterans who suffer from these 
common and serious illnesses.
                                 ______
                                 
  Response to Post-Hearing Questions Submitted by Hon. Zell Miller to 
                          Anthony J. Principi
    Question 1. The United States of America and Puerto Rico are home 
to over 24.8 million veterans. 685,000 of these veterans reside in 
Georgia. Although veteran populations as a whole have been declining, 
Georgia has one of the lowest relative declines in veteran populations 
in the United States. Additionally, we have recently experienced a 
significant increase in the populations of veterans over the age of 65. 
These demographics have produced an increasing need for geriatric and 
long-term care in Georgia. As Secretary of VA, what role do you think 
the agency should have in helping states prepare for these needs? What 
services, if any, do you believe the VA could and should provide to 
local and regional communities in managing these needs?
    Answer. As VA moves its long-term care (LTC) focus from nursing 
home care to home and community based care (H&CBC), VA can assist 
states and local communities that serve the long-term care needs of 
veterans.
    VA can make available the results of its Long-Term Care Planning 
Model (LTC), which offers a solid basis for estimating the demand for 
long-term care services. Joint planning efforts have emerged in some 
states and appear to be valuable in minimizing duplication of effort 
among agencies.
    VA can work jointly with states and communities in long-term care 
service delivery. The Department's sharing authority and the specific 
adult day health care sharing authority offer exciting opportunities to 
address the LTC needs of the veteran population and the frail, 
chronically ill and disabled elderly population at large. Adult Day 
Health Care and Assisted Living are programmatically and economically 
appropriate for joint development.
    VA will also examine new opportunities for volunteer work with the 
Veterans Service Organizations and local communities. VA's new 
authority in Public Law 106-117, to provide Respite Care in home and 
community based settings, will be valuable as the Department explores 
this endeavor.
    Finally, VA will continue its support for the State Veterans Home 
Grants and Per Diem program. As you know, through this long standing 
joint federal-state effort VA works in close coordination with states 
in providing long term care to veterans.
    Question 2. Vietnam Era veterans make up the largest portion of the 
United States' veteran population, with numbers exceeding 8.1 million. 
As this population ages, they will increasingly require managed care. 
As you know from your previous experience as Acting Secretary of the 
Department of Veterans Affairs, many of our veterans' medical centers 
are already filled to capacity. As Secretary of the VA, how will you 
confront our ever-increasing problems with excess capacity in the VA 
medical care system?
    Answer. I am aware that the Veterans Health Administration (VHA) 
has initiated a comprehensive review of its infrastructure needs to 
support modern health care delivery requirements. This review will 
first estimate health care needs out to the year 2010, then assess 
whether the current infrastructure optimally supports those needs. This 
initiative, called Capital Asset Realignment for Enhanced Services 
(CARES), will identify and objectively assess options for changing the 
current infrastructure to better meet those future needs. I expect that 
we may see proposals to reduce infrastructure in some areas; expand 
infrastructure in areas experiencing significant patient workload 
growth; and proposals to re-configure infrastructure to better meet 
current needs. The first phase of this effort is underway in the 
Chicago area, following that CARES studies will be initiated in up to 7 
VISNs in phase II, and all the remaining VISNs will conduct studies in 
phase III. The study in VISN 7 (including Georgia) is in phase III and 
could begin in the summer of FY 2002 and take approximately 1 year to 
complete. VA will work closely with you and all the stakeholders in 
VISN 7 to conduct this study.
    Question 3. In recent years, the United States' veteran population 
has led the national average in relocation towards Southern and 
Midwestern states. In Georgia, this relocation has led to one of the 
highest increases in the nation in veteran population over the age of 
65. This increasingly mobile population has resulted in medical errors 
due to a lack of communication between veterans' facilities. This lack 
of information is due in part to inadequate funding and dated medical 
equipment. As Secretary of the VA, what steps, if any, would you take 
to improve coordination between providers in the VA and DoD?
    Answer. The Department of Veterans Affairs has improved 
coordination among VA facilities and providers by implementing and 
enhancing the Computerized Patient Record System (CPRS) software that 
is implemented at all VA Medical Centers. CPRS has introduced Remote 
Data Views capabilities that enable VA clinicians to obtain and review 
clinical care information for a specific patient regardless of were in 
the VHA system that care was provided. Using CPRS Remote Data View, a 
provider can quickly review a patient's most recent visits to other VA 
medical facilities and then choose to view clinical data, such as 
health summary components and lab results, from some or all of the 
facilities at which the patient was seen. This software capability 
enables providers to better care for their patients, improves patient 
safety and reduces medical errors by making patient medical records 
available across facilities. It also optimizes available clinical 
resources by providing a mechanism for health care providers to 
concurrently view and discuss patient care activities. It reduces cost 
by eliminating the need for duplicate procedures and laboratory tests 
previously performed at a remote facility.
    VHA plans to change the existing clinical computing model by 
developing a Health Data Repository that will integrate data from 
multiple treatment locations as well a's allow for the introduction of 
data from non-VA locations such as community nursing homes or 
Department of Defense. The repository will take advantage of relational 
database technology and will enable the creation of a single patient 
record that delineates all aspects of a patient's care across the 
continuum with and across VHA.
    VHA is actively working with partners including the Department of 
Defense, Indian Health Service to build the Government Computerized 
Patient Record GCPR Framework. This initiative will facilitate the 
exchange and integration of patient-specific data gathered from other 
entities that provide health care to the veteran patient.
                                 ______
                                 
Response to Post-Hearing Questions Submitted by Hon. E. Benjamin Nelson 
                         to Anthony J. Principi
    Question 1. One of the biggest obstacles for veterans in Nebraska 
seeking health care is the distance they have to travel to hospitals. 
In an effort to streamline services, two rural inpatient hospitals in 
Nebraska have been closed in recent years and veterans from the Western 
part of our state are often forced to travel all the way to Omaha for 
care. Is there a way to provide services to veterans with often unique 
needs and still consolidate veterans' facilities?
    Answer. Similar to rural health care throughout the country, 
veterans living in rural areas such as Nebraska may travel greater 
distances for primary care than urban veterans. I am advised that VHA 
has addressed access to primary care in Nebraska in multiple ways. 
Primary care is available at three facilities, Omaha, Lincoln and Grand 
Island, as well as community based outpatient clinics located in North 
Platte and Norfolk, Nebraska. Inpatient services previously provided at 
Grand Island and Lincoln are now made available through a contractual 
arrangement with a community hospital in Grand Island (St. Francis 
Hospital) and Lincoln (Bryan LGH Hospital). The Omaha VA Medical Center 
serves as the tertiary care referral hospital. Access to primary care 
continues to be a priority for VHA in Nebraska.
    Question 2. Also on the subject of consolidation, I am concerned 
that the closing of those rural hospitals may have been too hasty. I do 
not have figures for the year 2000, but in 1999 29,500 veterans sought 
care in Nebraska--a 17% increase over the previous year and one of the 
highest growth rates in the nation. As you know, veterans often have 
special needs that can only be met at facilities specifically intended 
for veterans. Can you assure me that Nebraska veterans will continue to 
have convenient and quick assess to care when they need it?
    Answer. VHA advises me that a contractual arrangement with a 
community hospital in Grand Island and Lincoln ensures that inpatient 
services are maintained at the same level as when the Grand Island and 
Lincoln VA facilities provided inpatient care. In addition to 
maintaining programs designed to meet the unique needs of veterans, 
access to primary care continues to be a priority for VHA. In an 
attempt to improve access to primary care, the VA Central Plains Health 
Network (VISN 14) established community based outpatient clinics at 
North Platte and Norfolk, NE as well as Sioux City, IA. This is in 
addition to the primary care clinics, and specialty care clinics at the 
Grand Island and Lincoln, NE facilities and the full range of tertiary 
and specialty services at the Omaha facility. The need to expand 
community based clinics is continually assessed and re-evaluated and 
clinics will be added as needed to ensure veterans receive the best 
possible care. Veterans are assisted in transportation needs via a 
state wide transportation system which provides shuttle service to all 
facilities in Nebraska.
    Question 3. Last year, following a deluge of complaints from 
Nebraska veterans, the VA's Inspector General conducted an 
investigation of the Omaha VA Medical Center. While they found many 
positive things to say about the facility, they also discovered an 
alarming number of problems including:
     Poor treatment at the Post-Traumatic Stress Syndrome 
(PTSD) clinic;
     Inconsistent follow-up care for veterans with hepatitis C;
     Failure to communicate about patients' medical histories 
among hospital staff;
     Poor monitoring of narcotics prescriptions; and
     Poor management and a backlog in the hospital's pain 
management program.
    Will the VA follow-up to ensure that the recommendations of the 
Inspector General have been implemented? And what can be done to 
prevent these types of problems from occurring in the future?
    Answer. Since the Inspector General's report, a new Medical Center 
Director has been appointed to the Omaha VA Medical Center (VAMC). The 
new director has taken swift action to assure that all the 
recommendations are being fully addressed. Additionally, the VA Central 
Plains Health Network as well as VHA Headquarters, is closely 
monitoring the Omaha VA Medical Centers progress in addressing each of 
the recommendations. Changes made at the Omaha facility since the 
report include:
     Incorporating the PTSD program into the overall Mental 
Health Clinic to improve the administration and performance of the 
program. Separate from the Inspector General visit, the Omaha VA 
Medical Center hired a recognized VA PTSD expert to assist the Omaha 
program in making continual improvements and developing a formal 
curriculum for staff education. In November 2000, A follow-up visit by 
the internal VA consultant found significant improvement in the PTSD 
program's quality, compliance with national VA standards, and 
improvement with high patient satisfaction.
     Implementation of a call-back program has been initiated 
for hepatitis C virus (HCV) infected patients;
     All Nebraska VHA facilities have implemented an electronic 
medical record, which provides the capability of accessing medical 
information and records of care;
     Assuring that all narcotic prescriptions are hand written 
according to VA regulation and reviewing medication records for 
narcotics regularly; and
     Establishing a pain management clinic to ensure an 
effective pain management program. Patients with chronic pain problems 
are assessed by primary care providers and referred for care to the 
Anesthesiologist who is in charge of the program.
                                 ______
                                 
