[Senate Hearing 107-786]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 107-786
 
                          PENDING LEGISLATION
=======================================================================

                                HEARING

                               BEFORE THE

                     COMMITTEE ON VETERANS' AFFAIRS
                          UNITED STATES SENATE

                      ONE HUNDRED SEVENTH CONGRESS

                             SECOND SESSION




                               __________

                              MAY 2, 2002

                               __________

      Printed for the use of the Committee on Veterans' Affairs 














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                     COMMITTEE ON VETERANS' AFFAIRS

            JOHN D. ROCKEFELLER IV, West Virginia, Chairman

BOB GRAHAM, Florida                  ARLEN SPECTER, Pennsylvania
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         KAY BAILEY HUTCHISON, Texas

                     William E. Brew, Chief Counsel
      William F. Tuerk, Minority Chief Counsel and Staff Director

                                  (ii)

  









                            C O N T E N T S

                              ----------                              

                              May 2, 2002

                                SENATORS

                                                                   Page
Nelson, Hon. Bill, U.S. Senator from Florida.....................     6
    Prepared statement...........................................     7
Rockefeller, Hon. John D. IV, U.S. Senator from West Virginia, 
  prepared statement.............................................     2
Specter, Hon. Arlen, U.S. Senator from Pennsylvania, prepared 
  statement......................................................     4
Wellstone, Hon. Paul, U.S. Senator from Minnesota, prepared 
  statement......................................................    12

                               WITNESSES

Cullinan, Dennis, Director, National Legislative Service, 
  Veterans of Foreign Wars.......................................    31
    Prepared statement...........................................    32
Fischl, James R., Director, National Veterans Affairs and 
  Rehabilitation Commission, The American Legion.................    59
    Prepared statement...........................................    60
McClain, Tim, General Counsel, Department of Veterans Affairs, 
  accompanied by Frances M. Murphy, M.D., Deputy Under Secretary 
  for Health, Veterans Health Administration; Robert Epley, 
  Associate Deputy Under Secretary for Policy and Program 
  Management, Veterans Benefits Administration; John [Jack] 
  Thompson, Deputy General Counsel; Claude [Mick] Kicklighter, 
  Assistant Secretary for Policy and Planning/Acting Director, 
  Office of Operations, Security and Preparedness; and Vince 
  Barile, Deputy Under Secretary for Management, National 
  Cemetery Administration........................................    13
    Prepared statement...........................................    15
    Response to written questions submitted by Hon. Daniel K. 
      Akaka......................................................    24
Tucker, David, Senior Associate Legislative Director, Paralyzed 
  Veterans of America............................................    41
    Prepared statement...........................................    42
Violante, Joseph A., National Legislative Director of the 
  Disabled American Veterans.....................................    47
    Prepared statement...........................................    48

                                APPENDIX

Enzi, Hon. Michael B., U.S. Senator from Wyoming, prepared 
  statement......................................................    73
McKee, Thomas J., National Chairman of the Board, Air Force 
  Association, letter dated May 1, 2002, to Hon. John D. 
  Rockefeller IV.................................................    74
Miller, Thomas H., Executive Director, Blinded Veterans 
  Association, prepared statement................................    74
National Association of Veterans' Research and Education 
  Foundations (NAVREF), prepared statement.......................    76
Wildhaber, Michael E., Vice President, National Organization of 
  Veterans' Advocates (NOVA), letter dated May 15, 2002, to Hon. 
  John D. Rockefeller IV.........................................    82

                                 (iii)














                          PENDING LEGISLATION

                              ----------                              


                         THURSDAY, MAY 2, 2002

                                       U.S. Senate,
                        Committee on the Veterans' Affairs,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 9:40 a.m., in 
room SR-418, Russell Senate Office Building, Hon. John D. 
Rockefeller IV (chairman of the committee) presiding.
    Present: Senators Rockefeller, Graham, Jeffords, Akaka, 
Wellstone, Murray, Miller, Nelson, Specter, and Hutchinson.
    Chairman Rockefeller. Good morning, everybody. I apologize 
that once again Senator Nelson was so late. [Laughter.]
    Do you want a minute to shoot me down on that one?
    Senator Nelson. Mr. Chairman, I have not been here long 
enough to learn how to be late, but I am working on it.
    Chairman Rockefeller. OK. Well, that is a good shoot-down.
    Senator Akaka, I apologize.
    We have got a ton of things to do and I want to talk about 
some of these things. We have got VA disasters, I mean, how VA 
handles disasters for the country. [Laughter.]
    Yet we cannot also forget what we are about on a normal day 
at the Department of Veterans Affairs, which is serving our 
veterans.
    This morning we are going to look at a lot of legislation, 
hear points of view about it, and this will not be a markup as 
such. The legislation, as far as I can see, covers almost every 
aspect of veterans' lives--from annual cost-of-living-
adjustment for compensation, education benefits, to care and 
services for women's veterans, mental health care and research. 
I want to take my prerogative, so to speak, to highlight a 
couple of these.
    A couple pieces of legislation recognize that the VA--
which, as constantly needs to be said, is the Nation's largest 
integrated health care system--can and must play a larger role 
in emergency preparedness. This is something I would think the 
VA would have mixed feelings about. In effect, you are being 
left out, by the way I read it, from the Ridge operation. That 
may be the way the world works, but that is not the way the 
world ought to work because you are basically better at Federal 
health care than anybody else.
    You shared skilled caregivers and you supply help to 
overwhelmed communities on a regular basis. VA has been there 
for every single major domestic disaster of the last 20 years--
Oklahoma City, Hurricane Andrew, Floyd, September 11th, 
everywhere--you have been there. But most in Government, and 
most in public health, and most out there in the public, have 
no idea how much VA contributes, and it is a subject of some 
annoyance to me that our Government does not understand that.
    So, in order to highlight the VA's already enormous 
commitment to providing medical care during disasters, I 
introduced, with Senators Specter and Akaka, legislation to 
recognize VA's emergency missions. The legislation before us 
would also turn VA's research expertise to preventing the 
illnesses and the injuries that might arise from the use of 
terrorist weapons and would create an office to coordinate VA's 
disaster planning. In other words, that is my way of trying to 
help VA get a seat at the planning table.
    We also have legislation before us to waive the drug 
copayment for veterans with incomes between $9,000 and $24,000, 
all of whom are struggling to meet VA's new copayment rate of 
$7 per prescription. Despite, as I made clear at our last 
hearing, the VA's embarrassing failure to provide our Nation's 
aging veterans with a true spectrum of extended care services, 
the authority for doing such expires very soon. I have 
introduced legislation to extend those authorities while we 
continue to push VA to step up its long-term care efforts.
    Other issues press our aging veterans, including hearing 
loss and tinnitus that may, for some, result from their 
military service. Legislation before us would help VA rate 
service-connected hearing loss more fairly and determine 
scientifically whether service in certain military specialties 
might be associated with an increased risk of hearing loss 
later in life. This would help solve the problem of looking at 
everybody in the world who has a hearing problem and figuring 
out the fairest way to limit who gets to be presumed eligible 
for benefits?
    Other legislation on today's agenda would authorize the VA 
to extend its sexual trauma counseling and treatment programs 
beyond their current expiration date.
    We have a very ambitious agenda before us, including many 
bills sponsored by many colleagues on this committee, including 
one who will be coming, Senator Nelson, Bill Nelson, the lesser 
Nelson. [Laughter.]
    [The prepared statement of Senator Rockefeller follows:]

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

    Good morning. We meet today, as I'm sure I don't have to 
remind our witnesses, in a world where priorities have changed 
from ``business as usual.'' The attention of the government, 
certainly here in Congress, has been focused on protecting our 
Nation against the possibility of future terrorist attacks.
    The challenge that VA--and all of us--must face is 
preparing for emergencies without forgetting the reason that we 
are here today: to serve the men and women who served this 
nation. This morning, we will be reviewing legislation that 
would affect almost every aspect of veterans' lives, from the 
annual cost-of-living adjustment for compensation, to changes 
in education benefits, care and services for women veterans, 
and mental health care and research. I would like to highlight 
a couple of items in particular.
    Several pieces of legislation before us recognize that VA--
the Nation's largest integrated health care system--can and 
must play a larger role in emergency preparedness. VA has 
shared skilled caregivers and supplies with overwhelmed 
communities following every major domestic disaster of the last 
two decades, including the Oklahoma City bombing, Hurricanes 
Andrew and Floyd, and the September 11th attacks, but too many 
in government, and in public health, still have no idea how 
much VA contributes.
    In order to highlight VA's already enormous commitment to 
providing medical care during disasters, I introduced with 
Senators Specter and Akaka legislation to recognize VA's 
emergency missions. Legislation before us would also turn VA's 
research expertise to preventing the illnesses or injuries that 
might arise from the use of terrorist weapons, and would create 
an office to coordinate VA's disaster planning.
    We also have legislation before us to waive the drug 
copayment for low-income veterans. Although veterans with 
incomes of less than $24,000 a year are exempt from copayments 
for most VA health care services, the income threshold when it 
comes to prescription drugs is just $9,000 a year. This problem 
was compounded by VA's decision last year to increase 
prescription copayments from $2 to $7--an increase that may be 
reasonable by industry standards, but unduly burdens veterans 
with incomes between $9,000 and $24,000. I have been joined by 
many colleagues in offering a bill that would exempt those 
veterans from prescription copayments.
    We met in this room just a week ago to highlight again how 
desperately our nation's aging veterans need a true spectrum of 
extended care services. In 1999, Congress passed legislation 
that required VA to provide nursing home care to any veteran 
who is 70% or more service-connected disabled, and non-
institutional care to all enrolled veterans. We placed a four-
year expiration date on these programs so that we could 
adequately study and adjust them if needed. VA's embarrassing 
failure to make non-institutional long-term care programs a 
reality has denied crucial services to veterans, and has 
certainly prevented us from studying their effects. I have 
introduced legislation on today's agenda to extend these 
authorities for five more years, and will demand that VA step 
up its long-term care efforts.
    Other issues press our aging veterans, including hearing 
loss and tinnitus that may, for some, result from their 
military service. Legislation before us would help VA rate 
service-connected hearing loss more fairly, and determine 
scientifically whether service in certain military specialties 
might be associated with an increased risk of hearing loss 
later in life. Other legislation on today's agenda would 
authorize VA to extend its sexual trauma counseling and 
treatment programs beyond their current expiration date, so 
that veterans who experienced assault or harassment during 
military service can continue to depend on these critical 
programs.
    We have a very ambitious agenda before us, including many 
bills sponsored by my colleagues on this Committee. This 
hearing gives us an opportunity for public debate on the 
important issues that the proposed bills would affect, so that 
the Committee can give them full consideration.
    I look forward to hearing from my colleagues and our 
witnesses.

    Chairman Rockefeller. This hearing gives us an opportunity 
to discuss this, for you all to discuss it, for the VSO's to 
discuss it, and I look forward to what my colleagues might have 
to say in the way of opening statements, starting with my most 
special colleague, Senator Specter.
    Senator Specter. Thank you very much, Mr. Chairman. Thank 
you for convening this hearing on a variety of legislative 
subjects.
    The issues which veterans confront today are numerous. We 
face increased demands for veterans' health care and veterans' 
long-term nursing care, and the budget is never adequate. Each 
year, through the efforts of Chairman Rockefeller and others on 
this committee, and others in the Senate, we have increased 
VA's medical care budget--but still there is a decisive 
shortfall.
    So we welcome an opportunity to hear VA's testimony today. 
Today is an especially busy day with Senator Byrd--you know 
Senator Byrd--having scheduled hearings on homeland defense all 
day, and there is also a Judiciary Committee executive meeting 
today, so, while I will stay as long as I can, I will have to 
depart early. But I will review the transcript of today's 
hearing.
    Mr. Chairman, I appreciate your being here today, and 
appreciate your statement for the hearing record.
    Thank you, Mr. Chairman.
    [The prepared statement of Senator Specter follows:]

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

    Good morning, Mr. Chairman. It is a pleasure to be with you 
this morning at this hearing to gain the on-the-record views of 
VA, and the veterans service organizations, on the large agenda 
of legislation that the Committee will consider before the end 
of the year.
    I am pleased that you have asked the interested parties to 
provide their views on the record--and that they provide them 
early in the process; I support that goal. We do not want to 
rely entirely on informal communications in fashioning our 
markup agenda. Nor do we want a repeat of last year's 
experience when VA voiced its views on certain legislative 
issues only after those issues had already been informally 
conferenced with the House. This year, VA will need to speak up 
now so that we can benefit from its thinking early in the 
process. With the assistance of staff to sort through the views 
of the witnesses on all 27 bills on this agenda, we will then 
be postured to act wisely on the important policy questions 
before the Committee.
    Of course, I hope to learn this morning that there is 
unanimous support for the bills on the agenda that I have 
introduced. We have done good work in this Committee in 
updating and increasing VA educational assistance benefits, but 
we need to do more--especially for the widows and surviving 
children of service members who were killed in action. I look 
forward to testimony on S. 1113, S. 1517, and S. 2231.
    VA--in a departure from its recent position that Congress 
enacts too many ``unfunded mandates''--has proposed that we 
enact a ground-breaking new mandate: that VA be obligated to 
provide (or pay for) care to women veterans' newborn babies 
during the first 14 days of life in cases where VA provided 
delivery services. We need to look carefully at that proposal. 
In addition, we need to look closely at four key bills designed 
to enhance VA's preparedness for response to terrorism.
    I look forward to the witnesses' views on these, and other, 
proposals. If the witnesses cannot support certain items on the 
agenda, we need to hear that now--and we need to hear how they 
would improve these bills. For all of us have the same goal in 
mind: to fulfill our commitment to the Nation's veterans. As I 
have said many times, I am here in Congress to, figuratively, 
collect the bonus denied to my father, Harry Specter, and other 
World War I veterans. Working with VA and the service 
organizations, we will fulfill that commitment.

    Chairman Rockefeller. Thank you, Senator Specter.
    Actually, I do know Senator Byrd. I do. [Laughter.]
    Senator Akaka is next on our list here.
    Senator Akaka. Thank you very much, Mr. Chairman, and 
welcome to our panel to the committee. Along with my friend, 
the chairman of the committee, I am cosponsor of two important 
bills that represent the first step in acknowledging the 
Department of Veterans Affairs' critical role in preparing for, 
and responding to, natural disasters and terrorist attacks.
    S. 1561, strengthening the bioterrorism preparedness 
through expanded natural disaster medical systems training 
programs is one of them. Contrary to current press reports, the 
Federal Government is not unprepared for a biological attack. 
However, preparedness levels are not uniform or consistent 
across the United States, and there are serious problems. So, 
while not unprepared, we are clearly underprepared.
    Strengthening the public health system is very important 
and is being addressed by several congressional and 
administrative initiatives. Creating a critical line of defense 
against bioterrorism must involve health care professionals.
    Senator Rockefeller and I have proposed to use the existing 
emergency communication infrastructure, disaster training 
programs and community partnerships within the Nation's 163 
Veterans Affairs hospitals to train both VA hospital staff and 
local health care providers in recognizing and treating victims 
of biological weapons. We must make sure that first-line 
responders to bioterrorism events, doctors and nurses, have the 
training and resources necessary to respond immediately to an 
incident and the capacity to cope for the several hours or days 
it will take before Federal help can arrive.
    The second bill, S. 2187, the Department of Veterans 
Affairs' Emergency Medical Care Act of 2002, is pending. When 
VA has offered medical care to the general public during every 
major U.S. disaster since Hurricane Andrew, it has done so 
without the statutory authority to care for nonveterans and 
nonactive military personnel. Our legislation would provide 
this authority.
    Already an active participant in disaster response and 
preparedness, VA partners with DOD, FEMA, HHS to form the 
National Disaster Medical System. VA, also, is an emergency 
responder through the Federal Response Plan.
    Because of the hard work done by VA employees, this 
legislation does not need to create new VA programs, nor 
authorize any additional funds. I commend the dedication and 
initiative of the 225,000 VA personnel and am confident that 
they will continue helping all Americans respond to major 
disasters and medical crises.
    Thank you very much, Mr. Chairman, for having this hearing 
on pending legislation.
    Chairman Rockefeller. Thank you, Senator Akaka.
    Senator Nelson?
    Senator Nelson. Thank you, Mr. Chairman.
    I certainly want to thank our witnesses for being here 
today to discuss legislation that will affect our Nation's 
veterans and extend my appreciation for all of your efforts, as 
well as yours, Mr. Chairman, on behalf of our Nation's and 
certainly Nebraska's veterans.
    There are clearly some excellent initiatives that are on 
the discussion list for today, and in a perfect world, we could 
afford, and we could pass every bill that is put before us. But 
the truth is that we are faced, though we are a great country 
with vast resources, we are faced with a limited amount of 
those resources when it comes to tax dollars. As a former 
Governor, I have some experience with finding ways to balance 
budgets and make them work.
    But we must, in fact, take care of our Nation's veterans, 
provide the best benefits that we possibly can, certainly those 
that we can afford. Now this may require our committee, with 
the help of people like we have here today to prioritize the 
initiatives, because very often the prioritization will help us 
reduce the number of initiatives to those that are most 
important and that we can, in fact, afford.
    But one issue that comes to mind is in a rural area or a 
metropolitan area that veterans are affected differently by 
their circumstances, and one issue that comes to mind and which 
has caused me a great deal of concern is that a farmer's farm 
equipment is counted in his assets for eligibility 
determination, and that creates a hardship to where you can be 
equipment rich and otherwise income poor and unable to, one 
should not have to sell their farm equipment in order to make 
their ends meet because of the need for health care, 
particularly if we can find a way to establish need on the 
basis of true ability to pay.
    I hope that we are going to be able to work our way through 
that, and other issues today, and I appreciate very much, 
again, your being here.
    Thank you, Mr. Chairman.
    Chairman Rockefeller. Thank you, Senator Nelson.
    Senator Wellstone?
    Senator Wellstone. Mr. Chairman, if Senator Nelson needs to 
be in and out, I will follow him. I cannot stay real long, but 
my understanding is that you were in a real hurry, Bill, is 
that right? Bill, do you want me to follow? I can follow you if 
you are in a real hurry. I heard you wanted to--I will follow 
you.
    Go ahead.
    Senator Nelson of Florida. Too much protocol here.
    Senator Wellstone. Go ahead.
    Chairman Rockefeller. Senator Nelson from the great State 
of Florida.

   STATEMENT OF BILL NELSON, U.S. SENATOR FROM THE STATE OF 
                            FLORIDA

    Senator Nelson of Florida. Mr. Chairman, you have the full 
Nelson here at this end of the table. [Laughter.]
    Chairman Rockefeller. I spent my entire life growing up 
with another Nelson, who was Governor of New York. [Laughter.]
    And now I have two of them.
    Senator Wellstone. Mr. Chairman, I cannot resist this. 
Having been a college wrestler, a full Nelson is illegal. 
[Laughter.]
    Senator Nelson of Florida. Mr. Chairman, I wanted to bring 
to the attention of the committee a matter that you are going 
to consider, which has grave consequences for veterans. I might 
say that we have another piece of legislation to rename a 
veterans center down in Florida after one of the great heroes 
in Florida, but let me address my remarks to the matter of 
grave concern.
    Veterans' disability payments by law cannot be assigned. 
There is reason for that, and that is that the Nation is trying 
to compensate the veteran for their disability that has been 
caused in the line of duty, and therefore the law said that 
that is a personal payment to the veteran for the disability 
that that veteran has incurred in the service to his country--
thus, no assignment to another person.
    But some ``get rich quick'' operators have figured out a 
scheme that if the veteran deposits his disability check in a 
joint checking account, then that other entity can draw out the 
money, and does so with the concurrence of the veteran by 
offering quick cash to the veteran, paying as low as 30 cents 
on the dollar for a period of 8 or 10 years of the veteran's 
payments. Now that is a total bastardization of what was 
intended to be the veterans' disability payments system, where 
we are trying to honor the veterans for their service to this 
country. Of course, it is enticing that a veteran might have a 
quick cash need, and so he exchanges 10 years of his payments, 
and he only gets 30 cents on the dollar, and yet it is legal 
because they are taking it out, but it is not the spirit of the 
law, ergo the law says clearly you cannot assign a veteran's 
benefits.
    So the legislation would make this practice illegal. Now 
this is happening, and there are some 30 websites nationally. 
It has particularly affected my State. My former office 
manager's father here in Washington, 100-percent disabled, he 
gets solicited all of the time in the mail for this kind of 
stuff. It ought to be stopped.
    This bill, which it was called to my attention because we 
have got a lot of veterans in Florida, as you know. We have got 
1.7 million veterans, and we have got about 245,000 in Florida 
that are on disability payments, and of course this was called 
to my attention because of the ``get rich quick'' kind of 
scheme.
    Without me going out and really pushing this legislation, 
15 of our colleagues have cosponsored it. A couple of members 
of this committee have cosponsored. As a matter of fact, 
another member of this committee that we all have a great deal 
of respect for as a veteran, Senator McCain, has come to me and 
wants to help push this legislation.
    Now I just learned, as I walked in the door, something 
troubling. I have had enormous cooperation from the Veterans 
Department on this. As a matter of fact, they have issued press 
releases on this. I have got all kinds of testimony from former 
Secretaries of the VA, and the VA Inspector General, and I 
could quote all of those quotes, and I was just told by the 
staff walking in here that the VA is going to testify against 
this legislation because they think that veterans are big boys. 
Well, veterans are big boys, and they can make up their own 
minds on things----
    Chairman Rockefeller. And girls.
    Senator Nelson of Florida. And women. But the fact is, is 
this is a matter of what was the intention, the legislative 
intent in the original law, which wanted to honor our veterans 
and to compensate them for their service to the country. And so 
I respectfully put it in the wisdom of this committee, Mr. 
Chairman, to see if you all do not think that this practice 
needs to be stopped dead in its tracks.
    Thank you, Mr. Chairman.
    [The prepared statement of Senator Bill Nelson follows:]

   Prepared statement of Hon. Bill Nelson, U.S. Senator From Florida

    Mr. Chairman, I am pleased to appear before the committee 
to talk about two bills which I have introduced and being 
discussed today.
    The first is the Veterans Benefits and Pensions Protection 
Act. Senator McCain and I introduced this bill to protect our 
veterans from financial predators who offer ``instant cash'' in 
exchange for future pensions or disability pay.
    Current law prohibits the direct sale of a veteran's 
pension or disability benefits. These payments are a tax-free, 
monthly check from the government, meant to provide important 
financial support to veterans who were disabled or wounded in 
service to our country. In the state of Florida alone, 245,000 
veterans or their survivors received such compensation last 
year; and the Department of Veterans Affairs paid out nearly 
$21.3 billion dollars nationwide.
    To get at this pot of money, some companies have used a 
loophole that enables them to enter into a contract with 
veterans and offer them ``instant cash'' in exchange for future 
benefits.
    These contracts require veterans to sign away their 
disability benefits or pensions for a certain period--often 
eight years. In exchange, companies give them a lump-sum cash 
payment, typically valued at only thirty cents on the dollar. 
In certain cases, these companies also require veterans to put 
up collateral, such as taking out a life insurance policy, 
potentially leaving a veteran's family out in the cold.
    The VA has called this practice a ``financial scam'' and 
former Secretary of the VA, Hershel Gober, has stated, ``These 
schemes seem to target the most desperate of our veterans. No 
financial expert on the planet would encourage anyone to accept 
30 cents today if they could get a dollar tomorrow. He went on 
to say, ``VA lawyers are still studying the fine print in these 
schemes to determine whether or not they are legal. Even if 
they are legal, they're despicable, because they take money 
away from the people in the direst financial straights.... 
Doing this to veterans is reprehensible.''
    The VA Inspector General also stated: ``For many 
unsuspecting veterans, these benefit buyouts could be 
financially devastating.'' In one case, a veteran received a 
lump sum of $73,000 in return for his monthly benefit checks of 
$2,700 over ten years. That's an annual interest rate of 28.5 
percent.
    Mr. Chairman, I find this practice wrong and I'm determined 
to put a stop to it. My legislation would do just that.
    The intent of the law that prohibits the assignment of a 
veteran's benefits is clearly being skirted by companies that 
offer these instant cash schemes. Our bill expands the 
definition of assignment of benefits to outlaw these contracts 
and makes a violation punishable by a stiff fine and up to one 
year in jail.
    The second part of this legislation establishes a five-year 
education and outreach campaign, conducted by the VA, to 
provide information to veterans about what legitimate financial 
services are available to them.
    A bipartisan group of fifteen Senators have joined in 
support of this legislation, including two distinguished 
members of this Committee, Senator Murray and Senator Craig. 
The Disabled American Veterans, Paralyzed Veterans of America, 
Vietnam Veterans of America, AMVETS, Veterans of Foreign Wars, 
and The American Legion all have endorsed it as well.
    I would like to thank the VA General Counsel and the VA's 
legislative liaison for working with my staff to develop the 
technical language for this bill. I look forward to having the 
support of this committee as we move to better protect our 
veterans from ``instant cash'' and other financial schemes.
    I would like to conclude these remarks about this bill with 
a comment from one of our country's veterans. ``. . . My 
pension isn't a lottery winning. It's an award from the 
American people for serving my country, and it's appalling to 
think there are those out there that would rob you of this 
honor and steal your future.''
    The second bill that I have introduced is to rename the 
Veterans Affairs Regional Office in St. Petersburg, Florida in 
honor Congressional Medal of Honor winner, Command Sergeant 
Major Franklin D. Miller, United States Army, Retired.
    Frank Miller faithfully served our country as a soldier for 
thirty years from 1962 until his retirement in 1992. During 
much of that time, he served in Army Special Forces units, 
including four tours in the Republic of Vietnam. Frank Miller's 
combat decorations include the Congressional Medal of Honor, 
the Silver Star, two Bronze Stars, the Air Medal, and six 
Purple Hearts. He received the Medal of Honor for his bravery 
in battle in 1971, when, despite his own severe wounds, he 
single-handedly overcame four enemy attacks and safely 
evacuated the surviving members of his patrol.
    Upon Frank Miller's retirement from the Army in 1992, with 
the U.S. Army's highest enlisted rank of Command Sergeant 
Major, he continued to serve his country as a benefits 
counselor for the Department of Veterans' Affairs Regional 
Office in St. Petersburg, Florida. Former Joint Chiefs of 
Staff, General Henry H. Shelton, who knew Frank Miller 
personally, has described him as, ``an icon to what service in 
the armed forces is all about.''
    Sadly, in July of 2000, Frank Miller passed away in 
Florida. He is survived by his three children, and his brother, 
who also is a retired Command Sergeant Major of the Army's 
Special Forces.
    Frank Miller dedicated his life to serving our country. He 
was a loving father and brother, a true soldier's soldier, and 
a fellow American whose life impacted many people. Frank 
Miller's life should be remembered and appropriately 
commemorated. I hope to help honor his life by introducing 
legislation to name the Florida Veterans Affairs Regional 
Office in honor of Command Sergeant Major Franklin D. Miller.
    Thank you, Mr. Chairman, for the opportunity to appear 
before the Committee.

    Chairman Rockefeller. Eloquent and discouraging because, 
when you said there were 1.7 million veterans in Florida, that 
is about the population of my entire State. [Laughter.]
    Senator Wellstone?
    Senator Wellstone. Thank you.
    I will try to be brief, Mr. Chairman, and I want to 
apologize, too, to our distinguished panelists. I am going to 
be in and out because of two other things going on at the same 
time.
    We have got before us 1680, which is the Soldiers' and 
Sailors' Civil Relief Act, and one of the reasons I want to 
make a brief statement is to send a signal to the Department of 
Defense and the administration.
    This legislation provides protection to National Guard 
personnel that are protecting our Nation's airports and other 
vulnerable public facilities, and what the bill does is provide 
civil relief to the National Guard personnel that have been 
mobilized by State Governors at the request of the President in 
support of an operation during a war or national emergency.
    The Soldiers' and Sailors' Relief Act provides essential 
protections to service members on active duty, but it, 
unfortunately, only applies to National Guard personnel who are 
mobilized directly by the President and does not protect those 
who have been mobilized by Governors at the request of the 
President. That is the case with many men and women right now 
that are really protecting our airports and other public 
facilities.
    We are talking about 7,600 National Guard personnel in 
active duty in what is called title 32 status, and they are 
performing essential security missions. Let me talk about the 
Soldiers' and Sailors' Relief Act. This is really heartbreaking 
what is going on in the country. Even this does not provide the 
help we should be providing, but what this says is, look, these 
people, many of whom do not come from a lot of money, they are 
losing a lot of money every month, and at the very minimum we 
ought to protect them from exorbitant interest charges, and we 
ought to make sure they have relief from not being evicted from 
their homes or apartments, at the very minimum, or having 
cancellation of their life insurance. That is the protection 
that we give people, but we do not give these guard members 
that protection. It is just really almost outrageous what is 
going on.
    I want to insert, for the record, letters of support from 
The Military Coalition and the Enlisted Association of the 
National Guard. By the way, The Military Coalition is a 
consortium of 33 nationally prominent uniformed services and 
veterans organizations, representing 5.5 million current and 
former members of the seven uniformed services.
    [The information referred to follows:]

                                            EANGUS,
                                            Alexandria, VA,
                                                    April 30, 2002.
Hon. Paul Wellstone,
136 Hart Senate Office Building,
Washington, DC.
    Dear Senator Wellstone: I would like to thank you on behalf of the 
members of the Enlisted Association of the National Guard of the United 
States (EANGUS) for introducing S. 1680, to provide financial 
protections and civil relief to those National Guard personnel who have 
been mobilized by state governors as a result of the September 11 
terrorist attacks.
    National Guard soldiers and airmen called to active duty under 
Title 32 do not have the protection of the Soldiers and Sailors Civil 
Relief Act (SSCRA). National Guard and Reserve members called to active 
duty under Operation Enduring Freedom in Title 10 status do have that 
protection.
    The SSCRA was passed by Congress to provide protection for 
individuals called to active duty in any of tile military services. The 
SSCRA suspends certain civil obligations to enable service members to 
devote full attention to duty, The SSCRA protects the individual and 
his family from foreclosures, evictions, and installment contracts for 
the purchase of real or personal property if the service member's 
ability to make payments is ``materially affected'' by the military 
service. The SSCRA entities a person called to active duty to 
reinstatement of any health insurance that was in effect on the day 
before such service commenced, and was terminated during the period of 
service. It also protects the service member against termination of 
private life insurance policies during tile term of active service.
    I believe that all members of the National Guard performing active 
duty service for a national emergency or war at the call of the 
President should be entitled to protection under the SSCRA. Thank you 
for this legislation and its changes to the Soldiers and Sailors Civil 
Relief Act that will give National Guard members that protection. If 
there is anything that we can do to assist you, please feel free to 
ask.
            Respectfully,
                         MSG Michael P. Cline (Ret.), ARNG,
                                                Executive Director.
                                 ______
                                 
                            The Military Coalition,
                                            Alexandria, VA,
                                                  December 6, 2001.
Hon. John D. Rockefeller,
Chairman, Veterans Affairs Committee,
U.S. Senate,
Washington, DC.
    Dear Mr. Chairman: The Military Coalition, a consortium of 33 
nationally prominent uniformed services and veterans organizations, 
representing more than 5.5 million current and former members of the 
seven uniformed services, plus their families and survivors, would like 
to bring to your attention a serious inequity for National Guard 
members who have been called to active duty for Operation Noble Eagle 
in Title 32 status.
    National Guard soldiers and airmen called to active duty under 
Title 32 do not have the protection of the Soldiers and Sailors Civil 
Relief Act (SSCRA). National Guard and Reserve members called to active 
duty under Operation Enduring Freedom in Title 10 status do have that 
protection.
    The SSCRA was passed by Congress to provide protection for 
individuals called to active duty in any of the military services. The 
SSCRA suspends certain civil obligations to enable service members to 
devote full attention to duty. The SSCRA protects the individual and 
his family from foreclosures, evictions, and installment contracts for 
the purchase of real or personal property if the service member's 
ability to make payments is ``materially affected'' by the military 
service. The SSCRA entitles a person called to active duty to 
reinstatement of any health insurance that was in effect on the day 
before such service commenced, and was terminated during the period of 
service. It also protects the service member against termination of 
private life insurance policies during the term of active service.
    Military Coalition believes that all members of the National Guard 
performing active duty service for a national emergency or war at the 
call of the President should be entitled to protection under the SSCRA. 
Please support S. 1680 and its changes to the Soldiers and Sailors 
Civil Relief Act that will give National Guard members that protection.
            Sincerely,
                                    The Military Coalition.
                                              (Signatures Enclosed)
                                                    Air Force Assn.
                                          Air Force Sergeants Assn.
                                    Army Aviation Assn. of America.
                   Assn. of Military Surgeons of the United States.
                                              Assn. of the US Army.
Commissioned Officers Assn. of the U.S. Public Health Service, Inc.
                                   CWO, & WO Assn., US Coast Guard.
              Enlisted Association of the National Guard of the US.
                                                Fleet Reserve Assn.
                                   Gold Star Wives of America, Inc.
                       Veterans' Widows International Network, Inc.
                                               Marine Corps League.
                                Marine Corps Reserve Officers Assn.
                                Military Order of the Purple Heart.
                         National Order of Battlefield Commissions.
                                       Naval Enlisted Reserve Assn.
                                                Naval Reserve Assn.
                                        Nat'l Military Family Assn.
    Non Commissioned Officers Assn of the United States of America.
                                             Reserve Officers Assn.
                                    National Guard Assn. of the US.
                           The Military Chaplains Assn. of the USA.
                                         The Retired Enlisted Assn.
                                         The Retired Officers Assn.
                                          United Armed Forces Assn.
                                    USCG Chief Petty Officers Assn.
                                     US Army Warrant Officers Assn.
                                Veterans of Foreign Wars of the US.

