[Senate Hearing 107-489]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 107-489

                      PENDING BENEFITS LEGISLATION

=======================================================================

                                HEARING

                               BEFORE THE

                     COMMITTEE ON VETERANS' AFFAIRS
                          UNITED STATES SENATE

                      ONE HUNDRED SEVENTH CONGRESS

                             FIRST SESSION




                               __________

                             JUNE 28, 2001

                               __________

      Printed for the use of the Committee on Veterans' Affairs

80-133              U.S. GOVERNMENT PRINTING OFFICE
                            WASHINGTON : 2002
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                     COMMITTEE ON VETERANS' AFFAIRS

            JOHN D. ROCKEFELLER IV, West Virginia, Chairman

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

                     William E. Brew, Chief Counsel

      William F. Tuerk, Minority Chief Counsel and Staff Director

                                  (ii)

  


                            C O N T E N T S

                              ----------                              

                             June 28, 2001

                                SENATORS

                                                                   Page
Hutchison, Hon. Kay Bailey, U.S. Senator from Texas..............     8
Johnson, Hon. Tim, U.S. Senator from South Dakota................     1
    Prepared statement...........................................     3

                               WITNESSES

Daniels, Sidney, Deputy Director, National Legislative Service, 
  Veterans of Foreign Wars of the United States..................    51
    Prepared statement...........................................    53
Mackay, Leo, Ph.D., Deputy Secretary of Veterans Affairs; 
  accompanied by Joseph Thompson, Under Secretary for Benefits, 
  Department of Veterans Affairs; John H. Thompson, Deputy 
  General Counsel, Department of Veterans Affairs; and Robert 
  Epley, Assistant Deputy Under Secretary for Program Management, 
  Department of Veterans Affairs.................................    11
    Prepared statement...........................................    13
    Response to written questions submitted by:
        Hon. Arlen Specter.......................................    25
        Hon. Ben Nighthorse Campbell.............................    34
Surratt, Rick, Deputy National Legislative Director, Disabled 
  American Veterans..............................................    56
    Prepared statement...........................................    57
Tucker, David M., Senior Associate Legislative Director, 
  Paralyzed Veterans of America..................................    63
    Prepared statement...........................................    64
Vitikacs, John R., Deputy Director, National Economics 
  Commission, The American Legion................................    44
    Prepared statement...........................................    45

                                APPENDIX

Addlestone, David F. and Barton F. Stichman, Joint Executive 
  Directors, National Veterans Legal Services Program, 
  Washington, DC, letter dated July 23, 2001 to Hon. John D. 
  Rockefeller IV.................................................    82
Biden, Hon. Joseph R., Jr., U.S. Senator from Delaware, prepared 
  statement......................................................    71
Gallegly, Hon. Elton, a U.S. Representative in Congress from the 
  State of California, prepared statement........................    72
Griffin, Richard J., Inspector General, Department of Veterans 
  Affairs, prepared statement....................................    73
Johnson, E. Keith, Legislative Liaison, Tennessee Educational 
  Association of Veterans Programs Administrators, prepared 
  statement......................................................    75
Kramer, Kenneth B., Chief Judge, United States Court of Appeals 
  for Veterans Claims, Washington, DC, letter dated July 3, 2001 
  to Hon. John D. Rockefeller IV.................................    80
Manzullo, Hon. Donald, a U.S. Representative in Congress from the 
  State of Illinois, prepared statement..........................    72
National Funeral Directors Association, prepared statement.......    81
Nichols, Denise, Vice Chairman, National Vietnam and Gulf War 
  Veterans Coalition, prepared statement.........................    84

                                 (iii)

Stichman, Barton F. and David F. Addlestone, Joint Executive 
  Directors, National Veterans Legal Services Program, 
  Washington, DC, letter dated July 23, 2001 to Hon. John D. 
  Rockefeller IV.................................................    82
Sweeney, Donald, Legislative Director, National Association of 
  State Approving Agencies, prepared statement...................    86
  

 
                      PENDING BENEFITS LEGISLATION

                              ----------                              


                        THURSDAY, JUNE 28, 2001

                                       U.S. Senate,
                            Committee on Veterans' Affairs,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10:29 a.m., in 
room SR-418, Russell Senate Office Building, Hon. John D. 
Rockefeller IV (chairman of the committee) presiding.
    Present: Senators Rockefeller, Akaka, and Specter.
    Chairman Rockefeller. We have a distinguished regular panel 
with us today, but we also have some distinguished Senators who 
are going to come and talk about individual areas of interest, 
and I noticed one, Senator Tim Johnson from the State of South 
Dakota.

 STATEMENT OF HON. TIM JOHNSON, U.S. SENATOR FROM SOUTH DAKOTA

    Senator Johnson. Thank you, Mr. Chairman, for accommodating 
my time requirements. I will be very brief, but I do appreciate 
this opportunity to thank you and Senator Specter for your 
cooperation in your hearing today on veterans' benefits issues. 
I also want to thank you for allowing me to speak briefly about 
my legislation, called the Veterans' Higher Education 
Opportunities Act, S. 131, that I have introduced with Senator 
Susan Collins to improve the Montgomery GI Bill for our Nations 
veterans, and I would ask consent that my full statement, along 
with letters of support for S. 131, be included in these 
records.
    Chairman Rockefeller. It will be done.
    Senator Johnson. As many of you know, this bipartisan 
legislation has the support of Majority Leader Daschle, 
Republican Leader Lott, former Congressman Sonny Montgomery, 
the American Legion, the VFW, the DAV, and most of the higher 
education organizations all across our Nation. The Montgomery 
GI Bill has truly been one of the best investments our Nation 
has ever made in recruitment of the best and brightest to serve 
in our armed services. Since 1944, the GI Bill has allowed 21 
million veterans to further their education, including 8 
million each from World War II and the Vietnam War.
    Unfortunately, GI Bill benefits have not kept pace with 
increasing costs of higher education. The current monthly 
benefit only covers about half of the education costs, and as a 
result, only about 50 percent of the active duty men and women 
who pay $1,200, and for them, that is a significant amount of 
money, only half of those who pay in their $1,200 actually 
benefit from it and take any use from the GI Bill.
    Recently, the House of Representatives passed legislation 
to increase the monthly benefit over the next 3 years, and 
while I applaud the House for taking steps to improve the GI 
Bill, I still believe that they are not quite all the way there 
in terms of what needs to be done over the long haul.
    The Veterans' Higher Education Opportunities Act would 
immediately increase the GI Bill benefits to equal the average 
cost of a commuter student attending a 4-year public college. 
The House bill takes 3 years to get to that level, and by that 
time, it is likely that the GI Bill will no longer, again, 
fully cover the costs of higher education. This legislation 
takes, I believe, a better approach than the House bill because 
it also calls for GI Bill benefits to be updated annually, 
indexed, that is, to cover increasing college costs. This will 
ensure that veterans are not stuck in the current situation of 
not having education benefits that meet their needs and having 
the cost of higher education once again far outstripping the 
level of benefits available under the GI Bill.
    Mr. Chairman, I believe this is the year when Congress will 
have the opportunity to make substantial and lasting 
improvements to the Montgomery GI Bill. In 1999, the 
Congressional Commission on Service Members and Veterans 
Transition Assistance called for dramatic enhancements to the 
Montgomery GI Bill to pay for the full tuition, fees, and cost 
of books, along with a monthly subsistence allowance, for any 
qualified veteran to attend any school. The chairman of that 
commission is now Secretary of Veterans Affairs Tony Principi. 
I applaud Secretary Principi on his longstanding support for 
veterans' education benefits. Secretary Principi's leadership 
on this issue is reflected in the administration's support for 
an improved GI Bill.
    As mentioned, the House of Representatives has also 
expressed its support now for enhanced GI Bill benefits. I 
believe it is time for the Senate to take our turn, to show our 
support for America's veterans and our commitment to improving 
recruitment and retention in the armed forces. The 
administration and the House support improvements that are 
needed, but still fail to address fully the problems with the 
Montgomery GI Bill. With approval of S. 131, the Senate has the 
opportunity to truly bring the Montgomery GI Bill into the 21st 
century and ensure its viability for the future.
    Once again, I want to thank you, Chairman Rockefeller, and 
the entire committee for your leadership on veterans' issues 
and for holding today's hearing. I look forward to working with 
you and the committee on my legislation in order to have the 
Senate act on GI Bill improvements as soon as possible. Thank 
you, Mr. Chairman.
    Chairman Rockefeller. Senator Johnson, thank you very much.
    Senator Johnson. Thank you.
    Chairman Rockefeller. That was crisp, to the point, on the 
mark, and we thank you.
    Senator Johnson. Thank you.
    [The prepared statement of Senator Johnson follows:]

 Prepared Statement of Hon. Tim Johnson, U.S. Senator From South Dakota

    Chairman Rockefeller, I would like to thank you and Senator Specter 
for holding today's hearing on veterans benefits and your continued 
leadership on behalf of veterans nationwide. I appreciate the 
opportunity to testify before the Senate Veterans Affairs Committee in 
support of my bipartisan legislation to improve the Montgomery GI Bill. 
For the past two years, I have worked with Senator Susan Collins and 
others to modernize the Montgomery GI Bill and help veterans achieve 
their goals of higher education. Our bill, the Veterans' Higher 
Education Opportunities Act (S. 131), has received broad, bipartisan 
support in Congress and among the veterans and higher education 
communities. I look forward to hearing the committee's thoughts on this 
legislation and encourage the committee to approve S. 131 this year.
    The 1944 GI Bill of Rights is one of the most important pieces of 
legislation ever passed by Congress. No program has been more 
successful in increasing educational opportunities for our country's 
veterans while also providing a valuable incentive for the best and 
brightest to make a career out of military service. Over 21 million 
veterans have taken advantage of GI Bill benefits since 1944, including 
8 million each from World War II and the Vietnam War.
    Unfortunately, the current GI Bill can no longer deliver these 
results and fails in its promise to veterans, new recruits and the men 
and women of the armed services. The Veterans' Higher Education 
Opportunities Act will modernize the GI Bill and ensure its viability 
as education costs continue to increase.
    Over 96% of recruits currently sign up for the Montgomery GI Bill 
and pay $1,200 out of their first year's pay to guarantee eligibility. 
But only one-half of these military personnel use any of the current 
Montgomery GI Bill benefits. This is evidence that the current GI Bill 
simply does not meet their needs. The main reason why military 
personnel no longer use the GI Bill is because GI Bill benefits have 
not kept pace with increased costs of education.
    There is consensus among national higher education and veterans 
associations that at a minimum, the GI Bill should pay the costs of 
attending the average four-year public institution as a commuter 
student. The current Montgomery GI Bill benefit pays a little more than 
half of that cost.
    The Veterans' Higher Education Opportunities Act creates that 
benchmark by indexing the GI Bill to the costs of attending the average 
four-year public institution as a commuter student. This benchmark cost 
will be updated annually in order for the GI Bill to keep pace with 
increasing costs of education.
    The Veterans' Higher Education Opportunities Act is truly a 
bipartisan effort to address recruitment and retention in the armed 
forces. Cosponsors of S. 131 include Majority Leader Tom Daschle and 
Republican Leader Trent Lott, along with Senators: Harry Reid, Mary 
Landrieu, Olympia Snowe, Tim Hutchinson, Jeff Bingaman, James Inhofe, 
Joe Biden, Byron Dorgan, Ted Kennedy, Robert Torricelli, Jon Corzine, 
Joe Lieberman, Debbie Stabenow, Blanche Lincoln, and Max Cleland. In 
addition, the Veterans' Higher Education Opportunities Act has the 
overwhelming support of the American Legion and the Partnership for 
Veterans' Education a coalition of the nation's leading veterans groups 
and higher education organizations including the VFW, the American 
Council on Education, the Non Commissioned Officers Association, the 
National Association of State Universities and Land Grant Colleges, and 
The Retired Officers Association.
    As the parent of a son who serves in the Army, these military 
``quality of life'' issues are of particular concern to me. Making the 
GI Bill pay for viable educational opportunity makes as much sense 
today as it did following World War II. In fact, a study conducted on 
beneficiaries of the original GI Bill shows that the cost to benefit 
ratio of the GI Bill was an astounding 12.5 to 1. That means that our 
nation gained more than $12.50 in benefits for every dollar invested in 
college or graduate education for veterans.
    Congress and the President took an important step last year by 
passing into law the Veterans Benefits and Health Care Improvement Act 
of 2000. This law increases the monthly education benefit to $650 and 
increases educational benefits of veterans survivors and dependents. 
The House of Representatives recently approved legislation to further 
increase monthly education benefits over the next three years. While 
the House action sends a strong signal of Congress' intent to improve 
veterans' benefits, I am afraid it falls short of what is necessary to 
truly modernize the Montgomery GI Bill. The House bill takes three 
years to increase monthly education benefits to the level needed right 
now to cover the costs of higher education. The House bill also fails 
to include any provisions that would ensure GI Bill benefits keep pace 
with increasing costs of higher education. The Veterans' Higher 
Education Opportunities Act is the only bill that provides veterans 
with education benefits that cover the costs of higher education now 
and for the future.
    The very modest cost of improving the GI Bill will help our 
military and our society. I look forward to working with members of the 
Senate Veterans Affairs Committee on passage of the Veterans' Higher 
Education Opportunities Act this year, and I once again thank the 
committee for holding today's hearing.
                                 ______
                                 
                               The American Legion,
                                            Washington, DC,
                                                 February 22, 2001.
Hon. Tim Johnson,
U.S. Senate,
Washington, DC.
    Dear Senator Johnson: The American Legion thanks you for authoring 
S. 131, the Veterans' Higher Education Opportunities Act of 2001. The 
American Legion fully supports this important legislation which seeks 
to establish a benchmark for determining the annual basic benefit rate 
of active duty educational assistance under the Montgomery GI Bill 
(MGIB).
    The educational benefits offered, to veterans consistently fail to 
keep pace with the escalating costs of education in America. The 
provisions contained in the current MGIB program cover only a fraction 
of the cost of a contemporary education at an average four-year 
college.
    The American Legion believes S. 131 will help to transform the 
current MGIB program into a true veterans' benefit that parallels the 
quality of the original ``GI Bill of Rights''. A strong veterans 
educational benefit program will not only strengthen the national 
defense by improving recruitment, it will also prepare veterans for a 
smooth transition into the civilian workforce.
    Once again, The American Legion fully supports S. 131 and 
appreciates your continued leadership in addressing the issues that are 
important to veterans and their families.
            Sincerely,
                                        Steve A. Robertson,
                         Director, National Legislative Commission.
                                 ______
                                 
                        Department of South Dakota,
                          Disabled American Veterans, Inc.,
                                      Sioux Falls, SD, May 1, 2001.
Senator Tim Johnson,
324 Senate Hart Office Bldg.,
Washington, DC.
    Dear Senator Tim Johnson: Thank you for sponsoring The Veterans' 
Higher Education Opportunities Act of 2001, S. 131. I very much 
appreciate your recognition of the need to revise the basic benefit 
program of the Montgomery GI Bill and the sacrifices made by our 
Nation's servicemembers in the defense of our Country.
    Raising the monthly benefit amount ``to the average monthly costs 
of tuition and expenses for commuter students at public institutions of 
higher education that award baccalaureate degrees'', will be extremely 
helpful.
    I ask that you work to insure that the Senate Budget Resolution 
contain funding that will allow for the enactment of this important 
legislation. Please let me know if I can help you in any way.
    Thank you again for your support of veterans and their efforts to 
reach their educational goals and for your cosponsorship of S. 131.
            Sincerely,
                                            Gene A. Murphy,
                              Adjutant, Disabled American Veterans.
                                 ______
                                 
     Veterans of Foreign Wars of the United States,
                                            Washington, DC,
                                                      April 4, 2001
Hon. Tim Johnson,
U.S. Senate,
Washington, DC.
    Dear Senator Johnson: On behalf of the 1.9 million members of the 
Veterans of Foreign Wars, we extend our deepest thanks to you for your 
efforts in making veterans education a priority in S. 131, legislation 
offered jointly by you and Senator Susan Collins.
    The Montgomery GI Bill has lost ground over the last few years. It 
is no longer able to meet the educational needs of today's veterans. 
The funding level has not kept pace with the rising costs of higher 
education. S. 131 abates the GI Bill's loss of value by creating an 
index system so funding can be increased as higher education costs 
rise.
    We also thank you for your announced intention to offer an 
amendment to the Senate Budget Committee to create a reserve fund for 
veterans education. This amendment would provide the necessary funding 
to implement S. 131, resulting in a significant increase in funding for 
the Montgomery GI Bill.
    The Montgomery GI Bill is in dire need of additional resources, and 
we fully support your efforts, both in the original bill, and in the 
amendment. We are committed to working with you to make this 
legislation a success.
            Sincerely,
                                           Dennis Cullinan,
                            Director, National Legislative Service.
                                 ______
                                 
                   Air Force Sergeants Association,
                                          Temple Hills, MD,
                                                  January 30, 2001.
Hon. Tim Johnson,
502 Hart Senate Office Building,
Washington, DC.
    Dear Senator Johnson, On behalf of the 135,000 members of the Air 
Force Sergeants Association, I thank you for introducing S. 131, the 
``Veterans' Higher Education Opportunities Act of 2001.'' Your bill 
recognizes the rising costs of higher education, and the need to cover 
our veterans' out-of-pocket education expenses. If signed into law, S. 
131 would help to alleviate the financial burden that many veterans 
face while pursuing their degree.
    Again, we commend you for taking the initiative to modify the 
monthly benefit of the Montgomery G.I. Bill. As always, AFSA is ready 
to support you on this and other matters of mutual concern.
            Sincerely,
                                           James D. Staton,
                                                Executive Director.
                                 ______
                                 
    National Association of State Approving Agencies, Inc.,
                                                     April 6, 2001.
Hon. Tim Johnson,
324 Hart Senate Office Building,
Washington, DC.
    Dear Senator Johnson: I'm asking for your support on a veterans 
issue.
    The US Congress is considering restructuring the GI Bill by 
increasing the educational benefits it affords veterans and other 
eligible persons. I'm sure you are well aware of the tremendously 
positive impact the original GI Bill had on higher education and the 
nation as a whole following WW II.
    It is a fact, the present Montgomery GI Bill (MGIB) falls far short 
of offering the level of educational assistance that the original bill 
provided, and doesn't compare favorably to either Korean or Vietnam era 
GI Bills.
    At present there are a number of proposals before Congress, H.R. 
320 introduced by Evans and Dingell, H.R. 1280 a companion bill to S. 
131 introduced by Mr. Ronnie Shaws, MI, and H.R. 1291 introduced by 
Chairman Christopher Smith. In addition, Mr. Stump, former Chairman of 
House Committee on Veterans Affairs and the present Chairman of House 
Armed Services Committee, is expected to introduce a bill.
    The one bill that has been introduced in the Senate is the Veterans 
Opportunity Act S. 131. This bill was introduced by Tim Johnson, SD and 
Susan Collins, ME. Co-sponsors include Tim Johnson, Susan Collins, 
Byron Dorgan, James Inhofe, Mary Landrieu, Jeff Bingaman, Tom Daschle, 
Tim Hutchinson, Edward Kennedy, Trent Lott, and Olympia Snowe.
    Particularly important is your support of a budget resolution that 
contains funding to improve the Montgomery GI Bill. This would ensure 
that the necessary resources needed are available, no matter what 
concept of improvement to the current GI Bill is adopted.
    Furthermore, your support or co-sponsorship of the Senate Veterans 
Opportunity Act S. 131 would very much be appreciated. In general, the 
need to revise the Montgomery GI Bill is long overdue (see enclosure). 
If the initiatives to revise the Montgomery GI Bill are successful, 
veterans who might not be able to afford higher education after serving 
their country will be given an opportunity to do so.
    Thanks again for your support. If you have any questions, please 
contact me at your convenience.
            Sincerely,
                                          James R. Bombard,
     Chief, Bureau of Veterans Education, NYS Division of Veterans 
                                                           Affairs.
       President, National Association of State Approving Agencies.
                  Partnership for Veterans' Education
                      fulfilling america's promise
    We the undersigned representatives of associations advocating on 
behalf of veterans, uniformed servicemembers, and higher education urge 
Congress to support a new model for the Montgomery GI Bill. Current 
educational realities, the eroded value of the current GI Bill benefit, 
and increasingly difficult challenges in meeting military recruiting 
goals lead us to conclude that at least minimal reform must be enacted 
and funded.
    Our proposal is straightforward, provides meaningful educational 
opportunity, helps military recruiting, strengthens military retention, 
and has a realistic cost:
          1. Establish a sensible, easily understood benchmark for the 
        GI Bill that represents the minimum required to provide the 
        education promised at recruitment. Base future stipends for all 
        veterans on that benchmark.
                  a. Average tuition and expenses for a commuter 
                student at a public four-year college is a reasonable 
                and acceptable benchmark.
                  b. This benchmark, updated annually by The College 
                Board, is $9229 for academic year 2000-01.
          2. Provide the education that is promised at reasonable cost.
                  a. The GI Bill now provides nine monthly $650 
                stipends a year for four years. The total benefit is 
                $23,400.
                  b. Monthly stipends based dn the proposed benchmark 
                would have been $1025 for academic year 2000-01. The 
                new total benefit would be $36,900.
    Post-war experience clearly demonstrates that better educated 
veterans pay far more taxes and are more productive in the society and 
economy. If budget estimates account for these well-known facts, the 
benchmarking of the GI Bill benefit that we suggest will enjoy broad 
support. We urge you to support it.
    Three signature pages attached.
                                                    Air Force Assn.
                                          Air Force Sergeants Assn.
     American Assn. of Collegiate Registrars & Admissions Officers.
                                     American Council on Education.
                              American Assn. of Community Colleges.
                   American Assn. of State Colleges & Universities.
                                   American Military Retirees Assn.
                                                            AMVETS.
                                    Army Aviation Assn. of America.
                              Assn. of Military Surgeons of the US.
                                              Assn. of the US Army.
                              Blinded American Veterans Foundation.
                                             Blinded Veterans Assn.
                                             Catholic War Veterans.
Commissioned Officers Assn. of the U.S. Public Health Service, Inc.
                                             CWO, & WO Assn., USCG.
                                        Disabled American Veterans.
                              Enlisted Assn. of the National Guard.
                                                Fleet Reserve Assn.
                                   Gold Star Wives of America, Inc.
                                    Jewish War Veterans of the USA.
                                          Korean War Veterans Assn.
                                Marine Corps Reserve Officers Assn.
                                               Marine Corps League.
                                Military Order of the Purple Heart.
                             National Assn. for Uniformed Services.
             National Assn. of Independent Colleges & Universities.
                        National Assn. of State Approving Agencies.
        National Assn. of State Universities & Land Grant Colleges.
                 National Assn. of Veterans Program Administrators.
                                    National Guard Assn. of the US.
                                     National Military Family Assn.
                                National Order of Battlefield Comm.
                                       Naval Enlisted Reserve Assn.
                                                Naval Reserve Assn.
                                             Navy League of the US.
                                    Non Commissioned Officers Assn.
                                     Paralyzed Veterans of America.
                                             Reserve Officers Assn.
                           The Military Chaplains Assn. of the USA.
                                         The Retired Enlisted Assn.
                                         The Retired Officers Assn.
            The Society of Medical Consultants to the Armed Forces.
                          Tragedy Assistance Program for Survivors.
                                          United Armed Forces Assn.
                                                     USCG CPO Assn.
                                                   US Army WO Assn.
                                          Veterans of Foreign Wars.
                               Veterans' Widows Intl. Network, Inc.
                                       Vietnam Veterans of America.

    Chairman Rockefeller. There being no other Senators that I 
can immediately see, we will proceed with my statement and then 
we will go to the hearing. There will be, presumably, five or 
six Senators on and off the committee coming in to present 
legislative ideas, and as they do that, we will all just have 
to accommodate them. Don't you think that would be wise? I 
think that would be wise.
    Anyway, I am very pleased that our witnesses are here 
today, Dr. Leo Mackay, the Deputy Secretary of Veterans 
Affairs, and representatives from four of our service 
organizations. As I indicated, some Senators will come and we 
will accommodate them, and hopefully they will be as short as 
Senator Johnson.
    We have a lot of bills to discuss and I want to make sure 
that we have a chance to hear from all of our witnesses, so I 
will be brief, although it occurs to me my statement isn't 
brief. I have just said that I will be brief, but don't count 
on my being brief. [Laughter.]
    But I certainly urge our witnesses to be brief. We will be 
reviewing some very important pieces of legislation that affect 
virtually everything within the veterans' world--burial 
benefits, home loan guaranties, the annual cost-of-living 
increase in veterans' compensation, and on and on and on, and 
there are a couple of items that I would like to highlight in 
particular.
    There has been a lot of energy, and Senator Johnson just 
discussed it, surrounding the Montgomery GI Bill in the last 
several years. I am enormously pleased about the strides that 
we have taken toward improving the bill. At the same time, I am 
cognizant of the current benefits of $650 a month. It pays for 
about 63 percent of the average cost for a commuter student to 
attend a traditional public 4-year university, and we have to 
recognize that many veterans do not pursue traditional courses 
of study.
    So when we discuss where the GI Bill should go from here--
Senator Hutchison, we welcome you--we must ensure--please have 
a seat, because I am going to call right on you--when we think 
about the GI Bill, where it should go, we have to ensure that 
the benefit evolves, as Senator Johnson said, to keep up with 
the pace, with the career and educational choices that today's 
veterans want and require.
    I am very gratified, by the way, that Senator Specter 
joined me in introducing MGIB legislation that will begin to 
address the need for flexibility in the use of this benefit, 
and I was going to go on, but Senator Hutchison, to accommodate 
you, which I always try to do, I will stop this and call on you 
for whatever comments you might have to make.

STATEMENT OF HON. KAY BAILEY HUTCHISON, U.S. SENATOR FROM TEXAS

    Senator Hutchison. Thank you, Senator Rockefeller. I really 
appreciate your holding this hearing and all the support that 
you have given to the Persian Gulf veterans that my bill would 
try to help. You have really been a leader in this and I am 
hoping that my bill, along with Senator Durbin, would be a 
follow-on to your efforts and that is why I have introduced it.
    Let me just say that the Desert Storm disease has been very 
controversial and many people don't think it actually exists. 
My view is that when 100,000 of 700,000 men and women who went 
to Desert Storm came back with symptoms that they did not have 
before they left, such as chronic fatigue, muscle and joint 
pain, memory loss, sleep disorders, depression, and 
concentration problems, that we have a duty to make sure that 
these people are taken care of and given the benefits of a 
service-related illness.
    Chairman Rockefeller. Senator Hutchison, you should be on 
this committee. [Laughter.]
    Senator Hutchison. Well, I would love to be on this 
committee. I have not had that opportunity before, but I do 
thank you for that.
    The essence of our bill is that we are trying to extend the 
presumptive period, which runs out December 31 of this year, to 
December 31, 2001 so that we will have the time to continue the 
research on this phenomenon. Frankly, I think there is research 
that is beginning to show a causal connection between some of 
the elements that were faced over there and the symptoms that 
people are feeling.
    Second, we define an undiagnosed illness. We expand it and 
provide a list of the signs and symptoms that may be a 
manifestation of an undiagnosed illness, such as fatigue, 
muscle pain, joint pain, gastrointestinal signs and symptoms. 
What we are trying to acknowledge is that the veterans were 
exposed to a host of pharmaceuticals, chemicals, environmental 
toxins. Some were exposed to oil well fires, dust and sand 
particles that came from the places where the smoke was, 
petroleum fuels, possible exposure to chemical warfare nerve 
agents, biological warfare nerve agents, bromide pills to 
protect against the organophosphate nerve agents, insecticides, 
infectious diseases, and psychological and physiological 
stress.
    What we are trying to do with our bill is say that we 
didn't document as much as we should have at Desert Storm what 
our people were being exposed to, and when this many--if we 
were talking about 50 people out of 700,000, I think we could 
say maybe there was something else wrong and we couldn't put it 
onto the service in Desert Storm. But one out of seven? Come 
on. I just think we have an obligation to do more than we are 
doing, and that is what our bill tries to do.
    I consider our bill a follow-on to the bill that you 
originally passed and which has been very helpful, but I think 
we can't turn our backs on one in seven people who stepped up 
to the plate to serve our country. Thank you.
    Chairman Rockefeller. Thank you, Senator Hutchison. I know 
that you have been to homes in Texas and you have seen what 
happens to people who, over the years, when consulting with the 
Department of Defense, have been told that it is in their heads 
and been given some aspirin and told to go home. I mean, it is 
one of the great scandals of the last quarter century. I really 
appreciate your clear passion on the subject and the fact that 
you have come to talk to us about it, and I thank you very, 
very much.
    Senator Hutchison. Thank you, Senator Rockefeller. I just 
want to add one more thing for the record.
    Chairman Rockefeller. Sure.
    Senator Hutchison. Approximately 9,000 to 12,000 Persian 
Gulf veterans who filed a claim under your law were denied 
because the Veterans Administration did not believe the 
symptoms met the definition of an undiagnosed illness. So I 
just think we need to further clarify what an undiagnosed 
illness is and define the compensation while we continue to do 
the research, because I believe there is a causal connection 
and I think the research is beginning to show that. Thank you 
very much.
    Chairman Rockefeller. Thank you very much. I very much 
appreciate your coming.
    If I can go on with my statement, I also want to thank 
Senator Specter again, because we are both introducing a bill 
that would remove obstacles for Vietnam veterans claiming 
benefits related to Agent Orange exposure. Currently, Vietnam 
veterans suffering from respiratory cancers can claim 
disability benefits, but only if the disease manifested itself 
within 30 years of their service in Vietnam. That is kind of 
amazing. Our bill would eliminate this 30-year limit, recently 
found to have no basis in science, and I think common sense 
would tell us that anyway, and continue the scientific reviews 
to help us understand the long-term effects of dioxin and Agent 
Orange exposure, because the research part is necessary.
    So, anyway, looking at our very ambitious agenda, I want to 
be clear, listing a bill for consideration at this hearing, 
even a bill which I introduced or Senator Specter introduced, 
does not signal a position on my part about that bill. I want 
that understood. The purpose of this hearing is to get 
everything out. Introducing a bill is necessary for the 
committee to provide an opportunity for public input. That is 
important in the Veterans' Committee, so I look forward to 
hearing from my colleagues as they wander in and from our 
witnesses who are here.
    When Senator Specter comes, I will ask that the two bills 
that he talks about be added to the agenda as if originally 
listed and ask that witnesses please submit supplemental views 
if they wish to comment upon those bills.
    Our first panel consists of representatives from the VA 
itself. Dr. Leo Mackay, the Deputy Secretary of Veterans 
Affairs, will be presenting VA's testimony today. He is 
accompanied by Joe Thompson, the Under Secretary for Benefits, 
and Jack Thompson, the Deputy General Counsel.
    Let me say one more thing. Don't take this personally, 
because I know the way the world works, but the comment needs 
to be made. I had hoped that by providing advance notice of 
this hearing, that we would have draft copies of bills to be 
introduced, that the clearance process for VA's testimony, in 
particular, would have been expedited, done, and complete. 
Receiving VA's testimony in a timely fashion makes questions 
and honest dialog a lot more efficacious.
    It did not happen, though. We didn't get the testimony 
until late yesterday afternoon. You have to give a lot of 
testimony a lot of places, but we need that testimony. We need 
it so we can read it, so our staff can read it, so we can 
ingest it, digest it, and take what is said and what isn't 
said. I recognize that OMB and all kinds of others have to 
clear all kinds of things, and that is one reason I am glad I 
don't serve in the executive branch of government. But 
nevertheless, I want to put that on the record, that when we 
have a hearing and we have folks from VA, we want the testimony 
before us so that there can be better followup in terms of 
questions than there otherwise might be.
    Now, that having been said, Dr. Mackay, this is your first 
time of many more to come and we welcome you, so let us get 
down to business.

 STATEMENT OF LEO MACKAY, PH.D., DEPUTY SECRETARY OF VETERANS 
 AFFAIRS; ACCOMPANIED BY JOSEPH THOMPSON, UNDER SECRETARY FOR 
  BENEFITS, DEPARTMENT OF VETERANS AFFAIRS; JOHN H. THOMPSON, 
  DEPUTY GENERAL COUNSEL, DEPARTMENT OF VETERANS AFFAIRS; AND 
  ROBERT EPLEY, ASSISTANT DEPUTY UNDER SECRETARY FOR PROGRAM 
           MANAGEMENT, DEPARTMENT OF VETERANS AFFAIRS

    Mr. Mackay. Mr. Chairman, I also regret that the testimony 
arrived late here. We are always working to constantly improve 
our staff operation.
    Chairman Rockefeller. It did not arrive late here. It was 
sent late here.
    Mr. Mackay. Sent late here, yes, sir. Omission noted, but 
we will improve that because it is our aim to work closely with 
you and your committee, sir.
    I have a statement that times out at 5 minutes, an oral 
statement. I would be happy to forego that to leave more time 
for your questions.
    Chairman Rockefeller. No, you go ahead.
    Mr. Mackay. Well, good morning, Mr. Chairman and members of 
the committee. I am pleased to appear before you today to 
provide the Department's views on a number of pieces of 
legislation currently before the committee. With me this 
morning are our Under Secretary for Benefits, Mr. Joseph 
Thompson; his Assistant Deputy Under Secretary for Program 
Management, Mr. Bob Epley; and our Deputy Counsel, Mr. John 
Thompson.
    In the short time that I have available to me, I would like 
to provide highlights of the administration's views on these 
bills and would ask that my entire written statement be 
submitted for the record.
    We commend the committee for holding this hearing and I 
thank you and your staffs for the cooperation shown to the 
Department, to include a number of provisions that will clarify 
existing law and improve the benefits that we provide to our 
veterans and their dependents.
    The committee has before it S. 1090, the Veterans' 
Compensation Cost-of-Living Adjustment Act of 2001. The bill 
would authorize a cost-of-living adjustment in VA compensation 
and dependency and indemnity compensation rates. The 
administration strongly supports this legislation and urges its 
speedy adoption to meet the needs of our very deserving veteran 
community.
    S. 1091 would modify current law regarding presumption of 
service connection for Vietnam veterans. VA is currently 
studying the scientific merits of removing the 30-year 
respiratory cancer presumption and we defer taking a position 
pending the outcome of that review. We support the extension of 
the National Academy of Sciences for providing biennial reports 
to the Secretary on herbicide exposure.
    S. 1088 would permit accelerated Montgomery GI Bill 
payments for veterans training in high-tech courses----
    Chairman Rockefeller. What was the 30-year review?
    Mr. Mackay. We have a current----
    Chairman Rockefeller. When did it start, does anybody know?
    Mr. Epley. I believe within the last month, Senator.
    Chairman Rockefeller. OK. Thank you. Proceed.
    Mr. Mackay. In S. 1088, VA supports the concept of 
acceleration of benefits for high-cost short-term courses, but 
we do not believe that this should be limited to veterans in 
high-tech courses.
    S. 1093, the Veterans' Benefits Program Modification Act of 
2001, contains a number of provisions that VA is pleased to 
support. It would restrict compensation payments to prisoners 
and fugitives. It would make needed clarifying changes to the 
Veterans' Claims Assistance Amendments of 2000. It would remove 
the current 500-veteran cap on the number of vocational 
rehabilitation participants in a program of independent living. 
S. 1093 would also raise the maximum home loan guarantee from 
$50,750 to $63,175. Finally, it would make needed changes to 
the law regarding VA's need-based pension program.
    S. 131 would index monthly Montgomery GI Bill rates to the 
average monthly cost of tuition and fees for commuter students 
at 4-year colleges with annual adjustments. Mr. Chairman, VA 
acknowledges that the monthly benefits need to be increased. We 
prefer, however, the step increases found in H.R. 1291, which 
the Secretary testified in the other body on behalf of, which 
was recently passed by the House of Representatives.
    S. 228 would make permanent the Native American Home Loan 
Program. This program is slated to expire at the end of this 
year. We support an extension of the program through fiscal 
year 2005.
    S. 781 would extend through fiscal year 2015 the authority 
to guarantee home loans for members of the selected reserve. VA 
also supports this bill.
    S. 912 would increase various burial and plot allowances. 
However, this bill would increase expenditures for this program 
by more than three-fold, and consequently, we cannot support 
the bill in its proposed form. We can, however, support an 
increase from $1,500 to $2,000 for the burial allowance for 
service-connected deaths.
    S. 937 would amend the Montgomery GI Bill to permit service 
members to transfer their entitlement to their dependents, 
permit a limited form of accelerated benefits, make benefits 
allowable for technological occupations, and permit separated 
reservists to use Montgomery GI Bill benefits. Since DoD would 
pay for the transfer of benefits and for reservists, we defer 
to DoD on these two issues.
    Mr. Chairman, there are three bills before the committee 
today that VA is unable to support. S. 409, which statutorily 
extends until December 31, 2011, the presumptive period for 
undiagnosed illnesses suffered by Gulf War veterans. VA 
currently has the authority to extend this period 
administratively and that is the preferred method. This bill 
would also redefine undiagnosed illnesses to include poorly 
defined illnesses, such as fibromyalgia, chronic fatigue 
syndrome, and a couple of others. VA has adequate authority 
under existing law to establish presumptions for these 
conditions should scientific and medical evidence support such 
action.
    S. 457 would establish a presumption of service connection 
for hepatitis C for seven different categories of veterans. VA 
opposes this because presumption would be overly broad and 
necessarily result in compensating many veterans whose 
hepatitis is due to illegal intravenous drug use.
    S. 662 would authorize VA to provide headstones or markers 
for previously marked graves of veterans. VA has great concerns 
with this proposal. We believe the purpose of providing a 
headstone or marker is to ensure that no veteran grave goes 
unmarked, and we are particularly concerned with the concept of 
placing a marker at an area appropriate for the purpose of 
commemorating an individual. This bill represents a departure 
from a longstanding policy of providing headstones and markers 
for graves of veterans.
    Mr. Chairman, this completes my opening statement. We will 
be happy to answer your questions and those of the other 
members.
    [The prepared statement of Mr. Mackay follows:]

 Prepared Statement of Leo Mackay, Ph.D., Deputy Secretary of Veterans 
                                Affairs

    Mr. Chairman and Members of the Committee, thank you for the 
opportunity to testify today on several legislative items of great 
interest to veterans. Accompanying me today is Joseph Thompson, Under 
Secretary for Benefits, and John Thompson, Deputy General Counsel.
    Before I discuss the many bills that the Committee is considering 
today, I would like to note that, as you know, much of this legislation 
would affect direct spending and receipts and would, therefore, be 
subject to pay-as-you-go (PAYGO) rules. For all of the proposals and 
bills that VA will support today, that support is contingent on 
accommodating the proposals within the budget limits agreed to by the 
President and the Congress. The Administration will work with the 
Congress to ensure that any unintended sequester of spending does not 
occur under current law or the enactment of any other proposals that 
meet the President's objectives to reduce debt, fund priority 
initiatives, and grant tax relief to all income tax paying Americans.

