[Senate Hearing 108-613]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 108-613



                     HEARING ON PENDING LEGISLATION

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

                                HEARING

                               BEFORE THE

                     COMMITTEE ON VETERANS' AFFAIRS

                          UNITED STATES SENATE

                      ONE HUNDRED EIGHTH CONGRESS

                             SECOND SESSION

                               __________

                             JULY 10, 2003

                               __________

       Printed for the use of the Committee on Veterans' Affairs


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                     COMMITTEE ON VETERANS' AFFAIRS


                 ARLEN SPECTER, Pennsylvania, Chairman

BEN NIGHTHORSE CAMPBELL, Colorado    BOB GRAHAM, Florida
LARRY E. CRAIG, Idaho                JOHN D. ROCKEFELLER IV, West 
KAY BAILEY HUTCHISON, Texas              Virginia
JIM BUNNING, Kentucky                JAMES M. JEFFORDS, (I) Vermont
JOHN ENSIGN, Nevada                  DANIEL K. AKAKA, Hawaii
LINDSEY O. GRAHAM, South Carolina    PATTY MURRAY, Washington
LISA MURKOWSKI, Alaska               ZELL MILLER, Georgia
                                     E. BENJAMIN NELSON, Nebraska

      William F. Tuerk, Majority Chief Counsel and Staff Director
         Bryant Hall Minority Chief Counsel and Staff Director



                            C O N T E N T S

                              ----------                              

                             July 10, 2003

                                SENATORS

                                                                   Page

Specter, Hon. Arlen, U.S. Senator from Pennsylvania, Chairman....     3
Murray, Hon. Patty, U.S. Senator from Washington.................     1
Nelson, Hon. Bill, U.S. Senator from Florida.....................     3
Nelson, Hon. E. Benjamin, U.S. Senator from Nebraska.............     5

                               WITNESSES

Duehring, Craig W., Principal Deputy Assistant Secretary for 
  Reserve Affairs, Department of Defense.........................     6
    Prepared statement...........................................     7
    Response to written questions submitted by Hon. Jim Bunning..     9
Cooper, Daniel L., Under Secretary for Benefits, Department of 
  Veterans Affairs; accompanied by John W. Nicholson, Under 
  Secretary for Memorial Affairs; John H. Thompson, Deputy 
  General Counsel; and Ron Henke, Director of Compensation.......    10
    Prepared statement...........................................    11
    Response to written questions submitted by Hon. Jim Bunning..    26
Wilkerson, Phillip R., Deputy Manager of Operations and Training, 
  Veterans Affairs and Rehabilitation, The American Legion, 
  prepared statement.............................................    26
Jones, Richard, National Legislative Director, AMVETS, prepared 
  statement......................................................    35
Surratt, Rick, Deputy National Legislative Director, Disabled 
  American 
  Veterans, prepared statement...................................    40
Blake, Carl, Associate Legislative Director, Paralyzed Veterans 
  of America, prepared statement.................................    52
Cullinan, Dennis M., Director, National Legislative Service, 
  Veterans of 
  Foreign Wars, prepared statement...............................    58

                                APPENDIX

Inouye, Hon. Daniel K., U.S. Senator from Hawaii, prepared 
  statement......................................................    63
Bunning, Hon. Jim, U.S. Senator from Kentucky, prepared statement    64
Clinton, Hon. Hillary Rodham, U.S. Senator from New York, 
  prepared 
  statement......................................................    64
Filner, Hon. Bob, U.S. Representative from California, prepared 
  statement......................................................    65
Evans, Robert D., Director of Governmental Affairs, American Bar 
  Association, prepared statement................................    65

 
                     HEARING ON PENDING LEGISLATION

                              ----------                              


                        THURSDAY, JULY 10, 2003

                      United States Senate,
                    Committee on Veterans' Affairs,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 3:17 p.m., in 
room SR-418, Russell Senate Office Building, Hon. Patty Murray 
presiding.
    Present: Senators Specter, Murray, and E. Benjamin Nelson 
of Nebraska.
    Also Present: Senator Bill Nelson of Florida.