    Senator Wellstone. Let me just kind of point it out this 
way, Mr. Chairman and others. You have title 10 status and 
title 32 status. It is impossible to explain why one Guard 
member in title 32 status, called up by the Governor at the 
request of the President, on guard at our airports, can lose 
his or her home, be foreclosed on, while the same Guard members 
who were doing border security that have been called up 
directly by the President are provided that protection. I mean, 
it makes no sense whatsoever.
    The committee, and I thank you for this, has requested from 
the DOD a letter of explanation for their opposition. We passed 
this, and put it on the Defense Department appropriations bill 
last session, and then it got stripped out at conference, and 
the DOD opposed it. I would like to know why. That is why I am 
speaking today at this committee taking, I will just take a 
couple of more minutes.
    They have said, well, the State should provide the 
protection. We have got a U.S. Supreme Court, Marquette 
National Bank of Minneapolis v. First Omaha Service Corporation 
saying that one State cannot regulate the interest rates of a 
national bank located in another State. So a State cannot do 
it. It has to be Federal protection. One of the primary 
benefits of this is to keep a 6-percent cap on interest rates. 
So States cannot enforce such laws.
    Let me just simply conclude this way. We are going to be 
calling on our Guard members to do a lot. They are going to be 
doing more border security, and it is just--again, if I had my 
way, and maybe this is just a very, this piece of legislation, 
frankly, may be too incremental, I do not know, maybe other 
Senators and other Reps have had the same experience, I do not 
know if you have, but if you talk to people out there at the 
airports, these are people who never had much money, and what 
they are losing every month is unbelievable. I mean, and this 
is going on and on, and we are going to be asking them to do 
border security and other things. At the very minimum, for 
God's sake, we ought to give them the same protection.
    They are there. It is national emergency. The Governor has 
called them up at the request of the President of the United 
States of America. Why in the world do we not give them the 
same protection?
    So, today, as a member of this committee, I hope we will 
move this legislation expeditiously, and I would like to smoke 
the Department of Defense out. I would like to know what is the 
possible justification for their opposition? Because so far the 
only thing I have heard, does not hold up, which is, well, 
States should do it. States cannot. States do not have the 
authority.
    So I hope we can move this legislation, and frankly I hope 
we can pass this. I wish we could figure out a way of--I know 
the Guard members will say, hey, we are serving our country, 
but I wish we could figure out some way of providing some kind 
of income assistance or something that helps these families 
because they are really hurting.
    Thank you.
    [The prepared statement of Senator Wellstone follows:]

 Prepared Statement of Hon. Paul Wellstone, U.S. Senator From Minnesota

    I am glad to be here this morning to talk about S. 1680, a 
bill to amend the Soldiers' and Sailors' Civil Relief Act 
(SSCRA) to expand the protections of that Act to National Guard 
personnel protecting our nation's airports and other vulnerable 
public facilities. Specifically, the bill will provide civil 
relief to National Guard personnel mobilized by state governors 
at the request of the President, in support of an operation 
during a war or national emergency.
    The SSCRA provides essential protections to service-members 
on active duty. Unfortunately, it only applies to National 
Guard personnel mobilized directly by the President of the 
United States, and does not protect those mobilized by state 
governors at the request of the President--as is the case with 
many of the men and women protecting our nations airports and 
other public facilities.
    Right now nationwide there are about 7,600 National Guard 
personnel in active duty title 32-status conducting these 
essential security missions. About 5,800 of them are at 405 
airports throughout the nation. In Minnesota, we have 31 MN 
National Guard soldiers providing security at the Minneapolis-
St. Paul airport. The President has stated he is determined to 
remove the National Guard from airport security duty and that 
de-mobilization is underway. Unfortunately, in the meantime, 
the men and women of the National Guard doing this important 
work are not receiving the financial protections they rightly 
deserve.
    Colleagues, the SSCRA is an important Act that provides 
help to people who have taken on financial burdens without 
knowing they would be called up to serve in the military. I 
won't go into too much detail of the protections offered by it 
though I would like to mention a few. The SSCRA provides 
substantial debt relief, capping interest rates at 6% for any 
debts a service-member incurred before he or she went on active 
duty. This is very important since many of these men and women 
have mortgages on their homes and student loans, but have left 
higher-paying jobs to provide security for their fellow 
citizens. Capping interest on their debt is important to 
ensuring their and their loved ones financial security. The 
SSCRA also protects service-members on active federal duty 
against court judgments, evictions and cancellation of their 
life insurance.
    S. 1680 passed the Senate, with 12 co-sponsors, as an 
amendment to the 2002 Department of Defense Appropriations 
Bill. Unfortunately, it was stripped out of the conference 
report to that bill. Today the bill has the support of the 
Military Coalition--a consortium of 33 nationally prominent 
uniformed services and veterans organizations, representing 
more than 5.5 million current and former members of the seven 
uniformed services, plus their families and survivors--as well 
as the Minnesota National Guard. I would like to insert in the 
Committee record letters of support for the bill from the 
Military Coalition and the Enlisted Association of the National 
Guard.
    I understand the Committee has requested DOD's formal 
written views on the bill. I look forward to hearing those 
views. To date, DOD has opposed S. 1680 due to command 
structure differences between service-members called up by a 
state and those under the command of the Federal government, 
and because DOD believes states, and not the federal 
government, should provide ``Soldiers and Sailors-like'' 
protections. It is clear to me and all those that I have spoken 
with that DOD's reasoning for this opposition is flawed.
    The federal government pays the salaries of National Guard 
men and women in title 32 status and title 32 missions are 
always federal missions, regardless of the command and control 
situation. National Guard personnel in title 32 status deserve 
the same protections of those in title 10 status because, 
honestly, they are doing a very similar type of duty. It is 
impossible to articulate why one Guardsman who is in title 32 
status on airport security duty can lose his home to 
foreclosure while one in title 10 status on border security 
duty can not. The fact that the Governor issued the call-up 
orders rather than the President himself is irrelevant.
    DOD has also suggested that State's should provide 
``Soldiers' and Sailors-like'' protections but that solution 
that will not work for many National Guard personnel. The U.S. 
Supreme Court made clear in Marquette National Bank of 
Minneapolis v. First of Omaha Service Corp. Et. Al. (439 U.S. 
299) that one state can not regulate the interest rate of a 
national bank located in another state. One of the primary 
benefits of the SSCRA is the 6% cap on interest rates. A state 
simply can not enforce such a state law.
    We are in a very unique situation. We must be aware that 
National Guard units may be asked to do more in the coming 
months and years. S. 1680 will ensure we provide our citizen-
soldiers the civil relief they rightly deserve. Addressing this 
now will ease the burden placed upon these patriots and their 
families now and in the future. Colleagues, these young people 
are not asking for much. Extending the protections of the SSCRA 
is an important way to say that we value their service and that 
we will not forget them or their families commitment to the 
United States. I urge my colleagues to support it.

    Chairman Rockefeller. Thank you, Senator Wellstone.
    I want to move on now to our panel. We are going to hear 
from Tim McClain, who is the VA General Counsel, who is 
accompanied by--is my protocol correct?----
    Mr. McClain. Yes, sir.
    Chairman Rockefeller. --Dr. Fran Murphy, Deputy Under 
Secretary of Health; Bob Epley, VBA's Associate Deputy Under 
Secretary for Policy and Program Management; Jack Thompson, the 
Deputy General Counsel; Mick Kicklighter, the Assistant 
Secretary for Policy and Planning and currently Acting Director 
of the new Office of Operations, Security and Preparedness; and 
Vince Barile, who is Deputy Under Secretary for Management from 
the National Cemetery Administration. I thank you all for 
coming.
    Mr. McClain is right in front of me. I put to you the 
impossible task of trying to do this in 5 minutes.

 STATEMENT OF HON. TIM McCLAIN, GENERAL COUNSEL, DEPARTMENT OF 
   VETERANS AFFAIRS, ACCOMPANIED BY FRANCES M. MURPHY, M.D., 
      DEPUTY UNDER SECRETARY FOR HEALTH, VETERANS HEALTH 
ADMINISTRATION; ROBERT EPLEY, ASSOCIATE DEPUTY UNDER SECRETARY 
     FOR POLICY AND PROGRAM MANAGEMENT, VETERANS BENEFITS 
 ADMINISTRATION; JOHN [JACK] THOMPSON, DEPUTY GENERAL COUNSEL; 
HON. CLAUDE [MICK] KICKLIGHTER, ASSISTANT SECRETARY FOR POLICY 
 AND PLANNING/ACTING DIRECTOR, OFFICE OF OPERATIONS, SECURITY 
AND PREPAREDNESS; AND VINCE BARILE, DEPUTY UNDER SECRETARY FOR 
          MANAGEMENT, NATIONAL CEMETERY ADMINISTRATION

    Mr. McClain. I will endeavor to do it in 5 minutes.
    Mr. Chairman, thank you very much for inviting the 
Department to give you its views and comments on the many, many 
bills that are pending before this committee.
    I, first of all, request that my full statement be inserted 
in the record at this point.
    Chairman Rockefeller. Absolutely.
    Mr. McClain. Getting right to the point, the VA is pleased 
to lend its unqualified support for the following measures on 
today's agenda: S. 1113 and S. 2025, which would enhance 
pensions paid to Medal of Honor recipients; S. 1576, which 
would extend by 10 years our special treatment authority for 
Persian Gulf War veterans; S. 2043, extending by 5 years, the 
institutional and noninstitutional extended care authorities 
from the Millennium Act; and S. 2074, the Compensation COLA 
bill.
    Mr. Chairman, we also very much appreciate your introducing 
three bills at our request and inviting testimony from the 
different witnesses today, including S. 1905 to authorize care 
for newborns of enrolled women veterans, dental care for all 
POWs, and for other provisions; S. 2229, which is the 
Departments' version of the Compensation COLA bill, but also 
includes a provision to revise the current requirement for 
maintaining levels of VA institutional extended care provided 
to veterans in accord with 1998 levels. We believe this 
proposal is essential if veterans are to retain options for 
receiving nursing home care in the manner and locale of their 
choice; and S. 2186, legislation in support of a new VA 
Assistant Secretary for Office of Operations, Security and 
Preparedness.
    My prepared statement details our support for all of these 
bills, and it explains our support, also, for the Medical 
Emergency Preparedness Centers in S. 2132, and the State 
Approving Agency funding increases in S. 2231.
    Regarding some of the other bills under consideration 
today, we do not believe there is adequate justification for 
the following bills, and the VA or the administration does not 
support their enactment.
    First, is the beneficiary travel amendments in S. 984 and 
the pharmacy copayment amendments in S. 1408 because of their 
adverse impact on the resources for the provision of health 
care in the Department; the Montgomery GI bill amendments in S. 
1517; the anti-assignment provisions of S. 2003; the 
specialized mental health services provision of S. 2044, which 
would require VA to fund these services outside our VERA 
equitable allocation model; the provisions of 2079 that would 
subject VA's rating schedule to vexatious litigation and 
fundamentally change the role of the Court of Appeals for 
Veterans Claims; revisions of the law governing nonprofit 
research corporations, as proposed in S. 2132; and the 
retirement annuity amendment in S. 2227.
    Mr. Chairman, as to the other provisions and bills under 
discussion today, as our formal written statement provides, VA 
either does not object or does not yet have VA or 
administration positions on the bills. We will be providing 
views on those bills in writing in the very near future.
    That completes my brief oral statement, and myself and my 
colleagues accompanying me would be glad to answer any 
questions that you or the panel might have.
    [The prepared statement of Mr. McClain follows:]
   Prepared Statement of Tim McClain, General Counsel, Department of 
                            Veterans Affairs
    Mr. Chairman and Members of the Committee:
    Thank you for the opportunity to testify today on a number of 
legislative items of interest to veterans.
                                 s. 984
    This bill would increase the beneficiary travel mileage rates to 
reimbursement rates (applicable to privately owned vehicles) 
established by the General Services Administration (GSA). It would also 
include a new group of veterans among those entitled to beneficiary 
travel benefits under 38 U.S.C. Sec. 111, specifically veterans whose 
travel is in connection with treatment for a non-service connected 
disability at a non-VA facility, if the treatment is recommended by VA 
medical personnel at a facility that is not able to provide the 
recommended treatment.
    VA does not support S. 984. While VA's reimbursement rates are less 
than those established by GSA, any increase would decrease funds 
available for direct medical care. It is estimated that an increase in 
beneficiary mileage reimbursement rates to GSA's level of 36.5 cents 
would cost approximately $97 million that would have to come from 
medical care funding. Even a modest increase of 5 cents per mile would 
cost approximately $20 million. We cannot support diminishing VA's 
capacity to provide direct patient care to provide an added benefit to 
the very limited groups of veterans eligible for travel reimbursement 
benefits.
                          s. 1113 and s. 2025
    Both of these bills would enhance the special pension paid by VA to 
those who have been awarded the Congressional Medal of Honor, by 
increasing the monthly benefit to $1,000 (it is currently $600) and 
indexing the rate to annual increases in the cost of living. S. 2025 
would, in addition, provide that the special-pension eligibility shall 
commence on the first day of the month beginning after the date of the 
act for which an individual is awarded the Medal of Honor. Currently, 
the period of eligibility does not begin until after the military 
service concerned certifies to VA that the Medal of Honor has been 
awarded and the recipient applies for the pension. Under S. 2025, all 
individuals in receipt of the special pension on the date of enactment 
would be entitled to lump-sum payments representing the additional 
amounts of pension that would have been payable had they been eligible 
from the first of the month following the acts for which they received 
the medals. We note that as of March 2002, there were only 143 Medal of 
Honor recipients drawing the special pension.
    Last October we notified the Committee that we favor an increase of 
the monthly payments to $1,000 and the indexing of the rate, as 
provided in S. 1113. We also support the earlier effective dates for 
the awards called for in S. 2025. We are aware of situations in which 
there have been lengthy delays--through no fault of the recipients--in 
the awarding of Medals of Honor. The proposed effective-date amendment 
would be more equitable than current law, which bases periods of 
eligibility on when the Government acts to award Medals of Honor. We 
believe, however, there may be an internal inconsistency in the 
language of sections 2(a) and 2(c) of S. 2025 concerning the 
calculation of retroactive payments which we do not believe was 
intended. We would be pleased to work with the Committee staff to 
revise the bill to correct this technical problem. We would defer to 
the views of the Department of Justice regarding the merits of the 
criminal-law amendments in S. 2025.
    These proposals would increase direct spending; therefore, they are 
subject to the pay-as-you-go (PAYGO) provisions of the Omnibus Budget 
Reconciliation Act of 1990. We estimate the PAYGO costs associated with 
enactment of the rate increases in either S. 1113 or S. 2025 to be 
$670,000 for FY 2003, $3.2 million for the five-year period FY 2003 
through FY 2007, and $6.1 million for the 10-year period FY 2003 
through FY 2012. We have not yet estimated the costs of the effective-
date amendment in S. 2025.
                                s. 1408
    This bill would increase the income threshold used to define the 
group of low-income veterans who are exempted from paying the 
outpatient pharmacy co-payment. The exempted group would be expanded to 
include veterans who, for purposes of receiving VA health care, are 
deemed unable to defray necessary expenses of care, i.e., those with 
incomes below VA's ``means-test'' threshold. A provision of the bill 
would also prohibit the Secretary from increasing the pharmacy co-
payment until VA begins collecting co-payments for outpatient care.
    Currently, the low-income exemption applies only to those veterans 
whose incomes do not exceed the maximum annual rate of pension payable 
under 38 U.S.C. Sec. 1521 were they eligible for such pension. This is 
a much smaller group composed of very low-income veterans. Although VA 
appreciates the desire to standardize the definition of ``low-income'' 
veteran for purposes of both health care eligibility and the pharmacy 
co-payment exemption, VA cannot support S.1408. The proposal would 
significantly reduce much-needed revenue upon which the Department 
relies to continue providing services. We also recommend deletion of 
the provision deferring increases in the amount of the pharmacy co-
payment. VA is already implementing new regulations pertaining to both 
the pharmacy co-payment and the outpatient co-payment.
    We estimate the PAYGO costs of S. 1408 to be $300 million dollars 
annually.
                                s. 1517
    S. 1517 would enhance certain aspects of the Montgomery GI Bill 
(MGIB). Specifically, the bill would amend the chapter 30 MGIB-Active 
Duty program by eliminating both the $1200 pay reduction currently 
required to participate in the chapter 30 MGIB program and the election 
required of those who choose not to participate. The Administration 
does not support this proposal.
    S. 1517 would also add a new category of individuals under the 
chapter 30 program who would be entitled to transfer their entire 
entitlement or a portion of it to one or more of their dependents. 
Under this provision, individuals with not less than 15 years of active 
duty service would become eligible to transfer MGIB education benefits. 
While this provision would have significant PAYGO costs, our PAYGO 
estimate is still under development. Since this proposal does not 
support the readjustment goals of the MGIB, the Administration does not 
concur in its enactment.
    S. 1517 also would extend the time limitation for using an 
individual's chapter 30 MGIB entitlement from 10 years after the date 
of discharge or release from active duty to 20 years. In like manner, 
it would provide for a 20-year delimiting period for members of the 
MGIB-Selected Reserve as well. The Administration does not support 
these provisions. In our view, extending the 10-year period is not 
consistent with the stated purposes of the MGIB. We believe that 10 
years is sufficient time for most individuals to make the readjustment 
from military to civilian life.
    Finally, S. 1517 would provide for increased MGIB education 
benefits for those members of the Selected Reserve who are called to 
active duty for more than one year for a contingency operation. The 
Administration also does not support this proposal.
                                s. 1561
    This bill would authorize $2 million for fiscal year 2002 and such 
sums as may be needed for each subsequent fiscal year for VA to 
continue its efforts in responding to, and training of VA and other 
health-care professionals for, the medical consequences of bio-
terrorism.
    We support increasing VA's efforts in the area of emergency medical 
preparedness. However, we believe that the objectives of this 
legislation should be addressed in the context of other measures being 
considered that address VA's role in bio-terrorism preparedness. VA's 
current funding in these areas is appropriated in the Department of 
Health and Human Services budget for reimbursement to VA, in order to 
ensure close coordination. The Homeland Security Council is currently 
evaluating the distribution of resources and effort of each agency in 
the context of a national strategy.
                                s. 1576
    S. 1576 would extend through December 31, 2011, VA's special 
authority to treat Gulf War veterans for any disability, 
notwithstanding there is insufficient medical evidence to conclude that 
such disability may be associated with such service. That authority 
will expire after December 31, 2002. VA supports this proposal.
                                s. 1680
    S. 1680 would amend the Soldiers' and Sailors' Civil Relief Act of 
1940 (SSCRA) to treat certain National Guard duty as military service 
under that Act. This legislation would enable National Guard members 
who are called or ordered to service by their governor in support of 
Operation Enduring Freedom, or at the request of the President, to 
qualify for the protections afforded by the SSCRA. Examples of these 
protections are the six-percent interest rate limitation on pre-
existing consumer debt, and stays of judicial proceedings in civil 
matters.
    The only notable impact on VA would be in our loan guaranty 
programs. In these areas, VA itself would have to abide by the SSCRA's 
provisions. The impact of the proposed amendment in this regard would 
be minimal and the PAYGO cost to VA would be insignificant. Because the 
protections provided under the SSCRA are afforded to individuals 
serving in military service, the Department of Defense (DoD), not VA, 
is the Federal agency with the primary interest in this Act. Therefore 
we defer to DoD on this bill. We understand that DoD will provide its 
views on S. 1680 to the Committee shortly.
                                s. 1905
    Mr. Chairman, thank you for introducing S. 1905 at our request. It 
contains a variety of needed enhancements to veterans' programs and the 
ability of the Department to administer them. Among its most 
significant provisions, it would:
     Confer new authority for VA to provide medical care for 
newborn children of enrolled women veterans;
     Authorize us to provide dental care to more former 
prisoners of war; and
     Eliminate certain VA-specific restrictions on numbers of 
non-career SES members and on who may serve as Deputy Assistant 
Secretaries.
    I strongly urge its favorable consideration.
                                s. 2003
    S. 2003 would amend VA's anti-assignment statute, 38 U.S.C. 
Sec. 5301, by adding language to prohibit agreements, and collateral 
security arrangements, between persons receiving monetary VA benefits 
and third parties. Third parties use these agreements to acquire rights 
to receive monetary benefits paid to VA beneficiaries.
    Let me first say that, because 38 U.S.C. Sec. 5301 generally bars 
assignment of VA benefits, VA regional offices have not, and do not, 
honor such agreements. Nevertheless, once funds are paid to a 
beneficiary, except where the veteran has been found mentally 
incompetent, VA lacks the ability to oversee how those funds are used. 
While we would certainly counsel veterans, their dependents and 
survivors to very carefully consider the full ramifications of 
assigning their benefits, we believe they should be free to decide how 
best to manage their own personal finances. We do not, therefore, 
support enactment of S. 2003.
                                s. 2043
    S. 2043 would extend by five years (through December 31, 2008) VA's 
authority to provide non-institutional extended care services as part 
of the medical benefits package furnished to veterans. The bill would 
also extend through December 31, 2008, mandatory eligibility for 
nursing home care for veterans with a service-connected disability 
rated 70% or greater. Finally, S. 2043 would extend by five years the 
date by which the Secretary must report to Congress on the operation of 
its long-term care programs established under the Millennium Act. VA 
supports S. 2043 and the continuation of the Millennium Act non-
institutional long-term care provisions.
                                s. 2044
    S. 2044 would amend section 116 of the Millennium Act to direct 
that we increase funding for specialized mental health services for 
veterans. The measure directs that we expend $25 million for these 
programs, but it is not clear whether it would require $25 million for 
each of three successive years, or over a three-year period. The 
additional $25 million must also be over and above the baseline amount 
now being expended for these programs. However, it is unclear if we 
must expend an additional $25 million over the baseline each year for 
three successive years, or only over a three-year period. Finally, the 
measure directs that we consider these funds to be special-purpose 
funds that we must allocate outside the VERA allocation system.
    Although VA appreciates the need to ensure adequate funding for 
these highly valuable and essential health-care programs, we strongly 
oppose this bill. We do not believe any individual health service 
should be treated differently from other essential treatment programs 
for allocation of appropriated resources. We also believe it is 
inappropriate to direct that we allocate funds for programs like this 
outside of the VERA system.
                                s. 2060
    This legislation would designate the building housing VA's Regional 
Office in St. Petersburg, Florida as the ``Franklin D. Miller 
Department of Veterans Affairs Regional Office Building.'' It would 
also require the Secretary to provide for an appropriate ceremony for, 
and commemoration of, the new designation on the first Memorial Day 
that follows enactment of the bill. Finally, the bill would require the 
Secretary to permanently display a copy of Mr. Miller's Medal of Honor 
citation in the building's lobby. We respectfully defer to the views of 
Congress on the naming of Federal property.
                                s. 2073
    This bill would provide retroactive entitlement to Medal of Honor 
special pension to Mr. Ed W. Freeman. As indicated above, VA supports 
enactment of S. 2025, which would ``make whole'' special pensioners for 
whom the awarding of the Medal of Honor was delayed. We generally do 
not support private relief bills, so we would prefer that this issue be 
addressed through enactment of S. 2025. In general, VA opposes private 
bills that provide relief for veterans and their survivors beyond that 
available through existing law. We believe that individuals should not 
be singled out for treatment not afforded similarly situated persons.
                          s. 2074 and s. 2229
    Both S. 2074 and S. 2229 would increase the rates of compensation 
for service-disabled veterans and for dependency and indemnity 
compensation paid to survivors of veterans whose deaths were service-
related, effective December 1, 2002. As provided in the President's FY 
2003 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 1.8 percent. 
The proposed COLA is necessary to protect the benefits of affected 
veterans and their survivors from the eroding effects of inflation. 
These worthy beneficiaries deserve no less.
    We estimate that enactment of this COLA would cost $279 million 
during FY 2003, $1.66 billion over the period FY 2003-2007 and $3.45 
billion over the period FY 2003-2012, which is included in the 
President's Budget. Therefore, the PAYGO cost is zero.
    S. 2229, which you were kind enough to introduce at our request, 
would also revise the statutory requirement that VA continue to provide 
extended-care services at 1998 levels. As you know, current law 
requires VA to maintain staffing and level of extended care services 
provided in VA facilities at the levels provided during FY 1998. We 
propose to amend the law to require that VA maintain the overall level 
of extended care it provided during FY 1998 (i.e., the aggregate of 
care provided in VA facilities, care VA contracts for in community 
nursing homes, and care VA subsidizes in State homes). If VA were 
required to meet the current mandate regarding care in just VA 
facilities, it would need to divert to that program an estimated $161.2 
million by the end of FY 2004 from other health-care purposes, 
including community nursing-home care and State nursing-home 
construction. This would greatly disserve veterans, who benefit from 
both choice and access to care closer to loved ones.
                                s. 2079
    S. 2079 would effect four changes in current law. First, it would 
permit judicial review of amendments to VA's schedule of ratings for 
disabilities. Second, it would change the standard of review applied by 
the United States Court of Appeals for Veterans Claims (CAVC) in 
challenges to findings of fact made by VA in adjudicating claims for 
benefits. Third, it would expand the jurisdiction of the United States 
Court of Appeals for the Federal Circuit to permit review of CAVC 
decisions on rules of law not involving the validity or interpretation 
of a statute or regulation. Fourth, it would authorize the CAVC to 
award reasonable fees and expenses under the Equal Access to Justice 
Act to non-attorney practitioners.
Review of Rating Schedule
    Section 1 of S. 2079 would permit judicial review of VA's actions 
in adopting or revising provisions of its Rating Schedule. Such review 
is currently prohibited by 38 U.S.C. Sec. Sec. 502 and 7252(b). Under 
S. 2079, such review could be sought either through a rule-making 
challenge filed directly with the Federal Circuit or as part of an 
appeal from a VA decision on a benefit claim, which is presented first 
to the CAVC and may thereafter be appealed to the Federal Circuit. The 
bill would permit direct challenges in the Federal Circuit only with 
respect to a revision of the Rating Schedule occurring after the date 
of enactment of this bill. However, the bill would impose no similar 
limitation on challenges brought in connection with an appeal from a VA 
benefit decision. Accordingly, all changes to VA's Rating Schedule made 
at any time in the past would apparently be subject to review in such 
appeals.
    VA does not support this change. In the Veterans' Judicial Review 
Act, Congress prohibited judicial review of the Rating Schedule because 
of the disruptive effect such review may have on VA claims processing. 
This change unnecessarily revisits the issues that were resolved in the 
compromises that led to enactment of the VJRA. Those compromises were 
reached in recognition of the fact that empowering courts to review 
VA's rating schedule will result in additional time-consuming 
litigation concerning complex medical and vocational matters on which 
courts have no particular expertise or experience.
    Pursuant to 38 U.S.C. Sec. 1155, the disability ratings assigned in 
the Rating Schedule are based upon the ``average impairments of earning 
capacity resulting from such injuries in civil occupations'' and are to 
be revised by VA ``in accordance with experience.'' As the statute 
contemplates, the provisions of VA's Rating Schedule are based on VA's 
judgment and accumulated experience in evaluating the medical, 
vocational, and economic factors relating to the effect of specific 
disabilities on earning capacity. Disputes concerning the content of 
the Rating Schedule would not involve the type of legal issues or case-
specific fact issues that appellate courts are ordinarily called upon 
to decide. Rather, they would involve challenges to VA's informed 
judgment concerning the average economic effects of specific medical 
conditions.
    Appellate courts are ill-equipped to assess the many medical, 
social, economic, and experiential factors that inform VA's judgment on 
these issues, and the CAVC and Federal Circuit would be particularly 
hampered in this endeavor by the lack of any procedures for developing 
an evidentiary record for such review. Even if an appellate court could 
acquire sufficient information to permit judicial review of these 
discretionary judgments, the process would be extremely time-consuming 
and burdensome on VA and the courts alike.
    Apart from the disruptive effects that would ensue if a reviewing 
court modifies or invalidates portions of the Rating Schedule, judicial 
review may limit VA's flexibility to adopt beneficial rating provisions 
based primarily on its experience and expertise. Although 38 U.S.C. 
Sec. 1155 indicates that VA's experience will be the primary guide in 
adopting changes to the Rating Schedule, judicial review would 
necessarily result in increased formalization and a greater need for 
specific medical and vocational evidence to support each rating. Rather 
than benefiting veterans, in our view, the rigidity that would likely 
follow from judicial review may adversely affect the historically 
liberal nature of VA's Rating Schedule.
    For these reasons, determinations concerning the average impairment 
of earning capacity due to specific conditions should continue to be 
committed to VA's informed discretion. The costs that may be associated 
with this provision cannot be predicted, but would depend on the number 
of challenges filed under this provision and the outcome of such 
challenges.
Standard of Review for Findings of Fact
    Section 2 of S. 2079 would change the standard applied by the CAVC 
in reviewing findings of fact made by the Board of Veterans' Appeals. 
Currently, the CAVC is authorized to set aside any ``clearly 
erroneous'' finding of material fact. S. 2079 would direct the CAVC to 
set aside any finding of material fact that is ``not reasonably 
supported by a preponderance of the evidence.''
    The ``clearly erroneous'' standard is a well-known standard of 
appellate review. See Fed. R. Civ. P. 52(a). In contrast, the 
``preponderance'' standard is ordinarily used as a standard of proof 
describing a party's evidentiary burden before a fact-finding body such 
as the Board of Veterans' Appeals. As the Supreme Court has noted, 
standards of proof and standards of appellate review serve very 
different functions and are not interchangeable. Concrete Pipe and 
Products of California, Inc. v. Construction Laborers Pension Trust for 
Southern California, 508 U.S. 602, 622-23 (1993). Standards of proof 
describe the degree of evidence needed to convince the finder of fact 
in the first instance. Standards of appellate review, on the other 
hand, describe the degree of confidence an appellate court must have in 
the fact finder's decision, and ordinarily accord some deference to the 
fact finder's decision.
    There would be some incongruity in defining the CAVC's standard of 
review in terms of a standard of proof customarily employed only by 
initial fact finders. More troubling, however, is the fact that the 
``preponderance'' standard would require the CAVC to decide claims 
without any deference to VA's findings of fact. Under the ``benefit of 
the doubt'' rule in section 5107(b) of title 38, United States Code, 
any findings of fact adverse to the veteran must be based on a 
preponderance of evidence. Section 2 of S. 2079 would direct the CAVC 
to independently decide whether a preponderance of evidence supports 
each factual finding, allowing no deference to the Board, which holds 
hearings, takes testimony, and seeks additional evidence as necessary.
    This Committee's 1988 report on the Veterans' Judicial Review Act 
discussed the importance of according deference to the Board's 
``expertise as an arbiter of the specialized types of factual issues 
that arise in the context of claims for VA benefits.'' This approach 
comports with the ordinary practice of according deference to factual 
findings made by administrative agencies, in view of the agencies' 
expertise, familiarity with the types of evidence and evidentiary 
issues involved, and ability to evaluate the credibility of testimony 
and other forms of evidence. Under the Administrative Procedure Act, 
findings of fact by most agencies are reviewed under the deferential 
``substantial evidence'' standard.
    Even if the Committee believes that a standard less restrictive 
than the ``clearly erroneous'' standard is warranted, it should not 
take the drastic step of permitting de novo review of VA fact finding, 
as S. 2079 would. As this Committee noted in its report on the 
Veterans' Judicial Review Act, there are other intermediate review 
standards available, such as the ``substantial evidence'' standard. 
Permitting de novo review would derogate from the Board's primary 
expertise in weighing evidence, evaluating the credibility of evidence, 
and making factual determinations on complex medical issues. It may 
also be expected to increase the CAVC's responsibilities and caseload. 
Moreover, it would depart from established practice in American 
jurisprudence of tiered layers of judicial review and would uniquely 
deprive VA of the deference routinely accorded to factual findings of 
virtually all other agencies. The anomaly of a court performing 
precisely the same function as an agency and wielding the same fact-
finding authority is both redundant and inconsistent with the 
traditional roles of the executive and judicial branches of government.
    Finally, I want to make clear that the CAVC's current standard of 
review does not in any way deprive veterans of the benefit of the doubt 
accorded by law. Under current law, the CAVC routinely considers 
whether the Board has applied the ``benefit of the doubt'' standard, 
whether the Board has adequately explained the application of that 
standard to the facts of each case, and whether there is a plausible 
basis for the Board's conclusions under that standard. This review 
plainly ensures that the benefit of the doubt is accorded to veterans 
whenever applicable.
    We cannot predict the costs that may be associated with this 
provision, as they would depend largely upon the outcome of individual 
cases.
Federal Circuit Review of Issues of Law
    Section 3 of S. 2079 would authorize the United States Court of 
Appeals for the Federal Circuit to review decisions of the CAVC on a 
rule of law. Currently, the Federal Circuit may review CAVC decisions 
with respect to the validity or interpretation of a statute or 
regulation or with respect to a constitutional question. S. 2079 would 
clarify that the Federal Circuit may decide legal questions that do not 
involve a statute, regulation, or constitutional provision. Proponents 
of this provision have suggested that it is needed to permit review of 
judicially-created legal rules, such as those involving equitable 
tolling of time limits or the so-called ``treating physician'' rule 
adopted by courts in Social Security benefit claims. VA does not agree 
with that view. We do not believe that purely legal issues are 
insulated from review by the current statute. Notably, the Federal 
Circuit has decided challenges concerning judicially-created legal 
principles under the existing statute, including issues pertaining to 
equitable tolling and the treating physician rule. See Bailey v. West, 
160 F.3d 1360 (Fed. Cir. 1998) (en banc); White v. Principi, 243 F.3d 
1378 (Fed. Cir. 2001).
    Although we do not believe this provision is necessary, VA has no 
objection to it. Permitting judicial review of purely legal matters is 
consistent with the purpose of the Veterans' Judicial Review Act and, 
we believe, with the Federal Circuit's current practice.
    We would, however, recommend one change to this provision. S. 2079 
would amend section 7292(c) of title 38, United States Code, to state 
that the Federal Circuit may review CAVC decisions on a rule of law. 
This would ensure that the Federal Circuit would retain exclusive 
jurisdiction over review of decisions of the CAVC. We believe it would 
also be necessary to make this change in section 7292(a), the provision 
the Federal Circuit has identified as prescribing its jurisdiction in 
those cases. See Forshey v. Principi, No. 99-7064 (Fed. Cir. Apr. 1, 
2002).
    There would be no significant costs associated with this provision.
Fees for Non-Attorney Practitioners
    Section 4 of S. 2079 would authorize the CAVC to award reasonable 
fees and expenses for the services of non-attorney practitioners 
admitted to practice under that court's rules. Specifically, the bill 
would state that the CAVC's authority to award fees and expenses of 
attorneys under 28 U.S.C. Sec. 2412(b) shall include the authority to 
award fees and expenses of non-attorney practitioners ``as if such non-
attorney practitioners were attorneys admitted to practice before the 
Court.''
    As an initial matter, we believe this bill should refer to 
subsection (d) of section 2412, rather than to subsection (b). The 
Federal Courts Administration Act of 1992 amended subsection (d) to 
give the CAVC authority to award reasonable fees and expenses of 
attorneys under that subsection. We are aware of no cases in which the 
CAVC has awarded fees and expenses under the separate authority of 
subsection (b) of section 2412.
    VA has no objection to permitting payment of reasonable fees and 
expenses of non-attorney practitioners. We note that the CAVC currently 
has authority to award reasonable fees and expenses of non-attorney 
practitioners who are supervised by an attorney. This legislation would 
extend that authority to cases involving unsupervised non-attorney 
practitioners who have been admitted to practice under the CAVC's 
rules.
    VA does not, however, support the language in section 4 providing 
for awards ``as if [the] non-attorney practitioners were attorneys 
admitted to practice before the Court.'' This language may require that 
fees for non-attorney practitioners be commensurate with fees for 
attorneys. Although we recognize the valuable services provided by non-
attorney practitioners before the CAVC, their services ordinarily are 
not compensated at the same level as services of a licensed attorney. 
The Equal Access to Justice Act contemplates that fees generally shall 
correspond to the market rates for the kind and quality of services 
furnished. Accordingly, the CAVC should retain the authority to pay 
fees for attorneys and non-attorneys at different rates.
    There would be no significant costs associated with this provision.
                                s. 2132
    Section 1 of S. 2132 would require the Secretary to establish four 
Emergency Medical Preparedness Centers within the Veterans Health 
Administration (VHA). VA employees would staff the proposed Centers, 
and the Centers would be administered jointly by the offices within the 
Department that are responsible for directing research and for 
directing medical emergency preparedness.
    The Centers would have four specific purposes. First, they would 
carry out research and develop methods in detection, diagnosis, 
vaccination, protection, and treatment of injuries arising from the use 
of chemical, biological, radiological agents or incendiary or other 
explosive weapons or devices. Second, they would provide education, 
training, and advice on the medical consequences of the use of CBR 
agents or incendiary or other explosive weapons or devices. Third, the 
Centers would provide that same education, training, and advice to non-
VA health-care professionals. These activities would be accomplished 
through either the National Disaster Medical System or interagency 
agreements. Fourth, in the event of a national emergency, they would 
provide laboratory, epidemiological, medical, or other assistance, as 
the Secretary considers appropriate, to Federal, State, and local 
health care agencies and personnel involved in, or responding to, the 
national emergency.
    Each Center would be authorized to solicit and accept contributions 
of funds and other resources, including grants, to carry out their 
purposes and activities, subject to the Secretary's approval. Section 1 
of this bill would also authorize to be appropriated $20 million for 
these Centers for each of fiscal years 2003 through 2007. By the bill's 
terms, such authorization is valid only for funds appropriated 
separately and solely for purposes of the Centers; otherwise, the 
authorization is null and void.
    Section 1 of S. 2132 is similar to H.R. 3253 on which the Deputy 
Secretary testified on April 10, 2002, before the House Committee on 
Veterans' Affairs, Subcommittee on Health. However, it incorporates the 
recommendations VA suggested in its April testimony concerning H.R. 
3253 and adds a number of improvements to the House version of the 
bill. We are grateful to this Committee for having incorporated our 
recommendations. We strongly support the goals of section 1 of S. 2132 
and prefer it to H.R. 3253. However, the Executive Office of the 
President, through the Homeland Security Council (HSC), is currently 
crafting a comprehensive coordinated Federal policy on Homeland 
Security. VA is actively participating in this HSC effort. It is 
expected that HSC will deliver this policy to the President this July. 
The precise roles and responsibilities VA will be assigned in the area 
of Homeland Security will be reflected in that policy. We expect that 
we will have much to contribute in this area based on our depth of 
expertise and infrastructure, as alluded to above.
    Because the President's Homeland Security Policy is forthcoming, we 
would like to work with the Committee to ensure that section 1 of S. 
2132 is consistent with the comprehensive Federal plan.
    In addition, S. 2132 contains two provisions that would expand the 
purpose and operations of VA non-profit corporations. VA non-profit 
corporations function as flexible funding mechanisms that support VA 
research and education. VA non-profits receive and administer funds 
from outside sources, e.g., NIH grants and donations made by private 
sponsors, in support of approved VA research projects and education 
activities. However, the current statute expressly provides that VA may 
not transfer appropriated funds to the corporations. Section 2(a) of 
the bill would amend section 7362 of title 38 to permit the transfer of 
appropriated dollars from VA to a corporation pursuant to a contract or 
other agreement, including an agreement for actual research. In 
addition, section 2(b) of the bill would amend VA's sharing authority 
to treat VA non-profits like affiliated institutions for the purpose of 
sharing health-care resources related to research, education and 
training. These changes would broadly enable the corporations to sell 
services to the Department. The bill also provides that these 
arrangements would be outside the scope of Federal procurement law and, 
therefore, would not be subject to full and open competition.
    VA objects to these proposals on the grounds that they would alter 
the fundamental nature of the relationship between VA and the non-
profits, which is analogous to that created in a trust. Under current 
law the corporations exist as a flexible funding mechanism solely to 
support approved VA research and education. The amendments in section 2 
of the bill would make the relationship between Department health-care 
facilities and VA non-profits more like that with outside contractors 
or university affiliates; more of an arms-length negotiation rather 
than one of incontrovertible fiduciary support. This change would also 
shift the emphasis of VA non-profits away from the primary focus of 
providing flexible funding support for VA research, education and 
training to conducting and selling these services to VA. This shift 
would present a troubling risk of ceding Department control of VA 
approved research or education to the non-profits.
    Section 3 of the bill would amend the title 38 authorities related 
to VA non-profits by adding a new section 7364A to specifically state 
that corporation employees assigned to work on approved VA research or 
education and training shall be considered employees for purposes of 
Federal tort claim and medical malpractice coverage. VA strongly favors 
this provision. We note, however, that the phrase, ``carried out with 
Department funds'' in the proposed section 7364A(b)(2) might be 
interpreted to limit this coverage. Much of VA-approved research, or 
education and training is supported by external funds.
                                s. 2186
    Mr. Chairman, thank you for introducing S. 2186 at our request. 
This legislation would establish a new Assistant Secretary to perform 
operations, preparedness, security and law enforcement and a new VA 
office of Operations Security and Preparedness. We believe this new 
office is essential if we are to meet our responsibilities of 
protecting veterans, employees, and visitors to our facilities.
                                s. 2187
    S. 2187 would permit VA, on its own initiative, to care for those 
affected by a disaster or emergency and those responding to the 
emergency. The disaster or emergency must be either declared by the 
President or involve activation of the National Defense Medical System. 
The bill would also require other Federal agencies to reimburse VA for 
care provided to their officers, employees, and active duty members at 
rates agreed upon by the agencies. VA would not be required to charge 
for care provided to other individuals. Finally, the bill would allow 
VA to provide care in response to disasters and emergency situations 
before caring for all other beneficiaries except service-connected 
veterans and active duty military members referred during war or 
national emergency or who are responding or involved in a disaster or 
emergency.
    We are very interested in this measure, but we need to work with 
both the committee and other Federal departments and agencies to fully 
understand the implications of the bill. We anticipate providing 
further views on the measure at a later time. We would note, however, 
that the bill also proposes to amend 38 U.S.C. Sec. 1711(b). That 
provision is now codified at 38 U.S.C. Sec. 1784. Finally, the bill 
would conflict with an administrative provision that appears in VA's 
annual appropriation act that requires reimbursement of costs except in 
specified situations. For the provision to be effective that provision 
of the appropriations act will also need amendment.
                                s. 2227
    S. 2227 would clarify the effective date of changes to the method 
of computing retirement annuities for certain VA health-care personnel. 
Last January the Department of Veterans Affairs Health Care Programs 
Enhancement Act of 2001 (P.L. 107-135) became law. That bill changed 
the way part-time service performed before April 7, 1986, by certain VA 
health-care personnel is credited for annuity purposes. VA had 
recruitment and retention problems based upon the prior methodology of 
the annuity computation for VA nurses. These difficulties were 
addressed by the enactment of section 132 of P.L. 107-135. S. 2227 
would extend the benefits of section 132 of P.L. 107-135 to individuals 
who retired before the law's enactment. The Administration opposes 
legislation that modifies the retirement-benefit computations for 
employees who are already retired.
                                s. 2228
    This bill would provide that the Secretary may establish not more 
than 15 Centers for Mental Illness Research, Education, and Clinical 
Activities under38 U.S.C. Sec. 7320. VA has no objection to this 
provision.
                                s. 2230
    This legislation would revive VA's authority, contained in section 
3707 of title 38, to guarantee adjustable rate mortgage loans (ARMs). 
The bill would also amend this section to authorize VA to guarantee 
``hybrid'' ARMs.
    In 1992 the Congress authorized a three-year test program for VA to 
guarantee ARMs. That authority had a sunset date of September 30, 1995. 
Due to concerns about the cost of that program, the Congress let the 
ARM authority lapse.
    The interest rate on ARMs authorized by the 1992 statute, which 
would be reauthorized by the bill, is adjusted annually, based on a 
national interest-rate index approved by VA. Each annual increase or 
decrease is limited to one percentage point. In no event, however, may 
the interest rate be increased to more than five percentage points 
above the initial contract interest rate.
    The interest rate on hybrid ARMs, which would also be authorized by 
S. 2230, is fixed for an initial period of not less than three years. 
Thereafter, the rate would increase or decrease annually by up to one 
percentage point. The maximum lifetime increase of five percentage 
points would also apply to hybrid ARMs.
    The Administration does not yet have a formal position on S. 2230. 
The availability of ARMs would expand veterans' ability to qualify for 
home loans, as some veterans could qualify for the lower initial 
payments on an ARM who could not qualify for the payments on fixed rate 
loans 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. While veterans using their earned housing loan benefits 
should perhaps have the same options as borrowers using FHA and 
conventional loans, they already differ from the general public in that 
no downpayment is required. Adding a low upfront payment with the 
potential to escalate in the future to those veterans who do not 
qualify for fixed rate loans may lead to higher defaults and costs of 
the system. We need more time to analyze this bill and its 
implications.
    VA estimates that enactment of this bill would have a PAYGO cost of 
$21 million for the first year, and a 10-year cost of $266 million.
                                s. 2231
    S. 2231 would increase educational assistance benefits under VA's 
Survivors' and Dependents' Educational Assistance program (chapter 35), 
limit the number of months for those benefits, and increase funding to 
State Approving Agencies (SAAs). Specifically, it would raise the 
chapter 35 educational assistance allowance to $900 per month for a 
full-time course for Fiscal Year (FY) 2003 and to $985 for months after 
FY 2003. It would also raise the amounts payable for Special 
Restorative Training to $900 for FY 2003 and to $985 for the months 
thereafter. The proposed legislation would also decrease the 
entitlement available to chapter 35 recipients from the current 45 
months to 36 months, in the case of those who first file an educational 
assistance claim under chapter 35 after the date of enactment. Given 
the relatively short time to consider these important issues regarding 
chapter 35, we would like to provide you our views at a later date, 
after we have had sufficient time to consider the matter.
    The final provision of S. 2231 would increase the annual limit on 
funds available to compensate SAAs for work undertaken on behalf of VA, 
including approving educational institutions and programs for which 
veterans and other entitled participants receive VA-administered 
education benefits. On April 11, 2002, the Under Secretary for Benefits 
testified before the House Veterans' Affairs Subcommittee on Benefits 
in favor of H.R. 3731, a bill similar to this one. We, likewise, favor 
the increase to $18,000,000 contained in S. 1517. However, H.R. 3731 
additionally would provide increases in SAA funding of 3 percent for 
FYs 2004 and 2005, with funding for 2006 and each succeeding fiscal 
year remaining fixed at the FY 2005 level.
    Because of the cost-of-living pay increases mandated by State law, 
salaries for State employees have gone up since the last SAA funding 
increase in 1994. Additionally, over the last two years, the SAAs have 
been called upon to perform new and time-consuming duties as part of 
their mission. For example, Public Law 106-419, enacted on November 1, 
2000, initiated the licensing and certification test payment program 
and allowed VA to delegate approval responsibility to SAAs even though 
it was not covered in their contracts.
    We prefer the House version of this provision because it would 
increase SAA funding for the outyears.
                              other bills
    Mr. Chairman, we do not yet have positions on three other bills on 
today's agenda:
     S. 2205, involving compensation for service-connected 
mastectomies and making permanent VA's authority to provide counseling 
and treatment for sexual trauma;
     S. 2209, which would establish a new insurance program for 
service-disabled veterans; and,
     S. 2237, involving enhanced compensation for veterans with 
hearing loss.
    We will be presenting our views and estimates on these in writing 
to the Committee at a later time. It is worth noting, however, that all 
the bills on today's agenda together would have costs exceeding $2 
billion over five years. VA continues to believe that it is important 
to use the President's Budget as a guide on how to proceed.
    Mr. Chairman that concludes my prepared testimony. I will be 
pleased to respond to any questions you or the members of the committee 
may have.
                                 ______
                                 