                           COMPENSATION COLA

    The ``Veterans' Compensation Cost-of-Living Adjustment Act of 
2001,'' S. 1090, would authorize a cost-of-living adjustment (COLA) for 
fiscal year (FY) 2002 in the rates of disability compensation and 
dependency and indemnity compensation (DIC). Section 2 of the draft 
bill would direct the Secretary of Veterans Affairs to increase 
administratively the rates of compensation for service-disabled 
veterans and of DIC for the survivors of veterans whose deaths are 
service related, effective December 1, 2001. As provided in the 
President's FY 2002 budget request, the rate of increase would be the 
same as the COLA that will be provided under current law to veterans' 
pension and Social Security recipients, which is currently estimated to 
be 2.5 percent. We estimate that enactment of this section would cost 
$376 million during FY 2002, $7.1 billion over the period FYs 2002-2006 
and $28.5 billion over the period FYs 2002-2011. Although this section 
is subject to the PAYGO requirement of the Omnibus Budget 
Reconciliation Act of 1990 (OBRA), the PAYGO effect would be zero 
because OBRA requires that the full compensation COLA be assumed in the 
baseline. We believe this proposed COLA is necessary and appropriate in 
order to protect the benefits of affected veterans and their survivors 
from the eroding effects of inflation. These worthy beneficiaries 
deserve no less.

                       VETERANS COURT LEGISLATION

    A bill under consideration by this Committee, S. 1089, would expand 
temporarily the U.S. Court of Appeals for Veterans Claims (CAVC) so as 
to facilitate staggered terms for judges on that court. VA defers to 
the CAVC with respect to the merits of this change.
    The bill would also eliminate the current jurisdictional limitation 
on appeals to the CAVC based on the date of filing of a notice of 
disagreement. Currently, for the CAVC to have jurisdiction over a case, 
the administrative appeal underlying the action must have been 
initiated by a notice of disagreement filed on or after November 18, 
1988. See Veterans' Judicial Review Act of 1988, PL 100-687, Div. A, 
Sec. 402, 102 Stat. 4105, 4122.
    The requirement for filing of a notice of disagreement on or after 
November 18, 1988, is continuing to be applied by the CAVC and to have 
an impact on the number of cases heard by that court. Additional issues 
could be pursued to the court in claims already pending before VA, and, 
in addition, there would undoubtedly be a number of cases in which 
claimants would challenge the finality of prior VA decisions, if the 
impediment of the requirement for a notice of disagreement filed on or 
after November 18, 1988, were removed. This would have the effect of 
adding to the number of claims and issues pending before the court and 
VA. We will advise the Committee of our position on this provision once 
we have had the opportunity to more fully consider its potential 
impact.
    Another bill, S. 1063, the ``United States Court of Appeals for 
Veterans Claims Administration Improvement Act of 2001,'' is designed 
to improve the administration of the CAVC by allowing the CAVC to 
impose a registration fee on active participants at judicial 
conferences convened pursuant to 38 USC Sec. 7286 and by adding new 
administrative authority. VA defers to the CAVC with respect to the 
merits of this bill.

                              AGENT ORANGE

    A bill under consideration by this Committee, S. 1091, would remove 
the 30-year limitation on the period during which respiratory cancers 
must become manifest to a degree of 10-percent or more in Vietnam 
veterans exposed to herbicides during service in the Republic of 
Vietnam in order for service connection to be granted on a presumptive 
basis. At this time, the Department of Veterans Affairs (VA) is 
reviewing the findings of the recent Institute of Medicine report, 
Veterans and Agent Orange: Update 2000, on the issue of respiratory 
cancer. We are considering the scientific merits of the 30-year period.
    In addition, this bill would extend the presumption of exposure to 
herbicides provided by 38 USC Sec. 1116 to any veteran who served in 
the Republic of Vietnam during the Vietnam era. Currently, there is no 
general presumption of exposure for all Vietnam veterans, either for 
purposes of compensation or health-care eligibility. Pursuant to the 
Agent Orange Act of 1991, VA has established presumptions of service 
connection for ten categories of disease. See 38 C.F.R. Sec. 3.309(e). 
A veteran who was exposed to herbicides in service and who develops one 
of these diseases within the applicable presumption period, if any, is 
presumed to have incurred the disease in service, without the necessity 
of submitting proof of causation. In addition, 38 USC Sec. 1116(a)(3) 
provides that, if a veteran served in the Republic of Vietnam during 
the Vietnam era and has a disease that VA recognizes as being 
associated with herbicide exposure, the veteran is presumed to have 
been exposed to an herbicide agent during service.
    This bill would also extend for ten more years the period over 
which the National Academy of Sciences will transmit to VA reviews and 
evaluations of the available scientific evidence regarding possible 
associations between diseases and exposure to dioxin and other chemical 
compounds in herbicides. As additional scientific and medical evidence 
continues to be developed concerning the health effects of herbicide 
exposure, such reviews may shed light on the effects of exposure on the 
health of veterans. Accordingly, VA supports this provision. However, 
we will inform the Committee of our position on and cost estimate for 
this entire bill once our review is completed.

                               EDUCATION

    Section 1 of S. 1088 would authorize an individual to elect an 
accelerated payment of Montgomery GI Bill (MGIB) benefits for pursuit 
of certain high-technology courses. The tuition and fees for the course 
would have to exceed twice the aggregate basic MGIB education benefit 
otherwise payable for the enrollment period in order for the individual 
to qualify. The amount of the accelerated payment would be the lesser 
of 60 percent of the established charges for the course or the 
aggregate amount of basic MGIB educational assistance for which the 
individual has remaining entitlement.
    VA supports the accelerated-payment concept and we believe the 
provisions of this section are a step in the right direction. For 
example, many educational and training programs, including technical 
certification programs such as those offered by Microsoft, Cisco, and 
others, are of extremely high cost, but short duration. Under the 
current benefit payment method, an individual may receive $650 to $1300 
in monthly MGIB benefits for a program of a few months' duration that 
costs $5000 to $10,000, or more. Plainly, in such a case, the benefit 
pay-out is not structured in relation to course length, cost or value. 
Thus, the individual's educational needs when pursuing such short-term, 
high-cost courses frequently may not be met. The accelerated provision 
contained in this bill would cover a substantially greater proportion 
of the actual course cost to the veteran.
    We have not yet estimated costs of the education-benefit 
enhancements in S. 1088 or certain other bills on today's agenda, but 
will gladly supply them for the record.
    Section 2 of S. 1088 would amend the definition of ``educational 
institution'' to include any entity that provides, directly or under 
agreement, training required for a license or certificate in a vocation 
or profession in a technological field. It would become effective the 
date of enactment.
    The law defines a ``program of education'' as a curriculum or 
combination of unit courses or subjects pursued at an educational 
institution which is generally accepted as necessary for the attainment 
of a predetermined and identified educational, professional, or 
vocational objective. A program of education may be offered at either 
an institution of higher learning or a non-college degree school. 
Presently, the law does not permit VA to award benefits for courses 
offered by commercial enterprises whose primary purposes are other than 
providing educational instruction. Certified Network Administrator 
(CNA) and Certified Network Engineer (CNE) courses offered by Novell, 
Microsoft, and other companies, for example, are offered either through 
educational institutions or by designated business centers. Although 
the courses are identical regardless of where offered, only those 
veterans pursuing the courses at an educational institution may receive 
educational assistance.
    This bill would allow VA to award benefits to those veterans taking 
these courses at a business site. This would permit approval of courses 
offered by businesses only when the courses are needed to fulfill 
requirements for the attainment of a license or certificate generally 
recognized as necessary to obtain, maintain, or advance in employment 
in a profession or vocation in a technological occupation. We believe 
providing educational benefits for pursuit of these courses is fully 
consonant with MGIB purposes, and, given the bill's conditions on VA's 
approving the courses, adequate safeguards would exist against 
potential abuse. Consequently, we would support this provision of the 
bill.
    Section 8 of S. 1093, the ``Veterans' Benefits Programs 
Modification Act of 2001,'' would respond to the recent decision of the 
United States Court of Appeals for Veterans Claims (Ozer v. Principi) 
which held that the relevant statute placed no limit on the length of 
time an eligible spouse had to use Survivors' and Dependents' 
Educational Assistance under chapter 35 of title 38, United States 
Code. First, this section would clarify the spouse's opportunity to 
select the date from which his or her eligibility period for using 
chapter 35 benefits would commence. Such date could be any date between 
the effective date from which VA rated the veteran as having a total 
service-connected disability permanent in nature and the date VA 
notified the veteran of that rating. Second, the section would 
expressly provide that the spouse would have a fixed ten-year period, 
beginning on the selected date or otherwise applicable date, to use the 
available chapter 35 benefits.
    The stated intent of Congress in establishing the chapter 35 
program was to assist eligible spouses and surviving spouses in 
preparing to support themselves and their families at a standard of 
living which the veteran, but for his or her service-connected death or 
the total and permanent disablement from a disease or injury incurred 
or aggravated in the Armed Forces, could have expected to provide for 
his or her family. In view of the need for many spouses and surviving 
spouses to train for a productive place in society, Congress provided 
financial assistance for spouses and surviving spouses in training 
programs above the secondary level.
    The law contemplates providing such assistance to the spouse or 
surviving spouse during the period following onset of the veteran's 
disability or death in order to timely assist the eligible spouse in 
adjusting to the loss of aid and support from the veteran. It is 
appropriate, therefore, to direct and limit the availability of this 
educational assistance to a period reasonably needed to achieve the 
statutory purposes. We note that provisions applicable to other 
eligible persons under chapter 35, as well as all veterans under the GI 
Bill and vocational rehabilitation benefit programs administered by VA 
limit benefit eligibility to a circumscribed period. We believe it is 
fair and reasonable to do so here, particularly with the flexibility 
that also would be afforded for the spouse to select, within an 
appropriate range, the date when the eligibility period would begin. 
Consequently, we support this section of the draft bill which would 
apply a ten-year period for spouses to use their Dependents' 
Educational Assistance benefits.

                 INCARCERATED PERSONS & FUGITIVE FELONS

    The ``Veterans' Benefits Programs Modification Act of 2001,'' S. 
1093, would limit the provision of benefits for fugitive and 
incarcerated veterans. Section 7 of this bill would place a limit on 
compensation payments for veterans incarcerated on October 7, 1980, for 
felonies committed before that date who remain incarcerated for 
conviction of that felony after the date of the enactment of this 
provision. Section 5313 of title 38, United States Code, currently 
provides for the reduction of service-connected disability compensation 
for veterans confined in a Federal, State, or local penal institution 
as a result of conviction of a felony. The law was enacted on October 
7, 1980, and applies to those veterans who were convicted and 
incarcerated for a felony committed after the date of enactment, as 
well as those who were incarcerated on or after October 1, 1980, and 
are awarded compensation after that date. VA recently became aware of 
approximately 230 veterans who were incarcerated prior to enactment of 
the 1980 law, who remain incarcerated, and who were drawing 
compensation as of 1980. These veterans, who are not within the scope 
of the current benefit-reduction provision, are receiving some $2.5 
million per year in compensation benefits. These 230 veterans also do 
not have in effect an apportionment of their award for support of their 
dependents. Payment of benefits to these veterans, in our view, is 
contrary to the purpose for which service-connected disability benefits 
are awarded, since these veterans are being supported in prison by the 
government and are not capable of gainful employment by reason of their 
incarceration.
    +We estimate annual PAYGO cost savings of approximately $2.2 
million would be achieved and that there would be a one-time 
administrative cost for the reduction of the benefits to the 
approximately 230 incarcerated veterans who would be affected by this 
provision.
    Section 6 of this bill would prohibit the payment of certain 
benefits for veterans who are fugitive felons. Under current law, a 
fugitive is generally not subject to reduction of compensation, 
pension, education, or vocational rehabilitation benefits under 38 USC 
Sec. Sec. 1505, 3034, 3108, 3482, or 5313, as is the case with many 
incarcerated veterans. A prohibition on payment of benefits for 
fugitive felons would be a logical extension of the current limits on 
payments to incarcerated felons. VA supports this provision.
    We note, however, as a technical matter, that the draft bill would 
not appear to authorize payment of benefits to a veteran's dependent by 
apportionment, as is the case with veterans whose benefits are subject 
to reduction by reason of incarceration. We note also that the draft 
bill would bar the provision of life insurance benefits and benefits 
under the home loan guaranty program under title 38, chapters 19 and 
37, to fugitive felons, although incarcerated felons are not barred 
from receipt of such benefits under current law. We recommend that 
reference to chapter 19 and 37 benefits be deleted from section 6 of 
the draft bill.
    Because this proposal would raise unique information-development 
issues, no data are available to establish cost-savings estimates. In 
FY 1999, VA, working with the Bureau of Prisons, identified fewer than 
1,000 cases where VA beneficiaries were incarcerated and subject to an 
administrative reduction in their benefit payments. This translates to 
less than one percent of the total Federal prison population. Based on 
this experience, we expect that the number of fugitive felons who might 
be identified as VA beneficiaries will be small.

                    CLAIMS ASSISTANCE ACT AMENDMENTS

    The Veterans Claims Assistance Act of 2000 (VCAA), PL 106-475, 
struck out sections 5102 and 5103 of title 38, United States Code, 
added new sections 5100, 5102, 5103, and 5103A, and amended section 
5107, relating to VA's duty to assist claimants in presenting claims 
for benefits. Certain of the provisions, as enacted, raise questions 
regarding congressional intent with respect to the handling of 
incomplete applications and the applicability of the new provisions to 
undecided claims filed prior to November 9, 2000, the date of enactment 
of the VCAA, and claims not finally decided prior to November 9, 2000. 
The issue regarding undecided claims was addressed in a precedent 
opinion of the VA General Counsel, VAOPGCPREC 11-2000.
    With respect to incomplete applications, prior section 5103(a) 
provided that, if a claimant's application for benefits under the laws 
administered by the Secretary of Veterans Affairs was incomplete, the 
Secretary was required to notify the claimant of the evidence necessary 
to complete the application. In addition, section 5103(a) provided, in 
its second sentence, that, if the evidence requested was not received 
within one year from the date of the notification, no benefits could be 
paid or furnished by reason of the application. As added by section 3 
of the VCAA, new section 5102(b) states that, if a claimant's 
application for a benefit is incomplete, the Secretary shall notify the 
claimant and the claimant's representative, if any, of the information 
necessary to complete the application. However, no provision comparable 
to the second sentence of former section 5103(a), regarding the effect 
of a failure to provide evidence to complete an incomplete application, 
was included in new section 5102 or elsewhere in chapter 51 as amended. 
Thus, if a claimant were to submit an application for benefits and 
receive notification from VA that the application is incomplete, it 
does not appear that VA would be authorized to close or deny the claim 
based on an applicant's failure to respond. Further, if the claimant 
submits the requested information at any time in the future, and if a 
benefit were granted, VA would be required to establish an effective 
date for an award of benefits based on the date the incomplete 
application was filed without regard to whether the applicant responded 
to VA's request for further information to ``complete'' the application 
in a timely fashion. We do not believe this result was intended by 
Congress.
    Section 4 of the ``Veterans' Benefits Programs Modification Act of 
2001'' would remove the one-year period for the submission of 
information from new section 5103 and restore it to new section 5102. 
In other words, this provision has the effect of establishing a one-
year period for the submission of information necessary to complete an 
application, while eliminating the one-year period for the submission 
of information and evidence necessary to substantiate a claim. 
Establishing a one-year period for the completion of applications, 
rather than for the substantiation of claims, will allow VA to decide a 
claim based on a claimant's failure to respond to a request for 
information or evidence. This decision would be based on evidence VA 
has obtained on behalf of the claimant. Essentially, this provision 
restores the statute to its former status. This will enhance our 
ability to process claims in a timely manner. VA supports this 
modification. (We note as a technical matter that the new section 
5102(c)(1), proposed to be added by section 4, contains an apparently 
erroneous reference to ``section 5103(a)'' that should be changed to 
``section 5102(a)''.)
    Section 5 of the ``Veterans' Benefits Programs Modification Act of 
2001'' would amend section 7 of the VCAA to require VA, upon the 
request of a claimant or on the Secretary's own motion, to readjudicate 
in accordance with the VCAA claims that did not become final prior to 
November 9, 2000. Claimants whose claims did not become final prior to 
November 9, 2000, would have two years from that date to request 
readjudication, just as those claimants covered by current section 7(b) 
whose claims were finally denied as not well grounded prior to November 
9, 2000.
    Section 7(a) of the VCAA may be construed to create an unlimited 
duty on VA to locate and readjudicate claims filed before November 9, 
2000, that were not finally decided by VA as of that date. Section 
7(b)(4), by contrast, specifically states that VA is not obligated to 
locate and readjudicate claims found to be not well grounded in which 
VA's decision became final prior to November 9, 2000. Because section 
7(a) does not contain such a limitation, this provision may be 
interpreted as requiring VA to locate and readjudicate all claims in 
which VA issued a decision that was not final prior to November 9, 
2000. Because of the onerous consequences of such an interpretation, we 
do not believe that Congress intended to impose a duty on VA to 
undertake an unlimited review of these cases.
    In FY 2000, VA adjudicated approximately 601,000 claims for service 
connection, claims to reopen based upon new and material evidence, 
increased rating claims, and claims alleging clear and unmistakable 
error. In addition, VA rendered decisions regarding issues such as 
dependency status, income adjustments, and eligibility for hospital 
care in an additional 1 million claims in FY 2000. Also, in FY 2000, VA 
processed 246,000 cases for purposes of appellate review, adjusting VA 
benefits based upon a beneficiary's receipt of Social Security 
benefits, review required by recently-enacted legislation, matching VA 
records with Social Security records on deaths of beneficiaries, and 
reviewing ongoing benefit awards to determine if they are correct. If 
such a massive review of previously-decided claims were required, VA 
would be unable to adjudicate claims in which a decision has not yet 
been issued. The ultimate consequence of such an interpretation of 
section 7(a) would be delayed payment of benefits to veterans and their 
dependents. We therefore believe that a technical amendment to section 
7 to clarify Congress' intent in this regard, as included in section 5 
of the draft bill, is appropriate.
    Also, section 7(a) of the VCAA currently specifies that section 
5107 as amended applies to any claim filed on or after the date of 
enactment of the VCAA or filed before that date but not finally decided 
as of that date. However, the VCAA does not address the applicability 
to newly filed or pending claims of the other provisions of title 38, 
United States Code, created by that statute. The General Counsel has 
concluded in a precedent opinion, VAOPGCPREC 11-2000, that all of the 
provisions added by the VCAA apply to claims filed on or after November 
9, 2000, and to claims filed before that date but not finally decided 
as of that date. Nonetheless, we believe a technical amendment to 
section 7 to clarify Congress' intent in this regard is appropriate.

                       VOCATIONAL REHABILITATION

    Section 9 of S. 1093 would remove the cap on the number of 
vocational rehabilitation participants in the ``independent living 
services'' program under chapter 31 of title 38, United States Code. 
The limitation of 500 veteran participants was set when the program was 
being evaluated as a pilot. When the merit of the program subsequently 
was established, Congress made it permanent. However, the limit on the 
number of participants was not changed. The program has proved its 
worth over time and we are proud of the successful independent living 
outcomes achieved by participants who represent some of our neediest, 
most deserving veterans. Consequently, we strongly support eliminating 
the cap so that more qualifying veterans may receive this assistance.
    If the cap is lifted, we project that, even though the number of 
independent living cases will rise, net savings will accrue to VA and 
other federally funded service providers effectively achieving cost 
avoidance. Many of the veterans who completed programs of independent 
living are able to move from institutionalization back to family life 
or group homes. These individuals are able to maintain themselves in 
the community with significantly less reliance on others and community 
service providers.
    VA estimates that, if enacted, this section would result in benefit 
costs of about $7.4 million in FY 2002, with 5-year PAYGO costs of 
about $15.6 million for FYs 2002-2006.

                             HOUSING LOANS

    Section 10 of the ``Veterans' Benefits Program Modification Act of 
2001'' would increase the maximum VA housing loan guaranty from $50,750 
to $63,175. VA believes such an increase is justified and favors its 
enactment.
    Neither the law nor regulations set a maximum principal amount for 
a VA guaranteed home loan, so long as the total loan amount does not 
exceed the reasonable value of the property securing the loan, and the 
veteran's present and anticipated income is sufficient to afford the 
loan payments. As a practical matter, requirements set by secondary 
market institutions limit the maximum VA loan to four times the 
guaranty. The guaranty increase proposed by section 10 of the bill 
would have the effect of increasing the maximum amount lenders are 
willing to finance from the current $203,000 to $252,700.
    The VA guaranty has not been increased since October 1994. Housing 
prices have increased significantly during the past six-and-a-half 
years. Today, in a number of higher-cost areas, such as Atlanta, 
Anaheim/Santa Ana, Boston, Denver, Honolulu, Los Angeles, New York 
City, San Diego, San Francisco, and Seattle, the median home purchase 
price exceeds the effective VA maximum loan.
    Increasing the effective maximum VA home loan to $252,700 is 
consistent with recent increases in the loan limits for other housing 
programs. For example, the limit for a loan insured by the Federal 
Housing Administration of the Department of Housing and Urban 
Development was increased this year to $239,250. The conventional 
conforming loan limit for the Federal National Mortgage Association 
(``Fannie Mae'') and the Federal Home Loan Mortgage Corporation 
(``Freddie Mac'') was increased effective January 1, 2001, to $275,000.
    VA estimates that, under the provisions of current law, increasing 
the guaranty to $63,175 would increase the loan subsidy PAYGO costs to 
the Veterans Housing Benefit Program Fund by $4.3 million in FY 2002, 
and have 10-year subsidy PAYGO costs of approximately $140.9 million. 
It is important to note that our cost estimate is based, in part, on 
the fact that certain cost-saving provisions originally enacted as part 
of the OBRA will expire on September 30, 2008. We fully expect that 
these provisions will be extended prior to their scheduled expiration. 
Assuming that those OBRA provisions are extended until at least 
September 30, 2011, the 10-year subsidy PAYGO costs of the guaranty 
increase would be $83.5 million.

                                PENSION

    Section 2 of the ``Veterans' Benefits Programs Modification Act of 
2001'' would add to 38 USC Sec. 1503(a) a new paragraph (11), which 
would exclude proceeds of a veteran's life insurance policy, and a new 
paragraph (12), which would exclude ``any other non-recurring income 
from any source,'' from determinations of annual income for pension 
purposes. Section 3(b) of this draft bill would amend subparagraph (A) 
of 38 USC Sec. 5112(b)(4) to provide that the effective date of a 
reduction or discontinuance of pension by reason of a change in 
recurring income will be the last day of the calendar year in which the 
change occurred, with the pension rate for the following year to be 
based on all anticipated countable income. Section 3(a) of this draft 
bill would repeal the provision of 38 USC Sec. 5110(d)(2) that provides 
that the effective date of an award of death pension for which 
application is received within 45 days from the date of the veteran's 
death is the first day of the month in which the death occurred.
    VA disability pension is payable to low-income wartime veterans who 
cannot work due to permanent and total disability. Death pension is 
payable to low-income surviving spouses and dependent children of 
wartime veterans. Both programs are based on need, and VA improved 
pension is offset dollar-for-dollar by income from other sources 
(unless specifically excluded by statute). The current statute, 38 USC 
Sec. 5112(b)(4)(A), requires improved pension to be reduced or 
discontinued effective the last day of the month in which the 
beneficiary's income increased. In addition, under current 38 USC 
Sec. 5110(d)(2), an award based on a claim for death pension received 
within 45 days of the veteran's death is effective the date of death. 
An award based on a death pension claim received more than 45 days 
after the veteran's death is effective the date of claim. This 
effective date provision was added by the ``Deficit Reduction Act of 
1984'', PL 98-369, Title V, 98 Stat. 494, 854-901, as a cost-saving 
measure.
    The practical effect of Public Law No. 98-369 in many cases has 
been to exclude insurance proceeds from countable income for pension 
claimants who file more than 45 days after the date of the veteran's 
death. By waiting to file claims until after receipt of insurance 
proceeds, those claimants can receive pension effective from the date 
of claim, without regard to the recently received insurance proceeds. 
However, claimants who receive insurance proceeds and then file pension 
claims within 45 days of the veteran's death have those proceeds 
counted as income for the following 12 months. We understand that 
section 3(a) of the draft bill is intended to address this issue. We 
understand that section 3(b) of the draft bill is intended to address 
the concern that the existing end-of-the-month adjustment requirements 
complicate beneficiary income and effective-date calculations and often 
result in adjudication errors. Such errors occur most often in cases 
involving frequent income changes and overlapping income counting 
periods. We further understand that section 2 of the bill is intended 
to reflect the principle that life insurance proceeds and other similar 
types of non-recurring income are most appropriately addressed by 
application of net worth limitations.
    Certain aspects of the proposed amendments raise technical issues 
with respect to income determinations. We would be pleased to work with 
Committee staff on the technical aspects of these provisions to develop 
mutually acceptable language.

                                 S. 131

    S. 131, the ``Veterans' Higher Education Opportunities Act of 
2001,'' would provide for an increase in the education assistance 
benefit rate under the MGIB to take effect on October 1, 2001. This 
measure would provide that an MGIB participant whose obligated period 
of service is three or more years would receive an education benefit 
under that program equal to the average monthly costs of tuition and 
expenses for a commuter student at a public college that awards 
baccalaureate degrees. Service members with an obligated period of less 
than three years would receive 75 percent of that amount.
    VA would determine not later than September 30th each year the 
average monthly costs of tuition and expenses for the succeeding fiscal 
year based upon information obtained from the College Board provided in 
its annual survey of institutions of higher education.
    The President strongly supports the MGIB benefits program and 
acknowledges its great importance to veterans and the Nation. The 
President's FY 2002 Budget includes the annual cost-of-living increase 
for education benefits for veterans and service members, but does not 
include an additional MGIB benefit rate increase. However, the 
President would support MGIB program improvements, to include a 
reasonable increase in rates, if those improvements can be accommodated 
within the overall budget limits agreed to by the President and 
Congress. In this regard, the Secretary recently testified before the 
House Veterans Affairs Subcommittee on Benefits that VA supports, 
within the framework of those spending limits, the stepped increases 
contained in H. R. 1291.
    Our preliminary cost estimate indicates that S. 131, if enacted, 
would result in PAYGO costs of about $777 million in FY 2002, with a 5-
year cost of about $4.6 billion for FYs 2002-2006 and a 10-year 
projection of $12.4 billion.

                                 S. 228

    S. 228 would make permanent the direct loan program for Native 
American veterans living on trust lands. VA strongly supports this 
program, which currently has a sunset of December 31, 2001. We would 
recommend, however, that the current program be extended until 
September 30, 2005, rather than being made permanent.
    The Native American veteran direct loan program, which was enacted 
in October 1992, has enjoyed limited success. VA has made over 200 
loans under this program to Native American veterans. The majority of 
these loans have been to Native Hawaiians.
    VA recently participated in the Executive Branch's One-Stop 
Mortgage Initiative, which was an effort to develop a more consistent 
approach to delivering home ownership opportunities to Native 
Americans. VA is hopeful that this initiative will increase 
opportunities and remove barriers to participation in the VA loan 
program for Native American veterans living on trust lands. VA is also 
aware of efforts by the Federal National Mortgage Association to 
increase private-sector lender willingness to make loans on tribal 
lands.
    VA believes a four-year extension of the Native American veteran 
direct loan program would give both the Executive Branch and the 
Congress an opportunity to see how various initiatives regarding Native 
American housing loans affect the ability of these veterans to obtain 
VA financing, and whether further program modifications are indicated.
    In addition, we urge the Committee to amend S. 228 to make the 
following three changes to current law.
    First, we recommend modifying the law to permit VA to make loans to 
members of a Native American tribe that has entered into a memorandum 
of understanding (MOU) with another Federal agency if that MOU 
contemplates loans made by VA and the MOU conforms to the requirements 
of the law governing the VA program. Current law requires a tribe to 
enter into an MOU with VA before we can make loans to members of that 
tribe.
    We also suggest modifying the current requirement that all VA loan 
and security instruments contain, on the first page of each such 
document, in letters two-and-a-half times the size of the regular type 
face used in the document, a statement that the loan is not assumable 
without the approval of VA. We recommend that the law require that this 
notice appear conspicuously on at least one instrument (such as a VA 
rider) under guidelines established by VA in regulations.
    Those two amendments would implement recommendations by the One-
Stop Initiative. These changes would reduce the administrative burden 
on Indian housing authorities and bring more uniformity in federal loan 
program processing procedures. Eliminating the requirement for a 
separate MOU between each tribe and VA should expand the number of 
Native American veterans eligible for VA financing. The extremely 
strict loan assumption notice requirement in the current law has 
prevented VA from approving the use of uniform loan instruments now 
used in FHA, ``Fannie Mae,'' and ``Freddie Mac'' transactions.
    Finally, we recommend repealing the requirement that VA outstation, 
on a part-time basis, Loan Guaranty specialists at tribal facilities if 
requested to do so by a tribe. We have consolidated loan processing and 
servicing operations from 46 regional offices to nine Regional Loan 
Centers, and do not have the resources to outstation loan personnel at 
various tribal locations. VA continues to make periodic outreach visits 
to all tribes, and provides training to tribal housing authorities. We 
believe that we can provide all necessary services to Native American 
veterans seeking VA housing loans without outstationing employees in 
remote tribal locations.
    We would be pleased to work with your staff in drafting language to 
implement our suggested amendments.
    We estimate that enactment of S. 228 would not require any 
additional appropriation of loan subsidy. Public Law No. 102-389 
appropriated $4.5 million ``to remain available until expended'' to 
subsidize gross obligations for direct loans to Native American 
veterans of up to $58.4 million. We estimate that sufficient funds 
would be available to cover projected Native American veteran loan 
volume until at least FY 2005.

                                 S. 409

    S. 409, or the ``Persian Gulf War Illness Compensation Act of 
2001,'' would modify provisions in 38 USC Sec. Sec. 1117 and 1118 
governing compensation for certain Gulf War veterans. We oppose the 
enactment of this bill.
    Currently, 38 USC Sec. 1117 provides that the Secretary of Veterans 
Affairs may pay compensation to any Gulf War veteran suffering from a 
chronic disability resulting from an undiagnosed illness (or 
combination of undiagnosed illnesses) that became manifest during 
active service in the Southwest Asia theater of operations during the 
Gulf War or became manifest to a compensable degree within a 
presumptive period (currently ending on December 31, 2001) as 
determined by regulation. Section 1118 of title 38 provides for the 
establishment of presumptive service connection for diagnosed and 
undiagnosed illnesses associated with Gulf War service.
    Section 3(a) of the bill would establish a statutory presumptive 
period under 38 USC Sec. 1117 extending to December 31, 2011. The 
Secretary of Veterans Affairs would be authorized to extend that date 
by regulation. Section 3(b) would amend 38 USC Sec. 1117 by adding a 
new subsection to clarify that the term ``undiagnosed illness'' for 
purposes of presumption of service connection includes ``poorly 
defined'' illnesses such as fibromyalgia, chronic fatigue syndrome, 
autoimmune disorder, and multiple chemical sensitivity. Section 3(c) 
would amend 38 USC Sec. 1118 to reflect the modification of the meaning 
of the term ``undiagnosed illness.''
    In our view, the current provision of 38 USC Sec. 1117(b) 
authorizing the Secretary to prescribe by regulation the presumptive 
period for undiagnosed illnesses associated with Gulf War service is 
appropriate and should be retained. The Secretary's determinations 
regarding the presumptive period are made following a review of any 
available credible medical or scientific evidence and the historical 
treatment afforded disabilities for which manifestation periods have 
been established and take into account other pertinent circumstances 
regarding the experiences of veterans of the Gulf War. We plan to 
consider whether the current presumptive period should be extended 
administratively based on these factors.
    With regard to fibromyalgia, chronic fatigue syndrome, and 
autoimmune disorder, as referenced in section 3(b) of this bill, under 
current law, service connection may be established on a direct basis 
for disability resulting from one of these conditions. With regard to 
multiple chemical sensitivity, this condition is not recognized under 
VA's schedule for rating disabilities. VA has adequate authority under 
existing law to establish presumptions for these conditions should we 
conclude that scientific and medical evidence support such action. 
Under current 38 USC Sec. 1118, the Secretary may determine and 
prescribe in regulations which diagnosed and undiagnosed illnesses 
warrant such a presumption of service connection. Accordingly, we do 
not support the inclusion of reference to these conditions in 38 USC 
Sec. Sec. 1117 and 1118.

                                 S. 457

    S. 457 would amend 38 USC Sec. 1112 to establish a presumption of 
service connection for certain veterans suffering from hepatitis C. We 
oppose the enactment of this bill.
    S. 457 would add a new subsection (d) to 38 USC Sec. 1112, 
providing a presumption of service connection for certain veterans who 
suffer from hepatitis C to a degree of disability of 10 percent or 
more, notwithstanding that there is no record of such disease during 
the period of active military, naval, or air service. The presumption 
would apply where a veteran experienced one of the following during 
service: (1) transfusion of blood or blood products before December 31, 
1992; (2) blood exposure on or through the skin or a mucous membrane; 
(3) hemodialysis; (4) needle-stick accident or medical event involving 
a needle, not due to the veteran's own willful misconduct; (5) 
unexplained liver disease; (6) unexplained liver dysfunction value or 
test; or (7) service in a health-care position or specialty.
    We recognize that, because there is such a prolonged period between 
acute hepatitis C virus infection, which is typically asymptomatic or 
results in mild illness, and the development of symptomatic liver 
disease, it is difficult, in the absence of a medical history, to 
determine the source of infection for hepatitis C. However, 
epidemiologic research establishes that the highest incidence of 
hepatitis C infection occurs in persons who placed themselves at risk 
through destructive lifestyle choices. A May 1999 Centers for Disease 
Control and Prevention (CDC) fact sheet, ``Hepatitis C Virus and 
Disease,'' reports that injecting drug use accounts for about 60 
percent of hepatitis C cases. According to an October 16, 1998, CDC 
report, ``Recommendations for Prevention and Control of Hepatitis C 
Virus (HCV) Infection and HCV-Related Chronic Disease,'' 47 Morbidity 
and Mortality Weekly Report 5 (Oct. 16, 1998) (hereinafter ``CDC 
Report''), injection of drugs currently accounts for a substantial 
number of hepatitis C transmissions and may have accounted for a 
substantial proportion of hepatitis C infections in the past. According 
to the CDC report, after 5 years of injecting drugs, as many as 90 
percent of users are infected with hepatitis C. Although the 
contemplated presumptions would be rebuttable, in practice it would be 
unlikely in most cases that reliable evidence of past intravenous drug 
abuse would be readily available.
    We feel strongly that veterans' disability compensation should not 
be paid to individuals who incurred hepatitis C infection through drug 
abuse. Yet creation of presumptions as contemplated by S. 457 would 
certainly result in payment of compensation to persons who most likely 
incurred hepatitis C infection in that manner.
    The CDC report indicates that there is a very low risk of infection 
associated with certain of the risk factors included in proposed new 
subsection (d)(2) of 38 USC Sec. 1112. New subsection (d)(2)(B) would 
provide a presumption of service connection if a veteran who has 
hepatitis C was ``exposed to blood on or through the skin or a mucous 
membrane.'' New subsection (d)(2)(G) would establish a presumption 
based on service in a health-care position or specialty. The CDC report 
indicates that hepatitis C is transmitted primarily through large or 
repeated direct percutaneous, i.e., through the skin, exposures to 
blood. According to the CDC, the prevalence of hepatitis C infection 
among health-care workers, including orthopedic, general, and oral 
surgeons, who are at risk for being infected as a result of exposure to 
blood, is no greater than the general population. In addition, the CDC 
reports that there are no incidence studies documenting transmission 
associated with mucous membrane or nonintact skin exposures, although 
transmission of hepatitis C from blood splashes to the conjunctiva 
(membrane lining the eyelid) have been described. Thus, it appears 
likely that hepatitis C infection would only occur if blood permeated a 
veteran's skin, such as through an open wound or skin puncture. Based 
upon this CDC data, we believe that the risk of hepatitis C infection 
for veterans based upon exposure to blood on or through the skin or a 
mucous membrane is so small as to make a presumption on this basis 
unnecessary.
    New subsections (d)(2)(E) and (d)(2)(F) would provide a presumption 
of service connection for hepatitis C based on unexplained liver 
disease or unexplained liver dysfunction value or test. We are unaware 
of any evidence showing that, since testing became available for 
hepatitis C, unexplained liver disease diagnosed during service or 
unexplained liver dysfunction value or test performed during service 
would indicate a veteran had an hepatitis C infection which was not 
diagnosed while the veteran was on active service. We believe that 
serology testing is routinely performed when a service member is 
diagnosed with unexplained liver disease or has an unexplained liver 
dysfunction value or test and that that testing would reveal at the 
time whether the service member was infected with hepatitis C. As a 
result, a presumption of service connection for unexplained liver 
disease or liver dysfunction value or test is not warranted.
    We acknowledge that accurate serologic testing was not available 
until 1992. However, many causes of liver dysfunction value or test in 
patients whose serologic tests are negative for hepatitis A and 
hepatitis B are non-viral. These non-viral causes include liver toxins 
(e.g., alcohol, prescription and non-prescription drugs), non-viral 
infections (e.g., malaria, rickettsia), environmental factors (e.g., 
heatstroke), and malignancies.
    The Seattle VA Epidemiologic Research Institute has initiated a 
study involving 4000 veterans who receive care at 20 VA medical centers 
that will allow a better understanding of the risk factors associated 
with hepatitis C. Results of this study are expected in the summer of 
2002.
    We oppose S. 457 because it is overbroad and would undoubtedly 
result in the payment of compensation to many individuals whose 
hepatitis C infection resulted from drug abuse. Moreover, establishment 
of a presumption of service connection for hepatitis C infection based 
on certain risk factors identified in S. 457 cannot currently be 
supported by medical or epidemiologic data. VA is committed to the 
careful and compassionate adjudication of these claims, to include 
assistance in the development of evidence to establish benefit 
eligibility. Case-by-case determinations of entitlement based on the 
merits of individual claims continue to be, with respect to hepatitis C 
cases, preferable to adopting the broad presumptions called for by S. 
457.
    We do not currently have a cost estimate for S. 457, but would be 
pleased to provide one to the Committee for the record. However, based 
on a similar proposal, we estimate that PAYGO costs would be $168 
million over the period FYs 2002-2006, at a minimum.