 Response to Post-Hearing Questions Submitted by Hon. Arlen Specter to 
                          Anthony J. Principi
    Question 1. I have been blunt with prior VA Secretaries about the 
importance I place on working with the Committee in its legislative and 
oversight capacity. The appearance of the Secretary--not his or her 
staff--before this Committee is indispensable to the Committee, and to 
veterans. Can I count on you to work with the Committee so as to better 
serve veterans? Can I count on you to appear when requested?
    Answer. If confirmed, you can count on my active and continued 
cooperation with the Committee, including testimony when required.
    Question 2. VA has made significant changes in recent years in the 
way it delivers health care. Some of those changes are the result of 
legislation--e.g., ``eligibility reform,'' and the long-term care and 
emergency care provisions of the Millennium Act. But more, perhaps, are 
the result of budgetary pressures and the changing nature of health 
care in the United States, generally, and its increased emphasis on 
outpatient-based care. Do you foresee further restructuring of VA 
health care? Has there been enough change in VA over the past five 
years to effectively deliver health care to the nation's veterans?
    Answer. At this time, I don't know whether there will be further 
restructuring of VA health care. As I have promised, we will conduct a 
top to bottom review of the VA health care system. Although I believe 
VA effectively delivers health care to the nation's veterans, I would 
never say that the changes over the last five years mark an end to the 
process. We must continually strive to improve the VA health care 
system and remain alert to the changes in the health care arena so that 
VA can stay in the forefront of the health care delivery. If this 
requires change, then I assure you I will strive to make the 
appropriate changes.
    Question 3. Senator Rockefeller and I have worked hard to secure 
significant increases in VA health care funding over the past two 
years. Do you believe that the VA health care system is adequately 
funded? Will you seek additional funding to provide health care for our 
nation's veterans? Do you have a sense of how much increased funding is 
needed to make necessary improvements in the system? If so, how much?
    Answer. The $3 billion appropriation increase provided by Congress 
for Medical Care over the two-year period, FY 2000-2001 has 
significantly helped the system. I will be a strong advocate for 
maintaining appropriate funding levels for VHA. However, until I'm 
briefed in detail on VHA's budget requirements and determine the 
resources necessary to support the improvements I envision, I will not 
speculate on the magnitude of any additional funding needs.
    Question 4. In the past five years, VA's health care system has 
reduced its workforce over 15%--from approximately 201,000 employees to 
approximately 179,000 employees. At the same time, VA has seen more 
patients--approximately 3.89 million in FY 2001 as compared to 
approximately 2.86 million in FY 1996. Do you believe that these trends 
can continue? Should they? Can VA continue to achieve such growth in 
efficiencies and still provide quality care to veterans?
    Answer. I am aware that, over the past five years, VA has 
significantly restructured its health care system to improve quality, 
capacity, and access to care, mainly through expansion of outpatient 
health care programs. This was achieved by shifting resources through 
improvements in health care services delivery and by efficiencies 
gained through program and organizational restructuring, technology 
improvements, and business process re-engineering.
    VA informs me that the downward trend in employment has leveled off 
and as of December 30, 2000 VHA employment was approximately 182,000 
FTE. VA will continue its system restructuring and improvement efforts 
to maximize the delivery of health care to veterans within resources 
provided. I will work closely with the Congress and the VSOs to ensure 
that resource levels are appropriate to meet the health care needs of 
our Nation's veterans.
    Question 5. It has been argued in some quarters that VA has 
wasteful and overlapping ``infrastructure.'' GAO contends, for example, 
that VA wastes $1 million dollars per day maintaining unneeded 
building--money that could otherwise be spent on providing care. Do you 
agree that VA's medical ``infrastructure'' is wasteful and overlapping? 
If so, how will you stop this waste?
    Answer. I agree that VA's medical infrastructure does not optimally 
support modern health care delivery. I am aware that the Department has 
developed the Capital Asset Realignment for Enhanced Services (CARES) 
process to review its medical capital infrastructure requirements.
    VA's health care system has been assembled over the past 100 years. 
VA must work with all its stakeholders to identify needed changes. 
Modernizing VA will also require the support of the congressional 
committees responsible for overseeing the VA system. The CARES process 
has the potential to provide VA with a mechanism to better justify its 
capital needs and make changes that will enable it to more effectively 
carry out its health care mission.
    Question 6. I am very concerned about the current status of VA's 
``CARES'' process--a VA contractor evaluation of allegedly wasteful and 
overlapping medical infrastructure. This process needs to proceed--and 
it needs to proceed quickly. Do you support ``CARES''? Please provide 
me a detailed schedule of how--and when--this work will progress.
    Answer. VHA advises me that CARES is not just about facilities or 
buildings, but is about veterans health care needs and the 
infrastructure that will be needed to meet those needs in the most 
cost-effective manner in the future.
    The CARES program will assess veterans health care needs in each 
network, identify service delivery options to meet those needs, and 
identify options for realignment of capital assets linked to those 
needs. The goal is to improve both access to care and quality of care 
in the most cost effective manner, while mitigating impacts on staffing 
and communities and on other VA missions.
    I support the goals of the CARES initiative. It is a critically 
needed strategic planning mechanism. If successful, the evaluation 
criteria will allow difficult decisions to be made based on measurable 
criteria, with particular emphasis on quality of care.
    Phasing of this project is as follows:
     Phase I began on January 8, 2001 and is anticipated to 
take 90 days. Phase I includes the application of the CARES Evaluation 
Criteria to the results of the Delivery System Options Study conducted 
for VISN 12. Phase I will also evaluate these criteria as well as the 
entire CARES process and recommend adjustments.
     Phase II is expected to commence in April 2001 and take 
approximately one year. Phase II will comprise service delivery option 
studies in up to seven of the following VISNs: VISN 1 (Boston), VISN 3 
(New York), VISN 4 (Pittsburgh), VISN 10 (Cincinnati), VISN 11 
(Indianapolis), VISN 21 (San Francisco), and VISN 22 (Los Angeles).
     Phase III will complete the remaining VISN studies. It is 
projected to also take one year to complete, beginning in May 2002.
    Question 7. I think ``CARES'' is important--and I surely recognize 
that, in some cities, VA has multiple facilities which appear to 
compete with each other and which each appear to attempt to be ``all 
things to all people.'' But I also think that CARES analysis must take 
into account that multiple facilities in the same city can make sense 
if they operate under a single management and in a complimentary way. 
Do you agree?
    Answer. Again CARES is not just about facilities, but about 
veterans health care needs. Each CARES study is intended to answer the 
question, ``What health care service delivery options best meet future 
veteran health care needs, while assuring the highest quality care and 
optimal access for a defined veteran population in the most cost 
effective manner?''
    VHA has made significant progress in combining services over the 
last 5-6 years, integrating geographically close facilities under 
single management. CARES is designed to systematically evaluate each 
VISN using uniform, tested evaluation criteria.
    The planning horizon for each CARES study will be 2010. The study 
will concentrate on the Year 2010 demand for services, with a 
sensitivity analysis performed to the year 2020 to determine whether 
any longer range changes in demand could affect the viability of the 
service delivery options developed. CARES studies will result in a 
strategic plan for VHA for its current enrolled veterans and projected 
future enrollees.
    Question 8. This Committee supported the nomination of Dr. Thomas 
L. Garthwaite to be Under Secretary for Health, and we approved that 
nomination for a term of four years just a couple of months ago. 
Nonetheless, Dr. Garthwaite had indicated that he would step down if 
the next Administration does not want him to continue serving as Under 
Secretary. Will you ask Dr. Garthwaite to step aside? Will it be your 
decision to make? Will you assure this Committee that you will not take 
that action without first consulting the Committee?
    Answer. I am aware of the Under Secretary for Health's statutory 
term of office and the process set forth in the statute should the 
President choose to replace the Under Secretary before completion of 
the term. The President has assured me that I will have a key role in 
implementing his pledge to appoint veterans advocates to lead the 
Department. There is no predetermined decision to seek a replacement 
for the leadership of the Veterans Health Administration. I look 
forward to discussing health care matters with Dr, Garthwaite in the 
near future to discuss my vision for VA healthcare and the role he will 
play in implementing that vision. I have committed to working in 
partnership with VA's many stakeholders, including the Congress and the 
VSOs, as I reach major decisions concerning VA.
    Question 9a. In a recent budget submission, VA pledged to improve 
the timeliness of VA medical service delivery through a ``30-30-20'' 
initiative--a promise that veterans will obtain an initial visit with a 
health care provider within 30 days of applying for care; an 
appointment to see a specialist within 30 days after referral by a VA 
doctor; and an actual waiting time not to exceed 20 minutes. Are these 
goals realistic? Are they obtainable? Will you commit to them?
    Answer. I believe that the 30-30-20 goals are consistent with 
access and waiting time goals in other service industries and are 
consistent with veteran expectations. I am told that they are 
obtainable, over time, given adequate resources to meet the demand for 
care.
    Question 9b. One measure of VA's effectiveness is veteran patient 
satisfaction. Do you agree? How should VA gauge patient satisfaction?
    Answer. I agree that veteran patient satisfaction is critical to 
our success. And, in fact, I've been told that VHA's goal is to move 
beyond mere patient satisfaction to a higher goal of ``delighting'' 
patients. As a veteran, I applaud them for this objective.
    VHA should, and I am advised that it does, gauge patient 
satisfaction using standard industry patient satisfaction instruments. 
The use of these tools allows VHA to benchmark its performance relative 
to the private sector. Internally, this same data is used by VHA 
facilities to compare performance with other VHA facilities. This 
allows VHA to identify practices that result in improved customer 
satisfaction.
    In addition to traditional patient satisfaction instruments, VHA 
has developed instruments for assessing patient satisfaction in 
clinical areas or populations not traditionally assessed in the private 
sector. For example, VHA has specialized surveys for patients who 
receive prosthetic devices, patients in Spinal Cord Injury Centers and 
patients who receive home care services. In addition, I am told that 
VHA is completing an annual study on patient satisfaction of Persian 
Gulf War veterans. And with the aging of the veteran population, it 
will become increasingly important to develop a patient satisfaction 
tool for use in long-term care settings.
    Finally, VHA has further demonstrated its commitment to patient 
satisfaction by conducting semi-annual national surveys of patient 
satisfaction and developing a point-of-care Patient Satisfaction 
Toolkit that will allow facilities to generate surveys that are more 
responsive to local issues.
    Question 10. When he announced his intention to nominate you to be 
Secretary of Veterans Affairs, President-Elect Bush stated that 
reducing the amount of time it takes for VA to adjudicate a claim would 
be a top priority. Do you view this as a Presidential charge? How will 
you implement it?
    Answer. As I indicated in my testimony, President Bush has charged 
me with a top to bottom examination of VA benefits processing which I 
will achieve by commissioning a broad-based and inclusive task force 
charged with identifying problem areas and proposing solutions.
    Question 11. Do you believe VA's Veterans Benefits Administration 
(VBA) is now moving in the right direction to improve the quality and 
timeliness of its claims adjudication process? In what areas will you 
encourage VBA to continue on its present course? In what areas will you 
provide new direction?
    Answer. As I mentioned in my confirmation hearing before the 
Committee, I will create a broad-based and inclusive task force to 
conduct an examination of VA benefits processing. After I have 
considered their recommendations I will be in position to more fully 
answer your question.
    Question 12a. Many people are familiar with your work on the 
Commission on Service members and Veterans Transition Assistance. Fewer 
may recall that you were a member of a 1997 National Academy of Public 
Administration panel which studied VA's claims processing system. In 
fact, you offered dissenting views as part of the panel's report and, 
there, you made several observations about VA's claims processing 
system and the role the VA Secretary ought to play in improving that 
system. Please respond to the following questions relating to your 
participation on the NAPA panel.
    You stated in your NAPA report dissenting views that the report had 
failed to identify the ``root causes'' of claims processing problems. 
Among those ``root causes'' you noted were ``legislative requirements . 
. . [which] creat[e] some of the most arcane and complex requirements 
in all of government.'' You wrote, further, that ``[I]f VBA is to 
achieve its claims processing improvement targets, Congress will need 
to play an active role, including enacting legislative reform, [and] 
streamlining claims processing requirements. . . .'' If you are 
confirmed, what ``legislative reform'' measures, specifically, will you 
propose to Congress? How would you have us ``streamline claims 
processing requirements?''
    Answer. There is no question that the law governing disability 
compensation is extremely complex and could benefit from thoughtful 
reexamination. The NAPA report could have been, but was not, a part of 
that process. The forthcoming program evaluation, to be accomplished 
pursuant to the mandates of the Government Performance and Results Act 
(GPRA) should provide helpful guidance. But I need not remind the 
Committee that this is an extremely sensitive question for which 
considerable effort and time will be required to achieve consensus by 
veterans organizations and the Congress. As Secretary, I would be 
charged with implementing the law as the Congress has written it. VA's 
immediate pressing problem is to improve the quality and timeliness of 
claims processing within the framework of the law as it currently 
exists. That will be the function of the task force I have proposed.
    Question 12b. You also stated in the NAPA report that claims 
processing problems transcend the boundaries of any one VA 
organization, and that, therefore, ``[t]he Secretary should take the 
lead in breaking down the stove-pipe structures and barriers existing 
within VA today.'' You stated that ``[t]hose barriers are tall and 
thick, and they are protected by elements more focused on turf than on 
meaningful change, but change they must.'' Who or what are the 
``elements'' to whom or which you referred in 1997? Are they still 
present in VA? How will you break them down?
    Answer. As I indicated in my testimony, I support and will continue 
fostering the One VA initiative implemented over the past few years to 
help break down the stove-pipe structures and overcome the barriers of 
cross-Administration cooperation. I understand that this initiative 
included a number of educational conferences that involved VA managers 
and employees, union representatives, VSOs, State VA directors, and 
Hill Staff who worked together to identify specific opportunities for 
collaboration. These conferences resulted in the development of several 
Statewide and National initiatives that are already underway and 
improving the way VA provides service to veterans and their families. 
Of greater importance, the Department's career senior leaders have been 
actively involved in this initiative. Continuing and improving upon 
this initiative will be an important way to further the elimination of 
barriers to cooperation and will help reduce the focus on turf. As 
Secretary of the Department of Veterans Affairs, I will work with my 
senior leadership team to continue improving seamless service to 
veterans.
    Question 12c. In explaining the need for VA to work with the 
Department of Defense and other Federal agencies, you wrote in your 
NAPA dissent that ``[t]he Secretary should . . . look at the 
opportunities that exist for real improvements in information gathering 
and sharing beyond the VA. . . .'' What information does VA need to 
gather from outside itself to properly--and promptly--adjudicate 
claims? Why can't it get that information now? What will you do, as 
Secretary, to secure such access?
    Answer. As I explained in my testimony, I intend to work closely 
with Secretary Rumsfeld to improve the co-operation and data exchange 
between VA and DoD, particularly as it relates to service medical 
records.
    Question 12d. In arguing that VA's Veterans Benefits Administration 
should ``initiate new efforts to restructure and consolidate, where 
appropriate, its regional offices,'' you wrote that the Secretary 
``should dedicate Departmental resources to the development of a 
consensus among the VBA's various stakeholder organizations that a 
restructuring business plan is vital. . . .'' Do you still hold the 
view that a consensus needs to be built? If so, how will you build such 
consensus?
    Answer. As I indicated in a previous response to a pre-hearing 
question, I will need more information before I reach conclusions on 
the effectiveness of the SDN reorganization VBA implemented subsequent 
to my 1997 remarks. The effectiveness of the current organizational 
structure will be one of the issues I will ask to be reviewed by the 
task force I plan to convene. I believe the ability to reasonably 
project improved benefit delivery through proposed changes is the key 
to achieving needed consensus.
    Question 12e. I appreciate the need for consensus and 
consultation--especially with this Committee. The Committee, however, 
also expects you to lead--an action that sometimes must predate the 
evolution of consensus. If you believe that VBA's Regional Office 
structure needs to be modified, why do you not just move to fix it?
    Answer. Considerable change has occurred in the VBA organizational 
structure and VA's claims processing procedures since 1997. While I 
will not hesitate to initiate needed changes, the decisions I will make 
will be informed decisions, acting decisively but not impulsively. I 
also recognize that a key to achieving change is building consensus 
within Congress and the veterans community for those changes.
    Question 13a. President-Elect Bush has made ``education reform'' 
one of his top priorities. As you know, the Committee has made 
significant progress in the last four years in securing increases in 
Montgomery GI benefits. Yet what we have achieved--an 87% increase in 
the maximum monthly benefit paid to a full-time veteran students/
trainees still falls short of increases you advocated as Chairman of 
the Commission on Service members and Veterans Transition Assistance. 
Please explain the Commission's reasoning in recommending that we adopt 
a tuition-reimbursement benefit.
    Answer. The Commission's report will provide the most complete 
explanation of the findings and rationale underlying this specific 
recommendation. However, as I indicated in my response to one of the 
Committee's pre-hearing questions, I believe that educational benefits 
are essential if we are to give veterans the foundation for a 
successful civilian life.
    Question 13b. Will you advocate within the administration that VA 
seek legislation to provide for a ``tuition reimbursement'' benefit for 
veteran-students/trainees? How will you convince OMB to fund such a 
benefit?
    Answer. As Secretary of Veterans Affairs, I do realize that I must 
balance my advocacy and support for ``tuition reimbursement'' with the 
fiscal constraints of the federal budget. I will carefully examine the 
alternatives presented to me by well-intentioned advocates of veterans' 
education. As you may know, the Partnership for Veterans' Education, a 
coalition of more than 50 military and veterans' organizations and 
higher education groups, proposed a benchmark for veterans' benefits 
that would equal the average cost of tuition and educational expenses 
for a commuter student at a 4-year public college or university. I want 
to examine this and other possible proposals that sufficiently honor 
and reward our separating service members for their military service to 
this nation.
    Question 14. During the 106th Congress, legislation was enacted 
expanding, for civilians exposed to weapons-related radiation, the 
listing of diseases covered under the Radiation Exposure Compensation 
Act, and creating a new program for compensation for civilian 
Department of Energy employees who were exposed to radiation in 
weapons' plants. As a consequence, civilians will now be compensated 
for diseases that are not on VA's listing of ``presumptive'' diseases. 
Do you agree that this situation cannot be allowed to persist? Do you 
agree that veterans must be afforded benefits that are at least equal 
to those afforded to civilian Federal employees? Will you propose--or 
at least support--legislation to that effect?
    Answer. Atomic veterans deserve fair treatment, and if those with 
meritorious claims require additional presumptions in order to receive 
benefits, I would support that. However, before committing to a 
position on this matter, I need to be briefed on 1) the comparability 
of the civilians' and veterans' radiation exposures, and 2) the 
likelihood that meritorious claims by veterans would be denied in the 
absence of new legal presumptions.
    Question 15. As you know, Congress has enacted presumptions 
relating to certain diseases and environmental exposures. In some 
instances, Congress has, in addition, granted to VA explicit statutory 
authority to add diseases, by regulation, to such statutory listings. 
Do you believe that VA has authority to add to statutory listings of 
presumptive'' disease by regulation in the absence of such an explicit 
delegation of authority? If so, what is the legal source of that 
authority?
    Answer. The Department's long-held position is that 38 U.S.C 
Sec. 501(a) authorizes the Secretary to create evidentiary presumptions 
through rulemaking when they are found to be necessary for the fair and 
just administration of VA benefit programs. That section provides, in 
pertinent part:
    (a) The Secretary has authority to prescribe all rules and 
regulations which are necessary or appropriate to carry out the laws 
administered by the Department and are consistent with those laws, 
including--
          (1) regulations with respect to the nature and extent of 
        proof and evidence and the method of taking and furnishing them 
        in order to establish the right to benefits under such laws;
    Because legal presumptions are rules affecting the duty to produce 
evidence, they fall squarely within this authority. It was this 
authority upon which former Secretary Derwinski and I relied when, in 
1991, VA first proposed rules presuming certain diseases to have 
resulted from mustard-gas exposure.
    Question 16. VA's Committee on Care of Severely Chronically 
Mentally III Veterans has stated that VA is slow in adopting for use 
the latest FDA-approved medications for treatment of the mentally ill. 
Is this so? If so, why?
    Answer. I am informed by VHA that a recent survey addressing the 
concern expressed by the Committee on Care of Severely Chronically 
Mentally Ill Veterans has shown that, overall, VA's use of the latest 
medications for the care of the mentally ill is comparable to that of 
systems caring for similar non-VA populations (e.g. Medicaid). It has 
been noted that there appears to be some local variation in the use of 
these medications. The data on use of medications for mental disorders 
is being provided to the Networks and their facilities for their review 
and consideration of any needed changes in prescribing practices. It 
should be noted that VA's National Formulary includes virtually all of 
the latest antipsychotic and antidepressant medications. I will work 
with VHA to ensure appropriate treatment for severely, chronically 
mentally ill veterans.
                                 ______
                                 
Response to Post-Hearing Questions Submitted by Hon. Strom Thurmond to 
                          Anthony J. Principi
    Question 1. Would you please elaborate on your prior employment at 
QTC Medical Services, particularly that company's business dealings 
with the VA. Would you please explain what safeguards you have in place 
to avoid any conflict or apparent conflict of interest.
    Answer. The VA signed a contract with QTC in February 1998 to 
conduct medical examinations for compensation and pension claims 
purposes. QTC was selected from three bidders after a technical 
evaluation panel determined that corporation to be not only the best 
qualified, but also the lowest bidder. I joined QTC in June of 1999 as 
President of the Medical Services Division. I have now terminated all 
relationships with QTC and waived any and all future rights or benefits 
that could flow from my relationship with that organization. 
Furthermore, I will execute a formal memo to the Deputy Secretary of 
VA, recusing myself from any matter affecting QTC (until the Deputy 
Secretary is confirmed such delegation will be considered within the 
authority of the Under Secretary for Benefits). In order to ensure that 
the recusal has its full effect, the memo will delegate to the 
addressee all of the authority of the Secretary of Veterans Affairs to 
affect such matters. Further the memo requests, and authorizes, the 
Assistant General Counsel in the Department who serves as the 
designated ethics official, and the Inspector General, to monitor the 
implementation of the recusal.
    Question 2. What are your thoughts on improving VA medical care?
    Answer. I have heard from many sources that the quality and 
consistency of care in VA has improved over the past 6 years. I am told 
that VHA has used a data-driven, management-incentive strategy to yield 
consistent, sustained improvements in care. The availability of 
facility, network and national level measurement data has allowed VHA 
to benchmark its performance internally and externally.
    Despite recent success, I believe that all of health care, 
including VA, has room for improvement. President Bush has promised a 
top to bottom review of VA's healthcare system, implementation of the 
Millennium Health Care Act, and modernization of barriers hindering 
veterans' access to health care. I will look to the broad based, 
inclusive task force I have proposed to provide recommendations on how 
we can achieve these improvements.
    Question 3. What are your views on the Veterans Equitable Resource 
Allocation (VERA) program in VA?
    Answer. As directed by the Senate, VA has contracted with a 
Federally Funded Research and Development Center to determine whether 
the VERA methodology leads to a distribution of funds that covers the 
special needs of some veterans, and also to investigate the progress of 
this funding allocation method. VA recently entered into a contract 
with the RAND Corporation to conduct this study and the results are due 
to Congress no later than August 15, 2001. VA will give this study, 
along with the ongoing GAO VERA audit, careful consideration. If this 
study identifies problems in VERA resource allocations, VA will review 
and refine the VERA methodology and will act as quickly as possible to 
resolve any inequities. There are several VERA workgroups, comprising 
VHA field-based and headquarters staff, that provide ongoing evaluation 
of the VERA methodology and input on policy issues to improve VERA. I 
assure you that VA is open to future adjustments, refinements, and 
improvements to the VERA methodology if problems are identified.
    Question 4. Are there issues remaining from the veterans transition 
commission which you would like to address at the VA?
    Answer. I am pleased to note that many of the Transition Commission 
recommendations have been implemented or are being developed. I expect 
VA will continue to explore recommendations in the areas of outreach, 
use of information technology, data exchange and VA/DoD cooperative 
efforts to improve claims processing and service delivery. With respect 
to the Education, Vocational Rehabilitation and Employment, and Loan 
Guaranty programs, also I expect VA will continue to explore 
opportunities for assisting service members in their transition to 
civilian life by providing benefits that meet their unique needs.
    Question 5. Do you have some ideas on how the VA can improve the 
benefit determination and adjudication process?
    Answer. I plan to await the recommendations of the task force 
before rendering judgments on this matter.
                                 ______
                                 