            OPENING STATEMENT OF HON. PATTY MURRAY, 
                  U.S. SENATOR FROM WASHINGTON

    Senator Murray. This hearing will come to order. Let me 
just start by thanking all of our witnesses and the numerous 
people in attendance today for this hearing. I apologize for 
all of us who are late and unable to attend. There are so many 
committee hearings going on right now. Appropriations is 
marking up two hearings. We have had votes on the floor off and 
on and Senators are really struggling to try and get to all of 
the committee hearings. It does not mean anything to any of the 
bills that you are all here to support or to speak about. The 
Senators, I know, share with me a deep concern about making 
sure that these issues get addressed within this Congress. So I 
will note the many people in attendance at this office as well 
as our witnesses and let the other committee members know that 
you are here. We hope that several more will be arriving 
shortly.
    I am going to speak to one bill in particular. I know 
Senator Nelson has a comment, and we will see at that point 
whether we have been able to pull away any Senators from their 
other very serious obligations today.
    I am a co-sponsor of many of the bills before the Committee 
today, but I wanted to highlight one of them in particular, S. 
517, which is the Francis W. Agnes Prisoner of War Act of 2003. 
This bill will correct a glaring injustice facing some former 
American prisoners of war, and it will reaffirm our commitment 
to all those Americans who were held in captivity while 
fighting for our freedom.
    We know that those who have been prisoners of war often 
suffer medical problems many years later as a result of their 
captivity under inhumane conditions. Unfortunately, it took a 
long time for many ex-POW's to get the help that they need and 
that they deserve. In 1981, Congress began addressing this 
problem. It established certain medical conditions as 
presumptive for POW's, but it required a very high level of 
research certainty, 95 percent, before veterans could get 
benefits based on their medical problems. As a result, many 
health problems common in POW's were and still are denied 
coverage.
    Congress has taken some steps to fix this. It changed the 
standard for veterans of some conflicts. For example, the 
Vietnam veterans who were exposed to herbicides, Gulf War 
veterans who were exposed to unknown factors, now get the help 
that they need.
    Unfortunately, Congress never fixed this problem for 
veterans of the Korean Conflict and World War II. So today 
these brave former POW's are facing medical conditions because 
of their captivity, but they are being held to a much higher 
standard for care than veterans of other conflicts. It is not 
fair and my bill will fix that glaring injustice.
    I want to say a word about the veterans who are currently 
punished by the status quo. Today, World War II and Korean 
Conflict POW's are dying at a rate of 10 veterans a day. 
85,000, 70 percent have already died in the 50 years since 
these wars, most without receiving any disability benefits.
    Now, I am certainly not the only person who is working to 
correct this problem. The VA POW Advisory Committee, which was 
created by Congress back in 1981, has stated it is blatantly 
wrong to hold World War II and Korean Conflict POW's to a 
different and more stringent standard than Vietnam and Gulf War 
veterans. It has recommended that all POW's be held to the same 
medical presumption standards.
    The proposed legislation, S. 517, the Prisoner of War 
Benefits Act of 2003 will help correct this injustice facing 
our ex-POW's of World War II and the Korean Conflict. First, it 
would add five additional medical conditions to the presumptive 
list. Secondly, it would eliminate the minimum time held as a 
POW requirement to qualify for benefits. And finally, this 
legislation is complementary to legislation introduced in the 
House of Representatives by Congressman Michael Bilirakis, H.R. 
348. Here in the Senate, our bill is endorsed by the American 
ex-Prisoners of War.
    I also want this Committee to know that I named this bill 
after a great champion for veterans, and particularly for our 
former POW's. Fran Agnes survived as a prisoner of war for 
three-and-a-half years. He was a survivor of the Bataan death 
march and two POW camps in the Philippines. Fran Agnes lived a 
life of service to his family, to his fellow veterans, and to 
his community. In all of the time Fran and I spent together, he 
never asked me to do anything for himself. It was always 
something he wanted me to do for other veterans and their 
families.
    He often asked me to help the widows of our veterans, he 
asked me to support the POWs' lawsuit against the Japanese 
companies that profited from slave labor during World War II, 
and he would ask me about helping another veteran who might be 
having a problem with the VA. On February 9th of this year, 
Fran passed away and was laid to rest in the Tahoma National 
Cemetery with full military honors. Passing S. 517 will be a 
fitting tribute to Fran Agnes and all the other thousands of 
veterans who endured as prisoners of war and sacrificed for our 
liberty and our freedom.
    Again, a number of hearings are being held today and I will 
not be able to stay very long for this committee. I know we are 
waiting for other committee members to attend, but I want to 
register my strong support for S. 517. It really is the right 
thing to do for those who have sacrificed their liberty to 
protect our country.
    With that I will recognize Senator Nelson.
    Chairman Specter. Madam Chairman, may I interrupt for just 
a moment?
    [Laughter.]
    Senator Murray. I would like to introduce to you the 
Chairman of the Committee.

           OPENING STATEMENT OF HON. ARLEN SPECTER, 
                 U.S. SENATOR FROM PENNSYLVANIA

    Chairman Specter. First, I would like to thank you for 
acting as chairwoman, and secondly to explain to everybody 
assembled, I think as you already know, the Judiciary Committee 
is in the midst of marking up the asbestos bill. We are under 
great pressure to try to attend that markup. They require us to 
attend, even beyond the so-called quorum, to be there and 
participate in votes on amendments. When this hearing was 
scheduled there was no expectation that the Judiciary Committee 
would be meeting this afternoon. Our customary practice is to 
finish up the executive session of Judiciary in the morning. 
But Senator Hatch has reconvened the committee and we are in 
session. That, and voting, has accounted for the delay.
    So I want to thank you, Senator Murray, for filling in. 
Thank you. I am going to go back to the other hearing.
    Senator Murray. Thank you, Mr. Chairman.
    Senator Nelson.

            OPENING STATEMENT OF HON. BILL NELSON, 
                   U.S. SENATOR FROM FLORIDA

    Senator Nelson of Florida. Thank you, Madam Chairman. Madam 
Chairman, I have run into a very serious situation that 
requires a policy judgment on the part of the committee and the 
Senate. Let me describe it.
    Under existing law, a veteran's disability benefit cannot 
be assigned to someone else. There is a reason for that. The 
disability is to help the veteran with the particular 
disability suffered as a result of wounds in the service to the 
country. Therefore, existing law says that that veteran, that 
disability benefit that comes to him monthly, to him or her, 
should not be assigned and cannot be. So that is the intent of 
the existing law.
    But with laws, people find ways to get around them. What 
has happened is that by the creation of a joint banking account 
in the name of the veteran of which the monthly disability 
payment is put into the bank, and by creating a joint bank 
account with someone else, then they can take out that 
disability payment. What, in fact, is happening is that 
enterprises have been created by which they come to the veteran 
and say, ``We know that you need some cash right now. If you 
will give us the right to your veteran's benefit over the 
course of the next X number of years, we will give you up-front 
cash.''
    The problem is, they do not give them an equal amount of 
cash, and it is not even discounted at normal interest rates. 
It is hugely discounted so the veteran gets a mere pittance of 
a percentage of the total value of that benefit over 8 or 10 
years. It completely thwarts the purpose of the existing law, 
which is that the veteran ought to be the one benefiting from 
that disability payment that is being paid by the Federal 
Government.
    So that is the scheme. Last year, you all were kind enough 
to--and it was specifically Senator Specter--was kind enough to 
make this bill a part of the package, and when it went to 
conference the House insisted that it come out. So I wanted to 
come back and we are going to try it again.
    Now there is something that has happened in the meantime. 
The National Consumer Law Center has studied a range of 
financial and commercial scams directed not only at veterans, 
but at military and their families. They have also examined 
this scheme that I have just explained. They concluded that the 
lump sum pension schemes that are severely discounted are 
illegal under a variety of Federal and State truth-in-lending, 
usury, or consumer protection laws. But they agree that there 
is an ambiguity in the law that explains the absence of 
enforcement efforts.
    So we have got a terrible contravention of the spirit, 
indeed, the letter of existing law. Veterans are being taken 
advantage of by a fast-talking person who will come at a time 
when they need cash, and it thwarts the purpose of the 
disability payment system when they do not get their payments 
over time, because instead, they have taken the lure of the 
quick cash scheme. Then, of course, the Federal Government is 
getting its intent completely violated by virtue of the fact 
that the veteran is not getting the benefit for which the 
veteran is entitled as a means of some compensation for their 
tremendous service to our country.
    It can easily be fixed. Senator Specter has been very kind 
to indicate that he wants to do that. If you all so choose, I 
would hope that you would be very hard-nosed once you got into 
the conference committee. I have no idea where they were coming 
from in the House last year insisting that this provision not 
come out of the final bill. But the problem was that it was in 
the last two days of the session and there was the rush to get 
everything done.
    So thank you, Madam Chairman, for allowing me to explain 
this.
    Senator Murray. Thank you, Senator Nelson, for that 
excellent statement. I really appreciate your coming here today 
and giving that to us and wish you the best with that and look 
forward to working with you.
    I have been joined by my colleague, the other Senator B. 
Nelson, today. We are delighted to have you join us. As I have 
explained to the audience, there are numerous committee 
hearings going on and a lot of activity on the floor so we have 
been coming and going. I have to leave now at this time as 
well.
    I do want all the members of the audience to know that 
Senator Nelson will be able to stay for a short time and get 
some of the testimony. For any of you who are here that have 
testimony, we will leave the committee record open so that that 
testimony can be submitted. I will make sure that I let all 
committee members know that that is available for them and 
their staffs to have access to. So it will not get lost, we 
assure you.
    With that, it has been a deep honor to chair this 
committee, and not only that, but to hand it over to a 
Democratic colleague to chair this afternoon, Senator Nelson.
    [Laughter.]