                                 S. 662

    S. 662 would authorize the Secretary of Veterans Affairs to furnish 
headstones or markers for marked graves of certain individuals and to 
allow placement at a location other than a gravesite. We oppose the 
enactment of S. 662.
    Section 1(a) of the bill would amend 38 USC Sec. 2306, to require 
the Secretary of Veterans Affairs to furnish, upon request, a 
Government headstone or grave marker for placement at the grave of a 
veteran or other eligible individual, or at another area appropriate 
for the purpose of commemorating the individual, regardless of whether 
the individual's grave is currently marked with a privately purchased 
headstone or marker. Under current law, Government headstones or 
markers are furnished only for the unmarked graves of veterans and 
certain other eligible individuals. Pursuant to section 1(b) of the 
bill, the new requirement would be made applicable to burials occurring 
``on or after November 1, 1990.''
    We are particularly concerned with the concept of placing a marker 
at an ``area appropriate for the purpose of commemorating'' an 
individual. This provision represents an unwarranted departure from the 
longstanding policy of providing headstones and markers for the 
``graves'' of veterans. This purpose is reflected in 38 USC 
Sec. 2306(a), which requires VA to furnish, upon request, appropriate 
headstones or markers at Government expense for the unmarked ``graves'' 
of various classes of individuals. An exception to this policy is 
reflected in 38 USC Sec. 2306(b)(1), which authorizes the provision of 
a headstone or marker in a case in which the remains of an individual 
are unavailable for interment. Pursuant to this authority, if the 
remains of an individual are unavailable, an appropriate memorial 
headstone or marker will be furnished for placement in a national 
cemetery area reserved for that purpose, in a veterans' cemetery owned 
by a State, or, for veterans only, in a State, local, or private 
cemetery. In the context of this bill, we believe the requirement that 
a marker be provided for placement in an ``area appropriate for the 
purpose of commemorating the individual'' could be interpreted to 
include areas not located at grave sites, or even within cemeteries, 
which would be inconsistent with the current longstanding policy 
regarding the provision of headstones and markers. We believe that an 
individual's grave site is the appropriate area in which to memorialize 
an individual by placement of a headstone or marker and that a cemetery 
is the appropriate place to memorialize an individual whose remains are 
unavailable.
    We estimate the cost of enactment of S. 662, which includes 
removing the ``unmarked'' restriction and is retroactive to November 
1990, to be $6.6 million in FY 2002 and $20.7 million during the period 
FY 2002-2006. Because this bill would affect direct spending and 
receipts, it is subject to PAYGO requirements.

                                 S. 781

    S. 781 would extend the sunset for housing loan entitlement 
currently granted to persons whose only qualifying service was in the 
Selected Reserve, including the National Guard. Currently, housing loan 
entitlement for reservists expires on September 30, 2007. This bill 
would extend the expiration date until September 30, 2015. We favor the 
enactment of this bill.
    Extending home loan benefits to reservists recognized the important 
role the Reserves play in our National Defense. Reservists are often 
called upon to perform vital and dangerous missions all around the 
world. The availability of these benefits serves as an important 
recruiting incentive for the National Guard and Reserves.
    Because reserve entitlement is now set to sunset in six years, 
persons entering reserve service today have no assurance these benefits 
will still be available once they have fulfilled their six years of 
qualifying service. Therefore, an extension of the sunset at this time 
is justified.

                                 S. 912

    S. 912, the ``Veterans Burial Benefits Improvement Act of 2001,'' 
would increase the amount payable for several burial benefits for 
veterans. Section 2(a) of the bill would amend 38 USC Sec. Sec. 2302(a) 
and 2303(a)(1)(A) by increasing the burial and funeral-expense 
allowance for nonservice-connected deaths from $300 to $1,135, and 
amend 38 USC Sec. 2307 by increasing the burial and funeral-expense 
allowance for service-connected deaths from $1,500 to $3,713. Section 
2(b) would amend 38 USC Sec. 2303(b) by increasing the plot allowance 
payable for veterans buried in State or private cemeteries from $150 to 
$670. Section 2(c) would add a new section 2309, which would index 
these amounts based on the percentage increases of the Consumer Price 
Index. The initial increases in the various rates would be applicable 
to deaths occurring on or after the date of enactment of this 
legislation.
    S. 912 would immediately increase expenditures for this program by 
more than three-fold. In total the bill would increase spending by $680 
million in FYs 2002-2006 and $1.5 billion over ten years. VA cannot 
support this bill at this time. We believe that increases should 
correlate to the overall burial program, and VA is conducting a program 
evaluation and analyzing the report on burial benefits that was 
submitted to Congress last February. Once this evaluation is complete, 
we will offer further comment on increases to the burial program.
    The Government has responded to veterans' burial needs in recent 
years by establishing several new national cemeteries and by 
significantly enhancing the grant program under which state veterans 
cemeteries are established. The State Cemetery Grants Program now 
provides up to 100 percent of the costs of construction associated with 
the establishment, expansion, or improvement of state veterans 
cemeteries. This partnership between VA and the states ensures meeting 
our goal that 88 percent of veterans will live within seventy-five 
miles of a burial option by 2006. Since the 1988 enactment of Public 
Law No. 105-368, which in effect increased the permissible grant amount 
from 50 to 100 percent of construction costs, there has been an 
increased interest from the states in the program, as reflected in the 
increased number of pre-applications received.
    Given the expanding availability of burial options within both 
national and state veterans cemeteries, and the competing demands for 
scarce VA resources, we can at this time support only an increase to 
$2,000 in the burial and funeral-expense allowance for service-
connected deaths. The last increase (from $1,000 to $1,500) occurred in 
1988. The greatest obligation is owed to the families of those who have 
paid the ultimate price for their service, and we believe such an 
increase is warranted in their case. Once VA's evaluation and analysis 
is complete, we will be able to comment further on other burial benefit 
increases.
    The Secretary previously expressed support for the $2,000 increase 
in his testimony before the House Veterans' Affairs Committee on H.R. 
801. We estimate the new burial allowance would cost $5.3 million in FY 
2002 and $31.7 million over the 2002-2006 period. The new benefit would 
increase direct spending and under the PAYGO provision of the 1990 
Omnibus Budget Reconciliation Act would trigger a sequester if not 
fully offset. Assuming offsetting savings are found to prevent a 
sequester, VA would support this alternative increase.

                                 S. 937

    S. 937, the ``Helping Our Professionals Educationally (HOPE) Act of 
2001,'' provides for several significant improvements to the MGIB. This 
bill would permit service members to transfer MGIB entitlement to their 
spouse and/or children, allow for accelerated payment of MGIB benefits, 
make MGIB benefits available for technological occupations, and permit 
certain members of the Selected Reserve to use MGIB benefits after 
separation from the Reserve. Section 2 of S. 937 would amend the MGIB 
to permit certain service members to elect to transfer up to one-half 
of their entitlement to their dependent spouse and/or children. The 
implementation of this provision would be at the discretion of the 
Secretary of the military department concerned.
    Service members who have a critical military skill, or are in 
specialties requiring critical military skills and who agree to serve 
four or more years could make an election to transfer no more than 18 
months of entitlement. Individuals selected to use this option would 
designate to whom and how much of the entitlement would be transferred.
    Subject to the applicable delimiting date, a transfer of 
entitlement could be made while the service member is on active duty or 
after the individual's release from that duty. The terms of the 
transfer could be modified or revoked by the service member at any 
time. The spouse could use the transfer after the service member 
completes six years of active duty. In the case of a child, the 
transfer could be used after the service member completes ten years of 
service and the child completes the requirements for a secondary school 
diploma or equivalency certificate, or the child attains age 18. A 
transfer to a child would end upon that child attaining the age of 26.
    Further, under section 2 of S. 937, the dependent would receive the 
same MGIB basic benefit as the veteran and the death of that veteran 
would not interfere with the use of the transfer. The dependent and the 
individual making the transfer would be jointly liable for 
overpayments. If the individual failed to complete the terms of the 
agreement, the amount of transferred entitlement used by the dependent 
would be treated as an overpayment, unless the individual died or was 
released from active duty for medical reasons.
    Section 2 further would require that the Secretary of the military 
department concerned approve transfers of entitlement only to the 
extent that appropriations are available in a fiscal year and would 
furnish an annual report on the use of such transfers to Congress. The 
Department of Defense (DOD) would fund MGIB payments made to dependents 
under this section and prescribe regulations for this purpose.
    VA has not yet developed a PAYGO cost estimate for this bill, but 
we will gladly supply one for the record, in conjunction with DOD. 
Since this provision involves matters within DOD's jurisdiction and 
would be funded by that Department, VA defers to DOD's views on this 
section.
    Section 3 of S. 937 would permit the election of an accelerated 
MGIB payment in a lump-sum amount equal to the lesser of the initial 
month plus the allowance for the succeeding four months; or the amount 
payable for the entire quarter, semester, or term; or where applicable 
for the entire course. VA favors accelerated payment of MGIB benefits. 
However, we prefer a broader provision covering high-cost, short-term 
courses.
    VA estimates section 3 of S. 937, if enacted, would result in PAYGO 
costs of approximately $307 million in the first year with no 
additional costs in the out years.
    Section 4 would amend section 3452(c) of title 38, United States 
Code, to include in the term ``educational institution'' any entity 
that provides directly or under an agreement with another entity, a 
course to fulfill the requirements for the attainment of a required 
license or certificate. This provision would become effective October 
1, 2001.
    This provision is similar to section 2 of S. 1088, which VA 
supports. However, we suggest that the definition of ``educational 
institution'' found in section 3501(a)(6) be included in this 
amendment, as it is in section 2, so that the new definition could work 
to the advantage of individuals receiving Dependents' Educational 
Assistance under chapter 35.
    Our preliminary estimate is that section 4 of S. 937 would result 
in PAYGO costs of about $3.4 million in FY 2002, with 5-year costs of 
about $17.6 million for FYs 2002-2006.
    Section 5 of the bill contains an amendment to the chapter 1606 
MGIB-Selected Reserve program that would extend the amount of MGIB 
entitlement an individual who continues to serve in the Selected 
Reserve would receive. Under current law, MGIB entitlement for an 
individual in the Selected Reserve commences on the date the individual 
makes a commitment to serve 6 years and expires at the end of a ten-
year period following the date of that commitment or the date the 
individual is separated from the Reserve, whichever first occurs. This 
section provides that the individual's entitlement would expire 5 years 
after the individual is honorably separated from the Selected Reserve. 
VA has not developed a PAYGO cost estimate for this bill, but we will 
gladly supply one for the record, in conjunction with DOD. Since this 
provision involves matters within DOD's jurisdiction and would be 
funded by that Department, VA defers to DOD's views on this section.
    The Veterans Benefits Administration estimates that enactment of 
H.R. 3256 would result in an annual cost of $2.1 million during fiscal 
year (FY) 2001 and $10.5 million over the period FYs 2001-2005.
    The Veterans Benefits Administration estimates that enactment of 
H.R. 3256 would result in an annual cost of $2.1 million during fiscal 
year (FY) 2001 and $10.5 million over the period FYs 2001-2005.
    Mr. Chairman, this concludes my statement.
                                 ______
                                 
 Response to Written Questions Submitted by Hon. Arlen Specter to Leo 
                                 Mackay
                          s. 1113 and s. 1114
    Question 1. I introduced two bills: S. 1113 and S. 1114. Please 
provide me the Administration's views on each of these bills.
    Answer. This will be supplied under separate cover.
    [The information referred to follows:]

                 The Secretary of Veterans Affairs,
                                                Washington,
                                                  October 26, 2001.
Hon. Arlen Specter,
Ranking Member,
Committee on Veterans' Affairs,
U.S. Senate,
Washington, DC.
    Dear Senator Specter: I am pleased to provide the Committee with 
the views of the Department of Veterans Affairs (VA) on S. 1113, 107th 
Cong., a bill ``[t]o amend section 1562 of title 38, United States 
Code, to increase the amount of Medal of Honor Roll special pension, to 
provide for an annual adjustment in the amount of that special pension, 
and for other purposes.'' VA supports enactment of S. 1113.
    S. 1113 would amend section 1562 to increase the Medal of Honor 
special pension from $600 per month to $1,000 per month. This bill 
would also provide for annual increases in the rate of the pension, to 
be effective December 1 of each year (not including 2001), based on the 
rate of annual Social Security rate adjustments. VA supports the 
increase in the special pension to $1,000 and annual increases based on 
cost-of-living adjustments in Social Security.
    The Medal of Honor is considered the highest decoration for valor 
available to men in the Armed Forces, and was originally established 
during the Civil War. H.R. Rep. No. 87-12, at 2, 3 (1961). In 1916, 
Congress established the Army and Navy Medal of Honor roll, which was 
to include the name of each surviving person ``who ha[d] served in the 
military or naval service of the United States in any war, . . . who 
ha[d] been awarded a medal of honor for having in action involving 
actual conflict with an enemy distinguished himself conspicuously by 
gallantry or intrepidity, at the risk of his life above and beyond the 
call of duty, and who ha[d been] honorably discharged from service. . . 
.'' Act of April 27, 1916, ch. 88, 39 Stat. 53. Each surviving person 
whose name was entered on the Medal of Honor roll was entitled to 
receive a special pension of $10 per month for life. Id., 39 Stat. at 
54. The special pension was intended by Congress to serve as a 
``recognition of superior claims on the gratitude of the country'' and 
to ``reward[ ] in a modest way startling deeds of individual daring and 
audacious heroism in the face of mortal danger when war is on.'' S. 
Rep. No. 64-240, at 2, 8 (1916).
    Pursuant to section 1562(a) of title 38, United States Code, this 
special pension is paid ``monthly to each person whose name has been 
entered on the Army, Navy, Air Force, and Coast Guard Medal of Honor 
roll, and a copy of whose certificate has been delivered to the 
[Secretary of Veterans Affairs] under [38 U.S.C. Sec. 1561 (c)].'' It 
is a benefit that is payable ``in addition to all other payments under 
laws of the United States.'' 38 U.S.C. Sec. 1562(b).
    Congress has periodically increased the special pension in an 
amount it has deemed to be appropriate for this benefit. In 1961, the 
rate of pension was increased by Pub. L. No. 87-138 to $100 per month 
from its original rate of $10 per month. Congress recognized that, 
although ``it is impossible to place a price tag on valor, honor, 
patriotism, or other virtues. . . . in some cases holders of this 
highest award are in destitute circumstances and several have had to go 
on relief or resort to applying for welfare payments from the States in 
which they reside.'' H.R. Rep. No. 87-12, at 1-2 (11961). Congress 
believed that ``this pension is fully warranted in view of the 
outstanding, unusual, and distinguished service rendered to the Nation 
by each and every holder of the Congressional Medal of Honor.'' Id. at 
2.
    The rate was increased to $200 from $100 in 1978, effective January 
1, 1979, by Pub. L. No. 95-479. Congress recognized that the Consumer 
Price Index had more than doubled since the previous increase in 1961 
``and thus the enhancement which the special pension represents ha[d] 
been seriously diminished.'' S. Rep. No. 95-1054, at 34 (1978).
    The rate was then increased to $400 from $200 in 1993 by Pub. L. 
No. 103-161. Congress believed the increase in this special pension to 
$400 was ``justified in light of the changes in the purchasing power of 
the benefit that ha[d] occurred since 1979,'' and recognized that the 
``increase [wa]s consistent with increases that ha[d] been provided in 
the average rates of service-connected disability compensation since 
that time.'' H.R. Rep. No. 103-313, at 2 (1993).
    The Medal of Honor pension was last increased in 1998 by Pub. L. 
No. 105-368 from $400 to $600. Congress recognized that the increase, 
though still quite modest, was more generous when adjusted for 
inflation than the amount originally authorized in 1916. 144 Cong. Rec. 
H10,399 (daily ed. Oct. 10, 1998) (statement of Rep. Quinn). One reason 
Congress supported a more generous increase was to help defray some of 
the costs incurred by living Medal of Honor recipients, who are often 
asked to participate in patriotic ceremonies all over the country, 
which they frequently do at their own cost. Id.
    S. 1113 would increase the special pension rate monthly from $600 
to $1,000 and annually based on cost-of-living adjustments. When you 
introduced the bill on June 27, 2001, you expressed concern that, among 
the 149 surviving Medal of Honor recipients, a number of the recipients 
may be struggling financially and living near the poverty line. 147 
Cong. Rec. S6999 (daily ed. June 27, 2001) (statement of Sen. Specter). 
Moreover, taking into consideration the expenses borne by many Medal of 
Honor recipients to ``make frequent trips to provide accounts of their 
act of valor and, more importantly, to speak of the lessons learned in 
battle and the vigilance that freedom requires to this day,'' you 
opined that ``[t]he current $600 monthly amount is simply too small . . 
. to afford a minimum standard of living for our Nation's heroes given 
their expenses.'' Id. In light of your remarks, although we cannot 
verify the financial status of the surviving Medal of Honor recipients, 
VA shares your concerns and supports enactment of S. 1113.
    The costs associated with the enactment of this bill would be 
$715,200 for Fiscal Year (FY) 2002, $4 million for the five-year period 
from FY 2002 through FY 2006, and $9.2 million for the ten-year period 
from FY 2002 through FY 2011. These costs would be subject to the PAYGO 
requirements of the Omnibus Budget Reconciliation Act of 1990.
    For all of the proposals that VA supports, that support is 
contingent on accommodating the proposals within the budget limits 
agreed upon by the President and the Congress. The Administration will 
work with the Congress to ensure that any unintended sequester of 
spending costs does not occur under current law or the enactment of any 
other proposals that meet the President's objectives to reduce debt, 
fund priority initiatives, and grant tax relief to all income tax 
paying Americans.
    The Office of Management and Budget has advised us that, from the 
standpoint of the Administration's program, there is no objection to 
this submission of this report.
            Sincerely yours,
                                       Anthony J. Principi.
                                 ______
                                 
                 The Secretary of Veterans Affairs,
                                                Washington,
                                                 September 7, 2001.
Hon. Arlen Specter,
Ranking Member,
Committee on Veterans' Affairs,
U.S. Senate,
Washington, DC.
    Dear Senator Specter: Pursuant to your letter of June 28, 2001, I 
am pleased to provide the Committee the views of the Department of 
Veterans Affairs (VA) and our cost estimate on S. 1114, 107th Congress, 
which would ``increase the amount of education benefits for veterans 
under the Montgomery GI Bill.'' VA's answers to your questions for the 
record will be sent to you under separate cover, as will our views on 
S. 1113.
    S. 1114 would provide for stepped education assistance benefit 
increases under the Montgomery GI Bill (MGIB) for Fiscal Years 2002 
through 2004. Individuals whose obligated period of active duty is 
three or more years would receive full-time monthly benefits of $800 
for 2002, $950 for 2003, and $1,100 for 2004. Individuals whose 
obligated period of service is less than three years would receive 
monthly benefits of $650 for 2002, $772 for 2003, and $894 for 2004. 
Proportionately lesser amounts would be payable for less than full-time 
training.
    This measure, further, would suspend the statutory annual CPI-based 
adjustment in MGIB rates beginning in Fiscal Year 2002 and would 
reinstate that adjustment beginning in Fiscal Year 2005.
    The President's FY 2002 Budget includes the annual cost-of-living 
increase for education benefits for veterans and servicemembers, but 
does not include an additional MGIB benefit increase. However, the 
President would support MGIB program improvements, to include a 
reasonable increase in rates, if they can be accommodated within the 
overall budget limits agreed to by the President and Congress. In this 
regard, as mentioned in my June 7, 2001, testimony before the House 
Committee on Veterans' Affairs Subcommittee on Benefits, VA does 
support, within the framework of those spending limits, the stepped 
MGIB rate increases contained in H.R. 1291, a bill similar to S. 1114.
    Enactment of S. 1114, as drafted, would result in an increase in 
benefits cost subject to the pay-as-you-go (PAYGO) requirement of the 
Omnibus Budget Reconciliation Act of 1990. VA estimates the benefits 
cost increase at approximately $250 million in FY 2002, a 5-year total 
of $3.2 billion over the period FYs 2002-2006, and a projected 10-year 
total of $8.3 billion over the period FYs 2002-2011. We are enclosing a 
detailed 10-year cost estimate, together with the assumptions and 
methodology used in arriving at this estimate.
    The Office of Management and Budget advises that there is no 
objection to the submission of this report from the standpoint of the 
Administration's program.
            Sincerely yours,
                                       Anthony J. Principi.
Methodology
    a) Identification--S. 1114.
    b) Highlights--This proposal provides for increases to the 
Montgomery GI Bill monthly benefit payments in Fiscal Years 2002, 2003, 
and 2004, The full-time rates for a participant whose obligated period 
of service is three or more years would increase from $650 to $800 in 
2002, to $950 in 2003, and finally to $ 1,100 in 2004. For participants 
with an obligated period of service of less than three years, the full-
time rate would increase from $528 to $650 for 2002, to $772 for 2003, 
and $894 for 2004. Proportionally lesser amounts would be payable for 
less than full-time training.
    c) Estimated Benefit Costs and Trainee Estimate--

------------------------------------------------------------------------
                                                             Obligations
                                                  Trainees      ($'s in
                                                 (suction)       000)
------------------------------------------------------------------------
2002..........................................          800     $250,000
2003..........................................        1,700      510,000
2004..........................................        4,200      779,000
2005..........................................        7,700     8,07,000
2006..........................................       11,700      833,000
2007..........................................       17,200      872,000
2008..........................................       24,100      946,000
2009..........................................       31,000    1,020,000
2010..........................................       38,200    1,105,000
2011..........................................       45,300    1,162,000
Five-Year Obligations.........................  ...........    3,179,000
Ten-Year Obligations..........................  ...........    8,284,000
------------------------------------------------------------------------

    d) Administrative Costs--We assume that any additional employment 
requirements or administrative costs will be absorbed with current 
resources.
    e) Benefits Methodology--In costing this proposal, we increased the 
2001 annual average rate shown in the 2002 Congressional Budget 
submission by the proposed 23.1 percent rate increase (rounded to the 
nearest dollar) to compute the revised annual average benefit payment 
in 2002, by 18.8 percent in 2003, and 15.8 percent in 2004, in lieu of 
automatic CPI adjustments. Commencing in fiscal year 2005, educational 
rate increases would once again be tied to the CPI. To compute the 
cost, we multiplied the revised annual average benefit payments by the 
number of chapter 30 trainees included in the 2002 Congressional Budget 
submission. The costs generated from this calculation were subtracted 
from the costs that were already included in the 2002 budget submission 
for the annual CPI increase to arrive at the additional monthly benefit 
payments. To compute the additional trainees from suction (i.e., the 
effect of new individuals being drawn into the program as a result of 
the proposed increased benefits), we assumed that the trainees from the 
2002 Congressional Budget submission would gradually increase as the 
monthly benefit rose to make attending a four-year in-state public 
institution of higher learning more affordable. In the first year, we 
estimate that trainees would increase by .002 percent, with incremental 
increases reaching 13 percent by 2011.
    f) Other Assumptions--Enactment date October 1, 2001.
                                 ______
                                 
               EDUCATIONAL ASSISTANCE BENEFITS INCREASES

    Question 2. Yesterday, I introduced a bill which is identical to 
H.R. 1291--a bill which passed the House on June 19, 2001. That bill--
as you know--would increase the basic Montgomery GI Bill benefits by 
$150 per month in each of the next three years. The Administration has 
stated that it supports my bill ``if [its benefits increases] can be 
accommodated within the overall budget limits agreed to by the 
President and the Congress.'' Is there any reason for you to believe 
that those increases cannot be so ``accommodated?'' Is it not the case 
that the budget resolution made room for precisely these increases?
    Answer. It is our understanding that the House Budget Resolution 
did make funding available for paying the stepped increases contained 
in H.R. 1291 which, as you indicate, is the same as S. 1114. Provided 
these funds are not withdrawn, there is no reason to think that the 
increases contained in H.R. 1291 and S. 1114 cannot be accommodated.
    Question 3. I have also co-sponsored a bill with Chairman 
Rockefeller--S. 1088--which would authorize the payment of an 
accelerated ``up-front'' benefit to assist veteran-students who wish to 
take courses leading to ``high tech'' certifications that--I am told--
are ``tickets'' to high-paying computer industry jobs. Do you support 
this measure? Should we enact it and a measure increasing the basic 
monthly MGIB benefit?
    Answer. We support the broad acceleration concept contained in S. 
1088, but believe consideration should be given to high-cost courses, 
not merely high-tech courses. Although providing for accelerated 
payment would be a significant improvement to the MGIB, we believe 
priority should be given to an appropriate rate increase that can be 
accommodated within agreed budget limits.
    Question 4. The Administration has stated that--subject to budget 
limitations--it supports my proposed increase in Montgomery GI Bill 
benefits, but I do not know whether the Administration believes that 
the increases I have proposed--increases of $150 per month in the basic 
benefit during each of the next three years--would be the preferred 
course of action. Is an increase in the basic benefit what veterans 
need? Would you devote all budgetary allowances available to us to 
increases in the monthly benefit? Or do you believe that we should 
reserve some of those allowances--if we cannot do all that we would 
like to do--to enhance program flexibility by, for example, allowing 
accelerated benefits for high technology courses?
    Answer. As stated above, we believe it preferable that available 
resources be used for monthly rate increases.
    Question 5. The MGIB's monthly education benefit has been increased 
substantially over the past four years. What has been the impact--if 
any--of these increases on the percentage of veterans who use their 
education benefits? Are more utilizing the benefit than before? Are 
benefits increases the key to getting more veterans to use their 
benefits?
    Answer. Over the last four years or so, the usage rate has been as 
follows: 49.0 percent in Fiscal Year 1996; 52.8 percent in Fiscal Year 
1997; 54.0 percent in Fiscal Year 1998 and 55.6 percent in Fiscal Year 
1999. Currently the usage rate is 55.1 percent. While there has been 
some upward movement in the usage rate due to increased benefit rates, 
we would have to say that it has not been substantial. More veterans 
are using their benefits than before. We do believe that substantive 
rate increases such as those contained in S. 1114 and H. R. 1291 would 
have an impact on benefit usage. While benefit increases are important 
to the use of benefits, other factors such as advertising and outreach 
also play a role.
    Question 6. Of those eligible to use the various GI Bill education 
benefits we have had since the end of World War II, when were usage 
rates the highest? Is the VA's goal to get usage rates for Montgomery 
GI Bill eligibles up to that level? In your estimation, what would it 
take to encourage more eligible veterans to use their benefit?
    Answer. Since World War II, the greatest usage has occurred among 
those with Vietnam Era Service between August 5, 1964, and December 31, 
1976, for the period of time from June 1966 to September 1988. That 
usage rate was 65.9 percent. We would like to return at least to that 
level of usage and hopefully even higher. The proposed increases 
contained in S. 1114 and H. R. 1291 would drive the usage rate toward 
that level.
    Question 7. What do you believe the appropriate education benefit 
level should be for the survivors of service members killed in action? 
Should education benefits for survivors be in the same amounts as those 
we provide to veterans?
    Answer. We believe it is only fair that these benefits should be at 
the same level as those provided to veterans.
    Question 8. Yesterday, I sent a letter to the GAO asking that it 
provide me an analysis of the dollar value of the various educational 
assistance benefits--Pell grants, student loans, Hope Scholarships, tax 
deductions for tuition expenses and student loan interest payments, 
etc.--provided to students (and students' parents) who have not served. 
My thinking is that these are necessary and good programs--but the 
benefits provided to those who have served ought to exceed--and exceed 
by a substantial margin--the benefits provided to those who have not. 
Do you agree with that thinking? Has VA ever attempted to calculate the 
worth of assistance provided to ``ordinary'' students? Do the benefits 
that VA administers offer sufficient reward for service--and sufficient 
incentive to serve?
    Answer. We strongly agree with the thinking that educational 
assistance for those who have served in the military should exceed that 
offered to those who have not served. We have not undertaken a 
calculation of the worth of the assistance you describe that, although 
generally available, is not strictly targeted to those who have served. 
However, it is clear that MGIB benefits have not kept pace with 
increases in education costs so that, at current levels, the program is 
not optimally meeting its recruitment and readjustment objectives. At 
this time, the current level of benefits does not offer sufficient 
reward for service, nor are they sufficient incentive or reward for 
service. We believe the stepped rate increases contained in S. 1114 and 
S. 1291 would be a good first step toward improving this situation.

               PERSIAN GULF VETERANS--UNDIAGNOSED ILLNESS

    Question 9. As I understand it, a Persian Gulf War veteran who 
suffers an ``undiagnosed illness'' is entitled to a legal presumption 
of service-connection--i.e., he or she does not have to prove that the 
illness was caused by service--but only if the malady has manifested on 
or before December 31, 2001. Is that understanding correct?
    Answer. Yes, that is correct.
    Question 10. Does the Administration have authority to extend, by 
regulation, the ``presumptive period'' applicable to Persian Gulf War 
veterans who exhibit undiagnosed illnesses? If so, does VA intend to 
use that authority to extend the presumptive period? Or if 
legislation--such as S. 409 introduced by Senator Kay Bailey 
Hutchison--necessary to extend that presumptive period?
    Answer. Under 38 U.S.C. Sec. 1117(b), VA has the authority to 
extend, by regulation, the ``presumptive period'' applicable to Persian 
Gulf War veterans who exhibit undiagnosed illnesses. We are considering 
whether the ``presumptive period'' should be extended by regulation, 
and we will notify you and the other members of the Committee when we 
complete our assessment of this issue.
    Question 11. I am advised that three out of four claims for 
service-connection based on an ``undiagnosed illness'' are denied by 
VA. Is this so? If veterans are entitled to a legal presumption of 
service connection (assuming their symptoms have appeared on or before 
December 31, 2001) how can it be that three of four claims are denied?
    Answer. As of January 15, 2001, in claims for service connection of 
undiagnosed illness(es), service connection for at least one such 
illness was granted in 26.12% of the cases, and service connection was 
denied in 73.88% of the cases. Examples of the reasons for these 
denials include:
     No showing that the veteran has a current disability,
     The veteran has a diagnosed, rather than undiagnosed, 
illness (many of these veterans are service-connected for their 
diagnosed illness), or
     The veteran did not serve in the Southwest Asia theatre of 
operations (e.g. served in Turkey).
    It should also be noted that the Gulf War cohort has a higher than 
average percentage of veterans in receipt of VA service-connected 
disability compensation. Additionally, Gulf War veterans have a higher 
than average number of disabilities per veteran.
    Question 12. Am I correct in concluding that VA is being 
excessively stringent in processing Gulf War veterans' claims for 
compensation based on ``undiagnosed illness?'' How else can you account 
for a 75% denial rate in cases where the veteran has the benefit of a 
legal presumption?
    Answer. VA Service Centers' decisions in undiagnosed illness claims 
for service connection involve relatively little discretion. We apply 
the criteria in 38 U.S.C. Sec. 1117 and 38 C.F.R. Sec. 3.317 to the 
facts of each case. As stated above, the Gulf War cohort has a higher 
than average percentage of veterans in receipt of VA service-connected 
disability compensation.
    Question 13. By what standard does VA adjudicate claims for 
compensation based on ``undiagnosed illness?'' Are those standards 
consistently applied in the field? How does VA ensure the quality of 
its medical examinations and decisions on these claims?
    Answer. As stated above, we apply the criteria in 38 U.S.C. 
Sec. 1117 and 38 C.F.R. Sec. 3.317 to the facts of each case. Our 
Compensation and Pension Service reviews undiagnosed illness claims 
decisions as part of its quality assurance program, known as the 
Systematic Technical Accuracy Review (STAR). This process includes a 
review of the adequacy of the medical examination done in each claim 
reviewed. STAR not only allows VA to compare the performance of 
Veterans Service Centers; it also allows VA to provide valuable 
feedback to these Centers to help them avoid future errors. In addition 
to STAR, we have also formed a joint VBA/VHA project to analyze and 
improve the Compensation and Pension examination process.

                     VIETNAM VETERANS--LUNG CANCER

    Question 14. S. 1091--a bill that I have cosponsored with Senator 
Rockefeller--would eliminate the current requirement that respiratory 
cancers manifest within 30 years of a veteran's departure from Vietnam 
in order for such cancers to be presumed to have been caused by 
exposure to Agent Orange. This legislation is based on the Institute of 
Medicine's finding that the 30-year limitation has no scientific 
foundation and that it was, therefore, arbitrary. Do you agree that we 
should eliminate the 30-year ``delimiting period'' for Agent Orange-
induced lung cancer?
    Answer. At this time, the Department is reviewing the findings of 
the recent Institute of Medicine report, Veterans and Agent Orange: 
Update 2000, on the issue of respiratory cancer. We are considering the 
scientific merits of the 30-year period and we will notify you and the 
other members of the Senate Veterans Affairs Committee when we complete 
our assessment of this issue.
    Question 15. How many claims for VA compensation based on post-
Vietnam lung cancer have been denied for failure to satisfy the 30-year 
limit? Is there a way to identify these claimants? If we repeal the 30-
year limit, should we allow veterans who were denied compensation an 
opportunity to re-file their claims for benefits? Should we award 
denied benefits retroactively?
    Answer. A search of VA databases identified 883 in-country Vietnam 
living veterans whose claims for service connection for respiratory 
cancer have been denied. VA does have the capability to identify the 
883 claimants. Unfortunately, we do not have data regarding the denial 
reason.
    When claims for dependency and indemnity compensation are denied, 
the claimed condition is not entered into VA databases, so this 
information is not available. If the 30-year limit were repealed, 
veterans who were denied would be permitted to re-file their claims, 
under 38 U.S.C. Sec. 5110(g) and 38 C.F.R. Sec. 3.114. VA has not yet 
had the opportunity to analyze the merits of the provision of S. 1091 
which would call for retroactive awards of benefits.
    Question 16. Are you aware of other ``presumptive period'' 
limitations within title 38 which--like the one applicable to Agent 
Orange-induced lung cancer--lacks scientific foundation?
    Answer. We are not aware of any limitations that lack a scientific 
foundation.
    Question 17. S. 1091 would, among other things, create an explicit 
presumption of exposure to herbicide for veterans who served in 
Vietnam. It had been my understanding that VA had already presumed 
exposure. Was this not the case? If so, do we need to create a 
statutory presumption now?
    Answer. S. 1091 would expand the presumption of exposure to 
herbicide agents to include all Vietnam veterans; the current statute 
allows this presumption only for those Vietnam veterans who have one of 
the diseases linked to herbicide exposure in Sec. 1116(a). VA does not 
object to the expansion of this presumption. There appears to be no 
basis for distinguishing veterans who have diseases not necessarily 
recognized by VA as being associated with herbicide exposure for 
purposes of determining whether they have been exposed to herbicides in 
service.
    Question 18. If a Vietnam veteran appears at a VA Regional Office 
and provides proof of Vietnam service and proof of a presumptive 
``Agent Orange'' disease--e.g., non-Hodgkins lymphoma or lung cancer--
does he need to prove that he was exposed to herbicides? If so, how can 
he prove that?
    Answer. As stated in response to question 17, a Vietnam veteran 
with one of the presumptive Agent Orange diseases is presumed to have 
been exposed to herbicides in Vietnam, and need not provide any proof 
of exposure.