Response to Post-Hearing Questions Submitted by Hon. James M. Jeffords 
                         to Anthony J. Principi
                              vet centers
    Question 1. When the Vet Center program was established in 1979, it 
addressed the VA's mission to provide local readjustment counseling 
services to veterans. Last year, Congress expanded the role of Vet 
Centers by requiring them to open their doors to the counseling needs 
of veterans of all wars. Would you support increased funding for the 
Readjustment Counseling Service to meet this expanded mandate to 
provide all vets with this very important service?
    Answer. VHA reports that since enactment of enabling legislation, 
the Vet Center program has provided services to approximately 110,000 
Gulf War; 12,000 Lebanon, Grenada, and Panama; 30,000 World War II; 
22,000 Korean War; and 5,000 Somalia veterans. Veteran feedback 
indicates a very high level of satisfaction. I support the Readjustment 
Counseling Program and if the need arises for additional resources, I 
would be supportive.
                              hepatitis c
    Question 2. As I understand it, Acting Secretary Gober yesterday 
sent recommendations to OMB that would establish a service-connected 
presumption for Hepatitis C for veterans who had blood transfusions, 
solid organ transplants, and for medical personnel. Have you seen these 
recommendations? If so, would you support them? If not, what is your 
thought on the coverage of Hepatitis C in veterans?
    Answer. I have not yet seen this proposal and would need to be 
fully briefed before taking a position on it. However, if the proposed 
presumptions are necessary to the fair resolution of these claims, I 
would support them.
                          medicare subvention
    Question 3. What is your view of the future for VA interaction with 
the Medicare program? Would you support the Medicare Subvention pilot 
program as introduced by Senator Rockefeller and myself last Congress? 
How high a priority will this be for you?
    Answer. With the aging of our veteran population, I believe it is 
essential that there be ongoing and close interactions with the Health 
Care Financing Administration and the Medicare program. It makes sense 
that the care of individuals who depend on both the veterans health 
care system and the Medicare program be better coordinated. This would 
result in better medicine, better care for our patients, and the most 
efficient use of scarce federal dollars. In addition, I think that the 
Medicare program can benefit from many of the programs and research 
efforts that are underway within VA. More and more it is being shown 
that in many of the areas of concern to Medicare, such as patient 
safety and preventive medicine, VA is in the forefront of health care 
delivery today.
    I support efforts to implement a Medicare Subvention pilot, similar 
to that which is now underway within DoD. I think it makes sense to 
take a look at all options that may bring this about. I appreciate the 
effort and interest you and Senator Rockefeller have shown in this area 
and look forward to working with you and other members of Congress to 
gain authorization for a meaningful pilot that is fair to VA and to 
Medicare.
                        vera formula inequities
    Question 4. As you may know, last year the New England delegation 
requested a study that will be conducted by the Rand Corporation 
evaluating current VERA reimbursement procedures. I hope that you will 
give this study careful consideration. Do you intend to devote some 
attention to the problem of VERA inequities? Are you open to future 
adjustments in VERA if problem areas are identified?
    Answer. As directed by the Senate, VA has contracted with a 
Federally Funded Research and Development Center to determine whether 
the VERA methodology leads to a distribution of funds that covers the 
special needs of some veterans, and also to investigate the progress of 
this funding allocation method. VA recently entered into a contract 
with the RAND Corporation to conduct this study and the results are due 
to Congress no later than August 15, 2001. VA will give this study, 
along with the ongoing GAO VERA audit, careful consideration. If this 
study identifies problems in VERA resource allocations, VA will review 
and refine the VERA methodology and will act as quickly as possible to 
resolve any inequities. There are several VERA workgroups, comprising 
VHA field-based and headquarters staff, that provide ongoing evaluation 
of the VERA methodology and input on policy issues to improve VERA. I 
assure you that VA is open to future adjustments, refinements, and 
improvements to the VERA methodology if problems are identified.
                             visn structure
    Question 5. What is your opinion of the value of the Veterans 
Integrated Service Network (VISN) structure? Has it been successful? Do 
you anticipate any changes to this structure?
    Answer. VHA informs me that the VISN structure has allowed VHA to 
keep pace with the rapidly changing health care industry and foster 
flexibility and innovative approaches that enable the networks to 
address local healthcare needs quickly. As I said in my statement on 
January 18th before the committee, I believe that a broad based, 
inclusive, tightly-focused and short-fused task force, drawing on the 
commitment and knowledge of the VSOs, forward-looking VA employees, and 
VA's partners in health care delivery, can help me deliver on President 
Bush's promise of a top to bottom review of VA's healthcare system by 
identifying problems and proposing solutions. I await the 
recommendations of the task force.
                           medical histories
    Question 6. Legislation that was enacted this past November 
included language that requires the VA to take a complete military 
history from veterans who are enrolled and treated by the VA in order 
to have a more informed system to provide better treatment for 
veterans. The implementation date is March 1st of this year. Will you 
make implementation and enforcement of this provision a priority?
    Answer. I fully intend to support the implementation and 
enforcement of this provision. The VHA advises that in September 1999 
the Under Secretary for Health established the Veterans Health 
Initiative (VHI) in part to ensure better military histories be taken 
from veteran patients, specifically to improve care to veterans. One 
goal of this initiative is to ensure that all enrolled veterans will 
have a comprehensive military history taken, which will become part of 
their medical record. The expected outcomes are improved sensitivity to 
the effects of military experiences and exposures on veteran patients 
health and attitudes, improved patient satisfaction, increased 
awareness of the occupational risks in a patient's history, and a data 
base for future research activities.
                              agent orange
    Question 7. Will you support continued outreach by VA to find, 
treat and compensate Vietnam Veterans exposed to herbicides while in 
Vietnam? As new evidence presents itself, would you be willing to add 
diseases to the list of presumptive illnesses under the authority 
provided to you by the Agent Orange Act?
    Answer. As a Vietnam veteran myself, I feel a special 
responsibility to veterans exposed to herbicides during that conflict. 
I will insist that they be treated fairly and compassionately, and 
provided every benefit and service to which the law entitles them. As 
but one example, I would not hesitate to expand the list of compensable 
diseases if the evidence presented meets the threshold requirement of 
the Agent Orange Act of 1991.
                                 ______
                                 
Response to Post-Hearing Questions Submitted by Hon. Larry E. Craig to 
                          Anthony J. Principi
    Question 1. How are you planning on developing the Memorandum of 
Understanding between the Veterans Administration and the Department of 
Defense in order to provide medical services to TRICARE-dependent 
military retirees in the Veterans Medical Centers?
    Answer. I understand that VA and DoD are working together to 
identify and attempt to remove barriers to sharing between the two 
Departments. Section 113 of the ``Veterans Millennium Health Care and 
Benefits Act'' (P. L. 106-117) authorizes the Department of Defense 
(DoD) to reimburse the Department of Veterans Affairs (VA) for medical 
care provided to eligible military retirees. On December 20, 2000, the 
Under Secretary for Health, Veterans Health Administration (VA) and the 
Acting Assistant Secretary for Health Affairs (DoD) reported on the 
status of the development of a Memorandum of Understanding (MOU). The 
VA stated that there are issues that require further analysis and 
discussion before the drafting of an MOU could be initiated.
    The major issue cited implementation of the Millennium Act in the 
light of the Fiscal Year 2001 Defense Authorization Act's major benefit 
restructuring for DoD's Medicare-eligible retirees and the accompanying 
universal enrollment plan. Substantial changes in entitlement for these 
retirees and changes in the financing of that entitlement are looming. 
VA plans to revisit DoD's reimbursement for VA for medical care 
provided to eligible military retirees once DoD has satisfied 
legislative requirements regarding the new military retiree Medicare 
benefit structure.
    Question 2. Considering the rise in gas prices, are you going to 
adjust the travel reimbursement rates?
    Answer. The Department has advised me that the beneficiary travel 
mileage reimbursement rates are reviewed on an annual basis. During the 
review which took place in CY 2000, the Department elected not to 
raised mileage reimbursement rates, due to potential adverse financial 
impact on the medical care appropriation. During the upcoming CY 2001 
review cycle, rising gas prices will need to be addressed.
    Question 3. Do you plan to provide more Community Based Outpatient 
Clinics (CBOC) and expand services in the existing facilities?
    Answer. CBOCs are very important to the future of VA and will 
continue to be a priority. Over the last several years, VA has 
increased veteran access to health care services through the 
establishment of close to 400 new Community Based Outpatient Clinics. 
VHA Networks will be encouraged to plan for the establishment of 
additional CBOCs, and/or expand services at existing CBOCs, where there 
is demonstrated need and within the context of available resources.
    Question 4. How are you planning to reach out and ensure that all 
disabled veterans are adequately compensated for related service-
connected disabilities, and receive high quality medical care?
    Answer. To promote high quality medical care for veterans, I will 
work closely with VHA to monitor the success of its efforts to improve 
its performance in six critical areas:
     Improving the Quality of Health Care
     Improving Access to Services/Health Care
     Enhancing Customer Satisfaction
     Building Healthy Communities
     Improving Cost-Effectiveness
     Improving Functional Status
    I will evaluate the quality of healthcare provided by VHA through 
the collection and analysis of objective performance measurement data, 
which will be compared to internal and external benchmarks. I will 
insist that VHA identify best practices and innovations and spread 
those quickly across the entire system. I will evaluate VHA managers 
relative to their success in measurably improving care for veterans. 
The forthcoming program evaluation of the disability compensation 
program should provide valuable information to improve that program 
where needed.
    Question 5. How are you planning on implementing the Millennium 
Health Care Act?
    Answer. VHA advises that significant progress has been made on 
implementing Millennium Act requirements. However, a number of 
requirements have required significant program development and the 
issuance of Federal Regulations. I am advised that actions are underway 
on all provisions of the Act. I understand that the Committee staff 
will briefed on this in the near future
                                 ______
                                 
 Response to Post-Hearing Questions Submitted by Hon. Jeff Sessions to 
                          Anthony J. Principi
    Question 1. Given the enormity of the VA claims backlog, what are 
you prepared to do to guarantee that this process is improved while 
ensuring reliability, efficiency, and consideration for Alabama 
veterans, who are frankly becoming increasingly cynical about the 
claims process.
    Answer. I look forward to recommendations from the task force I 
proposes at my confirmation hearing before deciding on what particular 
changes need to be made.
    With respect to Alabama in particular, VBA officials inform me that 
numerous initiatives are underway that have been designed to provide 
more efficient and accurate service to our veterans and their families. 
Some of VBA's initiatives are highlighted below:
     Fast Track Partnership designed to rapidly turn around 
claims completely developed by our service organization partners. 
Results shows over 2302 claims completed since 10-01-97 inception with 
average processing time of 3.2 days.
     Added 20 employees to the claims processing staff over the 
past year.
     Implementation of Decision Review Officer program with 
five employees in November 2000 after training.
     Implementation of Case Management, a proactive system 
designed to closely monitor progress, improve communications, and keep 
claimants informed on the progress of their claims.
     Conducted Training, Responsibility, Involvement, and 
Preparation of Claims (TRIP) for all Alabama service officers. This 31 
hour training program was designed to enhance development skills and 
improve this partnership. Approximately 100 participants completed the 
program.
     Implemented TPSS, Training and Performance Support System, 
a computer based training system designed for rating specialists to 
improve quality.
     Established a Veterans Service Representative trainee 
mentoring program. Established a One-VA initiative with Central Alabama 
Veterans Health Care System and assigned a Rating Specialist and a 
Veterans Service Representative to work at that location to facilitate 
and improve the VA compensation and pension examination process.
    Question 2. Alabama's three Veterans Administration hospitals have 
come under increasingly harsh criticism for not properly addressing 
veterans' circumstances, whether it be waiting times, thoughtfulness, 
or quality of care. How will you create an atmosphere within the VA 
that addresses these quality of life and care shortfalls at our VA 
facilities?
    Answer. Specifically, as it relates to the Alabama facilities, VHA 
has advised me that there have been actions taken within the VISN 7 
Network to redirect resources to address deficiencies in these areas. 
Further, VHA advises me that they have moved to identify well-qualified 
permanent leadership in this VISN to provide expertise, stability, and 
accountability. I will also ask VHA to continue to assess the 
performance of Alabama facilities in each of these areas of concern and 
to keep me informed. I will assure that progress continues.
    Question 3. In your testimony before the Senate Veterans' Affairs 
Committee, you indicated a need to streamline the administration of the 
VA around the country by implementing technological improvements for 
the sake of potentially saving billions of dollars a year. How much of 
the potential savings would be directed towards improving medical care 
while at the same time promoting various avenues of access to quality 
health care?
    Answer. Until I have been more fully briefed on this matter by VHA 
officials and my Chief Information Officer, I am unable to provide a 
comprehensive answer to this question. I would expect that significant 
cost savings and benefits generated by new or enhanced IT systems would 
be directed towards improving the access and quality of care provided 
to the nations veterans.