         OPENING STATEMENT OF HON. E. BENJAMIN NELSON, 
                   U.S. SENATOR FROM NEBRASKA

    Senator Nelson of Nebraska. Thank you very much, Madam 
Chairman. As Senator Murray has said, this is an unusual time. 
It appears that we have more markups and committee hearings 
than at one particular moment. I think it was Senator Dan Akaka 
who said that he has not yet learned how to dance at two 
weddings at the same time, and this is a place that would 
challenge you to learn how do that, I can tell you.
    I want to thank the witnesses for being here and, of 
course, we will make your statements, to the extent that we are 
not able to get them in before I have to go unless somebody 
else arrives, part of the record, the same as with the others.
    I am a co-sponsor also with the other Senator Nelson of S. 
257. I certainly appreciate what he has said about that bill. I 
think it is something that needs to be addressed and I think we 
will--hopefully it will pass out of the Senate again as it did 
last year, but hopefully this time, unlike last time, it will 
survive the conference.
    I would like now to speak just for a second about S. 806. 
At a time when we are experiencing an increased level of 
deployments we need to be particularly sensitive to the 
hardships that the service members incur as a result of being 
deployed more frequently and for extended periods of time. I 
introduced the Deployed Service Member Financial Security and 
Education Act to compensate both active and reserve military 
personnel for frequent and lengthy deployments.
    As you know, because of the urgent nature of the issue, a 
portion of my bill was included in the defense authorization 
for 2004 authorizing a new special pay of $1,000 per month for 
active and reserve component military personnel who are 
deployed for 191 days or more, or active and reserve component 
military personnel who are deployed for 401 or more days of a 
rolling 730-day period; numbers that heretofore I do not think 
have been used in terms of deployment, and certainly not in 
modern times that I am aware of. And for reserve component 
military personnel who are mobilized for a second time within a 
year of being released from an earlier call up. Once again, 
something that I am sure has happened in the past, but perhaps 
not with the apparent frequency of the current time.
    I appreciated the support of this provision that we 
received because it directly assists service members and 
families when dealing with the difficulties of multiple 
deployments. At a time when we have got service members 
deployed in the Sinai, in Germany, on the Korean peninsula, in 
Bosnia, Afghanistan, and Iraq, and Kuwait, and perhaps Liberia, 
we must, I think, take a strong stand in favor of the service 
members, as this would permit us to do.
    In his written testimony, Deputy Assistant Secretary 
Duehring pointed out that there is a voluntary program in place 
to handle individual cases when student reservists have an 
issue with an institution of higher learning. We have found 
that institutions of higher learning were in some cases not 
giving back tuition when service members had their educational 
pursuits interrupted.
    So I appreciate the current voluntary forum, but it 
addresses the issue after a problem has arrived and it may not 
be consistently applied and we may not find out about every one 
of these situations. To avoid having that happen, I think it is 
important to correct the problem before it becomes an 
educational concern and/or a fear of our deployed reservists. 
Voluntary forums are great, but as I think we all know, they 
are not absolute guarantees. It is a relatively modest proposal 
that will assist the service member.
    I would like to end my remarks by thanking all the members 
of the Armed Services Committee and the families that have been 
supportive. We are prepared to now move forward. The members of 
the VA and the DoD, we are prepared to take your brief 
statements. We will adjourn after these statements, so have you 
selected--Mr. Duehring, are you the first on the line?