                     VIETNAM VETERANS--HEPATITIS C

    Question 19a. What is VA's current practice on adjudicating claims 
for service-connection where the veteran claims that he or she 
contracted Hepatitis C virus while in service?
    Answer. VA currently processes a claim for service connection for 
hepatitis C as follows:
    A. When VA receives a substantially complete application for 
benefits based on hepatitis C infection, VA sends the claimant a letter 
notifying him or her of the information and evidence necessary to 
substantiate this claim. This notice is required by the Veterans Claims 
Assistance Act of 2000. This letter informs the claimant of the 
medically recognized risk factors for contracting hepatitis C.
    B. In this notice letter to the claimant, VA informs the claimant 
what information and evidence VA will try to obtain on the claimant's 
behalf, and what information and evidence the claimant must submit. VA 
requests that the claimant submit information describing which 
medically recognized risk factors apply to him or her and the 
circumstances related to how the claimant contracted hepatitis C, if 
known. VA also requests that the claimant identify any medical 
treatment received for hepatitis C, advising the claimant that VA will 
request these medical records on the claimant's behalf to help 
substantiate the claim. The claimant is also requested to submit any 
evidence he or she may have relevant to this claim, including evidence 
of current hepatitis C infection, evidence of risk factors or hepatitis 
C infection in service, and evidence of any post-service treatment for 
the condition.
    C. VA makes reasonable efforts to obtain any evidence adequately 
identified by the claimant from federal and non-federal records 
custodians.
    D. VA reviews records received and determines if service connection 
can be granted on the evidence of record. This may be possible if the 
evidence shows that the claimant currently has a confirmed diagnosis of 
hepatitis C that was incurred in service (other than due to drug 
abuse), or shows a confirmed medically-recognized risk factor for 
hepatitis C infection (other than drug abuse) in service.
    E. If a medical examination or medical opinion is necessary to 
decide the claim, VA requests the examination or opinion. Examination 
is necessary to determine the veteran's current diagnosis if the proper 
confirmatory testing for hepatitis C is not of record. An examination 
or medical opinion would be necessary when the evidence shows there are 
conflicting risk factors--for example, blood transfusion in service as 
well as a history of drug abuse or tattooing in service with history of 
post-service blood transfusion--and there is no medical opinion in the 
record as to which risk factor is ``at least as likely as not'' the 
source of the hepatitis C infection. A VA medical examination would 
also be necessary to evaluate the current status of a hepatitis C 
infection if the evidence of record is inadequate to determine this.
    F. Adjudicate the claim, determining if service connection is 
warranted based on all the medical and lay evidence of record.
    Question 19b. If Hepatitis C were presumed to have been caused by 
exposure to certain risk factors--as is proposed by S. 457 now before 
the Committee--what adjudication processing steps would no longer be 
necessary?
    Answer. A. In all claims, VA would still provide the notice 
required by the Veterans Claims Assistance Act of 2000 upon receipt of 
a substantially complete application for benefits based on hepatitis C 
infection. This notice would notify a claimant of the information and 
evidence necessary to substantiate this claim. If S. 457 were enacted, 
VA would inform the claimant in this letter of the in-service risk 
factors that are presumed to cause hepatitis C infection.
    B. If S. 457 were enacted, this notice letter to the claimant would 
still inform the claimant what information and evidence VA will try to 
obtain on the claimant's behalf, and what information and evidence the 
claimant must submit. VA would request that the claimant submit 
information describing which risk factors, if any, apply to him or her 
and the circumstances related to how the claimant contracted hepatitis 
C, if known. VA would also request that the claimant identify any 
medical treatment received for hepatitis C, advising the claimant that 
VA will request these medical records on the claimant's behalf to help 
substantiate the claim. The claimant would also be requested to submit 
any evidence he or she may have relevant to this claim, including 
evidence of current hepatitis C infection, evidence of risk factors or 
hepatitis C infection in service, and evidence of any post-service 
treatment for the condition.
    C. If the claimant submits necessary information and evidence with 
the substantially complete application for benefits or in response to 
VA's notice letter, and the evidence confirms that the veteran was 
exposed to one of the risk factors proposed by S. 457, VA may not have 
to develop for further evidence. Alternatively, if the claimant 
responds to VA's notice letter by identifying sources of evidence that 
may confirm that he or she was exposed to one of the risk factors as 
proposed by S. 457, VA would develop for those records.
    D. If VA's review of these records confirms that the claimant was 
exposed to one of the risk factors proposed by S. 457, then a medical 
opinion on the etiology of any currently diagnosed hepatitis C may not 
be necessary. A VA examination may still be necessary to establish the 
current status of any hepatitis C infection.
    Question 20a. Am I correct that intravenous drug use is the leading 
cause of individuals newly infected with Hepatitis C?
    Answer. Yes.
    Question 20b. If that is so--and if Congress were to create a 
presumption of Hepatitis C service-connection for veterans who, for 
example, received a blood transfusion before December 31, 1992--how 
would VA determine whether a veteran with post-service history of drug 
use is entitled to compensation?
    Answer. Service connection for hepatitis C due to blood transfusion 
would be granted on a presumptive basis unless there was affirmative 
evidence to the contrary to rebut the presumption (38 U.S.C. 1113), 
which in the this example is the evidence of post-service history of 
drug use. The source of hepatitis C infection is a medical 
determination. If the source of hepatitis C infection is not apparent 
in the medical evidence of record, a claims examiner schedules a VA 
examination and asks the physician to give an opinion whether it is at 
least as likely as not that the hepatitis C infection is due to the 
blood transfusion rather than the post-service drug use.
    Question 20c. Would he or she be denied the benefit of presumption? 
Should he or she be denied that benefit?
    Answer. The benefit of the presumption would be denied if the 
medical evidence proves that the hepatitis C infection stems from drug 
use rather than the in-service blood transfusion. VA must deny the 
benefit of the presumption in such instance as directed by 38 U.S.C. 
Sec. Sec. 1110, 1113 and 1131.
    Question 21a. S. 457 would presume that Hepatitis C is service-
connected--and that the veteran, therefore, is entitled to 
compensation--in cases where the veteran was tattooed or body-pierced 
in service. Do you agree that Hepatitis C can be caused by tattooing or 
body piercing?
    Answer. Yes, but the risk of contracting hepatitis C due to 
tattooing or body piercing is very minimal.
    Question 21b. Do you think we should compensate persons for 
diseases that have resulted from such activities?
    Answer. In a case where it is shown that the veteran's hepatitis C 
was the result of these activities in service (direct service 
connection), VA would compensate the veteran. But we do not believe 
these activities should be the basis for presumptive service 
connection. According to the U.S. Centers for Disease Control and 
Prevention, there are no studies in the United States demonstrating 
that individuals with a history of tattooing or body piercing are at 
increased risk for hepatitis C infection based on those risk factors 
alone.
    Question 22. I note your support for increasing the VA loan 
Guaranty amount so that veterans in high cost areas can take advantage 
of their home loan entitlement. Are there other enhancements which 
could be made to the home loan program that would enable more veterans 
to realize the dream of home ownership? Do you support the idea of 
adding an adjustable rate mortgage feature to the program?
    Answer. We believe that increasing the guaranty amount on VA loans 
will help veterans in high cost areas realize the dream of home 
ownership. We also believe that adjustable rate mortgages will help 
more veterans use their home loan entitlement to become homeowners.
    Under the provisions of 38 USC 3707, VA was authorized to conduct a 
demonstration project to guarantee adjustable rate mortgages (ARMs) 
during fiscal years 1993, 1994, and 1995. This authority was allowed to 
expire for reasons of cost during a time when the Government was 
running large budgetary deficits. VA supports restoring VA's authority 
to guarantee ARMs, and also would support authorization for VA to 
guarantee a relatively new mortgage product referred to as a hybrid 
ARM.
    Hybrid ARMs are mortgages having an interest rate that is fixed for 
an initial period of more than 1 year. After the initial fixed rate 
period ends, these mortgages are subject to interest rate adjustments, 
typically on an annual basis and indexed to the corresponding term 
treasury bond yield. The most popular hybrid ARMs are those with the 
initial interest rate set for 3 years, 5 years, 7 years, or 10 years, 
and annual adjustments afterwards. These loan products are referred to 
in the mortgage industry as 3/1, 5/1, 7/1, and 10/1 ARMs, respectively. 
Among these hybrid ARMs, the 5/1 and 10/1 products are the most 
popular.
    The availability of ARMs as a financial option would expand 
veterans' ability to qualify for a mortgage, as some borrowers can 
qualify for the lower initial payments on an ARM that could not qualify 
for the payments on a fixed rate loan for the same dollar amount. The 
availability of hybrid ARMs would give veterans the additional option 
of having a fixed monthly payment for a certain number of years before 
payment adjustment would be a possibility.
    A VA-guaranteed ARM could be especially useful to a veteran who is 
a first-time homebuyer unable to qualify for a fixed rate loan to 
purchase the home of his or her choice. It would also be useful to 
veterans purchasing homes when fixed interest rate loans are high, as 
well as veterans who are buying in higher cost areas or who need to buy 
a larger home to accommodate the needs of the family. Adjustable rate 
loans are currently available through FHA and conventional mortgage 
programs. Veterans should not be forced to choose between either using 
their earned VA loan guaranty benefit or obtaining a loan with an 
adjustable interest rate.
    Question 23. By how much would the current VA backlog be reduced if 
the Congress were to enact the various VA-requested clarifications 
contained in Section 5 of S. 1091 of the Veterans Claims Assistance Act 
of 2000? Of those claims where a previous decision had been made by the 
Secretary prior to the enactment of that statute, how many have been 
readjudicated using the new adjudication standard? Has the 
readjudication of those claims resulted in decisions different than the 
original decisions? If so, in how many claims?
    Answer. The backlog of claims is, in part, due to the notice and 
development provisions of the Veterans Claims Assistance Act (VCAA) 
which the technical amendments proposed by VA do not address. However, 
the technical amendments would clarify that the VCAA applies to claims 
filed after the date of its enactment and to any claim VA had received 
but had not adjudicated as of the date of enactment. They would change 
current law by providing that VA would not be required to readjudicate 
any claim already decided by a VA regional office but for which the 
appeal period had not expired on the date of VCAA's enactment unless 
the claimant requests readjudication, or the Secretary moves for it, 
within two years of the date of the VCAA's enactment. Included within 
this class of claims are many claims denied as not well grounded but 
for which the appeal period had not expired on the date of VCAA's 
enactment.
    VA has made significant progress readjudicating these claims. VA 
has identified more than 98,000 claims where at least one issue was 
denied as not well grounded between the time period when the Morton v. 
West decision was rendered and the date of enactment of the Veterans 
Claims Assistance Act (VCAA). VA has completed the readjudication of 
24,007 of these claims, and another 36,272 of these claims are 
currently under review. VA will not stop readjudicating them even if 
the technical amendments were enacted. However, the technical 
amendments will allow VA to refrain from sending the VCAA notice and 
development letters in claims which VA has fully developed and 
adjudicated prior to the VCAA, even though they were ultimately denied 
as not well grounded.
    A preliminary review conducted by the Compensation and Pension 
Service of 147 claims previously denied as not well grounded and 
readjudicated under the VCAA show that 6 claims were granted after the 
new procedures in the VCAA were applied to those claims.
    In addition, the proposed technical amendment, which would remove 
the prohibition on the payment of benefits if a claimant does not 
submit evidence within one year of the date it was requested, would 
remove an ambiguity in the current language. If the ambiguity were 
resolved against VA, section 5103(b) could be interpreted as precluding 
VA from deciding a claim before the expiration of one year from the 
date it requested evidence. The proposed technical amendment prevents 
this potential problem that would add to the backlog.
    Question 24. How many loans have been made under the Native 
American Veteran Direct Home Loan Program? Of those loans, how many are 
in default?
    Answer. Through Fiscal Year 2000, 233 loans were made under the 
Native American Veteran Direct Loan Program. As of the end of April 
2001, 24 of these loans were more than 90 days delinquent. VA has not 
foreclosed on any loan made under this program.
                                 ______
                                 
Response to Written Questions Submitted by Hon. Ben Nighthorse Campbell 
                             to Leo Mackay
    Question 1. In 1998, Congress passed and the President signed into 
law, an omnibus appropriations measure that gives the Secretary the 
authority to determine what symptoms are compensable for illnesses that 
the Secretary determines to warrant such a presumption based on 
exposure to chemicals in service during the Persian Gulf War. And, the 
law further allows the Secretary to make such determinations in 
consultation with the National Academy of Sciences. Is it necessary to 
pass S. 409 which would extend the presumptive period and further 
define symptoms worthy of compensation? What steps are currently being 
taken to make these determinations?
    Answer. Currently, 38 U.S.C. Sec. 1117 provides that the Secretary 
may pay compensation to any Gulf War veteran suffering from a chronic 
disability resulting from an undiagnosed illness (or combination of 
undiagnosed illnesses) that became manifest during active service in 
the Southwest Asia theater of operations during the Gulf War or became 
manifest to a compensable degree within a presumptive period (currently 
ending on December 31, 2001) as determined by regulation. S. 409, 
``Persian Gulf War Illness Compensation Act of 2001,'' would define 
``undiagnosed illness'' as ``illness manifested by symptoms or signs 
the cause, etiology, or origin of which cannot be specifically and 
definitely identified, including poorly defined illnesses such as 
fibromyalgia, chronic fatigue syndrome, autoimmune disorder, and 
multiple chemical sensitivity''.
    With regard to fibromyalgia, chronic fatigue syndrome and 
autoimmune disorder service connection may be established on a direct 
basis under current law. With regard to multiple chemical sensitivity, 
this condition is not recognized under VA's schedule for rating 
disabilities. VA has adequate authority under existing law to establish 
presumptions for these conditions should [VA] conclude that scientific 
and medical evidence support such action. Under 38 U.S.C. Sec. 1118, 
the Secretary may determine and prescribe in regulations which 
diagnosed and undiagnosed illnesses warrant such a presumption of 
service connection. Therefore, VA does not support adding those 
illnesses to 38 U.S.C. Sec. Sec. 1117 and 1118. Regarding S. 409's 
inclusion of ``poorly defined illnesses'', this is a very vague term 
and would result in great uncertainty regarding proper implementation. 
In addition, we do not believe that current scientific or medical 
evidence supports creation of a presumption of service connection for 
such conditions. The Department is pursuing multiple research 
initiatives intended to identify diseases or conditions that may be 
associated with service in the Gulf War. The results of this research 
will provide a scientific foundation for decisions on possible 
presumptive service-connection of diseases or conditions found in 
veterans of the Persian Gulf War.
    S. 409 would also extend the presumptive period applicable to Gulf 
War veterans' disabilities due to undiagnosed illnesses that became 
manifest through December 31, 2011. Under 38 U.S.C. Sec. 1117(b), VA 
has the authority to extend, by regulation, the presumptive period 
applicable to Gulf War veterans who exhibit undiagnosed illnesses. We 
are considering whether the presumptive period should be extended by 
regulation, and we will notify you and the other members of the 
Committee when we complete our assessment of the issue.
    Question 2. I am a strong supporter of the Native American Veteran 
Housing Loan Program. In fact I supported legislation to not only 
extend the Demo Project but to require the VA to work with Indian 
country in making loans. I know the VA cannot knock on every door in 
Indian communities, but there are groups like the Native American 
Housing Council (NAIHC) and the National Congress of American Indians 
(NCAI) that can serve as conduits to Native Vets. What progress has 
been made in actually making home loans to Native Veterans?
    Answer. VA continues to make progress implementing the Native 
American Veterans Housing Loan Program. As we reported in VA's Annual 
Report to Congress for FY 2000, VA negotiated and entered into 
Memoranda of Understanding (MOUs) with 2 more tribes, to bring our 
total of participating governments up to 59. During FY 2000, VA field 
offices issued commitments and/or closed 21 loans, for a total of 233 
loans made under this pilot program since its inception.
    VA also continues its efforts to develop positive working 
relationships with Native American groups and tribes and relevant 
government entities and to provide program information and materials to 
these parties. VA field station personnel meet with tribal 
representatives across the country to provide program information.
    The Department actively participates in coordinated training and 
outreach seminars for potential homeowners and tribal representatives 
sponsored by the U.S. Department of Housing and Urban Development 
(HUD)'s Office of Native American Programs (ONAP). In addition, VA 
continues to distribute copies of its video, ``Coming Home; Native 
American Veteran Home Loans''. This video shows Native American 
veterans and tribal officials how the Native American Veterans Housing 
Loan Pilot Program may be used to help them achieve their homeownership 
goals.
    The Department has also been an active participant in the One-Stop 
Mortgage Center Initiative Task Force, created in 1998 to promote 
homeownership in Indian country. This Task Force is working to identify 
barriers that limit homeownership opportunities in Indian country, to 
make recommendations for actions to address the barriers, and to 
present a plan to implement the recommendations. The final report was 
issued in October 2000. The Task Force continues its efforts to 
implement its recommendations.

    Chairman Rockefeller. Thank you. A couple of things. The 
Montgomery GI Bill, $650, all kinds of things and suggestions 
to be done with it. There are different requirements now for 
service people who come home, become veterans, and they need 
different kinds of training than they used to.
    I wonder, Dr. Mackay, where you see the GI Bill going. What 
should we be adjusting in order to serve the veteran better? 
There is a traditional model, right----
    Mr. Mackay. Yes, sir.
    Chairman Rockefeller [continuing]. That we have all become 
accustomed to over these past years and that model has to be 
changing because the economy is changing and the job market is 
changing. How do you see it evolving? I am not talking about a 
price tag right now, I am talking about what people get to do.
    Mr. Mackay. Right. Let me offer a few brief comments and 
then I will ask Joe Thompson, as well.
    The purpose of the GI Bill originally, and continues to be 
the purpose of the Montgomery GI Bill, is, from our standpoint 
at VA, the readjustment of the veteran. There is a great 
opportunity cost involved with service. One obviously can't go 
to a full-time educational institution. You can't avail 
yourself of other opportunities. Once service is completed, the 
purpose of this educational benefit is to aid in readjustment 
and enhancement of the veteran as they go on to the subsequent 
parts of their lives.
    The original purpose of the GI Bill was to provide for 4-
year college, all the funds and books and tuition for that, and 
that would certainly be a reasonable goal to seek to reinstate. 
But as the work world changes and as people evolve and as 
training courses become different, there are other 
accommodations other than that strict 4-year higher educational 
model that I think are appropriate, and a number of the bills 
that are before this body recognize that, with features like 
accelerated benefit payments to pay for high-cost short-
duration courses that lead to licenses or certificates or other 
types of professional qualifications that pertain increasingly 
to the high-technology sector, but to other sectors, as well. 
VA supports----
    Chairman Rockefeller. Well, if you do the high-technology 
sector, sometimes that is going to mean a different way of 
doing your training, different certification, different types 
of test preparation, et cetera. Again, flexibility. I am 
looking for flexibility.
    Mr. Mackay. Right. That is certainly a key enhancement that 
can come to the Montgomery GI Bill. Our priorities are in an 
overall enhancement of the purchasing value of the benefit, and 
I think as I stated in my statement, H.R. 1291 does a good job 
of stepping up in a fairly aggressive manner, consistent with 
the budget reconciliation, budget strictures that we have, to 
increase those benefits. Accelerated payments, other things 
that enhance flexibility, as you noted, are desirable to 
enhance the Montgomery GI Bill.
    Joe?
    Mr. Joseph Thompson. I would have very little to add to 
that. I think the two things that the bills contain primarily, 
are an increase in the benefits so that education is more 
affordable and more flexibility so that we can pay for the ways 
people get educated in the year 2001.
    Chairman Rockefeller. I have shattered protocol, which I am 
going to explain in a minute and apologize for, but you would 
also agree that this is going to cost more and that then 
necessarily, because of the tax bill that we have just passed, 
do you believe we are going to have more to spend on the 
Montgomery GI Bill?
    Mr. Mackay. Mr. Chairman, I know that one of the reasons 
for the support, the Secretary's testimony in support of H.R. 
1291 is that it can be reconciled within the budget strictures 
that we have.
    Chairman Rockefeller. Everything can be until it comes down 
to all those things that have to be. Are you quite certain that 
this one will be?
    Mr. Mackay. That, of course, is left to the discretion of 
this body and the other. It is a very high priority, I think. 
One of the----
    Chairman Rockefeller. No, it starts with you all. It is 
what you are willing to fight for at the VA.
    Mr. Mackay. Yes, sir. We certainly support----
    Chairman Rockefeller. Support----
    Mr. Mackay [continuing]. The provisions to enhance the 
overall payment rates----
    Chairman Rockefeller. The funding itself.
    Mr. Mackay [continuing]. In the Montgomery GI Bill.
    Chairman Rockefeller. OK.
    Mr. Mackay. That is our testimony here today.
    Chairman Rockefeller. And part of the test, I think, of you 
all is how hard you fight for it. That is what I said to 
Secretary Principi at the very beginning. I mean, my test of 
anybody who works in the executive government, anybody that 
works where Senator Akaka and I work, is how hard we fight for 
what we are meant to be doing. So I will expect strong words 
from you all.
    Now, my horrifying breach of protocol is that I failed to 
recognize my dear friend, Senator Akaka, when he came in, and I 
should have interrupted and I have performed a breach of 
protocol, but hopefully not a breach of friendship. If you have 
any comments, Senator Akaka, we would be delighted to hear 
them.
    Senator Akaka. Thank you very much, Mr. Chairman. If it is 
all right with you, I will make my opening statement here.
    Chairman Rockefeller. Certainly.
    Senator Akaka. But before I do that, I just want to tell 
our witnesses that usually the Senate, whenever we have two 
similar names, we name what State they are from, you know, 
whether it is Thompson from Illinois or Thompson from Utah. It 
is difficult if I said J. Thompson. We have two Js here, so I 
hope we will have some distinction. Otherwise, we can say 
counsel or Secretary.
    Mr. Chairman, it is an honor for me to join you and my 
colleagues on the committee at this hearing. I would like to 
welcome all of you and your colleagues from the Department and 
representatives of veterans' service organizations.
    Earlier this month, President Bush signed into law a 
limited bill to improve veterans' benefits. Among other things, 
the legislation expands health insurance coverage for survivors 
and dependents of veterans with service-connected disabilities 
and extends life insurance coverage to the spouses and children 
of service members. While I appreciate the expeditious 
enactment into law of legislation to assist survivors of 
service members and veterans, there remain a number of pending 
measures which strive to enhance other benefits and programs 
administered by the Veterans' Benefits Administration.
    In particular, I am pleased that today's agenda includes 
two bills that I introduced, VA home loan programs. S. 228 
would permanently authorize the Native American Veteran Housing 
Loan Program. This program has enabled Native American veterans 
who reside on trust lands to qualify for VA home loan benefits. 
The authority to issue new loans under this successful program 
will end on December 31, 2001.
    The other measure is S. 781, which would extend the 
authority of the VA Home Loan Guarantee Program to issue home 
loans to members of the selected reserve. The program has made 
it possible for thousands of reservists to fulfill their dream 
of home ownership. Since authority for the program expires on 
September 30, 2007, this benefit can no longer be used as a 
recruiting incentive, since reservists must serve for at least 
6 years to qualify for the program. S. 781 would extend the 
program's authority through September 30, 2015, so that this 
benefit can continue to serve as a recruiting incentive.
    I look forward to receiving your testimony. It is important 
to hear from our veterans and the organizations that serve them 
in order to ensure that benefits address the needs of veterans. 
Our Nation's veterans deserve no less.
    Mr. Chairman, I look forward to working with you, as I have 
always done, and other members of the committee on legislation 
that will provide our Nation's veterans with the benefits they 
deserve. Thank you very much, Mr. Chairman.
    Chairman Rockefeller. Thank you, Senator Akaka.
    Before I continue my questioning, and you may have some 
questioning yourself, Senator, I want to say to any staff 
members of Senators of this committee who belong to this 
committee but are not here, if they are writing letters or 
making telephone calls or whatever in their offices, they ought 
to be here. I think that Senator Specter and I are going to 
keep up a drum beat. I have done this with Senator Simpson. I 
have done this with Senator Murkowski. It is the overall 
question which needs to be addressed firmly and frankly--why is 
it that Senators do not turn out for the Veterans' Committee?
    Everybody gives the lip service. Senator Akaka is always 
here. Senator Wellstone is usually here. Senator Thurmond often 
comes, and Senator Specter is here. But we share a mutual 
frustration in the lack of attendance. We have had meetings 
with staff, trying to figure out how we can do this. Can we 
threaten people? Can we plant devices in their offices? I mean, 
what is it that we need to do?
    But the point is, we need to get Senators that belong to 
this committee to come to this committee, because if they don't 
come to this committee, what they are saying is that what 
they--and if they are chairing some other committee or 
whatever, that is fine--but there is just a pattern here of 
attendance which has been for 17 years distressing to me. I am 
sometimes guilty of it myself, but not as much as others. It is 
not appropriate, it is not respectful, and it is not 
professional.
    We are going to keep count of who comes, and we may from 
time to time put out lists of hearings and those who showed up 
and those who didn't. There is nothing like a little 
accountability to catch people's attention, not only 
internally, but also the veterans organizations and the rest of 
it. We are serious about this, we have talked about it, and we 
are tired of dealing with empty chairs and good witnesses.
    Senator Specter is here and I would welcome, sir--I have 
already put your bills in the record, but I would welcome 
hearing whatever you have to say, as well as your description 
of your bills, or anything else you want to say.
    Senator Specter. Thank you very much, Mr. Chairman. I 
concur with your sentiments about the difficulties on 
attendance. For 4\1/2\ years, I chaired the committee and you 
were ranking member, and it was the same problem then. One of 
the grave difficulties on the Senate side, unlike on the House 
side, is that we have three major committees, really four major 
committees. Right now, the Senate is very heavily engaged in 
the Patients' Bill of Rights, a subject which will impact very 
substantially on veterans, as the citizenry generally. I am 
trying to work out a complex amendment on Federal versus State 
court jurisdiction, and our other colleagues have other 
assignments as well. But it is a relative rarity that there is 
anybody here beyond the chairman and the ranking member; 
Senator Rockefeller is correct about that.
    The legislation which I have proposed now relates to the GI 
Bill. The GI Bill has been an enormous boom to America, from 
the education of World War II veterans to the present. Not too 
many people in this room, as I look around, are World War II 
veterans. I had GI Bill benefits from service during the Korean 
War, and I visited a community college in Harrisburg a couple 
of weeks ago and it is really gratifying to see so many 
veterans there. Of a student body of about 600, about 400-and-
some are claiming GI Bill benefits, and those benefits do not 
stretch far enough. The House has taken the lead on this, and I 
think GI Bill improvements would be a way to show veterans that 
there really is recognition of their service. And it would be a 
way to add to the educational level of the American citizenry, 
and to the Nation's productivity.
    I have also introduced legislation patterned after a bill 
introduced by Congressman Weldon which relates to Congressional 
Medal of Honor winners. Such veterans have achieved the 
Nation's highest accolade, but they receive very little 
monetary compensation. We had a good legislative package last 
year; Senator Rockefeller, Senator Akaka, and some of our other 
colleagues have been very attentive to our veterans' interests.
    We have been successful in increasing the amounts which the 
administration, both Democrat and Republican, have put up. So 
to that extent, veterans' interests have been protected.
    I talk with some frequency about the first veteran I knew, 
my father, Harry Specter, who was disappointed when they broke 
their promise to give him a $500 bonus during the Depression. I 
note one of the blackest days in American history was when the 
veterans marched on Washington; today, if there is a 
demonstration, they roll out the red carpet. Then, they rolled 
out the cavalry and a major named George Patton with sabers 
drawn and they killed some veterans that day. So things are not 
as bad as they used to be, but they need to be a lot better.
    There is a lot more I could say, Mr. Chairman, but let that 
suffice for the moment.
    Chairman Rockefeller. Well, that is pretty potent. Let me 
continue with the line of questioning.
    The question of compensating Gulf War veterans for their 
disabilities has been around for a long time, and the question 
of scientific evidence and all the rest of it. We went through 
the same thing with Agent Orange in the Vietnam war, and 
frankly, it wasn't scientific evidence that tipped the balance, 
it was when Admiral Zumwalt came up when his son got cancer and 
changed the political dynamic of the situation, and all of a 
sudden people started paying attention.
    So, yes, I recognize the importance of scientific evidence. 
I also recognize the people I see, in West Virginia, the 
people's homes I go into, and Senator Specter and Senator Akaka 
see the same. You have kind of a catch-22 at work under our 
current laws. Doctors are trained to assign a diagnosis, but a 
diagnosis makes the veteran ineligible for benefits. That is 
more than a catch-22, that is sort of a contradiction.
    For example, a veteran who is found to have headaches or a 
muscle ache would be eligible for benefits under the 
undiagnosed illness authority. However, a veteran diagnosed 
with migraines or fibromyalgia would not be eligible. Those are 
fairly serious conditions. What do we do about that kind of 
situation?
    Mr. Mackay. Mr. Chairman, that is a wonderful question and 
an excellent exposition. The predicament we find ourselves in 
with regard to Persian Gulf veterans is, indeed, regrettable. 
We are $150 million and 10 years in medical research down the 
path, and still we do not have--it has been elusive to be able 
to get the kind of credible scientific and medical evidence 
that we need, in conjunction with the consideration of other 
circumstances, that would allow us to service-connect these 
disabilities, these illnesses.
    We have, as you noted, taken the step to compensate people 
based on disabilities, real disabilities, real hardships in 
their lives that are manifested by undiagnosed illnesses. I am 
in the same quandary that you are, but our approach has been, 
and the approach that we support is that we have adequate 
authorities in existing statute to service-connect these 
illnesses--fibromyalgia, chronic fatigue, the others that you 
mentioned and that are contained in S. 409 whenever and 
wherever the scientific and medical evidence presents itself 
and the research bears fruit and establishes a causal link.
    We have received one report from the National Academy of 
Sciences last year. There will be ongoing biennial reports from 
the Institute of Medicine, which has a very active research 
program with regard to Persian Gulf illnesses.
    I would ask our Under Secretary, Mr. Thompson, to comment 
further.
    Mr. Joseph Thompson. Mr. Chairman, we have the authority 
within law to service-connect on a direct basis those 
conditions, fibromyalgia and the rest of them. We also have 
done, I think, some pretty comprehensive reviews of the claims 
we have received to this point. Now, for Gulf War veterans who 
file claims for undiagnosed illnesses, about 26 percent of them 
have been granted service connection on that basis. About 
another 28 percent have been found to be entitled to some 
compensation or pension on other grounds. So more than half 
that have come to us receive either compensation or pension.
    I think there is a misperception that the agency is perhaps 
not being as attentive as it needs to be to veterans of the 
Gulf War or the Gulf War era. That cohort of veterans receive 
compensation at a greater rate than veterans of any other war 
in the 20th century. They are, we believe, being given a fair 
shake by the agency and the administrative claims process.
    Chairman Rockefeller. Yes, I think the three Senators here 
might probably add at this point that a lot of that came from 
some unrelenting pushing, shoving, anger on the part of this 
committee, embarrassment of the Department of Defense of an 
unprecedented nature, which I think had an effect on all of 
you. The registry got going. We discovered children and spouses 
of returning veterans, et cetera. All of these things, I think, 
encouraged that, and that is the way government is meant to 
work. The branches of government are meant to work together.
    For me, a diagnosed illness not being compensated is just a 
very interesting concept when you are dealing with a veteran 
and not a very pleasant one.
    My time is up. Senator Specter?
    Senator Specter. Thank you, Mr. Chairman.
    I am interested to hear that a higher percentage of Gulf 
War veterans are being compensated. What do you base that 
statistical conclusion on, Mr. Thompson?
    Mr. Joseph Thompson. Those are the statistics from our 
payment system. If I can, and I am going from memory on some of 
this, around 5 percent of all Korean veterans receive 
compensation. The numbers for Vietnam and World War II are very 
close, around 9 to 10 percent. The numbers for the Gulf are 
between 16 and 17 percent.
    Senator Specter. Well, the Department of Defense has a 
spotty record, at best, in responding to veterans' claims. But 
it was particularly bad for the Gulf veterans, for the 
exposures to chemicals at Khamisiyah. This committee ran a 
major investigation, brought in outside counsel, and an 
enormous number of claims were made and many of them could not 
be documented.
    I had a series of hearings in my State and we had hearings 
here on Gulf War syndrome and trauma. One of the really serious 
things we learned was that many officials ridiculed the claims. 
It was very hard to establish that the Gulf War veterans had 
been exposed to chemical substances at Khamisiyah. It was 
really sort of a fluke that it was discovered. We found the 
Department of Defense had just not told the truth about that.
    And when we have very laboriously created these 
presumptions, it has been quite a battle. When I was elected in 
1980, the big issue was Agent Orange. Nobody could prove 
causation. But those people had been subjected to very adverse 
conditions--they had been subjected to a lot of Agent Orange--
and so we created the presumptions. And it was very difficult 
to see people who had served being scoffed at.
    What about the question as to the level of proof which is 
required for a veteran to claim compensation, illustrative of 
Agent Orange in Vietnam or exposure to chemicals at Khamisiyah? 
If veterans have to fight those cases out, the Department of 
Defense and the Veterans' Administration can always find a 
bigger, better battery of doctors who will say that there is no 
causation. They will say that they don't know, but in the 
absence of affirmative proof, to what extent, Dr. Mackay, 
should the traditional burden of proof be on the veteran to 
prove that a specific exposure caused a specific ailment?
    Mr. Mackay. My understanding, and I acknowledge that we are 
proceeding in a broadly similar vein with respect to Persian 
Gulf illnesses that we did with Agent Orange, we have now, 
subsequent to the Agent Orange Act of 1991, we have established 
ten different categories of disease where the presumption holds 
that if these diseases are manifested in the prescribed period, 
that Agent Orange is presumed to be the cause. That was 
established by, it is my understanding, through scientific and 
medical evidence with the Institute of Medicine, using fairly 
lenient standards of causality.
    Senator Specter. Of presumption?
    Mr. Mackay. To establish the presumption.
    Senator Specter. Well, when you establish a presumption, it 
means you don't require any proof.
    Mr. Mackay. But in order to establish a presumption, you 
have to establish that there is some causality, that exposure 
to Agent Orange causes these diseases.
    Senator Specter. I don't think you do. When you establish a 
presumption, you say that it will be presumed that X caused Y, 
not that it is proved that X caused Y.
    Mr. Mackay. Perhaps Under Secretary Thompson can explain 
this better than I can, but my understanding----
    Senator Specter. I will turn it over to you, Under 
Secretary Thompson.
    Mr. Joseph Thompson. I will take a shot. I think the 
difference is how you go about deciding that a condition is a 
presumptive condition, that standard versus a veteran who now 
presents symptoms that would be a presumptive service-connected 
condition, and I think----
    Senator Specter. I can't understand you.
    Mr. Joseph Thompson. Dr. Mackay, we have standards on when 
you put a particular disease as a presumptive condition. For 
example, next month, diabetes, type two diabetes will become a 
presumptive condition under the Vietnam veterans dioxin 
regulations. We had to meet a standard----
    Senator Specter. Meaning it is presumptively caused by 
what?
    Mr. Joseph Thompson. Exposure to dioxin. That will be 
effective July 9?
    Mr. Epley. Correct.
    Mr. Joseph Thompson [continuing]. So that regulation is 
almost there. But you need a standard to decide which 
disabilities rise to that level, to become a presumptive 
condition, and I believe that is what Dr. Mackay was referring 
to. What is the standard----
    Senator Specter. What is that standard?
    Mr. Joseph Thompson. Positive association, I believe, is 
the standard.
    Mr. Epley. Significant statistical association.
    Senator Specter. What did you say, Mr. Epley?
    Mr. Epley. I am sorry. Significant statistical association 
is the standard that we used for Vietnam veterans.
    Senator Specter. Statistical association?
    Mr. Joseph Thompson. Right.
    Senator Specter. How high does the statistical association 
have to be to warrant a presumption?
    Mr. Epley. The scenario that is in existence came about 
under the Agent Orange Act and under litigation for Vietnam 
veterans and exposure to Agent Orange. We have set up a system 
with the National Academy of Science where they review the 
literature and look to try to estimate a level of association. 
There are four or five levels that they try to categorize it 
in, based on their findings, which they submit to VA. A 
determination is made by the Secretary as to whether or not it 
rises to the level of a presumption.
    Senator Specter. So you are saying there is no fixed 
standard?
    Mr. Epley. The standard is based on a court case back in 
the early 1990's, the Nemor case, which told us that the causal 
effect standard that we had been using at VA was too strict and 
told us that we should abide by a significant statistical 
association, which is----
    Senator Specter. That significant statistical association 
is determined by the National Academy----
    Mr. Epley. That is what they use----
    Senator Specter [continuing]. As they review the number of 
those exposed and the number who contracted a given ailment?
    Mr. Epley. Yes, sir, and the earlier reference to 
legislation passed within the last 2 years for Gulf War was 
paralleled on the Agent Orange Act and the arrangement that we 
have with the National Academy.
    Senator Specter. OK. Thank you very much. I am glad that 
Senator Alan Simpson is no longer a member of this committee. 
[Laughter.]
    Chairman Rockefeller. Senator Akaka?
    Senator Akaka. Thank you very much, Mr. Chairman.
    Mr. Secretary, I am glad to hear your testimony. In 
particular, I want to focus on S. 228. I am happy to know that 
the VA strongly supports this program. I knew the data that 
there were more Hawaiians who were taking advantage of the 
program than other Native Americans, but that was the reason 
for this bill.
    Several years ago, I was amazed to learn that no Native 
American veteran applied for housing. And, of course, the 
question was why, and we discovered that, apparently, there was 
no mechanism for them to do this because they were living on 
trust lands, so that was a problem. So we put forth this bill 
to take care of that and it has worked to some extent. It has 
worked well for the Hawaiian veterans, but it has not worked 
well for the other Native Americans and that is my question.
    You point out here in your statement that efforts are made 
to outreach to Native Americans. That causes me to wonder why, 
then, are the statistics so low for Native Americans who are 
taking advantage of the program? So my question to you is, what 
outreach efforts are being made at this time toward Native 
American veterans in this program?
    Mr. Mackay. Senator, that is a good question. I am going to 
have to--I am not cognizant of that and I am going to have to 
ask Joe to answer your question.
    Mr. Joseph Thompson. Senator, on the first part, as to why 
the rate is low, among other things, one of the major 
contributors, of course, is the difficulty of building on 
tribal land because the ownership of the land issues tend to 
present difficulties in a lot of places.
    We do try to outreach. We make a number of efforts, working 
through the tribal communities. Last year, we produced a film 
trying to capsulize how you would go about securing a home loan 
on tribal lands. We also are really making some more 
significant efforts to work with other government agencies that 
have agreements with tribes. We are trying to capitalize on 
those agreements. Instead of VA going in and negotiating 
memorandums of understanding with each tribe, we will use the 
ones that HUD has negotiated, for example, as long as they are 
consistent with our laws.
    So we are expanding it. It still is not what it should be. 
I think we do need to continue to make efforts in that regard. 
But we are trying to increase Native American home ownership.
    Senator Akaka. Can you also make a comment about out-
stationing? In the statement, it is suggesting that out-
stationing would be based on the tribe requesting services.
    Mr. Joseph Thompson. Right now, that is very difficult for 
us in the home loan program. We have been shrinking 
considerably in terms of staff. We have now in fact, 
consolidated what used to be in virtually every State to nine 
regional loan centers. So out-basing is a very expensive 
proposition for us in that regard. But we do believe that we 
make people available whenever a tribe expresses a need to have 
some VA employee there to help them with whatever aspect of 
home loan guarantee they may be concerned about. If there are 
issues where needs aren't being met, we are very open to 
hearing from anyone and we will see what we can do to expand 
that.
    Senator Akaka. I think you know the reason why more 
Hawaiians are requesting the program. It is because we have 
lands, trust lands that belong to the State that they can work 
out, so that works well.
    Mr. Joseph Thompson. Right.
    Senator Akaka. But for the American Indians, as you point 
out, we have those problems. But I am hoping that we can 
continue to outreach and try to help increase that number.
    Mr. Joseph Thompson. I think there are some initiatives 
that the U.S. Government is approaching in a more collective 
way, instead of every branch that is in the housing industry 
going about it in their own way. I think that may bear some 
fruit.
    Senator Akaka. My time is up, Senator Specter.
    Senator Specter [presiding]. Thank you very much, Senator 
Akaka.
    Thank you very much, Dr. Mackay, Mr. Thompson, Mr. 
Thompson, Mr. Epley.
    Senator Specter. We will turn now to the second panel, Mr. 
John Vitikacs, Mr. Sidney Daniels, Mr. Rick Surratt, and Mr. 
David Tucker, if you gentlemen would come forward.
    Our first witness is Mr. John Vitikacs. He began his 
service with the American Legion on November 1, 1982. He was a 
field service representative with the National Veterans' 
Affairs and Rehabilitation Commission. He was born in 
Frederick, MD, and graduated from Brownsville High School in 
Pennsylvania. He served on active duty. He has a master's 
degree in public administration from George Mason. Thank you 
for joining us, and the floor is yours.