  Response to Written Questions Submitted by Hon. Daniel K. Akaka to 
  Claude M. Kicklighter, Assistant Secretary for Policy and Planning/
         Acting Director, Operations, Security and Preparedness
    Question 1. While this funding is minimal in comparison to the 
funding for the Department of Health and Human Services and FEMA for 
other bioterrorism preparedness and response activities, what resources 
would this funding provide the VA disaster-training program? Would it 
expand the number of training sessions, the number of participants, and 
the number of community partners?
    Answer. We support increasing VA's efforts in the area of emergency 
medical preparedness. However, we believe that the objectives of this 
legislation should be addressed in the context of other measures being 
considered that address VA's role in bio-terrorism preparedness. VA's 
current funding in these areas is appropriated in the Department of 
Health and Human Services budget for reimbursement to VA, in order to 
ensure close coordination.
    Under this funding VA is developing an emergency mass-casualty 
decontamination program at our medical centers. Our medical centers are 
a unique national asset and, since they are located across the country, 
are in an excellent position to respond in the event of a weapons of 
mass destruction (WMD) incident anywhere in the United States. We are 
asking every medical center to implement a mass-casualty 
decontamination plan to prepare for a possible WMD incident in their 
community. They will consult and partner with their community's 
emergency planners to ensure development of a consistent program that 
meets community needs. A major part of this initiative is training for 
those VA health care workers who will be called upon to operate these 
decontamination facilities. We have already developed some excellent 
hospital decontamination programs within some of our Veterans 
Integrated Service Networks. Many of them have been nationally 
recognized by FEMA, and were the basis for such special decontamination 
programs as implemented by VA for the Winter Olympics in Salt Lake 
City.
    Question 2. What is the reason behind this lack of recognition? Is 
it based on a lack of awareness or interest? What have you and the VA 
leadership done to address this issue with HHS, FEMA, or the Office of 
Homeland Security?
    Answer. The Homeland Security Council is currently evaluating the 
distribution of resources and effort of each agency in the context of a 
national strategy. In order to assist in this evaluation, VA has met 
with the Deputy of the Office of Homeland Security and his senior staff 
members; Deputy Secretary, Health and Human Services (HHS), Director, 
Office of Public Health Preparedness, HHS, and key staff; Special 
Assistant, Office of Homeland Security, Department of Defense; and 
Director, Office of National Preparedness, Federal Emergency Management 
Agency. These meetings have generated improved support and interest. 
Presently, we are working to schedule monthly meetings with these 
Federal partners to further enhance our collaborative efforts and 
response to Homeland Security initiatives. In addition, our 
representation on the following Homeland Security Committees and 
working groups is helping to increase the awareness of VA's 
capabilities during times of crisis:
     National Strategy for Homeland Defense Steering Committee
     Deputy Secretaries Council Committee
    Policy Coordination Committees:
     Domestic Threat Response & Incident Management
          First Responders Working Group
          Operations Center Working Group
     Medical & Public Health
          Domestic Anthrax Vaccination Policy Working Group
     Research & Development
          National Bio-lab Requirements Working Group
          Radiological, Nuclear, Conventional/Detection & Response 
        Working Group
     Plans, Training, Exercises and Evaluation
     Communications

    Chairman Rockefeller. More or less perfectly handled.
    Senator Nelson?
    Senator Nelson. Thank you, Mr. Chairman.
    With regard to S. 1408, I think the question that I would 
have and the comment I would have there is I can understand the 
desire to raise a copay over a period of time. A 350-percent 
increase in a single year would seem excessive to me, and 
certainly to those who are most likely to have the need for 
that could very easily be those least able to absorb this kind 
of an increase.
    One of the problems that we share today is the lack of a 
Medicare prescription drug benefit, but also we do provide the 
prescription drug benefits for our veterans. I am very 
concerned that this is too much too quickly, and while I was 
Governor I did impose a copay, under the theory of insurance, 
to deal with utilization and some cost containment for the 
Medicaid program. So I am not opposed to copays, but this kind 
of an increase seems to me to be something that you could do 
gradually over a period of time with less disruption to 
veterans who could ill afford that kind of an increase, given 
the fact that many of them are currently experiencing health 
problems that require a considerable amount of a number of 
prescriptions.
    So it is not just on all of their prescriptions, it is on 
every prescription, and these days, if you visit with your 
veterans, as I do, and I know you do, they will have a whole 
host of little prescription drug bottles there that this drug 
is for that, and this drug, and they can put 10 or 15 of them 
out there, and so it is a significant increase to them 
percentagewise and in financial impact. That is why I 
understand the desire to recover and control the outgoing flow 
of dollars, but I am not sure that this is as well thought 
through as it should be.
    Mr. McClain. Senator, you are referring to the increase in 
the pharmacy copayment from $2 to $7?
    Senator Nelson. Yes.
    Mr. McClain. I am going to defer to Dr. Murphy because I 
think she has many of the reasons behind that, and also I think 
there was a provision in your bill regarding a requirement to 
raise outpatient copays before raising the pharmacy copay at 
any future time.
    Senator Nelson. Exactly.
    Mr. McClain. I will ask Dr. Murphy to address that also.
    Dr. Murphy. Senator, the pharmacy copay was raised to $7 
this year. It is a modest cost for increasingly expensive 
drugs. At the same time, we did lower the cost for basic care 
in the VA, the basic primary care appointment was lowered from 
$50 to $15, and that was looked at as a way to balance and 
reduce copays overall. We will still be charging a $50 copay 
for specialty care.
    Senator Nelson. I understand the logic because it is based 
on economics, but shifting from one patient's utilization to 
another patient's utilization may show equity on the balance 
sheet and the operating statement, but my concern is about the 
shift of the cost for prescription drugs to individuals who are 
currently having it. Their dollars may go up, costs may go up, 
but their utilization of the other kind of care that we have 
reduced, if you will, the copay, may not affect them, and so we 
can have a shift.
    If they can end up net even, I probably would not have the 
concern, but there is usually a ``shifter'' and a ``shiftee,'' 
and I am worried about, in this case, those who end up with a 
higher cost for prescription drugs at a time when we do not 
have Medicare providing it and this is the only facility.
    Thank you, Mr. Chairman.
    Chairman Rockefeller. Thank you, Senator Nelson.
    I think your concern, too, had to do with the income level 
that was----
    Senator Nelson. The $9,000-a-year-income level as well.
    Chairman Rockefeller. My question, and I really want this 
on the record, is the question of how your medical research and 
other programs have been affected by the results of terrorism. 
HHS and others are doing very well by OMB, and I would think 
that you would not be happy with the--oh, $2 million you have 
gotten from the new money being handed out for homeland 
security. You have received $2 million for preparedness?
    Mr. McClain. Yes, Senator.
    Chairman Rockefeller. Oh, that is terrific.
    I would not think you would be very happy about that, and I 
would like to know why you are not very happy about it so that 
the world can understand a little bit better why you need a 
seat at the table.
    General Kicklighter. Sir, after the terrorist attack on 
September 11th, our Secretary put together a working group to 
take a look at what our needs were. We must be prepared. You 
said this most eloquently in your opening statement, that we 
must be prepared to, first of all, be able to take care of our 
veterans that may be in our facilities or our patients and also 
to be able to take care of our employees to be able to continue 
to perform their functions under a terrorist attack, and then, 
also, as you said, this is a tremendous national asset that is 
in every community all across America that must be prepared to 
come to the aid of our Nation when and where possible.
    We looked at what it would take to be able to respond. The 
study indicated that we had a need for about $115 million in 
2002, and about $104 million in 2003, and about $78 million in 
2004, for us to really be able to take advantage of this unique 
capability and measure up to this new threat that our Nation 
faces, both focusing on continuing to support veterans and also 
being able to respond to the attack or disaster.
    The $2 million provided certainly was not adequate, and we 
still have a need for much more, and we are doing all we can 
internally, but as you know, there is not a lot of resources 
that are available to be moved around internally.
    Chairman Rockefeller. What gets in my craw is, again, I 
think too many people think of the VA as they thought of the VA 
30 years ago, and everything is different. Again, it is the 
largest system of integrated health care in this country. If 
some people say, well, it is a Government-run thing, well, so 
is the war on terrorism, so is homeland security, for the most 
part. It is very offensive to me; that research is something 
that we pride ourselves on in the VA, it is the way we attract 
and keep physicians. It is offensive to me that you have been 
overlooked.
    Lots of people get overlooked, but this is a case where I 
think it is not in the national interests, and that is why I 
think it is important to have somebody from VA at the homeland 
security planning table. Hence, you name a person. So that is 
why that bill is in there.
    General Kicklighter. Sir, let me make a few comments and I 
will pass it over to Dr. Murphy.
    We could not agree with you more, and we are working hard 
to ensure that people/other agencies understand what the 
Department of Veterans Affairs brings to this war. We work a 
great deal with the Homeland Security Office and the White 
House. We had Governor Tom Ridge over yesterday for a 
conference. We had HHS over this past week, Dr. D.A. Henderson 
and his team. We have met with DOD. We are trying hard to make 
sure that our Nation understands what unique capability VA has 
to offer. We believe, once we have discussions/briefings with 
the other lay offices, they will go away with a new 
appreciation and understanding. This is a beginning not an end 
of what we need to do, we will to continue to educate, 
coordinate, and build relationships.
    Chairman Rockefeller. Did the Governor have such a 
reaction?
    General Kicklighter. My perception is he did, and we had 
his team over about 5 weeks ago, headed by Admiral Steve Abbott 
and all of his key deputies, and they left there with a new 
appreciation of what VA offers in the way of emergency response 
in time of crisis.
    We are making progress, but not as much as we would like 
to, but we are trying.
    Chairman Rockefeller. Have you talked with HHS?
    General Kicklighter. Yes, sir. We had a meeting with them 
this past week.
    Chairman Rockefeller. Because they are the ones who are 
getting all of the money.
    General Kicklighter. And we pointed that out. [Laughter.]
    They agreed that we will start meeting on a monthly basis. 
In the very near future, we will start having monthly meetings 
with HHS, FEMA, with the Department of Defense, and with 
Homeland Security. That is our goal, and we are moving in that 
direction.
    Chairman Rockefeller. Good. And the other agencies have 
agreed to those meetings.
    General Kicklighter. Yes, sir, they have.
    Chairman Rockefeller. That is very good. That sounds like 
it is being handled well.
    General Kicklighter. It is a beginning. With that, I will 
hand over to Dr. Murphy.
    Dr. Murphy. I think General Kicklighter covered the issue 
very well.
    I would just add that one of the misperceptions is that 
because we are a Federal agency and an executive branch 
Department, that we are not part of the local communities. In 
fact, VA is different than many of the departments, in that we 
are integrated into every city, every community in the country, 
and VA needs to be there to be part of that Federal public 
health infrastructure, and we can play a very valuable role if 
we are given the mission to do so.
    Chairman Rockefeller. You are more than integrated, in 
terms of West Virginia. You play a huge part, and you are 
geographically dispersed in a perfect way. You are in each part 
of the State, and to pass this up is just absurd. It is just 
absurd.
    Anyway, we have all of your testimony, and I very much 
appreciate----
    Senator Specter, my total apology, sir. My peripheral 
vision is not suitable today. Do you have any questions?
    Senator Specter. Well, I had to go to another committee 
meeting, Mr. Chairman, so I did not hear the testimony that has 
been delivered up till now.
    But let me ask, in a general sense, Mr. McClain, what do 
you consider to be the most important area of Veterans 
Administration activity which needs additional funding?
    Mr. McClain. I think it is homeland security, security and 
preparedness, Senator.
    Senator Specter. That activity does benefit the veterans in 
a general sense, as it benefits all of us, but let me ask for 
what area of veterans' benefits specifically would you request 
additional funding--educational benefits? Long-term nursing 
care? Additional outpatient service? More hospital beds? Where 
would you place priority insofar as additional spending is 
concerned?
    Mr. McClain. Well, Senator, I am going to ask Dr. Murphy to 
address that. Certainly, health care is one of our main 
concerns.
    Senator Specter. Dr. Murphy?
    Dr. Murphy. Senator, we support the administration's 
budget. However, the needs for the veterans' health care system 
are growing day-by-day. The enrollment rates are outstripping 
our actuarial predictions for this year, as they did last year. 
Pharmaceutical costs are going up. Veterans are recognizing 
that the uniform benefits package that is offered by VA, and 
the pharmacy benefit, and the quality of care are really 
unparalleled in the U.S. health care system. Veterans are 
coming to us in larger and larger numbers.
    We are providing care to a million more veterans and we 
would like to continue to have open enrollment. But in order to 
meet all of the legislative mandates, maintain the high quality 
of care and provide that uniform benefits package, we do 
require the resources that it takes to maintain all of those 
programs.
    Senator Specter. Well, I understand, Dr. Murphy, that you 
obligated to support the administration's budget, but are you 
prepared to give your professional judgment that the efforts of 
some of us to supplement VA medical care funding by $2.5 
billion would be excessive?
    Let the record show a small smile and pause. [Laughter.]
    Chairman Rockefeller. No, let the record also show we do 
not want her to be fired. [Laughter.]
    Senator Specter. You have the right to remain silent.
    Dr. Murphy. I think what I can say is that the 2003 budget 
that was put forward gives you an accurate picture of what the 
needs were at the time the budget projections was put together. 
The enrollment being above what we had predicted and some of 
the other health care costs being above projections, there 
needs to be an adjustment. The $1,500 deductible would require 
action by this body.
    Senator Specter. Well, I do not want the General Counsel to 
avoid some cross-examination.
    Mr. McClain, how is the claims adjudication backlog? Do you 
need more judges? Do you need confirmation of the nominations 
now pending?
    Mr. McClain. The judges to the Appellate Court, to the 
Court of Appeals for Veterans' Claims?
    Senator Specter. Start there.
    Mr. McClain. Certainly, there----
    Senator Specter. How many vacancies do you have?
    Mr. McClain. Currently, I think there are two on that 
court, but they just authorized two additional swing slots, so 
to speak, because the 15-year terms of the initial appointments 
are now coming up in the next couple of years. That court was 
constituted in 1989, and so in the next couple of years, they 
will all----
    Senator Specter. So we now have Article One judges, Article 
Three judges and swing judges?
    Mr. McClain. Well, we have got Article One judges.
    Senator Specter. Tell me what a swing judge is. I know what 
an Article One judge is.
    Mr. McClain. There was a legislation passed to add two 
additional judges to the court. There were five originally. 
There is, for a period of time, up to seven. I am sorry, Mr. 
Thompson corrected me, from seven to nine. One of the slots was 
a 13-year appointment in order to begin to stagger the term so 
that you do not have, in another 15 years, this same turnover 
of the court.
    Senator Specter. Is a swing judge a judge appointed for a 
lesser period of time?
    Mr. McClain. Yes.
    Senator Specter. So how many vacancies does the court have, 
counting those which have not been replaced and counting the 
new slots?
    Mr. McClain. Well, there is one currently. I believe there 
has been a nomination for that, and we understand that there 
may be some retirements coming up this year and next year.
    Senator Specter. Would you provide the committee with what 
you anticipate there, and give us--my time is up--additional 
information as to what the backlog is and the adequacy of the 
existing resources to handle the backlog?
    Mr. McClain. Yes, Senator, I will.
    [The information referred to follows:]
              Fact Sheet: Judicial Caseloads and Vacancies
                       current judicial vacancies
    There is currently one vacancy on the U.S. Court of Appeals for 
Veterans Claims (CAVC). On March 21, 2002, President Bush nominated Mr. 
Bruce Kasold to fill that vacancy. The nomination is pending in the 
Senate Committee on Veterans' Affairs.
    However, as discussed at the hearing, Section 601 of Public Law 
107-103, authorized the temporary expansion of the CAVC to nine members 
(from its usual seven) in anticipation that several of the judges may 
retire in the next few years as their terms expire. In fact, Judge 
Ronald Holdaway has already announced that he will retire in November 
of this year. The President has not as yet exercised this authority to 
nominate additional members to the CAVC.
    There currently are no vacancies on the twelve-member U.S. Court of 
Appeals for the Federal Circuit, which hears appeals of CAVC decisions.
                         pending judicial cases
     As of May 9, 2002, a total of 1,875 cases were pending 
before the CAVC, consisting of: 1,607 appeals from the Board of 
Veterans Appeals, 45 writ petitions, and 223 petitions for fees under 
the Equal Access to Justice Act.
     As of May 21, 2002, approximately 375 appeals from CAVC 
decisions were pending before the U.S. Court of Appeals for the Federal 
Circuit. However, the resolution of 273 of these (involving a common 
EAJA-fee issue) will be controlled by a decision in three lead cases.
                       adequacy of ogc resources
    Barring unforeseen events, we believe the resources currently 
available to the Office of General Counsel and those requested in the 
President's FY 2003 budget will permit us to provide timely 
representation to the Secretary in these matters before the courts.

    Senator Specter. Thank you. Thank you very much.
    Thank you, Mr. Chairman.
    Chairman Rockefeller. Thank you, Senator Specter.
    Let me just close this panel with something that was just 
handed to me. Getting back to the homeland security aspect, 
this has been an amazing sequence.
    The working group chaired by Charlie Battaglia, who, of 
course, we all know, identified what it called a ``bare bones'' 
need to prepare VA medical centers, and it said ``bare bones'' 
was $248 million. The administration asked them to try again, 
and so they did, and they cut it to $77 million, and out of 
that you got $2 million. So let the record reflect that.
    I thank all of you very much. I appreciate you taking the 
time to be here.
    Mr. McClain. Thank you, Mr. Chairman.
    Chairman Rockefeller. Our second panel represents the major 
veterans service organizations.
    First, we have Jim Fischl, who is director of the National 
Veterans Affairs and Rehabilitation Commission for the American 
Legion.
    If we could have order, I would appreciate it very much.
    Second, we have Joe Violante, national legislative director 
of Disabled American Veterans.
    Also, David Tucker, senior associate legislative director, 
Paralyzed Veterans of America.
    Finally, Dennis Cullinan, who is director of the National 
Legislative Service, VFW.
    So we welcome you all and hope that you will keep your 
statements to 5 minutes. Obviously, your testimony is part of 
the record.
    Mr. Cullinan, we will start with you.