       STATEMENT OF CRAIG W. DUEHRING, PRINCIPAL DEPUTY 
 ASSISTANT SECRETARY FOR RESERVE AFFAIRS, DEPARTMENT OF DEFENSE

    Mr. Duehring. Sir, I believe, Mr. Chairman, I believe I 
drew the short straw so I will begin. I have submitted a longer 
testimony for inclusion in the record, if that is permitted. 
What I have done is just extracted five points out of that to 
highlight.
    The Department of Defense supports the re-enactment of the 
Soldiers and Sailors Civil Relief Act of 1940, which I will 
call the SSCRA, as the Service Members Civil Relief Act. The 
need to modernize the language of the Act, incorporate over 60 
years of case law, and add generally accepted practices is 
evident. The Department believes both S. 792 and S. 1136 
accomplish this goal and would like to thank the committee and 
its staff for their work on this important effort. The 
Department of Defense has only a few comments regarding 
specific provisions of S. 792, S. 1136, and Section 3 of S. 
806.
    First, the Department prefers S. 1136's requirements 
regarding notifying members of the benefits of the Act in 
Section 105 over the notification requirement in Section 105 of 
S. 792. We appreciate S. 1136's recognition that the 
Department's current approach of notifying our members to the 
provisions of SSCRA through recurring mobilization and 
deployment briefings and other command information media has 
been effective and that an additional requirement for written 
notification is unnecessary.
    Second, the Department prefers Section 301 of S. 1136 over 
Section 301 of S. 792 because it includes an automatic 
inflation adjustment to the maximum monthly rental amount for 
leases covered by that section's eviction protections. Tying 
the maximum rental amount to the basic allowance for housing, 
BAH, will result in extending this protection to more members 
who are stationed in high-cost areas, because that allowance is 
based on rental costs in the area where he or she is stationed.
    Number three, we believe that Section 305(b) of S. 1136 can 
be improved by amending it to allow termination of automobile 
leases only when the period of active duty military service 
exceeds a certain threshold, perhaps 180 days. As written, the 
section would allow least termination for short periods of 
active duty when the member does not lose the use of a vehicle 
or loses it for only a short time. Applying the termination 
provision only to longer periods of active duty when members 
are more likely to lose the use of their vehicles is more 
consistent with the SSCRA's historic balance between service 
members and those they do business with, a balance that has 
resulted in widespread support for SSCRA within the business 
community.
    Fourth, the Department defers to the Department of 
Education on Section 207(a)(2) of S. 1136 and Section 3(a) of 
S. 806 which would extend the 6 percent interest rate cap to 
federally-insured student loans. We note that while the 
interest rate cap does not currently apply to such loans, the 
Department of Education has a policy of, during periods of 
mobilization, requiring complete forbearance of interest and 
principal repayment on federally-insured student loans for a 
period of active service up to one year with extensions 
possible. Unlike the interest rate cap, this DOE policy helps 
service members even when interest rates are below 6 percent.
    Finally, the Department also defers to the Department of 
Education on Section 707 of S. 1136 which would require 
institutions of higher education to re-enroll students who left 
school to perform active duty service and to allow completion 
of unfinished courses at no additional cost, and on Sections 
3(b) of S. 806, which addresses the same concern with a more 
detailed set of requirements, including leaves of absence, 
restoration of educational status, and refunds for uncompleted 
coursework.
    We note though that the Department has worked closely with 
the educational community, State governors, and the service 
members opportunity colleges, SOC, a DoD-funded consortium of 
colleges and universities established in 1972 on a voluntary 
program for taking care of reserve component members who must 
leave school upon mobilization. We believe SOC provides us with 
a variety of options that have met the needs of our student 
population for many years.
    I would again like to thank the committee and its staff for 
all the effort that has gone into these important bills. I will 
be happy to answer questions that you may have.
    [The prepared statement of Mr. Duehring follows:]
The Prepared Statement of Craig W. Duehring, Principal Deputy Assistant 
          Secretary for Reserve Affairs, Department of Defense
    Mr. Chairman and members of the Committee, thank you for giving me 
the opportunity to come before you this morning to discuss S. 792 and 
S. 1136, two versions of the Service members Civil Relief Act, and 
section 3 of S. 806, the Deployed Service Members Financial Security 
and Education Act of 2003.
    The Department of Defense supports the reenactment of the Soldiers' 
and Sailors' Civil Relief Act of 1940 (SSCRA) as the Service members 
Civil Relief Act. The need to modernize the language of the Act, 
incorporate over 60 years of case law, and add generally accepted 
practices is evident. The Department believes both S. 792 and S. 1136 
accomplish this goal and would like to thank the Committee and its 
staff for their work on this important effort.
    The SSCRA has been an essential ingredient in the total quality of 
life package for our military men and women, and their families, since 
its passage. In passing this Act and its Civil War and World War I era 
predecessors, Congress recognized that active military service may 
cause severe, often insurmountable, problems in handling personal 
affairs back home: frequent involuntary moves, extended deployments 
overseas, and long separations from families, sometimes with little 
advance notice. Congress also recognized the need to have military men 
and women focused on their operational mission free from worry about 
the welfare of their families or their personal affairs.
    Congress addressed these problems adequately and equitably through 
the Act's skillfully crafted balance among the needs of our nation for 
a strong national defense, the needs of service members--and their 
families--for security in their personal affairs, and the needs of 
those who have dealt with and depend upon service members for 
fulfillment of their obligations.
    S. 792 and S. 1136 in large part maintain this important balance 
while addressing three areas where our experience with the Act 
indicates that change is needed: clarifying and simplifying the 
language; incorporating generally accepted procedures; and updating the 
Act to reflect 60 years of change in America. With the ongoing Global 
War on Terrorism and reserve mobilization, now is a good time to update 
and clarify the Act so it can remain vital and continue to serve the 
needs of military members and those with whom they do business.
    The questions most frequently asked by service members, their 
families, and those who deal with them reveal that parts of the Act are 
difficult to read and understand, and therefore difficult to follow. It 
is apparent from these questions that the entire Act needs to be 
rewritten in plain English and in modern legislative drafting form. S. 
792 and S. 1136 redraft each section, updating the language and 
removing much ambiguity.
    Additionally, the Act does not provide necessary procedural 
guidance in many areas. For example, although the Act protects service 
members with its stay of proceedings provision, it does not explain how 
to go about obtaining the needed relief. S. 792 and S. 1136 provide 
this missing procedural guidance.
    Finally, the world of 1940 could not have foreseen all the changes 
in American life that more than 60 years of technological advances and 
business practices would bring. The extensive use of leases for 
automobiles and business equipment could not possibly have been 
imagined over 60 years ago. S. 792 and S. 1136 reflect over 60 years of 
progress in America.
    The Department of Defense has only a few comments regarding 
specific provisions of S. 792, S. 1136, and section 3 of S. 806.
    First, the Department prefers S. 1136's requirement regarding 
notifying members of the benefits of the Act in section 105 over the 
notification requirement in section 105 of S. 792. We appreciate S. 
1136's recognition that the Department's current approach of notifying 
our members of the provisions of the SSCRA through recurring 
mobilization and deployment briefings and other command information 
media has been effective and that an additional requirement for written 
notification is unnecessary.
    Second, the Department prefers section 301 of S. 1136 over section 
301 of S. 792 because it includes an automatic inflation adjustment to 
the maximum monthly rental amount for leases covered by that section's 
eviction protections. Tying the maximum rental amount to the Basic 
Allowance for Housing will result in extending this protection to more 
members who are stationed in high cost areas because that allowance is 
based on rental costs in the area where he or she is stationed.
    Third, we believe that section 305(b) of S. 1136 can be improved by 
amending it to allow termination of automobile leases only when the 
period of active duty military service exceeds a certain threshold, 
perhaps 180 days. As written, that section would allow lease 
termination for short periods of active duty when the member does not 
lose the use of a vehicle or loses it for only a short time. Applying 
the termination provision only to longer periods of active duty, when 
members are more likely to lose the use of their vehicles, is more 
consistent with the SSCRA's historical balance between service members 
and those they do business with, a balance that has resulted in 
widespread support for the SSCRA within the business community. Unlike 
the real property pre-service lease termination provision, for which 
there is not a minimum period of active duty, the automobile lease 
termination provision applies to movable, depreciable property, 
justifying a minimum period of active duty to ensure that the provision 
applies to those members who really need it and to reduce its cost to 
the lease financing community.
    Fourth, the Department defers to the Department of Education on 
section 207(a)(2) of S. 1136 and section 3(a) of S. 806, which would 
extend the six percent interest rate cap to federally-insured student 
loans. We note that while the interest rate cap does not currently 
apply to such loans, the Department of Education (DOE) has a policy of, 
during periods of mobilization, requiring complete forbearance of 
interest and principal repayment on federally-insured student loans for 
a period of active service, up to one year, with extensions possible. 
Unlike the interest rate cap, this DOE policy helps service members 
even when interest rates are below six percent.
    Finally, the Department also defers to the Department of Education 
on section 707 of S. 1136, which would require institutions of higher 
education to reenroll students who left school to perform active duty 
service and to allow completion of unfinished courses at no additional 
cost, and on section 3(b) of S. 806, which addresses the same concern 
with a more detailed set of requirements, including leaves of absence, 
restoration of educational status, and refunds for uncompleted course 
work. We note, though, that the Department has worked closely with the 
educational community, state governors, and the Service Members 
Opportunity Colleges (SOC), a DoD-funded consortium of colleges and 
universities established in 1972, on a voluntary program for taking 
care of reserve component members who must leave school upon 
mobilization. Under this very effective program, which covers the same 
elements as section 707 of S. 1136 and section 3(b) of S. 806, SOC is 
the focal point for handling individual cases when student-reservists 
have a problem with an institution. Section 207 of the National Science 
Foundation Authorization Act of 1998 (Public Law 105-207), directed the 
NSF to convene a forum of government officials, representatives of the 
higher education community, and members of the Armed Forces reserve 
components to discuss and seek consensus on an appropriate resolution 
to problems related to the academic standing and financial obligations 
of reservists called to active duty. The forum concluded it was best to 
seek solutions through enhanced communications between DoD and the 
postsecondary education community and did not recommend legislation.
    I would again like to thank the Committee and its staff for all of 
the effort that has gone into these important bills. We appreciate this 
opportunity to discuss them with you.
                                 ______
                                 