   STATEMENT OF JOHN R. VITIKACS, DEPUTY DIRECTOR, NATIONAL 
           ECONOMICS COMMISSION, THE AMERICAN LEGION

    Mr. Vitikacs. Good morning, Mr. Chairman. Mr. Chairman, to 
my left at the table with me is Mr. C. Smithson, who is our 
Assistant Director for the American Legion Task Force for 
Persian Gulf Veterans, and Mr. Smithson will be available to 
answer any technical issues related to the Persian Gulf and S. 
409.
    Mr. Chairman, in the interest of time, I would be willing 
to forego my written oral remarks this morning and go straight 
to questions, but I will leave that up to the chair.
    Senator Specter. OK, that would be fine.
    [The prepared statement of Mr. Vitikacs follows:]
   Prepared Statement of John R. Vitikacs, Deputy Director, National 
               Economics Commission, The American Legion
    Mr. Chairman and Members of the Committee:
    The American Legion appreciates the opportunity to provide 
testimony on various veterans' benefit legislation and several draft 
bills that directly affect the 24 million veterans--past, present and 
future. The American Legion continues to be deeply concerned about the 
future of veterans' earned entitlements and deeply appreciate the 
leadership of this Committee for addressing these important issues.
    S. 131--the Veterans' Higher Educational Opportunities Act of 2001, 
would amend title 38, United States Code, to modify the annual 
determination of the basic benefit of active duty educational 
assistance under the Montgomery GI Bill (MGIB). The measure would 
change the amount of veterans' educational assistance allowance under 
MGIB from a fixed amount adjusted for inflation to an amount equal to 
the average monthly costs of tuition and expenses for commuter students 
at public institutions of higher education that award baccalaureate 
degrees (75 percent of such amount for veterans whose initial obligated 
period of active duty is two years). The proposal requires the 
Secretary of Veterans Affairs to determine such average monthly costs 
each year and to publish such amounts in the Federal Register.
    The American Legion commends the Committee for its most recent 
actions, which resulted in improvements to the current Montgomery GI 
Bill (MGIB) through enactment of Public Law 106-419. In particular, the 
provision on licensure and credentialing greatly enhances the benefits 
available under the MGIB. Nonetheless, a stronger MGIB is necessary to 
provide the nation with the caliber of individuals needed in today's 
armed forces. S. 131 is a good starting point to address the overall 
recruitment and retention needs of the armed forces and to focus on 
current and future educational requirements of the All-Volunteer Force.
    Over 96 percent of recruits currently choose to enroll in the MGIB 
and pay $1,200 out of their first year's pay to guarantee eligibility. 
However, only one-half of these military personnel use any of the 
current MGIB benefits. This is due in large part because current MGIB 
benefits have not kept pace with the increasing costs of education. 
Costs for attending the average four-year public institution as a 
commuter student during the 1999-2000 academic year were nearly $9,000. 
Public Law 106-419 recently raised the basic monthly rate of 
reimbursement under MGIB to $650 per month for a successful four-year 
enlistment and $528 for an individual whose initial active duty 
obligation was less than three-years. The current educational 
assistance allowance for persons training full-time under the MGIB--
Selected Reserve is $263 per month. Although extremely useful, the MGIB 
educational allowance improvements enacted under Public Law 106-419 
have not addressed the fundamental shortcomings of the program. Data 
today suggests that only one-fourth of all enlistees, who enroll in 
MGIB, actually complete a four-year degree of higher education.
    The Servicemen's Readjustment Act of 1944, the original GI Bill, 
provided millions of members of the armed forces an opportunity to seek 
higher education. Many of these individuals may not have taken 
advantage of this opportunity without the generous provisions of that 
law. Consequently, these servicemen and servicewomen made a substantial 
contribution not only to their own careers, but also to the well being 
of the nation. Of the 15.6 million World War II veterans eligible for 
the original GI Bill, 7.8 million took advantage of the education and 
training provisions. The total education costs of the original GI Bill 
(terminated on July 25, 1956) were estimated to be approximately $14.5 
billion. The Department of Labor estimated that the federal government 
actually made a profit because veterans earned more income and 
therefore paid higher taxes. Today, a similar concept applies. The 
educational benefits provided to members of the armed forces must be 
sufficiently generous to have an impact. The individuals who use MGIB 
educational benefits are not only taking the necessary steps to enhance 
their own careers, but also, by doing so, will make a greater 
contribution to their community, state, and nation.
    In determining the costs of tuition and expenses under S. 131, the 
Secretary would take into account tuition and fees, the cost of books 
and supplies, the cost of board, transportation costs, and other non-
fixed educational expenses.
    The American Legion strongly supports the provisions of S. 131. 
Increasing the educational benefit available through the MGIB will 
provide a better incentive to veterans to complete a program of higher 
education. Conversely, several important enhancements are not 
incorporated into the bill. Among these are eliminating the required 
$1,200 ``buy-in'' payment. The American Legion believes that veterans 
earn this benefit through the risks, sacrifices, and responsibilities 
associated with military service. Eliminating the ``buy-in'' provision 
would automatically enroll veterans' in the MGIB. Veterans would become 
eligible to receive the earned benefit through meeting the terms of 
their enlistment contract and by receiving an honorable discharge.
    The American Legion is concerned that S. 131 does not increase the 
rate of educational benefits earned by members of the Select Reserves. 
Today, the All-Volunteer military relies on the National Guard and the 
Reserves to meet its force requirements. Individuals serving in the 
Select Reserves can be activated to duty at a moment's notice. 
Oftentimes, these units reinforce the active-duty military around the 
globe, as is presently the case in the Balkans. The American Legion 
believes that members of the National Guard and the Reserves should 
also receive a substantial increase in MGIB educational benefits.
    Additionally, The American Legion supports House Veterans' Affairs 
Committee Chairman Chris Smith's veterans' education bill, H.R. 1291--
the 21st Century Montgomery GI Bill Enhancement Act. The provisions 
contained in H.R. 1291 which seek to raise the monthly rate of GI Bill 
entitlements to $1,100 by 2004 will help bring current entitlements 
closer to the actual cost of education in America today. While The 
American Legion supports both S. 131 and H.R. 1291, it is our hope that 
efforts will continue to restore the benefits afforded through the 
Montgomery GI Bill to the level of the original Servicemember's 
Readjustment Act of 1944.
    The American Legion advocates that the following provisions must 
become part of any successful overhaul of the current MGIB:
     The dollar amount of the entitlement should be indexed to 
the average cost of a college education including tuition, fees, 
textbooks, and other supplies for a commuter student at an accredited 
university, college, or trade school for which they qualify. The 
American Legion supports indexing the monthly MGIB payment to the 
average costs of a college education or trade school tuition. The MGIB 
would then be adjusted on an annual basis to include tuition, and other 
associated costs, and includes a separate monthly stipend. With these 
provisions, veterans would be provided educational benefits on par with 
the first recipients of the original GI Bill.
     The educational cost index should be reviewed and adjusted 
annually. The Chronicle of Higher Education Almanac annually publishes 
the average costs at four-year public and private colleges for commuter 
students and at two-year colleges.
     A monthly tax-free subsistence allowance indexed for 
inflation must be part of the educational assistance package. Veterans 
must receive a monthly income stipend in addition to tuition 
assistance.
     Service members would no longer have to elect to enroll in 
the MGIB upon enlistment. Enrollment in the MGIB would become automatic 
upon commencement of active duty service, or active duty service for 
training purposes. Veterans would still have to meet the MGIB 
eligibility criteria in order to receive educational benefits.
     The current military payroll deduction ($1200) requirement 
for enrollment in MGIB must be terminated. The MGIB would rightly 
become an earned benefit rather than a participatory benefit.
     If a veteran enrolled in the MGIB acquired educational 
loans prior to enlisting in the Armed Forces, MGIB benefits may be used 
to repay existing educational loans.
     If a veteran enrolled in MGIB becomes eligible for 
training and rehabilitation under Chapter 31, of Title 38, United 
States Code, the veteran shall not receive less educational benefits 
than otherwise eligible to receive under MGIB.
     If a veteran becomes eligible for vocational 
rehabilitation training, they would not receive less educational 
assistance than under the provisions of Chapter 30 of Title 38, United 
States Code.
     A veteran may request an accelerated payment of all 
monthly educational benefits upon meeting the criteria for eligibility 
for MGIB financial payments, with the payment provided directly to the 
educational institution.
     Separating servicemembers and veterans seeking a license 
or credential must be able to use MGIB educational benefits to pay for 
the cost of taking any written or practical test or other measuring 
device. The American Legion commends the action taken in Public Law 
106-419 that enables veterans to use MGIB eligibility to enroll in 
certified education courses to obtain state licenses and certification 
in specialty occupations.
     The American Legion strongly encourages Congress to 
increase the rate of MGIB payments to members of the National Guard and 
the Reserves. Today's Total Force Concept places a greater reliance on 
the National Guard and the Reserves. Citizen soldiers who choose to 
enlist in the Select Reserves must be provided additional compensation 
to further their individual education.
    The American Legion believes that all of these provisions are 
equally important to providing the appropriate and necessary 
enhancements to the current MGIB.
    S. 228--would amend section 3761 of title 38, United States Code, 
to make permanent the Native American veterans housing loan program, 
which currently terminates on December 31, 2001. The purpose of such 
loans is to permit Native American veterans who are located in a 
variety of geographic areas and in areas experiencing a variety of 
economic circumstances to purchase, construct, or improve dwellings on 
trust land.
    The American Legion recognizes the sacrifices made by Native 
American veterans and has no objection to permanently extending the 
Native American housing loan program. Every man and women who has worn 
the uniform in honorable service to this country deserves the rights 
afforded them through that service.
    S. 409--the Persian Gulf War Illness Compensation Act, would 
clarify the standards for compensation for Gulf War veterans suffering 
from certain undiagnosed illnesses and to extend Gulf War compensation 
presumption.
    Shortly after returning home from the 1991 Gulf War, thousands of 
Gulf War veterans began complaining of unexplained multiple symptom 
illnesses that alluded diagnosis or clear definition. At the time, VA 
was precluded from compensating veterans for service-connected 
disabilities unless the claimed condition had been clearly diagnosed. 
Aware that thousands of disabled Gulf War veterans were ineligible for 
disability compensation because Gulf War veterans' illnesses remained 
ill defined and poorly understood, Congress developed legislation that 
would permit VA to compensate these veterans. In 1994, hallmark 
legislation in the form of PL 103-446 was enacted to ensure 
compensation for ill Gulf War veterans suffering from unexplained 
conditions commonly referred to as Gulf War veterans' illnesses. Yet 
most Gulf War veterans who have filed a claim for undiagnosed illness 
compensation have been denied service connection for those conditions. 
PL 103-446 looked good on paper, but a dismal seventy-five percent 
denial rate is the current reality for our sick Gulf War veterans 
trying to receive VA service connection for Gulf War-related 
undiagnosed illness.
    Although the final product contained ambiguities in the language 
that permitted VA to write regulations (38 C.F.R. Sec. 3.317) narrowly 
interpreting section 1117 of Title 38, floor statements and hearing 
transcripts from the period during which PL 103-446 was crafted make 
clear that Congress intended for VA to compensate Gulf War veterans 
suffering from disabilities that were likely related to their Gulf War 
service, regardless of how these illnesses would be labeled by a 
physician. The original intent of Congress and the spirit of the law 
were also addressed in a June 3, 1998, letter from House Veterans' 
Affairs Committee Chairman Bob Stump to Department of Veterans Affairs 
Secretary Togo D. West. VA's response in the form of General Counsel 
Opinions and Congressional testimony make it quite clear that it will 
take legislative action to correct the deficiencies and injustice 
caused by the vagueness of PL 103-446.
    Conditions that fall under the umbrella of Gulf War veterans' 
illnesses share many symptoms and can be labeled several different ways 
by physicians. Among the common labels are chronic fatigue syndrome 
(CFS) and fibromyalgia (FM). Although technically diagnosed, such 
conditions are not well understood by the medical community and are 
considered poorly defined because their exact causes remain unknown. 
Moreover, researchers investigating Gulf War veterans' illnesses 
recognize that the pattern of symptoms reported by Gulf War veterans 
overlap with recognized but poorly defined illnesses such as FM and CFS 
(this point was further discussed and supported earlier this year at a 
government sponsored Gulf War veterans' illness research conference 
held in Alexandria, Virginia). Despite this, a veteran with such a 
diagnosis will be denied compensation under the current undiagnosed 
illness law.
    It must also be kept in mind that physicians undergo years of 
rigorous training in order to diagnose and treat illness. Yet VA 
compensates veterans who are examined by physicians who are unable to 
diagnose their illness. As a result, many disabled Gulf War veterans 
are left in a very precarious situation. If their examining physician 
labels their illness, they are ineligible for compensation. If the 
physician does not, the veteran becomes eligible for compensation. This 
scenario would be comical if it did not result in the continued 
suffering of ill Gulf War veterans. Additionally, there is a growing 
body of evidence found in the medical literature which suggests that 
the symptoms of CFS and FM so overlap with each other that these 
illnesses are sometimes indistinguishable to physicians. CFS and FM are 
often diagnoses that physicians arrive at after they excluded other 
diseases. Patients with these illnesses do not test positive on any 
available medical tests. For example, one does not test positive for 
fatigue on a blood test. Although a physician may diagnose these 
illnesses after spending a great deal of time with a patient, the very 
nature of such conditions often results in different examining 
physicians of the same patient diagnosing one or the other, or even 
none, of these illnesses in the same patient.
    As you can see Mr. Chairman, there are many uncertainties and 
unanswered questions that encompass the multiple unexplained physical 
symptoms experienced by many Gulf War veterans. To date, research into 
the possible causes and long-term health effects from the multitude of 
toxic agents and other hazards Gulf War veterans were exposed to during 
the war, has been mostly inconclusive. Uncertainty and confusion have 
also plagued effective treatment and definitive diagnosis, hindering a 
proper treatment regimen and also, often times, adversely impacting the 
veteran's undiagnosed illness claim, precluding the veteran from 
rightfully deserved compensation. This is why it is imperative that the 
law allowing compensation for such illnesses recognize the 
uncertainties and limitations in Gulf War research and treatment in 
order to establish a fair and just means of compensation for ill Gulf 
War veterans.
    Clarifying the definition of ``undiagnosed,'' for VA purposes under 
the law, to include poorly defined conditions such as CFS, FM and other 
such conditions is necessary in order to recognize both the original 
intent of Congress and the complexities involved with Gulf War-related 
research and treatment. Doing so would serve to correct the 
deficiencies in the current law and help to ensure that ill Gulf War 
veterans receive the compensation to which they are entitled.
    Mr. Chairman, the presumptive period for undiagnosed illness claims 
is set to expire at the end of this year. However, Gulf War-related 
research to date, as highlighted by a September 2000 Institute of 
Medicine (IOM) report on the long-term health effects of exposures 
during the Gulf War, has been inconclusive. Research is ongoing and IOM 
is scheduled to release several additional reports on long-term health 
effects in the future. Therefore, due to the inconclusive nature of 
Gulf War research and the resulting uncertainties, it would be 
unconscionable to allow the presumptive period to expire at the end the 
year. The nature of Gulf War veterans' illnesses and limitations and 
problems with Gulf War research, as cited by IOM, warrant, at the very 
least, a ten year extension of the presumptive period.
    S. 457--would establish certain presumptions, which would apply to 
claims for service connection by veterans suffering from hepatitis C. 
Under this legislation, if a veteran is diagnosed with hepatitis C and 
was exposed to one or more enumerated risk factors while on active 
duty, there will be a presumption of service connection. The 
presumption would apply to those veterans, who, while in service:
     Received a transfusion of blood or blood products;
     Were exposed to blood on or through the skin or mucous 
membrane;
     Underwent hemodialysis;
     Experienced a needle-stick accident or medical event 
involving a needle, not due to the veteran's willful misconduct;
     Were diagnosed with unexplained liver disease;
     Experienced an unexplained liver dysfunction or;
     Served in a health-care position or specialty under such 
circumstances, as the Secretary shall prescribe.
    Mr. Chairman, hepatitis is not a new disease. The prevalence of the 
hepatitis C virus in the veterans' population and the long-term adverse 
health consequences are now recognized as a major public health issue. 
It is an easily transmitted blood-borne virus, which can result in 
potentially fatal health problems years or decades after being 
contracted. The circumstances of military training, combat and other 
related activities in locations around the world offer many 
opportunities for contact with infected blood or blood products. VA 
estimates that ten to twenty percent of all veterans have hepatitis C, 
as compared with fewer than two percent for the general population. 
Study data indicates that Vietnam veterans appear to be the group most 
affected. Many of these veterans, both men and women, unknowingly 
contracted the hepatitis C virus 25 or 30 years ago and may only now 
become symptomatic with severe liver disease and other related 
problems. Medical studies have established that this virus can remain 
dormant in a person's system for their entire lifetime or, in other 
individuals, it can become active at some point and attack various 
organs, particularly the liver. According to VA, fifty-two percent of 
liver transplant recipients have hepatitis C.
    Mr. Chairman, there is sufficient and compelling scientific 
evidence of a link between certain risk factors inherent in many types 
of activities and duties associated with military service and the 
numbers of veterans with a current diagnosis of hepatitis C. In light 
of the available information, The American Legion wrote to former 
Secretary of Veterans Affairs Togo D. West in August, 1999 urging him 
to promulgate regulations establishing hepatitis C as a presumptive 
disease for the purpose of entitlement to service connected disability 
compensation and VA medical care. Although proposed regulations have 
been developed, they have not been published in the Federal Register 
for public comment.
    Under the current law and regulations, it is very difficult for a 
veteran to receive favorable action on a claim for service connection 
for hepatitis C or a related medical problem, because of a general 
inability to prove that the virus was, in fact, acquired during 
military service. Claims by many hepatitis C veterans who may have been 
treated for what was described as acute hepatitis in service are also 
denied by VA. Again, because they cannot prove the current condition is 
related to exposure to hepatitis C in service. Even though it is clear 
that VA intends to amend the regulations and provide certain 
presumptions in cases involving hepatitis C, these regulations have yet 
to be issued. Preliminary indications are that the number and scope of 
these presumptions will be limited.
    Mr. Chairman, The American Legion believes the broad presumptions 
in S. 457 would remove an often insurmountable legal hurdle to VA 
compensation and medical care for veterans who are disabled from 
hepatitis C and related medical problems. Once service connection is 
established, they would become eligible for vocational rehabilitation 
benefits and assistance. We believe action on this legislation is 
essential to ensuring the welfare and wellbeing of thousands of 
veterans who were unknowingly exposed to the hepatitis C virus as a 
result of service in the armed forces.
    S. 662--would amend section 2306 of title 38, United States Code, 
to authorize the Secretary of Veterans Affairs to furnish headstones or 
markers for marked graves of, or to otherwise commemorate, certain 
individuals.
    The American Legion continues to support this measure. It is proper 
and correct to afford all veterans equal application of burial 
benefits. All too often, veterans and their families are unaware that 
purchasing and erecting a private grave marker voids all rights to 
obtaining a government headstone. This is particularly distressing in 
those instances when the veteran's spouse precedes him or her in death, 
or when the veteran purchases a gravesite in advance of their death to 
ease the burdens that later fall on the family. The American Legion 
understands the original intent of the law that placed the restriction 
on obtaining a government marker for the veteran's privately marked 
gravesite. It is time to end this unfairness.
    The American Legion supports the entitlement for all honorably 
discharged veterans to receive an appropriate grave marker provided by 
the Department of Veterans Affairs, without regard to any other private 
marker or headstone that may be in place at the time of application.
    S. 781--would amend section 3702(a)(2)(E) of title 38, United 
States Code, to extend until September 30, 2015, the authority for 
housing loans for members of the Selected Reserves who have honorably 
completed at least six years of such service or who were discharged or 
released from the Selected Reserve before completing six years because 
of a service-connected disability.
    In the current era of military downsizing and increased operations 
tempo, Guard and Reserve troops are being tasked more than ever to 
augment the active duty force. The American Legion recognizes the 
sacrifices made by members of the Guard and Reserve forces and supports 
extending the authority for housing loans to eligible members of the 
Selected Reserve.
    S. 912--the Veterans' Burial Benefits Improvement Act of 2001, 
would increase the authorized allowance for burial and funeral expenses 
for deceased veterans who: (1) at the time of death were in receipt of 
veterans' disability compensation or veterans' pension benefits; or (2) 
were veterans of any war or were discharged or released from active 
military service for a service-connected disability and for whom there 
is no next of kin or sufficient resources to cover funeral or burial 
costs. The measure also increases the burial plot allowance for 
veterans who, at the time of death, were receiving hospital or nursing 
home care in or through the Department of Veterans Affairs. The 
proposal authorizes the annual adjustment of such allowances based on 
increases in the Consumer Price Index.
    The American Legion views the proposed increases in certain burial 
benefits as recognition that inflation has eroded the value of these 
important benefits. The service-connected death benefit has remained at 
$1,500 since the late 1970s. The American Legion recommends that the 
service-connected death benefit should be at the least doubled.
    The American Legion supports an increase in the veterans' burial 
and plot allowance, and believes these benefits should apply to all 
eligible veterans. Prior to OBRA 1990, all honorably discharged 
veterans were eligible for these benefits. Since these benefits were 
eliminated in the spirit of deficit reduction, with significant 
budgetary surpluses, Congress should finally restore these benefits. A 
proposed increase in the burial plot allowance will be welcomed by all 
states that participate in VA's State Cemetery Grants Program. However, 
the burial plot allowance paid to individual states should apply to all 
veteran burials, not just those who served during a period of war.
    S. 937--Helping Our Professionals Educationally (HOPE) Act of 2001, 
would amend Chapter 30 of title 38, United States Code, to permit the 
transfer of entitlement to educational assistance under the MGIB by 
members of the Armed Forces.
    Provisions of the HOPE Act include:
     Each military service would choose whether to participate.
     Each participating service would choose which Military 
Occupational Specialties (MOS) would be eligible for benefits.
     Participating service members must meet existing MGIB 
criterion.
     Participating service members must have completed at least 
six years of service and agree to serve at least four more years.
     Participating service members may transfer up to fifty 
percent (50%) of their total MGIB benefit entitlement.
     Spouses may use HOPE benefits after six years of service.
     Children may use HOPE benefits after ten years of service.
     Children must use HOPE benefits between the ages of 18 and 
26.
    At this time, The American Legion has no official position on the 
transferability of MGIB benefits and is currently evaluating the 
provisions of S. 937.
    Mr. Chairman, The American Legion is pleased to provide comments on 
pending legislation that seeks to improve veterans' earned 
entitlements.
    Draft legislation has been developed proposing a cost-of-living 
adjustment (COLA) in the monthly rates of compensation for service-
disabled veterans, including the annual clothing allowance, and 
Dependency and Indemnity Compensation (DIC) to surviving spouses and 
dependent children of veterans who died of a service-connected 
disability. The percentage of increase in these benefits would be the 
same as the COLA authorized for beneficiaries under Social Security and 
would be effective December 1, 2001. The President's proposed budget 
for the Department of Veterans Affairs for FY 2002 included a cost-of-
living adjustment of 2.5 percent, based on the projected increase in 
the consumer price index.
    The American Legion supports the proposal to provide an appropriate 
COLA for veterans receiving disability compensation and individuals in 
receipt of DIC benefits. We believe it is important that this Committee 
take the required action to ensure the continued welfare and wellbeing 
of disabled veterans and their families by enacting periodic 
adjustments in their benefits, which reflect the increased cost-of-
living. The American Legion also believes that annual congressional 
hearings on such legislation provide an important forum to discuss 
issues of concern relating to the compensation and DIC programs, which 
might not otherwise be available.
    Mr. Chairman, The American Legion fully supports legislation to 
repeal the 30-year limit currently in place for respiratory cancers 
presumptively associated with Agent Orange exposure in Vietnam. The 
American Legion has long opposed this arbitrary statutory limit. 
Available evidence, including recent reviews of peer-reviewed 
literature by the Institute of Medicine (IOM), does not indicate that 
the potential harmful effects of herbicide exposure simply cease after 
30 years. As the number of veterans reaching this scientifically 
unsupported limit increases with each passing day, it is imperative 
that legislation correcting this great injustice be enacted in order to 
stop the hardship this unjust limit has already caused for many ailing 
Vietnam veterans.
    It has been more than 25 years since the cessation of hostilities 
in Vietnam and we still do not fully understand the ramifications of 
the herbicides used during that war. Even today, as highlighted by the 
recent IOM findings regarding Type 2 diabetes and acute myelogenous 
leukemia (AML), research is uncovering associations between diseases 
and herbicide exposure that were previously unknown. This means that 
although science does not support a relationship between a certain 
condition and exposure to herbicides today, tomorrow may be a different 
story.
    The current system recognizes the ever-changing nature of Agent 
Orange research by allowing veterans diagnosed with a condition not 
currently recognized by VA as associated with Agent Orange exposure to 
obtain service connected compensation if the veteran submits medical 
evidence linking the claimed condition to herbicide exposure in 
Vietnam. Such claims are decided on a case by case basis and hinge on 
medical evidence, usually in the form of expert medical opinions, 
linking a particular condition in an individual to the exposure. 
Currently, the law presumes exposure to herbicides for veterans who 
served in Vietnam if they have been diagnosed with one of the 
conditions officially recognized as associated with herbicide exposure. 
However, precedent decisions from the appellate court system have held 
that the law does not afford this presumption to veterans in cases 
where the claimed condition is not officially recognized, even if the 
veteran has submitted credible medical evidence supporting an 
association between the claimed condition and herbicide exposure. In 
cases such as this, the veteran has the added burden of proving actual 
exposure to herbicides, requiring additional development of the claim 
and often resulting in unnecessary delay and further hardship for the 
veteran.
    Mr. Chairman, legislation amending the current law, by removing 
language that limits the presumption of herbicide exposure to cases in 
which the claimed condition is officially recognized, is warranted.
    Health care professionals are only just beginning to understand the 
long-term health effects associated with exposure to herbicides. The 
reports generated by the National Academy of Sciences (NAS) have played 
a crucial role in both our understanding of health effects from 
herbicide exposure and the VA compensation process regarding these 
conditions. Based on where we stand today with respect to Agent Orange 
research and where we need to be, The American Legion fully supports 
legislation to extend NAS reviews and reports pertaining to herbicide 
exposure from 10 years to 20 years. Such legislation must also extend 
VA's authority to take appropriate compensation-related action based on 
the findings of these reports.
    The American Legion is pleased to comment on the draft bill to 
amend title 38, United States Code, to facilitate the use of 
educational assistance under the MGIB for education leading to 
employment in the field of high technology.
    Section 1 of the measure would provide accelerated payments of 
educational assistance under MGIB for education leading to employment 
in the high technology industry. The American Legion supports this 
provision. The American Legion policy resolution on the MGIB makes no 
distinctions as to what courses of study should qualify for advanced 
educational assistance. Instead, we support providing advanced 
educational assistance under MGIB, as required to all eligible 
veterans, with the payment provided directly to the educational 
institution.
    Section 2 of the draft bill would amend section 3452(c) and 
3501(a)(6) of title 38, United States Code, to recognize certain 
private technology entities in the definition of educational 
institutions. The American Legion recommends that any technology entity 
providing a course of study to veterans under MGIB be subject to the 
same standards and requirements as any educational institution subject 
to regulation by the State Approving Agencies.
    Contained in Section 10 of a separate draft bill is language that 
would amend section 3703(a)(1) of title 38, United States Code, to 
raise the home loan guaranty limit from $50,750 to $63,175. The 
provision would increase the amount of a veteran's home loan guaranteed 
by the United States from $203,000 to $252,700. The American Legion 
supports this provision. However, there are locations where the 
increased home loan amount will still require qualified veterans to 
live significant distances from their place of employment. For 
instance, a guaranteed home loan amount of $252,700 may be appropriate 
in Birmingham, Alabama or Salt Lake City, Utah, but insufficient in 
Washington, D.C. or Sacramento, California. The American Legion 
believes that VA should study the feasibility of adjusting the amount 
of government-backed loans obtained through the VA home loan guaranty 
program for local economic housing conditions.
    Mr. Chairman, that completes my testimony. Again, I thank you for 
allowing The American Legion to provide comments on these important 
issues. The American Legion looks forward to working with the members 
of this Committee to improve the lives of all of America's veterans.

    Senator Specter. We turn now to Mr. Sidney Daniels, 
appointed Director of the VFW Action Corps and Deputy Director 
of the National Legislative Service in August 1997, after 
serving 6 years as Director of Veterans' Employment. He has a 
B.S. degree in political science from Florida A&M in 
Tallahassee. He has been with the VFW Washington Office since 
1985. Welcome, Mr. Daniels, and we look forward to your 
testimony.

    STATEMENT OF SIDNEY DANIELS, DEPUTY DIRECTOR, NATIONAL 
  LEGISLATIVE SERVICE, VETERANS OF FOREIGN WARS OF THE UNITED 
                             STATES

    Mr. Daniels. Thank you, Mr. Chairman. On behalf of the over 
two million members of the Veterans of Foreign Wars, I 
appreciate the opportunity to participate in today's hearing 
and to share our views with respect to the numerous legislative 
bills under consideration.
    Mr. Chairman, the first bill I would like to discuss is S. 
1090, the Veterans' Compensation Cost-of-Living Adjustment Act 
of 2001. We welcome the introduction of this measure, which 
would increase the rate of compensation for veterans with 
service-connected disabilities and the rates of dependency and 
indemnity compensation paid to survivors of certain disabled 
veterans. We especially welcome language in the measure that 
provides that the rate of increase paid by the VA shall be 
equal to the percentage rates payable under Title II of the 
Social Security Act.
    The VFW, therefore, strongly supports each of the 
provisions of this bill, with the exception of language found 
in Section 2, Subparagraph 3. We oppose the language that 
states, ``Each dollar amount increased pursuant to Paragraph 2 
shall, if not a whole dollar amount, be rounded down to the 
next lower whole dollar.'' It is our understanding that the 
practice of rounding down VA compensation to the next whole 
dollar was introduced following the passage of the Omnibus 
Budget Reconciliation Act of 1990, also known as OBRA.
    While we certainly understand the importance of OBRA law in 
terms of assisting government mangers in working toward a 
balanced budget, it is the view of the VFW that our veterans 
have done more than their fair share to help balance the 
Federal budget and this need not continue in this day of budget 
surpluses. We, therefore, oppose the permanent extension of 
OBRA provisions that permit rounding down compensation 
payments.
    Mr. Chairman, with respect to S. 1093, the Veterans' 
Benefits Program Modification Act of 2001, we concur with all 
provisions of this measure but recommend a modification to 
Section 3 pertaining to effective dates of awards and 
reductions and discontinuance of benefits. The VFW supports the 
repeal of the 45-day rule. Under the current law, widows and 
widowers are required to file a claim within 45 days of the 
veteran's death, while still grieving from the loss of a loved 
one and at the time when they are least able to conduct 
business. So we welcome the change in the 45-day rule.
    But with this change, with the proposed repeal of the 45-
day rule, another result is the effective date for payment of 
death pension would now become the date of claim. We recommend 
that Section 5110(a) be amended to allow the effective date to 
be the first date of the month in which the veteran dies, 
provided VA received a claim within 1 year of the date of 
death.
    On a related note, Mr. Chairman, we also urge the inclusion 
of language in this measure that would allow the reinstatement 
of eligibility for death pension for remarried surviving 
spouses upon determination of a remarriage. Under P.L. 105-178, 
reinstatement of benefits for DIC compensation recipients was 
accomplished, but similar provisions were not provided for 
death pension recipients.
    The VFW strongly supports the Veterans' Higher Education 
Opportunities Act of 2001. S. 131 is progressive legislation 
which, if enacted, would adequately provide for the education 
needs of this nation's service members and veterans. This 
measure is simple and straightforward. Every year, it indexes 
MGIB, Montgomery GI Bill, payments to the average monthly cost 
of tuition and expenses for a commuter student at a 4-year 
public university or college. This legislation would reduce the 
ever-increasing gap between what the MGIB pays out and the high 
cost of attending college.
    We believe that it will greatly assist recruiting efforts. 
An increased MGIB benefit would make the program competitive 
with the other forms of financial aid available so that 
military service can become a more attractive option for our 
nation's high school graduates. Simply put, more high school 
graduates will be open to military service. If this legislation 
is enacted, it would bring the MGIB program in line with the 
other great educational programs from the World War II era, 
Korea, and Vietnam. It will also advance the idea that a nation 
would pay for a service member's education as a sign of 
gratitude for their dedication and service to this country.
    Mr. Chairman, we also support S. 937, the Helping our 
Professionals Education Act of 2001. S. 937 would permit the 
transfer of Montgomery GI Bill education entitlements by 
members of the armed forces to their families.
    Senator Specter. Mr. Daniels, your red light is on, so if 
you could summarize, your full statement will be made a part of 
the record.
    Mr. Daniels. Yes, sir. I can conclude at that point, Mr. 
Chairman. I would be happy to take questions. Thank you.
    Senator Specter. Thank you very much.
    [The prepared statement of Mr. Daniels follows:]
    Prepared Statement of Sidney Daniels, Deputy Director, National 
   Legislative Service, Veterans of Foreign Wars of the United States
    Mr. Chairman and members of the committee:
    On behalf of the over 2 million members of the Veterans of Foreign 
Wars of the United States, I appreciate the opportunity to participate 
in today's hearing and to share our views with respect to the numerous 
legislative bills under consideration.
    the veterans compensation cost of living adjustment act of 2001
    Mr. Chairman, we welcome the introduction of this legislation, 
which would increase the rates of compensation for veterans with 
service-connected disabilities, and the rates of dependency and 
indemnity compensation paid to the survivors of certain disabled 
veterans. We especially welcome language in this measure that provides 
that the rate of increase paid by the VA shall be equal to percentage 
rates payable under Title II of the Social Security Act.
    The VFW, therefore, strongly supports each of the provisions of 
this bill with the exception of language found on page 3, lines 21 
through 23. The language we object to indicates that ``each dollar 
amount increased pursuant to paragraph (2) shall, if not a whole dollar 
amount, be round down to the next lower whole dollar amount''.
    It is our understanding that the practice of rounding down 
compensation to the next whole dollar was introduced following the 
passage of the Omnibus Budget Reconciliation Act of 1990 (OBRA). While 
we certainly understand the importance of the OBRA law in terms of 
assisting government managers work towards a balanced budget, it is the 
view of the VFW that our veterans have done more than their fair share 
to help balance the federal budget, and this need not continue in this 
day of budget surpluses. We, therefore, oppose the permanent extensions 
of the OBRA provision that permits rounding down compensation payments.

           VETERANS BENEFITS PROGRAM MODIFICATION ACT OF 2001

SEC. 2. EXCLUSION OF CERTAIN ADDITIONAL INCOME FROM DETERMINATION OF 
                    ANNUAL INCOME FOR PENSION PURPOSES

    The VFW concurs with each provision under this section.

SEC. 3. EFFECTIVE DATES OF AWARDS AND REDUCTIONS AND DISCONTINUANCES OF 
                    BENEFITS

    The VFW supports the repeal of the 45-day rule. Under the current 
law, widows and widowers are required to file a claim within 45 days of 
the veteran's death while still grieving from the loss of a loved one 
and at a time when they are least able to conduct business.
    On a related note, Mr. Chairman, we also urge the inclusion of 
language in this measure that would allow the reinstatement of 
eligibility for death pensions for remarried surviving spouses upon 
termination of a remarriage. Under PL 105-178, reinstatement of 
benefits for dependency and indemnity compensation was accomplished, 
but similar provisions were not provided to possible death pension 
recipients.

SEC. 9. REPEAL OF FISCAL YEAR LIMITATION ON NUMBER OF VETERANS IN 
                    PROGRAMS OF INDEPENDENT LIVING SERVICES AND 
                    ASSISTANCE

    The VFW strongly supports repeal of current language that limits 
the number of veterans who may participate in a program of independent 
living services.

SEC. 10. INCREASE IN HOME LOAN GUARANTY AMOUNT FOR CONSTRUCTION AND 
                    PURCHASE OF HOMES

    The VFW agrees with the language in this section to amend the 
current law by raising the VA home loan guaranty to $63,175, a level 
that is comparable to the guaranty provided by the Federal Housing 
Administration.

    S. 131, THE VETERANS' HIGHER EDUCATION OPPORTUNITIES ACT OF 2001

    The VFW strongly supports the Veterans' Higher Education 
Opportunities Act of 2001. S. 131 is progressive legislation which, if 
enacted, would adequately provide for the educational needs of this 
nation's servicemembers and veterans. This measure is simple and 
straightforward. Every year, it indexes MGIB payments to the average 
monthly cost of tuition and expenses for a commuter student at a 4-year 
public university or college. This legislation would reduce the ever-
increasing gap between what the MGIB pays out and the high costs of 
attending college.
    We believe that it will greatly assist recruiting efforts. An 
increased MGIB benefit will make the program competitive with the other 
forms of financial aid available so that military service can become a 
more attractive option for our nation's high school graduates. Simply 
put, more high school graduates will be open to military service.
    If this legislation is enacted, it will bring the MGIB program in 
line with the other great programs from WWII, Korea, and Vietnam. And 
it will advance the idea that a nation will pay for a servicemember's 
education as a sign of gratitude for their dedication in service of 
this country.

    S. 937, THE HELPING OUR PROFESSIONALS EDUCATIONALLY ACT OF 2001

    The VFW supports S. 937. We believe passage of this measure with 
its authority to transfer entitlements to family members will have a 
major positive impact on military retention.
    We strongly favor the language in section 4, which establishes that 
MGIB benefits may be used for training in technological occupations 
offered by non-traditional institutions.

A BILL TO AMEND SECTION 1116 OF TITLE 38, UNITED STATES CODE, TO MODIFY 
  AND EXTEND AUTHORITIES ON THE PRESUMPTION OF SERVICE-CONNECTION FOR 
 HERBICIDE-RELATED DISABILITIES OF VIETNAM ERA VETERANS, AND FOR OTHER 
                               PURPOSES.

    Mr. Chairman, the VFW greatly appreciates your efforts in drafting 
this legislation, to repeal the 30-year limitation on the manifestation 
of respiratory cancers as related to herbicide exposure. The VFW 
supports this legislation.
    There is no scientific evidence that warrants a 30-year cutoff. 
That number is basically arbitrary. In April, the national Institute of 
Medicine (IOM) released its Agent Orange Update 2000 report and found 
that there is a growing amount of evidence that suggests that there is 
an association between exposure to herbicides and cancers of the lung, 
bronchus, and trachea. Further, the report found that ``the greatest 
relative risk [of developing cancer] might be in the first decade after 
exposure, but until further follow-up has been carried out for some of 
the cohorts, it is not possible to put an upper limit on the length of 
time these herbicides could exert their effect.'' (Emphasis Added)
    Because current science cannot accurately forecast an end-point, 
the 30-year limit on the presumption of service connection should be 
unlimited, so that we can be sure that all veterans receive the 
compensation they are entitled to, and the treatment they deserve.

     S. 409, THE PERSIAN GULF WAR ILLNESS COMPENSATION ACT OF 2001

    The VFW supports this legislation to clarify the standards used for 
compensation of Persian Gulf Undiagnosed Illness. Under the current 
interpretation of PL 103-446, some veterans are being denied the 
compensation to which they may be entitled. For a veteran to be 
eligible for compensation for an undiagnosed illness, one of the 
criteria is that no known clinical diagnoses can exist that would 
explain the veteran's condition.
    The problem is that Persian Gulf Illness has symptoms that 
frequently overlap with other illnesses, making it easy for a doctor to 
misdiagnose Persian Gulf Illness. As a result, one veteran may be 
granted compensation for undiagnosed illness for chronic fatigue while 
the other veteran, who has similar symptoms of fatigue, may be 
diagnosed with chronic fatigue and is denied compensation for 
Undiagnosed Illness.
    This bill will ensure the proper implementation of PL 103-446 by 
refining the definition of undiagnosed illness that, in turn, will 
allow Persian Gulf veterans to receive compensation in a more efficient 
and convenient manner.

          S. 912, THE BURIAL BENEFITS IMPROVEMENT ACT OF 2001

    The VFW supports the intent of The Burial Benefits Improvement Act 
of 2001 that would provide increases in burial and funeral expenses of 
certain service connected veterans. The VFW further supports more 
expansive legislation that also provides assistance to the spouses of 
those veterans who die from non-service connected conditions. 
Specifically, we recommend $1,000 for veterans who die from a non-
service connected condition. In addition, we recommend the burial plot 
allowance be increased to $1,000.
    Finally, we strongly support Section 2309 of this measure, which 
would annually adjust the amount of burial benefits according to the 
Consumer Price Index.