    Chairman Rockefeller. Thank you very much, Mr. Principi. I 
appreciated your statement and I appreciated your kind of out-
of-the-box approach to it because I think that is going to be 
necessary. As I said before, it is not just what you think, but 
how it is translated down through the ranks. And that I think 
is the great magic of a good administrator. It can be done and 
I believe you can do it.
    We will now have a 5-minute round of questioning. I notice 
that the designate has a time clock and we do not, so I presume 
that means we can cheat a little bit. But let me start off in 
my last 18 hours of glory here. [Laughter.]
    You have promised a top-to-bottom look at the health care 
system. That is one of the reasons, Senator Nelson, that you 
will love this committee, as Senator Jeffords and Senator 
Hutchinson do, because so much of its work is about health 
care. And if you are intrigued by health care, this is the 
place to be because it is health care at a particular phase of 
life and it deals with health care matters like PTSD, which are 
ignored by so many others and yet which we are discovering goes 
all the way back to World War I, as well as the Korean war and 
the Gulf War. So top to bottom----
    Senator Thurmond. Mr. Chairman, I am going to have to 
leave. I would like to submit a few questions to be answered 
for the record.
    Chairman Rockefeller. Thank you very much, Senator 
Thurmond, and thank you for remaining as long as you did.
    Senator Thurmond. Remember, I organized this committee. 
[Laughter.]
    Chairman Rockefeller. Yes, sir. That is now twice on the 
record today. [Laughter.]
    I do think we have made substantial progress in this area. 
We have started some things that have not been completed, but 
it has been a committee which I think has tried, working with 
VA administrators, to do good work.
    Let's take long-term care. Again, nothing had been done by 
the Government in long-term care since Medicaid in the 1960's 
until Senator Specter and I and those on the committee did it 
in conference with Chairman Bob Stump a year or so ago. It has 
not all been implemented, as I indicated, but nobody else in 
Government has done anything about long-term care. My own view 
is that, in terms of health care, the two biggest problems in 
the country are the ones about which we are doing the least, 
and one is long-term care and the other is mental health. And 
the Department of Veterans Affairs is doing something about 
both and the health care system is doing very little about 
either outside of the VA. So, we can be proud of that.
    You indicated that you want to take this look. My guess is 
that you will probably put together a task force also to look 
at how you do this top to bottom. But again with your higher 
bar, you will have the experience and the instinct to suggest 
to us what you think some of those changes from the top to the 
bottom might look like.
    Mr. Principi. Yes, sir. You talked about extended care, and 
I note that this year 39 percent of the veteran population is 
over the age of 65 compared to 15 percent in the general 
population, and that figure grows to 53 percent over the age of 
65 over the next 20 years. So we see a significant increase in 
our elderly Korean and Vietnam war veteran population and we 
have to address those challenges.
    Clearly, I think we need to look at the entire system to 
ensure that it is aligned to the needs of the veteran 
population and the profound changes in health care in America 
to ensure that we are meeting those needs both in urban and 
rural areas. And I think there are some studies on this subject 
ongoing at this time.
    Members have talked about the growth in the number of 
outpatient clinics, which I think is a very, very positive 
step. However, I believe GAO has reported we spend a million 
dollars a day on maintaining, heating, and cooling empty 
hospital beds. How do we make better use of those beds? Should 
they be converted, should they be closed, should their mission 
be changed to extended care facilities or assisted care 
facilities?
    We need to look at our specialized programs to ensure that 
the intent of the law is being met with regard to maintaining 
capacity in spinal cord injury, in blind rehabilitation, and 
PTSD. VA plays an enormous leadership role in those specialized 
programs. We need to maintain our leadership role and do more. 
Research is another important component of that.
    So I think there are lots of different parts of this health 
care system that we need to look at. We have to identify how we 
are going to do this top-to-bottom review and over what period 
of time we will conduct it. Those are some of the points that I 
would want to look at as well as looking at the organizational 
structure, the VISN structure, to ensure that we have 
uniformity of access throughout the system so that veterans in 
one VISN are not being treated differently than veterans in 
another VISN. We need to ensure that wherever you live or 
reside, you have equal access to the health care in the system.
    Chairman Rockefeller. Which is both the problem but not 
necessarily the problem of my State, where we have four 
different VA hospitals, each of which report to a different 
VISN. You cannot say by definition that is bad. But one also 
needs to know that it can work and is an integrated system. And 
I know that is on your mind.
    Mr. Principi. I would not want to see the VA evolve into 22 
separate health care systems. We are a national resource. We 
are one national health care system with uniform policies and 
procedures and standards that should be followed through the 
entire system. I believe in centralized policy formulation 
combined with decentralized policy implementation.
    Chairman Rockefeller. I have a number of other questions. 
But I call now upon Senator Jeffords.
    Senator Jeffords. Thank you very much, Mr. Chairman. 
Chairman. I will repeat that twice. It is a pleasure to be with 
you again. I look forward to working with you.
    I want to followup perhaps a little bit on the previous 
questions and on how we can improve the financing of the 
various health care options that we have. I would like to talk 
a little bit about Medicare subvention and what is your view on 
the future of the VA interaction with the Medicare program, and 
would you support the Medicare subvention pilot program as 
introduced by Senator Rockefeller and myself in the last 
Congress. I kind of loaded the audience for that one. How high 
a priority is that?
    Mr. Principi. It is a very, very high priority. I have 
always been a supporter of Medicare subvention. I think the 
pilot program is the right approach to take to see how well 
this could work. I have not heard of any good arguments against 
Medicare subvention. I am sure there are challenges with it, 
but I do believe that it could prove to be an excellent 
mechanism to get Medicare eligible veterans into the VA and 
with the cost of their care reimbursed by HHS. So I think it is 
something that will be a very, very high priority. We need to 
look at that and see if the pilot program should be made 
permanent.
    Senator Jeffords. Vet Centers. When the Vet Center program 
was first established back in 1979 it addressed the VA's 
mission to provide local readjustment counselling services to 
veterans. Last year Congress expanded the role of the Vet 
Centers by requiring them to open their doors to the 
counselling needs of veterans of all wars. Would you seek and/
or support increased funding for the readjustment counselling 
service to meet this expanded mandate? And how is it being 
handled now?
    Mr. Principi. Senator, quite honestly, early on in my 
tenure on the Hill back in the 1980's I was somewhat concerned 
about and cynical of the Vet Center program. I was wondering if 
it really could meet its intended purpose. I remember visiting 
a Vet Center which looked like a bunker in Vietnam and I was 
concerned about it not being linked more closely with the VA.
    But, as you know, the decision was made to maintain the Vet 
Center program. At that point in time, I went to work to ensure 
that we had high quality people staffing our Vet Centers. I 
thought that was important, when I was Deputy Secretary, to 
make sure that we had the right programs. I also wanted to make 
sure that Vet Center staff had the breadth of experience and 
knowledge to ensure that veterans who sought help through the 
Vet Centers and not through the mainstream VA medical system 
could get the breadth of services they needed.
    I think the Vet Centers can play an important role in not 
only psychological counselling, PTSD, but also in all of the 
related problems--employment, training, and education. I 
certainly will look at the Vet Center program. I am committed 
to the program. Funding decisions must be based upon funding 
priorities. I can give you a more detailed, informed decision 
on whether we need to increase the funding or not when the VA 
budget is sent to the Congress. But I will support the program.
    Senator Jeffords. Thank you. The VERA formula inequities, I 
would like to chat a little bit about that. As you may know, 
last year the New England delegation requested a study that 
will be conducted by the Rand Corporation to evaluate the 
current VERA reimbursement procedures. I hope that you will 
give your careful attention to that study. Do you intend to 
devote some attention to the problem of the VERA inequities?
    Mr. Principi. Yes, I certainly do. One of the first things 
I intend to do, if confirmed, would be to sit down with Dr. 
Garthwaite and better understand the VERA methodology, the 
model and how it works, and what the issues are. I know there 
have been some concerns expressed about VERA from different 
Members.
    So I need to take a look at it to assure that the funds are 
being equitably distributed. We must both make sure that we 
have adequate funding for the growing population in the 
Southeast, the Sun Belt in the Southwest, and for those who 
don't get down to those areas of the country. They may be in 
the Rust Belt, the Northeast, but they need to be cared for as 
well. So I need to look at that entire program.
    Senator Jeffords. As I understand it, Acting Secretary 
Gober yesterday sent recommendations to OMB that would 
establish a service-connected presumption for hepatitis C for 
veterans that had blood transfusions, solid organ transplants, 
and for medical personnel. Have you seen these recommendations?
    Mr. Principi. No, sir, I have not. I know that hepatitis C 
is a major issue, a major problem. I have not seen the proposed 
regulation. I have not been briefed on it, but I am aware that 
it is a major problem that I will have to address.
    Senator Jeffords. What are your thoughts about coverage of 
hepatitis C?
    Mr. Principi. If there is a linkage between exposure to 
blood on the battlefield or in hospitals, or with organ 
transplants, I certainly believe that veterans should be 
compensated for that disease. So, generally speaking, I support 
the presumption of service-connection where there is a causal 
relationship to exposure. Absolutely.
    Senator Jeffords. Thank you very much. I really look 
forward to working with you. We have had great experiences in 
the past and I know they are going to go into the future.
    Mr. Principi. Thank you, Senator Jeffords.
    Chairman Rockefeller. Thank you, Senator Jeffords.
    Senator Hutchinson.
    Senator Hutchinson. Thank you, Mr. Chairman. I want to 
associate myself with some of your remarks. You may only have 
20 hours left but I want to be in your good graces. [Laughter.]
    You commended Mr. Principi for his willingness to think 
outside the box, and that is reflected in his opening 
statement. I think that is very important as well.
    As we go to the 21st century, change is going to be 
essential. Your willingness to look at needed change is very 
refreshing. Sometimes our veterans and our friends in the VSOs 
are concerned that change equates to abandonment or at least a 
diminution of commitment. I think with your background in the 
system as well as your experience in the private sector, you 
can both reassure veterans and still have the objectivity to 
support needed changes.
    One of the things we had an opportunity to visit about, if 
I recall correctly, was the issue of VA and DoD acquisition and 
purchasing systems. We have got parallel acquisition systems 
for medical supplies and equipment and that many of the items 
purchased are similar, if not identical, and yet we do not have 
a means by which we can realize the savings from the power of 
these two departments acting as one. There is I think a certain 
synergy there. But there have been political obstacles or 
artificial walls that have been erected that have prevented 
that from ever happening. Would you comment on your willingness 
to work with Secretary Rumsfeld on trying to make that a 
reality and what might be the result of it.
    Mr. Principi. Absolutely, Senator. I recall during my 
previous administration working closely with Senator 
Rockefeller on legislation reforming pharmaceutical purchasing 
in VA. That legislation saved VA countless hundreds of millions 
of dollars that could be used to expand the reach of health 
care.
    An interesting story. When I sat down with the President-
elect, I mentioned to him how important I thought it was for 
Secretary-designate Rumsfeld and myself to get together to 
break down these barriers in lots of areas--in the transmission 
of data, because we cannot do anything at the VA without the 
medical records and the personnel records of the individual, 
and in procurement.
    I get quite emotional about it. Here we have these two 
procurement systems for medical supplies, equipment, and 
pharmaceuticals. I am absolutely convinced, based upon 
testimony before the Transition Commission I chaired and 
discussions during its meetings, that if we bring those two 
together we can save close to $500 million a year. That is in 
just the sheer purchasing power of the two agencies' 
procurement program and in developing a national formulary to 
cover the beneficiaries of both departments and utilizing 
universal product numbering. The savings are very significant. 
$2 billion over 5 years. We can buy an awful lot of 
pharmaceuticals, we can provide an awful lot of health care to 
needy people and service-connected veterans with that money.
    I was so pleased that the other morning I was sitting in my 
office and there was a knock on the door and it was Secretary-
designate Rumsfeld. He said the President-elect told me I 
should come over and talk to you, that you had some good ideas 
about breaking down the barriers. He said he went to the Hill 
for his confirmation hearing and Senator Cleland cornered him 
and said you better talk to Tony because you might have some 
good ideas about how your two systems can work better together.
    So I think in the procurement arena we can do a lot. I 
think in data transmission we can do a great deal. And I think 
that increased partnering, while maintaining the separate 
identities and the missions of both health care systems, we can 
certainly be a much healthier and better health care system.
    Senator Hutchinson. I find that very hopeful and the two 
anecdotes that you related are being very positive. I look 
forward to seeing how that develops.
    The chairman also mentioned what the VA had done on mental 
health, and rightly to be commended. When I was on the House 
side and had the opportunity to serve with Sonny Montgomery and 
for a couple of years chaired the Subcommittee on Health Care 
in the House Veterans' Affairs Committee we worked hard and 
helped to develop the eligibility reform legislation. One 
element of that legislation requires the VA to maintain its 
capacity to provide specialized treatment in the area of mental 
illness, mental health.
    VA's own in-house experts, its Committee on Care of 
Severely and Chronically Mentally Ill Veterans reported last 
September that the VA is not in compliance with that 
requirement of Public Law 104-262. I hope that is an area that 
you will make a priority to ensure that compliance occurs.
    Mr. Principi. Mental health has always been a high priority 
for me. It sometimes is not very glamorous. It is tough dealing 
with alcohol and substance abuse problems, the associated 
problems of HIV and homelessness. These are very real human 
needs in the veterans community. There will be a lot of 
attention paid to chronic mental illness, mental health under 
my tenure. We will work on that.
    Senator Hutchinson. I know my time has expired, so I will 
not again bring up the Fayetteville Veterans Home. [Laughter.]
    But I just assume that when you are confirmed next week----
    [Laughter.]
    Senator Hutchinson. Thank you, Mr. Chairman.
    Chairman Rockefeller. Thank you, Senator Hutchinson.
    Senator Nelson.
    Senator Nelson. Thank you, Mr. Chairman.
    Mr. Principi, I again want to thank you very much for your 
wading into public service again. Clearly, as a manager of a 
major agency with 200,000 employees, you are going to be 
challenged at every level. And it sounds as though you have 
already begun the process of trying to figure out what you need 
to do but also get the impact that you can receive from a study 
of essential areas to help you work your way through the 
management issues.
    I will ask you the same question I asked Mr. Rumsfeld 
during his confirmation hearing last week. As a manager going 
in, while you will have specific ideas about what you want to 
do and they will be supplemented by further study and 
additional thoughts once you are there, but sometimes when you 
go in there is one big idea that you start with or that you 
hope to finish with. It is unfair for us to ask you a lot of 
specifics right now because you have got to work. But is there 
one big idea that you hope to bring to the management of this 
agency based on your experience and your knowledge?
    Mr. Principi. I have several. Clearly, eliminating the 
claims backlog is probably the most important issue I face 
early on. Bringing together a group of people both within 
Government and outside of Government, because there are some 
wonderfully talented people in the private sector in large 
corporations that have done medical evaluations, insurance 
companies type, to see if we can learn a little bit from them. 
Their insights on how they have done it and been very 
successful in the private sector coupled with our people and 
the leadership of the veterans service organizations who have 
focused on compensation and pension, putting this brain trust 
together to come up with some concrete practical solutions is 
one idea that I would like to embark on shortly after arriving.
    The technology issue, of course. I believe one of the keys 
to our success is technology. I think we have to leverage the 
technology, our artificial intelligence software, that is out 
there and incorporate that technology in everything we do. I 
believe it can be enormously helpful to reduce the backlog in 
claims processing, in claims evaluation and in adjudication. I 
also believe it can be tremendously important on the health 
care side. And the two systems have to be linked. So I want to 
devote some time to that.
    And I think the third area is procurement reform. We just 
need to get on with it. We need to drive down pricing in 
pharmaceuticals, medical supplies, and medical equipment. I 
think that can be done and those dollars can be redirected to 
provide more health care.
    Senator Nelson. Thank you.
    Chairman Rockefeller. Thank you, Senator Nelson.
    Let me ask you a philosophical question. We had a hearing 
this morning with Governor Thompson of Wisconsin about running 
HHS, and that is also a pretty large group of folks. And within 
that organization is something called HCFA, the Health Care 
Financing Administration. I was talking a little bit about how 
one gets control of HCFA. In other words, you have 4,000 
genuine health care experts in all kinds of various fields, 
most of them in Baltimore, all of them having been there a long 
time, although a lot of them will retire, which is a problem 
that you also face. I have been here through about four or five 
HCFA directors and they have all made adamant, committed, stern 
statements as to getting control of those 4,000 workers. But 
none of them have been able to do it. Part of that is our fault 
because we do not give them sufficient people to take in with 
them so that they can place them strategically throughout HCFA 
in order to carry out the will of the administrator of HCFA. So 
we're talking about resources, personnel.
    Your organization is slightly larger than 4,000, spread all 
over the country. And this should not be taken politically, but 
anybody who runs for executive office never makes the 
assumption they will be in for 8 years. You hope you are and 
you work for that, but you have to deal with the idea of 4 
years, which is very little time. So the question I am asking 
you is, how do you get control, what do you need, what do you 
need to do, what do you need to say that is different from what 
others have said running this second largest organization in 
the Federal Government, to get management over the VA as well 
as possibly be able to accomplish some of the goals that you 
yourself have talked about this morning?
    Mr. Principi. Great question, Senator. I think the first 
thing I have to do is win the respect and the confidence of the 
people in the agency at all levels of the agency. They have to 
understand and know that my heart is in the agency and our 
mission. I believe in our mission. I care very deeply about the 
mission. And then I need to articulate a vision of where I 
believe the agency needs to go in this new century. And then to 
work hard. To work day and night bringing the people together, 
surrounding myself with talented people and making them feel 
part of the process, not excluding them from participation. And 
recognizing that the buck stops with me. I have to make the 
tough decisions and I have to bring those decisions to you 
after consulting with you.
    So I think success starts with winning the respect and 
confidence of VA employees and leaders, demonstrating 
leadership, and that I will listen to and want to learn from 
them. Then through hard work we come up with a blueprint, a 
vision, if you will, that says we must do the following, and 
get on with it right away for VA to remain a viable national 
resource.
    You are absolutely right. I look at this as a 4-year 
assignment. I know if I don't start on day one, I am not going 
to get there. I have got to hit the deck running so to speak, 
but not act impulsively. I have to listen and learn, but VA 
must get moving and come together.
    You know, the Commission on Servicemembers and Veterans 
Transition Assistance was a group of 12 interesting people, 
Democrats, Republicans, generals and privates, former Hill 
people, and executive branch people. Somehow we were able to 
subordinate our personal views to reach a consensus and send to 
you a unanimous report. Four members of the Commission were 
representatives of veterans service organizations, half were 
Democrats. I think the point is that if I can try to take some 
of the lessons in how we operated there and bring it to VA, 
perhaps we can get consensus and perhaps we can begin moving 
together. I guess that is the way I want to start.
    Chairman Rockefeller. I think you have talked about your 
own commitment and you have talked some about structure. We 
have to assume that they are going to feel your commitment and 
your intensity and your willingness to work hard and fight 
hard. But I think a lot of it really does come down to 
structure, getting your people where you need to have them so 
that you have somebody who is managing something which is 
tremendously important to veterans and to you, in the 
measurement of your own success, as you measure your own 
success, you need to have somebody there who is one of your 
people.
    I really believe in that. I am sure that former Governor 
Nelson strongly believes in that. That is what Governors get to 
do. They come in and everybody goes out and you appoint your 
own people to run every single department, the Secretaries and 
the Under Secretaries and the Under Under Secretaries and then 
the people beneath that. Some people call that politics. 
Others, if you are good Governors like Ben Nelson and Jay 
Rockefeller were, consider it an effective way to run a 
government. But we deprive people in the Federal Government of 
doing that. We absolutely deprive them of doing that. We say 
here are three secretaries, here is somebody for government 
relations, one or two others, and then go ahead and change the 
system.
    The second thing I want to say, and we can talk more about 
this, is that one of the things I think President-elect Bush is 
going to be very good at, because he has shown I think the 
wisdom and the courage to surround himself with strong people, 
is something I happen to respect, and that is the ability to 
have people take him on, his own people take him on, his own 
heads of agencies, people close around him, say, ``Mr. 
President, I think you are wrong on this. I think you ought to 
look at this, this, this, and this, and I would like to have 
another chance to discuss this with you.'' I am sure that 
former Governor Nelson was the same. I never asked anybody in 
the years I was Governor whether they were Republican or 
Democrat. It didn't make any difference to me. I wanted to know 
who they were and did they have the strength to come at my 
face, so to speak, if they felt I was wrong.
    And so I don't want to derail you, certainly not with this 
committee, with the President-elect early on, but I would like 
to know that you will be willing to do that. I can remember we 
had a health care budget fight at the highest levels of 
Government fairly recently and I did that. Well, it is one 
thing for me to do it because they, unfortunately, have to deal 
with me in one way or another, or with Ben Nelson. And we 
happened to win that fight. It was a budget fight. I want you 
to win those fights. And I want to know that you will be 
willing to take on the President of the United States, and the 
Vice President of the United States when it is something about 
which you care passionately and they seem not to because they 
don't know as much as you do.
    Mr. Principi. Absolutely. Sir, I could not agree with you 
more. And I did speak to the President-elect about that. I told 
him that I intended to be a very strong advocate. I told him 
that I intended to go to the mat with Mitch Daniels at OMB. I 
know that in the final analysis, I may not get everything. But 
I told him I was going to be that passionate advocate and I was 
going to fight very, very hard for an adequate budget and the 
things I thought I needed, including people around me, be they 
Democrats or Republicans, but the best team possible to manage 
this agency. And without that I said I could not be successful 
for my agency or for his administration. And he agreed. He told 
me that he respected that and that he wanted me to do that. We 
seemed to reach agreement on it.
    Chairman Rockefeller. And I think you will find us behind 
you in that process.
    Senator Nelson.
    Senator Nelson. You told me this is going till 7 tonight? 
[Laughter.]
    Chairman Rockefeller. Yes. [Laughter.]
    Senator Nelson. I really don't have any other questions. I 
do look forward to working with you on these issues. I hope you 
will be an advocate for the veterans, that that advocacy will 
include access and availability of services and benefits in a 
convenient manner that meets the needs.
    I would share one thought with you that somebody shared 
with me a long time ago and maybe you can use. And after you 
attribute it to me once, it's yours. That is, as you face the 
agency and you continue to work with the managers below you and 
the good personnel who work there, to remind them that if you 
always do what you've always done, you will always get what 
you've always got. That is what change has to effect. Change 
will create uncertainty which creates a cause for insecurity. 
That will be external and internal. But I think you must be an 
agent of change if you are going to correct the problems of an 
overload and backlog of processing as well as the important 
point of making your available resources stretch across the 
needs that are out there. It is important we not shortchange 
our veterans. I believe you are totally committed to making 
sure we don't. I hope that we can work with you to make sure 
that is the mission of the agency.
    Mr. Principi. Thank you, Senator. I certainly look forward 
to working with you and getting out to Nebraska as well.
    Senator Nelson. I am a little intimidated to invite you 
because I am the junior Senator and we have just built a new 
Veterans Home in North Fork, NE. I suspect what I can do is 
give you a conditional invitation that I will bring the other 
appropriate inviters into the process. But that facility will 
be opening shortly and we would be delighted and honored to 
have you there with us if it is at all possible.
    Mr. Principi. I would be pleased to be there with you, 
Senator.
    Senator Nelson. Thank you.
    Chairman Rockefeller. Mr. Principi, just a thought. You 
were talking earlier about Vet Centers and then we were talking 
about taking on the President. I noticed when I said ``taking 
on'' the President in a constructive sense that there were a 
number of heads behind you that went up and down. That told me 
exactly what I wanted. That it isn't always the new wing that 
you open or the ones that you close that engage or disengage 
veterans. Sometimes it is a sense of whether you are willing to 
fight. And it is a very interesting thing, that Ben Nelson 
knows as well as I do, that very often, I think most often, the 
people have a sense of that, and I am talking about all of 
these 220,000 people that work for you and all of the veterans. 
And I connect the heads that are going up and down and our 
earlier discussion about Vet Centers.
    You at one point had questions about Vet Centers, but you 
seem to have fewer of them now. If people feel with the two of 
us or with you--us, our constituents, with you, our 
constituents including veterans and the people that work for 
you--that you are fighting for them, that you will stand up to 
whomever has to be stood up to to fight to do the very best you 
can, not that you can always win but that you do the best you 
can, I think that often that becomes psychologically as 
important, if not more important, than what might actually 
happen, because I think it is sometimes the fastest way to 
trust.
    I think it is the human nature of people in a bureaucracy 
and out there, veterans and our constituents, as they make up 
their minds about whether you are on their side or not, are you 
willing to fight for them or are you not; if they are in 
trouble, can they go to you or can they not; and they have that 
instinct and it is a yes or it is a no. And if it is a yes, you 
can do all kinds of things that you could not possibly do 
otherwise. And the people in your agency feel the same way and 
they see that, they react to that, and they do things which 
they didn't know they could do because they see somebody who is 
not always on the defensive. I don't want you to be on the 
defensive. That is why I mentioned these oversight hearings.
    Sometimes people come here and we appear hostile or we are 
hostile, we are angry about something. But it is constructive. 
It is because we do not meet enough as a committee, I think, 
and so when we do meet, things flow. Well, that's the same way 
as when you have a town meeting. You go to a little town in 
south central Nebraska and they have not seen you in several 
months and they let things flow. And that is good. That is 
human nature. Often, just by virtue of letting those things 
flow, expressing their dissatisfaction with what you are doing 
about this or that, it often takes away a lot of their angst 
and, in turn, because you have heard it and you have heard 
their angst, it motivates you to solve their problem. Now you 
just forgive me for that.
    Mr. Principi. Well I agree with you. But I want to take you 
with me the next time I go to that town in southwestern 
Nebraska. [Laughter.]
    Chairman Rockefeller. All right. On benefits, we have 
discussed already, as you have, that this is a particularly 
difficult time. You are going to be losing what percentage did 
you tell me in the next 2 or 3 years?
    Mr. Principi. Close to half.
    Chairman Rockefeller. Close to half of all the people who 
have been working on this for a long time. By definition, they 
will be the most experienced half, because they will be the 
ones who will be retiring. So this presents you with a real 
problem because we were just discussing how can we get this 
done in a more rapid fashion. So you have got to train a new 
adjudicator. It must take 2 to 3 years to do that properly. The 
experience of that, trial and error, not everybody is willing 
to help people out. I know you have training courses for that. 
Technology is improving. But technology does not always do it, 
and I have seen that in my own State where the technology is 
incredible but the backlog grows. That could only say that 
people, as we are more litigious as a society, people do that 
more or they are more aware of their rights and they submit 
more.
    How do you approach, in general terms, how are you going to 
handle that? The math is stacked against you and so are the 
retirement numbers.
    Mr. Principi. Sir, I know that the VA, VBA in particular, 
currently has a very, very aggressive recruiting campaign to 
bring on new rating specialists and get them trained. They are 
working very, very diligently at that. I certainly want to look 
at that from a human resources perspective to see what more can 
be done. I think that part of the task force's charge will be 
to address some of those issues. It comes at a time when our 
economy has been golden and it has been very difficult to 
compete with the private sector to get people to come to VA.
    I think you need to also look at partnering with the 
private sector in some regards. We need to maintain a strong 
infrastructure in-house. But I think VA has been a model for 
performance-based contracting, wherein companies are rewarded 
for excellent service and they are penalized when their work 
product falls below a certain level. I think they have done 
very, very well. So I believe that we need to aggressively 
bring on new people to VA, get them trained as quickly as 
possible, as comprehensively as possible before we put them 
into the trenches, so to speak.
    We need to look at technology as part of the solution, not 
the entire solution, like you said, because ultimately a rating 
specialist has to rate each case, a computer cannot do that. 
But a computer can help, software can help cut down the time 
needed to reach a decision. I think we need to, as VA is 
currently doing with virtual VA, start eliminating paper files. 
I think we need to modernize and get electronic files, 
including electronic signatures.
    So I think it is a combination of things, Senator. But it 
really starts with bringing on new people to replace these 
experts. I think VA is doing that, to its credit. We may have 
to accelerate that. We may have to look at new ways to deliver 
the service. I don't think anything should be off the table. I 
do not have enough information right now to come before you and 
say I think I have specific solutions. But what I do need to do 
is to identify them as quickly as possible and make sure they 
are implemented and just keep our feet to the fire. We talked 
earlier about the Persian Gulf War Registry and how that 
somehow got off track.
    What I need to do is to make sure that once we make a 
decision we follow through. I think one of VA's shortfalls has 
been that it has been very difficult to make decisions. I think 
even during my tenure, and I am not just talking about the past 
8 years, but historically, decisions at VA come about very 
slowly. It is decision by management committee and it just 
grinds on and grinds on. There is a lot of inertia I think 
because VA is so large, not because people are not well-
intentioned. But it is very, very difficult to make decisions 
at VA, at least it was. I trust it won't be under my 
leadership. We have got to get on with it. There is a time for 
deliberation and there is a time for decision and a time for 
action. I intend to make sure we are thoughtful, but I am going 
to make sure that we make the decisions at the appropriate time 
and we move ahead. I think that is part of the solution: just 
get on with it.
    Chairman Rockefeller. I don't want to extend this hearing 
but, before I ask you a couple of pro forma questions, I just 
want to say two things. No. 1 is I agree with what you have 
just said. But, again, I ask you to let us help. Come to us in 
anger, in frustration about what you need in the way of people, 
in the way of resources, in order to manage.
    Mr. Principi. Yes, sir.
    Chairman Rockefeller. Everybody thinks in terms of the cost 
of health care and the cost of building or closing a hospital 
or whatever. But we do not talk enough about the cost of not 
being able to run the United States' second largest agency the 
way it needs to be for the people who have sacrificed the most 
so that we can be free and have our way of life. I just think 
that is such an important subject and I think it is one that 
you should feel very aggressive, at least insofar as I am 
concerned, and I am sure Senator Specter agrees, to come to us. 
I think there is a lot of dollar saving in efficiency and 
performance increasing consequences of being able to get 
control, and you should feel strong in coming to us in that.
    The final thing I want to say before the pro forma 
questions is there are some of us who have not given up at all 
on the consequences of the Persian Gulf War, whether it is 
pyrodostigmine bromide, or whether it is the DoD report that 
came out a month or so ago saying that they had not misled 
anybody at all, and that is about the fifth iteration of that I 
have been through over the last 8 years. And yes, you are the 
one who has worked with the Registry, started the Registry, and 
we are working now with spouses and the children of some of 
those Persian Gulf War veterans. But I still spend a lot of 
time with people who cannot sleep, whose lives have 
disintegrated, whose marriages have disintegrated, if you touch 
their arm very lightly they just shriek with pain, or they have 
rashes or PTSD, have all kinds of problems.
    America, still to a certain extent--the VA less so than 
anybody else--stands by and watches a lot of this happen. It is 
something which has always made me angry at our Government, at 
our Government's willingness to protect itself at the expense 
of those who are hurt, people who went overseas, went to the 
front lines, got exposed to all kinds of things and conditions 
which we have never really fought before except I guess in 
parts of the Second World War. But I just want to tell you that 
this is something that at least this particular Senator in no 
way has lost interest in or has given up fighting the cause on.
    Mr. Principi. Senator, we share a common belief, a common 
concern. I can't tell you how strongly I feel about it. I 
think, as you do, that some of the greatest patriots in this 
country are the men who walked the streets of Nagasaki and 
Hiroshima, put their hands over their face at Bikini Atoll, 
scrubbed the ships of the radiation, walked into the chambers 
to test mustard gas protective equipment and came out with 
chronic bronchitis, or were exposed to Agent Orange, as my 
colleagues and I were in Vietnam, or those young men and women 
breathing in that smoke from the fires in the Gulf.
    It is tough. These are tough issues because the science is 
never quite there. It is always mixed. And 20 or 30 years later 
veterans have got rare forms of cancer and they believe that it 
is related to their exposure to ionizing radiation and we force 
them to go through you know what to try to make the case for 
service-connection. We just have to do a better job. Certainly, 
I want to make sure the science is there because I want to 
protect the integrity of the C&P program. But at the same time, 
I think we need to do a better job. We need to be more 
compassionate and we need to apply the benefit of the doubt 
rule. And I intend to do that. I am going to look at it 
carefully, but I agree with you, Senator.
    Chairman Rockefeller. Well, you and I both remember when 
the so-called science did not appear to be there on Agent 
Orange until a fellow by the name of Zumwalt came in and set us 
straight, and then all of a sudden, the science seemed to make 
less difference. So we understand each other and I am happy 
with your answer.
    Now these are my pro forma questions and I will conclude 
the hearing with them.
    Do you, Mr. Principi, have any conflicts of interest which 
have not been fully disclosed to the committee, or do you know 
of any other matter which, if known to the committee, would 
impact upon the committee's recommendation to the Senate on 
your nomination?
    Mr. Principi. No, I do not.
    Chairman Rockefeller. Have you fully and accurately 
provided financial information to the committee in such form 
that it shall be considered as if submitted today under oath?
    Mr. Principi. I have.
    Chairman Rockefeller. Do you agree to supply such 
information, materials, documents, and other things as may be 
requested by the committee in the course of its oversight and 
legislative responsibility for as long as you serve as 
Secretary?
    Mr. Principi. I shall.
    Chairman Rockefeller. You have already answered this 
question, but I will ask it again. Do you agree to appear 
before the committee at all such times and on such matters as 
the committee shall request for so long as you serve as 
Secretary?
    Mr. Principi. I certainly will, Senator.
    Chairman Rockefeller. Very good.
    Senator Nelson, anything else?
    Senator Nelson. No. I just look forward to working with 
you, Mr. Principi.
    Mr. Principi. As do I, Senator. Thank you very much.
    Chairman Rockefeller. You have a very, very tough job 
coming up. A lot of good people have taken it on; nobody has 
conquered it yet. Maybe you are going to be the man.
    Mr. Principi. I will try.
    Chairman Rockefeller. The committee stands in recess.
    [Whereupon, at 3:55 p.m., the committee was adjourned, to 
reconvene at the call of the Chair.]
                            A P P E N D I X