      Response to Written Questions Submitted by Hon. Jim Bunning 
                          to Craig W. Duerhing

    Question:. G.I. Bill educational benefits are an important 
recruiting tool for the military. It has often been suggested that 
service members should be able to freely transfer their educational 
benefits to their spouse or children. Would the Defense Department be 
interested in such a benefit to recruit and retain quality service 
members?
    Answer: The authority to transfer educational benefits to a 
member's spouse and children was enacted in section 654 of the National 
Defense Authorization Act for Fiscal Year 2002 (Public Law 107-107; 115 
Stat. 1153). This provision amended chapter 30 of title 38, United 
States Code, to give the Secretaries of the Military Departments, the 
Secretary of Homeland Security, the Secretary of Health and Human 
Services and the Secretary of Commerce concerned the discretionary 
authority to permit a member in a critical skill designated by the 
Secretary concerned and who is entitled to basic educational assistance 
to transfer up to eighteen months of Montgomery GI Bill eligibility to 
the member's spouse, children or a combination of the spouse and 
children.
    The Air Force conducted a limited implementation of this authority 
to determine its effectiveness in improving recruiting and retention. 
During this test, the Air Force found that this new authority had 
limited effect on helping them achieve their personnel management 
objectives. Although none of the Military Departments are currently 
using this authority, it is a recruiting and retention tool that is 
available to them.

    Senator Nelson of Nebraska. Mr. Duehring, you were one 
second short of five minutes and you cannot beat that. I 
appreciate it very, very much.
    Admiral Cooper, I believe you may be next and last; is that 
correct?
    Mr. Cooper. I guess so, sir. He had three things to talk 
about. I only have 19.
    [Laughter.]