 STATEMENT OF DENNIS CULLINAN, DIRECTOR, NATIONAL LEGISLATIVE 
               SERVICE, VETERANS OF FOREIGN WARS

    Mr. Cullinan. Thank you very much, Mr. Chairman.
    On behalf of the men and women of the Veterans of Foreign 
Wars of the United States and our Ladies Auxiliary, I wish to 
express our sincere appreciation for inviting us to testify 
here today. The activities of this committee are paramount to 
the proper and timely provision of care, benefits and services 
to this Nation's veterans by VA. Today's extensive legislative 
hearing reflects yet another example of your long and proud 
tradition of service to this Nation's defenders in a strong, 
directed and bipartisan manner.
    I will begin our testimony with S. 984, the Veterans' Road 
to Health Care Act of 2001. The VFW supports this measure in 
that it would ensure access to care for nonservice-connected 
veterans needing VA care and bring the VA rate into conformance 
with Federal mileage standards. These adjustments are clearly 
the right thing to do for our veterans.
    Next, S. 1408. The VFW strongly supports the Veterans' 
Copayment Adjustment Act. This bill amends veterans' health 
care program provisions to conform income thresholds for 
copayment for outpatient medications to those in effect for 
hospital and nursing home care and medical treatment. Viewed by 
the VFW as being essential toward providing access to low-
income veterans to VA medications, it is supported by VFW 
Resolution 635, calling for equity in VA health care 
copayments. I would also note here that the VFW did send a 
letter to Secretary Principi calling for just this action.
    Next, 1517. The VFW supports the Montgomery GI Bill 
Improvements Act. This bill acts upon the long-sought VFW 
objective of amending the basic educational assistance 
provisions of the GI bill to eliminate the pay reduction 
currently required of a service member as a precondition of 
participation.
    Next under consideration, S. 1561. We are supportive of 
this bill to strengthen the preparedness of health care 
providers within the Department of Veterans Affairs and 
community-based hospitals to respond to bioterrorism. We 
strongly recommend, however, that $250 million be authorized, 
the bare-bones level, for this purpose, in place of the $2 
million specified in this bill.
    Next, I will talk about S. 1576. The VFW supports this bill 
to amend Section 1710 of Title 38 to extend the eligibility for 
health care of veterans who served in Southwest Asia during the 
Persian Gulf War to December 31, 2011. The cause and cures for 
the disabilities collectively known as Persian Gulf Illness 
have yet to be found. The termination of health care for those 
veterans suffering from this affliction would be both premature 
and wrong.
    S. 1680, the VFW also strongly supports this legislation 
that would extend the protection afforded by the Soldiers' and 
Sailors' Civil Relief Act to those National Guard members who 
are called to service by their State Governors at the request 
of the President. This is the right thing to do.
    S. 2003. The VFW supports the Veterans Benefits and Pension 
Protection Act that would prohibit unscrupulous companies from 
taking advantage of veterans by bilking them out of their 
compensation pension or DIC, in return for a so-called lump-sum 
payment.
    Next, S. 2025. The VFW strongly supports this bill, the 
Living American Hero Appreciation Act, that would increase the 
amount of the special pension that Medal of Honor recipients 
receive from $600 per month to $1,000. I emphasize our view 
that this legislation does not attempt to quantify their honor, 
but is a sign of the deep respect that all Americans have for 
these, the very bravest of us all.
    Next under consideration, S. 2043. The VFW strongly 
supports this bill that extends through December 2008 certain 
long-term care provisions in the Veterans' Millennium Health 
Care Act. I would share with you or deep disappointment that 
the provisions of this act have not been properly acted upon 
some 3 years after they were put into law.
    Mr. Chairman, I see that my time is about to expire. I, 
once again, express our sincere appreciation for inviting our 
testimony.
    Thank you.
    [The prepared statement of Mr. Cullinan follows:]
 Prepared Statement of Dennis Cullinan, Director, National Legislative 
                   Service, Veterans of Foreign Wars
    Mr. Chairman and members of the committee:
    On behalf of the 2.7 million men and women of the Veterans of 
Foreign Wars of the United States and our Ladies Auxiliary, I wish to 
express our sincere appreciation for inviting us to testify here today. 
The activities of this committee are paramount to the proper and timely 
provision of care, benefits and services delivered to this nation's 
veterans by the Department of Veterans Affairs (VA). Today's extensive 
legislative hearing reflects yet another example of your long and proud 
tradition of service to this nation's defenders in a strong, directed 
and bipartisan manner.
                                 s. 984
    The first bill under discussion today is S. 984, the Veterans Road 
to Health Care Act of 2001. This bill directs the Secretary of Veterans 
Affairs to pay the travel expenses of a veteran whose travel is in 
connection with treatment or care for a non-service-connected 
disability at a non-Department of Veterans Affairs facility if the 
treatment or care: (1) is provided upon the recommendation of 
Department medical personnel; and (2) is not available at the 
Department facility at which the recommendation is made.
    It also requires the Secretary, in calculating travel expenses 
under the Veterans Beneficiary Travel Program, to utilize the current 
Federal mileage reimbursement rates for use on official business of 
privately owned vehicles.
    The VFW supports this measure in that it would ensure access to 
care for non-service connected veterans needing VA care and that it 
would bring the VA rate into conformance with Federal mileage 
standards. These adjustments are clearly the right thing to do for our 
veterans. Many must travel long distances just to receive the most 
basic of services at VA facilities. Right now, they receive just a 
fraction of the full amount. And in many cases, after the $6 roundtrip 
deductible is subtracted, veterans receive nothing for their expenses. 
Although the amount of money this entails may seem small, to our 
veterans, many of whom are on fixed or limited incomes, it is 
invaluable. Additionally, we urge the adoption of language as called 
for by VFW Resolution No. 666 asking the Congress to repeal sections 
111(c)(1) and (2) of 38 U.S.C. authorizing deductibles from portions of 
travel pay made to VA patients.
                                 s.1408
    The VFW strongly supports S. 1408, the Veterans' Copayment 
Adjustment Act. This bill amends veterans' health care program 
provisions to conform income thresholds for copayment for outpatient 
medications to those in effect for hospital and nursing home care and 
medical treatment. Increases in such co-payments are contingent upon 
the collection of co-payments for outpatient visits for medical 
services for certain veterans. Viewed by the VFW as being essential 
toward providing access to low income veterans to VA medications, it is 
supported by VFW Resolution 635 calling for equity in VA Health Care 
Copayments. It should also be noted that the VFW sent a letter to the 
Secretary last year calling for this action. The VFW would also urge 
consideration of VFW Resolution 639 calling on Congress to exempt all 
enrollment priority category 5 veterans from having to make medication 
co-payments.
                                s. 1517
    The VFW supports S. 1517, the Montgomery GI Bill Improvements Act 
of 2001. This bill acts upon the long-sought VFW objective of amending 
the basic educational assistance provisions of the Montgomery GI Bill 
to eliminate the $1,200 pay reduction currently required of service 
members as a precondition to eligibility for benefits. It also permits 
certain service members to transfer their entitlement to benefits to 
their spouses or dependent children. Both VFW Resolution 661 and VFW 
Resolution 687 support these provisions.
    This legislation also extends the period after discharge during 
which former service members may utilize their benefits and increases 
benefits available to members of the Selected Reserve called to active 
duty as part of a contingency operation. This legislation provides for 
some of the MGIB enhancements called for in VFW Resolution 650, ``A GI 
Bill For The 21st Century.''
                                s. 1561
    While supportive of this bill to strengthen the preparedness of 
health care providers within the Department of Veterans Affairs and 
community hospitals to respond to bioterrorism, we strongly recommend 
that $250 million be authorized for this purpose in place of the $2 
million specified in this measure. The VFW recommended funding level 
represents our and the Independent Budget's projection as to the actual 
need in this critical area. Additionally, it is the amount that was 
called for by Secretary Principi when speaking before the House 
Veterans' Affairs Committee last fall.
                                s. 1576
    The VFW supports this bill to amend section 1710 of Title 38, 
U.S.C., to extend the eligibility for health care of veterans who 
served in Southwest Asia during the Persian Gulf War to December 31, 
2011. The cause and cures for the disabilities collectively known as 
Persian Gulf Illness have yet to be found. The termination of access to 
VA health care for those veterans suffering from this affliction would 
be both premature and wrong. VFW Resolution 625 urges support for all 
Gulf War Veterans.
                                s. 1680
    The VFW also strongly supports S. 1680, legislation that would 
extend the protections afforded by the Soldiers' and Sailor's Civil 
Relief Act (SSCRA) to those National Guard members who are called to 
service by their state governors at the request of the President.
    The SSCRA was passed in 1940 to help alleviate some of the 
financial burdens that being called to active duty military service 
places on the service members. The SSCRA, among other things, 
temporarily places an interest rate cap on the debts incurred by an 
individual, including their mortgage, car loans and credit card debt. 
In addition, it prevents them from being removed from their house or 
apartment, and from suffering undue consequences from non-payment of 
taxes while on active duty.
    Currently, National Guard members called to service at the request 
of the President are eligible for SSCRA's protections. Those members of 
the National Guard called up in support of Operation Enduring Freedom 
and the Homeland Defense mission, however, were called up by each of 
the governors at the President's request and, as a result, are not 
eligible for protection under the SSCRA.
    It simply is not fair that these Guardsmen do not receive the same 
protections. The men and women protecting and securing our airports, 
nuclear facilities, and other important locations are tasked with the 
same responsibilities whether they were called to active duty by the 
governors at the President's request, or by the President himself. 
These men and women, whose role is so vital, are given every other 
general benefit of an active duty service member including VA veteran 
status and Tricare family health insurance.
    Extending the financial protections of the SSCRA to these brave men 
and women corrects the fundamental inequity and oversight in the law. 
It is clearly the proper and equitable thing to do.
                                s. 2003
    The VFW also supports this bill, the Veterans Benefits and Pensions 
Protection Act that would prohibit unscrupulous companies from taking 
advantage of veterans by bilking them out of their compensation, 
pension, or dependency and indemnity compensation in return for 
services, securities, or other agreements. Currently, veterans may not 
directly assign their benefits to a third party. These companies have 
found a loophole that they unjustly use to defraud veterans wherein 
they offer a large lump sum payment in return for the veteran's 
benefits for a period of time. Unfortunately for the veteran, they 
receive pennies on the dollar for their benefits and compensation. This 
legislation would close the loophole and prevent these companies from 
taking advantage of our veterans.
    We also applaud the inclusion of this bill's outreach provisions. 
Informing veterans and their families of the deceitful practices these 
companies and individuals use can only lessen the chances that these 
companies will continue to take advantage of our veterans.
                                s. 2025
    The VFW strongly supports this legislation, the Living American 
Hero Appreciation Act, that would increase the amount of the special 
pension that Medal of Honor recipients receive from $600 per month to 
$1,000 per month. In addition, this legislation would automatically 
enact a cost-of-living adjustment for the special pension in the 
future.
    This legislation also authorizes the VA Secretary to provide a lump 
sum payment to all special pension recipients for the period between 
their actions that warranted the Medal of Honor and the actual date 
they began receiving their special pension. We believe that this 
provision is especially important to prevent the singling out of 
individual Medal of Honor winners. This ensures that all these brave 
men and women are treated equally and fairly.
    The provisions of this legislation are much deserved. Nothing can 
be said to accurately sum up their important and heroic contributions. 
This legislation does not quantify their honor; it is a sign of the 
deep respect that all Americans have for these, the very bravest of us 
all.
                                s. 2043
    The VFW strongly supports this bill that extends through December 
31, 2008, the period during which: (1) noninstitutional extended care 
services will be considered to be medical services required to be 
provided by the Secretary of Veterans Affairs to eligible veterans; and 
(2) the Secretary shall be required to provide nursing home care to 
veterans with service-connected disabilities. The VFW is deeply 
disappointed that these services, as provided for in the Millennium 
Health Care Act almost three years ago, have yet to be properly 
implemented by VA.
                                s. 2044
    The VFW supports this legislation that amends the Veterans 
Millennium Health Care and Benefits Act to increase the authorization 
of appropriations for a program to expand and improve the provision of 
specialized mental health services to veterans. It also requires the 
Secretary of Veterans Affairs to allocate specified amounts of such 
funds among programs: (1) identified by the Mental Health Strategic 
Health Care Group and the Committee on Care of Severely Chronically 
Mentally Ill Veterans; (2) on post-traumatic stress disorder; and (3) 
on substance abuse disorder. The VFW places special emphasis on the 
plight of our homeless veterans and those suffering from PTSD and 
substance abuse as providing ample evidence of the need for enhancing 
VA mental health programs.
                                s. 2074
    The VFW also is pleased to offer our support for this important 
legislation, the Veterans' Compensation Cost-of-Living Adjustment Act, 
to provide the annual cost-of-living adjustment to compensation, the 
clothing allowance, and DIC rates for veterans and their families. It 
greatly benefits those who are least able to adjust their incomes to 
keep pace with inflation and is vital to many of our veterans and 
retirees, many of whom have limited or fixed incomes. VFW Resolution 
621 urges the Congress to approve an annual cost-of-living adjustment.
    As in past years, we must also point out the inequity of the 
current rounding provisions. The practice of rounding veterans' 
compensation down to the nearest whole dollar started as a way of 
meeting balanced budget goals. Veterans, both in and out of uniform, 
have done more than their fair share with respect to keeping this 
nation's fiscal house in order. Although the few dollars savings our 
veterans would receive each year may not seem like much to you or I, to 
those on fixed incomes, it could bring some welcome relief. VFW 
Resolution 620 urges the Committee to end the practice of rounding down 
veterans' compensation.
                                s. 2186
    The VFW has no objection to this bill, the Department of Veterans 
Affairs Reorganization Act of 2002, that would increase from six to 
seven the number of authorized Assistant Secretaries of the Department 
of Veterans Affairs and would also add Department operations, 
preparedness, security, and law enforcement to their required 
functions.
                                s. 2187
    This legislative initiative, the Department of Veterans Affairs 
Emergency Medical Care Act of 2002, enjoys VFW support. It authorizes 
the Secretary of Veterans Affairs, during, and immediately following, a 
disaster or emergency declared by the President, or in which the 
National Disaster Medical System is activated, to furnish hospital care 
and medical services to individuals responding to, involved in, or 
otherwise affected by such disaster or emergency. It also authorizes 
the Secretary, during such period, to: (1) furnish care and services to 
veterans without regard to their enrollment in the Department of 
Veterans Affairs annual patient enrollment system; and (2) give a 
higher priority to the care of individuals involved in or affected by 
the disaster or emergency over all other eligible groups except 
service-connected disabled veterans and active-duty military personnel 
responding to or involved in such disaster or emergency.
    The Secretary is further authorized, during and immediately 
following such a disaster or emergency, to furnish hospital care and 
medical services to active-duty military personnel responding to or 
involved in such disaster or emergency. It provides a priority for such 
personnel over all other eligible groups except service-connected 
disabled veterans. It is the VFW's position that the Department be 
provided with all requisite funding to carry out these actions while 
continuing to fully provide for the veteran patient workload.
                                s. 2205
    The VFW supports this initiative to clarify the entitlement to 
disability compensation of women veterans who have service-connected 
mastectomies and to provide permanent authority for counseling and 
treatment for sexual trauma.
    According to VA statistics, women veterans now make up about 5 
percent of enrolled veterans, a percentage that is expected to double 
over the next two decades. The VFW is committed toward ensuring that 
women veterans receive all VA compensation that is their due and that 
they enjoy access to the best possible health care, including for 
gender-specific medical conditions, in the most appropriate setting. 
The VFW would also urge that such compensation and services also be 
provided to all male veterans requiring such services. This provision 
is supported by VFW Resolution 603, which calls for sexual trauma 
treatment for all veterans.
                                s. 2209
    The VFW is pleased to offer our support for this legislation, the 
Robert Carey Service Disabled Veterans' Insurance Act, that would make 
many much-needed changes to the Service-Disabled Veterans' Insurance 
program (SDVI). SDVI was created to provide insurance for those 
veterans whose service-connected disability prevents them from 
receiving commercial life insurance. A recent VA report, Program 
Evaluation of Benefits for Survivors, studied the various VA insurance 
programs and determined several problems with SDVI that this 
legislation addresses.
    First, it would increase the maximum coverage to $50,000. The 
current program has an initial benefit of only $10,000 with the option 
to purchase $20,000 in supplemental life insurance. Increasing this 
amount is essential. As VA's report notes, over half of SDVI 
beneficiaries receive less than $15,000 from all insurance sources--an 
amount that is far below the recommended insurance level of two to 
three times the insured's annual income. As SDVI frequently represents 
the sole, or largest, source of life insurance, the VFW believes that 
it is imperative that the amount of coverage be increased if VA is to 
truly meet the intent of the SDVI program.
    Second, this legislation changes the actuarial table used to 
determine premiums for the program. Currently, VA uses an actuarial 
table from 1941 that does not accurately reflect the improved health 
and life span all Americans lead due to the developments in medicine 
and health care over the last 60 years. This outdated table results in 
veterans paying significantly higher life insurance premiums. Under the 
current mortality table, for example, a 60-year-old veteran would pay 
$31.20 per $1,000 of coverage for SDVI. Using the more modern 1980 
mortality table, that amount halves to $15.60. Additionally, the 
outdated table places veterans at an even greater disadvantage when you 
compare SDVI coverage to what is available on the commercial market. 
Under a term life insurance plan, that same 60-year-old veteran could 
pay as little as $4.41 per $1,000 of coverage. The premium rates are 
unnecessarily high. If VA is to provide insurance at rates comparable 
to the commercial market, it is essential that the more modern table be 
used.
    This legislation goes a long way towards improving the benefits 
provided under the SDVI program. The improvements made by this program 
will greatly aid those veterans who have the greatest difficulty 
obtaining private insurance coverage. Further, it will encourage more 
eligible veterans to participate in this worthwhile program. Bringing 
SDVI's benefits in-line with the private sector is simply the right 
thing to do for those who have defended our country.
                                s. 2228
    The VFW supports this bill to amend title 38, United States Code, 
to authorize the Secretary of Veterans Affairs to operate up to 15 
centers for mental illness research, education, and clinical 
activities. Contingent upon the provision of requisite funding, we view 
this as a valuable initiative toward better serving those whose wounds 
of war are not physical in nature and whose suffering is often not 
readily apparent.
                                s. 2230
    The VFW is happy to support this legislation that would make 
permanent the authority to provide increased financing opportunities to 
veterans under the VA Home Loan Program by allowing VA to offer 
conventional and hybrid Adjustable Rate Mortgages (ARMs). Under P.L. 
102-547, the VA secretary was authorized to begin a demonstration 
project to begin offering adjustable rate mortgages through the VA Home 
Loan program that are similar to the Department of Housing and Urban 
Development's (HUD) programs.
    ARMs allow the mortgagee to periodically adjust the interest rate 
in accordance with the provisions of the mortgage. ARMs have proven to 
be very popular alternatives to conventional home financing. They 
typically offer a lower-than-normal initial interest rate, which may 
make it easier for our veterans to obtain affordable financing. And, if 
interest rates drop, the homebuyer can save thousands of dollars above 
what they would pay using a conventional mortgage.
    Despite these advantages, there are some drawbacks. If the interest 
rates increase, the homebuyer may end up paying more than they normally 
would, even with the reduced initial interest rate.
    As written, we feel that this legislation and the section of code 
it modifies (Title 38, Section 3707) do an excellent job of 
safeguarding our veterans from some of the negative consequences this 
type of mortgage can have. The law contains both periodic and overall 
interest rate caps to help protect the borrower. Periodic caps limit 
the amount that interest may increase from one year to the next, while 
Overall caps prevent the interest rate from increasing above a certain 
amount over the life of the loan. The current VA program limits the 
periodic cap to one percent and the overall cap to five percent over 
the life of the loan.
    The VFW believes that permanently expanding the financing 
opportunities for our veterans is the right thing to do as it helps 
assure them of the opportunity to pursue the American Dream of home 
ownership. The advantages of the ARM program may make it a viable 
alternative for many of our veterans, while the safeguards in the 
program lessen their chances of harm and, further, it brings veterans 
in line with what is available to non-veterans through HUD.
                                s. 2231
    The VFW is again pleased to offer our support for S. 2231, the 
Survivors' and Dependents' Educational Assistance Adjustment Act. This 
legislation would make the monthly benefit amount under the Dependents' 
Educational Assistance Program (DEA) equal to what veterans receive 
under the Montgomery GI Bill (MGIB). It would also increase the funding 
provided to support the important tasks of the State Approving Agencies 
(SAAs).
    The DEA program provides education and training benefits for the 
spouse and children of a veteran who is permanently and totally 
disabled, or who dies from a service-connected disease. We believe that 
this worthwhile program helps us show our gratitude for the family's 
loss and compensates the spouse and children for the loss of income and 
support that would have been provided by the veteran were it not for 
his or her service-connected disability. We feel that providing an 
increased benefit would result in increased usage, allowing more 
surviving spouses and children to have an opportunity to not only 
support their families, but to better themselves and make valuable 
contributions to society.
    The VFW is also proud to strongly support the provisions of S. 2231 
that would increase the amount of funding available to SAAs. SAAs are 
an essential component of the administration of the MGIB and other VA 
educational programs. They evaluate, approve, and supervise the GI Bill 
programs within their respective states. It is their responsibility to 
ensure that veterans have access to a quality education that will 
benefit them long into the future.
    Increasing their funding is essential. Between 1995 and 2000, their 
budget was flat-lined. Only in the last two years have they received a 
slight increase. If this legislation does not pass, their funding will 
revert to the same level they had seven years ago. SAAs have had to 
deal with this difficult budgetary situation all while dealing with 
many increased responsibilities. Passed just last year, The Veterans' 
Education and Benefits Expansion Act (P.L. 107-103) greatly increases 
the responsibilities of SAAs, particularly through its emphasis on 
benefits for training in hi-tech courses and schools. These classes 
must all be evaluated for their appropriateness and educational value. 
Once approved, the SAAs must ensure continued compliance with all state 
and federal regulations. It is clear that their burden has increased; 
it is time that their budget did the same.
    Mr. Chairman and Members of the Committee, this concludes the VFW's 
testimony. We again thank you for including us in today's most 
important discussion and I will be happy to respond to any questions 
you may have. Thank you.
                                 ______
                                 
Resolutions Adopted by the 102nd National Convention of the Veterans of 
Foreign Wars of the United States Held in Milwaukee, Wisconsin, August 
                              18-24, 2001
     resolution no. 603.--sexual trauma treatment for all veterans
    WHEREAS, some veterans (women and men) suffer personal assault and/
or sexual trauma while serving in active duty; and
    WHEREAS, many veterans who suffer from sexual trauma are not 
eligible to receive sexual trauma treatment and counseling from the 
Department of Veterans Affairs because they are in the National Guard/
Reserve or they lack the minimum 24-month active duty service 
requirement; and
    WHEREAS, the current Sexual Trauma Treatment Program under the 
auspices of the Department of Veterans Affairs is temporary; now, 
therefore
    BE IT RESOLVED, by the Veterans of Foreign Wars of the United 
States, that there will be established permanent VA programs for all 
veterans who need sexual trauma treatment; and
    BE IT FURTHER RESOLVED, that the Veterans of Foreign Wars insists 
there be absolutely no limitations or restrictions to access of VA 
sexual trauma treatment services thereby making such treatment 
available to all veterans regardless of their length of service or 
reserve status.
     resolution no. 620.--repeal section 8005 of public law 101-508
    WHEREAS, Public Law 101-508, the Omnibus Budget Reconciliation Act 
of 1990 (OBRA), contained a provision that veterans' compensation and 
Dependency and Indemnity Compensation (DIC) be rounded down to the next 
lower dollar; and
    WHEREAS, veterans, whose earning power is limited or completely 
lost because of service-connected disabilities, must rely on 
compensation for the necessities of life; and
    WHEREAS, surviving spouses of veterans who died of a service-
connected disability often have limited or no income other that DIC; 
and
    WHEREAS, compensation and DIC rates are modest, and erosion due to 
inflation has a direct impact on recipients with fixed income; and
    WHEREAS, the OBRA provisions were instituted solely as a means to 
balance the budget; and
    WHEREAS, veterans have sacrificed extensively since 1990 as part of 
the duty of all Americans to help balance the budget; and
    WHEREAS, there is no longer a need for such budget balancing 
measures when it is estimated that the government will now have a 
projected budget surplus over $5 trillion in the future; now, therefore
    BE IT RESOLVED, by the Veterans of Foreign Wars of the United 
States, that we urge Congress to repeal section 8005 of Public Law 101-
508, which requires the Department of Veterans Affairs to round down to 
the next lower dollar, veterans' compensation and DIC.
 resolution no. 621.--cost-of-living increase for va beneficiaries and 
                           military retirees
    WHEREAS, payments to VA beneficiaries and military retirees must be 
protected from inflation; and
    WHEREAS, many VA beneficiaries and military retirees live on 
limited or fixed incomes; and
    WHEREAS, many other segments of society have a better ability to 
adjust their incomes to compensate for inflation so that they are not 
adversely affected by cost-of-living increases; now, therefore
    BE IT RESOLVED, by the Veterans of Foreign Wars of the United 
States, that we urge Congress to provide timely annual increases in an 
amount at least commensurate with the Consumer Price Index (CPI) for 
all Department of Veterans Affairs' beneficiaries and military 
retirees.
           resolution no. 625.--support for gulf war veterans
    WHEREAS, during the Persian Gulf War, according to official 
military reports, members of the armed forces were exposed to various 
toxic substances and environmental hazards, and
    WHEREAS, many of these veterans, and in some cases their dependents 
and survivors. are now suffering from illnesses, or manifesting 
symptoms of illnesses that may be attributed to their service in the 
Persian Gulf, and
    WHEREAS, many Gulf War veterans did not begin to manifest symptoms 
until several years after returning from the Persian Gulf theater of 
operation; and
    WHEREAS, according to some scientific studies and reports, Gulf War 
veterans are reporting symptoms at a greater rate than their peers who 
did not deploy to the Persian Gulf; and
    WHEREAS, Public Law 105-277, Persian Gulf Veterans Act of 1999 and 
Public Law 105-368, Veterans Programs Enhancement Act of 1998, requires 
the Secretary to enter into an agreement with the National Academy of 
Sciences (NAS) to review available scientific and medical evidence with 
the end goal to determine whether there is sufficient evidence to 
warrant presumption of service connection for the occurrence of a 
specified condition; and
    WHEREAS, current available medical and scientific evidence has vet 
to determine the cause, effects, or latency period for the illnesses or 
symptoms associated with service in the Persian Gulf; now, therefore
    BE IT RESOLVED, by the Veterans of Foreign Wars of the United 
States, that we continue to urge the Secretary of Veterans Affairs to 
establish a open-ended presumptive period until medical and scientific 
research can be adequately utilized to help determine an appropriate 
time in which conditions associated with Gulf War service will 
manifest; and
    BE IT FURTHER RESOLVED, that we urge the Department of Defense and 
the Department of Veterans Affairs to provide health care for all 
active duty military and veterans and, as appropriately determined, 
their dependents and survivors, whose health has been adversely 
affected by the Persian Gulf War, and to conduct all necessary tests to 
determine the causes of these illnesses; and
    BE IT FURTHER RESOLVED, that we urge Congress to adequately fund 
appropriate medical and scientific research, and the Departments of 
Defense, Health and Human Services, and Veterans Affairs to implement 
all relevant laws that support all research efforts.
    BE IT FURTHER RESOLVED, that we shall petition the Departments of 
Veterans Affairs and Defense to define the Persian Gulf War region 
(also known as the Kuwait Theater of Operation and Southwest Asia 
Theater of Operations) under 38 USC Sec. 1117 and 10 USC Sec. 101. The 
Gulf War should be defined as the period ``Beginning on August 2, 1990, 
and ending thereafter on the date prescribed by Presidential 
proclamation or by law, and including the following geographic 
locations: Iraq, Kuwait, Saudi Arabia, Egypt, Israel, Turkey, Syria, 
Jordan, Bahrain. Qatar, United Arab Emirates, Oman, Neutral Zone 
between Iraq and Saudi Arabia, Yemen, Persian Gulf, Arabian Sea, Gulf 
of Aden, Gulf of Oman, Gulf of Suez, Suez Canal, Gulf of Aqaba, and Red 
Sea.''
       resolution no. 635.--equity in va health care co-payments
    WHEREAS, Public Law 99-272, Consolidated Omnibus Budget 
Reconciliation Act of 1985, allowed certain categories of veterans, in 
order to become eligible for VA health care, to pay a co-payment in an 
amount equal to 20 percent of the estimated average cost (which in 
Fiscal Year 2000 was $229.00); and
    WHEREAS, VA has no accounting system capable of tracking actual 
costs for the care it provides and had to use an alternate mechanism to 
calculate the average cost per veteran. In Fiscal year 2001, non-
service connected, category 7 veterans are required to pay an 
outpatient co-payment of $50.80 for each outpatient visit; and
    WHEREAS, VA has established a system designed to bill a veteran's 
insurance company for ``reasonable charges.'' This system-bills the 
veteran's insurance company at a rate of $35.00 for an office visit 
while the veteran pays a co-payment fee of $50.80; and
    WHEREAS, due to this calculation, a non-service connected veteran's 
co-payment cost continues to rise each year requiring a veteran to pay 
a co-payment much higher than that for an average office visit in the 
private sector and what VA bills the veterans insurance company. This 
creates a justifiable reason for veterans not to choose VA as their 
primary health care provider; and
    WHEREAS, the Millennium Bill authorized the Secretary of Veterans 
Affairs to adjust the veterans co-payment for care as deemed 
appropriate and as of this convention has yet to be changed; now, 
therefore
    BE IT RESOLVED, by the Veterans of Foreign Wars of the United 
States, that the Secretary of Veterans Affairs immediately address this 
issue of fair, Just, and equitable co-payments for category 7 veterans.
              resolution no. 639.--va alzheimer's facility
    WHEREAS, all the state veterans homes in the U.S. average about 30% 
Alzheimer's patients and/or some form of dementia conditions, who are 
inappropriately placed in the traditional nursing home setting; and
    WHEREAS, only a few Alzheimer's facilities even exist in the United 
States; and
    WHEREAS, the Department of Veterans Affairs construction budget 
funds for veterans nursing homes, but does not have authorization to 
fund any unique projects in long term care; and
    WHEREAS, the aging of our veteran population will only increase the 
need for nursing home beds which are being filled with dementia 
patients inappropriately placed in these facilities; and
    WHEREAS, veterans with Alzheimer's disease need facilities designed 
for their particular condition, as opposed to assigning them to 
traditional nursing homes: now, therefore
    BE IT RESOLVED, by the Veterans of Foreign Wars of the United 
States, that we support the need for Alzheimer's facilities for 
veterans and urge VA to maintain an open Alzheimer's unit within each 
Veterans Integrated Service Network; and
    BE IT FURTHER RESOLVED, that these facilities be uniquely designed 
for veterans with Alzheimer's disease using other than the routine 
medical or psychiatric care models. The program should include 
Alzheimer's research as an integral part of the veteran's treatment 
program.
          resolution no. 650.--a gi bill for the 21st century
    WHEREAS, the original GI Bill, which is recognized as one of the 
most profound pieces of legislation Congress passed last century, 
enabled millions of America's veterans, who otherwise might not have 
been able to afford an education, to attend college or receive 
vocational training; and
    WHEREAS, the current Montgomery GI Bill does not keep up with 
inflation or the rising cost of higher education; and
    WHEREAS, legislation pending before the 107th Congress would fully 
address VFW's resolution that all members of the Armed Services be able 
to attend any college, university or vocational school to which they 
are accepted; now, therefore
    BE IT RESOLVED, by the Veterans of Foreign Wars of the United 
States, that we urge Congress to enact a new GI Bill for the 21st 
Century which would provide an educational benefit that covers the cost 
of tuition, fees, books and related expenses along with a stipend to 
cover housing expenses, at the university or college of the veteran's 
choice.
  resolution no. 661.--repeal of the montgomery gi bill pay reduction 
                               provision
    WHEREAS, a provision of the Montgomery GI Bill (MGIB) law requires 
service members who wish to participate in the MGIB program to agree to 
a pay reduction of $1200 during the first year of their enlistment; and
    WHEREAS, a pay reduction of $100 per month for twelve consecutive 
months can, and often does, present a hardship to young service members 
whose salaries tend to be low during the initial enlistment; and
    WHEREAS, the MGIB of 1985, in requiring the $1200 pay reduction as 
a condition of participation, makes a sharp departure from the spirit 
of previously enacted GI Bill Educational Assistance programs, where 
service members were not required to assist in financing their 
education benefits; and
    WHEREAS, a substantial number of service members have suffered 
economic hardship due to the MGIB pay reduction provision, and the fact 
that monies paid into the program cannot be refunded, even when the 
service member changes his/her mind about pursuing higher education or 
training; now, therefore
    BE IT RESOLVED, by the Veterans of Foreign Wars of the United 
States, that we hereby petition Congress to repeal the pay reduction 
provision of the Montgomery GI Bill.
                resolution no. 666.--veterans travel pay
    WHEREAS, Title 38 United States Code section 111 authorizes the 
Secretary of Veterans Affairs to pay the actual expenses of travel 
(including lodging and subsistence) or, in lieu thereof, an allowance 
based upon mileage traveled; and
    WHEREAS, the law requires a $6.00 roundtrip deductible ($3.00 one 
way) with a maximum deductible of $18.00 within a calendar month; and
    WHEREAS, the majority of veterans who use this benefit are 
primarily on a fixed income, and to have them absorb the $18.00 
deductible places a hardship on these veterans; now, therefore
    BE IT RESOLVED, by the Veterans of Foreign Wars of the United 
States, that we urge Congress to repeal section 111(c)(1)(2) Title 38 
U.S.C. that authorizes deductibles from portions of travel pay made to 
VA patients.
resolution no. 687.--support transferability of educational benefits to 
                       a dependent family member
    WHEREAS, the retention of trained, skilled, and experienced 
military personnel continues to be a major national security issue; and
    WHEREAS, active duty military personnel are often unable to utilize 
their educational entitlements due to the demands placed upon them by 
their duties and responsibilities; and
    WHEREAS, the Commission on Service Members and Veterans Transition 
Assistance, recommended that Congress provide beneficiaries with the 
ability to transfer their education benefits to spouses and children; 
and
    WHEREAS, the children and spouses of military personnel are often 
unable to attend institutions of higher learning due to financial 
inability or hardship; now, therefore
    BE IT RESOLVED, by the Veterans of Foreign Wars of the United 
States, that we recommend that Chapter 30 Title 38 United States Code 
be amended to allow active duty military personnel to transfer or 
assign their educational benefits to dependent spouses or children.

    Chairman Rockefeller. Thank you, sir.
    Mr. Tucker?