                              ----------                              

  Prepared Statement of Hon. Daniel K. Akaka, U.S. Senator From Hawaii
    Mr. Chairman, it is an honor to join you and my colleagues in 
welcoming Mr. Anthony J. Principi to today's confirmation hearing on 
his nomination to be the Secretary of the Department of Veterans 
Affairs. The VA Secretary is an important cabinet position responsible 
for ensuring that veterans are provided quality services and benefits 
which they have earned through their courageous and selfless service in 
defense of our nation.
    I commend President-elect George W. Bush's nomination of Mr. 
Principi to be VA Secretary. Mr. Principi has extensive experience with 
the Executive and Legislative branches of the government. He served as 
the VA's first Deputy Secretary in 1989 after being appointed by former 
President George Bush, who named him the VA's Acting Secretary in 1992. 
He also served as Chief Counsel of the Senate Veterans' Affairs 
Committee and Staff Director of the Senate Armed Services Committee. 
Most recently, he served as Chairman of the Congressional Commission on 
Military Servicemembers and Veterans Transition Assistance which was 
responsible for reviewing the adequacy and effectiveness of 
servicemembers' and veterans' transition assistance programs.
    Mr. Principi's impressive background in dealing with veterans 
issues will assist him in addressing the challenges facing the VA. In 
the past few years the VA medical system has changed dramatically in 
order to better meet the needs of veterans. The VA has changed from an 
inpatient-based system to a primarily outpatient-based system. This has 
resulted in health care services which are more accessible, efficient, 
and focused on the needs of patients. While the VA has been able to 
treat more veterans, improve the quality of health care services, and 
increase patient satisfaction, there remain areas where improvements 
can and should be made. The progress made by the VA in the past does 
not mean much if they are not maintained and if there is not a 
continued effort to improve the effectiveness of the VA. I believe that 
Mr. Principi is fully aware of the challenges he will face as VA 
Secretary and is well-prepared to serve the men and women who served in 
the Armed Forces.
    As a highly decorated Vietnam veteran, Mr. Principi has a strong 
commitment to his fellow veterans which contributes to his belief in 
the Department of Veterans Affairs and its mission of service to 
veterans. In addition, he has proven that he possesses the dedication, 
knowledge, and experience which are needed to be a representative and 
advocate for veterans as VA Secretary. These qualities will serve him 
well as he leads the efforts of the VA to improve the quality of health 
care services, decrease the time in which benefits claims are 
processed, and enhance the adequacy and effectiveness of veterans 
benefits. For these reasons, I intend to support the confirmation of 
Mr. Anthony J. Principi as Secretary of the Department of Veterans 
Affairs, and look forward to working with him to address the needs of 
veterans.
                                 ______
                                 
 Prepared Statement of Hon. Ben Nighthorse Campbell, U.S. Senator From 
                                Colorado
    Good afternoon, Mr. Chairman. I cannot be with you today because my 
schedule requires me to lend support to fellow Coloradan Gale Norton in 
her confirmation hearing before the Energy Committee. I welcome you, 
Mr. Principi, and gladly support your nomination for Secretary of 
Veterans Affairs.
    President-elect Bush has said his goal is to modernize our 
veterans' health care system and to speed up the agency's notoriously 
slow claims process. Mr. Principi, I am pleased you were nominated to 
carry out this agenda. Your appointment is a powerful sign that this 
administration wants to take care of its veterans.
    You have said that the nation can never ignore its debt to its 
military veterans. That attitude will go a long way in tackling the 
tough job ahead of you. We can all agree that one of our greatest 
national responsibilities is the welfare of our nation's veterans. It 
is critical that we find a balanced way to make good on the promises 
made to them.
    You will be heading up an agency responsible for providing medical 
care and other services to 27 million veterans. Your participation in 
many levels of our veterans affairs system has strengthened your 
understanding of the management problems in a top-down system. This 
experience will be necessary in running a department that has 
experienced problems with accountability and efficiency during the past 
several years.
    As a fellow veteran, and as Senator of a state with one of the 
highest numbers of military retirees in the country, I look forward to 
working with you and enthusiastically endorse your nomination.
                                 ______
                                 
               Prepared Statement of The American Legion
    Mr. Chairman and Members of the Committee:
    The American Legion greatly appreciates the opportunity to provide 
written testimony regarding the appointment of Mr. Anthony J. Principi 
as the Secretary of Veterans Affairs. While The American Legion's 
legislative agenda contains several resolutions directly related to 
policies and procedures within VA, which will be addressed in today's 
hearing, this testimony is in no way an endorsement or denouncement of 
Mr. Principi's nomination. Section 2, Article II of The American Legion 
Constitution states: The American Legion shall be absolutely 
nonpolitical and shall not be used for the dissemination of partisan 
principles nor for the promotion of the candidacy of any person seeking 
public office or preferment.
    By providing written testimony for this important hearing, The 
American Legion hopes to bring attention to key issues affecting the 
quality and timeliness of services provided to America's veterans 
through VA programs and services. The recommendations outlined in this 
testimony will assist the new Secretary in carrying out his 
obligations.
    The past eight years have witnessed a significant reorganization 
and realignment of Veterans Health Administration (VHA) resources and 
programs. More has been done to improve VA health care in the past five 
years than was accomplished over the past several decades. Quality, 
efficiency and effectiveness are the hallmarks of today's VHA. In order 
to sustain the progress made in VHA since 1992, several additional 
objectives must be met. These essential actions include Medicare 
subvention and greater cooperation with the Department of Defense (DoD) 
health care system.
    Congress must continue to increase VHA funding to maintain a world-
class health care system. There are precious little additional 
efficiency savings expected throughout the system. Yet, those veterans 
now enrolled and using the system will continue to rely on VHA for the 
foreseeable future. Therefore, The American Legion believes Congress 
must examine how to balance the annual appropriations process with 
additional funding that will not be offset by the Office of Management 
and Budget (OMB). The American Legion believes that a strategic goal of 
VHA should be to seek opportunities to increase non-appropriated 
funding. The now invalid 30-20-10 strategic goals sought to enhance the 
annual appropriations process by increasing non-appropriated revenues 
by ten percent by the year 2002. This goal should be revived.
    The guiding principle for VA must be improved service to veterans 
and to their dependents and survivors. This requires improving access 
to and the timeliness of veterans' health care, increasing quality in 
the benefit claims process, and enhancing access to national and state 
veterans' cemeteries. Specific goals yet to be achieved include:
     Set the veterans' health care system on a sound financial 
footing for meaningful long-term strategic planning and program 
performance,
     Improve clinic appointment scheduling for access to 
medical treatment,
     Enact Medicare subvention legislation,
     Establish pilot programs to provide health care to certain 
dependents of eligible veterans,
     Improve cooperative arrangements between VA and DoD's 
Tricare system,
     Reduce the benefits claims backlog and improve the quality 
of the claims process,
     Continuous enhancement of the Montgomery GI Education 
Bill,
     Repeal of section 1103, title 38, United States Code, 
concerning service connection of tobacco-related illnesses,
     Increase the rate of beneficiary travel reimbursement.
                     veterans health administration
    The American Legion commends VHA for the evolutionary changes made 
over the past several years. Most, if not all, of these alterations 
were long overdue and necessary. This includes eligibility reform, 
enrollment, the reorganization of the 172 medical centers into 22 
integrated service networks, the elimination of certain fiscal 
inefficiencies, and the expansion of community-based outpatient 
clinics. For many years, VHA's annual budget appropriation was the 
guiding principle behind its management decisions. To a degree this is 
still true. However, today there is growing evidence that VHA strategic 
planning will help guide future budget development.
    The primary short-term objectives of VHA must be to improve patient 
access and health services delivery. The American Legion's VA Local 
User Evaluation (VALUE) guidebook cites patient access as the largest 
single source of continuing veteran complaints. Paradoxically, as VA 
annual inpatient admissions have decreased by 32 percent since 1994, 
ambulatory care visits have increased 35 percent. This phenomenon, 
along with a large decrease in administrative and clinical staff and a 
significant increase in patient enrollments over the past few years, 
has placed a tremendous strain on VHA's ability to meet its workload in 
a timely and consistent manner. As VHA becomes more proficient in 
attracting new patients, it must also provide consistent access to care 
across all 22 Veterans Integrated Service Networks (VISNs).
    Currently, the national average waiting time for a routine, next-
available appointment for Primary Care/Medicine is 64 days (with a 
range of 36-80 days). The next available appointments for specialty 
care:

------------------------------------------------------------------------
                                                  Average
                Specialty Care                      Days        Range
------------------------------------------------------------------------
Eye Care (combined Ophthalmology & Optometry).           94       42-141
Audiology.....................................           50        22-91
Cardiology....................................           53        19-78
Orthopedics...................................           47        12-69
Urology.......................................           79       39-108
------------------------------------------------------------------------

    There are additional concerns about the average clinic appointment 
waiting times for dermatology and pulmonary clinics. However, these 
specialty clinics are not included in the VISN director's performance 
standards. Therefore, no national average waiting times were reported. 
In the main, these waiting times indicate that there are serious access 
differences between VA health care and private sector health care.
    There are also reported concerns about large distances that 
veterans in rural areas have to travel for certain care. For example, 
veterans in eastern Montana must travel nearly 700 miles to Fort 
Harrison, Montana for routine inpatient surgery. For complex surgical 
procedures, these same veterans are required to travel to Salt Lake 
City or Denver. This excessive travel places great strain on veterans 
and their families. Since 1994, the Miles City, Montana VA Medical 
Center has reduced its payroll over $7 million per year by eliminating 
nearly 145 full time employee positions. The American Legion questions 
why contract services for required surgery have not been acquired to 
reduce excessive travel requirements?
    In some cases, The American Legion believes VHA has gone too far, 
too fast in attempting to improve its fiscal efficiency. Veterans 
should not have to increase their travel time for the benefit of VA. 
Rather, VHA needs to improve its cooperation with other federal, states 
and private health care providers to improve the quality and timeliness 
of care for veterans.
                           gi bill of health
    Several years ago, The American Legion created a blueprint for 
meeting the current and future health care needs of America's veterans 
and for supplementing VHA's annual health care appropriation. By now, 
Members of this Committee should be familiar with the proposed GI Bill 
of Health. Once fully implemented, the GI Bill of Health would expand 
VHA's patient base and increase its non-appropriated funding through 
new revenue sources.
    VHA's short-term and long-term future must be clearly defined to be 
responsive to the veterans' community. All individuals who enter 
military service should be assured that there is a health care system 
dedicated to serving their needs upon leaving the military. That 
concept is especially important to disabled veterans and to military 
retirees. The GI Bill of Health would ensure that all honorably 
discharged veterans would be eligible for VA health care on a permanent 
basis, as they would fall into one of the core entitlement categories. 
A unique feature of the GI Bill of Health is that it would also permit 
certain dependents of veterans to enroll in the VA health care system. 
The American Legion advocates that dependents and surviving spouses of 
veterans be allowed to use the system and that all monies recovered 
from any source based on such treatment be returned to VA. An 
additional significant step will be to enact VA-Medicare subvention.
    At the current workload level, VHA requires an annual appropriation 
increase of approximately $1 billion to maintain current services and 
meet its prosthetics and pharmacy costs. The amount of potential 
efficiency savings is decreasing yearly. The projected $3 billion 
funding increase over FY 2000-2001 must compensate for the flat line 
budgets of FY 1997-99 and fully fund the provisions of the Millennium 
Act. Consequently, there is a continuing need to adequately fund VHA's 
uncontrollable cost increases at an acceptable level.
    Change within VHA, over the past several years, has been the result 
of a series of small steps. The American Legion acknowledges that the 
progress made within VHA has been extraordinary. However, this progress 
has to be sustained and reinforced. In order to accomplish this goal, 
Congress must unlock the creative potential of VHA to develop 
alternative revenue sources to complement the annual appropriations 
process.
    At a recent VA planning meeting, VHA unveiled six strategic goals 
to be accomplished by 2006:
     Put quality first,
     Provide easy access to medical knowledge, expertise and 
care,
     Enhance, preserve and restore patient function,
     Exceed customers' expectations,
     Maximize resource use to benefit veterans, and
     Build healthy communities.
    The American Legion believes these are important goals. We also 
think VHA must continue to improve its efficiency. However, we believe 
VHA must explore all opportunities to develop alternative revenue 
sources to complement its annual appropriations. To do less will 
continue to force VHA to solely rely on the annual budget process to 
establish patient treatment priorities. There is a distinct possibility 
that if future funding does not keep pace with the needs the veterans 
who seek treatment through VHA, the current open access to all seven-
priority groups will close.
                          medicare subvention
    Public Law 105-33, the Balanced Budget Act of 1997, established 
VA's Medical Care Collection Fund (MCCF) and requires that amounts 
collected or recovered after June 30, 1997, be deposited in this 
account. Beginning October 1, 1997, amounts collected in the fund are 
available only for furnishing (1) VA medical care and services during 
any fiscal year; and for (2) VA expenses for identification, billing, 
auditing and collection of amounts owed the government. Public Law 105-
33 also extended to September 30, 2002, the following Omnibus Budget 
Reconciliation Act (OBRA) provisions:
     Authority to recover co-payments for outpatient 
medications, nursing home and hospital care;
     Authority for certain income verification; and
     Authority to recover third-party insurance payments from 
service-connected veterans for nonservice-connected conditions.
    The Health Service Improvement Fund was established to serve as a 
depository for amounts received or collected under the following areas 
as authorized by title 38, U.S.C., Section 1729B:
     Reimbursements from DoD for Tricare-eligible military 
retirees;
     Enhanced-use lease proceeds; and
     Receipts attributable to increases in medication co-
payments.
    The Extended Care Revolving Fund was also established by the 
Millennium Act and was to receive per diems and co-pays from certain 
patients receiving extended care services authorized in title 38, USC, 
Section 1710B. Amounts deposited in the fund are used to provide 
extended care services.
    Clearly, Congress is providing VA with the authority to bill, 
collect, retain and use revenues from sources other than direct, 
federal discretionary appropriations. However, one of the major health 
care payers (Medicare) is exempt from billing; yet, its beneficiaries 
are welcomed and encouraged to receive treatment in VA medical 
facilities.
    Currently, approximately 10.1 million veterans are Medicare-
eligible solely based on their age. Criteria for Medicare-eligibility 
are different than eligibility for treatment in VA. In the VA health 
care network, certain veterans are eligible for treatment at no cost 
for medical conditions determined to be service-connected. Other 
veterans are eligible for treatment at no cost because they are 
economically indigent. All other veterans must pay for treatment 
received.
    Medicare subvention would allow VA to seek reimbursement from the 
Health Care Financing Administration (HCFA) for treatment of 
nonservice-connected medical conditions of Medicare-eligible veterans, 
especially those veterans who are military retirees.
    More than 734,000 Medicare beneficiaries have lost HMO coverage 
over the past two years and another 934,000 seniors will be dropped by 
their HMO plans next year. Many VA eligible beneficiaries are included 
in those dropped from coverage and will eventually come to VA for care. 
The argument that VHA is already reimbursed for its Medicare population 
and that Medicare subvention will result in double funding is grossly 
mistaken. VHA is now mandated to provide care to all seven priority 
groups; Medicare eligibility is not a mandate for care or treatment. As 
more Medicare eligible veterans seek first time care in VHA, health 
care costs and subsequent waiting times will increase. It is imperative 
that Congress examines this issue and takes the actions necessary to 
ensure that VHA receives all funding necessary to execute its health 
care mission in a quality and timely manner.
                                tricare
    The most significant recent change in military health care is the 
introduction of Tricare, the DoD regional managed care program. 
Introduced in 1995, Tricare today is being challenged to maintain a 
quality health care delivery system for active duty military personnel, 
certain military retirees, and dependents.
    Today, DoD is having severe administrative problems with Tricare. 
The American Legion is extremely concerned how DoD will fix these 
problems and how favorably DoD Health Affairs can guarantee Tricare's 
long-term success.
    There are multiple reasons why Tricare is failing to meet the 
expectations of its beneficiaries. Some of these include:
     Infrastructure and financial problems,
     Problems with provider networks--resulting in weak network 
links to subcontractors,
     The inability to attract and retain qualified health care 
contractors,
     No financial tracking system outside of the Military 
Treatment Facilities,
     Difficulties in processing claims in a timely manner,
     Tricare lacks portability between all 12 regions,
    The American Legion believes that VHA can greatly assist DoD 
through expanded authority to provide care to Tricare beneficiaries. 
With limited budgets, both VA and DoD must discover innovative ways to 
provide care to active duty personnel, to all veterans and military 
retirees, and to eligible dependents.
    Congress recognized the utility of having VHA play a greater role 
in the treatment of Tricare beneficiaries when it passed the Veterans 
Millennium Health Care and Benefits Act (PL 106-117). This legislation 
requires VA and DoD to enter into an agreement to reimburse VA for the 
cost of care provided to retired servicemembers who are eligible for 
Tricare and who are enrolled as Priority 7 veterans. These veterans 
would not be required to pay VA inpatient and outpatient copayments.
    Eight years ago, it was impractical to suggest that VHA was capable 
of assisting DoD in resolving many of its patient treatment problems. 
Today, although not without concerns of its own, VA is in a much better 
position, both financially and organizationally, to assist with the 
delivery of health care to DoD beneficiaries. The American Legion 
believes that VA and DoD should closely coordinate medical care 
services to the extent possible, thereby eliminating duplication of 
effort and achieving greater cost efficiencies. With active planning, 
VHA can become the largest single provider of health care to America's 
veterans, military retirees, and their dependents. DoD could then 
assume the responsibility of providing health care to active duty 
servicemembers, Reserve Component members, and their dependents.
                    veterans benefits administration
    Given the number of veterans and other eligible beneficiaries who 
file claims each year and with an annual expenditure of over $19 
billion in compensation and pension payments, it is imperative that 
Congress maintain strong oversight of the operations of the Veterans 
Benefits Administration's (VBA) Compensation and Pension Service.
    Over the last several years, the backlog of pending claims has 
fallen from approximately 450,000 to less than 325,000 cases. However, 
it still routinely takes six months to a year or more to process 
disability compensation claims, because of the increased number of 
issues per claim and their legal complexity. In addition, annually, 
some 30,000 to 40,000 new appeals are initiated and it will take over 
two years for an appeal to reach the Board of Veterans Appeals (BVA or 
the Board). The Board is currently reviewing appeals docketed in April 
and May of 1999. Of the cases decided by the Board during the first 
nine months of FY 2000, 25.9 percent were allowed and 29.3 percent were 
sent back to the regional office for further development and 
readjudication. Remanded cases may be pending for another year or two 
in the regional office, and a substantial percentage will eventually be 
returned to the Board. Sometimes, cases are remanded two and three 
times, because the regional office fails to complete the specified 
corrective action, which adds several more years to the appeal. It is 
little wonder that veterans are angry and frustrated. The system 
appears all too often to be adversarial and unresponsive to their 
needs.
    Despite this history, The American Legion believes VBA is committed 
to bringing about much needed change to the claims adjudication system 
with the overall goal of providing quality, timely service to veterans 
and its other stakeholders. In recent years, VBA's strategic plans have 
made many promises and we have, in fact, seen the implementation of a 
variety of programmatic and procedural changes. However, it is obvious 
that progress toward major improvements in service continues to be slow 
and that much remains to be done. Unfortunately for thousands of 
veterans and other claimants, the overall quality of regional office 
decision-making remains inconsistent and problematic.
    Beginning in late 1997, The American Legion implemented a program 
of formal visits to VA regional offices (VAROs) to gain greater insight 
into the underlying causes for veterans' complaints about unacceptably 
long processing times, the high number of appeals, and the substantial 
overturn rate by the Board. These visits have provided our staff the 
opportunity to evaluate, firsthand, the quality of recently adjudicated 
Legion cases. We have been very pleased with the level of cooperation 
received and the support expressed for this program by VA Central 
Office and regional office officials. Over this period, our staff has 
reviewed approximately 350 claims involving original and reopened 
claims for service connection and entitlement to an increased rating 
for a service-connected disability at 15 VAROs. Some type of 
substantive error was found in 40 to 50 percent of the cases reviewed. 
An exit briefing has been held with the regional office director and 
the service center manager at the conclusion of each visit to discuss 
specific findings. Subsequently, the regional office director, the 
Under Secretary for Benefits, his staff and Legion officials are 
provided a written report covering management issues and the individual 
case review findings.
    Comparing the reports of the past two years, The American Legion 
found there has been little overall improvement in the way claims are 
being adjudicated. At most of the offices, there has been a pattern of 
recurring problem issues, which continue to have a direct and adverse 
effect on the quality and timeliness of regional office claims 
adjudication. They relate to budget, staffing, training, quality 
assurance, accountability, and attitude. These findings confirm our 
long-held view that quality must be VBA's highest priority. Without 
guaranteed quality, along with personal and organizational 
accountability, thousands of claims will continue to revolve 
unnecessarily through the system. Much of VBA's valuable financial and 
personnel resources will be wasted, and veterans will not receive the 
benefits and services they are entitled to and that Congress intended 
they should have.
       grants for construction of state extended care facilities
    Currently, this nation is faced with the largest aging veterans' 
population in its history. VA estimates the number of veterans 65 years 
of age or older will peak at 9.3 million in the year 2000. By 2010, 42 
percent of the entire veteran population, an estimated 8.5 million 
veterans, will be 65 or older, with half that number above 85 years of 
age. By 2030, most Vietnam Era veterans will be 80 years of age or 
older. The State Veterans' Home Program must therefore continue, and 
even expand its role as an extremely vital asset to VA. Additionally, 
state homes are in a unique position to help meet the long-term care 
requirements of the Veterans Millennium Health Care and Benefits Act.
    State homes provide over 24,000 beds with a 90 percent occupancy 
rate that will generate more than seven million days of patient care 
each year. The authorized bed capacity of these homes is 90 nursing 
care units in 40 states (17,844 beds); 46 domiciliaries in 32 states 
(5,841 beds); and 5 hospitals in 4 states (469 beds). For FY 1999, VA 
spent $255 per day to care for each of their long term nursing care 
residents, while paying private-sector contract nursing homes an 
average per diem of $149 per contract veteran. The national average 
daily cost of caring for a state veterans' home nursing care resident 
during FY 1999 was $137. VA reimbursed state veterans' homes a per diem 
of only $40 per nursing care resident.
    As many VA facilities reduce long-term care beds and VA has no 
plans to construct new nursing homes, state veterans' homes are relied 
upon to absorb a greater share of the needs of an aging veteran 
population. If VA intends to provide care and treatment to greater 
numbers of aging veterans, it is essential to develop a proactive and 
aggressive long-term care plan. VA should work with the National State 
Veterans' Homes' Directors to convert some of its underutilized 
facilities on large multi-building campuses to increase the number of 
available long-term care beds.
                                pharmacy
    In 1997, VA established the National Formulary Policy that allows 
for pharmaceuticals listed on the formulary to be made available 
throughout the entire VA healthcare system. Once on the formulary, 
those pharmaceuticals listed on the formulary cannot be made non-
formulary at the VISN or local level.
    The Pharmacy Benefits Management Board (PBM) determines which 
pharmaceutical items are to be included in the formulary based on 
scientific evidence guidelines and prescribing privileges and not cost. 
Also, VA has established a policy for requesting a non-formulary drug 
and each VISN has a protocol for prescribing providers to request a 
patient be treated with a non-formulary medication which must be 
justified by the National PBM Board.
    The American Legion is concerned that the justification process for 
the non-formulary prescriptions interferes with the doctor-patient 
relationship and causes doctors to fear poor performance evaluations if 
they prescribe non-formulary items. VA needs to be more proactive in 
communicating to the field its policy for pharmaceutical best practices 
associated with prescribing, purchasing, dispensing, administering, and 
tracking medications, so that providers can act in the best interests 
of their patients, reduce adverse medication events, and not worry 
about administrative ramifications.
    The American Legion supports a program that will allow veteran-
patients access to the most appropriate pharmaceuticals regardless of 
whether or not an item is formulary or non-formulary and providers 
should not be penalized on their performance measures for using non-
formulary items.
                      gulf war veterans' illnesses
    The American Legion continues to actively support Gulf War veterans 
and their families, as it has since August 1990. The American Legion 
created two particular programs specifically for Gulf War veterans, the 
Family Support Network in October 1990, and the Persian Gulf Task Force 
in October 1995. Today, The American Legion serves Gulf War veterans 
and their families at the community, state, and national levels through 
15,000 local posts and an array of programs and services.
    Thousands of Gulf War veterans, who suffer undiagnosed illnesses 
with a range of symptoms, know as ``Gulf War veterans' illnesses,'' are 
not receiving adequate care or compensation from VA and DoD. In this 
regard, The American Legion makes the following recommendations:
     VA and DoD should conduct their respective exams in a 
standard and uniform way as well as create a database that will merge 
the individual data from both exams so that patterns in health can be 
better analyzed,
     VA and DoD should aggressively move to educate its medical 
doctors about newly defined illnesses (Chronic Fatigue Syndrome, 
Fibromyalgia, etc.) that are commonly misdiagnosed as psychological 
conditions. VA should also discourage its doctors from giving diagnoses 
for common symptoms unless diagnosed properly and so that the Registry 
and CCEP data will be accurate,
     VA and DoD should conduct extensive follow-up to Gulf War 
veterans who participate in the Registry and CCEP examinations to 
monitor health status.
    In the upcoming year, the American Legion will be pursuing 
legislation to amend Title 38 USC Sec. 1117, Compensation for 
Disabilities Occurring in Persian Gulf War Veterans. In November 1994, 
the Persian Gulf War Veterans Benefits Act (Public Law 103-446) was 
enacted to compensate Gulf War veterans suffering from illnesses or 
symptoms that can not be diagnosed or clearly defined. As the number of 
sick Gulf War veterans continues to increase, it is quite apparent the 
VA is too narrowly implementing the law (38 C. F. R. Sec. 3.317) and 
effectively denying compensation to veterans that the law was intended 
to help. It is clear that the intent of Congress was not only to 
compensate Gulf War veterans with conditions that can not be diagnosed 
but to also compensate sick veterans diagnosed with ill-defined 
conditions such as chronic fatigue syndrome or fibromyalgia. The 
American Legion, calls upon the VA to extend the presumptive period for 
service connection for undiagnosed illnesses indefinitely.
    In September 2000, in response to DoD disclosure that South Korean 
troops sprayed the herbicide Agent Orange along the demilitarized zone 
between North and South Korea in 1968 and 1969, VA expanded its Agent 
Orange registry program to include veterans who served in Korea during 
that time period. As approximately 80,000 troops may have been exposed, 
The American Legion strongly urges VA to take appropriate action to 
ensure that Agent Orange related compensation, currently afforded the 
Vietnam veterans is extended to these veterans.
                       homeless veterans programs
    On any given night, there are approximately 750,000 homeless people 
in America. Of that number, at least one third are veterans. 
Furthermore, in most major cities, the percentage of veterans in the 
homeless male population is over 50 percent.
    While The American Legion is concerned about the homeless problem 
in general, it is particularly concerned about the plight of homeless 
veterans and is committed to bringing an end to this national disgrace.
    The American Legion is monitoring the problem and is acting as a 
clearinghouse for information on the resources and programs that are 
available to assist homeless veterans. Representatives of the Economic 
and Veterans Affairs & rehabilitation Commissions within The American 
Legion are working with both the public and private sectors to find 
unique and effective ways of assisting homeless veterans and bringing 
an end to homelessness in America.
    Resolution No. 144 from The American Legion's 82nd National 
Convention outlines our organizational support for the Homeless 
Chronically mentally Ill program, the Homeless Domiciliary program and 
the Compensated Therapy Rehabilitation program to be funded separately 
from general VA funding.
            medical construction and infrastructure support
Major Construction
    The VA major construction program is not being funded in an 
adequate manner. The major construction appropriation over the past few 
years has allowed for only one or two projects per year. Meanwhile, the 
number of priority projects continues to accumulate. For FY 2001, 16 
major ambulatory care or seismic correction projects were submitted to 
OMB. Of this number, only one major VHA project is recommended. For FY 
2002, 28 major projects are submitted for funding.
    VHA currently has 66 patient care and other related use buildings 
that require significant seismic correction. Along with the necessary 
ambulatory care and patient safety projects, it will require from $250 
million to nearly $1 billion to address VHA's current major 
construction requirements. Of the 28 major projects submitted for 
funding consideration for FY 2002, 22 are ambulatory care related and 
six are seismic correction projects.
    The American Legion objects to efforts to close VHA medical 
facilities for the sake of cost cutting. At a time that access to care 
and service delivery is eroding, the Capital Asset Realignment Study 
(CARES) process may find that VHA needs to expand service in certain 
areas. It is unthinkable that the expansion of care option would not be 
part of the CARES review. No planning options should be excluded; that 
includes contraction, expansion, and maintaining the status quo. In the 
final analysis, the CARES process must consider what is best for the 
veteran, not what is best for VHA.
    VHA needs to use the disposal authority it already has to begin to 
reduce its unused building inventory. The CARES process may be too time 
consuming to allow VHA to divest itself of unneeded buildings in an 
appropriate timeframe.
    Currently, ten major medical center projects are considered high 
priority. Additionally, two parking structures are rated as priority 
projects. These are:
     Long Beach--Seismic Correction/Clinical--$26.6 million
     San Diego--Seismic Correction/Bldg. 1--$51.7 million
     Miami--Hurricane and Flood Addition--$23.6 million
     Augusta--Spinal Cord Injury Modernization--$18.3 million
     Cleveland (Brecksville)--Buildings for Special Emphasis 
Programs--$39 million
     VISN 6--Special Emphasis Beds--$28.9 million
     Dallas--Mental Health Enhancement--$27.2 million
     Atlanta--Modernize Patient Wards--$12.8 million
     Fargo--Ambulatory Care/Patient Environment--$18.4 million
     Cleveland (Wade Park)--Clinical Consolidation--$18.6 
million
     West Haven--Patient Environment--$13.8 million
     St. Louis--Parking Structure--$5.2 million
     Tampa--Parking Structure--$10.7 million
Minor Construction
    Annually, VHA must meet the infrastructure requirements of a system 
with approximately 4,700 buildings, 600,000 admissions and over 35 
million outpatient visits. To do so requires a substantial inventory 
investment. For the past several years, minor construction has been 
funded in the annual range of $175 million. It is penny wise and pound-
foolish to reduce this investment. If Congress fails to appropriate 
$175 million for minor construction in FY 2002, VHA will have to delay 
approximately one-third of its priority minor projects.
                                summary
    Mr. Chairman, VHA and VBA have made considerable progress in 
addressing many of their shortcomings over the past several years. In 
this statement, The American Legion has laid out the priority issues 
still facing VA. Many of the issues cited will not be resolved 
overnight. There is a lot of agreement within VA and among Members of 
Congress that many of the subjects discussed justly require priority 
attention. That being so, let's commit to developing effective short-
term and long-range strategies to address these matters and as a 
result, improve the services and programs of the Department for current 
and future generations of America's veterans.
    There are many important issues before the Congress of the United 
States. However, The American Legion believes that Congress must focus 
on finding effective solutions to veterans' concerns. The veterans of 
this nation have always answered when their country called. It is time 
to make a fundamental commitment to make the programs and services of 
VA second to none in helpfulness, effectiveness and efficiency. The 
priority challenges facing VA today:
     Increase access to VA health care and improve the 
timeliness of such care,
     Develop new non-appropriated revenue streams to complement 
the VA health care appropriations process, without OMB funding offsets,
     Enact the Medicare subvention provision of the GI Bill of 
Health,
     Enact the dependents care provision of the GI Bill of 
Health,
     Increase resource sharing and cooperation between VA and 
DoD health care,
     Provide adequate medical research and medical construction 
funding,
     Maintain strong oversight of Persian Gulf War statutes,
     Make veteran friendly improvements to the Montgomery GI 
Bill,
     Continue the recent expansion of newly constructed 
national and state veterans' cemeteries,
     Amend the current statute that restricts veterans' 
eligibility to obtain an appropriate VA headstone or marker for 
previously marked graves,
     Ensure qualitative improvements are made in VA 
Compensation and Pension Service,
     Provide necessary funding support for the General 
Operating Expenses of the Veterans Benefits Administration,
     Develop a realistic and viable short-term and long-range 
strategic plan to include all VA programs and services,
     Establish initiatives to persuade civilian employers to 
recognize formal military training.
    Mr. Chairman and Members of the Committee, in this statement, we 
have laid out the priorities of The American Legion regarding the many 
programs and services made available to the veterans of this nation and 
to their dependents and survivors. As this nation begins a new century, 
let us never forget those brave men and women who have honorably served 
this nation and those who are still serving. Let us agree that this 
nation will always make the right decisions regarding earned benefits 
for our veterans, their dependents and survivors.
    Thank you for allowing The American Legion to provide testimony for 
this important confirmation hearing.
                                 ______
                                 