    S. 662, TO AMEND TITLE 38, UNITED STATES CODE, TO AUTHORIZE THE 
  SECRETARY OF VETERANS AFFAIRS TO FURNISH HEADSTONES OR MARKERS FOR 
   MARKED GRAVES OF, OR TO OTHERWISE COMMEMORATE, CERTAIN INDIVIDUALS

    We support this legislation to authorize the VA Secretary to 
provide headstones or markers for marked graves or otherwise 
commemorate certain individuals.
    We are concerned, however, over the language in subsection (f) that 
states ``a headstone or marker furnished under subsection (a) shall be 
furnished, upon request, for the marked grave or unmarked grave of the 
individual or at another area appropriate for the purpose of 
commemorating the individual.'' We are concerned with the word 
``appropriate''. However, we believe that the VA can clarify its 
meaning when they write the implementing regulations.

   S. 781, TO AMEND SECTION 3702 OF TITLE 38, UNITED STATES CODE, TO 
  EXTEND THE AUTHORITY FOR HOUSING LOANS FOR MEMBERS OF THE SELECTED 
                                RESERVE

    We strongly favor this measure that would amend section 3702 of 
Title 38, United States Code, to extend the authority for housing loans 
for members of the Selected Reserve.

     S. 457, TO AMEND TITLE 38, UNITED STATES CODE, TO ESTABLISH A 
 PRESUMPTION OF SERVICE-CONNECTION FOR CERTAIN VETERANS WITH HEPATITIS 
                       C, AND FOR OTHER PURPOSES.

    We support this measure without further comment.
      s. 1063, united states court of appeals for veterans claims 
  administration improvement act of 2001 and s. 1089, a bill to amend 
section 7253 of title 38, united states code, to expand temporarily the 
united states court of appeals for veterans claims in order to further 
          facilitate staggered terms for judges on that court
    We support both of these measures without further comment.
    Mr. Chairman, this concludes our testimony. I would be happy to 
answer any questions that you, or the committee, may have.

    Senator Specter. We turn now to Mr. Rick Surratt. In 1967, 
he was wounded by shell fragments. He was named Deputy National 
Legislative Director of the million-member Disabled American 
Veterans in 1998. He has a very distinguished record with DAV's 
professional staff going back to 1976. Thank you for joining 
us, Mr. Surratt, and we look forward to your testimony.

    STATEMENT OF RICK SURRATT, DEPUTY NATIONAL LEGISLATIVE 
              DIRECTOR, DISABLED AMERICAN VETERANS

    Mr. Surratt. Thank you, Mr. Chairman. I am Rick Surratt 
with the Disabled American Veterans. In our written statement, 
we have commented on the provisions in each of the 14 bills 
before you today. I will just briefly highlight our position on 
the matters of primary importance to the DAV here.
    We support S. 409, which would extend for an additional 10 
years the presumptive period for service connection of the 
undiagnosed illnesses suffered by Persian Gulf war veterans.
    Another bill before you, S. 1091, would replace the 30-year 
presumptive period for respiratory cancers due to Agent Orange 
exposure with an open-ended presumptive period because there is 
no scientific evidence to support the 30-year limitation. We 
support that provision in S. 1091 and its other provisions to 
reinstate the presumption of exposure to herbicides for all 
Vietnam veterans and to extend the period for adding new 
diseases to the presumptive list.
    For the same reason that S. 1091 would remove the 30-year 
limitation for respiratory cancers, you should extend the 
presumptive period for undiagnosed illnesses. Because we still 
do not know the causes and exact nature of these undiagnosed 
illnesses, we have no way of knowing how long after service in 
the Persian Gulf it takes for them to appear. Your laws 
authorize service connection to be presumed in instances where 
circumstances suggest that a particular disease is due to 
military service, but where circumstances also make it unlikely 
that evidence will be available to prove it.
    That is the case with hepatitis C, because the disease, 
which is transmitted by infected blood, such as blood 
transfusions for combat wounds, does not appear for many years 
after the infection, thus preventing veterans from proving its 
existence during service. Therefore, we support S. 457, which 
would authorize a presumption of service connection for 
hepatitis C.
    We support. S. 662, which would allow government headstones 
or markers for graves, regardless of whether they were marked 
by other means.
    We also believe increases in the burial and plot allowances 
are long overdue. Without any adjustment for increasing costs 
for several years, their value has been severely diminished. 
We, therefore, support S. 912.
    Of course, we appreciate and support. S. 1090, which would 
provide an annual cost-of-living increase in disability 
compensation, dependency, and indemnity compensation, and the 
clothing allowance.
    S. 1093, among other things, makes amendments to the 
effective date provisions of last year's Veterans' Claims 
Assistance Act. We are unsure of the practical effect of these 
amendments. However, we would rather see an amendment that 
would make the duty to assist provisions in that Act apply to 
all cases in which veterans were erroneously denied VA 
assistance by reason of the erroneous interpretation of law by 
the courts.
    We also would like to see a provision added that would 
permit veterans to waive additional assistance under the Act. 
The Court of Appeals for Veterans Claims is using this new law 
to remand cases without a decision, even where the veteran 
objects to the remand, in instances where the veteran knows 
additional assistance from VA will not strengthen the factual 
support for his or her case. Thus far, the court has refused to 
let veterans waive their rights to additional assistance under 
the Act.
    We support provisions in S. 1093 that would remove the 
limitation on participation in programs for independent living 
to 500 veterans annually. While this limitation may have been 
appropriate when this was a pilot program, it is not 
appropriate now.
    We support the provision in S. 1093 to increase the maximum 
VA home loan guarantee to reflect increases in housing costs. 
The current VA maximum is not high enough to support a loan for 
the average-priced housing in some areas of the nation. The 
increase from the current $50,750 maximum to $63,175 will give 
veterans access to home ownership in these areas.
    We also believe that Native American veterans living on 
tribal lands should have the same opportunities for home 
ownership as other veterans. We, therefore, support. S. 228, 
which would change the current program for direct housing loans 
to Native American veterans from a temporary pilot program to a 
permanent one.
    There is no question that the enhancement in these bills 
for the Montgomery GI Bill are good and beneficial and should 
be reported by this committee, so we hope to see that happen, 
also.
    Mr. Chairman, that completes my testimony and I will, as 
did my other colleagues, be happy to answer any questions you 
may have.
    Senator Specter. Thank you very much, Mr. Surratt.
    [The prepared statement of Mr. Surratt follows:]

    Prepared Statement of Rick Surratt, Deputy National Legislative 
                  Director, Disabled American Veterans

    Mr. Chairman and Members of the Committee:
    I am pleased to appear before you on behalf of the more than one 
million members of the Disabled American Veterans (DAV) and the members 
of its Women's Auxiliary to provide our views on several pieces of 
legislation before the Committee.
    These several bills cover a range of issues important to veterans 
and servicemembers, and their families. The DAV is an organization 
devoted to advancing the interests of service-connected disabled 
veterans, their dependents, and their survivors. Among these bills, are 
several provisions of importance to the DAV's membership. We fully 
support most of these provisions, but for the reasons we state below, 
we oppose or have concerns about a few.
     s. 1093--veterans' benefits programs modification act of 2001
    Section 2 of this bill would exclude from annual income for 
nonservice-connected pension entitlement life insurance proceeds and 
non-recurring income. Nonservice-connected pension is a needs-based 
benefit. Entitlement and the amount of the benefit are therefore 
governed by annual income and the beneficiary's net worth. While the 
DAV has no mandate from its membership on this issue, stability of 
pension rates and other equitable and practical considerations make 
this a meritorious change. We believe, however, that the proceeds of 
these types of income should also be exempted from net worth 
calculations under section 1522 of title 38, United States Code, and 
sections 3.274 and 3.275 of title 38, Code of Federal Regulations. 
Otherwise, the beneficial purposes of this legislation may be defeated.
    Section 3(a) of the bill would repeal the requirement that death 
pension claims be filed within 45 days of the veteran's death to be 
eligible for an award of death pension effective the first day of the 
month in which the death occurred. Because the entire text of section 
5110(d)(2) of title 38, United States Code, would be stricken, this 
appears to leave no rule in place by which the effective date of the 
award would be the first day of the month of death. Before the 45-day 
rule was enacted, awards of death pension were effective the first day 
of the month of death if the application was filed within 1 year from 
the date of death. While we, again, have no mandate from our membership 
on this issue, we suggest that what is now section 5110(d)(1), to 
become 5110(d) under this bill, be amended to again apply to death 
pension as it did before the 45-day rule was enacted and codified at 
section 5110(d)(2).
    Section 3(b) would replace the ``end-of-the-month'' rule for 
reductions and discontinuances in pension awards based on increases in 
income with an end-of-the-year rule. Under this amendment, any change 
in entitlement to or the rate of pension consequent to an increase in 
income would be the end of the calendar year in which the income 
increased rather than the end of the month in which the income 
increased. We have no mandate from our membership on this issue, but 
this amendment appears beneficial for pension recipients and practical 
for the Department of Veterans Affairs (VA).
    Section 4 of this bill amends section 5102 of title 38, United 
States Code, to impose a 1-year time limit upon a claimant's submission 
of information necessary to complete an application for benefits, other 
than Government life insurance benefits. We have no objection to this 
amendment. It also amends section 5103 of title 38, United States Code, 
by removing the 1-year time limitation for the submission of 
information or evidence necessary to perfect a claim for benefits. This 
amendment appears to remove the 1-year time limit for the submission of 
evidence necessary to perfect a claim. If the Committee were to deem 
the retention of such or some other requirement advisable, we suggest 
that the time limit include a ``good cause'' exception. Such exception 
is now included in VA's regulation, section 3.109(b), title 38, Code of 
Federal Regulations. Section 3.109(a)(2) specifies the types of claims 
to which the time limit applies and makes an exception for evidence 
that a claimant might submit to support the credibility of a witness or 
to authenticate documentary evidence timely filed. When a disposition 
has become final under section 3.158 or sections 3.160(d), 20.1103, 
20.1104 of title 38, Code of Federal Regulations, ``evidence to enlarge 
the proofs and evidence originally submitted'' are not admissible in 
that claim. Section 3.109 implemented the provisions of section 5103 in 
effect before the amendments made by the Veterans Claims Assistance Act 
of 2000, Pub. L. No. 106-475 (VCAA). VCAA made only minor, 
nonsubstantive changes in the language of the 1-year time limit.
    In addition, any time limitation on the submission of evidence 
should expressly indicate it is subject to other provisions that 
suspend the finality of VA decisions. For example, under section 
7105(c) of title 38, United States Code, an appeal initiated with a 
notice of disagreement suspends the finality of a VA decision. Thus, 
under VA regulations, evidence submitted before a decision becomes 
final by expiration of the 1-year appeal period or submitted during the 
pendency of an appeal has the same effect as if it were submitted with 
the application for benefits. See 38 C.F.R. Sec. Sec. 3.156(b), 
3.400(q)(i), 20.1304(b) (2000). Thus, the 1-year rule does not operate 
when finality is suspended and a claim continues to be open and 
pending.
    The section heading indicates that section 5 of the bill clarifies 
the date the VCAA modifications in the duty to assist become effective. 
In amending section 7(a)(2) of VCAA, section 5(a)(1)(B) of the bill 
appears to narrow the category of claims to which the VCAA applies 
under section 7(a)(2). Section 7(a)(2) now applies to claims ``filed 
before the date of the enactment of this Act and not final as of that 
date.'' Section 5(a)(1)(B) of this bill strikes ``and not final as of 
that date'' and inserts in its place, ``in which a decision had not 
been issued by the Secretary of Veterans Affairs before that date.'' 
Because decisions are not final when issued, this gives the appearance 
of excluding from VCAA's provisions claims which were decided but not 
final before enactment of VCAA. However, section 5(a)(2) of this bill 
appears to include these claims under section 7(b) of VCAA. Section 
7(b)(2)(A) of VCAA makes it applicable to claims in which the denial or 
dismissal ``became final during the period beginning on July 14, 1999, 
and ending on the date of the enactment of this Act. . . .'' These 
claims were finally denied between July 14, 1999, and the enactment 
date of VCAA specifically on the basis that they were not ``well 
grounded.'' This bill retains this language, merges old subparagraph 
(B) into (A) and adds a new subparagraph (B), which seems to make VCAA 
applicable to all claims not finally denied before enactment of VCAA.
    The DAV believes that any claimant who received a denial of 
benefits by reason of the erroneous interpretation of the well-grounded 
claim requirement should be entitled to a new adjudication under the 
clarification of the law by VCAA. The time in which the claim was 
denied itself has no bearing on the merits of the claim or the 
corresponding degree of injustice consequent to misapplication of the 
law, and the time of denial should not be the basis of an arbitrary 
rule which denies or affords justice for similarly situated aggrieved 
claimants. For that reason, the DAV proposes language that would make 
VCAA more equitably cover all claims denied because of this erroneous 
interpretation of law. The first precedent decision of the Court of 
Veterans Appeals, now the Court of Appeals for Veterans Claims, that 
misconstrued the law as requiring claimants to prove their claims were 
well grounded as precondition for VA assistance was issued on October 
12, 1990. Gilbert v. Derwinski, 1 Vet. App. 49 (1990). In our proposed 
language we include a provision to permit claimants to waive the duty 
to assist provisions of VCAA as a way of avoiding unnecessary 
prolongation of the proceedings:
    Applicability and waiver:
      (a) This Act shall apply to
            (1) any claim denied by the Department of Veterans Affairs, 
        the Court of Appeals for Veterans Claims, or Court of Appeals 
        for the Federal Circuit on or after October 12, 1990, on the 
        ground that such claim was not well grounded if the claimant 
        requests that the Secretary readjudicate such claim within two 
        years from the date of enactment of this act or review is 
        initiated on the Secretary's own motion within such period; and
          (2) any claim pending on, or filed on or after the date of 
        enactment of this act.
      (b) The enhanced duty to assist and notice provisions of this Act 
shall not apply in any case where the claimant waives those provisions 
of the Act.

    New subsection (b) is required to prevent the Court of Appeals for 
Veterans Claims (``Court'') from remanding essentially all appeals, 
even over the objections of appellants. Appellants often make specific 
assignments of legal error, or clearly erroneous fact finding, in their 
appeals to the Court. The Court has adopted the position that it 
generally need not either consider or decide any such assignments of 
error in cases where the Veterans Claims Assistance Act of 2000 
(``VCAA'') applies or is potentially applicable. Rather, the Court 
follows a practice of piecemeal litigation, and this practice severely 
harms appellants.
    The Court has concluded that where a Board decision must be 
remanded because of the Board's failure to consider or apply the VCAA 
the appeal is at an end. E.g., Mahl v. Principi, No. 99-1678 (U.S. Vet. 
App. June 7, 2001). For example, an appellant raises alleged legal 
errors committed by the Board in an appeal to the Court. The Court, 
either on its own motion or at the urging of the Secretary, concludes 
that a remand is required for further proceedings before the VA 
pursuant to the VCAA. The Court will decline to consider the 
assignments of alleged legal error advanced by the only party entitled 
to invoke the Court's jurisdiction, the claimant. Mahl v. Principi. 
Rather than resolve the legal dispute that caused the appeal to be 
brought to the Court, the Court remands the case to the Board with the 
disputed issue(s) of law entirely unsettled. When the Board then 
discharges any additional duty it may owe to the claimant under the 
VCAA, the Board has no reason to revise its treatment of the case with 
respect to the claimant's alleged errors. The Court has not overturned 
the Board's prior decision. The claimant has no recourse other than to 
appeal a second time, thereby having lost a significant amount of time 
and potentially legal fees associated with the original appeal, the 
remand to the Board, and the second appeal to the Court.
    The VCAA grants additional rights to those claiming benefits from 
the VA. To many, however, the benefit of VCAA is only theoretical 
because VA assistance or more thorough notices will not materially 
affect the outcome of their claims. Such claimants should be permitted 
to waive their rights when they determine such a waiver is in their 
overall interest. The Court should not be permitted to use VCAA as a 
pretense to summarily remand cases to the Board. In short, VCAA should 
not become a tool to delay justice. The Court has strongly indicated 
that it will not permit such a waiver and has to date not allowed a 
waiver even though a number of appellants have attempted to waive their 
rights under the VCAA. The VCAA has become a heavy burden rather than a 
benefit to some claimants at the hands of the Court. Congress should 
act now to relieve that unnecessary burden.
    Section 6 of the bill would prohibit the payment or provision of 
specified veterans' benefits in the case of a veteran who is a fugitive 
felon. We infer that the public policy reasons for this section would 
be that felons, assuming they could somehow receive and expend their 
veterans' benefits while fugitives, should not be given government 
assistance while they are fleeing the justice system of that government 
and should not have VA benefits to aid in their evasion of the 
authorities. It is doubtful, we believe, that a fugitive would be able 
to receive and use most of these benefits, for example, a home loan. We 
particularly object to the denial of these benefits to dependents. 
Under current law, the compensation of an imprisoned veteran can be 
apportioned to dependents. The loss of earnings consequent to 
disability adversely effects dependents, and compensation is intended 
to make up for the loss of earnings. Dependents of veterans, especially 
children, are in no less need of the compensation they rely on for the 
necessities of life when a veteran is imprisoned. If compensation were 
discontinued upon the veteran's incarceration, innocent dependents 
would be twice harmed by the actions of the veteran. The same is true 
with respect to depriving dependents of compensation when the veteran 
is fleeing justice and unavailable to support them. If this provision 
is enacted, it should be applicable only to the fugitive veteran.
    Section 7 of the bill extends to veterans incarcerated for felonies 
committed before October 7, 1980, the same limitation on payment of VA 
benefits applicable to veterans incarcerated for felonies committed 
after that date. The DAV has no position on this provision of the bill 
except to note that it would appear to give retroactive effect to a 
measure that could be viewed as punitive.
    Section 8 of the bill would override a judicial interpretation of 
section 3512(b) of title 38, United States Code. Under section 3501(a) 
of title 38, United States Code, a spouse becomes eligible for 
educational benefits when the veteran's service-connected disability is 
rated permanent and total, the veteran dies while so rated, or the 
veteran dies of a service-connected disability. The Court of Appeals 
for Veterans Claims held that the plain language of section 3512(b) 
provides that the 10-year delimiting period for a spouse's use of 
educational benefits ends 10 years after the latest of any of those 
three events. Under existing law, the spouse of a veteran who died 
while rated permanent and total would have already become eligible when 
the permanent and total rating was assigned, but the death while so 
rated begins a new 10-year delimiting period. While the effect of this 
bill is somewhat unclear to us, it appears to make the law more 
restrictive. It appears to provide that the 10-year period will end 10 
years from the first event by which the spouse became eligible, unless 
the spouse elects an alternative later date as specified in the bill. 
It has always been congressional intent that laws governing veterans' 
benefits be liberally applied in favor of beneficiaries. In this 
instance, the Court followed the plain language of the law to give it 
an effect favorable to veterans' spouses. Under existing law, an 
eligible spouse would always automatically be entitled to the latest 
possible delimiting date, as it should be. Based on our understanding 
of the bill before us, we prefer existing law and therefore oppose this 
part of the bill.
    Section 9 of the bill would remove the limitation on the number of 
veterans who, during a fiscal year, may participate in programs of 
independent living. For service-connected disabled veterans who are 
incapable of rehabilitation to achieve a vocational goal, VA may 
provide a program of independent living services and assistance to 
enable the veteran to achieve maximum independence in daily living. 
This program began as pilot, and, as such, was limited to 500 
participants each fiscal year. When the program was made permanent, 
this limitation was retained in section 3120 of title 38, United States 
Code, with priority given to veterans whose inability to achieve a 
vocational goal was solely attributable to the effects of the service-
connected disability. The change in this bill would replace the 
numerical limitation and priority with the priority only.
    We understand that this program--beyond the independence and 
incidental benefits afforded some of our most seriously disabled 
veterans--also results in cost savings for the Government. It saves the 
Government the high costs of nursing home care for those veterans who, 
but for this program, would enter nursing home care and those veterans, 
who by reason of this program, are able to leave nursing home care to 
live independently in their communities. The DAV fully supports section 
9 of this bill.
    Section 10 of the bill would increase the maximum amount of the VA 
home loan guaranty to $63,175. To make home ownership easier for 
eligible veterans and other persons, the VA home loan guaranty program 
creates conditions in which lenders extend credit under terms more 
favorable than they do to the general population. VA's guaranty of 
repayment allows lenders to make loans without borrower down payments 
and other safeguards that would generally be necessary under 
conventional lending practices. Under mortgage industry standards, at 
least 25% of the total mortgage loan must be covered by the guaranty to 
adequately protect the lender against borrower default. With the 
current $50,750 maximum for a VA home loan guaranty, this effectively 
limits veterans to homes costing a maximum of $203,000, unless they can 
make up the difference with a down payment. A recent survey by the 
Federal Housing Finance Board showed average home prices higher than 
$203,000 in several areas of the Nation. Several years have passed 
without any adjustment in the maximum home loan guaranty, and the 
erosion of the benefit in the face of increasing housing costs has put 
housing beyond the reach of veterans living in these several areas of 
the Nation. To make VA loan amounts match maximum loan amounts proposed 
for the Federal Housing Administration (FHA), the maximum VA guaranty 
must be increased to $63,175, which would allow VA loans up $252,000. 
As one of the four organizations who make this recommendation in the 
Independent Budget, the DAV fully supports this section of the bill.

      S. 1091--BILL TO AMEND PROVISIONS FOR SERVICE CONNECTION OF 
               DISABILITIES RELATED TO HERBICIDE EXPOSURE

    Section 1(a) of this bill would repeal the requirement that 
respiratory cancers must manifest to the required degree within 30-
years after the veteran's service, and section 1(b) provides for a 
beginning date of compensation in an amount that would have been paid 
had this requirement not been in effect. Inasmuch as this limitation 
apparently has no scientific basis, the DAV supports repeal of the 30-
year limitation with retroactive effect.
    Section 1(c) would reinstate the presumption of exposure to 
herbicides for Vietnam veterans. From 1980 to 1999, VA presumed 
exposure to herbicides in the case of any Vietnam veteran who claimed 
exposure, in recognition that circumstances make it near impossible to 
prove or rule out exposure in individual cases and in observance of the 
benefit-of-the-doubt rule. Following a court decision in which the 
court had no cognizance of the presumption and did not recognize it, VA 
conveniently abandoned the presumption, although the circumstances 
responsible for this policy and its legal premises had not changed. 
Now, the only veterans entitled to the presumption of exposure to 
herbicides are those who claim compensation for disabilities subject to 
the statutory presumption of service connection. Others are left with 
the often impossible burden of proving exposure even though existing 
records are insufficient to document individual exposure in most 
instances. The DAV strongly supports section 1(c) of this bill.
    Section 1(d) extends the process and sunset period from 10 to 20 
years for adding additional diseases to the list of those to be 
presumed service connected due to herbicide exposure. Because 
scientific knowledge remains incomplete regarding the effects of 
herbicide exposure, we believe this extension is fully justified. The 
DAV therefore supports this section of the bill.

 S. 1090--VETERANS' COMPENSATION COST-OF-LIVING ADJUSTMENT ACT OF 2001

    This bill would increase the rates of disability compensation, 
dependency and indemnity compensation, and the clothing allowance by 
the percentage of annual increase in the cost of living, with rounding 
down of the adjusted rates to the next lower whole-dollar amount. These 
increases would be effective December 1, 2001.
    Congress must adjust these benefit rates regularly to avoid the 
decrease in their value that would otherwise occur by reason of rising 
costs of goods and services. The DAV supports this bill. However, we 
continue to oppose rounding down of compensation increases, and we urge 
this Committee to reject recommendations to permanently extend rounding 
down provisions.

S. 1089--BILL TO AUTHORIZE ADDITIONAL JUDGES AND REPEAL JURISDICTIONAL 
 NOTICE OF DISAGREEMENT REQUIREMENTS FOR COURT OF APPEALS FOR VETERANS 
                                 CLAIMS

    Section 1 of this bill would temporarily authorize two additional 
judges for the Court of Appeals for Veterans Claims. These additional 
judges would be appointed to the Court and will have gained experience 
in veterans' law before several of the Court's current judges retire 
near the same time. The DAV supports the goals of section 1 of this 
bill. Section 2 of the bill repeals the requirement for a written 
notice by a judge regarding acceptance of reappointment as a condition 
for retirement. The DAV has no objection to this provision.
    Section 3 of the bill repeals sections 402 and 403 of the Veterans' 
Judicial Review Act, Public Law 100-687. To limit the workload of the 
newly created court, Congress restricted the Court's jurisdiction to 
cases in which the administrative appeal was initiated by a notice of 
disagreement on or after the date of enactment of the judicial review 
bill, November 18, 1988. With judicial review legislation, Congress 
relaxed some of the attorney fee restrictions, but limited authority 
for attorney fees to cases in which the notice of disagreement was 
filed on or after the date of enactment of Public Law 100-687. The 
jurisdictional and attorney fee restrictions no longer serve any 
beneficial purpose, but can complicate appeals or present additional 
issues that the Court must resolve. The DAV supports this section of 
the bill.
    While we are pleased to see the Committee undertaking ways to 
improve judicial review of veterans' claims, we are disappointed that 
none of these bills incorporate Independent Budget recommendations for 
improving the judicial appeal process. The Independent Budget 
recommends legislation to change the standard for judicial review of 
questions of fact in a way that will have the courts enforce the 
benefit-of-the-doubt rule. It also recommends limited judicial review 
of changes to VA's Schedule for Rating Disabilities and expanded 
jurisdiction of the Court of Appeals for the Federal Circuit to 
authorize that court to review questions of law.

      S. 1063--UNITED STATES COURT OF APPEALS FOR VETERANS CLAIMS 
                 ADMINISTRATION IMPROVEMENT ACT OF 2001

    This bill, introduced by request, would authorize the Court to 
charge participants attending the Court's judicial conferences a 
registration fee and would authorize the Court to expend the funds 
collected to defray the expenses of judicial conferences and other 
activities and programs that are designed to foster bench and bar 
communication and relationships or the study, understanding, public 
commemoration, or improvement of veterans law or of the work of the 
Court. The DAV supports the goals of this bill.

  S. 1088--AMENDMENTS TO MONTGOMERY GI BILL TO AUTHORIZE ACCELERATED 
    PAYMENTS FOR EDUCATION IN HIGH TECHNOLOGY AND FOR OTHER PURPOSES

    This bill makes the Montgomery GI Bill more flexible to accommodate 
the non-traditional educational programs now offered for employment in 
the high technology industry. These programs compress training into 
short-term courses but cost as much or more than the more lengthy 
courses offered over a full college term. This bill will allow veterans 
attending such courses to elect to receive their educational allowances 
in accelerated payments. Although the DAV has no mandate from its 
membership on this issue, we believe this bill has beneficial purposes 
and should be reported by the Committee.

      S. 131--VETERANS' HIGHER EDUCATION OPPORTUNITIES ACT OF 2001

    S. 131 would increase the Montgomery GI Bill allowance to reflect 
the average cost of tuition. The current GI Bill allowance is 
substantially less than the average costs of college. Although the DAV 
has no mandate on this issue from its membership, this bill is 
beneficial to veterans and should be reported by the Committee.

  S. 228--BILL TO MAKE THE NATIVE AMERICAN HOME LOAN PROGRAM PERMANENT

    The program under which VA provides direct housing loans to Native 
American veterans living on trust lands began as a 5-year pilot in 
1993. It has been extended but is due to expire in 2002. S. 228 would 
make it a permanent program. We believe Native American veterans should 
have the same opportunities for home ownership that other veterans 
enjoy. The Committee should favorably consider this bill.

       S. 409--PERSIAN GULF WAR ILLNESS COMPENSATION ACT OF 2001

    This bill specially extends the presumptive period for undiagnosed 
illnesses of Persian Gulf War veterans to December 31, 2011, a period 
of 10 additional years from the expiration date set by the Secretary of 
Veterans Affairs in accordance with specific rulemaking authority 
delegated to him in section 1117 to title 38, United States Code. This 
bill also includes in the meaning of ``undiagnosed illnesses'' poorly 
defined illnesses that have been given diagnostic labels and prescribes 
signs and symptoms that will be considered a manifestation of an 
undiagnosed illness.
    Because the causes and underlying disease mechanisms responsible 
for undiagnosed illnesses are still unknown, the appropriate 
presumptive period is still unknown. Extension of the presumptive 
period is therefore warranted. We also believe that clarification of 
the meaning of undiagnosed illnesses to include poorly defined 
illnesses will prevent inappropriate disallowance of these claims by 
VA. The DAV fully supports extension of the presumptive period and the 
other clarifying provisions of this bill.

       S. 457--PRESUMPTION OF SERVICE CONNECTION FOR HEPATITIS C

    For veterans suffering from hepatitis C who, during military 
service before December 31, 1992, were exposed to specified known risks 
of hepatitis C infection, this bill would authorize a presumption of 
service connection. The DAV submits that service connection for 
hepatitis C is fully justified when a veteran has a history of exposure 
during service that could have transmitted the infection. Although we 
would prefer to see this issue resolved by regulations issued by the 
Secretary of Veterans Affairs, we support the goals of this bill.

   S. 662--HEADSTONES OR MARKERS FOR MARKED GRAVES OR TO COMMEMORATE 
                          CERTAIN INDIVIDUALS

    This bill would remove the restriction that authorizes government 
headstones or markers for unmarked graves only. The DAV believes that 
any eligible person should be entitled to receive a headstone or 
marker, regardless of whether the grave or place of commemoration has 
been marked in some other manner. The DAV supports S. 662.

  S. 781--EXTENSION OF AUTHORITY FOR HOUSING LOANS TO MEMBERS OF THE 
                            SELECTED RESERVE

    The authority for housing loans to members of the Selected Reserve 
is set to expire on September 30, 2007. S. 781 would extend the 
expiration date to September 30, 2015. The DAV has no mandate on this 
issue, but we have no objection to its passage.

          S. 912--BILL TO INCREASE BURIAL AND PLOT ALLOWANCES

    This bill would increase the burial allowance for veterans who die 
of service-connected disabilities from $1,500 to $3,713 and would 
increase the burial allowance for other eligible veterans from $300 to 
$1,135. It would increase the plot or interment allowance from $150 to 
$670.
    Our Government provides burial allowances as a final measure of 
appreciation for service rendered on behalf of the Nation and to help 
ensure that our Nation's military veterans will be buried with the 
dignity they deserve. However, over the several years these allowances 
have not been adjusted, the value of the benefit has eroded to the 
point they no longer provide a substantial contribution to the costs of 
burial. The DAV supports S. 912.

   S. 937--HELPING OUR PROFESSIONALS EDUCATIONALLY (HOPE) ACT OF 2001

    This bill would permit servicemembers to elect to transfer their 
entitlement to educational assistance under the Montgomery GI Bill to 
dependents, allows for election of an accelerated payment of the 
educational allowance, makes GI Bill benefits available for training 
provided by other than colleges and traditional educational 
institutions, and extends the time in which members of the Selected 
Reserve may use their educational benefits. The DAV has no mandate on 
these issues, but we do not oppose its enactment.

                                CLOSING

    The DAV sincerely appreciates the introduction of these bills and 
the Committee's interest in improving benefits and services for 
veterans, and we appreciate the opportunity to appear before the 
Committee to testify on these important measures.

    Senator Specter. We now turn to David Tucker, Associate 
Legislative Director of Paralyzed Veterans of America. He has 
been at the organization since 1993. He has a Bachelor's in 
history from the University of Utah and a Doctor of 
Jurisprudence from William and Mary. Thank you for joining us, 
Mr. Tucker, and we look forward to your testimony.

  STATEMENT OF DAVID M. TUCKER, SENIOR ASSOCIATE LEGISLATIVE 
            DIRECTOR, PARALYZED VETERANS OF AMERICA

    Mr. Tucker. Thank you, Senator Specter, Senator Akaka. For 
the sake of brevity, I would also be willing to forego my oral 
statement with the assumption that my written statement is made 
part of the record and just go straight to questions.
    Senator Specter. Without objection, it will be made part of 
the record.
    [The prepared statement of Mr. Tucker follows:]

  Prepared Statement of David M. Tucker, Senior Associate Legislative 
                Director, Paralyzed Veterans of America