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

    Mr. Tucker. Chairman Rockefeller, we appreciate this 
opportunity to present our views on the legislation that we are 
facing today on today's agenda. We have so much legislation and 
so little time, so I will limit my remarks to the measures 
relating to the VA's fourth mission and long-term care.
    The VA has four health care missions. The primary mission 
is the provision of health care to veterans; the second is to 
provide education and training for health care personnel; the 
third is to conduct medical research; and the fourth, in the 
words of the General Accounting Office, is to serve as a back-
up to the Department of Defense health system in war or other 
emergencies and as a support to communities following terrorist 
incidents and other major disasters.
    A major component of the VA's fourth mission is to assist 
States and localities. In fact, as the GAO points out, the VA 
is the primary back-up to other Federal agencies during 
national emergencies. We could not agree with you more, Mr. 
Chairman, that the VA needs to have a seat at the table as we 
are discussing what our national response is in this time of 
national emergency.
    As our public health system has been reduced, the VA's role 
has, over the years, grown larger. The VA is the only health 
care system that is capable of providing a comprehensive and 
national response to the threats we face from terrorist 
activities and national disasters and emergencies. The VA must 
be prepared and provided with the resources it needs, as well 
as explicit statutory guidelines to accomplish its 
comprehensive and vital fourth mission. There are four bills 
before us today that take important steps in advancing this 
goal.
    We strongly support S. 2187, the Department of Veterans 
Affairs Emergency Medical Care Act of 2002. This measure would 
clarify in Title 38 the VA's critical fourth mission.
    In addition, we support S. 1561, introduced last October, 
that would authorize $2 million in fiscal year 2002 to assist 
the VA in meeting its responsibilities. Of course, we believe 
that the VA must be authorized at a far, far higher level than 
the $2 million, but this is at least a step in the right 
direction.
    We support S. 2132, a measure that would establish for four 
Medical Emergency Preparedness Centers. We have previously 
testified in favor of a similar measure introduced in the House 
of Representatives.
    Finally, we support S. 2186, the Department of Veterans 
Affairs Reorganization Act of 2002, a bill introduced by 
request that authorizes the addition of an Assistant Secretary 
to oversee the VA's ``operations, preparedness, security and 
law-enforcement functions.''
    Taken together, these bills represent a serious initial 
response to adequately addressing the scope of the VA's fourth 
mission in this time of national emergency, but we believe that 
more needs to be done. Unfortunately, amongst a growing 
recognition of the VA's critical role in assisting our States 
and localities, the administration has failed to step forward 
and provide the funding necessary to accomplish this important 
mission, nor the leadership necessary to move forward. It is 
estimated that the VA will require $250 million in fiscal year 
2003 to begin to satisfy these requirements.
    The VA will be attempting to meet its many responsibilities 
as part of this mission, but we must ensure that this important 
work does not come at the expense of the VA's three other 
critical missions, especially the provision of health care to 
sick and disabled veterans.
    Let us be clear on this point. Without these additional 
resources, the funding needed as part of this national effort 
will have to come out of the resources available to provide 
health care to veterans.
    We support S. 2043, a bill that extends the period for the 
provision of noninstitutional extended care services and 
required nursing home care. As the hearing recently held by 
your committee demonstrated, the VA has been woefully negligent 
in meeting its responsibilities of the Millennium Act.
    I see my time is quickly advancing on me here.
    We also want to make sure that you recognize our strong 
opposition to Title II of S. 2229. That is a measure introduced 
by the VA that would allow the VA to include nursing home care 
furnished by private providers and State veterans' nursing 
homes when reporting its capacity requirements under the 
Millennium Act. Enacting this provision would provide the VA 
with a gimmick that would allow it to claim that it is 
maintaining the capacity required by law. The fact is that the 
VA has done little to provide these required services and now 
is searching for a way to circumvent the law and still claim 
that it is meeting its capacity requirement reporting 
requirements.
    The VA's experience with long-term care is a real national 
asset and an asset that we must not allow to be frittered away. 
It is our hope that this committee will continue to push the VA 
to provide the full range of care that is mandated currently by 
law.
    Thank you very much, Mr. Chairman. That concludes my 
remarks.
    [The prepared statement of Mr. Tucker follows:]
   Prepared Statement of David 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 the 27 pieces of legislation on today's 
agenda.
                            va's 4th mission
    The Department of Veterans Affairs (VA) has four critical health-
care missions. The primary mission is the provision of health-care to 
veterans. VA's second mission is to provide education and training for 
health-care personnel. VA's third mission is to conduct medical 
research, and its fourth, in the words of the Government Accounting 
Office (GAO), is ``to serve as a backup to the Department of Defense 
(DOD) health system in war or other emergencies and as support to 
communities following domestic terrorist incidents and other major 
disasters.'' A number of measures before us today address this critical 
4th mission.
    Public Law 97-174, the ``Veterans' Administration and Department of 
Defense Health Resources Sharing and Emergency Operations Act,'' 
currently part of 38 U.S.C. Sec. 8111A, established the VA as the 
principal medical care backup for military health care ``[d]uring and 
immediately following a period of war, or a period of national 
emergency declared by the President or the Congress that involves the 
use of the Armed Forces in armed conflict[.]'' 38 U.S.C. Sec. 8111A. On 
September 18, 2001, in response to the terrorist attacks on September 
11, 2001, the President signed into law (P.L. 107-40) an 
``Authorization for Use of Military Force'' which constitutes specific 
statutory authorization within the meaning of section 5(b) of the War 
Powers Resolution. This authorization satisfies the statutory 
requirement that triggers the VA's responsibilities to serve as a 
backup to the Department of Defense (DOD).
    An important part of the VA's 4th mission is to assist states and 
localities. In fact, the GAO, in its January 2001 report entitled 
``Major Management Challenges and Program Risks'' (GAO-01-255) 
characterizes the VA's role as the ``primary backup to other federal 
agencies during national emergencies.''
    The GAO has further characterized the VA's role as serving as a 
``backup to the Department of Defense (DOD) health system in war or 
other emergencies and as support to communities following domestic 
terrorist incidences and other major disasters[.]'' The GAO makes an 
important point stating that the ``VA's role as part of the federal 
government's response for disasters has grown with the reduction of 
medical capacity in the Public Health Service and military medical 
facilities.'' The VA is the only health care system that is capable of 
providing a comprehensive and national response to the threats we face 
from terrorist activities and national disasters and emergencies.
    The VA must be prepared, and provided with the resources it needs, 
as well as explicit statutory guidelines, to accomplish this 
comprehensive and vital mission. These bills take important steps in 
advancing this goal.
    PVA strongly supports S. 2187, the ``Department of Veterans Affairs 
Emergency Medical Care Act of 2002.'' This measure would clarify the 
VA's critical 4th mission. In addition, PVA supports S. 1561, 
introduced last October, that would authorize $2 million in FY 2002 to 
assist the VA in meeting its responsibilities under its 4th mission.
    PVA supports S. 2132, a measure that would authorize the 
establishment of four medical emergency preparedness centers. We have 
previously testified in favor of a similar measure introduced in the 
House of Representatives. PVA also supports sections 2 and 3 of S. 2132 
which make important modifications, technical in nature, to the VA's 
research corporations. Finally, PVA supports S. 2186, the ``Department 
of Veterans Affairs Reorganization Act of 2002,'' a bill introduced by 
request that would authorize the addition of an Assistant Secretary to 
oversee the VA's ``operations, preparedness, security and law 
enforcement functions.''
    Taken together, these bills represent a serious initial response to 
adequately addressing the scope of the VA's critical 4th mission in 
this time of national emergency. But we believe that more needs to be 
done.
    Unfortunately, amongst the growing recognition of the VA's critical 
role in assisting our states and localities, the Administration has 
failed to step forward and provide the funding necessary to accomplish 
this important mission, nor the leadership necessary to move forward. 
It is estimated that the VA will require $250 million in fiscal year 
2003 to begin to satisfy its 4th mission requirements. The VA will be 
attempting to meet its many responsibilities as part of its 4th 
mission, but we must ensure that this important work does not come at 
the expense of the VA's three other critical missions, especially the 
provision of health care to sick and disabled veterans.
                             long-term care
    As The Independent Budget stated:
          On November 30, 1999, the Veterans Millenium Health Care and 
        Benefits Act was signed into law. The Millenium Act's long-term 
        care provisions made it clear that inpatient and outpatient 
        long-term care services are integral parts of the system of 
        care that VHA [Veterans Health Administration] is to provide 
        for enrolled veterans. The law also specified that, like other 
        specialized services, VHA's inpatient long-term care is a 
        unique national resource and its capacity must not be 
        diminished in the process of VHA's restructuring and 
        realignment. Two years have passed since the passage of the law 
        and no implementing regulations have been issued. VHA continues 
        to reduce its inpatient long-term care capacity and enrolled 
        veterans do not know that they have access to these services.
    PVA supports S. 2043, a bill that would extend the period for the 
provision of noninstitutional extended care services and required 
nursing home care. As the hearing recently held by this Committee 
demonstrated, the VA has been woefully negligent in meeting its 
responsibilities under the ``Veterans Millenium Health Care and 
Benefits Act of 1999,'' P.L. 106-117.
    This Act required the VA to provide extended care services to 
enrolled veterans, to include nursing home care to any veteran who is 
in need of such care for a service-connected condition, or who is 70 
percent or more service-connected disabled. PVA was a strong advocate 
for the enhanced alternatives to institutionalization such as Adult Day 
Health Care, Respite Programs, as well as improvements to the State 
Veteran Home Program.
    It is our hope that this Committee will continue to push the VA to 
provide this care that is mandated by law. We look forward to working 
with the Committee to ensure that the VA fully complies with these 
important statutory provision.
    PVA strongly opposes Title II of S. 2229, the ``Veterans Benefits 
Improvement Act of 2002,'' introduced at the request of the VA. This 
provision would allow the VA to include nursing home care furnished by 
private providers and State veterans' nursing homes when reporting the 
capacity of its extended care services. Enacting this provision would 
provide the VA with a gimmick that would allow it to claim that it is 
maintaining the capacity required by law. The fact is that the VA has 
done little to provide these required services, and now it is searching 
for a way to circumvent the law and still claim that it is meeting 
capacity requirements.
                           health-care issues
    PVA strongly supports S. 1408, the ``Veterans' Copayment Adjustment 
Act.'' Last year, we fought a concerted battle to ensure that veterans 
living in higher-cost geographical areas were not unduly penalized by a 
``one size fits all'' means test. We were able to achieve passage, and 
enactment, of a compromise version that limits the amounts paid in co-
payments by veterans with income levels above the VA's means test but 
below the Low Income Index established by the Department of Housing and 
Urban Development.
    S. 1408 would increase the current $9000 threshold for exemption 
from pharmaceutical co-payments, and raise it to the standardized level 
of $24,000. We also applaud Section 3 of S. 1408 that requires the VA 
to delay implementing increases in prescription co-payments until there 
is a more equitable adjustment in the co-payments for other health care 
services.
    PVA supports S. 1576, which would extend the eligibility for health 
care of veterans who served in Southwest Asia during the Persian Gulf 
War for an additional 10 years. In January, this eligibility, which had 
expired on December 31, 2001, was extended an additional year. S. 1576 
would provide the 10 year extension that was originally intended last 
year. This bill represents the responsibility that the VA has to care 
for our service men and women who have been placed in harm's way.
    PVA supports S. 2044, which would expand and improve the provision 
of mental health services to veterans by providing an addition $10 
million in health care grants, and S. 2228, which would increase from 5 
to 15 the number of Mental Illness Research Education and Clinical Care 
(MIRECC) Centers. The Independent Budget explicitly called for 
increased funding for the VA's MIRECC Centers. The VA's wide variety of 
mental health programs, together with other specialized services such 
as blind rehabilitation, prosthetics, amputee services, and our own 
spinal cord dysfunction services, are the core programs of VA health 
care. Congress has given them special status, mandating in P.L. 104-262 
that VA maintain the capacity to provide these services. This bill 
would greatly assist the VA's capacity to treat veterans with mental 
illness, particularly Post Traumatic Stress Disorder (PTSD) and 
substance abuse disorders.
    The Independent Budget called for the VA to ``increase the priority 
given to women veterans programs to ensure that quality health care is 
provided and that services are maintained,'' as well as calling on the 
VA to ``not fail to meet [the] identified needs of [veterans] who have 
experienced sexual trauma during military service.'' We are pleased 
that S. 2205 supports these recommendations. In addition, we support 
Section 1 of S. 2205 that more fully complies with Congressional intent 
regarding disability compensation and mastectomies. We also support 
Section 101 of S. 1905 that would delineate the provision of health 
care for newborn children of enrolled veterans. Although not dealing 
with health-care issues, we do not oppose the other provisions of S. 
1905.
    Finally, we support S. 2227 which clarifies the calculation of 
annuities for retired personnel, and reiterates the Congressional 
intent behind the ``Department of Veterans Affairs Health Care Programs 
Enhancement Act of 2001,'' P.L. 107-135. This Act provided the VA with, 
as Chairman Rockefeller stated, ``several tools to respond to the 
looming nursing crisis.''
                           veterans' benefits
    PVA supports the language increasing the veterans beneficiary 
travel reimbursement rate from 11 cents-per-mile to the government 
rate, currently 34.5 cents-per-mile, in S. 984, the ``Veterans Road to 
Health Care Act of 2001.'' We must, however, express concern over the 
language contained in S. 984 that would authorize the payment of travel 
expenses to veterans seeking non-service-connected care at non-VA 
facilities. We appreciate the intent behind this provision, but are 
concerned about the expansion of this benefit to cover non-service-
connected conditions treated at non-VA facilities.
    PVA supports S. 1680, a measure to amend the Soldiers' and Sailors' 
Civil Relief Act of 1940 to provide that duty of the National Guard 
mobilized by a State in support of Operation Enduring Freedom or 
otherwise at the President's request be deemed military service under 
the 1940 Act. This bill would provide the important financial 
protections found in the 1940 Act to the men and women who have been 
called up since September. This is a matter of simple equity. These 
individuals called up under these limited circumstances have faced 
extended duty and suffered real financial hardships. We ask that this 
Committee find a way to ameliorate these inequities.
    PVA supports S. 2003, the ``Veterans Benefits and Pensions 
Protection Act of 2002.'' This measure would provide protection to some 
of our most vulnerable veterans. S. 2003 would close a current loophole 
by prohibiting assignment contracts entered into for specified periods. 
The VA Inspector General has stated that ``these schemes seem to target 
the most financially desperate veterans who are most vulnerable. For 
many unsuspecting veterans these benefit buyouts could be financially 
devastating.''
    PVA supports S. 2074, 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. We 
oppose again this year, as we have in the past, the provision rounding 
down to the nearest whole dollar compensation increases.
    An important goal of PVA, and The Independent Budget, has been the 
reform of the Service Disabled Veterans' Insurance program. In fact, 
The Independent Budget has recommended legislation authorizing the VA 
to revise its premium schedule to reflect current mortality tables, 
rather than relying on mortality tables from 1941. We support S. 2209, 
the ``Robert Carey Service Disabled Veterans' Insurance Act of 2002.'' 
This measure would not only provide the authority to update these 
antiquated mortality tables, a move that will drastically decrease 
premiums, but will also create a new insurance program for service-
disabled veterans offering as much as $50,000 in coverage at prices 
comparable to commercial policies.
    PVA supports S. 2230, a bill that would make permanent the 
authority of the VA to guarantee adjustable rate mortgages (ARMS), and 
authorize the guarantee of hybrid adjustable rate mortgages. As Senator 
Specter stated when introducing this measure, that ``while home buyers 
must be prudent in choosing to use ARM financing, foreclosing the 
option to veterans, in my estimation, smacks of paternalism. ARM loans 
are insured by FHA [Federal Housing Administration]; my legislation 
would simply apply to the VA loan guaranty program a principle already 
embraced by FHA and the commercial lending sector: one type of 
financing does not meet all home buyer needs.''
    We support S. 2237, the ``Veterans Hearing Loss Compensation Act of 
2002.'' This is an important matter of simple fairness to veterans. As 
the United States Court of Appeals for the Federal Circuit stated in 
Boyer v. West, 210 F.3d 1351 (2000), affirming a decision by the Court 
of Appeals for Veterans' Claims, ``[a]ny changes that parties may seek 
in order to eliminate a statutory incongruity should be brought to the 
attention of Congress.'' The inequitable treatment accorded to veterans 
with service-connected hearing loss has been brought to the attention 
of Congress, and S. 2237 is the result. We also applaud Senator 
Rockefeller for calling for an exhaustive study that will help the VA 
better understand the effect of certain military specialties on hearing 
loss.
    PVA fully supports S. 2079, a bill to facilitate and enhance 
judicial review of veterans' benefits. We note that this measure 
encompasses recommendations made in The Independent Budget. Section 1 
would provide an important oversight role within our Constitutionally-
mandated Separation of Powers framework. As Gellhorn and Levin stated 
in Administrative Law and Process (West Publishing Co., 1997), 
``judicial review [is] generally regarded as the most significant 
safeguard available to curb excesses in administrative action.'' 
Section 1 of S. 2079 provides for this important safeguard.
    Section 2 of S. 2079 makes enforceable the ``benefit of the doubt'' 
statutory standard, a pro-veteran standard fully supported by Congress. 
Section 3 would enable judicial review of decisions of law made by the 
Court of Appeals for Veterans' Claims, and Section 4 would allow non-
attorney practitioners recognized by the Court access to award fees 
under the Equal Access to Justice Act. PVA urges this Committee to take 
swift action and report this measure favorably.
    PVA supports S. 1113, a bill that increases the amount of special 
pension for those veterans who were awarded the Medal of Honor. The 
veterans who were awarded this highest of military honors epitomize the 
virtues of courage and sacrifice. They deserve the benefits provided by 
this bill. PVA supports Section 2 of S. 2025, which provides for this 
same increase in the Medal of Honor pension. We also supports Section 3 
of S. 2025, which would make it a criminal offense to ``knowingly wear, 
possess, manufacture, purchase, or sell a Medal of Honor, or the 
ribbon, button, or rosette.'' Any activity such as this is 
disrespectful to the valor of those individuals who rightfully wear 
this award.
    Finally, PVA does not oppose S. 2060, a bill that would name the VA 
Regional Office in St. Petersburg, Florida, after Franklin D. Miller.
                          educational benefits
    As we testified before this Committee last year, ``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 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.''
    In light of this, PVA supports S. 1517, the ``Montgomery GI Bill 
Improvements Act of 2002.'' The provisions proposed in this bill stem 
from the recommendations of the U.S. Commission on National Security/
21st Century, co-chaired by former Senators Gary Hart and Warren 
Rudman. The Hart-Rudman Commission recommendations called for 
improvements in veterans' educational assistance benefits in order to 
ensure that our Armed Forces are able to recruit and retain highly 
qualified and dedicated individuals into the service. This measure 
encompasses four out of the seven recommendations of this Commission.
    PVA supports Section 2, which would eliminate the $1200 cost to 
service members in order to be eligible for the benefits. Likewise, we 
support the transfer of entitlements as outlined by Section 3. It is 
important that service members be given the option of assisting in the 
education of their dependents if they so desire. PVA also supports 
Section 4 and Section 5 as proposed.
    PVA supports Section 2 of S. 2231, the ``Survivors' and Dependents' 
Educational Assistance Adjustment Act of 2002.'' The legislation would 
increase the rate of monthly Survivors' and Dependents' Education 
Assistance benefits from $670 to $985 over a two-year period. PVA also 
supports Section 4 of the bill that would increase funding for State 
Approving Agencies, which certify educational programs provided to 
veterans, from $13 million to $18 million. State Approving Agencies are 
vital in determining the quality of educational institutions and 
programs that are available to veterans. The proposed increase in the 
funding for the State Approving Agencies will ensure that only the 
highest quality education programs are available to veterans and will 
better ensure that they are able to take advantage of these programs. 
PVA opposes Section 3, which would reduce the time available for 
education assistance from 45 months to 36 months.
    This concludes PVA's testimony. Again, we appreciate this 
opportunity to express our views on legislation pending before this 
Committee. I will be happy to respond to any questions.

    Chairman Rockefeller. Thank you, Mr. Tucker.
    Remember, everything is included, so it is not that you----
    Mr. Tucker. I kind of felt like an auctioneer there for a 
little bit.
    Chairman Rockefeller. You did not get to say everything you 
wanted, but everything you have written is received.
    Mr. Tucker. Thank you, Mr. Chairman.
    Chairman Rockefeller. Mr. Violante?

STATEMENT OF JOSEPH A. VIOLANTE, NATIONAL LEGISLATIVE DIRECTOR 
               OF THE DISABLED AMERICAN VETERANS

    Mr. Violante. Thank you, Mr. Chairman. I am pleased to 
provide the views of Disabled American Veterans on the pending 
legislation.
    First, let me say we deeply appreciate and value the 
advocacy this committee has always demonstrated on behalf of 
the men and women of America's armed forces.
    Although not on today's agenda, we have touched on the 
crisis of VA health care, and I would like to briefly talk 
about a possible solution. DAV has begun a campaign to 
guarantee that veterans who seek medical services provided by 
VA actually receive the care they need. Changing veterans' 
health care from a discretionary to a mandatory program would 
correct the existing problem, where annual funding of veterans' 
health programs falls far short of what is required to serve 
the enrolled veterans. Making veterans' health care mandatory 
would eliminate the year-to-year uncertainty about funding 
levels that has prevented the VA from adequately planning for 
and meeting the growing needs of veterans seeking treatment. I 
hope we can count on this committee's support.
    My oral remarks this morning will focus solely on S. 2079. 
This bill includes important changes to law to make the 
judicial review process for veterans more efficient and 
effective. Given the special purposes of benefits for veterans, 
the process is designed to error in favor of the veteran when 
the VA must choose between allowance and denial in a close 
case. This principle is given legal effect in the statutory 
benefit of the doubt rule. VA can legally find against a 
veteran only when the evidence favoring the veteran is 
outweighed by negative evidence.
    Although this bedrock rule is the foundation for the 
resolution of material questions of fact in veterans' claims, 
the Court of Appeals for Veterans' Claims rarely reviews VA 
decisions to ensure the rule was properly applied.
    Under current law, the Veterans Court upholds factual 
findings by the Board of Veterans Appeals unless they are 
clearly erroneous. That means a veteran can be deprived of 
benefits when there is some slight evidence that gives the 
Government a plausible reason for denial, and it renders the 
benefit of the doubt rule meaningless. The amendment made by 
section 2 of this bill will give veterans their day in court, 
as originally envisioned by the Judicial Review Act.
    Section 3 will make another important change to 
strengthening the appellate process for veterans by filling a 
void in the jurisdiction of the Court of Appeals for the 
Federal Circuit. As a matter of sound public policy, fairness 
to veterans and the overall effectiveness of judicial review, 
the jurisdiction of the Federal Circuit should be expanded to 
include ordinary questions of law. The American Bar Association 
and the Federal Circuit Bar Association supports this 
expansion, as does the Independent Budget and, of course, the 
DAV.
    Section 1 of the bill addresses another void in the 
jurisdiction of the Federal Circuit. Although the Federal 
Circuit has jurisdiction to consider petitions challenging the 
legality of regulations issued by VA, Section 502 of Title 38, 
United States Code, immunizes from judicial review an action 
relating to the adoption and revision of the schedule for 
rating for disabilities. Congress wisely sought to avoid 
opening this unique area of VA rulemaking to outside 
interference. Unfortunately, however, VA has full discretion 
now to do what they want, and this would provide an avenue when 
they are arbitrary and capricious in that decision.
    Finally, we support the provisions for equal access to 
justice fees for nonattorneys.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Violante follows:]
Prepared Statement of Joseph A. Violante, National Legislative Director 
                   of the Disabled American Veterans
    Mr. Chairman and Members of the Committee:
    I am pleased to provide this Committee with the views of the 
Disabled American Veterans (DAV), an organization of more than one 
million wartime disabled veterans, on the numerous pieces of 
legislation pending before the Committee.
    Today's agenda covers a wide range of issues important to the 
health and well being of our nation's sick and disabled veterans and 
their families. We deeply value and appreciate the advocacy this 
Committee has always demonstrated on behalf of the men and women who 
have served in America's Armed Forces. The agenda before us today 
abundantly demonstrates your commitment to our nation's veterans and 
their families.
    Mr. Chairman, for the past eight decades, the DAV has been devoted 
to one single purpose: building better lives for our nation's disabled 
veterans and their families. During the past 82 years, the DAV has 
never wavered in its commitment to serve our nation's service-connected 
disabled veterans, their dependents, and survivors.
    Although not on today's agenda, I find the need to briefly comment 
on the crisis in the Department of Veterans Affairs (VA) health care 
system. I realize that this issue is not new to the Committee, and that 
you have recognized the necessity of increasing funding for VA health 
care in your recent ``Views and Estimates.'' Quite frankly, however, 
our combined efforts to correct this serious problem have not been 
successful.
    Mr. Chairman, the DAV has begun an all-out campaign to guarantee 
that veterans who seek medical services provided by VA actually get the 
care they need. Changing veterans' health care from a discretionary to 
a mandatory program, as we are proposing, would correct the existing 
problem where annual funding of veterans' health programs falls far 
short of what is required to serve all enrolled veterans. Making 
veterans' health care mandatory would eliminate the year-to-year 
uncertainty about funding levels that has prevented the VA from 
adequately planning for and meeting the growing needs of veterans 
seeking treatment.
    I hope that we can count on your support to make timely, quality VA 
health care a reality for our nation's sick and disabled veterans, by 
changing VA health care funding from a discretionary to a mandatory 
program.
                                s. 2079
    This bill includes four important changes in law to make the 
judicial review process for veterans more efficient and effective. Our 
laws, like the human relationships they regulate, are complex and ever 
evolving. Laws governing veterans' entitlements are no different. 
Indeed, these laws can be quite complex, especially where they deal 
with cause-and-effect relationships between military service and 
diseases and injuries, and the quantification of disability from those 
diseases and injuries for compensation purposes. Thus, in veterans' 
benefits, as it has often been acknowledged generally, law is not an 
exact science. The variables of human interactions and the 
corresponding nuances inherent in the factual bases on which legal 
rights rest require the intervention of human judgment. Such judgment 
is, of course, not infallible. Under our legal system, we therefore 
view the right to appeal as an important element of fairness and 
insurance against injustices that result from human error. However, the 
appellate process also benefits the institution and decision makers 
whose decisions are subjected to outside scrutiny. It serves as a 
quality control mechanism and a higher authority on the law for 
agencies like VA. Appellate courts also review regulations issued by 
federal agencies to ensure the regulations are consistent with the 
statutes enacted by Congress and within the authority of the issuing 
agency. Before I discuss section 1 of S. 2079, which deals with 
judicial review of VA regulations, let me turn to the provisions of the 
bill that affect appeals of claims decisions.
    It has been said that appellate courts serve dual functions: first, 
they correct injustices for individuals, and, second, they decide and 
develop the law for uniform application across a system. Unfortunately, 
veterans have seen in practice an imbalance develop between these two 
roles of judicial review. With that imbalance, the system serves itself 
far better than it serves a veteran seeking a real and timely remedy 
for an erroneous denial of benefits. Provisions in S. 2079 will correct 
this imbalance and make justice for veterans the primary object of 
judicial review, without diminishing the secondary role of judicial 
review in developing legal precedent and a body of law for general 
application.
    As I noted, where a decision requires human judgment, there is 
unavoidably a risk of error. Given the special purposes of benefits for 
veterans, the process is designed to err in favor of the veteran when 
an adjudicator must choose between allowance and denial in a close 
case. This principle is given legal effect in the statutory benefit-of-
the-doubt rule. That fundamental rule in veterans' law mandates a grant 
of the benefit when the evidence neither proves nor disproves the 
claim. Section 5107 of title 38, United States Code, provides: ``When 
there is an approximate balance of positive and negative evidence 
regarding any issue material to the determination of a matter, the 
Secretary shall give the benefit of the doubt to the claimant.'' As a 
consequence, VA can legally find against a veteran only when the 
evidence favoring the veteran is outweighed by negative evidence. This 
rule does more than mandate that VA give veterans the benefit of the 
doubt: it is the dividing line for determining whether a claim is 
proved or disproved in all instances.
    Although this bedrock rule is the foundation for the resolution of 
material questions of fact in veterans' claims, the United States Court 
of Appeals for Veterans Claims (the ``Veterans Court'') does not review 
VA decisions to ensure the rule was properly applied. Because, by 
nature, veterans' appeals more often involve factual disputes than 
legal ones, this void in the review process leaves many veterans 
without any means to enforce this controlling provision of law, and 
they simply have no remedy for erroneous denials on this basis. The 
change made by section 2 of this bill will increase the chances that 
the truth will be discovered by a more probing appellate review than 
what is available under current law and practice.
    Under current law, the Veterans Court upholds factual findings by 
VA's Board of Veterans' Appeals (BVA) unless they are ``clearly 
erroneous.'' Under the meaning given that term for application in 
veterans' appeals, a BVA finding of fact will not be disturbed if it 
has a ``plausible basis.'' That means a veteran can be deprived of 
benefits when there is some slight evidence that gives the government a 
plausible reason for denial, and it renders the benefit of the doubt 
rule meaningless. The Veterans Court has shown a preference for 
deciding finer points of law that it can elucidate in scholarly 
discourse or for sending cases back to BVA on procedural grounds, while 
avoiding, in the overwhelming majority of instances, actually deciding 
veterans' appeals on the merits. This prolongs an already protracted 
appellate process in which indigent, elderly, and disabled veterans 
must go through multiple reviews and wait years for a proper decision. 
The amendment made by section 2 will give veterans their ``day in 
court,'' as envisioned in the original 1988 judicial review legislation 
for veterans. It will make the process exist to serve them, not the 
convenience of the Veterans Court and VA. Rather than a court that, in 
a select few cases, uses a veteran's claim as a platform for an 
abstract exposition of points of law, veterans deserve a court that 
actually decides their appeals.
    Section 2 amends section 7261, of title 38, United States Code, by 
replacing the clearly erroneous standard of review with a requirement 
that the Veterans Court must reverse a decision in which the benefit of 
the doubt was not resolved in favor of the veteran as required by 
section 5107. Of course, under section 5107, the veteran still has the 
burden to submit evidence that is sufficient to meet his or her burden 
of proof under the law.
    Section 2 of the bill corresponds to a longstanding DAV resolution 
to require judicial enforcement of the benefit-of-the-doubt rule and a 
recommendation by the DAV and the three other veterans' organizations 
that present The Independent Budget each year. Accordingly, the DAV 
fully supports this provision in S. 2079.
    Section 3 of S. 2079 will make another important change to 
strengthen the appellate processes for veterans by filling a void in 
the jurisdiction of the United States Court of Appeals for the Federal 
Circuit (the ``Federal Circuit''). As a matter of fairness, public 
policy has been to afford at least one review on appeal of points 
responsible for the disposition of a case. However, under the current 
scheme of judicial review, the Veterans Court can decide a question of 
law for the first time or create a new rule of law that is not subject 
to review by any other court. In such instances, no remedy for error 
exists.
    The Federal Circuit is empowered to review an ``interpretation'' of 
a statute or regulation by the Veterans Court but not an ordinary 
question of law that does not involve statutory or regulatory 
interpretation. Appellate courts fill in the gaps in statutory law and 
procedures with ``judge-made law,'' that is, law established by 
judicial precedent rather than by statute. Unless overturned by a 
higher court, these rules of law are as binding as those enacted by 
Congress. Through judicial precedent, the Veterans Court has created 
several rules of law. The Veterans Court also decides ordinary 
questions of law unreviewable by the Federal Circuit when it applies 
the law to facts. Whether an event occurred or not is a question of 
fact, but the legal significance of a fact is a question of law. When 
the legal significance of a fact is not governed by an interpretation 
of a statute or regulation, per se, it is an ordinary question of law 
not reviewable by the Federal Circuit. Obviously, this limitation on 
Federal Circuit jurisdiction shields decisions by the Veterans Court 
from review in a number of instances.
    As a matter of sound public policy, fairness to veterans, and the 
overall effectiveness of judicial review, the jurisdiction of the 
Federal Circuit should be expanded to include ordinary questions of 
law. At our most recent annual National Convention, DAV delegates again 
adopted a resolution calling for this change in the Federal Circuit's 
jurisdiction. The American Bar Association has adopted a resolution 
calling for this change in law, and the Federal Circuit Bar Association 
also supports this expansion of the Federal Circuit's jurisdiction. In 
addition, The Independent Budget recommends this change.
    Section 1 of the bill addresses another void in the jurisdiction of 
the Federal Circuit. Although the Federal Circuit has jurisdiction to 
consider petitions challenging the legality of regulations issued by 
VA, section 502 of title 38, United States Code, immunizes from 
judicial review ``an action relating to the adoption or revision of the 
schedule for ratings for disabilities.'' Formulation of criteria for 
evaluating disabilities involves expertise in medical and vocational 
fields and is more practically dealt with through rulemaking by the VA 
Secretary. Similarly, unlike other matters of law, this is an area 
generally outside the expertise of the courts. Congress therefore 
wisely sought to avoid opening this unique area of VA's rulemaking to 
outside interference. Unfortunately, without any constraints or 
oversight whatsoever, VA is completely free to promulgate rules for 
rating disabilities that are arbitrary and capricious or do not conform 
to the basic principles prescribed by Congress for the rating schedule. 
While changed circumstances will understandably sometimes warrant 
changes in the ratings that are less generous than previously, VA has 
made some revisions to the schedule that are without underlying 
justification. Arbitrary and capricious or unlawful changes to the 
rating schedule should not be immune to correction. This change in law 
incorporates a recommendation by The Independent Budget, and the DAV 
supports it.
    Finally, section 4 of the bill would authorize the Veterans Court 
to award fees under the Equal Access to Justice Act (EAJA) for 
successful representation by nonattorneys in cases before that court. 
Under EAJA, the government must pay a party's attorney fees when a 
party prevails in an action in which the government's position was not 
substantially justified. Through EAJA, Congress shifted the costs of 
legal fees to the government to facilitate enforcement of rights by 
individuals with moderate incomes, small businesses, and nonprofit 
organizations. The goal is to encourage citizens to assert their legal 
rights against the government and discourage the government from using 
public resources for unwarranted defenses of its actions.
    Although EAJA fees may be awarded for nonattorneys who assist or 
are supervised by attorneys in cases before the Veterans Court, such 
fees cannot be awarded for veterans' service organization 
representatives and other nonattorneys who are admitted to practice and 
who successfully represent appellants before the Veterans Court without 
attorney supervision. This anomaly is the result of a judicial 
interpretation of the term ``attorney fees'' as being broad enough to 
include fees for services of paralegals, law clerks, and other 
nonattorneys who assist or are supervised by lawyers but not broad 
enough to include the services of unsupervised nonattorneys who perform 
the same services as lawyers before the Veterans Court.
    This puts veterans' service organization representatives at a 
distinct disadvantage and potentially harms the veteran or other 
appellant because it removes the incentive for VA to settle the 
meritorious cases of these appellants. VA is free to prolong the 
litigation in these cases even though the government's position is not 
substantially justified. This situation is extremely unfair. Moreover, 
provisions that discourage participation of qualified nonattorneys in 
the representation of appellants before the Veterans Court are 
certainly inappropriate given the added burden a high proportion of 
nonrepresented appellants currently places on the Court. Congress 
should change the law to permit EAJA fees in cases where nonattorneys 
successfully represent appellants. For these reasons, The Independent 
Budget recommended this change in law. As mandated by DAV Resolution 
No. 20, the DAV fully supports section 4 of S. 2079.
    The provisions of S. 2079 will greatly improve the judicial review 
process for veterans. The DAV believes this is one of the most 
important bills for veterans in the 107th Congress. We urge the 
Committee to promptly report this bill for consideration by the Senate.
            s. 984 veterans' road to health care act of 2001
    This bill would authorize payment of travel expenses for treatment 
of nonservice-connected disabilities, at facilities not associated with 
the VA, if the treatment is provided upon the recommendation of VA 
medical personnel, and is not available at the VA facility at which 
such recommendation is made.
    In accordance with its Constitution and Bylaws, the DAV's 
legislative focus is on benefits for service-connected disabled 
veterans, their dependents and survivors. Our legislative agenda is 
determined by mandates in the form of resolutions adopted by our 
membership.
    The DAV has no mandate on this issue.
                          s. 1113 and s. 2025
    Both bills would increase the amount of Medal of Honor Roll special 
monthly pension from $600 to $1,000.
    The Independent Budget for fiscal year 2003 recommended that all 
veterans' compensation and pension programs be maintained, protected 
and improved, and that annual adjustments be made to offset the rise in 
the cost of living. As one of the co-authors of The Independent Budget, 
the DAV supports the proposed increase in this important benefit.
    Though similar in regard to the amount of increase, both bills 
include unique aspects that would further benefit Medal of Honor 
recipients. S. 1113 would provide for an annual increase in the amount 
of Medal of Honor monthly special pension by the same percentage as 
benefits payable under title II of the Social Security Act. Annual 
adjustments are necessary to offset rising costs of living, as noted in 
The Independent Budget. S. 2025 would make the increase in the amount 
of special pension effective from the date that the recipient is 
awarded the Medal of Honor, and also increase the criminal penalties 
associated with misuse or fraud relating to the Medal of Honor. Though 
we have no resolution concerning this issue, it is clearly offensive 
and shameful to fraudulently claim such an honor. The DAV would not 
object to heavier punishments for this crime.
    Hopefully, beneficial provisions from both bills can be 
incorporated into final legislation. Certainly, individuals who have 
gone above and beyond the call of duty deserve the utmost consideration 
of a grateful nation.
              s. 1408 veterans' co-payment adjustment act
    This bill would standardize the income threshold for co-payment for 
outpatient medications with the income threshold for inability to 
defray necessary expenses of care. We understand that section 3 of the 
bill is moot as a result of the changes made by VA establishing a 
three-tiered co-payment structure for outpatient medical care.
    DAV is opposed to co-payments for veterans' medical care and 
prescriptions. Unfortunately, the VA Secretary elected to increase 
medication co-payments from $2 to $7 for each 30-day supply of 
medication, despite strong objection from the veterans' community. DAV 
Resolution No. 218 supports the repeal of co-payments for medical care 
and prescriptions provided by the VA. We will continue to voice our 
objection to co-payments on the basis that they fundamentally 
contradict the spirit and principle of veterans' benefits. As the 
beneficiaries of veterans' service and sacrifice, the citizens of our 
grateful nation want our government to fully honor our moral obligation 
to care for veterans and generously provide them benefits and health 
care entirely free of charge.
    The law authorizing medication co-payments is due to expire on 
September 30, 2002. We have urged members of Congress to oppose 
extending medication co-payment provisions beyond the sunset date. Our 
hope is that this legislation (S. 1408) will become moot if the law on 
co-payments is allowed to expire on September 30, 2002. However, if the 
sunset date were extended, there would at least be a provision in place 
that would be beneficial to some veterans. Therefore, we are not 
opposed to the Committee's favorable consideration of this measure.
       s. 1517 montgomery gi bill (mgib) improvements act of 2001
    This bill would eliminate the $1,200 pay reduction currently 
required of servicemembers during their first 12 months of active duty 
as a precondition to eligibility for MGIB benefits. Servicemembers' 
lowest earning potential is during their initial year of service. 
Therefore, many cannot afford to further lower their monthly income by 
$100 and they opt against enrolling in the valuable MGIB. Elimination 
of the $1,200 reduction would provide a greater recruitment incentive 
and enable veterans to attain better economic status through higher 
education and training. The national economy is stimulated as a result 
of the thousands who utilize the GI Bill. The DAV does not oppose this 
provision.
    This bill would also expand the period veterans are eligible to use 
their MGIB benefits from 10 to 20 years after discharge in recognition 
of today's need for continuing education. Also, many newly discharged 
veterans have family and financial obligations that hinder educational 
enrollment. Extension of the eligibility period would allow them to 
seek higher education in later years that are more conducive to study. 
The DAV does not oppose this provision.
    Additionally, this legislation would allow servicemembers with at 
least 15 years of active duty to transfer their MGIB entitlement to 
their spouses or dependent children. We have no position on this 
provision.
    Lastly, this bill would enable members of the Selected Reserve who 
are called to active duty to be eligible for increased MGIB benefits if 
they serve in such an operation for more than one year. The DAV would 
not oppose enactment of this legislation.
                     s. 1561, s. 2132, and s. 2187
    S. 1561 would strengthen the preparedness of health care providers 
within the VA and community hospitals to respond to bioterrorism.
    S. 2132 would provide for the establishment of medical emergency 
preparedness centers in the Veterans Health Administration, and provide 
for the enhancement of the medical research activities of the VA. This 
measure would establish at least four medical emergency preparedness 
centers in VA to carry out research on and develop methods of 
detection, diagnosis, vaccination, protection, and treatment for 
chemical, biological, radiological, and incendiary or other explosive 
devices that pose a threat to public health and safety. It also seeks 
to provide, at the discretion of the Secretary, education, training, 
and advice to health care professionals throughout the United States, 
and to provide contingent rapid response laboratory assistance to local 
health care authorities in the event of a national emergency.
    S. 2187, the Department of Veterans Affairs Emergency Medical Care 
Act of 2002, would authorize the Secretary of Veterans Affairs to 
furnish health care during a major disaster or medical emergency.
    DAV does not have a resolution from our membership on any of these 
measures; however, their purposes appear beneficial. We do not oppose 
favorable consideration of S. 1561, S. 2132, and S. 2187 by the 
Committee. These bills would allow VA to enhance its support role in 
federal security and homeland emergency efforts. VA's extensive health 
care system, graduate medical education and research program, and 
unique specialized services make VA an essential asset in responding to 
potential chemical, biological, and radiological attacks. Clearly, VA's 
foremost responsibility is its primary mission of providing medical 
care to our nation's veterans; however, VA is a unique national 
resource, and all Americans benefit from its exceptional health-related 
training and research programs.
    The VA's Veterans Health Administration (VHA) is the nation's 
largest direct provider of health care services, with over 1,300 
facilities, including hospitals, ambulatory care and community-based 
outpatient clinics, counseling centers, nursing homes, and domiciliary 
facilities. VA's primary mission is to provide health care to our 
nation's veterans. Its second mission is to provide education and 
training for health care personnel. VA trains approximately 85,000 
health care professionals annually and is affiliated with nearly 1,400 
medical and other schools. Its third mission is to conduct medical 
research. VA's fourth mission, defined in Public Law 97-174, the 
Veterans Administration and Department of Defense (DoD) Health 
Resources Sharing Act, enacted in 1982, provides that VA is the 
principal medical care backup for military health care ``[d]uring and 
immediately following a period of war, or a period of national 
emergency declared by the President or the Congress that involves the 
use of the Armed Forces in armed conflict[.]''
    Currently, multiple federal agencies, including VA, are involved in 
emergency response for potential terrorist acts and other domestic 
disaster or emergency situations. State and local agencies have the 
primary responsibility for managing medical response during 
catastrophic events. VA's role is to augment the efforts of state and 
local authorities should such events occur. As part of its emergency 
preparedness responsibilities, VA is charged with planning for 
emergency health care service for VA beneficiaries, active duty 
personnel, and, as resources permit, to civilians in communities 
affected by national security emergencies. In the past, VA has been 
there in times of crisis, providing emergency relief following 
earthquakes, hurricanes, and flood disasters. Following the terrorist 
attacks of September 11, VA stood ready to respond. Although casualties 
were minimal, VA cared for patients, deployed staff, supplies, and made 
its inventory readily available. In New York, VA assisted emergency 
workers and the National Guard to help them carry out their duties in 
the immediate aftermath of the terrorist attacks. Staff from VA's 
National Center for Posttraumatic Stress Disorder (PTSD) began to 
assist DoD in its relief efforts at the Pentagon. In the months 
following the attacks, VA also broadcast the DoD sponsored series on 
``Medical Management of Biological and Chemical Casualties'' and 
``Medical Response to Chemical and Biological Agent Exposure'' 
throughout its satellite Network.
    VA plays a key-supporting role as part of the Federal Response Plan 
and the National Disaster Medical System. VA's Medical Emergency 
Radiological Response Team is trained to respond to radiological 
emergencies. VHA also supports the Public Health Service and Health and 
Human Service's office of Emergency Preparedness to ensure that 
adequate stockpiles of antidotes and other necessary pharmaceuticals 
are maintained nationwide in case of a catastrophic event such as the 
use of weapons of mass destruction. Additionally, VA, well known as a 
leading authority in treating PTSD, makes available its highly trained 
mental health staff to assist victims traumatized by large-scale 
disasters.
    The terrorist attacks in New York, Washington, D.C., and 
Pennsylvania made us feel vulnerable and keenly aware that attacks 
could occur anywhere in the United States at any time. The immediate 
establishment of the Office of Homeland Defense by the President was 
reflective of the urgency and serious threat of terrorism here at home 
and our resolve to be prepared to handle the consequences of potential 
future attacks. The tragic deaths from anthrax fueled fears of other 
toxic agents being let loose on unsuspecting citizens. As a nation, we 
resolved to face these fears and to address new potential threats with 
concrete solutions. The introduction of these measures is reflective of 
that goal. Clearly, VA has a multitude of resources and expertise that 
could be utilized should we experience a chemical, biological, or 
radiological attack. In past conflicts, and, at times, by our own 
government, veterans have experienced exposure to a variety of toxic 
substances during military service, prompting VA to develop a core of 
specialized medical programs and treatments. VA has expertise in areas 
such as radiation exposure, exposure to toxic chemical, biological, and 
environmental agents, and recently developed two new centers for the 
Study of War-Related Illnesses. VA also has unique expertise in 
diagnosing and treating stress-related disorders such as PTSD. Clearly, 
VA could contribute greatly to the advancement of knowledge and 
treatment of patients with exposure to chemical, biological, and 
radiological agents.
    However, if we expect VA to address these new threats--and address 
them promptly and effectively--VA must be provided with sufficient 
funding to correct its current deficiencies and carry out all its 
missions. VA is presently struggling to carry out its primary mission 
of providing timely, quality health care to our nation's veterans. As 
this Committee is aware, increasing numbers of veterans are seeking 
care from VA; however, medical care funding has not kept pace with 
inflation and increasing enrollment, which has placed significant 
financial stress on the VA system and caused longer waiting times for 
patient care. Continued budget shortfalls and open enrollment have 
stretched VA to its limits, making it extremely difficult for VA to 
provide the timely, quality health care services veterans, especially 
service-connected disabled veterans, deserve.
    VA and the General Accounting Office (GAO) provided testimony 
before the House Veterans' Affairs Committee on October 15, 2001, and 
discussed VA's ability to respond to DoD contingencies and national 
emergencies. Clearly, VA will play a vital role in helping our nation 
meet its new challenges, and a high degree of readiness is essential in 
the event of additional terrorist acts on our homeland. Some of the 
deficiencies and opportunities VA identified to improve its ability to 
carry out all its missions included substantial upgrades to personal 
protection gear, equipment, and training to properly respond to a 
chemical attack. Secondly, VA reported it would be very difficult to 
treat veterans, military personnel, and civilians at the same time, 
should a mass-casualty event occur. Thirdly, VA noted that significant 
staffing shortages could result if there was a call-up of Reserve or 
National Guard units. Finally, VA reported that long-term needs for 
PTSD counseling following a catastrophic event might impact on its 
ability to treat veterans. Despite these challenges, VA confirmed its 
intent to meet its critical emergency response missions.
    GAO confirmed in its testimony that VA's role as part of the 
government's response for disasters has grown with the reduction of 
medical capacity in the Public Health Service and military medical 
facilities. The testimony addressed VA's strengths and limitations in 
its emergency response capabilities and relative to planning for 
homeland security, and noted that VA hospitals do not have the 
capability to process and treat mass casualties resulting from weapons 
of mass destruction. It also noted that VA hospitals are better 
prepared for treating injuries resulting from chemical exposure than 
those resulting from biological agents or radiological material. 
Notably, it pointed out that VA hospitals, like private sector 
community hospitals, lack decontamination equipment and supplies for 
treating mass casualties. Finally, GAO stated that, ``[c]urrently, VA's 
budget authority does not include funds to address these 
shortcomings.'' (Emphasis added.)
    We agree with GAO's concluding observations that VA, in its 
supporting role, makes a significant contribution to the emergency 
preparedness response activities carried out by the lead federal 
agencies. We also concur that enhancing VA's role may be beneficial; 
however, the potential impact on VA being able to carry out all its 
health care missions if suggested enhancements are made, is unclear, as 
is the impact on the VA medical care budget.
    VA is clearly in a unique position to support other lead agencies 
in managing large-scale disasters. S. 1561, S. 2187, and S. 2132 would 
certainly enhance VA's capabilities and contributions in this regard, 
but without sufficient funding to meet its primary mission, it is 
questionable if additional obligations should be put upon VA to carry 
out these added responsibilities.
    The Independent Budget has recommended a funding level of $250 
million for VA's fourth mission.
                                s. 1576
    This bill would extend to December 31, 2011, eligibility for health 
care of veterans who served in Southwest Asia during the Persian Gulf 
War.
    A range of illnesses of an unknown etiology struck many 
servicemembers returning from the Gulf War in 1991. It is suspected 
that the illnesses are related to variable exposures, including smoke 
from oil field fires and other petroleum agents, depleted uranium, 
chemical and biological elements, desert parasites, vaccines, 
chemoprophylactic agents, and vehicle paints. Investigations by 
Congress, the DoD, VA and the Institute of Medicine have thus far 
failed to identify the source or sources of these ailments.
    Gulf war veterans suffering from unexplained illnesses should 
continue to get the care they need. The DAV strongly urges that Gulf 
War veterans receive priority medical treatment for ailments that may 
be associated with their service in the Persian Gulf. The DAV fully 
supports this bill.
                                s. 1680
    This bill would extend civil relief provided under the Soldiers' 
and Sailors' Civil Relief Act of 1940 (SSCRA) to National Guard 
personnel mobilized by state governors in support of Operation Enduring 
Freedom, or who are otherwise called up at the request of the 
President.
    Specifically, this bill would limit interest rates on debt incurred 
prior to mobilization, to 6 percent annually and protect against the 
following:
     eviction from rental or mortgaged property;
     cancellation of life insurance;
     the sale of property to pay taxes; and
     the binding terms of leases.
    Currently the SSCRA only applies to National Guard personnel 
mobilized directly by the President of the United States, and does not 
protect those mobilized by state governors at the request of the 
President, as is the case with those National Guard now protecting our 
airports.
    National Guard forces have had increased responsibilities since the 
tragic events of September 11, 2001. Their mission is vital to our 
national security. Their service and sacrifices must be honored.
    Although we have no resolution on this issue, it is a logical and 
equitable improvement to the SSCRA. The DAV would not oppose the 
enactment of this legislation.
                                s. 1905
    Section 101 of S. 1905 would authorize care for newborn children of 
enrolled women veterans following delivery. Women Veteran Coordinators 
have complained that it is very difficult to secure a contract for care 
for a woman veteran for the delivery of a baby without securing a 
contract for initial post-delivery newborn care. Private hospitals are 
reluctant to accept a sole contract for care for the mother and risk 
financial responsibility for the care of the newborn infant following 
delivery. The promise of comprehensive health care services includes 
prenatal care and delivery. Health care professionals consider the 
initial newborn care immediately following delivery as part and parcel 
of the delivery itself. This legislation would authorize VA to pay for 
the initial care of the newborn infant for 14 days after the date of 
birth or until the mother is discharged from the hospital, which ever 
is the shorter period.
    DAV has no resolution from our membership on this issue; however, 
its purpose is beneficial. We have no objection to the Committee's 
favorable consideration of this section of the measure.
    Section 102 would authorize outpatient dental care for all former 
prisoners of war (POWs), eliminating the requirement of at least 90 
days internment for eligibility for such care. DAV is fully supportive 
of this provision given the extreme hardships experienced by all 
American POWs, regardless of their length of internment. We recognize 
that oral health is integral to the general health and well-being of a 
patient and is part of comprehensive health care. DAV Resolution No. 
235 supports legislation to provide outpatient dental care to all 
enrolled veterans.
    Section 103 would authorize pay comparability for the Director of 
Nursing Service. DAV supports this provision of the bill in keeping 
with DAV Resolution No. 235, which seeks the enactment of legislation 
providing for competitive salary and pay levels for VA physicians, 
pharmacists, dentists, and nurses.
    DAV has no mandate on the provisions contained in Sections 201-203 
and Sections 301-304; however, we are not opposed to their favorable 
consideration by this Committee.
    S. 2003 would clarify the applicability of the prohibition on 
assignment of veterans' benefits to agreements regarding future receipt 
of VA benefits.
                                s. 2003
    At our National Convention in Orlando, Florida, August 21-25, 1999, 
our delegates passed DAV Resolution No. 203, urging the VA, through its 
Inspector General, to investigate the practices of advance funding or 
``factoring'' agreements to determine whether they were a violation of 
law. This bill would clarify the prohibition on assignment of veterans' 
benefits.
    DAV supports this measure.
                                s. 2043
    S. 2043 would extend by five years the provision to provide non-
institutional extended care services and required nursing home care. 
With enactment of the Veterans Millennium Health Care and Benefits Act, 
the term ``medical services'' specifically included non-institutional 
extended care services. Additionally, it authorized nursing home care 
for any veteran in need of such care for a service-connected disability 
and to any veteran in need of such care who has a service-connected 
disability rated 70 percent or more. However, both these provisions are 
set to expire December 31, 2003. This measure would extend the sunset 
date for provisions to include non-institutional extended care services 
under the term ``medical services'' and required nursing home care 
until December 31, 2008. It also extends the date of the required 
report to Congress on these provisions to January 1, 2008.
    DAV supports this measure. VA faces significant challenges in 
meeting the needs of an increasingly larger elderly veterans 
population. In providing nursing home care to eligible veterans, VA 
clearly needs to have alternative options to traditional institutional 
extended care available. One such initiative, supported by The 
Independent Budget, is assisted living. This approach combines housing, 
support services, personal care assistance, and health care for 
patients who do not require 24-hour medical supervision. This 
alternative to institutional nursing home care is less expensive and 
provides an important option for veterans and their families based on 
the individual medical needs of the patient.
                                s. 2044
    This bill would increase funding and improve the specialized mental 
health services provided to veterans under the Veterans Millennium 
Health Care and Benefits Act, Public Law 106-117.
    DAV fully supports this measure. As part of The Independent Budget, 
DAV has urged Congress to improve specialized mental health services, 
particularly programs for the treatment of post-traumatic stress 
disorder and substance abuse. Given the high proportion of VA patients 
who need treatment for mental health problems and the long-documented 
need to expand VA's mental health service capacity, we applaud the 
Chairman for the introduction of S. 2044. The treatment and 
rehabilitation of veterans with mental disorders is among the highest 
priorities for the Veterans Health Administration. This bill will begin 
to address necessary programmatic expansion and funding needs of these 
important mental health programs.
                                s. 2060
    This bill would rename the VA Regional Office in St. Petersburg, 
Florida, after Franklin D. Miller.
    The DAV national organization has no position on this measure.
                                s. 2073
    This bill would provide for the retroactive entitlement of Ed W. 
Freeman to the Medal of Honor special pension.
    DAV has no position on this bill. We would not be opposed to its 
favorable consideration by this Committee, however.
                                s. 2074
    S. 2074 would increase the rates of disability compensation, DIC, 
and the clothing allowance by the percent of annual increase in the 
cost of living, with rounding down of the adjusted rates to the next 
lower whole dollar amount. These increase would be effective December 
1, 2002.
    It is important for Congress to 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 extend this cost-savings provision beyond its 
current sunset date.
                                s. 2186
    This bill would establish a new Assistant Secretary to perform 
operations, preparedness, security and law enforcement functions.
    DAV has no position on this measure. We would, however, recommend 
that Congress provide sufficient additional funding for this new 
position and for any additional staff that will be necessary to carry 
out the duties of the new office should this new position be authorized 
by Congress.
                                s. 2205
    Section 2 of S. 2205 clarifies the terms for entitlement to special 
monthly compensation for women veterans who have service-connected 
mastectomies. DAV fully supports this provision of the bill and we are 
extremely grateful for the Chairman's initiative to right this wrong.
    We believe that VA took a very narrow view of what constitutes the 
anatomical loss of a breast for the purposes of special monthly 
compensation. VA argued that anatomical loss of a breast exists when 
there is complete surgical removal of breast tissue (or the equivalent 
loss of breast tissue due to injury). As defined in 38 C.F.R. 4.116, 
diagnostic code 7626, note (2001) radical mastectomy, modified radical 
mastectomy, and simple (or total) mastectomy result in anatomical loss 
of a breast, but wide local excision, with or without significant 
alteration of size or form, does not.
    VA went on to argue, wide local excision would not be equivalent to 
anatomical loss of a breast because it involves less than complete 
removal of the breast tissue and there is no standard or feasible way 
to define such partial removal of breast tissue. VA's attempt to 
conveniently qualify the statutory term ``anatomical loss'' as 
necessarily meaning the loss of all breast tissue is not justified by 
the statutory language itself nor supported by the meaning of the term 
as applied by VA to other truly analogous conditions. The term 
anatomical loss must be reasonably read to mean the substantial loss of 
the bodily part, as it is elsewhere in VA regulations. For example, 
loss of use of a testicle will be established when the ``diameters of 
the affected testicle are reduced to one-third of the corresponding 
diameters of the paired normal testicle,'' or when the ``diameters of 
the affected testicle are reduced to one-half or less of the 
corresponding normal testicle and there is alteration of consistency so 
that the affected testicle is considerably harder or softer than the 
corresponding normal testicle.'' 38 C.F.R. Sec. 3.350(a)(1). DAV 
provided several other examples in its formal response to the proposed 
rule to implement statutory provisions authorizing special monthly 
compensation for service-connected loss of a female breast to 
demonstrate that VA has not approached its rulemaking fairly and 
objectively on this issue.
    We recommended, that because loss of half or more of a female 
breast would cause such deformity and loss of bodily integrity as to 
have essentially the same practical effect as a total mastectomy, that 
VA should revise its definition to provide that anatomical loss will be 
found when there is loss of half or more of the breast. Unfortunately, 
VA ignored our recommendation, and a legislative remedy is necessary to 
clarify congressional intent on the award of special monthly 
compensation for service-connected loss of a breast. Again, we thank 
the Chairman for his efforts to correct this issue.
    Section 3 would make permanent the authority for counseling and 
treatment for sexual trauma. A VA study, designed to asses the health 
status of women veterans who use VA ambulatory services, revealed there 
is a high prevalence of sexual assault and harassment experiences 
reported among women veterans accessing VA services and that active 
duty military personnel report rates of sexual assault higher than 
comparable civilian samples. We testified previously on this issue and, 
because of these disturbing findings, DAV recommended that the VA 
Sexual Trauma Counseling Program be made permanent. We support this 
provision in the legislation and are hopeful the Committee will act 
favorably upon it.
    Section 4 would require that VA submit a report to the Committees 
on Veterans' Affairs of the Senate and House of Representatives on the 
furnishing of health care to women veterans in the VA health care 
system to include a list of Women Veterans' Comprehensive Health 
Centers, staffing levels at such centers, the type of services 
furnished, and the number of women provided care. It would also require 
VA to provide the number of sites that furnish care through a full-
service women's primary health care team, including information about 
staffing levels, the type of services provided and the number of women 
seen in those care settings. Finally, the report would require specific 
information about women veteran coordinators and the number of hours 
each dedicates to that position.
    We support this provision of the bill. DAV recognizes the 
importance of having access to this type of information to track the 
status of programs and services available to women veterans through the 
VA Women Veterans Health Program.
s. 2209 robert carey service disabled veterans' insurance (sdvi) act of 
                                  2002
    This measure would create a new life insurance program for service 
disabled veterans, offering as much as $50,000 in coverage at a price 
comparable to that of commercial coverage for healthy persons.
    The current SDVI program offers only a meager level of coverage 
that pays little more than the cost of today's funeral expenses. Nearly 
half of all SDVI beneficiaries rely on VA compensation as their sole 
source of income and are unable to purchase additional coverage.
    Most disabled veterans have levels of coverage far below the amount 
recommended by financial planners. This bill would begin to restore the 
effectiveness of SDVI. The DAV fully supports this provision.
    S. 2209 would also fulfill a recommendation in The Independent 
Budget to base SDVI premiums on more current mortality tables. The 
intent of the SDVI program was to make life insurance available to 
disabled veterans at rates comparable to rates offered to healthy 
persons by commercial insurers. Because today's SDVI premium rates are 
still based on life expectancy from 1941 mortality tables, SDVI is now 
more costly than commercial policies. These changes will enable the 
SDVI program to achieve its intended purpose. The DAV fully supports 
this provision.
                                s. 2227
    This measure would clarify the effective date of the modification 
of treatment for retirement annuity purposes of part-time service 
before April 7, 1986, of certain VA health care professionals.
    DAV has no position on this bill; however, we would not be opposed 
to its favorable consideration by this Committee to ensure that the 
intent of its prior legislation is fully complied with by the Office of 
Personnel Management.
                                s. 2228
    This bill would authorize the Secretary of Veterans Affairs to 
operate up to 15 centers for mental illness research, education, and 
clinical activities. The purpose of these centers is the improvement of 
health care services and related counseling services for veterans 
suffering from mental illness through research, providing specific 
models for treatment purposes, education and training of health care 
professionals, and the development and implementation of innovative 
activities.
    The DAV supports this measure to increase the number of these 
centers from 5 to 15.
                                s. 2229
    This measure would authorize a cost-of-living increase in rates of 
disability compensation and dependency and indemnity compensation 
(DIC). It would also revise the requirements for maintaining levels of 
extended care services for veterans.
    S. 2229 would increase the rates of disability compensation, DIC, 
and the clothing allowance by the percent 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, 2002.
    As we noted with respect to S. 2074, it is important for Congress 
to 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 the COLA provision of this bill, which is the same 
as S. 2074. However, we continue to oppose rounding down of 
compensation increases, and we urge this committee to reject 
recommendations to extend this cost-savings provision beyond its 
current sunset date.
    DAV is concerned that Title II of S. 2229 would greatly decrease 
the VA's capacity to provide nursing home care to veterans in homes 
under VA's direct jurisdiction. Accordingly, we would be opposed to any 
change in the method by which VA calculates the number of veterans 
receiving extended care services pursuant to section 1710B(b) of title 
38, United States Code.
                                s. 2230
    This measure would give VA permanent authority to guarantee 
Adjustable Rate Mortgage (ARM) loans. The legislation would also give 
VA authority to guarantee a new type of ARM financing called a 
``hybrid.''
    Hybrid ARM loans provide a fixed rate of interest during the first 
three to ten years of the loan, and an annual interest rate adjustment 
thereafter. Both conventional ARMs and hybrid ARMs would provide 
veterans with financing options that are currently available to non-
veterans under federal Housing Administration programs.
    The DAV has no resolution concerning this issue, but we would not 
oppose the addition of a hybrid ARM option to the VA loan guarantee 
program.
 s. 2231 survivors' and dependents' educational assistance adjustment 
                              act of 2002
    This bill would increase educational assistance for survivors and 
dependents of servicemembers from $760 to $985 per month, reduce the 
duration of educational assistance from 45 to 36 months, and increase 
funding to State Approving Agencies (SAAs) from $14 million to $18 
million.
    Many spouses and children of severely disabled veterans would be 
unable to afford tuition at an institution of higher learning or pursue 
a vocational endeavor because of the reduced earning ability of such 
veterans. The increase in Dependents' Educational Assistance (DEA) 
provided in this bill enables them to meet the cost of tuition and 
associated expenses of most 4-year colleges. The DAV supports this 
provision.
    This legislation would also provide an increase of $4 million in 
additional funds to SAAs. Currently funded at $14 million annually, 
SAAs have been given additional responsibilities by Congress. 
Additional funds are necessary to fulfill these new responsibilities. 
SAAs determine which educational institutions and programs are approved 
for use of VA educational benefits. SAAs are instrumental in assuring 
the success of quality educational programs. The DAV has no opposition 
to this provision.
    In an effort to make DEA comparable to the Montgomery GI Bill, this 
bill would reduce the period of eligibility for DEA from 45 to 36 
months. We do not support this provision.
                                s. 2237
    This bill removes the inequity in compensating veterans for 
service-connected hearing loss by eliminating the requirement that 
there by ``total'' deafness in both the service-connected and the 
nonservice-connected ear before VA could apply special consideration 
when evaluating loss of paired organs or extremities.
    Another provision of this bill would require independent scientific 
review of evidence on occupational hearing loss, particularly acoustic 
trauma associated with military service. It would require VA to 
determine whether the evidence warrants a presumption of service 
connection for hearing loss or tinnitus as a result of certain military 
occupations. This corresponds to a recommendation in The Independent 
Budget that Congress enact a presumption of service connection for 
hearing loss suffered by combat veterans and those that had military 
duties involving high levels of noise exposure.
    DAV supports the provisions of this bill.
    Mr. Chairman, this concludes my testimony. I would be happy to 
answer any questions you may have.