  Prepared Statement of David E. Woodbury, AMVETS National Executive 
                                Director
    Mr. Chairman, I am Dave Woodbury, National Executive Director for 
AMVETS. We appreciate the opportunity to provide written testimony 
concerning the nomination of Mr. Anthony J. Principi to serve as the 
Secretary of Veterans Affairs.
    AMVETS is a congressionally chartered veterans service organization 
whose membership is open to all honorably discharged veterans who have 
served their country, including those currently on active duty. We are 
proud of our rich tradition as veterans' advocates. We believe that a 
``grateful nation'' has a sacred duty to honor veterans and to make 
good on the promises made by our forebears to care for those who have 
worn this nation's uniform in their time of need. We thank you, Mr. 
Chairman, and the members of your committee for this opportunity to 
support Mr. Principi's nomination. We also thank you for your support 
and leadership on behalf of veterans' programs.
    We are certainly mindful of the importance of this high national 
office. The Department of Veterans Affairs is the federal government's 
second largest department, responsible for a nationwide system of 
health-care services, benefits programs and national cemeteries 
supporting more than twenty-seven million veterans. Its role is central 
to ensuring that our veterans receive critical medical care, benefits 
to which they are legally entitled, and lasting remembrance for their 
selfless sacrifices, patriotism, and unswerving dedication to this 
nation whenever America called.
    We believe the Department of Veterans Affairs should be led by an 
individual who understands that freedom is not free; that the price is 
too frequently measured in terms of lives lost, citizen soldiers either 
physically or psychologically crippled for life--men and women whose 
service to our nation left them irreparably damaged. This leader must 
be a veterans advocate for he and the department he leads hold the fate 
of millions of patriotic Americans in their grasp.
    In these terms, AMVETS is encouraged by President-elect George W. 
Bush's nomination of Anthony J. Principi to be Secretary of Veterans 
Affairs. We believe the President-elect has chosen a man who possesses 
the vision, commitment, dedication and compassion to successfully lead 
the department in its continuing efforts to address and solve those 
issues on which veterans' welfare is so critically dependent. We are 
heartened by the fact Mr. Principi is a combat veteran who has 
displayed a lifelong commitment to and respect for our men and women in 
uniform. His earlier service as Deputy Secretary of Veterans Affairs, 
as Acting Secretary, and more recently, as Head of the Congressional 
Commission on Service members and Veterans Transition Assistance, has 
consistently demonstrated a thorough understanding of and sensitivity 
to the issues which directly impact on the quality of life of veterans.
    In summary, Mr. Chairman, AMVETS wholeheartedly endorses Mr. 
Principi's nomination as Secretary of the Department of Veterans 
Affairs. We believe he is the right man for the job at a time when 
veterans need and deserve a strong, fair, and committed advocate. We 
urge you and your Committee to forward Mr. Principi's nomination 
favorably to the full Senate for confirmation.
    Thank you again, Mr. Chairman, for providing AMVETS the opportunity 
to submit written testimony concerning the nomination of Anthony J. 
Principi as Secretary of Veterans Affairs.
                                 ______
                                 
  Prepared Statement of Thomas H. Miller, Executive Director, Blinded 
                       Veterans Association (BVA)
    Mr. Chairman and members of this distinguished committee, on behalf 
of the Blinded Veterans Association (BVA), I want to express our 
sincere appreciation for the invitation to submit written testimony on 
the nomination of Mr. Anthony J. Principi to be Secretary of Veterans 
Affairs. BVA is very pleased to endorse his nomination for this vital 
position within the administration's cabinet.
    Mr. Principi possesses outstanding credentials that will enable him 
to fulfill completely and honorably the responsibilities of the 
position of Secretary. In addition to being a decorated veteran of the 
Vietnam War, Mr. Principi has had a long and distinguished career in 
public service. As we all know, much of his service has been on behalf 
of America's veterans--both in the Legislative and Executive Branches 
of the government.
    BVA has worked closely with Mr. Principi during his tenures as both 
Staff Director and Chief Council of the committee as well as in his 
capacity as Deputy Director of Veterans Affairs under Secretary 
Durwinski. During his service on the Hill as well as within the VA, Mr. 
Principi demonstrated the exceptional management and leadership skills 
necessary to undertake the responsibilities of heading the second 
largest department in the federal government. His dedication and 
commitment to veterans and their families will also contribute to Mr. 
Principi's success as Secretary of Veterans Affairs.
    It is extremely important to highlight Mr. Principi's effective 
management style during his service as Deputy Secretary. This Committee 
held an Oversight Hearing in June of 1990 on Prosthetics and the 
Special Disabilities Programs. The hearing occurred at a time when 
these programs were suffering from lack of resources and upper-
management support. Mr. Principi was the lead witness for the 
Department and committed himself to rectifying the problems identified 
during the hearing. Despite repeated attempts by management at the 
Health Care Service to reverse policy decisions that had resulted from 
the hearing, Mr. Principi never faltered and maintained his promises.
    One of the important outcomes of the Oversight Hearing was the 
establishment of the Federal Advisory Committee on Prosthetics and 
Special Disabilities Programs. As one of the initial members of that 
Committee, I can personally attest to Mr. Principi's insistence that 
the commitments he had made be fully implemented and supported. This 
kind of leadership was very refreshing, and it resulted in the 
successful resolution of many of the problems identified at the 
hearing.
    BVA has always been extremely impressed with the interest shown by 
Mr. Principi in support of the Special Disabilities Programs. As BVA is 
most directly concerned with the Blind Rehabilitation Services provided 
by VA, Mr. Principi's exceptional sensitivity to the needs of America's 
blinded veterans and their families has resulted in the organization's 
strong endorsement of his nomination. Based on my personal experience 
on the Advisory Committee, it is abundantly clear that Mr. Principi's 
interest in the other Special Disabilities Programs was just as 
genuine.
    For the aforementioned reasons, BVA believes Mr. Principi possesses 
all the qualities and characteristics essential to being an effective 
leader of the Department of Veterans Affairs and advocate for America's 
veterans. His proven record of dedicated service, his in-depth 
knowledge of the Department, and his impeccable integrity leave no 
questions as to the validity of his nomination. The Blinded Veterans 
Association strongly urges a swift Committee recommendation to confirm 
Mr. Principi as the new Secretary of Veterans Affairs.
                                 ______
                                 
 Prepared Statement of David W. Gorman, Executive Director, Washington 
             Headquarters of the Disabled American Veterans
    Mr. Chairman and members of the committee:
    On behalf of the more than one million members of the Disabled 
American Veterans (DAV) and its Auxiliary, I express my appreciation 
for this opportunity to present the written views of our organization 
on the nomination of Anthony Principi for the office of Secretary of 
Veterans Affairs.
    Mr. Chairman, in these challenging times that confront our nation, 
the Department of Veterans Affairs (VA) stands at an important 
crossroads in its history. The impact your deliberations will have upon 
the present and future well being of America's veterans, their 
dependents and survivors, and the Department established to care for 
them, is significant.
    Your actions today are of primary importance in terms of assuring 
that the highest caliber of leadership is placed at the helm of our 
nation's system of federal veterans' benefits and services.
    The magnitude of the responsibility of the VA and the scope of its 
various programs are well known to this Committee. The wide array of 
specialized care to meet the unique needs of veterans, such as amputee 
programs, advanced rehabilitation, prosthetics, spinal cord injury 
medicine, blind rehabilitation, post traumatic stress disorder 
treatment, mental health services, and long-term care is at the very 
heart of the VA health care system.
    In addition, the VA supplies one-third of all care provided for 
this nation's chronically mentally ill. About 25 percent of the 
nation's homeless are veterans, and the VA has developed broad-reaching 
programs to meet their psychosocial needs. The VA is also the largest 
source of health care for AIDS-related disorders. Many of the men and 
women treated by VA simply do not have health insurance or cannot 
afford to pay for medical care. For them, the VA is their only health 
care safety net.
    Mr. Chairman, the VA's responsibilities also include providing 
veterans, their dependents and survivors with service-connected 
disability and death compensation, nonservice-connected disability and 
death pension, vocational rehabilitation, assistance in educational 
pursuits, guaranteed home loans, and life insurance protection.
    The individual who becomes Secretary of Veterans Affairs shoulders 
an enormous responsibility to ensure our government honors America's 
commitment to the men and women who served our great nation and 
preserved our freedoms. This Committee, and the Congress as a whole, 
assume no less of a responsibility.
    The DAV believes that the next Secretary of Veterans Affairs must 
be an individual who possesses those characteristics and traits of 
leadership necessary to successfully direct a national system of 
federal veterans' benefits and services and advance the interests of 
our nation's veterans. Because VA is currently poised at a significant 
crossroad in its history--restructuring its health care system to 
better meet the needs of sick and disabled veterans--the next Secretary 
must possess a combination of knowledge, skill, and experience of 
veterans' issues to enable him or her to guide the VA down the most 
appropriate path.
    Mr. Chairman, I firmly believe that Tony Principi is sufficiently 
qualified to be Secretary of Veterans Affairs. Indeed, as his record 
demonstrates, he possesses the essential experience to lead the VA in 
the 21st century, and to improve the quality of life for veterans and 
their families by improving the delivery of benefits and health care 
services provided by the VA.
    Mr. Principi, a decorated combat veteran of the Vietnam War, served 
as the first Deputy Secretary of Veterans Affairs and later as the 
Acting Secretary. He is thoroughly familiar with the bureaucratic 
system that is charged with delivering timely, quality benefits and 
health care services to our nation's veterans.
    His prior experience at the VA and on Capitol Hill, where he served 
as Chief Counsel and Staff Director for the Senate Armed Services 
Committee and Committee on Veterans' Affairs, will enable Tony Principi 
to swiftly take command of the leadership role at VA to make certain 
that veterans' issues are considered a national priority in the new 
Administration and especially during this transition period.
    Mr. Chairman, while we firmly believe that Mr. Principi possesses 
the requisite requirements to assume the office to which he aspires, we 
would be negligent in our obligation to our nation's veterans if we did 
not recognize your Committee's obligation to scrutinize Mr. Principi's 
qualifications and to question him about his philosophical beliefs as 
to the future role VA will play in meeting the needs of America' s 
veterans.
    It is our belief that such an examination of the nominee will 
reveal, and assure this Committee and the veterans' community, that 
Tony Principi will make sure that any policy changes or reorganization 
plans affecting the Department or any of its functions would not occur 
unless and until it was determined that it was in the best interests of 
our nation's veterans, that it would preserve the integrity and 
independence of the VA and its programs, and was thoroughly discussed 
with the veterans service organizations.
    Further, I believe examination of Mr. Principi would also reveal 
that he will have a candid working relationship with the Veterans' 
Affairs Committees and Appropriations Committees in the House and 
Senate, and with the Congress as a whole, utilizing a nonpartisan 
concept. Additionally, I would expect Mr. Principi would surround 
himself with staff members of high competence and a genuine 
understanding of the needs of America's veterans. The environment he 
would foster at VA will encourage dedication to duty, quality of 
productivity, and personal initiative on the part of all VA employees.
    Finally, examination of Tony Principi's philosophy should also 
reveal that first and foremost his loyalty would be directed at 
promoting the best interests of this nation's veterans and the 
Department created and committed to fulfilling their needs. In closing, 
let me state that not only do we support President-Elect George W. 
Bush's nomination of Anthony Principi to be Secretary of Veterans 
Affairs, but Mr. Principi can expect the support of the DAV in his 
efforts to improve, reform, strengthen and lead the Department of 
Veterans Affairs in the 21st century.
    Mr. Chairman, this completes my testimony. Thank you and the 
Committee for your quick action in confirming the next Secretary of 
Veterans Affairs.
                                 ______
                                 