    Chairman Rockefeller, Ranking Member Specter, members of the 
Committee, on behalf of the Paralyzed Veterans of America (PVA) I am 
pleased to present our views on benefits-related legislation pending 
before the Committee.
    The ``foundation document'' of veterans' benefits was an act of the 
English Parliament in its 1592-1593 session. Parliament passed ``An 
Acte for the Reliefe of Souldiours'' to provide for the soldiers and 
sailors who had served since the defeat of the Spanish Armada in 1588. 
As the Act states, in pertinent part and with modern spelling:
          For as much as it is agreeable with Christian Charity, 
        Policy, and the Honor of our Nation that such as have, since 
        the 24th day of March, 1588, adventured their lives, and lost 
        their limbs, or disabled their bodies--or shall hereafter 
        adventure their lives, lose their limbs, or disable their 
        bodies in defense and service of Her Majesty and the State--
        they should, at their return, be relieved and rewarded to the 
        end that they may reap the fruit of their good deservings and 
        that others may be encouraged to perform the like endeavors; be 
        it enacted[.] (Emphasis added). From House Committee Print 4, 
        90th Congress, 1967.
    Indeed, veterans' benefits must be looked at as a means for a 
nation to recognize and reward the service of its veterans as well as 
to encourage future generations to serve with the promise that these 
benefits will be there for them. PVA's expertise is in health care and 
specialized services, and we note that the provision of adequate 
budgets for the Department of Veterans Affairs (VA) health care system 
sends an important signal regarding how we treat our veterans. 
Likewise, the benefits measures we will address today send a message, a 
message meant to assure the men and women who serve in our Armed Forces 
that we shall not forget their sacrifices, or their service.
    With an all-volunteer service, it is essential that we make 
military service attractive and that we encourage all segments of 
society to serve our Nation. Military service should be a top option, 
not an option of last resort. This is especially critical in periods of 
economic expansion and low unemployment. The way we treat veterans 
today will either encourage or discourage the men and women currently 
contemplating service. This is why it is so important that benefits 
promised be delivered, and that these benefits maintain their original 
goals, and their original intentions.
    The benefits measures we are addressing today may be viewed as 
covering the gamut of benefits, from recruitment and retention, to 
achieving earned benefits after discharge, to providing fitting 
memorials to deceased veterans.
    PVA believes that the over-arching goal of Montgomery GI Bill 
(MGIB) legislation should be first, the improvement of benefits; 
second, the provision of flexible alternatives to a traditional 
university education to meet the needs of a new century while staying 
true to the intent underlying the MGIB; and third, the provision of 
transferability as a tool to retaining the men and women who possess 
the critical skills and specialties demanded by our evolving Armed 
Services.
    PVA supports S. 131, the ``Veterans' Higher Education Opportunities 
Act of 2001.'' PVA has long supported increases in the MGIB. Recently, 
the House of Representatives passed H.R. 1291, the ``21st Century 
Montgomery GI Bill Enhancement Act,'' which increased the basic monthly 
benefit. We believe that this is a step forward, but as we testified 
before the Benefits Subcommittee, we also believe that the MGIB benefit 
should be ``tied to the average cost of tuition at public colleges or 
universities.'' S. 131 accomplishes this goal.
    When the GI Bill was first enacted in 1944, it covered the costs of 
tuition and fees at any college or university to which the veteran 
gained admittance and provided a monthly amount equivalent to $500 for 
single veterans and $750 for married veterans in 2001 dollars. 
Currently, the MGIB provides only $650 per month. If the MGIB is to be 
used as a meaningful tool for recruitment purposes, a veteran who has 
served the requisite amount of time should be assured of a benefit that 
will essentially meet the tuition costs of a college education. S. 131 
also guards against the deleterious effects of inflation by updating 
annually the amount provided based upon a benchmark set by the College 
Board. If S. 131 were in place today, the monthly stipend for this 
academic year would be $1025.
    S. 131 meets the intent underlying the original GI Bill, and if we 
are to promote education in the 21st century, as well as work to ensure 
that military service always attracts large segments of our population, 
then S. 131 should be passed by this Committee and this Congress.
    PVA also supports S. 1088, a bill to facilitate the use of 
educational assistance under the MGIB for education leading to 
employment in high technology industry. This measure would allow 
veterans to use their MGIB benefits in courses leading to certification 
in technical fields. If the MGIB is to be used not only for recruitment 
purposes, but also as a means of enabling a veteran to make a smooth 
transition back to civilian life, then S. 1088 is a vital means to 
accomplish these goals.
    Finally, we support S. 937, the ``Helping Our Professionals 
Educationally (HOPE) Act of 2001.'' S. 937, by providing limited 
transferability to family members of MGIB benefits, would be a powerful 
incentive to active duty personnel to remain in military service. In 
addition, as our military forces continue to evolve to meet the 
challenges of a new century, S. 937 would provide the means to enable 
the Armed Services to target and retain individuals with critical 
skills and specialties.
    PVA believes that all three measures relating to the MGIB should be 
passed. All three measures would provide a powerful benefit that would 
promote education for our Nation, promote recruitment in our Armed 
Services, and be a potent tool to retain military personnel with 
critical skills and specialties.
    PVA believes that statutes and regulations governing the provision 
of benefits for veterans and their dependents should be construed 
liberally. For this reason we take no position regarding section 8 of 
S. 1093. It is not clear to PVA whether this proposed amendment would 
narrow the options currently enjoyed by spouses and dependents.
    PVA supports S. 228, a bill to make permanent the Native American 
Veteran Housing Loan Program. Since the inception of this pilot program 
in 1992, and its extension from 1997 to December 31, 2001, 233 Native 
American veterans, residing on trust lands, have been able to achieve 
the dream of home ownership. We support making this successful pilot 
program permanent.
    PVA is not opposed to S. 781, a bill to extend the authority for 
housing loans for members of the Selected Reserve. PVA supports 
extending the authority of the VA Home Loan Program through September 
30, 2015. This is an important benefit to members of the National Guard 
and Reserve who serve the requisite six years, and by extending this 
program for an additional eight years will ensure that this benefit may 
indeed be used as a recruiting incentive until 2009.
    In addition, PVA supports section 10 of S. 1093. PVA notes that the 
intent underlying this section is to ameliorate the effect of inflation 
upon the home loan guaranty amount and to enable this program to keep 
pace with the guaranty amounts provided by Federal Housing Authority. 
This amount was last increased in 1994, and PVA supports the increase 
contained in this section from $50,750 to $63,175.
    PVA supports S. 1091, a bill to modify and extend authorities on 
the presumption of service-connection for herbicide-related 
disabilities of Vietnam veterans. Because of the impossible task of 
determining who in fact might have been exposed to Agent Orange, 
Congress, a decade ago, provided a presumption that all veterans who 
had served in Vietnam had been exposed to this herbicide. The Court of 
Appeals for Veterans Claims (CAVC), in McCartt v. West, 12 Vet.App. 164 
(1999) limited this presumption to veterans experiencing one or more of 
the diseases listed by the VA, rather than any disease claimed by the 
veteran. Currently, veterans who suffer diseases not listed must first 
prove exposure to Agent Orange and then prove that the exposure led to 
the disease. S. 1091 would restore the benefit of the doubt to all who 
served in Vietnam.
    S. 1091 also provides for the review of all claims filed for 
respiratory cancers and denied as a result of the 30-year manifestation 
limit. Further, S. 1091 eliminates this 30 year limitation, relying on 
a National Academy of Science report that has found no scientific basis 
for this specific time-frame. Finally, S. 1091 provides for five more 
biennial reports from the National Academy of Science, reports slated 
to end without congressional action.
    PVA is not opposed to S. 409, the ``Persian Gulf War Illness 
Compensation Act of 2001.'' This measure extends the presumptive period 
from the end of this year to the end of 2011 and expands the definition 
of ``undiagnosed illnesses.''
    PVA is also not opposed to S. 457, a bill to establish a 
presumption of service-connection for certain veterans with Hepatitis 
C. Researchers believe that the Hepatitis C virus was widespread in 
Southeast Asia during the Vietnam War. A test for the virus was not 
available until 1990, and the virus has few symptoms. The VA has found 
that approximately 20 percent of its inpatient population is infected 
with the virus, and other studies have shown that possibly 10 percent 
of Vietnam veterans are Hepatitis C positive. This legislation will 
provide the service-connection nexus necessary for these veterans to 
seek VA treatment.
    PVA does not take a position on S. 1063, the ``United States Court 
of Appeals for Veterans Claims Administrative Improvement Act of 
2001.'' PVA believes that the CAVC should be provided the same level of 
administrative control over its funds that other similarly-situated 
Article I courts enjoy. We also believe that all courts must, above all 
else and at all times, be removed from any appearance of impropriety. 
PVA simply does not know if other similar Article I courts enjoy the 
administrative control over practice fees that the Court is seeking in 
S. 1063, and we ask that this Committee look to the practices of these 
other courts when contemplating passage of this measure.
    PVA supports S. 1089, a bill to expand temporarily the United 
States Court of Appeals for Veterans Claims in order to further 
facilitate staggered terms for judges on that court. Providing for a 
temporary expansion to facilitate staggered terms will ensure that 
there are judges on the CAVC to hear the cases of veterans, and will 
provide ample time for the nomination and confirmation process. PVA 
also strongly supports the removal of the Notice of Disagreement (NOD) 
as a jurisdictional requirement.
    Regarding sections 4 and 5 of S. 1093 relating to amendments to the 
``Veterans Claims Assistance Act of 2000'': We are amenable to changes 
that clarify congressional intent, but we are concerned lest any change 
may be utilized by the VA or the Court of Appeals for Veterans Claims 
to put us back on the path of the well-grounded claim procedural 
roadblock, or to dispense with providing assistance in the guise of 
efficiency. We have no objection to providing for a one-year time 
limitation in which to complete an application, as long as the VA, or 
the Court, does not begin to construe a completed application as a 
proven claim.
    PVA does oppose the removal of the one-year time limitation 
contained in 38 U.S.C. Sec. 5103(b) if it is the VA's intention to 
utilize this removal to deny benefits before the one-year period has 
elapsed. Doing so would be a substantial departure from the 
congressional intent underlying the ``Veterans Claims Assistance Act of 
2000.'' PVA believes that the VA, under that statute, may indeed award 
benefits prior to the end of this limitation. We are cognizant of the 
concern of the VA regarding its backlog of claims, for it is a concern 
that we share and that we have expressed for many, many years. For the 
VA to deny a claim before the time has elapsed to retrieve the 
information necessary to process that claim, which is the manner in 
which we are interpreting this proposed amendment to Sec. 5103, would 
fly in the face of the liberalizing statute enacted last November.
    We are willing to work with this Committee and the VA to attack the 
backlog problem and to better identify, statistically, the extent and 
scope of the problem, but we are not willing to entertain any steps 
that may be construed by the VA or by the CAVC as nullifying or 
limiting the VA's statutory duty to assist claimants in obtaining 
evidence necessary to substantiate their claims for benefits. We have 
fought for too long to reinstate this basic concept.
    PVA does not oppose section 5 of S. 1093, but only if the VA does 
not use this technical change to violate the spirit of section 7 of the 
``Veterans Claims Assistance Act of 2000.'' Finally, PVA wishes to note 
our concern that the VA is already seeking statutory changes to the 
duty to assist legislation enacted at the end of last Congress, before 
regulations have become final and before the many fears of the VA are 
shown to be actual, or chimerical.
    PVA supports S. 1090, a bill to increase the rates of compensation 
for veterans with service-connected disabilities and the rates of 
dependency and indemnity compensation for certain disabled veterans. 
PVA does oppose again this year, as we have in the past, the provision 
rounding down to the nearest whole dollar compensation increases.
    PVA has no objection to sections 2 and 3 of the S. 1093. These 
sections would exclude life insurance proceeds and other non-recurring 
income from determinations of annual income for pension purposes, as 
well as change the reporting requirement for changes in recurring 
income from the end of the month to the end of the calendar year. These 
changes will better reflect the amount of recurring income and 
eliminate the anomaly faced by some pension recipients. PVA also 
understands that section 3 of the Committee Print will remove the 45 
day application requirement for the receipt of death pensions.
    Although PVA does not oppose sections 6 and 7 of S. 1093, we do 
feel we lack the special expertise to fully consider any possible due 
process considerations that these provisions may encompass. We trust 
that this Committee will fully consider these as it moves forward to 
insure that the targets of these provisions are the only ones that are 
affected by these provisions.
    PVA supports section 9 of S. 1093. This section would remove the 
current cap on the number of veteran participants in programs of 
independent living services. Although this program initially was a 
pilot program, it is now an important program that assists veterans who 
are too disabled to retrain for employment to achieve and maintain a 
stated independent living outcome. All who qualify should be able to 
take advantage of this program.
    PVA, in testimony before the House Subcommittee on Benefits, stated 
that the increases for burial allowances contained in H.R. 801 were ``a 
very good starting point'' but that we desired to see the increases 
reflect the ``tremendous rise in burial expenses since the last 
adjustment.'' In a letter to Senator Barbara Mikulski who, along with 
Senator Kay Bailey Hutchison, introduced S. 912, the Veterans Burial 
Improvement Act of 2001, PVA, along with the other co-authors of the 
Independent Budget, stated that ``this proposed legislation would help 
ensure that our Nations' military veterans will be buried with the 
dignity they deserve.''
    PVA notes that the allowance for service-connected deaths was last 
adjusted in 1988 and the allowance for other deaths was last adjusted 
in 1978. This legislation would return burial benefits to the same 
percentage level as was intended by the original legislation enacted in 
1973, and would ensure that the gap between actual costs, and actual 
benefits would remain the same in the future by adjusting these 
benefits annually to cover the increased costs due to inflation. This 
increase is long overdue, and PVA supports S. 912.
    PVA would also like to note, in passing, two provisions of 
importance to PVA contained within the House-passed version of H.R. 
801. These provisions would increase the amount of assistance provided 
to disabled veterans for automotive and adaptive equipment and the 
Specially Adapted Housing Grant. We ask that this Committee move 
forward as soon as possible with these provisions.
    In addition, we support the measure introduced by Senator Dodd and 
currently co-sponsored by 17 Senators, S. 662. This measure would 
authorize the VA to reimburse the costs of providing headstones or 
markers where a family has already done so privately. S. 662 would 
repeal a measure enacted in 1990 that eliminated this reimbursement 
provision. We agree with Senator Dodd that we must ``make sure that all 
our veterans receive the recognition they have earned,'' and we agree 
that the current law, which prohibits the VA from providing as many as 
20,000 headstones or markers to the families of veterans must be 
amended.
    In closing, passage of many of these proposals will indeed enable 
veterans to, in the words of Parliament stated over five centuries ago, 
``reap the fruit of their good deservings'' and encourage others to 
``perform the like endeavors.'' These measures send a clear message 
concerning the importance of military service to this Nation, to those 
who are veterans and to those who will be veterans in the future.
    This concludes PVA's testimony concerning benefits-related 
legislation before this Committee. I will be happy to respond to any 
questions.

    Senator Specter. In my round of questioning, I would like 
to explore with you gentlemen what additional legislation you 
think might be appropriate, looking beyond these bills. We 
appreciate your generalized endorsements, and Mr. Surratt, we 
note the suggestions you made, which we shall take under 
consideration.
    With respect to the presumptions which have been discussed, 
are there any other ailments or maladies or conditions which 
any of you think ought to be included within the statutory 
presumptions we might enact?
    Mr. Surratt. I can't think of any that we have presented in 
the budget, can you, Mr. Tucker, that we have some suggestion 
or scientific suggestion on so far. Certainly, the VA has taken 
care of the diabetes, supposedly, due to Agent Orange, and the 
hepatitis C is one that we need to act on, that you have in a 
bill already.
    Quite frankly, the Secretary could act on that, we think, 
more efficiently than you could in the legislation if they 
would move that forward and include all the proper criteria. 
That way, we would avoid any pay-go implications, and quite 
frankly, if you have circumstantial evidence that a certain 
category of diseases is related to service, that provides a 
basis for direct service connection, as we do for post-
traumatic stress disorder and things based on radiation.
    Senator Specter. Have you had a chance, Mr. Surratt, or 
others, to examine the statistical standard which is used to 
establish presumptions without direct proof? Do you think that 
standard is adequate?
    Mr. Surratt. Well, the fundamental standard is at least as 
likely as not, and that relates back to the benefit of the 
doubt rule and the statistical standard was limited suggestive 
evidence. I suppose--I haven't examined that in detail, but I 
suppose that roughly equates to the benefit of the doubt rule.
    Senator Specter. Let me acknowledge the presence today here 
of Mr. Curtis Jackson, President of the American Federation of 
Employees in Pittsburgh. Would you stand, Mr. Jackson. Thank 
you for joining us. We appreciate your being here.
    Is there any other suggestion that any of you panelists 
might have for any further legislation at the present time?
    Mr. Daniels. Mr. Chairman, we would like to submit as a 
followup to this question information on ALS. We believe that 
there is a compelling argument that can be made that ALS should 
also be considered for presumptive. But again, I am not the 
expert. The expert on this issue is not with us today, but we 
can get you some information before the close of business 
today.
    [The information referred to follows:]

    A recent study of veterans' health records showed a higher-
than-normal incidence of ALS among Persian Gulf War veterans. 
Researchers do not yet know why.
    Isolating definite cause-and-effect relationships between 
environmental factors of military service and higher-than-usual 
prevalence of certain diseases among veterans has often proven 
problematic. Congress has historically solved such problems 
equitably by authorizing presumptions of service connection in 
circumstances where a statistical association is shown and it 
is at least as likely as not that the disease is due to 
military service. Such a provision for disposition of claims 
for service connection is consistent with the ``benefit of the 
doubt'' rule. This rule is based on the fundamental principle 
of VA law that a veteran should always be given the benefit of 
the doubt or that reasonable doubt should be resolved in the 
veteran's favor when conflicting evidence or confounding 
factors cause a matter to be neither proved nor disproved.
    As long as the question os a causal connection between 
service in the Persian Gulf and ALS goes unresolved, the 
circumstances of a higher-than-usual incidence of ALS in 
Persian Gulf War veterans warrant a presumption of service 
connection.

    Senator Specter. I appreciate that suggestion, Mr. Daniels. 
While I know you don't have any statistical backup, let us get 
a little fuller picture of your sense as to why you think ALS 
might be included. ALS, of course, is commonly known as Lou 
Gehrig's disease, amyotrophic lateral sclerosis.
    Mr. Daniels. If I may, may I refer to a statement from the 
independent budget. The independent budget, as most of you 
know, is prepared by the group of organizations, PVA, DVA, 
Veterans of Foreign Wars.
    ALS, more commonly known as Lou Gehrig's disease, is a 
fatal neurological condition. ALS is an acquired disease in all 
but about 5 percent of cases. There is an autoimmune dominant 
trait for the acquired form of the disease. Several causes or 
precipitative factors are known. Acquired ALS rarely affects 
people younger than 50.
    I have not read this in advance, and I cannot go to the 
pertinent parts, but I would much rather submit a statement at 
a later date, if I could.
    Senator Specter. Mr. Daniels, would you suggest that for 
Vietnam veterans, Gulf War veterans?
    Mr. Daniels. Gulf War veterans.
    Senator Specter. Just Gulf War veterans?
    Mr. Daniels. Yes, sir.
    [The information referred to follows:]

   Resolution No. 647.--Amyotrophic Lateral Sclerosis (Lou Gehrig's 
                 Disease) High Among Gulf War Veterans

 [Adopted by the 102nd National Convention of the Veterans of Foreign 
 Wars of the United States held in Milwaukee, Wisconsin, August 18-24, 
                                 2001]

    WHEREAS, Amyotrophic Lateral Sclerosis (ALS), commonly 
known as ``Lou Gehrig's Disease,'' is a fatal neurological 
condition that destroys motor neurons, the specialized brain 
and spinal cord nerve cells that control muscles; and
    WHEREAS, while progression of the disease may vary, 
approximately 50 percent of people with the disease die within 
three years of the first symptoms; and
    WHEREAS, an estimated 30,000 Americans (less than one 
percent of the population) suffer from this disease which 
typically appears in people between the ages of 50 and 70; and
    WHEREAS, the average age of a Persian Gulf War veteran is 
32 years; and
    WHEREAS, estimates suggest that normal incidence risk is 
less than one in one million per year for a person in their 30s 
to contract ALS; and
    WHEREAS, a recent study of veterans' health records showed 
a higher than normal incidence of ALS among Persian Gulf War 
veterans, with no present research as to why; and
    WHEREAS, that ``normal incidence'' is estimated at 27 
veterans in one million but there are approximately 80 veterans 
with ALS symptoms enrolled in the VA's ``Epidemiological 
Investigation into the Occurrence of Amyotrophic Lateral 
Sclerosis Among Gulf War Veterans'' currently being conducted 
at the Durham VA Medical Center; and
    WHEREAS, Congress has historically solved such uncertainty 
by authorizing a presumption of service connection in 
circumstances where a statistical association indicates it is 
at least as likely as not that the disease is due to military 
service; and
    WHEREAS, as long as a question of a casual connection 
between service in the Persia Gulf and ALS goes unresolved, the 
circumstances of a higher than usual incidence of ALS in 
Persian Gulf War veterans warrant a presumption of service 
connection; now, therefore
    BE IT RESOLVED, by the Veterans of Foreign Wars of the 
United States, that we call for intensified medical and 
scientific research to determine the cause of Amyotrophic 
Lateral Sclerosis among Gulf War veterans and, in the interim, 
we urge Congress to grant a temporary presumption of service 
connection for Amyotrophic Lateral Sclerosis for Persian Gulf 
War veterans until such time as the research is complete.

    Senator Specter. How about more presumptive diseases for 
atomic veterans? Does anybody have a comment about that?
    Mr. Surratt. Yes. All the diseases for atomic veterans that 
are on the VA regulation for direct service connection should 
be made presumptive. Again, Senator, we have covered this in 
the independent budget, and you will have to excuse me for not 
mentioning that when you gave me ample opportunity to. But we 
have recommended in the independent budget this year that those 
diseases on VA's list of radiogenic diseases be also included 
as presumptive diseases.
    Senator Specter. Does anybody else have anything they would 
like to add? My red light is on now.
    Mr. Surratt. Yes. Certainly, we would like to see you 
seriously consider the recommendations we made in the 
independent budget for changing judicial review. One issue in 
particular, if I may elaborate on that, under the court's 
standard for reviewing questions of fact, they defer to the BVA 
if there is a plausible basis for the factual finding. However, 
the law mandates that the VA go in favor of the veteran if 
there is the benefit of the doubt.
    So if it only takes that much to uphold a factual finding 
when they are supposed to rule in favor of the veteran unless a 
preponderance of the evidence is against the veteran, then that 
makes that standard unenforceable and, thus, in some instances, 
meaningless.
    Senator Specter. We will take a look at that. We also have 
some questions in writing and we would ask that you be 
available for any questions which may be submitted by any other 
committee member.
    Thank you all very much for coming. That concludes our 
hearing.
    [Whereupon, at 11:48 a.m., the committee was adjourned.]


                            A P P E N D I X

                              ----------                              

  Prepared Statement of Hon. Joseph R. Biden, Jr., U.S. Senator From 
                                Delaware
    Mr. Chairman, I commend you for moving forward with consideration 
of the Veterans' Higher Education Opportunities Act of 2001 (S. 131), 
of which I am a cosponsor, and I want to take just a few moments to 
explain why I feel this legislation is so important.
    No one from either side of the aisle questions the importance of 
education as the steppingstone to success in the 21st century. We all 
know that the economy of the future is going to require people with 
specialized training and skills, while the unskilled labor that 
typified the 18th and 19th centuries is becoming less and less 
prevalent. In this regard, it is hardly surprising that Congress is 
flooded with proposals to enhance access to high-quality elementary 
education, secondary education, and higher education. I myself have 
championed initiatives relating to expansion of Pell Grants, broadening 
of student loans, and tax incentives to help families pay for a college 
education. The recent passage of a comprehensive education bill is a 
key milestone toward the goal of enhancing educational opportunity for 
all.
    As we rightly promote the importance of government help for 
education, both for elementary and secondary schooling as well as 
higher education, it might be useful to recall that one of the first, 
and most successful, of the higher education initiatives was the GI 
bill that was enacted back in 1944. Following World War II, millions of 
veterans were able to obtain college educations through the GI bill, 
with the result that many were able to attain a standard of living they 
could not have imagined. Furthermore, all this college-trained talent 
contributed to the burst of economic advances that improved life for 
all of us over the ensuing decades.
    Fast forward 57 years. We still have a GI bill, and in our highly 
successful all-volunteer military, it turns out that the single most 
important factor that attracts many young people to join the military 
is the availability of educational benefits after discharge. Yet the 
current GI bill suffers from one big flaw: the educational stipend is 
no longer sufficient to pay for the cost of a college education.
    The current monthly payment in the GI bill has not come close to 
matching the rate of inflation in educational costs over the past 50 
years. Just consider these statistics. At present, the standard GI bill 
benefit is $650 per month for 36 months. That's it. Moreover, we now 
ask servicemembers who want educational benefits after discharge to 
contribute $1200 while they are in the military. By contrast, when it 
began in 1944, the GI bill benefit included full tuition and fees at 
any educational institution to which the veteran could gain admittance, 
PLUS a monthly stipend equivalent to $500 in 2001 dollars ($750 for 
married veterans).
    We thus find ourselves in an anomalous situation: at the same time 
that the government is ramping up its support and subsidy for non-
veterans seeking college educations, the program that started this 
whole thing, and which provides key benefits for those who put their 
lives at risk for the country, is lagging way behind.
    The Veterans' Higher Education Opportunities Act of 2001 goes a 
long way toward redressing this situation. The key provision of this 
bill is quite simple: the total VA educational stipend under the 
Montgomery GI Bill will be increased to a level equal to the average 
cost of tuition at 4-year public colleges. In other words, the standard 
36 months of GI bill benefits will be sufficient to allow a veteran to 
attend college and complete a degree.
    The 21st Century Montgomery GI Bill Enhancement Act (H.R. 1291), 
which has been recently passed by the House of Representatives, is an 
important step in the right direction. However, I believe that the 
Senate bill (S. 131) you are considering is an improvement over the 
House bill. The Senate bill makes the enhanced educational benefits for 
veterans available right away, rather than being phased in over several 
years, and indexes these benefits for inflation. I hope that you and 
the Committee will see fit to endorse the provisions in S. 131 and move 
this bill to the Senate floor.
    Mr. Chairman, the Veterans Higher Education Opportunities Act of 
2001 provides the minimal benefit that we should be offering to those 
who are willing to make the ultimate sacrifice to keep our country free 
and prosperous, and I look forward to working with you to ensure 
enactment of this important legislation.
                                 ______
                                 
  Prepared Statement of Hon. Elton Gallegly, a U.S. Representative in 
                 Congress From the State of California

    Mr. Chairman, I introduced the House companion bill to S. 409, the 
Persian Gulf War Illness Compensation Act of 2001, with my colleagues 
Congressmen Don Manzullo (R-IL) and Ronnie Shows (D-MS). This bill 
would make it easier for veterans who suffer from Gulf War-related 
illnesses to receive compensation. This bipartisan measure has the 
support of a majority of the House of Representatives and a number of 
major veterans organizations.
    As one of the original cosponsors of the 1991 resolution to 
authorize then-President Bush to use force in the Persian Gulf, I 
believe it is important to take care of the men and women who went to 
war against Iraqi dictator Saddam Hussein and are now suffering from 
unexplained and devastating ailments. Many of those suffering from Gulf 
War Illness were Reservists and National Guardsmen uprooted from their 
families and jobs. They answered the call, and we have a duty to help 
them.
    According to the California Veterans Administration, more than 
54,000 men and women from my district served in the Persian Gulf War. 
Many of these veterans came home and developed symptoms for which they 
still are being denied compensation.
    It is clear that Americans who fought in the Persian Gulf War have 
been exposed to chemical weapons or other harmful chemical or 
biological agents. The Department of Veteran Affairs, which has the 
option to compensate and treat veterans for undiagnosed illnesses, has 
denied 78.5 percent of Gulf War Illness claims presented to it. This is 
unacceptable.
    The VA has too narrowly implemented legislation we passed in the 
103rd Congress (Public Law 103-446) to grant sick Gulf War Veterans 
relief by limiting compensation to only those veterans whose ``illness 
. . . [which] by history, physical examination, and laboratory tests 
cannot be attributed to any known clinical diagnosis.'' So if any of 
the symptoms of your illness are diagnosable, or if you are 
misdiagnosed with having another recognizable illness, you do not get 
compensation. S. 409 will close this loophole that has denied these 
veterans their just compensation.
    Under Persian Gulf War Illness Compensation Act of 2001, the 
Department must recognize that veterans are suffering from the illness 
if they meet certain criteria. To qualify for benefits, a veteran must 
have served in the Gulf conflict between Aug. 2, 1990, and Dec. 31, 
1991. In addition, the veteran must have suffered from one or more 
chronic conditions, including fatigue, unexplained rashes, severe 
headaches, joint pain, muscle pain, sleep disturbances and circulatory 
disorder. The symptoms must manifest themselves by Dec. 31, 2011.
    With the recent passing of the tenth anniversary of the Gulf War, 
it is time to finally take care of these brave men and women who served 
their country honorably. I urge you to favorably report S. 409 and 
bring it to the Senate floor.
                                 ______
                                 
 Prepared Statement of Hon. Donald Manzullo, a U.S. Representative in 
                  Congress From the State of Illinois

    Ten years ago, a patriot from Freeport, Illinois, named Dan Steele 
went off to war in Iraq to fight for the American people and protect 
the freedoms this country has known for more than 200 years. During the 
buildup in the Gulf, Dan's leg was fractured by an Iraqi soldier's 
apparent suicide attack. Over the next eight years, Dan suffered from 
various conditions shared by many other soldiers who fought in the Gulf 
War.
    In May 1999, Dan succumbed to his illnesses and passed away. The 
county coroner listed ``Gulf War Syndrome''; as a secondary cause of 
death on his death certificate. Shortly after Dan's funeral, I 
contacted his widow, Donna. She vowed to Dan that she would do whatever 
she could so that this would not happen to other veterans. Her story 
moved me to introduce legislation in 1999 to compensate our suffering 
Gulf War veterans.
    Since the Gulf War ended ten years ago, the federal government has 
conducted hundreds of studies on Gulf War Illness. Despite this 
research, the VA continues to deny 75% of veterans' claims for 
compensation for undiagnosed illness. Enough is enough!
    This year, I joined forces with Senators Hutchison and Durbin and 
Representatives Gallegly and Shows to reintroduce legislation that 
better defines Gulf War Illness and requires the VA to compensate our 
ailing veterans accordingly (H.R. 612/S. 409).
    Momentum is building behind this legislation. It has the support of 
all the major veterans organizations and over 220 bipartisan 
cosponsors. Because identical bills have been introduced in both the 
House and Senate, this legislation should more quickly reach the desk 
of President Bush. And once it gets there, I have a very good feeling 
that he will sign it based on his past vows to take better care of our 
sick soldiers.
    Two years ago, I met Dan Steele's son, D.J., shortly after his dad 
passed away. I promised myself that I would not stop fighting for this 
cause until I present this bright twelve-year-old with a copy of the 
signed bill that was inspired by his brave father.
                                 ______
                                 
Prepared Statement of Richard J. Griffin, Inspector General, Department 
                          of Veterans Affairs

    Mr. Chairman and members of the Committee, I welcome the 
opportunity to submit testimony on two issues presented in Bill S. 1093 
to limit provision for benefits for fugitives and incarcerated 
veterans. These two legislative initiatives were proposed by my office 
to significantly strengthen the integrity of the programs and systems 
administered by the Department of Veterans Affairs (VA) and enhance the 
American public's trust and confidence in our government.

PROHIBITION ON PROVIDING CERTAIN BENEFITS WITH RESPECT TO VETERANS WHO 
                          ARE FUGITIVE FELONS

    The first initiative relates to the suspension of Veteran's 
benefits to fugitive felons. Denying government benefits to fugitive 
felons is not a new idea. In fact, as a result of Public Law 104-193 
(Personal Responsibility and Work Opportunity Reconciliation Act) 
enacted by Congress in 1996, fugitive felons are currently barred from 
receiving Supplemental Security Insurance (SSI) payments from the 
Social Security Administration (SSA) and food stamps from the 
Department of Agriculture (DOA). Continuing Congressional and media 
interest in this issue was highlighted again on April 25 of this year 
when the Senate Committee on Finance conducted a hearing to identify 
the difficulties associated with improper payments made by Federal 
agencies, including those made to fugitive felons, and to seek possible 
solutions to curb what appears to be a slow and fragmented government 
approach to the problem. Our Office of Inspector General (OIG) proposal 
includes statutory language similar to the 1996 law and will prohibit 
fugitives, and parole and probation violators from receiving benefits 
from VA. The law will also authorize VA to share investigative 
information with law enforcement authorities concerning veterans who 
are fugitives.
    There are a number of persuasive arguments for seeking statutory 
changes to Title 38, directing VA to deny benefits to fugitive felons. 
First, being a fugitive from justice is itself a violation of Federal 
law as codified in Title 18 USC 1073 (Flight to avoid prosecution). 
Providing financial or other benefits to fugitives may actually be 
facilitating (aiding and abetting) their continuing criminal activity, 
which could lead to the erosion of the public's trust and confidence in 
the integrity of programs and systems administered by VA.
    The second reason for denying benefits to fugitives relates to the 
mandate of the Inspector General Act of 1978. The Act requires each 
Inspector General to continuously review existing and proposed 
legislation relating to programs and operations and to make 
recommendations concerning the impact on the economy and efficiency of 
the programs and the systems that deliver the services. Under current 
law, fugitives from justice are eligible to receive a variety of 
veterans benefits, representing a significant financial outlay for the 
government. Simultaneously, the government is expending considerable 
financial, technical, and human resources to locate, arrest, and bring 
to justice the very same fugitives. The result of this conflict is a 
duplication and waste of government resources. This proposed 
legislative initiative resolves the conflict by terminating the 
imprudent duplication of expenditures, thereby enhancing the 
Department's image with the veterans community and the American 
taxpayer.
    Third, many fugitives are violent offenders or have a propensity 
for violence. Allowing these individuals to visit medical and other 
facilities to receive VA benefits represents a significant safety risk 
to American citizens, particularly veterans and Department employees. 
This is a major concern for VA administrators, particularly hospital 
directors, who spend significant resources to promote a safe and secure 
work environment, free from rampant drug distribution and other 
criminal activity. Excluding fugitives from participating in VA 
programs would assist in maintaining an environment that will better 
promote the mission and strategic goals of VA.
    Finally, significant cost savings to the government could be 
realized as a result of this initiative. The welfare reform legislation 
enacted in 1996 has led to the implementation of a highly successful 
SSA OIG Fugitive Felon Project. According to the SSA Inspector 
General's latest Semiannual Report to Congress, since the program's 
inception, 29,863 fugitives receiving SSI payments have been 
identified; 3,540 fugitives have been arrested; $53,591,239 in 
overpayments have been identified; and $91,476,159 in government 
savings are estimated. Similarly successful is DOA's Operation Talon. 
This is a joint venture with other Federal, state, and local law 
enforcement agencies, which, according to DOA OIG's most recent 
Semiannual Report to Congress, has apprehended nearly 7,400 fugitives 
since initiation, including many violent offenders.
    To determine the extent to which VA is making payments to veterans 
who are wanted by law enforcement authorities for committing felony 
criminal offenses, VA OIG has recently undertaken a pilot statistical 
research project that matches VA systems of records with fugitive files 
received from law enforcement authorities. To date, we have received 
files from the U.S. Marshals Service and the States of California and 
Tennessee. While the project is still ongoing, preliminary results 
indicate that VA is paying a considerable amount of money to fugitive 
felons that could be redirected into veterans programs. For example, 
matching records based on either social security number alone or full 
name and date of birth, a total of 1800 statistical ``hits,'' or 
possible fugitive felons, were identified, representing $14,859,975 in 
VA compensation/pension benefits paid in Year 2000. Additionally, 3,821 
``hits'' were identified in the medical and educational programs. While 
the value of VA medical benefits paid has not yet been determined, 
disbursement of educational benefits totaled $517,878 in the same year. 
A particularly disturbing discovery is that 52 ``hits'' were identified 
in the fiduciary file, meaning that it is possible that 52 fugitive 
felons are acting as fiduciaries for 83 veterans unable to care for 
themselves, with a total payout of $933,287 in Year 2000. Our research 
also found that 1,015 fugitive felons may have active home loans 
guaranteed by VA. The value of the loans has not yet been determined.
    The statistical results to date represent unconfirmed ``hits,'' or 
potential fugitive felons identified with each VA file reviewed. 
Additional data analysis with the current files, along with those we 
hope to receive from other states that initially indicated an interest 
in participating in our pilot study, will confirm the actual number of 
individual matches. Nevertheless, at the present time, the pilot study 
has identified a total of 6,688 matches and $16,311,140 in payments for 
all benefit files. These matches represent approximately 2 percent of 
all felony warrants reviewed in the study. In comparison, SSA OIG's 
fugitive program has identified exact matches (name, date of birth, 
social security number, and gender) in approximately 1.7 percent of all 
felony warrant files reviewed. Our research findings are significant, 
particularly in view of the limited data included in the pilot study. 
The files received from the U.S. Marshals Service and the States of 
California and Tennessee, which were matched with VA records, contained 
approximately 281,008 felony warrants. Based on our discussions with 
officials from the National Crime Information Center (NCIC) and the SSA 
OIG, we estimate there could be as many as 1.9 million outstanding 
felony warrants existing in the United States. Moreover, every year law 
enforcement authorities in this country issue over 1 million new felony 
warrants.
    In anticipation of receiving Congressional authorization to bar VA 
benefits to fugitive felons and to assist other law enforcement 
agencies in locating and apprehending these fugitives, VA OIG has 
developed close liaison with other federal and state agencies. For 
instance, we have had preliminary discussions with officials from the 
FBI's Information Technology Center (ITC), which has the infrastructure 
to provide individual law enforcement agencies with investigative 
information when a fugitive felon is identified through an automated 
matching program. Further, our meetings with SSA OIG have assisted us 
immensely in identifying some of the major considerations in the 
design, development, and operation of a successful fugitive felon 
initiative, including the importance of securing appropriate additional 
fulltime resources dedicated to ensure reliability of the matching and 
validation process and the professional administration of the program. 
As a result, VA OIG projects that an additional 25 investigative, 
technical, and support personnel and additional computer resources 
would be required to initiate and manage a successful fugitive felon 
program nationwide.
    With the proper resources, VA OIG looks forward to the day its 
staff can join with SSA OIG and DOA OIG in not only effectuating 
savings for the U.S. government, but also to ``treat felons as 
felons,'' regardless of the types of VA benefits they are using to 
finance their flight from justice, and to better assist law enforcement 
agencies in making this country a safer place to live.

     LIMITATION ON PAYMENT OF COMPENSATION FOR VETERANS REMAINING 
       INCARCERATED FOR FELONIES COMMITTED BEFORE OCTOBER 7, 1980

    The second legislative initiative we have proposed relates to the 
reduction of service-connected disability compensation for all veterans 
confined in a Federal, State, or local penal institutions as a result 
of a veteran's conviction of a felony. VA OIG has become aware of 
approximately 230 veterans who were incarcerated prior to the enactment 
of Public Law 96-385, effective October 7, 1980, and are currently 
drawing about $2.5 million per year in compensation benefits. These 230 
veterans do not have an apportionment for support of their dependents. 
Congress decided to reduce the service connected disability benefits 
paid to veterans who are incarcerated for a felony. The benefits paid 
to these veterans, who were incarcerated prior to enactment of the law, 
represent an unjust enrichment and defeats the purpose for which 
service connected disability benefits are awarded: since these veterans 
are not capable of gainful employment by reason of their incarceration, 
and there is no apportionment made for the support of dependents. We 
support the position that it is not the intent of the proposed change 
in law to retroactively terminate the benefits of those persons 
incarcerated prior to the enactment of the original law (pre-1980), but 
rather to terminate their benefits as of the date last paid. This 
change would permit the Department to quickly achieve the projected 
cost savings without creating any undue hardship on the incarcerated 
veteran. We estimate that an annual cost avoidance of $2.2 million 
would be achieved by enactment of this legislative initiative. An 
estimated $42 million in compensation payments would be avoided for the 
projected lifetime of these incarcerated persons. We calculated our 
estimate of lifetime benefits that would be avoided based on the number 
of years until the incarcerated persons reach age 70. This estimate is 
based on Year 2000 dollars.
    In July 1986, VA OIG reported that veterans who were imprisoned in 
State and Federal penitentiaries were improperly receiving disability 
compensation benefits or needs based pension. This occurred because 
controls were not adequate to ensure benefits were terminated or 
reduced upon incarceration, as required by Public Law 96-385. 
Department managers agreed to implement certain measures to identify 
incarcerated veterans and reduce or terminate benefits as appropriate.
    In Fiscal Year 1999, we conducted a follow-up evaluation to 
determine if disability benefit payments to incarcerated veterans were 
appropriately adjusted, and other procedures agreed to in 1986 had been 
taken. We found that Department officials did not implement the agreed 
to control procedures and improper payments to prisoners continued. We 
reviewed a sample of files of veterans incarcerated in state and 
Federal prisons and found that 72 percent of the cases were not 
adjusted as required. We estimate that nationwide, about 13,700 
incarcerated veterans have been, or will be overpaid by about $100 
million. Additionally, overpayments to newly incarcerated veterans 
totaling about $70 million will occur over the next 4 years, if the 
Department does not establish appropriate controls.
    In conclusion, the two legislative initiatives we have proposed, 
Prohibition on Providing Certain Benefits With Respect to Veterans Who 
Are Fugitive Felons and the Limitation on Payment of Compensation for 
Veterans Remaining Incarcerated for Felonies Committed Before October 
7, 1980, are ways the law must be changed to make our government more 
efficient, to provide all citizens a safer environment in which to 
live, and to gain the respect and confidence of the American public.
                                 ______
                                 
Prepared Statement of E. Keith Johnson, Legislative Liaison, Tennessee 
      Educational Association of Veterans Programs Administrators

    Mr. Chairman and Distinguished Members of the Senate Committee on 
Veterans' Affairs: Thank you for the invitation and opportunity to 
provide written testimony on veterans' education benefits as they 
relate to several bills before your committee today. While I would 
welcome sharing my testimony with you in person, I do understand the 
time constraints and urgency of acting upon all veterans' benefit 
legislation before your committee today.
    My name is E. Keith Johnson and I am representing the Tennessee 
Educational Association of Veterans Programs Administrators (TEAVPA). 
TEAVPA was formed about 25 years ago and is the state professional 
association of veterans' education benefit program administrators 
serving at approximately 200 U. S. Department of Veterans Affairs 
approved higher education institutions across Tennessee. I am employed 
as the full-time Veterans Affairs Coordinator at East Tennessee State 
University in Johnson City so I work with student veterans one-on-one 
daily.
    I also represent Tennessee on the Southern Region Education 
Committee for Veterans (SRECV) an advisory committee to the Atlanta 
(Southern) Regional Processing Office (RPO) that administers veterans' 
education benefit programs in the southeastern part of the country. 
Moreover, I am honored to be one of three higher education 
representatives/members of the Veterans' Advisory Committee on 
Education (VACOE), which is congressionally charged with providing 
advice and consultation to the Secretary of Veterans Affairs on matters 
regarding the administration of veterans' education programs. [Title 
38, United States Code Sec. 3692] I also serve on the Board of 
Directors of the National Association of Veteran Program (education 
benefits) Administrators (NAVPA). Finally, I am a veteran who utilized 
the GI Bill to acquire my higher education.
    Last week, the U. S. House of Representatives passed the ``21st 
Century Montgomery GI Bill Enhancement Act'' (House Resolution 1291). 
Earlier in this session of Congress, several related bills were 
introduced in the Senate. The ``Veterans' Higher Education 
Opportunities Act of 2001'' (Senate 131 originally sponsored by Senator 
Tim Johnson) and ``Helping Our Professionals Educationally (HOPE) Act 
of 2001'' (Senate 937 initially introduced by Senator Max Cleland). The 
Senate Veterans' Affairs Committee Chairman recently introduced Senate 
1088 that is cosponsored by the ranking member on the committee. All of 
the bills before the committee proposing to enhance the Montgomery GI 
Bill are long overdue however, I am concerned that efforts to do too 
many things at one time will draw attention and support away from 
taking immediate action to restore the basic ``buying power'' to the GI 
Bill. At the very least I urge the committee to support, in a 
bipartisan manner, the pending House legislation before the Senate and 
not risk realistic remedies to the present GI Bill with other proposed 
enhancements.
    I would like to take this opportunity to share with how the GI Bill 
can impact a state's student veteran population and highlight some 
recently established programs in Tennessee to supplement the education 
benefits of veterans and certain veterans' dependents. Tennessee has 
demonstrated it can finding creative ways to support our veterans and 
certain veterans' dependents pursuing a higher education by providing 
complementary non-financial state benefits. Finally, I want to briefly 
share with you my views on the adequacy and administration of veterans' 
education benefit programs.
    The Tennessee General Assembly enacted legislation that required 
the development of a Statewide Master Plan for Higher Education 2000-
2005 (SMPHE) that will serve as a future development guide for higher 
education in the state. A few areas of the state plan are relevant to 
matters before the committee today. The master plan envisions that 
``higher education will be seen as a valued opportunity to prepare 
students for professions, careers, and lifelong learning in order to 
meet the challenges of living in a rapidly changing world and to 
develop thinking, principled citizens.'' (SMPHE, p. 4) The mission of 
the plan, in part, is and I quote, ``Tennessee higher education will 
prepare its citizens for productive and responsible social and economic 
roles in the 21st century by providing appropriate educational 
opportunities.''
    Of the nine specific goals in the plan, I want to present two. 
Simply put, the first goal is to ``elevate the educational attainment 
levels of Tennesseans.'' Tennessee is below the national average in 
students pursuing postsecondary education. Research indicates that 17% 
of Tennesseans have a baccalaureate degree or higher, compared to the 
national average of 24%. The number of individuals in the state with 
associate degrees is 4.2%, which is two percent below the national 
average of 6.2%. (SMPHE, p. 4) Over the last 20 years, the gap in 
undergraduate enrollments in the state, compared to other southern 
states, has increased from one to three percentage points. Tennessee 
has the poorest per student state funding during the period 1995-2000 
among 16 southern states according to figures of the Southern Regional 
Education Board (SREB). The increasing costs of a higher education 
ultimately are being passed on to students and student veterans are not 
exempt from those increased costs and their veterans' education 
benefits already trail certain average higher education costs. We 
simply have to reverse the trend in Tennessee.
    The low educational attainment level of the state's citizenry poses 
a threat to the state's economy. We are experiencing economic growths 
in Tennessee, but employers are beginning to notice a shortage of 
educated and skilled employees. In the future, companies will be 
reluctant to locate to Tennessee if we cannot meet their needs for an 
educated and trained workforce. The Governor's Council on Excellence in 
Higher Education recently commented in a report, ``for too long, 
Tennessee has relied only on the state's natural resources, the 
richness of its soil, the state's geographic location, the beauty of 
its land, the creativity of its leaders, and the predisposition of its 
people to work hard. Tennesseans need to sustain the best from the 
past, but must do more. Tennessee must begin to educate its people more 
fully. Human capital is the new resource. . . .'' (SMPHE, p. 4)
    The relationship between educational attainment and economic growth 
is clear. Effective competition in an increasingly global market 
requires a highly skilled and productive workforce, for both the 
professional and the highly trained technical personnel. In light of 
the importance we are placing on higher education in Tennessee, it is 
only appropriate that another goal of the master plan be for public 
higher education to play a major role in the economic development of 
Tennessee.
    About 200,000 students enroll in post-secondary educational 
institutions in Tennessee annually. During the federal fiscal year 
2000, there were just over 5,000 student veterans pursuing a higher 
education and utilizing the Montgomery GI Bill--Active Duty (``MGIB-
AD''; Chapter 30, Title 38, United States Code). The economic value of 
veterans' education benefit payments to Tennesseans for the last full 
fiscal year was almost 19 million dollars. [Exhibit A] In the last five 
years, the benefit value totals approximately 92 million dollars from 
MGIB-AD benefits alone. When considering all of the veterans' and 
certain veterans' dependents' education benefit program payments to 
students in Tennessee for the last five years, the figure doubles 
reaching approximately 175 million dollars. [For further information 
refer to Exhibit A] The amount of benefits paid to Tennesseans has 
remained consistent over the last five years although the slight 
decline in the number of trainees is probably offset by recent 
increases in benefit payments. Tennessee has a slightly higher average 
of students in four-year institutions than what is reported nationally. 
[Exhibit C] Since two percent of total benefit payments and trainees 
are in Tennessee, the state is fairly representative of a typical 
state. [For further information refer to Exhibits A & C]
    Enhancing veterans' education benefit program(s) will ultimately 
aid Tennessee to achieve its higher education and economic goals. A 
1986 Congressional Research Service study indicated that the country 
recouped between $5.00 and $12.50 for every dollar invested in the 
original GI Bill enacted after World War II. The economic return 
results from increased taxes paid by veterans who achieved higher 
incomes made possible by a college education. (As cited in reference 
following for USCNS, p.108) The state would likewise share in the 
economic return from the investment of enhancing the GI Bill. 
Therefore, educated veterans can potentially play an important role in 
achieving the state's economic goals.