    Chairman Rockefeller. Thank you very much.
    Mr. Fischl?

   STATEMENT OF JAMES R. FISCHL, DIRECTOR, NATIONAL VETERANS 
   AFFAIRS AND REHABILITATION COMMISSION, THE AMERICAN LEGION

    Mr. Fischl. Thank you, Mr. Chairman. The American Legion 
appreciates the opportunity to present its views concerning the 
many legislative proposals before us today. While all of them 
are important, I will only address a few of them because of the 
time constraints.
    With regard to S. 2079, it is a significant milestone in 
the claims adjudication process. It was not until the creation 
of the Court of Appeals for Veterans' Claims in 1988 that VA 
claimants had anywhere to turn if their claim were denied at 
the Board of Veterans' Appeals.
    The American Legion believes that this legislation will 
provide for more timely, easier and a more just system for 
claimants, which is more in keeping with the nonadversarial 
structure of the adjudication process. The most important 
element of this bill is section 2, which protects the 
nonadversarial claims adjudication process by eliminating the 
clearly erroneous standard of reversal for factual findings and 
inserting the preponderance of the evidence standard of 
reversal.
    Because the court strictly interpreted the clearly 
erroneous standard, it is the American Legion's experience 
that, in many instances, the VA regional office and the BVA 
have not properly applied the benefit of the doubt rule. 
Section 2 of this bill remedies this problem. The court will 
now have to reverse BVA factual findings if the finding was not 
reasonably supported by a preponderance of the evidence. The 
ultimate result of this amendment will be that many more 
deserving veterans will obtain their justly earned benefits at 
a much earlier time.
    S. 2237, Veterans' Hearing Loss Compensation Act of 2002. 
This proposal would make it less of a burden for veterans to 
obtain service connection and be compensated for hearing loss 
related to their service. It also will require VA to assess the 
effects of acoustic trauma associated with various military 
occupational specialties. This is long overdue, and we applaud 
this initiative. However, the American Legion would like to see 
the language of the bill amended to include noise-induced 
hearing loss, as well as the proposed acoustic trauma.
    According to the Merck Manual, which is the oldest 
continuously published medical textbook in the English 
language, any source of intense noise, such as internal 
combustion engines, heavy machinery, gunfire or aircraft may 
damage the inner ear. The onset of hearing loss related to 
noise exposure is often not immediate. The fact that hearing 
loss is not noted on separation does not mean that subsequent 
hearing loss is not related to exposure to loud noises while on 
active duty.
    The American Legion is concerned that the exclusion of 
noise-induced hearing loss may deprive many veterans of the 
benefit of the presumption contemplated by this legislation.
    Mr. Chairman, you raised the issue of how would we 
determine which hearing loss was service connected and which 
was not because there are many intervening causes that could be 
attributed to the hearing loss. The American Legion would 
suggest that a competent medical opinion could address the 
probability that the exposure to noise while on active duty 
could be related to the current hearing loss.
    S. 1576 would extend Persian Gulf War veterans eligibility 
for VA health care through December 31, 2011. PL 107-135 
extended health care benefits for Persian Gulf veterans through 
December 31, 2002. Thus, the language of S. 1576 should be 
amended to change the terminal eligibility to December 1, 2012.
    S. 1517, the Montgomery GI Bill Improvement Act of 2001 
would provide many sought-after enhancements to the Montgomery 
GI Bill program. We certainly applaud the elimination of the 
$1,200 deduction. We are currently evaluating our position on 
the provision of transferring of entitlement to educational 
assistance by members with 15 years of active duty service. We 
do not support extending the time limitation for use of 
Montgomery GI Bill eligibility and entitlement from 10 to 20 
years. We do, however, recommend that the VA, on a case-by-case 
basis, be able to extend the limiting period for eligible 
veterans, and we would suggest that this not be limited to just 
a severe medical condition, where the veteran was able to 
document that he was not able to attend school, that it should 
include provisions such as a veteran that lost employment and 
had to now seek a new career field, that that veteran, perhaps 
it be 15 years down the road, that he be able to use his 
remaining entitlement to help procure a new career field.
    I see my time has ended, so I will yield to the red light, 
and our testimony is of record.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Fischl follows:]

  Prepared Statement of James R. Fischl, Director, National Veterans 
       Affairs and Rehabilitation Commission, The American Legion