 STATEMENT OF DANIEL L. COOPER, UNDER SECRETARY FOR BENEFITS, 
                DEPARTMENT OF VETERANS AFFAIRS; 
ACCOMPANIED BY JOHN W. NICHOLSON, UNDER SECRETARY FOR MEMORIAL 
  AFFAIRS; JOHN H. THOMPSON, DEPUTY GENERAL COUNSEL; AND RON 
                HENKE, DIRECTOR OF COMPENSATION

    Mr. Cooper. Thank you very much for the opportunity to 
testify today on several bills of great interest to the 
veterans. I am accompanied by Mr. Jack Thompson, who is a 
Deputy Counsel, and General John Nicholson, the Under Secretary 
for Memorial Affairs, and Mr. Ron Henke, the Director of 
Compensation in my outfit. My written testimony goes into 
substantial detail on each of the 19 bills under consideration. 
In respect for your time here I will try not to reiterate that 
complete detail now. Rather, I will summarize the VA positions 
on the various measures so that the committee can direct 
questions to any areas where you might want to. I respectfully 
request that my written testimony be placed in the record.
    Senator Nelson of Nebraska. Without objection.
    Mr. Cooper. I am pleased to state the VA fully supports 
several of the measures under consideration today. We have 
proposed and strongly support S. 517, improving benefits for 
former POW's, and S. 1133, which contains a number of VA's 
legislative proposals. We support S. 249, reinstating DIC 
benefits to remarried survivors over the age of 55; S. 1131, 
the annual cost of living allowance for compensation, or COLA, 
increases for each year; and S. 1213 which would provide 
compensation and burial benefits to Filipino veterans residing 
in the United States.
    We also support portions of several other measures, 
specifically, the proposal in 1124 to increase the burial and 
funeral allowances for service-connected deaths to $3,700, the 
provision in S. 1188 that eliminates the two-year limitation on 
accrued benefits, and the provision of S. 1239 on prohibition 
against compensation for substance abuse disabilities.
    There is merit in the intent of several of the other 
proposals, but we cannot support them because they are not in 
the President's budget and would require offsetting savings. 
These proposals are S. 1281, Section 2 on new presumptions for 
ex-prisoners of war; S. 1132 Sections 2 and 3 on monthly pay 
rates and entitlements for Chapter 35 dependents' education 
benefits; and Section 4 of 1132 on increased DIC for surviving 
spouses with children.
    S. 1136 and S. 792 outline comprehensive revisions to the 
Soldiers and Sailors Relief Act, as you heard. Generally, we 
defer to DoD in these areas. There is one exception. VA 
administers the provisions of the Civil Relief Act pertaining 
to insurance protection. We generally support the proposed 
protection increase to $250,000, but we do have several 
concerns of a technical nature which I have stated carefully in 
my written report. These concerns are described in that 
testimony.
    For reasons discussed in my written testimony, we cannot 
support the following measures:
    S. 257 relating to veterans assignment of benefits to third 
parties. In fact, we do not recognize any third parties. We 
give the benefits to the veteran. What they do after that, of 
course, we cannot control.
    S. 978 establishing home loan guarantees for residential 
cooperatives. That is stated very carefully in my testimony. 
The reason is, we have nothing that they hold onto. That is, a 
cooperative is a group of people. Therefore, whereas in 
condominiums you have the property, there is no property that 
goes with a cooperative.
    S. 1282 relating to national cemeteries in underserved 
areas and S. 1360 relating to the redefining of notice 
agreement, or NODS, in the VA appeals process.
    Please excuse my brevity. I am coming in under a minute. So 
on these many important issues I have not only skimmed through 
the issues, but I have done so with respect to your time. As I 
previously mentioned, my written testimony is quite extensive 
and offers far greater detail to these various provisions.
    At this point I will be glad to answer any questions you 
may have.
    [The prepared statement of Mr. Cooper follows:]

    The Prepared Statement of Daniel L. Cooper, Under Secretary for 
                Benefits, Department of Veterans Affairs

    Mr. Chairman and Members of the Committee, thank you for the 
opportunity to testify today on several bills of great interest to 
veterans.

                                 S. 249

    This bill would amend 38 U.S.C. Sec. 103(d) to remove, for 
surviving spouses who remarry after age 55, the bar on the payment of 
Dependency and Indemnity Compensation (DIC) to surviving spouses who 
remarry. VA has no objection to this bill in principle, but because the 
mandatory costs are not included in the President's FY 2004 Budget, we 
cannot support enactment without a corresponding offset.
    The DIC program provides tax-free monthly benefits to the surviving 
spouse of a veteran who dies in or as a result of military service. 
Current law denies DIC during periods of the surviving spouse's 
subsequent marriage or (in cases not involving remarriage) during 
periods when the surviving spouse lives with another person and holds 
himself or herself out openly to the public to be that person's spouse.
    DIC was created for two purposes: to replace family income lost due 
to the service member's or veteran's death and to serve as reparation 
for the death. In 1956, the Servicemen's and Veterans' Survivor 
Benefits Act replaced the preexisting death-compensation program and 
the $10,000 Servicemen's-Indemnity-Act payment with DIC. The House 
Select Committee on Survivor Benefits explained, in a 1955 report, H.R. 
Rep. No. 84-993, that ``these two separate and distinct survivor 
benefit programs . . . would become one. To this limited extent one of 
the objectives of the committee, greater simplicity, would be 
accomplished and the long-term interest and equity of survivors 
protected.'' In this manner, DIC was intended to meet, at least in 
part, the Government's obligation to those who died in the defense of 
our country. An expansion of DIC eligibility would well serve this 
purpose for the following reasons.
    S. 249 would assist surviving spouses by allowing those over age 55 
to maintain their standards of living, thus removing any economic 
disincentive to remarriage. A veteran's surviving spouse would be able 
to subsequently marry without fear of economic deprivation, and the 
elderly couple could live together in comfort and dignity--legally 
married.
    Benefits for surviving spouses of military retirees through the 
Department of Defense's (DoD) Survivor Benefit Plan do not terminate if 
remarriage takes place at age 55 or thereafter. Social Security 
survivors' benefits do not terminate if remarriage takes place at age 
60 or thereafter. S. 249 would thus better align DIC benefits with 
benefits provided to surviving spouses of military retirees under DoD's 
Survivor Benefit Plan and to surviving spouses under the Social 
Security program.
    Enactment of S. 249 could result in benefit costs of as much as 
$23.9 million during FY 2004 and $1.1 billion during the period FY 2004 
through 2013.