  GOVERNMENTAL VETERANS' EDUCATION BENEFIT ENHANCEMENT RECOMMENDATIONS

    Several federal government reports have recently highlighted the 
need to enhance veterans' education benefits. In the ``Phase III 
Report'' by the United States Commission on National Security/21st 
Century (USCNS) dated February 15, 2001 and entitled, ``Road Map for 
National Security: Imperative for Change,'' more commonly known as the 
``Hart-Rudman Commission,'' the Commission enumerated their 
recommendations as to ``how government should work.'' (Preface, v) 
Specifically, ``Recommendation 44'' of the report states, ``Congress 
should significantly enhance the Montgomery GI Bill, as well as 
strengthen recently passed and pending legislation supporting benefits 
. . . for qualified veterans.'' (p. 105) The Hart-Rudman Commission 
further stated that ``GI Bill entitlements should equal, at the very 
least, the median education costs of four-year U. S. colleges, and 
should be indexed to keep pace with increases in those costs.'' (p. 
106)
    In perhaps the most significant study ever conducted, the Report of 
the Congressional Commission on Servicemembers and Veterans Transition 
Assistance (CSVTA) dated January 14, 1999 issued some strong 
recommendations on veterans' education benefits. The report has and 
will certainly continue to receive considerable attention, especially 
with respect to the recommendations on education benefits for veterans. 
The report, authored by the current Secretary of Veterans, Affairs 
Anthony J. Principi, ``recommends that Congress enhance the MGIB by . . 
. paying qualifying veterans the full costs of tuition, fees, books, 
and supplies, as well as a subsistence allowance . . . indexed for 
inflation. Benefits also would be payable for non-institutional 
training. . . .'' (CSVTA, pp. 27-28)
    I concur with the general findings in these reports. Enhancements 
to the GI Bill are uniquely beneficial to veterans and the country.

         STATE VETERANS' EDUCATION PROGRAM ORGANIZATION SUPPORT

    The Tennessee Educational Association of Veteran Programs 
Administrators (TEAVPA) adopted a resolution at their last year's 
annual conference that is relevant to the subject being discussed 
today. The TEAVPA resolution called for the state association to join 
the ``Partnership for Veterans' Education: Fulfilling America's 
Promise.'' This unprecedented coalition is composed of over 50 major 
veterans and/or educational organizations supporting an enhanced GI 
Bill that will meet the costs of a typical higher education. The agreed 
upon standard among coalition members is the cost to attend an average 
public, four-year commuter educational institutional as reported 
annually by The College Board in Trends in College Pricing.

                      CONCLUSION & RECOMMENDATION

    The proposed increases in monthly benefit payments over the next 
three years will make significant and important progress toward 
restoring the GI Bill to fulfill the promise of an education to 
eligible Tennessee veterans. However, Congress must ensure that the GI 
Bill continues to keep pace with the costs of higher education so that 
repeated efforts to restore the benefits to adequate levels are not 
necessary. If at the end of the third year the GI Bill is indexed to 
certain annual reported college costs, the GI Bill well into the future 
will be a viable means for veterans acquiring a higher education and 
realizing the fulfillment of the promise made by this country.
    States and the federal government should work in concert with each 
other toward goals of providing for the higher education of veterans 
and certain veterans' dependents. Presently only about half of the 
states offer some form of state-based education benefit specifically 
for veterans and their dependents. Tennessee has demonstrated there are 
veterans education benefits that states can provide that supplement 
federal government benefit programs.

``Veterans' Dependents' Post-Secondary Education Assistance Act of 
        2000''
    Tennessee Public Chapter 767 enacted last year provides certain 
supplementary education benefits for veterans and certain veterans' 
dependents. Essentially the new law provides for an education through a 
baccalaureate degree for the dependents of veterans who make the 
ultimate sacrifice. The major provision of the Act established the 
``Certain Veterans' Dependents Education Benefit Program.'' Under this 
program, every dependent child in the state under the age of twenty-one 
(21) years, whose parent (father or mother) was killed, died as a 
direct result of injuries received, or has been officially reported as 
being a prisoner of war or missing in action while serving honorably as 
a member of the United States armed forces during a qualifying period 
of military conflict, or the spouse of such veteran, is entitled to a 
waiver of tuition, and or maintenance fees, and shall be admitted 
without cost to any of the institutions of higher education owned, 
operated and maintained by the state. [Section 2(a), Public Chapter 
767] Legislation has passed the current session of the General Assembly 
and signed into law that extends eligibility to the dependents of 
former prisoners of war. [Public Chapter 293] Eligible veterans' 
dependents would likely receive benefits under the Survivors' & 
Dependents' Educational Assistance Program (Chapter 35, Title 38, 
United States Code).
    The second provision of the Act established the ``Student Veterans' 
& Dependents' Tuition & Fee Payment Deferment Program.'' Any student 
with eligibility to any of the education benefit programs of the United 
States Department of Veterans Affairs (USDVA) and other certain 
military related education benefits, may be granted a deferment of the 
payment of their tuition and fees at public educational institutions 
until the end of the term. Under certain circumstances the law permits 
deferments into the next term. All too frequently months pass before 
students receive their benefit payments from the USDVA. This relatively 
simple state law has put many students at ease with paying their 
tuition and fees with their benefit payments.

``Tennessee National Guard Tuition Assistance Act''
    I indicated earlier that I wanted to highlight some veterans' 
education program administration concerns affecting Tennesseans. The 
lack of timely processing of education claims in regional processing 
offices is unacceptable. Seemingly the delays only get worse with time 
when, through the use of information technology, administration of the 
processes should improve. For example, the Regional Processing Offices 
currently have more claims currently waiting to be process than last 
year's pending claims load for the same period. Moreover, the Atlanta 
RPO has 30,000 education issues pending. The education claim delays 
extend to the processing of applications for benefits, enrollment 
certifications, and to appeals to decisions. I urge the committee to 
explore remedies to ensure acceptable and timelier service to our 
student veterans. Students need to receive benefit payments with some 
greater sense of regularity and consistency.
    In recent years much attention has been focused on enhancing the 
active-duty GI Bill. However, eventually attention will need to turn to 
improving Montgomery GI Bill--Selected Reserve (``MGIB-SR''; Chapter 
1606, Title 10, United States Code). The overall objective of providing 
adequate veterans' education benefit programs will not be complete 
until due consideration is given to the MGIB-SR program. This program 
is of great interest to states and its benefit value impacts the 
recruiting and retention efforts in the states' National Guard. 
Moreover, it was noted in one of the government reports that the GI 
Bill ``should carry a sliding scale providing automatic full benefits 
for Reserve and National Guard personnel who are called to active duty 
for overseas contingency operations. (USCNS, p. 106) I support this 
specific recommendation since there has been a tremendous increase in 
members and units of the Tennessee National Guard fulfilling worldwide 
military missions.
    Student veterans have expressed their frustration with another 
problem related to the treatment of veterans' education benefits by 
other federal agencies. GI Bill benefit payments should be excluded as 
a financial resource for all federal student financial aid programs and 
purposes to prevent what is given in one benefit from being diminished 
by the other.
    Aside from not keeping pace with the escalating costs of a higher 
education, the GI Bill has seemingly not evolved with the times. 
Enhancements to the veterans' education benefit programs will not be 
modernized until the GI Bill benefit payments are permitted for 
emerging professional technical training leading to certification and 
lucrative employment especially in emerging fields like information 
technology. Under outdated assumptions of the old GI Bill is a bias 
that education can only occur through attending traditional education 
institutions and earning certificates or degrees. Professional 
certification and licensure are relatively new areas to consider 
expanding eligibility. Moreover, the Hart-Rudman Commission endorsed 
technical training alternatives. (USCNS, p. 106)
    Finally, the GI Bill should eventually be updated to allow for 
payment of benefits for lifelong learning initiatives. Currently the 
MGIB-AD expires ten years from the veteran's discharge from active 
military service. Members of the National Guard and Reserve must remain 
in an active participation status with the Selected Reserves to utilize 
their ``earned'' education benefits and that must be done within ten 
years from the initial eligibility date. Increasingly higher education 
is taking place throughout an adult's lifespan. Many veterans need to 
later update their knowledge or skills or retrain into a new job 
altogether. The expiration date of veterans' education benefit programs 
needs to be reconsidered. The ``Hart-Rudman Commission'' agrees. The 
USCNS report recommended ``the Bill [GI Bill] should . . . extend 
eligibility from ten to twenty years. . . .] (p. 106)
    As is clearly set forth in the Principi Commission report, we need 
to restore veterans to the ranks of public and private sector 
leadership. With ever decreasing numbers of veterans in the population, 
we need to give veterans the incentive to rise and fill those important 
leadership ranks in our country, and that is achieved through 
adequately providing for veterans' higher education. Many of my 
previous recommendations have these additional and important social 
benefits.
    I want to share with you a relevant quote related to the subject of 
testimony before this committee today. ``Upon the subject of education 
. . . I can only say that I view it as the most important subject which 
we as a people can be engaged in.'' This same individual called upon 
Congress to ``care for him who shall have borne the battle and for his 
widow, and his orphan.'' Abraham Lincoln made those statements, the 
first in an 1832 letter, and the latter at his second inaugural address 
in 1865. I believe it is clear what President Lincoln would urge this 
committee to do today with respect to the legislation before this body. 
Those remarks are just as true today as they were over 150 years ago.
    I fully support immediate and basic enhancements to the Montgomery 
GI Bill and urge the committee to not lose sight that more work is 
essential to restore veterans' education benefit programs to their 
former value.
                                 ______
                                 
United States Court of Appeals for Veterans Claims,
                                            Washington, DC,
                                                      July 3, 2001.
Hon. John D. Rockefeller IV,
Chairman, Committee on Veterans' Affairs,
U.S. Senate,
Washington, DC.
    Dear Mr. Chairman: Thank you for inviting the Court to provide 
written comments on two pending bills, S. 1063 and S. 1089, that you 
recently introduced. We very much appreciate your support for improving 
the operation of the Court.

                                S. 1063

    Regarding S. 1063, the Court is most appreciative of your having 
introduced, at the Court's request, the legislation, submitted as a 
draft bill by the Court on May 24, 2001. For the reasons set forth in 
our transmittal letter, the Court supports the enactment of that 
legislation. However, based on a request from Committee staff of both 
parties on the House Committee on Veterans' Affairs, we have reassessed 
the additional sentence that section 2(a) of the bill would add to 38 
U.S.C. Sec. 7285(a), regarding other registration fees, in order to 
recast that authority in more generic terms and thereby possibly 
foreclose the need for future legislation on this subject. As a result, 
we have proposed that section 2(a) of the bill be revised to read as 
follows:

SEC. 2. REGISTRATION FEES.

      (a) Section 7285(a) of title 38, United States Code, is amended 
by adding the following sentence at the end: ``The Court may also 
impose registration fees on persons participating at judicial 
conferences convened pursuant to section 7286 of this title and in 
other Court-sponsored activities.''.

    We hope that you will be able to incorporate this proposed 
revision.

                                S. 1089

    Regarding S. 1089, the Court is again most appreciative of your 
interest and support. As to section 1, proposing a temporary expansion 
from seven to nine judges for a transition period from the present to 
August 2005, the Court notes that this provision, according to your 
introductory statement, is intended to solve the problem of 
simultaneous vacancies in the 2004-05 period ``by allowing two 
additional judges to be appointed to full terms, in order to bridge the 
retirement of the original judges.'' Cong. Rec. S6667-68 (daily ed. 
June 22, 2001). This problem was called to the attention of the 
Congress by the Court in 1997, and the Congress responded, as you have 
noted, with the enactment of the Court of Appeals for Veterans Claims 
Amendments of 1999, Pub. L. No. 106-117, title X, 113 Stat. 1587, 1590 
(found at 38 U.S.C. Sec. 7296 note). That law offered a period, which 
has now expired, during which two judges of the Court could retire 
early under special terms and conditions. As you also have noted, no 
judge opted for early retirement under those special terms and 
conditions.
    The Court continues to believe that the simultaneous vacancies that 
will be occasioned by the terms of four active judges ending within an 
eleven month period from September 14, 2004, to August 6, 2005, will 
under present law present very serious problems for the effective 
functioning of the Court. Section 1 of S. 1089 proposes another method 
of ameliorating that simultaneous-vacancy problem and would also 
increase the staggering of the terms of future judges appointed to the 
Court. Assuming that nominations and confirmations occur in a 
relatively timely fashion, the Court believes that the approach in 
section 1 offers a constructive way of dealing with both problems. 
Although the need for staffing of two additional chambers (and 
concomitant space and equipment requirements) would make this 
alternative considerably more costly than an early-retirement approach 
that offered terms and conditions of retirement sufficiently attractive 
to induce two early retirements, the Court supports enactment of 
section 1 if enactment of an enhanced early-retirement option is not 
considered viable at this time. Moreover, the Court is especially 
appreciative of the effort that has been expended to create this 
approach to dealing with a very real and substantial looming problem 
for the Court and its ability to handle its caseload effectively.
    We do have two suggestions for modification of the language of 
section 1. In paragraph (2)(C) (page 3, line 21, to page 4, line 1), in 
the subsection (h) that would be added to section 7253, we believe that 
the following revised text would be technically preferable to carry out 
what we understand the intent to be:
            ``(C) If no judge is appointed as described in clause (A), 
        or if no judge is appointed as described in clause (B), or if 
        no judge is appointed as described in either of those clauses, 
        the number of judges that is authorized by this subsection to 
        be appointed but is not appointed as described in those clauses 
        may be appointed pursuant to a nomination or nominations made 
        during the period beginning on January 1, 2004, and ending on 
        September 30, 2004.''
    We also suggest, as a technical matter, that ``only'' be 
substituted for ``not more than'' in clauses (A) and (B) (page 3, on 
lines 15 and 18), respectively.
    Second, in section 1(a)(2), we suggest that, in lieu of lines 20-23 
on page 3, insert ``judges in excess of seven (other than judges 
serving in recall status under section 7257 of title 38, United States 
Code) who were appointed or reappointed after January 1, 1997.''. We 
believe that this would carry out the intent to count as part of the 
seven none of the Court's original judges (five are still serving) 
unless reappointed under new subsection (h)(4)--that is, to count only 
Judge Greene and any replacement or new-position appointees.
    As to section 2 of S. 1089, relating to 38 U.S.C. Sec. 7296(b)(2), 
which provides for one of the three options for retirement from the 
Court--completion of the term to which appointed (the other two 
retirement alternatives are retirement based on the Rule of 80 under 
section 7296(b)(1) and disability retirement under section 
7296(b)(3))--the Court believes that the proposed repeal of the 
written-notice requirement is appropriate in light of the provision 
included in the new subsection (h)(4) that would be added to 38 U.S.C. 
Sec. 7253 by section 1(a)(1) of the bill, under which a judge appointed 
before 1991 (there are five such sitting judges) would be eligible to 
accept one of the two new appointments authorized by the bill even 
though this would mean that he would not complete the term of his 
initial appointment and commission.
    As to section 3 of S. 1089, proposing to repeal the notice of 
disagreement (NOD) requirements added in sections 402 and 403 of the 
Veterans' Judicial Review Act, Pub. L. No. 100-687, 102 Stat. 4105, 
4122 (1988) (found at 38 U.S.C. Sec. Sec. 7251 note and 5904 note, 
respectively), the Court offers no comment on the policy implications 
of such repeal. That is a matter for the Congress and the President. We 
note, however, that the Court does not anticipate that the repeal of 
these added NOD requirements would substantially affect the Court's 
caseload.
          * * * * *
    Again, we appreciate the opportunity to comment on S. 1063 and S. 
1089 and your interest in introducing them. The Court stands ready to 
offer any appropriate assistance in connection with the pending 
measures and to answer any questions regarding this letter.
            Sincerely,
                                         Kenneth B. Kramer,
                                                       Chief Judge.
                                 ______
                                 
    Prepared Statement of the National Funeral Directors Association

    The National Funeral Director's Association (NFDA) wants to thank 
the Committee for the opportunity to submit testimony for the record on 
these very important issues.
    NFDA is an individual membership professional association that 
represents more than 13 thousand licensed funeral directors throughout 
the United States. A large majority of our members are small-business 
men and women who own and operate funeral homes in communities all 
across America.
    Most of our members live in cities of less than 50,000 population, 
with the average NFDA member funeral home serving about 180 families a 
year and employing four people.
    NFDA has long been a supporter of veterans benefits issues, ranging 
from the use of a military honor guard at veterans' funerals to the 
active support of the World War II Memorial to be constructed on the 
national Mall. Honoring those who have served in the armed services is 
a very important issue to our members, especially since many of them 
are veterans themselves, or have had loved ones lost in service to this 
country.
    The National Funeral Directors Association would like to express 
its strong support for the death, burial and memorial benefits 
legislation currently pending before this Committee. Veterans are one 
of this country's most cherished assets. Their brave and selfless 
actions defending this country are ones that should be honored in 
death, as well as in life, and never forgotten.
    On behalf of the funeral directors around the country and the 
veterans and their families and communities they serve, I want to 
express our strong support for S. 912, ``The Burial Benefits 
Improvement Act of 2001,'' and S. 662, To amend title 38, United States 
Code, to authorize the Secretary of Veterans Affairs to furnish 
headstones or markers for marked graves of, or to otherwise 
commemorate, certain individuals.
    NFDA strongly supports S. 912, ``The Burial Benefits Improvement 
Act of 2001,'' a bill to increase the funeral and burial expenses as 
well as plot allowances for veterans. At a time of unimaginable grief, 
funeral directors deal with the families of service members who must 
plan for the funeral of their loved one. This process is never easy, 
but is made more difficult when a family must plan a funeral in 
accordance with current VA mandated funeral and burial expense levels.
    NFDA endorses any legislation that recognizes the reality of the 
cost of a funeral and burial in 2001 and seeks to help the families of 
veterans manage that expense.
    NFDA fully supports S. 662, a bill to allow deserving veterans the 
ability to have their grave marked with an official Veterans 
Administration headstone or marker, even if they already have a private 
one. This legislation corrects a longstanding problem that continues to 
place an undue hardship on the families of veterans.
    The current law, which prohibits a veteran from receiving an 
official headstone or marker if his/her grave was previously marked 
with a private marker, works an extreme hardship on many families of 
veterans who are unaware this restriction exists when they purchase a 
private headstone, many times years in advance of their passing. This 
prohibition is unfair because many families want to honor their loved 
ones by attaching an official VA marker directly on the grave or to a 
privately purchased headstone.
    The National Funeral Directors Association supports the entitlement 
for all honorably discharged veterans to receive an appropriate grave 
marker provided by the Department of Veterans Affairs, without regard 
to any other private marker or headstone that may be in place at the 
time of application. We agree with Senator Dodd that we must ``make 
sure that all our veterans receive the recognition they have earned,'' 
and we agree that the current law, which prohibits the VA from 
providing as many as 20,000 headstones or markers to the families of 
veterans, must be amended.
    These bills are a modest first step on the path to correcting a 
long-standing inequity where veteran's funeral, burial and memorial 
benefits are concerned. Individuals who have served their country in 
times of war have earned these benefits.
    NFDA supports Senators Mikulski (D-MD), Hutchison (R-TX) and Dodd 
(D-CT) efforts to help our nation's veterans. All veterans should 
benefit from the funeral, burial and memorial benefits put forth in S. 
912 and S. 662. NFDA offers to work with the members of this committee 
to help pass theses measures as well as to develop additional 
legislation that will further reconcile these benefits with today's 
costs.
    Thank you for the opportunity to submit testimony. If the Committee 
or any of its members have any questions or need any further 
information, please contact Allison Salyer in the NFDA Washington, DC 
office.
                                 ______
                                 
          National Veterans Legal Services Program,
                              2001 S Street, NW, Suite 610,
                                     Washington, DC, July 23, 2001.
Hon. John D. Rockefeller IV,
Chairman, Committee on Veterans' Affairs,
U.S. Senate,
Washington, DC.
    Dear Chairman Rockefeller: Thank you for inviting the National 
Veterans Legal Services Program (NVLSP) to submit written testimony 
regarding several VA benefits-related bills pending before the 
Committee on Veterans' Affairs--S. 1063, S. 1089, S. 1091, and S. 1093. 
We separately set forth our views on each bill below.

                                S. 1063

    NVLSP supports this bill without reservation.
    S. 1089
    NVLSP supports the intent of this bill without reservation. We 
especially applaud section 3 of the bill, which repeals 
(``terminates'') the notice of disagreement (NOD) provisions in the 
Veterans' Judicial Review Act of 1988. These provisions have engendered 
an inordinate amount of litigation, and the underlying need for the 
provisions lost its vitality long ago.
    We do, however, advocate two changes in subsection 3(d), regarding 
the applicability of the terminations. The first change involves the 
applicability of subsection 3(b). This subsection repeals the NOD 
provision as it affects the operation of 38 U.S.C. Sec. 5904(c), which 
allows agents and attorneys to charge fees for services rendered in 
representing a VA claimant after the Board of Veterans' Appeals (BVA) 
renders a first final decision in a case. The services for which 38 
U.S.C. Sec. 5904(c) authorizes agents and attorneys to charge a fee 
include representation on (1) a reopened claim filed with a VA regional 
office; (2) a motion for reconsideration filed with the BVA; and (3) a 
claim filed with the BVA for revision of a final BVA decision based on 
clear and unmistakable error.
    The subsection 3(d) provisions governing the applicability of 
subsection 3(b) are triggered by what has occurred or may occur in the 
future in the U.S. Court of Appeals for Veterans Claims (CAVC). When an 
agent or attorney charges a fee for representation before the VA in 
these three types of administrative proceedings, there is no need to 
file an appeal with the CAVC. Thus, as written, subsection 3(b) will 
not have much impact because its repeal will only become applicable 
when an event occurs in a forum to which the claimant will often not be 
using. For subsection 3(b) to have its intended impact, subsection 3(d) 
needs to be changed so that it is triggered by an event that takes 
place at the VA.
    We suggest bifurcating the applicability provisions in subsection 
3(d) so that one set of rules applies to subsection 3(a) and another 
set of rules applies to subsection 3(b). We suggest that subsection 
3(b) should apply to any case in which the BVA renders a first final 
decision on or after the date of enactment of this Act.
    The second suggested change involves the applicability provisions 
in subsection 3(d) as they relate to subsection 3(a). Since the repeal 
to the NOD requirement is long overdue, NVLSP believes that the repeal 
should also be applicable to any appeal filed with or pending before 
the U.S. Court of Appeals for the Federal Circuit or the U.S. Supreme 
Court on or after the date of the enactment of the Act.

                                S. 1091

    NVLSP supports the intent of this bill without reservation. By way 
of background, the attorneys at National Veterans Legal Services 
Program (NVLSP) have been involved in the Agent Orange issue for over 
20 years. We have served as counsel to the plaintiff class counsel in 
the ongoing case Nehmer v. U.S. Veterans Administration, Civ. No. C 86-
6160 (TEH) (N.D. Cal.) ever since that lawsuit was filed in 1986. See, 
e.g., Nehmer, 712 F.Supp. 1404 (N.D. Cal. 1989); 32 F. Supp. 2d 1175 
(N.D. Cal. 1999).
    During the course of the discovery process as a result of the 1999 
decision of the Nehmer District Court, NVLSP attorneys have reviewed 
over 12,000 VA claims files and identified over 1,400 Vietnam veterans 
and survivors of deceased Vietnam veterans who have been granted 
disability or death benefits due to herbicides containing dioxin, but 
as to whom the VA has refused to pay the amount of retroactive 
compensation required by the 1991 consent decree in Nehmer. In 
addition, for the past four and one-half years, NVLSP has been in 
contact with approximately 14,000 additional Nehmer class members to 
inform them about their rights to VA benefits due to Agent Orange 
exposure. To this end, NVLSP has mailed these individuals a copy of its 
Self-Help Guide on Agent Orange. Thus, NVLSP's staff has had extensive 
contact with thousands of Agent Orange claimants and is intimately 
familiar with the VA's processing of Agent Orange claims.
    Our comments on this bill are as follows:
    NVLSP strongly support the bill's removal of the 30-year limitation 
on the manifestation of respiratory cancers. The first reason we 
support this change is scientific. The chair of the Institute of 
Medicine (IOM) panel reporting the most recent findings of the IOM 
stated at the public presentation of the IOM's findings that there was 
no scientific basis for the current 30-year limit and that the limit 
was ``completely arbitrary.''
    The second reason for our support is a practical one. We have seen 
many claims (especially claims for DIC filed by widows) that have been 
rejected by the VA because the cancer was not diagnosed until more than 
thirty years after the veteran left Vietnam. In the large majority of 
these cases, the cancer was in stage four when it was diagnosed and 
therefore the cancer was probably in existence within the thirty-year 
period. Many of the claimants in these cases could have prevailed even 
under the 30-year manifestation rule if they had obtained a medical 
opinion addressing when the cancer first manifested itself. But, 
unfortunately, many of these claimants were of limited means and/or did 
not understand how to pursue the denial of their claims. Many came from 
rural areas where sophisticated health care is limited and there is 
little help available to deal with the subtle adjudication issue at 
hand.
    NVLSP also strongly supports the provisions in S. 1091 that would 
eliminate any need for a Vietnam veteran or survivor to prove exposure 
to herbicide agents in claims for service connection or DIC. Finally, 
NVLSP strongly endorses the extension of the 10-year mandate in 38 
U.S.C. Sec. 1116(e) to 20 years. The recent reports from the IOM have 
provided significant insight into diseases related to herbicides in 
Vietnam. The IOM reports clearly indicate that more information on the 
health effects of dioxin exposure should become available in the next 
decade. Gaining additional knowledge is also important because the VA 
has begun to recognize that exposure to herbicides occurred in places 
outside of Vietnam and that certain presumptions are appropriate in 
those cases. See 66 Fed. Reg. 23 (May 8, 2001).
    While NVLSP strongly endorses S. 1091, we strongly recommend two 
amendments to the bill.
    1. DIC claimants. S. 1091 does not explicitly state that its 
provisions apply to claims of survivors of deceased Vietnam veterans 
for dependency and indemnity compensation (DIC). Indeed, by referring 
to ``each claim for disability compensation'' in section 1(b)(1) and to 
``establishing service connection for a disability resulting from 
exposure to a herbicide agent'' in section 1(c)(1)(B)(i), the bill 
could wrongly be read so that DIC claims are excluded. There is no 
reason to exclude survivors from the bill's provisions, and we urge the 
Committee to amend the bill to clarify the intent to make its 
provisions equally applicable to both disability and DIC claims.
    2. The Effective Date for Awards. Section 1(b)(2)(A) of S. 1091 
states that ``the effective date of the award shall be the date on 
which the claim would otherwise have been granted . . .'' The date a 
claim is granted or should have been granted is not generally a factor 
in the assignment of an effective date for an award of benefits 
according to the provisions in the statute governing effective dates of 
awards--38 U.S.C. Sec. 5110. In almost all cases, the effective date 
that 38 U.S.C. Sec. 5110 would require is before the date a claim is 
granted. Thus, NVLSP strongly urges that this subsection be amended to 
provide that ``the effective date of the award shall be the date that 
would have been assigned pursuant to section 5110 of title 38, United 
States Code, or other existing legal requirements if the claim had been 
granted on the date that it was denied as referred to in paragraph 
(1).''

                                S. 1093

    NVLSP's only comments on S. 1093 are as follows. We do not know the 
extent to which the VA has, since November 9, 2000, notified claimants 
pursuant to the VCAA of the need to submit additional information in 
order to complete an application, but to the extent that it has, the 
retroactive effective date of the change in Section 4 could create 
serious due process problems. If a claimant were not informed in the 
past of a deadline for submission of information to complete an 
application, a retroactive effective date would be unduly harsh. We 
believe that amending the effective date to the date of enactment will 
eliminate any such due process problems.
            Respectfully submitted,
                                        Barton F. Stichman,
                                       David F. Addlestone,
                                         Joint Executive Directors.
                                 ______
                                 
 Prepared Statement of Denise Nichols, Vice Chairman, National Vietnam 
                    and Gulf War Veterans Coalition

    The National Vietnam and Gulf War Veterans Coalition, a coalition 
of 106 member groups including such groups as Viet Now, Rolling 
Thunder, Vietnam Veterans of the War, Inc, and Gulf War Veterans Groups 
nationally and internationally, have endorsed S409/HR612 The Gulf War 
Veterans Compensation Act of 2001.
    In the 105th Congress, there were many hearings on the Gulf War 
Illnesses to include House efforts (Congressman Shay's Government 
Reform Committee Investigation) and multiple Senate Veterans Affairs 
Committee Hearings. In the hearings on the senate side at that time 
there was mention of a need for a blanket disability for the Gulf War 
Veterans. At the end of the session, legislative action and law was 
passed to send the Gulf War Veterans to the Institute for Medicine to 
review the Health consequences of over 20 known exposures. The 
Institute of Medicine completed their first study in November of last 
year on the Sarin, Depleted Uranium, PB tablets, and vaccines. 
Unfortunately, when the Veterans Affairs Administration awarded the 
contract to the IOM they limited them to the use of only peer reviewed 
journal articles. This was probably related to national security 
concerns but it prevented the IOM from requesting and reviewing DOD 
unpublished research and reports on these exposures, which definitely 
hurt the gulf war veterans obtain service connection to diseases, known 
and unknown, related to these exposures. There were similarities seen 
with the Sarin Gas Victims of the Japan Subway incident.
    Anthrax reactions are still being examined by the IOM after the 
House of Representative (Rep Shays subcommittee on Government Reform 
and the Full Government Reform Committee) and the door must be kept 
open for the Gulf War Veterans and for those that have had health 
consequences from the Anthrax Vaccine. Research is on going on the 
interactions of PB tablets and nerve agents and other exposures. Many 
Federally Funded Research projects are still not reported as completed 
and published.
    We are still receiving inquiries weekly, if not more frequently 
from Gulf War Veterans both deployed and nondeployed and those that 
have received Anthrax vaccines who are just now realizing their 
symptoms and who have not yet reported into the VA or the DOD medical 
facilities for assistance. The veterans have as normal people, with 
chronic type disease processes, normal coping going on where if they 
can they keep continuing to try to do their normal activities and deny 
their symptoms as long as they can before their bodies can not 
continue.
    The research and review ongoing at the IOM has not even gotten to 
the stage of considering the synergistic effects of multiple exposures.
    It is imperative that we continue the present coverage for the 
veterans and extend the time presumption period of time another ten 
years until 2011. We need to also remember to extend the Priority Care 
to these veterans as is currently in place.
    The symptoms list and the time period of the symptoms to be 
considered chronic will not be changed in this legislation, the bill 
simply seeks to codify two separate sections of The 38 CFR USC code 
(sections 117 and 118) for clarity to the VA adjudicators, in order 
that the importance of proper review of claims is fully implemented. 
Too many claims have been denied and the veterans are the ones that 
suffer unnecessarily. Since 1993, the Sense of the Congress has been to 
care for the Gulf War Veterans and to enact the benefit of the Doubt to 
the Veterans! It is to this government's advantage to rectify the 
errors of the past and to seek adequate and effective compensation for 
the Gulf War Veterans. The president in his campaign even stated that 
he did not want the Gulf War Veterans standing in line with hat in 
hand.
    If we do not take these positive steps, the trust and faith in our 
government by both the active duty and the veterans will suffer. We 
have seen effects on recruitment and retention due to the fact that our 
veterans are not as well care for as they should be when they have put 
their life in harms way and have been damaged. This situation creates a 
vicious cycle where then the government has to then funnel more money 
into ads, educational benefits, and other recruitment and retention 
efforts in order to overcome a negative effect from failure to fully 
compensate and care for the veterans of a war/conflict.
    The other portion of the bill is the effort to direct that every 
benefit of the doubt goes to the veteran. The symptoms are a 
constellation of symptoms and normally do not consist of just one or 
two symptoms, the majority of the veterans have had all of the symptoms 
listed and the epidemiological surveys have clearly shown that problem.
    The last item of the bill 1-b- highlights the overlapping of the 
symptoms the gulf war veterans have with some of the diagnosed 
illnesses re Chronic Fatigue, Multiple Chemical Sensitivities, and 
other autoimmunological diseases. The Art and Science of Medicine does 
not guarantee 100 percent accurate or correct diagnosing and therefore 
if the symptoms are common and overlapping the veterans claims should 
not be thrown out for Undiagnosed Illnesses if they have received a 
diagnosis for a known illness that may or may not be an accurate 
diagnosis. Again, this seeks to give clear legal guidance to the VA 
adjudicators to give the benefit of the doubt to the veteran.
    The Gulf War Veterans are ill and it is real. We should not have 
the veterans who are ill and need assistance fight their own government 
for the earned benefit that they EARNED by putting their bodies and 
life on the line for the United States Government (and its citizens), 
its national policies and security. We Recommend that this bill be Fast 
Tracked and passed into law now.
    We must get passed the issue of compensation and into the other 
needs of the Gulf War Veterans such as complete and accurate diagnostic 
testing and medical treatment options. We have attached a list of these 
Identified needs and hope that other Senators and Representatives will 
take proactive action in these issues.
    We would like to recommend that legislative steps be taken for the 
troops and veterans that did not serve in theater and who are ill, 
whether it is from anthrax vaccine, other vaccines, pb tablets, or NBC 
exposures from secondary routes. These veterans have also been waiting 
for assistance and enacting a registry, priority care, and compensation 
is the next step. These steps may also help us further the research 
into undiagnosed illness and find the factor that may have caused the 
most damage or the key component to their illnesses. WE need to do this 
for National Security and for the future soldiers of this country and 
for the Citizens as well.
    Thank you for your time and interest at today's hearings. We stand 
ready to testify in person at the next Senate or House Hearing on the 
Issue of Gulf War Veterans Compensation/Health and Investigations 
relating to it.
                                 ______
                                 
 Prepared Statement of Donald Sweeney, Legislative Director, National 
                Association of State Approving Agencies

    Thank you Mr. Chairman and members of the Committee for the 
opportunity to comment on the provisions of Senate Bill 1088. The 
Association is grateful for the leadership that the Chairman and 
Ranking Member have provided on the topic addressed by the bill. 
Allowing accelerated payments is an excellent step in the right 
direction to resolving one of the major problems confronting the use of 
the Montgomery GI Bill.
    Today's society demands that our Nation's veterans be competitive 
in the market place, especially in the high technology industry. To be 
so, they must initially acquire and, subsequently, periodically upgrade 
appropriate knowledge and skills. Many educational institutions and 
training establishments have addressed the demands of the high 
technology industry by developing concentrated, short-term entry level 
as well as advanced instruction. The costs that accompany such 
instruction are usually much greater on a monthly basis than those 
affiliated with a two or four year degree program. One way to offset 
the escalation in these costs is to provide the veteran an opportunity 
to utilize his or her VA educational benefits at an accelerated rate, 
which is the focus of S. 1088.
    We strongly believed that the rules governing the administration of 
the GI Bill need to be flexible in providing our Nation's veterans as 
many choices as possible to reach their educational and career goals. 
We are pleased to provide our support for the provisions of S. 1088 and 
will work for the enactment of the bill.
    Thank you again, Mr. Chairman, for the opportunity to comment.

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