    Mr. Chairman and Members of the Committee:
    The American Legion appreciates the opportunity to discuss 
the several bills scheduled for consideration today.
    The American Legion would like to commend you, Mr. 
Chairman, for scheduling this hearing on a variety of 
legislative proposals that are intended to improve the delivery 
of healthcare benefits and services to this nation's veterans; 
provide for increases in compensation rates; increase the 
special pension for Medal of Honor recipients; and improve 
education assistance under Chapters 30 and 35, title 38, United 
States Code (USC); and for other purposes.
    S. 984, the ``Veterans' Road to Health Care Act of 2001,'' 
would amend title 38, USC, to provide for payments under the 
Beneficiary Travel Program in connection with care for a 
veteran's nonservice-connected disability at a non-VA facility, 
if such care is recommended by VA medical personnel and such 
care is not available at the VA facility making the 
recommendation. This bill would also raise the beneficiary 
travel payment of $0.11 to match the Federal employees travel 
reimbursement rate, which is currently $0.365.
    The American Legion, by resolution, supports an increase in 
veterans' beneficiary travel pay. Payments to disabled 
veterans, under this program, have not been increased since 
1978. In part, VA was reluctant to increase this payment, 
because the necessary funding would come from the medical care 
appropriation. An increase in beneficiary travel potentially 
reduces much needed funding for direct patient care; however, 
the failure to provide any increase over such an extended 
period of time has meant that veterans are not reasonably 
reimbursed for costs incurred to visit a VA medical center for 
service-connected or other authorized care and treatment. The 
lack of a consistent and reliable mechanism to periodically 
adjust the per mile authorization for beneficiary travel 
creates an injustice and an unfair economic burden to many 
veterans.
    The American Legion fully supports an increase, but 
strongly recommends this increase must be accompanied by 
commensurate appropriated funds, so that a gain in beneficiary 
travel does not result in a loss of medical treatment.
    The bill would also authorize payment for travel to a non-
Department facility for the treatment of a nonservice-connected 
condition based upon recommendation by VA /medical personnel, 
when the treatment is not available at the VA facility where 
the recommendation is made. The American Legion is concerned 
about this proposal, because it would establish payment for 
treatment outside of the Veterans Health Administration (VHA) 
system, while there is no current mechanism to provide payment 
for such care within the system. Often veterans encounter 
hardship when they are referred to another VA facility for care 
not available at their local Veterans Affairs Medical Center 
(VAMC) or health care system.
    It is often economically sound--cheaper--for VA to provide 
services ``within house'' even though it means sending veterans 
quite some distance from one VA facility to another. This same 
economy does not necessarily apply to veterans, who at times 
must get to these facilities at their own expense. As an 
example, for years The American Legion heard complaints from 
veterans in Las Vegas, NV about the time and expense they had 
to invest in order to go to and from Las Vegas to southern 
California for specialized services. Veterans in West Texas 
voiced similar concerns about having to go to Albuquerque, NM. 
Much has been done in both places to improve the situation and 
make services available locally. Nevertheless, veterans must 
meet the basic eligibility criteria to receive beneficiary 
travel pay. This does not cover many veterans when they are 
referred or must travel to another VAMC for the outpatient 
treatment of a non-service-connected condition, even if the 
local VAMC cannot provide the needed care or treatment. .
    The American Legion would not support paying beneficiary 
travel for veterans to travel to a non-VA facility until it is 
first available for veterans to travel within the VHA system 
based on the same criteria--VA medical recommendation and lack 
of service at the originating VA point of treatment.
    S. 1113 would amend title 38, USC, section 1562, to 
increase the amount of special pension for Medal of Honor 
recipients from $600 to $1000 a month. It would also provide 
for an annual adjustment in this rate indexed to the cost-of-
living adjustment in Social Security benefits.
    The American Legion supports this special recognition 
program for those 149 living veterans who have earned this 
nation's highest military award for their bravery and self-
sacrifice. The special pension awarded these individuals was 
last adjusted in 1998. The American Legion believes it is 
timely and appropriate that this benefit be substantially 
increased and that provision be made for an annual cost-of-
living adjustment in the monthly rate of pension payable.
    S. 1408, the ``Veterans' Co-Payment Adjustment Act,'' would 
standardize VA's income threshold for co-payment for outpatient 
medications with the current VA means test threshold for 
inability to defray the necessary expenses of care.
    This legislation would exempt certain veterans from co-
payments for needed prescription drugs by standardizing the 
income thresholds for outpatient medications and the inability 
to defray the necessary expense of care (the Means Test). The 
American Legion has heard--loud and clear--the negative 
reactions of veterans to the recent medication co-payment 
increase. At the time the regulation was proposed, The American 
Legion voiced its opposition to the rate of the increase and 
suggested alternative actions. Clearly, the sizeable percent of 
this increase has presented difficulties for certain veterans, 
especially those with low fixed incomes and those who are 
barely above the threshold for exemption--the pension rate of 
$9,556--as well as those veterans who require multiple or 
maintenance medications. Veterans also find the complex and 
arcane rules that govern eligibility difficult to follow. 
Standardizing the threshold, as proposed, would help to 
simplify the co-payment criteria, but most importantly, it 
would assist those least able to afford the increase in their 
prescription co-payments.
    The American Legion also believes it is equally important 
to look at the present co-payment charge for some inexpensive 
over-the-counter medications. A veteran taking a daily aspirin 
as part of maintenance treatment for a coronary disease is 
required to pay $7 for a 30-day supply. That is $21.00 for less 
than a 100 pills, when anyone can go to their local pharmacy 
and buy a bottle of that amount or more for a couple of 
dollars. This is an obvious oversight in the current regulation 
that needs to be examined and rectified. However, the co-
payment system must have a common sense logic that does not 
discourage compliance or force veterans to go elsewhere for 
their medication by overcharging them due to insensitivity or 
inflexibility.
    Section 3 would limit the prescription co-payment increase 
pending a reduction of the outpatient visit co-payment. The 
intent of this section, basically, has been met with the 
reduction in the cost of a primary care outpatient visit from 
$50.20 to $15.00.
    S. 1517, the ``Montgomery GI Bill Improvement Act of 
2001,'' would provide a number of enhancements to the 
Montgomery GI Bill (MGIB) program.
    Section 2 of the legislation proposes to repeal the pay 
reduction and election not to enroll in the basic MGIB 
educational assistance program. The American Legion agrees that 
the current required military payroll deduction of $1200 to 
enroll in the MGIB should be terminated. We believe that 
veterans earned this benefit through the risks, sacrifices, and 
responsibilities associated with military service. Eliminating 
the ``buy-in'' provision would automatically enroll veterans in 
the program. They would then become eligible to receive the 
earned benefit through meeting the terms of their enlistment 
contract and by receiving an honorable discharge.
    Section 3 would provide for the transfer of entitlement to 
educational assistance by members with 15 years of active duty 
service. The intent of MGIB, and its predecessors, has been 
primarily to assist veterans in the process of readjustment to 
civilian life after military service. This involves training, 
retraining, and higher education as means of helping these 
veterans get on with their lives and careers. It is an 
individual, earned benefit. Currently, there are provisions to 
extend educational benefits to family members in Chapter 35, 
USC. The American Legion is currently evaluating its position 
on this provision.
    Section 4 would extend the time limitation for use of MGIB 
eligibility and entitlement from 10 to 20 years. The American 
Legion does not support this proposal. In establishing the 
several previous GI Bill education programs, its position has 
been that an individual should have a reasonable period of time 
after leaving service within which to make their adjustment to 
civilian life. The American Legion believes the current 10-year 
delimiting period is a reasonable period of entitlement; 
however, we would recommend that VA have the authority to waive 
the delimiting period for any eligible veteran on a case-by-
case basis. The American Legion believes the MGIB program 
should remain a key part of VA's readjustment programs, rather 
than becoming some type of general educational benefit.
    Section 5 of the bill would provide MGIB benefits for 
members of the Selected Reserve called to active duty for more 
than one year for a contingency operation. The American Legion 
supports efforts to increase educational assistance benefits 
for Selected Reserves, under Section 1610 of title 10, United 
States Code. Currently, the All-Volunteer military relies on 
the National Guard and Reserves to meet its force requirement. 
Individuals in the Selected Reserves can be activated for duty 
at a moment's notice. Oftentimes, these units reinforce the 
active duty forces at home and around the world, as is the case 
in Operation Enduring Freedom. The American Legion believes 
those members of the National Guard and the Reserves should 
receive a substantial increase in MGIB benefits.
    However, we do not support the one-year service entitlement 
provision. We believe this requirement is excessive. Generally, 
National Guard and Reserve units are activated for periods of 
six to eight months at a time every eighteen months. In 
recognition of their service and sacrifices, The American 
Legion urges Congress to consider improving the quality of life 
benefits, such as educational benefits, as well as allowances 
and privileges to the National Guard and Reserves, so as to 
more closely approximate those provide for their counterparts 
in the active force.
    S. 1561 would authorize the appropriation each fiscal year 
of such sums as may be necessary to implement training programs 
and cooperative efforts within the VA healthcare system and in 
the community to respond to threats of bioterrorism.
    The American Legion concurs with this effort to strengthen 
the preparedness of health care providers within VA and 
community hospitals to respond to bioterrorism. In the wake of 
September 11, 2001, came a renewed effort and vital interest in 
how prepared the nation is to react and respond to national 
emergencies. The American Legion has testified in the past as 
to its support of such initiatives and to the fact that the VHA 
and VA already possess many of the resources needed to play a 
key role in the event of a national emergency. The American 
Legion believes VA should have a major role in Homeland 
Security, especially in the area of bioterrorism and mass 
casualties.
    S. 1576 would extend Persian Gulf War veterans' eligibility 
for VA healthcare through December 31, 2011.
    As stated in Section 1, the intent of the legislation is to 
provide a 10-year extension of eligibility for health care of 
veterans who served in Southwest Asia during the Gulf War. 
However, subsequent to its introduction, Public Law (P.L.) 107-
135 was signed by the President, extending the eligibility of 
Persian Gulf veterans for VA healthcare for one year (through 
December 31, 2002). Thus, the language of S.1576, as 
introduced, does not reflect this change in the law and only 
extends the eligibility to December 31, 2011. In keeping with 
the original intent of this bill, we believe it should be 
amended to change the terminal eligibility date to December 31, 
2012.
    Given the many unanswered questions surrounding the 
unexplained multi-symptom illnesses plaguing many Gulf War 
veterans and the inconclusive nature of research to date, The 
American Legion strongly supports a 10-year extension of 
eligibility for health care for these veterans.
    S. 1680 would amend the ``Soldiers' and Sailors' Civil 
Relief Act of 1940'' to provide that duty in the National Guard 
mobilized by a state in support of Operation Enduring Freedom 
or otherwise at the request of the President shall qualify as 
military service under the Act.
    The Soldiers' and Sailors' Civil Relief Act of 1940 
provides certain legal protection and safeguards to those 
individuals serving on active duty in defense of the nation, 
``under the emergent conditions which threaten the peace and 
security of the United States.'' The purpose of this act was 
``to enable such persons to devote their entire energy to the 
defense needs of the nation.'' These provisions apply to 
members of the National Guard, while performing Federal 
service. If the National Guard is mobilized at the direction of 
the State governor, these provisions do not apply.
    However, since the events of September 11, 2001, the role 
of the National Guard has drastically changed. They have now 
taken on additional military security responsibilities, at the 
request of the President, as part of Operation Enduring 
Freedom. While those members of the National Guard serving on 
active duty (not under title 10, USC) are entitled to military 
healthcare, they are not afforded the same legal protections of 
the Soldiers' and Sailors' Civil Relief Act as other members of 
the armed forces. The American Legion supports the much-needed 
change to the Act proposed by S. 1680.
    S. 1905 proposes a number of improvements in the VA 
healthcare and benefit programs.
    Section 101 of the legislation would amend title 38, USC, 
section 1701 to authorize VA to provide care for newborn 
children of enrolled women veterans, as part of its ``medical 
services.'' Such care may be provided until the mother is 
discharged from the hospital after delivery of the child or for 
14 days after the date of the child's birth, whichever period 
is shorter, and only if the VA contracted for the delivery of 
the child. The American Legion supports the extension of such 
services to women veterans.
    Section 102 would amend title 38, USC, section 1712 to 
eliminate the requirement that a veteran must have been held as 
a prisoner-of-war for a period of not less than 90 days, in 
order to be eligible for VA outpatient dental care.
    The American Legion has long supported changes in the law 
that are intended to alleviate the health problems and 
disabilities resulting from the hardships experienced by former 
prisoners-of-war during their internment. The American Legion 
supports this proposed change.
    Section 103 would exempt the position of the Director of 
the VA Nursing Service from the nurse-pay restrictions in title 
38, USC, section 7451 and require that the Director of Nursing 
Service be paid at a rate comparable to other non-physicians 
(SES) VA executives.
    The American Legion has no objection to this proposal.
    Section 201 would amend title 38, USC, section 112 to 
prohibit the issuance of Presidential Memorial Certificate, a 
burial flag, or a government headstone or gravemarker, if the 
deceased veteran had been convicted of committing a Federal or 
State capitol crime or who are determined administratively to 
have committed such crime, but had not been convicted due to 
death or flight to avoid prosecution. Section 202 would 
disqualify certain individuals for memorialization in veterans 
cemeteries.
    Mr. Chairman, we understand the strong feelings underlying 
these proposals that those who commit capitol crimes basically 
forfeit their civil rights and should be punished to the full 
extent to the law. However, the law also provides that anyone 
who honorably serves in the Armed Forces of the United States 
is entitled to a burial flag, a Presidential Memorial 
Certificate, and a government headstone or marker based on such 
service. These proposals would take away an individual's right 
to these benefits ex post facto, based on something they did 
later in life and that has no relationship to their period of 
honorable military service. The American Legion opposes 
Sections 201 and 202.
    Section 203 proposes to amend title 38, USC, section 7266 
to clarify the period within which to appeal decisions of the 
Board of Veterans Appeals (BVA).
    Currently, VA is required, under title 38, USC, section 
7104(e), to promptly mail a copy of the BVA decision to the 
claimant at the last known address and to mail or otherwise 
send a copy of the decision to the claimant's authorized 
representative, if there is one. The claimant then has 120 days 
from the date of mailing to file a notice of appeal with the 
United States Court of Appeals for Veterans Claims (the Court).
    Mr. Chairman, in an appeal to the Court, under this 
proposal, rather than having 120 days to file an appeal to the 
Court from the date the Board's decision is mailed to the 
claimant, the 120 appeal period would run from the date a copy 
of the Board's decision is mailed or sent to the authorized 
representative, if any. The American Legion believes this would 
be beneficial to the claimant. It recognizes that there may be 
some delay at the Board in sending a copy of the decision to 
the representative and that the claimant should have sufficient 
opportunity to consult with their representative regarding a 
possible appeal.
    Mr. Chairman, The American Legion has no objections to the 
proposed changes included in sections 301-304 of this bill.
    S. 2003 would amend title 38, USC, section 5301 to prohibit 
any type of agreement assigning the payment of a veteran's 
compensation, pension, or survivor's DIC benefits to another 
person. It includes penalties against such persons entering 
into such agreements with a veteran or other beneficiary
    The American Legion remains concerned by stories of various 
loan ``scams'' being used by companies and individuals to take 
advantage of unsuspecting, sick and disabled veterans and their 
families. They offer instant lump-sum cash payment in exchange 
for the individual's VA benefits. However, the actual payment 
is steeply discounted by 60-70 percent or higher, according to 
a VA investigation. The companies apparently go to great 
lengths to avoid calling these arrangements loans, which could 
violate State and Federal laws against loan sharking and truth-
in-lending requirements. While veterans should be free to do 
what they want with their benefits, The American Legion 
believes there is a loophole in the current law that, as a 
matter of public policy, should be closed, in order to prevent 
veterans from being victimized by such predatory practices. 
These schemes have sought to skirt the intent, if not the 
letter of the current law. The American Legion believes this 
proposal will help address this problem and provide substantial 
penalties for violators of the law.
    This legislation would also authorize the appropriation of 
$3 million to be used over the next five years by VA for the 
purpose of outreach and education concerning the prohibition to 
assignment of their veterans' benefits and financial risks of 
entering into any such an arrangement.
    S. 2025 would amend title 38, USC, section 1562 to increase 
the amount of special pension for Medal of Honor recipients 
from $600 to $1000 monthly. It would also provide for an annual 
adjustment in this rate indexed to the cost-of-living 
adjustment authorized for Social Security recipients. This bill 
further proposes to authorize the payment of a lump-sum payment 
of special pension for the period from the date of the award of 
the Medal of Honor to the date of initial receipt of the 
special pension. As with regard to S. 1113, The American Legion 
supports the proposed increased in this special benefit.
    The legislation also provides for increased criminal 
penalties associated with the misuse or fraud relating to the 
Medal of Honor. Although The American Legion has no formal 
position on this proposal, we believe it is essential to 
protect the honor and integrity of the nation's highest 
military award. This requires that there be substantial 
penalties for those individuals or companies who would 
denigrate the Medal of Honor for any reason or purpose.
    S. 2043 would extend by five years VA's authority to 
provide non-institutional extended care services and required 
nursing home care.
    Section 1 of the bill would amend title 38, USC, to extend 
by five years the period for the provision by the Secretary of 
VA of non-institutional extended care services and required 
nursing home care, and for other purposes.
    The provisions of the Veterans' Millennium Health Care and 
Benefits Act, P.L. 106-117, that this bill would involve 
essential elements of care that are critical to VA's efforts to 
meet the needs of its substantial aged and aging veteran 
population. The American Legion is concerned about VA's 
struggle to define its role in long term care and its inability 
to meet the capacity requirements of the Millennium bill. 
Clearly, with the length of time it has taken to develop the 
regulations and guidance to implement the Millennium bill, VA 
has not had sufficient time to assess or demonstrate the 
benefits of the mandated provisions for nursing home care nor 
the advantages of non-institutional programs and services.
    For VA to meet the mandate for nursing home care, it must 
have sufficient resources dedicated to this endeavor, and it 
must maintain its capacity as indicated by legislation. Too 
often VA nursing home care is being shifted to the private 
sector, and after brief contracts for community care, veterans 
and their families must apply for Medicaid or Medicare or 
assume responsibility for the cost of care. VA Nursing Home 
Care Unit facilities are also being underutilized due to 
staffing shortages. In site visits to Las Vegas, Nevada and El 
Paso, Texas, The American Legion's Field Service Unit (FSU) 
observed that veterans there do not have similar access to the 
range of long term care services, in particular home based 
services, available to other veterans in the country.
    The American Legion recognizes the benefits of a robust 
non-institutional care program that supports and maintains 
veterans at their home rather than in institutional settings. 
Therefore, The American Legion strongly concurs with an 
extension of the time frame for the provision of the stated 
services, and will continue to monitor VA's efforts in 
providing extended care.
    S. 2044 would provide for the further expansion and 
improvement of VA program of specialized mental health 
services.
    This legislation further improves specialized mental health 
services to veterans by increasing the funds available for 
already-established grant programs for the treatment of 
veterans with post-traumatic stress disorder and substance use 
disorders. The American Legion applauds the efforts to channel 
resources for the treatment of these veterans. On numerous 
occasions, The American Legion has voiced its concerns about 
the lack of reinvestment in mental health programs subsequent 
to their significant restructuring during the past several 
years. These funds are essential for many of the programs that 
initially requested funds under this authority, but who have 
yet to move forward with the intended enhancements.
    S. 2060 would authorize the VA Regional Office in St. 
Petersburg, Florida to be named after Franklin D. Miller, in 
recognition of his distinguished military career and service to 
his fellow veterans and the nation.
    The American Legion has no objection to this proposal.
    S. 2073 would authorize the lump-sum award of the special 
Medal of Honor pension to Ed W. Freeman retroactively from 
November 1965 to June 2001.
    The American Legion has no objection to this legislation.
    S. 2074, the ``Veterans' Compensation Cost-of-Living 
Adjustment Act of 2002,'' would provide a cost-of-living 
adjustment (COLA) in the monthly rates of disability 
compensation and Dependency and Indemnity Compensation. These 
benefits would increase by the same percentage as Social 
Security benefits and be effective December 1, 2002.
    The American Legion supports the annual adjustment in the 
monthly compensation and DIC benefits for disabled veterans and 
DIC beneficiaries. It is important that their financial support 
is not eroded by increases in the cost-of-living. However, The 
American Legion remains opposed to any effort that would 
automatically index their COLA to that provided for Social 
Security beneficiaries. We believe Congress has a 
responsibility to annually consider the needs of service-
disabled veterans and their families and provide an appropriate 
adjustment in their benefits. Hearings on the subject afford a 
valuable forum to discuss this and other compensation-related 
issues, which might not otherwise be available.
    S. 2079 proposes the amendment of title 38, USC, to expand 
the scope of review of the United States Court of Appeals for 
Veterans Claims and United States Court of Appeals for the 
Federal Circuit.
    Mr. Chairman, The American Legion believes this legislation 
provides for a number of significant improvements in veterans' 
judicial review.
    Section 1 would amend title 38, USC, section 502 to delete 
the exclusion from judicial review of actions relating to the 
adoption or revision of Part 4 of title 38, Code of Federal 
Regulation, Schedule of Rating Disabilities. Under this 
proposal, the United States Court of Appeals for the Federal 
Circuit would have sole jurisdiction in any appeal involving 
this issue. This exception was included in P.L. 102-83. 
However, there are substantive issues of law contained in Part 
4, which the Court cannot consider. There are issues relating 
to the application of the rating schedule, attitude of rating 
specialists, total disability and other, which should be, at 
least, subject to judicial scrutiny.
    Section 2 would amend title 38, USC, section 7261 to 
clarify the standard of review under which the Court of Appeals 
for Veterans would reverse an erroneous finding of fact by the 
Board of Veterans Appeals. Currently, VA is required to give 
the claimant the benefit of reasonable doubt, (under title 38, 
USC, 5107(b)), when all of the evidence of record is considered 
and there is an approximate balance of positive and negative 
evidence regarding the merits of the claim. When the claim 
comes before the Court, the appellant must show that the Board 
of Veterans Appeals decision was clearly erroneous. This 
standard is often difficult to meet, since the Court will 
uphold the factual determinations of the Board of Veterans 
Appeals, if there is a plausible basis for their finding of 
fact. To overcome this disparity, this legislation would 
require the Court to apply the less stringent ``preponderance 
of evidence'' standard in reviewing factual determinations of 
the Board of Veterans Appeals. We believe this proposed change 
in the law would enable the Court to more clearly and fairly 
address the claimant's issues in their appeal.
    Section 2 would also amend section 7261 to expand the 
authority of the Court to not only set aside determinations of 
the Board of Veterans Appeals, but to reverse them rather than 
having to remand them back for further review and 
readjudication. This is a historic change in the judicial 
review process. It addresses a long-standing concern of The 
American Legion about the years it often takes for a claimant 
to get their case finally before the Court only to have it 
remanded back to the Board, which means further frustration, 
hardship, and delay. This will help provide more timely final 
decisions on issues on appeal by the Court.
    Section 2 would further amend section 7261 to require the 
Court to utilize the entire evidence of record and set forth 
the evidence upon which the Court relied upon in making its 
determination. The American Legion believes this provides for a 
fuller description and discussion of all the evidence and 
information considered by the Court in reaching its decision, 
and, therefore, would be beneficial to the claimant.
    Section 3 would amend title 38, USC, section 7292, to 
provide that United States Court of Appeals for the Federal 
Circuit (the Federal Circuit) shall have jurisdiction over 
decisions of the United States Court of Appeals for veterans 
claims on all questions of law. Currently, the Federal Circuit 
is only authorized to review the Court's findings on question 
of statutory or regulatory interpretation. The Federal 
Circuit's decision in Livingston v. Derwinski, 959 F. 2d 224 
(1992), highlighted the problem of the statutory limitation on 
the Federal Circuit's ability to address certain questions of 
law raised in an appeal of a decision of the lower Court. The 
American Legion believes this change will overcome some of the 
shortcomings in the current statutes providing for judicial 
review of the veteran's claims.
    Section 4 would authorize the payment of fees under the 
Equal Access to Justice Act to non-attorney practitioners 
before the United States Court of Appeals for Veterans Claims. 
The American Legion has no formal position on this proposal.
    S. 2132 would provide for the establishment of VA medical 
emergency preparedness centers and enhancement of the VA 
medical research program.
    This legislation authorizes the Secretary to establish at 
least four medical emergency preparedness centers at VA medical 
centers with staffing by VA employees. The mission of the 
centers includes carrying out research and developing methods 
of detection, diagnosis, vaccination, protection, and treatment 
for chemical, biological, and radiological threats to the 
public health and safety. The centers would also provide 
education, training, and advice to health-care professionals, 
including health care professionals outside VHA; and provide 
contingent rapid response laboratory assistance and other 
assistance to Federal, State, and local health care authorities 
in the event of a national emergency.
    Unilaterally, VA responded to the tragic events of 
September 11th very quickly. The Veterans Benefits 
Administration (VBA), VHA, and the National Cemetery 
Administration were mobilized to assist in answering questions, 
provide mental health services, filing for benefits, and 
assisting with burial arrangements. Also, VA worked with 
Federal Emergency Management Agency (FEMA), the Office of Crime 
Victims (OCV), American Airlines and the American Red Cross. 
VA's National Center for Post-Traumatic Stress Disorder (PTSD) 
sent six team members from the Palo Alto Education Division to 
the Pentagon Family Assistance Center within days of the 
attack. For more than two weeks, this team provided 
psychological support and education to the recovery workers and 
family members at two separate locations.
    Even though the response was quick and more than adequate, 
much work remains to be done on the ability of this nation to 
respond immediately in the event of a national emergency. The 
establishment of these emergency preparedness centers, we 
believe, is a step in the right direction. However, there 
already exists a Center within VA that performs many of the 
functions proposed in this legislation. A team from The 
American Legion conducted an on-site visit and was very 
impressed with the operation.
    The Emergency Management Strategic Healthcare Group (EMSHG) 
Emergency Operations Center was activated in response to VA's 
concerns over Y2K, and has remained the alternate site for VA 
Central Office in the event of a national emergency. It has 
been revised to oversee VA's response to combat and civilian 
casualties resulting from weapons of mass destruction (WMD); 
nuclear, biological or chemical (NBC) attacks or natural or 
accidental disasters. The mission of EMSHG is to provide 
comprehensive emergency management services to VA, coordinate 
backup to the Department of Defense (DoD) and assist the public 
via the National Disaster Medical System (NDMS) and the Federal 
Response Plan (FRP).
    The American Legion has testified in the past that it would 
like to see close involvement of this entity in the 
establishment of the proposed additional emergency preparedness 
centers. The American Legion was very impressed with the team 
and its operations at the EMSHG and is very supportive of its 
efforts to facilitate coordination in the event of a national 
disaster. Many things remain to be done that The American 
Legion would like to see incorporated into the medical 
emergency preparedness centers, based on some of the 
observations we made during the EMSHG site visit. These include 
the following:
    1. Assess how VA will continue to act as a back up for DoD 
and the NDMS under the CARES process. The EMSHG should be 
incorporated into any further VISN evaluations and as the 
options are implemented in VISN 12;
    2. Increase coordination with the National Center for PTSD 
and the Readjustment Counseling Services as part of the 
strategic planning process;
    3. Garner DoD input in developing a better understanding of 
their needs through national and local efforts, especially in 
evaluating their bed space needs;
    4. Consider VA's role with the NTSB when military assets 
and personnel are involved;
    5. Require VA identify unutilized space available for use; 
and
    6. Create a National Registry of personnel to contact in 
the event of a national emergency.
    The American Legion reiterates its support for the 
establishment of the proposed emergency preparedness centers.
    Section 2 clarifies that VA Medical Centers may enter into 
contracts or other forms of agreements with nonprofit research 
corporations to provide services to facilitate VA research and 
education.
    The American Legion believes that research and education 
for the betterment of the veteran and his family is a key 
element of the VA's overall mission. We have always advocated 
strongly for research and the dollars needed to support it.
    The American Legion supports this change relating to 
contracts between VA Medical Centers and research corporations.
    Section 3 clarifies that research corporation employees are 
covered under the Federal Tort Claims Act (FTCA).
    It is critical that the employees of VA-affiliated research 
corporations be protected under the FTCA while carrying out 
their duties under a VA appointment. If they are not, the 
alternatives the corporations would have to look at are not 
acceptable. Two of these are to either use funds normally 
devoted to supporting research to buy an expensive blanket 
insurance policy or to close down the entire operation, neither 
of which is acceptable.
    The American Legion supports this legislation.
    S. 2186, the ``The Department of Veterans Affairs 
Reorganization Act of 2002,'' would establish within VA an 
Assistant Secretary position that would be responsible for 
operations, preparedness, security and law enforcement 
functions. The American Legion recognizes the extremely 
important role VA has as a key support agency in disaster 
response, as well as its responsibilities to protect those who 
use, staff and visit its facilities, while assuring veterans 
services are maintained. The American Legion has no objection 
to the addition of another Assistant Secretary position, per 
the Secretary's request, to help organize VA so that it 
effectively responds to its responsibilities.
    S. 2187, the ``Department of Veterans Affairs Emergency 
Medical Care Act of 2002,'' would authorize VA to furnish 
healthcare during a major disaster or medical emergency. It 
also seeks to give VA the statutory authority, which it has 
never had, to furnish care for non-veterans and non-active-duty 
military personnel. The American Legion applauds the efforts 
and contributions VA has made to the general public in response 
to major national disasters. Over the past 20 years, VA has 
responded to every major domestic disaster, including Oklahoma 
City, Hurricanes Andrew and Floyd, and of course, the attacks 
perpetrated upon the nation on September 11, 2001.
    The American Legion witnessed first hand some of the care 
provided by the VA at the Pentagon after September 11. The VA's 
national Center for Post-Traumatic Stress Disorder (PTSD) sent 
six team members form the Palo Alto Education division to the 
Pentagon Family Assistance Center within days of the attack. 
For more than two weeks, this team provided psychological 
support and education to the recovery workers and family 
members at two separate locations.
    At the Pentagon Family Assistance Center, VA's team 
provided:
     Psycho-education for counselors in support of 
families of missing or deceased;
     Debriefing of support staff, counselors, and other 
agencies (including Red Cross, FEMA, and DoD);
     Psycho-education and debriefing to Casualty 
Assistance Officers (CAO), who are charged with providing case 
management to the families of the deceased;
     Educational materials regarding disaster response 
for victims and helpers;
     Facilitator's guide for behavioral and emotional 
support debriefing for use by DoD counselors;
     Consultation with operation and mental health 
leadership in a long-term disaster response plan;
     Family support; and
     Program evaluation questionnaire for CAOs to 
assess preparedness, effectiveness, and utilization of 
resources while providing services for family members of 
deceased victims.
    At the US Army Community and Family Support Center command 
Group in Alexandria, Virginia, VA's team provided:
     Psycho-education regarding human response to 
disaster and utilization of psychological first aid;
     Psycho-educational materials;
     Counseling to Pentagon employees; and
     A survey for staff to use as self-assessment in 
response to the disaster.
    As always, VA was there to help all the victims. Their 
contributions to all the disaster relief they have provided 
over the many years is immeasurable.
    The American Legion strongly supports this bill.
    S. 2205 would amend title 38, USC, to clarify entitlement 
to disability compensation of women who have service-connected 
mastectomies, provide permanent authority for counseling and 
treatment for sexual trauma, and for other purposes.
    Section 1 would amend section 1114(k) to provide that the 
loss of half or more of the tissue of one or both breasts meet 
the criteria for entitlement to special monthly compensation. 
The enactment of legislation last year provided entitlement to 
special monthly compensation for those women veterans who 
suffered the loss of one or both breasts as a result of their 
military service. However, VA implementing regulations 
arbitrarily defined such ``loss'' as to require the complete 
removal of one or both breasts through either a simple or 
radical mastectomy. The American Legion believes this 
definition is too restrictive and inconsistent with the intent 
of law, which was to assist women veterans who have undergone 
this type of procedure in their rehabilitation.
    Section 2 would make permanent VA's authority to provide 
counseling and treatment for victims of sexual trauma. Current 
authority for these counseling and treatment programs runs only 
through December 31, 2004. The American Legion believes this 
type of care is an essential part of VA's comprehensive medical 
care services and, as such, the requirement for periodic 
reauthorization adversely affects VA's ability to effectively 
plan and budget for this program.
    Section 3 requires VA to submit a report to Congress on its 
healthcare program for women veterans. The American Legion has 
been a strong supporter of VA's women veteran healthcare 
program and has worked with VA and Members of Congress on 
ensuring that these veterans have the necessary services and 
programs available to meet their special healthcare needs. VA's 
overall healthcare delivery system has undergone radical 
changes in recent years and it continues to evolve and develop. 
In this time of transition and change, it is important to 
ensure that women veterans' programs are getting proper 
attention and resources. The American Legion believes the 
proposed report on how VA is delivering healthcare to women 
veterans will be helpful to Congress and those in the veterans' 
community in understanding how well the healthcare needs of 
this veteran population are being met.
    S. 2209, the ``Robert Carey Service Disabled Veterans' 
Insurance Act of 2002,'' would amend title 38, USC, to provide 
an additional program of service-disabled veteran's insurance 
(SDVI), and to update certain basic structural components of 
the existing service-disabled insurance program. The American 
Legion is generally supportive of this proposal.
    This legislation is based on certain findings by the 
private sector study on Program Evaluation of Benefits for 
Survivors of Veterans with Service-Connected Disabilities, 
completed in Spring 2001, which found an enhancement was needed 
in insurance coverage options for veterans with service-
connected disabilities who had been out of service for several 
years. The proposed legislation would provide such veterans up 
to $50,000 Term insurance coverage on a level, permanent 
premium basis up to age 70, at which point the amount of 
insurance would reduce to 20 percent of the face value held, 
but which would then be in a paid-up insurance state. A 
standard disability waiver of premiums provision would also 
apply, and the aggregate of service-disabled coverage held 
under all such programs would not exceed $50,000. Qualifying 
criteria would be the same as for the current SDVI program, but 
with the added constraint of an overall eligibility period of 
applying for such within 10 years of release from active duty.
    The American Legion has long been in favor of an 
enhancement to the VA's SDVI program, which would bring it into 
line with today's economic realities. The standard SDVI maximum 
of $10,000 has long been insufficient, and only the most 
disabled veterans under age 65 who cannot follow gainful 
employment because of their disability qualify for supplemental 
SDVI coverage, for which they must pay full premiums.
    The American Legion feels this legislation to be a step in 
the right direction in addressing certain deficiencies of the 
present program, but we favor a more extensive overall 
eligibility period than the 10 years after release from active 
duty specified in the bill. The American Legion further 
believes that service-disabled veterans who receive increases 
in their service-connected disabilities, rather than only those 
who receive original ratings for service-connection, should be 
eligible to apply for such coverage and that such provision be 
extended to the regular SDVI program as well. In connection 
with this issue, The American Legion has found that the current 
two-year eligibility period from the date of notification of a 
rating granting service connection is too restrictive and 
should be extended to a more reasonable and appropriate time 
for all SDVI programs.
    Too many disabled veterans, as found both by the Program 
Evaluation group and as The American Legion has seen in its own 
extensive experience, lose the chance for much needed insurance 
coverage because they are unaware of the program, or because 
they were not able to see beforehand how their service-
connected disabilities would progress. Further, as the majority 
of applications for SDVI are currently from Viet Nam Era 
veterans, we feel an open period on this new insurance program 
for this group is appropriate. This would take into account 
their current service-connected rating levels, the deficiencies 
in the VA insurance programs in effect during that time (such 
as the absence of an operating transitional Veterans' Group 
Life Insurance program), and no subsequent opportunity for 
coverage afforded them similar to the Veterans' Reopened 
Insurance program permitted to veterans of WWII and Korea in 
the 1965-66 time period.
    The reduction to 20 percent of face value at age 70, with 
such remainder then being in a paid up status, we understand to 
be necessitated by budget considerations. However, VA should 
take special care that such provision, along, of course, with 
the existence of the program itself if approved by Congress, be 
fully communicated to all eligible veterans to avoid 
misunderstanding and confusion in later years.
    This proposed legislation does not permit the provisions of 
regular SDVI Gratuitous insurance to apply, retaining the limit 
in such cases to $10,000 even for those veterans whom would 
have qualified for coverage under this proposal.
    As the primary purpose of Gratuitous SDVI continues to be a 
matter of equity and principle, to permit an insurance 
settlement in cases where a veteran, otherwise eligible, could 
not apply for SDVI because of a service-connected disability 
rendering him or her mentally incompetent and hence unable to 
do so, thus placing them on an even footing with other 
qualifying service-connected veterans. The American Legion 
believes the same principle should govern this new program. 
Beneficiaries of deceased veterans who would otherwise have 
qualified for insurance under this proposed legislation and 
also meets the rigorous criteria for gratuitous insurance 
should be permitted the full $50,000 settlement. Given the 
rarity of such cases we do not believe this should impact 
adversely on program costs to a significant extent. 
Beneficiaries of those veterans meeting gratuitous insurance 
criteria outside the overall eligibility period for such new 
coverage, where the veteran would have qualified only for 
standard SDVI, would still be eligible for the regular $10,000 
Gratuitous insurance. The SDVI programs would then be 
consistent in their application.
    Additionally, The American Legion is in full agreement with 
VA's proposal to switch to the Commissioners 1980 Standard 
Ordinary Table of Mortality for the determination of premium 
rates for all SDVI programs, rather than the outdated 1941 
Table presently in use. It is neither sensible nor fair to base 
premiums rates for service-disabled veterans on mortality 
tables over sixty years old, and long rendered obsolete by 
changes in American living conditions and modern medicine, 
evident to all. Such action constitutes a deliberate 
overcharging of disabled veterans for their own benefits, and 
works to negate the original intent of Congress in such 
programs.
    Finally, The American Legion supports the proposal to add a 
new insurance benefit for service-connected veterans. The 
American Legion strongly believes both the new issue presently 
under consideration and the current SDVI program, are necessary 
to a viable and proper set of benefits for our country's 
veterans who we continue to rely on in times of recurring 
crisis.
    S. 2227 proposes to clarity the effective date of the 
modification treatment for retirement annuity purposes the 
part-time service before April 7, 1986, of certain VA health 
care professionals. Retired VA nurses, who worked part-time 
before 1986, worked hard to have P.L. 107-135, Department of 
Veterans Affairs Health Care Programs Enhancement Act of 2001, 
passed to restore full pension benefits which were 
``grandfathered'' for other employees. The intent of the law 
was to restore full credit promised to all nurses who worked 
part-time before 1986. However, there are those who are 
interpreting the law as only restoring the full pensions to 
Registered Nurses that retire after the bill was signed in 
January 2002. This interpretation has caused considerable 
consternation among the nursing population affected by P.L. 
107-135, and has prompted this clarification.
    The American Legion continues to believe that given VA's 
nursing shortage, coupled with the critical need to provide the 
best care to the veteran population possible, any further 
decrease in benefits to VA nurses would jeopardize the 
recruitment and retention programs of that nursing population.
    The American Legion fully supports this legislation.
    S. 2228 would authorize VA to increase from five to 15 the 
number of Mental Illness Research, Education, and Clinical 
Centers (MIRECCs) established by VHA. The American Legion 
continues to strongly support the development of the MIRECCs, 
both in geriatrics and mental illness. They are major 
contributors to improvements in direct patient care, 
advancements in knowledge through research, the dissemination 
of information through education as well as the development of 
quality providers based on the three core components of the 
centers' activities. While these centers are national in scope, 
their prosperity is often tied to the fate of the host medical 
center or Veterans Integrated Service Network (VISN) as they 
become subject to hiring freezes and budget cutbacks faced by 
those entities.
    The American Legion adamantly supports the further 
development of additional MIRECCs noting once again the need 
for accompanying funding to support these efforts if they are 
to remain viable.
    S. 2229, the ``Veterans' Benefits Improvement Act of 
2002,'' would increase the monthly rates of veterans' 
disability compensation and dependency and indemnity 
compensation (DIC) by the same percentage as the increase 
authorized in Social Security benefits, effective December 1, 
2002. The American Legion supports the annual cost-of-living 
adjustment in these benefits, as proposed in S. 2229 and S. 
2074.
    This legislation would also provide that the Secretary of 
VA shall ensure that staffing and level of VA extended care 
services, excluding nursing home care, are not less than FY 
1998 levels. It would also require that the average daily 
census in VA nursing home facilities, including those veterans 
placed in community contract facilities as well as State 
nursing homes, is not less than FY 1998 levels.
    S. 2230 would make permanent the authority of the Secretary 
of VA to guarantee adjustable rate mortgage and to authorize VA 
to guarantee hybrid adjustable rate mortgages.
    The American Legion supports the proposal to make permanent 
the authority of the Secretary of VA to guarantee adjustable 
rate mortgages and authorize the guarantee of hybrid adjustable 
rate mortgages. Originally the purpose of the VA home loan 
guaranty program was to help returning World War II veterans in 
their readjustment to civilian life and to stimulate the 
economy by assisting those veterans in obtaining mortgage 
financing from the private sector. In 1992, Congress authorized 
VA to conduct an initial three-year pilot program, which 
allowed VA to guarantee Adjustable Rate Mortgages (ARMs). This 
legislation would make this type of mortgage a permanent part 
of the VA home loan guaranty program. It would also allow the 
borrower to obtain a home loan with an interest rate below the 
current market rate for a fixed number of years rather then 
having the rate change on a yearly basis. Therefore, The 
American Legion supports this proposed legislation to improve 
and strengthen the ability of the VA Loan Guaranty Service's to 
serve America's veterans.
    S. 2231, the ``Survivors' and Dependents' Educational 
Assistance Adjustment Act of 2002,'' would increase the monthly 
rates of educational assistance for surviving spouses and 
dependents under Chapter 35 of title 38, USC. The American 
Legion is supportive of the proposed changes. It is important 
that these benefits be periodically increased, in order to keep 
pace with increased cost of higher education and maintain the 
level of assistance necessary to achieve the goals of the 
program.
    S. 2237, the ``Veterans' Hearing Loss Compensation Act of 
2002,'' and would:
    1. Amend title 38, USC, section 1160(a)(3), to eliminate 
the requirement that a veteran who is totally deaf in one ear 
due to a service-connected condition also be totally deaf in 
the other ear due to a non-service-connected condition in order 
for compensation to be paid under this section as if the 
combination of disabilities were the result of service-
connected disability;
    2. Add to title 38, USC, new Section 1119, Presumption of 
service-connection for hearing loss associated with particular 
military occupational specialties. The particular military 
occupational specialties for which presumptive service-
connection would be granted are to be identified by the 
National Academy of Sciences (NAS). The Secretary of VA would 
determine which of the occupational specialties identified by 
NAS would actually be covered by the new statute and;
    3. Direct that VA engage NAS to undertake a large-scale 
assessment of acoustic trauma associated with various military 
occupational specialties.
    The American Legion has no formal position on these issues; 
however we offer the following comments and concerns. The 
American Legion is pleased with the provision of S. 2237 
eliminating the total deafness requirement from title 38, USC, 
section 1160(a)(3), which provides special consideration in the 
evaluation of a veteran's overall disability when there is the 
loss or loss of use of a paired organ or extremity. This change 
will make it easier for a veteran who is partially deaf to be 
compensated at a higher rate under the existing rating schedule 
by allowing the non-service connected ear to be evaluated at 
its actual level of hearing loss. The American Legion believes 
veterans should be compensated for the full extent of their 
hearing disability.
    The American Legion has long been concerned by the 
difficulties many veteran have in establishing service-
connection for delayed onset hearing loss incurred as a result 
of exposure to noise and acoustic trauma while in service. The 
fact that normal hearing may have been noted on separation does 
not necessarily preclude the establishment of service-
connection for a diagnosed hearing loss later in life. However, 
the medical linkage required to establish service connection 
many years after service is an obstacle that is difficult and, 
in many instances, impossible for the veteran to overcome.
    This legislation would go a long way toward eliminating 
that obstacle for many veterans whose service to their country 
included exposure to extreme noise and acoustic trauma. 
According to the Merck Manual, any source of intense noise, 
such as internal combustion engines, heavy machinery, gunfire, 
or aircraft, may damage the inner ear. Although persons vary 
greatly in susceptibility to noise-induced hearing loss, nearly 
everyone loses some hearing if exposed to sufficiently intense 
noise for an adequate time. However, that hearing loss may not 
be evident until years later. Any noise above 85 decibels can 
be damaging. High-frequency tinnitus usually accompanies the 
hearing loss. It appears that the loss occurs first at the 4 
kHz level and gradually occurs in the lower and higher 
frequencies, if the noise exposure continues. In contrast to 
most sensorineural hearing losses, loss is less at 8 kHz than 
at 4 kHz.
    The American Legion notes that this bill uses the term 
``acoustic trauma'' as the source of injury to a veteran's 
hearing. This type of trauma is usually associated with high-
compression blast or explosion and produces the same kind of 
sensory hearing loss as noise-induced trauma. While veterans in 
such Military Occupational Specialties (MOSs) as infantry, 
artillery, naval gunnery and explosive ordnance disposal are 
routinely exposed to these types of noise hazards, a large 
number of veterans claiming service-connection for noise-
induced hearing loss were in military-industrial specialties 
such as aircraft flightline and flight deck operations, 
shipboard boiler rooms, machine shops and heavy equipment 
maintenance. The American Legion is concerned that the term 
``acoustic trauma'' will deprive many veterans of the benefit 
of the presumption contemplated by this legislation and 
suggests that the language be amended to include ``noise-
induced hearing loss.''
    The American Legion welcomes the study of the effects of 
military service on hearing acuity across the veteran 
population, including the assessment of VA's and DoD's data on 
hearing threshold shift in veterans who served from the onset 
of World War II, forward. We believe this study will yield 
valuable data on the treatment of hearing loss in veterans and 
the prevention of hearing loss in future veterans.
    Mr. Chairman, that completes our testimony.