                                 S. 257
 
   S. 257, the ``Veterans Benefits and Pensions Protection Act of 
2003,'' would amend VA's anti-assignment statute, 38 U.S.C. Sec. 15301, 
by adding language to prohibit certain agreements, as well as 
collateral security arrangements, between persons receiving monetary VA 
benefits and third parties. Third parties use these agreements to 
acquire for consideration rights to receive monetary benefits paid to 
VA beneficiaries. Besides prohibiting these agreements and 
arrangements, S. 257 would subject third parties who enter into such 
agreements or arrangements to penalties of fine, imprisonment, or both. 
The bill would also require VA to ``carry out a program of outreach'' 
to inform veterans and other beneficiaries of the prohibition and would 
authorize $3,000,000 in appropriations for such outreach for FY 2004 
through 2008.
    Let me first assure the Committee that, because 38 U.S.C. 
Sec. 15301 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, VA lacks the ability to oversee how 
those funds are used, unless the beneficiary has been found mentally 
incompetent. 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. 
Therefore, we do not support enactment of S. 257.

         S. 517 AND S. 1281 POW'S--MINIMUM CONFINEMENT PERIODS

    Section 2(a) and (b) of S. 517 would eliminate the current 
requirements that a former prisoner of war (POW) be detained or 
interned for at least thirty days in order to be eligible for a 
presumption of service connection for certain diseases, and at least 
ninety days in order to be eligible to receive VA care and treatment 
for a dental condition or disability.
    VA supports section 2(a) and (b) of S. 517, which are virtually 
identical to provisions in a draft bill we recently submitted to 
Congress. Currently, 38 U.S.C. Sec. 1112(b) provides a presumption of 
service connection for certain diseases for former POW's who were 
detained or interned for at least thirty days. Also, 38 U.S.C. 
Sec. 1712(a)(1)(F) provides eligibility for VA outpatient dental care 
services and treatment, and related dental appliances for dental 
conditions or disabilities of former POW's who were detained or 
interned for at least ninety days. Recent military engagements 
involving the United States instruct that, because of our Nation's 
advanced technology and superior warfare capability, actual combat may 
end in a far shorter period of time than in previous wars. As a result 
of this phenomenon, American soldiers who are detained or interned by 
the enemy are likely to be held for less than 90 days, or even 30 days, 
as was the case with the United States soldiers held as POW's during 
Operation Iraqi Freedom. Recent experience has indicated, however, 
that, despite the shorter duration, the conditions of detention or 
internment may be such that these former POW's may suffer from many of 
the same diseases for which a presumption of service connection is 
available pursuant to section 1112(b) and from dental conditions or 
disabilities for which dental care and treatment is currently available 
pursuant to section 1712(a)(1)(F) for former POW's who were held for 
longer periods. We believe it would be equitable to eliminate the 
requirement of a particular duration of detention or internment so that 
all former POW's would be eligible for the presumption of service 
connection for the diseases specified in section 1112(b) and for dental 
care and treatment pursuant to section 1712(a)(1)(F). We estimate that 
enactment of section 2(a) and (b) would have mandatory costs of $3.3 
million in FY 2004 and $61 million over ten years.

               POW'S--DISEASES PRESUMED SERVICE CONNECTED

    Section 2(c) of S. 517 would add heart disease, stroke, liver 
disease, diabetes (type 2), and osteoporosis to the list of diseases 
for which a presumption of service connection is available pursuant to 
38 U.S.C. Sec. 1112(b). Section 2 of S. 1281 would add cardiovascular 
disease (heart disease), cerebrovascular disease (stroke), and chronic 
liver disease, including cirrhosis and primary liver carcinoma, to the 
presumptive diseases in section 1112(b).
    Section 2(c) of S. 517 would also authorize the Secretary to 
promulgate regulations creating a presumption of service connection for 
any other disease which the Secretary determines has a ``positive 
association with the experience of being a [POW].'' A ``positive 
association'' would exist ``if the credible evidence for the 
association is equal to or outweighs the credible evidence against the 
association.'' In deciding whether to promulgate such a regulation, the 
Secretary would be required to consider the recommendations of the 
Advisory Committee on Former POW's and any other available sound 
medical and scientific information and analyses. VA would have 60 days 
from receipt of an Advisory Committee recommendation to make a 
determination as to whether a presumption of service connection is 
warranted, and then another 60 days to publish in the Federal Register 
either proposed regulations, if VA determines that a presumption is 
warranted, or a notice explaining the scientific basis for a 
determination that a presumption is not warranted.
    VA continues to investigate the long-term health consequences of 
the conditions of POW internment or detention, such as malnutrition, 
vitamin deficiency, and exposure to parasitic and infectious diseases. 
In severe forms, such conditions of internment or detention could 
likely be associated with the conditions specified in section 2 (c) of 
S. 517 and section 2 of S. 1281. It is also true that many POW's 
suffered physical and mental torture and maltreatment, which could lead 
to long-term stress and anxiety, which in turn have been shown to have 
adverse effects on the health of many individuals. VA is committed to 
properly compensating former POW's for the disabilities resulting from 
their service to our Nation. In light of the potential connection 
between the POW experience and the diseases listed in the subject 
bills, we could support enactment of section 2 (c) of S. 517 and 
section 2 of S. 1281 only if the Committee can identify offsetting 
savings, since most of these costs are not in the President's FY 2004 
Budget. We estimate that enactment of all of the S. 517 provisions, 
i.e., elimination of the minimum confinement period and additional 
diseases presumed to be service connected, would result in benefit 
costs of $29.4 million in FY 2004 and $517.3 million over the ten-year 
period FY 2004 through FY 2013. If S. 517 were enacted, the most 
significant presumptions of S. 1281 would be addressed. If the S. 517 
presumptions were not enacted, we estimate the benefit costs of S. 1281 
would be $20.9 million in FY 2004 and $364.7 million over ten years.
    We also note that, in its December 20, 2002 report, the Advisory 
Committee on Former POW's recommended to VA that cardiovascular disease 
be established as a presumptive condition. In response to this and 
previous recommendations by the Advisory Committee to add presumptive 
conditions, VA is establishing a Workgroup on Medical Presumptive 
Conditions in Former POW's to establish procedures, guidelines, and 
standards to determine whether a disease should be designated by VA as 
presumptively service connected in former POW's. We contemplate that 
the Workgroup will be comprised of representatives of the Under 
Secretaries for Benefits and Health, General Counsel, and Chairman of 
the Advisory Committee on Former POW's. The activities of this 
Workgroup will assist VA in determining whether scientific and medical 
evidence supports further expansion of the list of conditions presumed 
to be service connected in former POW's. In our view, these activities 
will render unnecessary the procedures for establishment of new 
presumptions based on consideration of recommendations from the 
Advisory Committee on Former POW's, as proposed in sectionE2 (c) of S. 
517.