        Prepared Statement of the Paralyzed Veterans of America
    Chairman Specter, Minority Member Rockefeller, members of the 
Senate Committee on Veterans' Affairs, the Paralyzed Veterans of 
America (PVA) is privileged to be invited to submit testimony for the 
record concerning the confirmation of Anthony J. Principi as Secretary 
of the Department of Veterans Affairs.
    The timely nomination and confirmation of a qualified Secretary of 
Veterans Affairs are critical elements to the start of a new 
Administration and a new Congress. The Secretary serves as the leading 
representative for veterans within the highest levels of the Executive 
Branch of government and is the chief advocate for ensuring the 
adequacy and integrity of VA budgets, is responsible for the 
administration and delivery of the benefits and services established by 
Congress and is a national spokesperson on behalf of the services and 
sacrifices of the men and women who have served in the Armed Forces.
    Paralyzed Veterans of America believes that there are several 
critical criteria for the position of Secretary. First, the individual 
selected for that position must be a knowledgeable and committed 
advocate on behalf of veterans. Second, the nominee must be an 
unqualified supporter of an independent veterans healthcare system and 
cognizant of the core function of the system's specialized services 
including spinal cord dysfunction care. Third, the individual selected 
for Secretary must recognize and support the broad range of benefits 
that have been established to assist veterans in recognition of their 
service. And, finally, the individual who will serve as Secretary must 
demonstrate a willingness to deal openly and forthrightly with the 
veterans' service organizations and the Congress in addressing the 
current and future needs of veterans and the operations of the 
Department of Veterans Affairs.
    Mr. Chairman, and members of the Committee, PVA feels confident 
that the current nominee, the Honorable Anthony J. Principi, meets each 
of these litmus tests. Mr. Principi's long and distinguished career in 
service to veterans certainly marks him as a committed advocate. His 
service as Deputy and Acting Secretary in an earlier Administration was 
characterized by firm leadership and dedication to the needs of the 
veterans of this nation. His service on the staff of this Committee was 
similarly that of an individual motivated by concern for his fellow 
veterans.
    Mr. Principi has demonstrated his support for the veterans 
healthcare system throughout his career. It has been PVA's personal 
experience that he understands and is committed to the role of 
specialized services and their unique place within this system.
    As Chairman of the Congressional Commission on Servicemembers and 
Veterans Transition Assistance Mr. Principi demonstrated a breadth and 
depth of understanding of the many benefits and services necessary for 
the support and readjustment of veterans. The efforts of this 
Commission reflect the nominee's concern for veterans and his 
willingness to solicit veterans' views and experiences in guiding the 
direction of veteran's benefits. While PVA did not agree with every 
conclusion and recommendation of this Commission, we did recognize that 
they were all the result of diligent evaluation and hard work that is 
characteristic of Mr. Principi.
    It has also been the experience of PVA and many of its members that 
Mr. Principi is sincerely open and willing to entertain the views and 
opinions of those most affected by the Department of Veterans Affairs. 
Our relationship with Mr. Principi has been one of forthrightness and 
respect. We have no reason to believe that future dealings with him and 
the Department should be any different.
    For the above reasons, and from our personal experience in dealing 
with Mr. Principi, the Paralyzed Veterans of America is both pleased 
and honored to support the nomination and confirmation of Anthony J. 
Principi as Secretary of Veterans Affairs. PVA asks for your 
enthusiastic support for this nominee. We believe the veterans of this 
nation will be well served by Mr. Principi and we look forward to 
working with him, and the Congress, in addressing the needs of 
veterans.
    Thank you and this concludes the statement of the Paralyzed 
Veterans of America.
                                 ______
                                 
  Prepared Statement of Robert E. Wallace, Deputy Executive Director, 
             Veterans of Foreign Wars of the United States
    Mr. Chairman and members of the committee:
    On behalf of the 2.6 million men and women of the Veterans of 
Foreign Wars and our Ladies Auxiliary, I wish to express our sincere 
appreciation for your providing us this opportunity to express our 
views here today. As we now all set about preparing ourselves to 
properly meet the great challenges and fully realize the enormous 
potential of the 21st Century on behalf of America's veterans, it would 
be hard to imagine any more significant act in this regard than the 
selection of the Secretary of Veterans Affairs. It is for this reason 
that we are both humbled and gratified to play a role in this process.
    We of the VFW are honor bound and pledged to never waiver nor 
relent in our fight on behalf of America's true heroes--our nation's 
veterans: active duty, reserve and National Guard members, their 
families and survivors, and our military retirees. We are committed to 
the proposition that as this nation moves forward into the 21st 
Century, those who stood in harm's way, who bear the scars and injuries 
of body or spirit so that we might all be prosperous and free, shall 
never be ignored or left behind.
    This is why we are adamant this nation's veterans be provided with 
the leadership they have earned and deserve a champion, an impassioned 
advocate as their Secretary of Veterans Affairs!
    It is our view that Anthony J. Principi fully possesses the 
intellect, experience, and, most importantly, commitment to veterans to 
meet this expectation.
    Since his first position of leadership in the arena of veterans 
affairs in 1983 as Associate Deputy Administrator for Congressional and 
Public Affairs, Mr. Principi has always impressed us with his 
graciousness and his willingness to discuss even potentially 
controversial issues in the interest of better serving veterans. Our 
respect and appreciation for Mr. Principi's integrity, strength of 
convictions and candor only increased in the ensuing years.
    When Mr. Principi returned to VA in March of 1989, as the first 
Deputy Secretary of Veterans Affairs, his efforts to keep the newly 
established Department of Veterans Affairs on course to meet the 
demands imposed by a burgeoning population of sick and elderly veterans 
were of singular importance and effectiveness. His leadership within 
the Department and ability to reach out to the veterans' community is 
his hallmark accomplishment. There may be no doubt that Mr. Principi's 
numerous contributions have gone a long way toward making VA what it is 
today.
    We would also note here that it was Deputy Secretary Principi who 
at the inception of the Persian Gulf War took the initiative calling 
for the creation of a registry to track the medical conditions 
affecting those who served in that conflict. There is a certain 
symmetry and appropriateness to his confirmation hearing as VA 
Secretary taking place on the tenth anniversary of that war.
    The VFW also greatly values Mr. Principi's significant record of 
legislative accomplishment on behalf of those who have served the 
nation in uniform when he was chief counsel and Staff Director of the 
Senate Veterans Affairs Committee from 1984 to 1988. That he was able 
to achieve so much under two separate Chairmen may be seen as a 
remarkable accomplishment and bears strong testimony to his strength of 
character and sense of mission for serving his fellow veterans.
    Mr. Principi's three years of distinguished service as Counsel of 
the Senate Armed Services Committee prior to his joining the VA in 
1983, also strongly attests to his commanding intellect and energy.
    His most recent role as chairman of the Congressional Commission on 
Servicemembers and Veterans Transition Assistance, further demonstrated 
his commitment to service by making a number of major recommendations 
beneficial to our men and women in uniform as they reenter civilian 
life.
    Given his record of advocacy, we are confident that Mr. Principi is 
fully commited to meeting the many monumental challenges facing VA in a 
manner that will ensure quality, timely and accessible services to all 
veterans.
    In closing, speaking on behalf of the membership of the Veterans of 
Foreign Wars of the U.S., we offer our strong endorsement of Anthony J. 
Principi to be Secretary of Veterans Affairs.
                                 ______
                                 
          American Academy of Physician Assistants,
                               950 North Washington Street,
                                  Alexandria, VA, January 11, 2001.
Hon. John D. Rockefeller IV,
Chairman,
Committee on Veterans' Affairs,
U.S. Senate,
Washington, DC.

Hon. Arlen Specter,
Ranking Minority Member,
Committee on Veterans' Affairs,
U.S. Senate,
Washington, DC.
    Dear Senators Rockefeller and Specter: On behalf of the nearly 
41,000 practicing physician assistants represented by the American 
Academy of Physician Assistants (AAPA), I am very pleased to convey the 
AAPA's support for the nomination on Mr. Anthony Principi as Secretary 
of the Department of Veterans Affairs.
    Mr. Principi's background and experience are uniquely suited to 
lead a public agency whose job is to administer programs that benefit 
our nation's veterans. Mr. Principi's experiences as a Vietnam War 
combat veteran, congressional staff on the Senate Veterans' Affairs 
Committee, Deputy Secretary of the VA, and, most recently, as President 
of QTC Medical Services, Inc., confirm his exceptional preparedness for 
this important job. His earlier position as acting secretary of the 
agency demonstrated the capacity to provide innovative leadership in 
administering the agency during a period of transition.
    Mr. Principi offers a well-rounded knowledge of veterans' issues, 
demonstrated leadership, and a commitment to public service. The AAPA 
is also pleased that Mr. Principi has demonstrated his understanding 
and support of the role of physician assistants in providing medical 
care during his previous tenure at the VA and through his work in 
corporate health care delivery.
    Mr. Principi will serve our nation well as Secretary of the 
Department of Veterans Affairs. Accordingly, I urge your support for 
his nomination as it moves forward for consideration before the Senate. 
Should you have any questions regarding the physician assistant 
profession, the American Academy of Physician Assistants, or the 
Academy's support for Mr. Principi, please do not hesitate to have your 
staff contact Sandy Harding, the AAPA's Director of Federal Affairs.
    I look forward to Mr. Principi's confirmation as Secretary of the 
Department of Veterans Affairs.
            Sincerely,
                                   Glen E. Combs, PA-C, MA,
                                                         President.
                                 ______
                                 
       Chamber of Commerce of the United States of 
                                           America,
                                         1615 H Street, NW,
                                  Washington, DC, January 17, 2001.
Hon. Arlen Specter,
Chairman,
U.S. Senate Veterans' Affairs Committee,
Washington, DC.
    Dear Chairman Specter: The U.S. Chamber strongly supports the 
nomination of Mr. Anthony Principi to serve as Secretary of the US. 
Department of Veterans' Affairs. Expanding military and veterans 
benefits, including full college scholarships, and offering home loans 
without down payments for our nation's celebrated veterans are just a 
few of the challenging initiatives that the new Secretary will face. We 
believe Mr. Principi has the experience to successfully champion these 
issues.
    As a graduate of the United States Naval Academy and a combat 
decorated Vietnam veteran, Mr. Principi understands issues facing our 
veterans. In 1989, Anthony Principi was appointed to Deputy Secretary 
of Veterans' Affairs for the Department and was named Acting Secretary 
in 1992 under President George Bush. Later in his career, Anthony 
served as Chief Counsel and Staff Director for the U.S. Senate 
Committee on Armed Services.
    Currently, Mr. Principi is the Chairman of the Commission on 
Servicemembers and Veterans Transition Assistance, which reviews and 
reports programs that provide benefits and services to veterans and 
servicemembers making the transition to civilian life. The Commission 
was created under public law in 1996, and was a pet project of former 
United States Senator Robert Dole.
    Mr. Principi is eminently qualified to serve his country as 
Secretary of Veterans' Affairs. Under his leadership, we are confident 
that his experience and commitment to issues facing our veterans will 
be skillfully addressed.
    Accordingly, we urge the Committee to report out the nomination of 
the Anthony Principi and request that you insert this letter into the 
hearing record.
            Sincerely,
                                         Thomas J. Donohue,
                             President and Chief Executive Officer.
                                 ______
                                 
                               Marine Corps League,
                                             P.O. Box 3070,
                                  Merrifield, VA, January 22, 2001.
Hon. Arlen Specter,
U.S. Senate,
Chairman, Senate Veterans' Affairs Committee,
Washington, DC.
    Dear Mr. Chairman: On behalf of the over 51,000 members of the 
Marine Corps League, it is with a great deal of pleasure and honor that 
we recommend the Honorable Anthony Principi for confirmation as 
Secretary for Veterans' Affairs.
    Mr. Principi is a proven professional in the Department of Veterans 
Affairs. A man of honor and integrity, Mr. Principi has proven he has 
what it takes to make tough choices in the budget arena, and at the 
same time ensure that veterans' are not forgotten and receive their due 
as promised by this great Nation. His confirmation as Secretary of 
Veterans' Affairs would be an outstanding choice for veterans and for 
all Americans.
    Mr. Chairman, the Marine Corps League wishes you the very best and 
continued success with the Senate Veterans' Affairs Committee,
            Semper Fidelis,
                                                Diana Dils,
                                               National Commandant.
                                 ______
                                 
    National Vietnam & Gulf War Veterans Coalition,
                            1660 L Street, N.W., Suite 204,
                                  Washington, DC, January 11, 2001.
Hon. Arlen Specter,
Chairman, Committee on Veterans Affairs
United States Senate,
Washington, DC.
    Dear Mr. Chairman: The National Vietnam & Gulf War Veterans 
Coalition is a federation of 106 veteran groups. One of our ten (10) 
goals is to have Vietnam and Gulf War veterans appointed to high 
visibility government positions.
    It is with the latter in mind that we are pleased to endorse and 
support President-Elect Bush's nomination of Anthony J. Principi as the 
next Secretary of the Department of Veterans Affairs.
    I and my organization have previously worked with Tony Principi 
when he served as Deputy Secretary. We were impressed with his 
availability to listen to our concerns, his fairness in all matters, 
and his advocacy for improving the plight of all veterans. Tony is a 
man of integrity with whom we have confidence will be an effective 
advocate for both the Bush administration and this country's veterans. 
We urge you and the Committee on Veterans Affairs to expeditiously 
forward his nomination to the Senate for a full confirmation vote.
            Sincerely,
                                      J. Thomas Burch, Jr.,
                                                          Chairman.
                                 ______
                                 
Non Commissioned Officers Association of the United 
                                 States of America,
                                         10635 IH 35 North,
                               San Antonio, Texas, 16 January 2001.
Hon. John D. ``Jay'' Rockefeller IV,
Committee on Veterans Affairs,
Washington, DC.
    Dear Mr. Rockefeller: The Non Commissioned Officers Association of 
the United States of America strongly supports the confirmation of Mr. 
Anthony J. Principi as Secretary of Veterans Affairs.
    The Association highly regards Mr. Principi as the man most 
qualified to be Secretary of Veterans Affairs. His distinguished public 
service including Deputy Secretary of Veterans Affairs and most 
recently leadership as Chairman of the Congressional Commission on 
Servicemembers and Veterans Transition Assistance demonstrate not only 
an awareness of issues but also the ability to decisively act on behalf 
of veterans and servicemembers. He has the confidence and trust of the 
Non Commissioned Officers Association.
    Request his expeditious confirmation,
            Sincerely,
                                          David W. Sommers,
                                                     President/CEO.
                                 ______
                                 
     Veterans of Foreign Wars of the United States,
                                Department of Pennsylvania,
              201 N. Front Street, Harrisburg, PA, January 9, 2001,
Hon. Arlen Specter,
U.S. States Senate,
Washington, DC.
    Dear Senator Specter, The United States Congress will face many 
challenges and will be making decisions that will guide America and the 
world into the next century.
    I want to express my personal thanks to you for the way you have 
represented Pennsylvania, not only as our voice in the U.S. Senate, but 
your 100% commitment to all of America's veterans.
    Your leadership as Chairman of the Veterans Affairs committee is a 
testament that a free nation does remember. We look forward to that 
same commitment in the 107th Congress.
    President-Elect George W. Bush has nominated Anthony J. Principi to 
be Secretary of Veterans Affairs. I believe his background and 
experience make him an excellent choice for that important position. I 
know that he will be asked many questions during the confirmation 
hearing. I also know that you will do ``the right thing'' on behalf of 
Americas Veterans. I, for one will support whatever action you take.
    Sincere best wishes and I hope to meet with you and discuss 
veterans issues in the very near future.
            Respectfully,
                                             Almon J. Long,
                                              Legislative Chairman.

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