    Chairman Rockefeller. It is ruthless, is it not?
    Mr. Fischl. Yes, it is. [Laughter.]
    I was going to ask the VFW to yield part of their time, 
but----
    Mr. Cullinan. I had already declined, Mr. Chairman.
    Mr. Fischl. They have a history of being not cooperative. 
[Laughter.]
    Chairman Rockefeller. No, the VSO's have gotten closer, but 
not that close. [Laughter.]
    I have questions, but what is embarrassing is I know 
exactly how you are going to respond to each one of them. So I 
could use that to get you to respond to each one of them, to 
put it on the record, but several of you have already addressed 
some of those questions. I do not see a need at this point to 
probe because we have your testimony. We know what you think. I 
think I would have guessed what you were going to say before we 
received the testimony, and you have come and made your pitch 
to help us now prepare for a markup.
    So I do not feel the need. There are not other members 
here. I, personally, do not feel the need to grill you. I would 
if I felt the need to, but I do not. And so I think what I will 
just do is really thank you for coming here, for all of you 
having, in your various ways, worked to help support, to 
critique, to oppose certain legislation and, thus, to help us 
arrive at how we are going to act on this, when hopefully we 
have more members.
    So I thank you very much. I thank all of you who attended, 
and this hearing stands in recess.
    [Whereupon, at 10:51 a.m., the committee was adjourned.]
                            A P P E N D I X

                              ----------                              

 Prepared Statement of Hon. Michael B. Enzi, U.S. Senator From Wyoming
    Thank you, Chairman Rockefeller and Ranking Member Specter, for 
holding this hearing on legislation pending before the Veterans' 
Affairs Committee. I particularly appreciate the opportunity to speak 
on behalf of the ``Veterans Road to Health Care Act of 2001,'' which I 
introduced last June. This legislation would raise the travel 
reimbursement rate for veterans who must travel to hospitals operated 
by the U.S. Department for Veterans' Affairs for treatment. Veterans 
currently receive 11 cents per mile for reimbursement. This bill would 
raise that to 34.5 cents per mile, which is equivalent to the 
reimbursement level for Federal employees. My bill would also provide 
reimbursement at the Federal employee level for veterans who have been 
recommended to special care facilities by their VA physician for a non-
service connected disability. This provision would provide veterans 
access to critical care that the VA recognizes but does not have the 
facilities to treat.
    Given the fluctuating nature of gas prices and the many costs 
associated with automobile travel, 11 cents per mile rarely covers the 
expenses veterans face when they are forced to travel to distant places 
for health care. I have heard from numerous veterans in Wyoming who 
describe the difficulty in budgeting for travel between their hometown 
and the VA hospital, especially given the fact that many are on a fixed 
income. Health care access is vital for our nation's veterans, and they 
should not be forced to choose between paying for travel to a treatment 
center recommended by the VA or for other necessities needed for 
everyday life.
    In Wyoming, we have two VA hospitals, one in Cheyenne and one in 
Sheridan. These hospitals provide many critical services, however many 
Wyoming veterans have to travel hundreds of miles to be treated at the 
facility and to be covered by their military health care plan. This 
poses a serious problem in terms of travel expense. Some of the largest 
towns in Wyoming are over 300 miles away from the nearest VA facility. 
For example, a veteran living in Evanston, Wyoming's eighth largest 
city, must travel 360 miles to reach a VA hospital, while a veteran 
from Rock Springs, Wyoming's fifth largest city has to travel almost 
300 miles to Cheyenne or Sheridan. This is large population of veterans 
who must bear the out-of-pocket expense of promised health care.
    This bill particularly addresses the health care needs of veterans 
who require special treatment. It would allow veterans who have been 
referred to a special care center by their VA physician to be 
reimbursed under the Travel Beneficiary Program for their travel to the 
specialized facility. This would apply to only those veterans who 
cannot receive adequate care at their VA facility and who have a non-
service connected disability.
    This legislation is important to all veterans, but it is 
particularly important for veterans in rural states like my home state 
of Wyoming. Because rural states are less populated, have greater 
distances between towns, and far fewer options for transportation, the 
cost of automobile travel is a significant barrier to quality medical 
care. Unlike urban areas, where alternative travel is readily 
available, rural veterans face a disparate cost in receiving comparable 
health care benefits. For this reason, I believe we must strengthen the 
VA's Beneficiary Travel Program.
    Although the U.S. Department of Veterans' Affairs opposes this 
bill, it is important to note that their opposition is based on their 
current budgetary constraints. The VA will testify that this provision 
was not included in last year's appropriations process, and, therefore, 
the immediate enactment date would result in funds being pulled 
directly from the medical care budget. Yet, what the VA fails to 
mention is that veterans have little need for quality medical care if 
they cannot access it. Although I understand the VA's concerns, I would 
like to reiterate that the intent of this bill is to improve medical 
care for all veterans and equalize the disparate treatment of rural and 
urban veterans. As such, I strongly encourage the Veterans' Affairs 
Committee to consider this bill based on its merits, and then work with 
the VA to address the problems with the enactment date and the 
additional appropriations needs.
    Our veterans made unimaginable sacrifices in defending the freedoms 
of this country, and I believe the government should provide adequate 
and equal health care for all veterans regardless of their geographic 
location. It is our nation's responsibility to provide veterans the 
kind of access to health care they have earned through their service to 
our country. Travel expenses should not be THE deterring factor when 
deciding whether or not to seek treatment. This bill would help 
equalize access and I strongly urge you to consider it carefully.
    Thank you Mr. Chairman.
                                 ______
                                 
                                     Air Force Association,
                                  Arlington, Virginia, May 1, 2002.
Hon. John D. Rockefeller IV,
Chairman, Senate Veterans Affairs Committee,
U.S. Senate,
Washington, DC.
    Dear Mr. Chairman; The Air Force Association is pleased to offer 
our endorsement and comments on a number of legislative items to be 
considered by the Senate Veterans Affairs Committee in the coming days 
and weeks. On behalf of our membership of 146,000 airmen, veterans, 
retirees and their dependents, thank you for your hard work and 
leadership on issues affecting the United States Air Force and its 
veterans.
    In your Committee's upcoming consideration and markup of 
legislation, I offer our endorsement of the following important bills:
     S. 1408: Increasing the income threshold for pharmacy co-
payments addresses an important inequity in the current law. The Air 
Force Association does not support means testing for earned benefits 
under any circumstance; however, we do understand the need to offer a 
lower cost benefit to those veterans who are most in need of financial 
assistance. Prescription drug, coverage is one of the VA's most vital 
benefits, and low cost access should be brought in line with all other 
VA health care.
     S. 1905, S. 2186 & S. 2229: Addressing primarily technical 
and administrative issues within the VA, these bills are important as 
they go a long way to offering Secretary Principi the latitude and 
authority he needs to ensure our nation's veterans are receiving the 
quality and efficiency of care they deserve.
     S. 2187: Events of the last year have tested our nation's 
resolve, and our ability to respond to domestic emergencies. This bill 
recognizes the important contribution that the VA makes to our nation's 
disaster response capability and is an important step in ensuring our 
ability to respond to future emergencies.
     S. 2231: There is little doubt that the surviving 
dependents of those service members who make the ultimate sacrifice for 
their nation deserve all the support we can give them. This legislation 
to bring the Dependents Education Assistance program's benefit levels 
in line with the Montgomery GI Bill is a vital step in our support of 
these deserving individuals.
     S. 1576: Increasing numbers of veterans of the Gulf War 
are falling ill to unknown ailments or diseases with unknown causes. 
Our efforts in both research of these illnesses and the care of those 
who are sick are vital to our nations own health. Extending priority of 
care and access to care is nothing short of the right thing to do.
    As always, we appreciate the opportunity to voice our concern, and 
greatly appreciate your efforts on behalf of some of our nation's most 
deserving individuals.
            Sincerely,
                                           Thomas J. McKee,
                                    National Chairman of the Board.
                                 ______
                                 
  Prepared Statement of Thomas H. Miller, Executive Director, Blinded 
                          Veterans Association
    On behalf of the Blinded Veterans Association, thank you for this 
opportunity to submit our views on S.984, ``Veterans Road to Health 
Care Act of 2001.'' BVA strongly supports this legislation. This is 
demonstrated by the BVA's adoption of Resolution 20-01 urging Congress 
to adopt S.984, which amends Title 38 USC section on Beneficiary 
Travel. BVA's resolution requests the Department of Veterans Affairs 
(VA) to pay travel for all veterans accepted for care in one of the VA 
Special Disabilities Programs as well as increase the amount reimbursed 
for expenses incurred in travel for VA medical appointments.
    BVA is grateful to Congressman Enzi for including the beneficiary 
travel section within this legislation. We are currently discussing 
some changes in language with Congressman Enzi's staff regarding the 
language of this section. BVA supports the provision in S.984 that 
allows for payment of beneficiary travel for veterans specifically to 
DEPARTMENTAL facilities.
    BVA encourages this Committee to consider favorably this amendment 
to Title 38 governing beneficiary travel, and an exception for 
beneficiary travel associated with participation in one of the special 
disabilities programs. Exceptions should only be granted to veterans 
who have been accepted for care at the receiving facility. In the case 
of blind rehabilitation, there is a very formal and detailed 
application procedure for admission to a Blind Rehabilitation Center. 
An application must be completed at the veteran's home facility and 
then forwarded to the appropriate BRC. Clearly, therefore, these are 
veterans who are patients enrolled at one facility that is unable to 
provide the necessary care and who have been accepted by a distant VA 
facility capable of providing the needed services. The cost to expand 
the travel eligibility to these veterans would certainly be minimal for 
VA. If the responsibility continues to fall on the veteran, it will 
surely serve as a deterrent to blind rehabilitation or any other 
specialized program that requires veterans to travel great distances at 
their own expense.
    When the beneficiary travel law was changed in part to reduce the 
VA costs, we believe the law and subsequent regulations were intended 
to address beneficiary travel applicable to veterans traveling to their 
local VA facilities for care. The special disability programs are only 
available at a few facilities around the system and require longer and 
more expensive travel. We strongly believe that if a veteran enrolled 
in VA health care must be referred to another VA facility other than 
the primary station to receive the care they need, VA should then be 
required to pay for those travel expenses. Although these veterans are 
normally outpatients when referred for blind rehabilitation, we believe 
for beneficiary travel purposes they should be treated as inter-
facility transfers. This form of transfer is not bound by the general 
beneficiary travel regulations and relieves the veteran of the burden 
of paying for his or her own travel.
    Despite all the potential benefits to be realized from 
participating in blind rehabilitation, many veterans are not highly 
motivated to leave home after losing their vision, particularly the 
elderly. There are several reasons for this reluctance. For one, 
veterans are anxious about leaving their home and families for a period 
of six to eight weeks because they remain unconvinced that the proposed 
rehabilitation would be beneficial. Depression, characterized by 
feelings of being overwhelmed and without hope, does not generate a 
high degree of motivation to reach out for help.
    The physical and emotional limitations inherent in sight loss are 
formidable deterrents for veterans seeking blind rehabilitation. Those 
limitations are severely exacerbated by the veteran's inability to 
travel to the appropriate BRC. Some blinded veterans are not eligible 
for Beneficiary Travel and are therefore expected to pay for their own 
travel to the BRC. These veterans are also required to pay the Social 
Security co-payment of $800 plus a $10 per diem. In most of these 
cases, air travel is required because of the long distances involved, 
and the price of airline tickets are cost prohibitive for these 
veterans. When motivation is marginal to begin with, the additional 
financial burden of transportation often proves to be the proverbial 
last straw causing the veteran to decline rehabilitation.
    All blinded veterans, regardless of their service-connection status 
receive the complex care rate through VERA. According to the recent GAO 
study, VA Health Care: Allocation Changes Would Better Align Resources 
with Workload, ``Table 3: Complex Care Workload Allocations Compared 
With Complex Care Expenditures, Fiscal Year 2000,'' \1\ seven of the 
eight VISNs that host BRCs indicated an excess in allocation for 
complex care patients. If VISNs have excess allocations for complex 
care patients, why not pay for the travel of all veterans who must 
travel to receive specialized VA services?
---------------------------------------------------------------------------
    \1\ U.S. General Accounting Office, VA Health Care: Allocation 
Changes Would Better Align Resources with Workload, GAO-02-338 
(Washington, DC.: February 28, 2002) pp. 20-21.
---------------------------------------------------------------------------
    BVA is aware that VA costed this bill at $97 million. Further 
research reveals that this amount is only for the increase in mileage 
payment alone. VA did not cost the beneficiary travel proposal in this 
bill. Originally, VA informed BVA that the cost of the mileage increase 
would be estimated at $1 million per cent proposed--from $.11 to $.34--
an increase of $23 million dollars. We would like an explanation as to 
how this estimate increased so greatly within a matter of days. BVA 
supports the mileage increase. We understand there are budgetary 
concerns and suggest that the increase be incrementally implemented. 
This will decrease the effects on the health care budget, but more 
fairly compensate veterans who have to drive long distances to receive 
their promised health care. BVA is disappointed with the numbers games 
being played by VA regarding this bill. We suggest that VA cost the 
beneficiary travel amendments proposed in this legislation. In the 
future, BVA requests that VA be more explicit in its testimony when 
reporting the estimated cost of a bill.
    Thank you, once again, for this opportunity to share the views of 
BVA on this important piece of legislation. VA should be proud of its 
special disabilities programs, especially blind rehabilitation. VA's 
blind rehabilitation program is recognized worldwide for its excellent 
services. These services should not be denied to blinded veterans for 
any reason. We hope that you will help remove this barrier of unfair 
travel regulations to ensure equal access to VA health care, especially 
special disability programs, for all of America's veterans.
                                 ______
                                 
 Prepared Statement of the National Association of Veterans' Research 
                   and Education Foundations (NAVREF)
    The National Association of Veterans' Research and Education 
Foundations (NAVREF) thanks the Committee on Veterans Affairs for the 
opportunity to submit a statement for the record of the hearing on May 
2, 2002, regarding Sections 2 and 3 of S. 2132. NAVREF is a membership 
organization of the eighty-five VA-affiliated nonprofit research and 
education corporations (NPCs) authorized by 38 U.S.C. Sec. Sec. 7361-
7368.
    NAVREF strongly encourages the Committee to approve S. 2132, 
Sections 2 and 3 in order to:
    1) Clarify that VA medical centers (VAMCs) and NPCs may enter into 
VA-approved contracts and other forms of agreements for the purpose of 
facilitating VA research and education; and
    2) Provide Federal Tort Claims Act (FTCA) coverage for certain NPC 
employees.
    NAVREF thanks the Committee and its staff for the careful attention 
given to formulating Sections 2 and 3. Considerable care has been taken 
to modify the NPC authorizing statute to allow the NPCs to better 
fulfill their purpose of facilitating VA research and education while 
at the same time ensuring VA oversight.
      s. 2132. section 2. modification of authorities on research 
 corporations--regarding contracts and other agreements between vamcs 
                                and npcs
    The NPCs exist to facilitate VA's research and education missions, 
and each year they donate to their affiliated VAMCs research related 
personnel services, equipment, travel support, construction, and 
supplies as well as education related services. Last year, these 
contributions had an aggregate value of $141 million nationally. When 
it is cost effective and efficient, VAMC research and education 
programs would like to purchase additional services from NPCs over and 
above what they can afford to donate. However, to date, the VA Office 
of General Counsel (OGC) has considered a VA payment for a service 
provided by an NPC to be a prohibited transfer of VA-appropriated 
funds. As a result of this interpretation of Sec. 7361(a), the NPCs' 
ability to facilitate VA research and education has been curtailed.
    Section 2 of S. 2132 has been carefully crafted to permit VAMCs to 
make payments to NPCs pursuant to VA-approved contracts, or other forms 
of agreements, for services provided by the NPCs to facilitate VA 
research and education. Please note that an integral feature of Section 
2 is that all such agreements would be subject to VA review and 
approval. NAVREF and its members welcome this requirement to provide 
mutual assurance that the agreements will withstand rigorous scrutiny.
    Agreements executed according to the provisions of Section 2 would 
allow the NPCs to better fulfill their purpose of facilitating VA 
research and education. Examples of situations in which VA-approved 
agreements would facilitate VA research or education include:
    1. When a VAMC does not have a technician on staff with the highly 
technical skills necessary to conduct tests for a research project, the 
facility could contract with an NPC for the services. The NPC would 
hire someone to run the tests and would bill the VA project on a per 
test basis. This would allow VA to pay only for the services it needed.
    2. VA cardiac researchers at a VISN 21 facility could contract with 
an NPC to obtain access to a $1.5 million Sonata Magnetic Resonance 
scanner. Because the facility and its research program have 
insufficient VA funds to purchase the scanner and to pay for staff to 
operate it, the NPC has offered to lease the Sonata, renovate a VA 
office to house it and hire staff to operate it. Under S. 2132, Section 
2, the VA facility could then contract with the NPC for part-time VA 
research use of the scanner. To recoup the remaining cost of the lease, 
the NPC could bill NIH and private sector research projects for scans, 
and any remaining excess capacity may be made available to university 
researchers at a reasonable charge.
    3. The Education service in a VISN 20 facility could execute a 30-
day contract with an NPC to provide meeting planning services for a VA-
funded training program on state of the art treatment of diabetes. 
Lacking a staff member with the skills and time required to administer 
the conference, the Education service could contract with the NPC to 
process registrations and fees, arrange and pay for catering, and 
duplicate and assemble the training materials.
    4. Researchers in VISN 7 who lack sufficient funding to purchase a 
$300,000 confocal microscope could contract with an NPC for use of one. 
The NPC would lease and staff the microscope. Under a VA-approved 
contract, the microscope would be available to VA researchers for the 
time they needed it, and the NPC would contract with the affiliated 
university to make it available to their researchers for the remaining 
time.
    5. A VAMC could contract with an NPC to efficiently process 
research patient subject fees and reimbursements for the patients' 
travel and meal costs. Processing these payments through VA often takes 
weeks, which is a disincentive for patients to participate in studies.
    As demonstrated by these examples, NAVREF anticipates that 
contracts and other forms of agreements between VAMCs and NPCs often 
would be used to provide core services for research projects conducted 
in VA facilities and funded by VA, NIH and other federal agencies, the 
private sector and other nonprofits. In some cases, these agreements 
would foster collaboration with affiliated universities as well as 
other medical institutions in the community at the same time as they 
would spread the cost of expensive equipment among several users. By 
employing NPC resources rather than VA funds to make major purchases, 
VAMCs could avoid substantial upfront costs in favor of paying only for 
the services they actually need. In addition, VAMCs would be assured of 
access to high tech equipment and related services that otherwise may 
not be readily available.
    NAVREF also anticipates that agreements would be executed to 
facilitate VA's education mission when a VAMC wants to hold a 
conference or training program, but lacks sufficient personnel to 
process registrations and handle all the logistical details.
    Most importantly, such services would be provided by organizations 
that are motivated by VA's needs, not profit, and that exist solely to 
serve VA's research and education missions. Further, oversight would be 
provided by VA review and approval of the agreements that will allow 
NPCs to provide the necessary services.
 s. 2132. section 3. coverage of research corporation personnel under 
           federal tort claims act and other tort claims laws
    The VA Office of General Counsel has long maintained that NPC 
employees who have VA without compensation (WOC) appointments and work 
on VA-approved research projects under the supervision of VA employees 
are afforded protection against medical malpractice liability under the 
Federal Tort Claims Act and 38 U.S.C. Sec. 7316, subject to 
certification by the Attorney General that the employee's work is 
within the scope of government work. However, in an opinion issued in 
2000, the Department of Justice (DOJ) cast doubt on the OGC position by 
stating that NPC employees are not federal employees for purposes of 
the FTCA.
    In the same opinion, DOJ pointed out that Congress has conferred 
federal employment status for purposes of FTCA coverage on certain non-
federal employees of such organizations as the Thrift Investment Fund, 
the Arctic Research Commission, the Peace Corps, the Postal Service, 
the Public Health Service and the Atomic Energy Commission. Similarly, 
Section 3 of S. 2132 would confer FTCA coverage on certain NPC 
employees.
    Absent approval of Section 3, the March 2000 DOJ opinion puts NPC 
physicians, nurses, technicians and allied health care professionals 
working on VA approved research and education at risk of being 
personally liable for suits alleging negligence or malpractice. 
Fortunately, the risk appears to be minimal even though in 2001, the 
corporations cumulatively expended more than $68 million in research 
related salary expenses, and NAVREF estimates that nationwide, the NPCs 
have 2,000 research employees. Since Congress authorized the NPCs in 
1988, not a single negligence or medical malpractice suit has been 
filed against an NPC employee. According to OGC, VA-wide there were 
only 12 research related suits or claims between 1995 and 2000. These 
ultimately resulted in only five payments totaling $530,000.
    Ever since DOJ issued its March 2000 opinion, NAVREF has encouraged 
NPCs to evaluate each employee's level of risk and when warranted, to 
purchase private sector medical malpractice insurance accordingly. 
Reasonably priced medical malpractice coverage for state certified 
health care workers other than physicians is available. However, 
certification requirements vary from state to state so not all NPC 
employees can be covered. Obtaining coverage for physicians is often 
problematic because VA doctors are not required to be state-certified. 
When insurance for physicians is available, it can be very expensive 
and often excludes coverage for research-related care. Until recently, 
some of the larger corporations purchased a policy from St. Paul 
Insurance. However, St. Paul recently decided to exit this industry and 
is neither renewing policies nor writing new ones. To date, NAVREF has 
not found a reasonably priced alternative provider.
    FTCA coverage is warranted for NPC employees for the following 
reasons:
    1. Research and education are among VA's statutory missions and NPC 
employees may work only on VA-approved research projects and education 
activities.
    2. In performing these duties, NPC personnel often provide care for 
VA patients in VA facilities and work alongside VA personnel. 
Therefore, they are vulnerable in the same ways VA employees are 
vulnerable.
    3. NPC employess must have WOC appointments.
    4. NPC employees work under the supervision of VA personnel in VA 
facilities.
    5. Work done by NPC employees generally is donated to the VA in 
support of VA's research and education missions.
    Since 1989, VA has maintained that NPC employees with WOC 
appointments working on VA-approved research under the supervision of 
VA employees are covered by the FTCA. As a result, an explicit 
statement to that effect by Congress in S. 2132 would impose no new 
burden on VA or the Department of Justice. Further, VA General Counsel 
attorneys maintain that the facts of a case--should one ever accur--are 
likely to invoke FTCA coverage regardless of the DOJ position. However, 
the 2000 DOJ opinion raises the degree of uncertainty to an 
unacceptable level. In the absence of explicit FTCA coverage, NPSs must 
decide whether to take their chances that the FTCA will cover an 
employee despite the DOJ opinion; to sharply curtail their activities 
by only hiring employees with access to reasonably priced private 
sector insurance; to purchase expensive blanket insurance using funds 
that would otherwise be used to support research; or to close down.
    Congress has already provided FTCA coverage for other organizations 
that support government missions, and Section 3 of S. 2132 would simply 
add the NPCs to that list. NAVREF strongly encourages the Committee to 
approve this coverage for employees of the NPCs--organizations that 
exist solely to support the VA research and education missions.
    Again, NAVREF strongly encourages the Committee to approve Sections 
2 and 3 of S. 2 132.
    Thank you for considering our views.
                                 ______
                                 

                                                      May 15, 2002.
Hon. John D. Rockefeller IV,
Chairman, Committee on Veterans' Affairs,
U.S. Senate,
Washington, DC.

          Re: Comments on Pending Benefits-Related Legislation

    Dear Senator Rockefeller: Thank you for this opportunity to provide 
the written testimony of the National Organization of Veterans' 
Advocates (NOVA) commenting on benefits-related legislation now pending 
before the Committee.
    You have expressed specific interest in NOVA's comments on S. 2079, 
a bill that you introduced, as well as S. 1905, a bill presenting 
matters that the Department of Veterans Affairs (DVA) has initiated for 
possible enactment. We have provided NOVA's comments about these bills 
in detail further below. In sum, however, NOVA strongly supports the 
proposed legislation contained in S. 2079. With respect to S. 1905, 
NOVA strongly opposes one provision contained therein, Section 203 of 
Title II, which can be interpreted as eliminating an important 
appellate-rights notice protection currently afforded to veterans-
benefits claimants. Minimally, because the meaning of the text of this 
proposed change is unacceptably confusing, it would require 
clarification.
    In regard to the many other currently pending items of veterans-
benefits legislation, NOVA provides specific comments on a selected few 
of these provisions, which we believe should be implemented because 
they would serve to enhance the entitlement of veterans-benefits 
claimants.
    The specific comments of NOVA are as follows:
                                s. 2079
    As a general matter, NOVA supports, on the broadest possible basis, 
the right of veterans-benefits claimants to seek and receive judicial 
review of adverse DVA decisions and other agency actions affecting 
their entitlement to benefits. Consistent with NOVA's position, the 
thrust of the provisions of S. 2079 would be to expand various aspects 
of the jurisdiction of
    the federal courts to review adverse DVA benefits decisions and 
actions. Therefore, with great enthusiasm, NOVA supports enactment of 
all of the provisions contained in S. 2079.
    Section 1 of S. 2079 expands the right to judicial review for 
veterans-benefits claimants by allowing for judicial scrutiny of the 
DVA's Schedule for Rating Disabilities (SRD), set out at 38 C.F.R., 
part 4.
    Since the inception of the recent era of judicial review of 
veterans claims, existing law expressly has exempted from such review 
any actions of the DVA related to the SRD. See 38 U.S.C. 
Sec. Sec. 7252(b) and 7261. The importance of the SRD to the 
adjudication of veterans-benefits claims cannot be overstated. The SRD 
is the source of all the criteria relied upon by the DVA to identify 
specific disabilities for which claimants can be compensated, as well 
as the criteria to evaluate their severity, and thus the amount of 
compensation to be paid as a result. This provision, therefore, if 
enacted, would for the first time cause the DVA's actions in regard to 
this crucial aspect of the payment of disability compensation to be 
subject to judicial review.
    While important simply because it would subject the actions of the 
DVA to adopt or amend provisions of the SRD to judicial scrutiny for 
the first time, the extent of the change created by this proposed law 
is rather modest and incremental. For one, it provides that only the 
United States Court of Appeals for the Federal Circuit may review an 
action of the DVA to adopt or revise the SRD. In addition, the scope of 
the Federal Circuit's review of the DVA's actions in such matters is 
limited to a deferential standard. Only if the Federal Circuit found 
the DVA's action in adopting or revising a provision of the SRD to be 
``arbitrary, capricious, an abuse of discretion, or otherwise not in 
accordance with law'', or ``in excess of statutory jurisdiction, 
authority or limitations, or in violation of statutory right,'' could 
it ``hold unlawful and set aside such action.''
    Despite the limited nature of the Federal Circuit's proposed new 
jurisdiction to review the DVA's actions with regard to the SRD, it is 
NOVA's view nonetheless that this provision represents an important 
expansion of the judicial review rights of veterans-benefits claimants. 
Accordingly, NOVA strongly supports its enactment into law.
    Section 2 of S. 2079 would extend the jurisdiction of the United 
States Court of Appeals for Veterans Claims to review factual findings 
of the DVA in benefits decisions.
    This specific provision would replace the current standard of 
review of factual issues used by the veterans' Court, which is 
extremely limited. At present, the veterans' Court is required to find 
that a DVA factual finding is ``clearly erroneous'' prior to reversing 
such a finding. This current standard is so difficult to satisfy in 
most cases that the veterans' Court has articulated its view of the 
standard as prohibiting the Court from reversing a DVA factual finding 
even if the Court would have reached a different result upon its own de 
novo review. See, e.g., Gilbert v. Derwinski, 1 Vet.App. 49, 53 (1990).
    Indeed, at present, the DVA is easily able to defeat a veterans-
benefits claimant's challenge to one of its factual findings because 
all that is needed is a ``plausible basis'' in the record to support 
the adverse factual finding. Id. This standard has greatly contributed 
to the paucity of decisions by the veterans' Court, measured over its 
entire 12-years of existence, in which it has reversed erroneous 
factual findings by the DVA.
    This important provision of S. 2079 would replace the veterans' 
Court's current standard of review of factual findings with the ``not 
reasonably supported by a preponderance of the evidence'' test. In 
other words, this new standard would require the veterans' Court to 
reverse a factual finding by the DVA if it is ``not reasonably 
supported by a preponderance of the evidence.'' This change would make 
the veterans' Court's standard of review of material factual issues 
consistent with the pro-claimant, non-adversarial standard of review 
that generally binds the DVA at the agency level of the adjudication 
process. As a general matter, the DVA is not permitted to deny a 
veterans-benefits claim unless the ``preponderance of the evidence'' is 
against the claim. Gilbert, 1 Vet.App. at 53-54. Upon implementation in 
the veterans' Court of the standard of review proposed here, the 
veterans' Court similarly would not be permitted to affirm an adverse 
material finding of fact by the DVA unless the ``preponderance of the 
evidence'' supported such a finding. Because of the great enhancement 
of the judicial review rights of veterans-benefits claimants this 
change would create, NOVA strongly supports enactment of this provision 
of S. 2079.
    Section 3 of S. 2079 also provides for an expansion of the right to 
judicial review for veterans-benefits claimants before the Federal 
Circuit. At present, the Federal Circuit does not possess plenary 
jurisdiction to review issues of law presented in decisions of the 
veterans' Court. Rather, in a particular case, its review authority is 
limited to review of ``any challenge to the validity of any statute or 
regulation or any interpretation thereof.'' 38 U.S.C. Sec. 7292(c).
    This provision would extend the Federal Circuit's jurisdiction so 
that an appellant could raise before that federal court a challenge to 
``a decision'' of the veterans' Court whenever that decision involves 
``a rule of law.'' This provision, if enacted, would constitute another 
important enhancement of the right of veterans-benefits claimants to 
judicial review, and, accordingly, NOVA supports its passage.
    Lastly, Section 4 of S. 2079 provides for an amendment to the Equal 
Access to Justice Act (EAJA), 28 U.S.C. Sec. 2412(b), to allow for the 
veterans' Court to award attorneys fees and expenses to ``non-attorney 
practitioners'' admitted to practice before the veterans' Court on the 
same basis as for an attorney admitted to practice before the Court. 
Although this provision does not directly relate to an expansion of a 
veterans-benefits claimant's right to judicial review, it does enhance 
the options such a claimant has in regard to representation services 
before the Court. Therefore, NOVA, whose membership includes both 
attorneys and qualified non-attorney practitioners, also supports this 
last provision contained in S. 2079.
    As a final matter, in regard to this particular bill, NOVA would 
point out to the Senate Committee on Veterans' Affairs that each of the 
four provisions in S. 2079 discussed above are also elements of a 
similar bill originating in the House of Representatives, H. 4018. The 
House bill, introduced by Representative Lane Evans, is similarly 
supported by NOVA for all the same reasons NOVA supports S. 2079. In 
addition, however, H. 4018 contains two additional provisions not found 
in S. 2079 that NOVA believes deserves support because these provide 
further enhancement of the overall rights of veterans-benefits 
claimants.
    The first is a provision that would allow for the interim payment 
of compensation benefits to a claimant whose appeal has been pending 
unadjudicated and awaiting a final decision for more than a specified 
period of time. The second would codify in Title 38 of the United 
States Code the ``expeditious'' re-adjudication requirement enacted in 
the Veterans' Benefits Improvement Act of 1993. Both of these 
provisions are intended to address the ongoing crisis in the area of 
veterans benefits caused by the DVA's chronically delayed and erroneous 
decision-making. The concern about this crisis is shared by NOVA on 
behalf of its members and their individual clients, as well as for all 
veterans-benefits claimants. Therefore, NOVA supports these latter two 
proposed items of legislation contained in H. 4018, and urges that they 
also be included in any final legislation that is passed to enact the 
existing provisions of S. 2079.
                                s. 1905
    This bill contains a number of discrete items that would change 
existing law as deemed important and proposed by DVA. Only three of 
these provisions require specific comment by NOVA. The first two are 
proposals to increase benefits for two narrow classes of veterans. The 
first, at Section 101 of Title I of the bill, is to amend 38 U.S.C. 
Sec. 1701 to allow for the medical care of newborn children of veterans 
enrolled in the veterans health care system. The other, at Section 102 
of Title I of the bill, is to allow for the provision of outpatient 
dental care for all veterans who were prisoners of war. Because both of 
these provisions enhance the array of benefits potentially available to 
eligible veterans, NOVA supports their enactment.
    However, a third item proposed by the DVA in S. 1905, at Section 
203 of Title II, is opposed by NOVA as it currently reads. Because this 
provision may eliminate an important notice protection presently 
afforded to veterans-benefits claimants, it warrants further critical 
scrutiny by the Committee.
    This provision purports to change 38 U.S.C. Sec. 7266(a), which 
sets out that a ``person adversely affected by [a Board of Veterans' 
Appeals''] decision shall file a notice of appeal with the [veterans'] 
Court within 120 days after the date on which notice of the decision is 
mailed pursuant to section 7104(e)'' of Title 38. Section 7104(e) (1) 
provides, straightforwardly and unambiguously, that the ``Board shall 
promptly mail a copy of its written decision to the claimant at the 
last known address of the claimant.''
    With this revision, the DVA would have Congress strike the current 
requirement that the Board mail its adverse decision to the claimant in 
all cases pursuant to Section 7104(e)(1)--``shall promptly mail . . . 
to the claimant at the last known address of the claimant''--and 
replace it with the lesser requirement that a ``copy of the decision 
pursuant to section 7104(e) . . . is mailed or sent to the claimant's 
representative. . . .'' Under the proposed change, only ``if the 
claimant is not represented'' would the Board be required to have the 
Board decision ``mailed to the claimant.''
    The language of this change would allow the DVA to satisfy its 
notice obligations regarding adverse Board decisions through mailing 
exclusively to the claimant's representative, eliminating the existing 
requirement that the decision be concurrently mailed to the claimant. 
As such, this proposed change is adamantly opposed by NOVA. The current 
procedure, whereby the adverse Board decision is mailed to both the 
claimant and claimant's representative, maximizes the claimant's 
potential to exercise his or her right to judicial review of an adverse 
Board decision. Because the DVA's proposed change would diminish the 
potential of veterans-benefits claimants to seek judicial review, NOVA 
does not support this proposal, and urges that it be rejected by the 
Committee.
                                s. 1656
    This bill, which was introduced by Senator Feingold and Senator 
Hatch, and referred to the Committee on Veterans' Affairs in November 
of 2001, remains pending. It is intended to address the ongoing crisis 
in the DVA's chronically delayed and erroneous adjudication of 
veterans-benefits claims. Indeed, at Section 2 of the bill, entitled 
``Findings'', the scope and depth of the problem is concisely and 
clearly set out.
    The bill further provides an outline of a proposed mechanism for 
Congress and DVA to address the problem. The bill would require the 
DVA, with ongoing Congressional oversight, to create, among other 
things, a comprehensive plan that would improve the competency of 
claims adjudicators through education and training, as well as by 
holding them accountable for the accuracy and timeliness of their 
decision-making.
    Without commenting specifically on the exact mechanism that would 
be required to implement the provisions of this bill, NOVA agrees with, 
and supports the goals underlying this proposed legislation. Therefore 
we believe that the Committee should afford this bill serious 
consideration, and enact it or some similar vehicle that would address 
the critical deficiencies that currently plague the veterans-benefits 
adjudication process.
                                s. 2237
    Finally, NOVA also strongly supports S. 2237, which addresses the 
issue of disability compensation for veterans with service-connected 
hearing loss. In particular, NOVA supports the particular provision 
that would eliminate the existing statutory requirement that any non-
service-connected hearing loss in one ear be deemed ``normal'' for 
purposes of evaluating the severity of the hearing loss in the other, 
service-connected ear, except in those cases where the non-service-
connected hearing loss is ``total.'' See 38 U.S.C. Sec. 1160(a)(3).
    Because the sense of hearing is inherently a bi-lateral process, 
the current law creates an injustice for affected veterans who do not 
suffer from a total hearing loss in the non-service-connected ear. The 
rating criteria used by DVA to evaluate the severity of service-
connected hearing loss requires that an assessment of the hearing loss 
in both ears be used, combining the loss in each ear. When the non-
service-connected ear is deemed ``normal'' regardless of the actual 
level of hearing loss in that ear, the hearing loss in the service-
connected ear is artificially under evaluated. Thus, upon application 
of the rating criteria for hearing loss, many veterans with bi-lateral 
hearing loss are excluded from receiving compensation, or receive less 
compensation than they would otherwise if the hearing loss in both ears 
was service connected.
    The validity of the existing interpretation of the statute and how 
it operates was challenged in the Courts. However, in the seminal case, 
Boyer v. West, the Federal Circuit concluded that, despite the apparent 
disparate treatment of the affected veterans, the Court was constrained 
from overturning the statute based on deference to Congressional 
intent. See 210 F.3d 1351, 1356 (Fed.Cir. 2000). Therefore, enactment 
of this proposed legislation is essential to redressing the present 
inequity in the current law, and NOVA urges that it be enacted.
    To conclude, again, on behalf of NOVA's individual members, and the 
many veterans-benefits claimants we represent before the DVA and the 
federal Courts, we offer our sincere thanks for this opportunity to 
provide the Committee with our input on the many important legislative 
matters pending before you. We look forward to continuing to work with 
the Committee to enhance and protect the entitlement to benefits that 
our veterans and their families deserve.
            Respectfully submitted,
                                      Michael E. Wildhaber,
                                                    Vice President.

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