     REVIEW OF DOSE RECONSTRUCTION PROGRAM OF DEPARTMENT OF DEFENSE

    Section 3 of S. 1281 would require the Secretary of Defense and the 
Secretary of Veterans Affairs to conduct a joint review of the mission, 
procedures, and administration of the DoD Dose Reconstruction Program 
for preparing radiation dose estimates and to report to Congress on 
their findings within 90 days after the bill is enacted. The bill would 
also require the Secretaries to provide for ongoing independent review 
and oversight of the Dose Reconstruction Program and would require 
establishment of an advisory board as one method of providing such 
ongoing review. VA does not support this provision.
    DoD has statutory responsibility for preparing radiation dose 
estimates. VA uses those dose estimates in adjudicating some claims for 
service-connected benefits filed by veterans exposed to radiation in 
service or their family members. A recent review by the National 
Research Council (NRC) of the National Academy of Sciences identified 
several concerns regarding certain methods and assumptions employed by 
DoD that may have caused underestimation of the upper-bound limits of 
exposure in some cases. We understand that DoD is presently in the 
process of revising its Dose Reconstruction Program to address the 
concerns identified by the NRC. Correspondingly, VA is working to 
identify claims previously decided based on dose reconstructions from 
DoD. Once we have identified those claims, we intend to seek revised 
dose estimates from DoD, if the claimant potentially could benefit from 
a revised dose estimate.
    We believe the provisions of this legislation requiring VA and DoD 
to jointly review and report on the Dose Reconstruction Program would 
be superfluous in view of the comprehensive NRC report. The committee 
of highly qualified experts assembled by the NRC spent more than two 
years reviewing the Dose Reconstruction Program. The NRC report 
discusses in detail the specific concerns identified in the Dose 
Reconstruction Program and provides a clear framework for DoD's current 
efforts to revise its program. We do not believe that a further review 
of the same matters by VA and DoD would provide any significant 
additional information to aid in identifying and correcting any 
problems in the Dose Reconstruction Program. The oversight 
responsibilities that would be required by this legislation would 
unnecessarily divert VA resources from the task of identifying and 
reviewing potentially affected claims.
    Dose estimates prepared by DoD are often an important piece of 
evidence VA must consider in adjudicating claims for benefits based on 
radiation exposure. In view of the importance of this information and 
the difficult and sensitive nature of the adjudicative issues involved 
in such claims, we consider it important to avoid even the appearance 
that VA is influencing DoD's procedures and methods of preparing the 
dose estimates. Assigning VA an oversight role in matters affecting the 
creation of such evidence may result in a perception among some 
veterans that the estimates lack objectivity.
    For these reasons, we do not support this provision. We estimate 
that this provision, if enacted, would result in approximately $350,000 
in annual costs to VA.

                    DISPOSITION OF RANCH HAND STUDY

    Section 4 of S. 1281 would require VA, not later than 60 days after 
the date of the enactment of this Act, to contract with the National 
Academy of Sciences (NAS), or other appropriate organization, to 
determine the appropriate disposition of the Air Force's well-known 
``Ranch Hand'' epidemiologic study when it terminates in 2006. Among 
other things, the NAS would be required to address, and ultimately 
report on, the advisability of extending the study and the disposition 
of the specimens, medical records, and other data collected in the 
course of this long-term study.
    VA generally supports the suggestion for independent review of the 
merits of the Ranch Hand study, as proposed. VA has never been involved 
in the funding, conduct, or direction of DoD's ``Ranch Hand'' study. As 
a result, VA cannot provide close oversight of the NAS contract, as 
proposed in section 4 of the bill. Were VA required to enter into the 
contract required by section 4, we estimate the costs associated with 
enactment of this provision to be $1.5 million, which would be 
redirected from veteran's Medical Care funds.
    Section 5 of the bill would require both VA and DoD to make 
available to NAS in each of fiscal years 2004 through 2013, $250,000 
each from their respective appropriations for the Medical Follow-Up 
Agency (MFUA). MFUA would use these funds for epidemiological research 
on members of the Armed Forces and veterans.
    We support the continued funding of the MFUA whose independence and 
outstanding scientific reputation lend a high degree of credibility to 
critical studies that have a direct bearing on VA health care and 
compensation policies. As you know, the MFUA has been essential to VA 
for conducting a number of critical studies on veterans' health issues, 
including a study on Shipboard Hazard and Defense (SHAD) veterans, 
studies on actual hepatitis rates among veterans, and a congressionally 
mandated study on hearing loss among military personnel. In short, the 
MFUA is a critical asset for VA.

                       S. 792, S. 806 AND S. 1136

    S. 792 and S. 1136 are very similar bills that recodify and revise 
the Soldiers' and Sailors' Civil Relief Act of 1940 (SSCRA), while 
renaming it the ``Service members Civil Relief Act'' (SCRA). Most of 
the protections provided under the SCRA would be afforded to current 
members of the uniformed services and to their dependents. DoD, not VA, 
is the Federal agency with the primary interest in these bills, and we 
defer to DoD on all such matters that fall within DoD's jurisdiction.
    There is, however, one provision of the SSCRA, Article IV-
Insurance, that VA is charged with administering. I would like to 
summarize for the Committee at this time our views on the insurance-
protection provisions of S. 792 and S. 1136.
    Under section 402(c) of the SCRA, the maximum amount of life 
insurance coverage protection provided would be increased from $10,000 
to $250,000. The original intent of the SSCRA with regard to life 
insurance protection was to provide individuals summoned to active duty 
with a guarantee that their commercial life insurance coverage would 
not lapse for non-payment of premiums during service. While the 
provision of the current statute that provides protection for up to 
$10,000 of coverage under certain types of policies was of greater 
significance during the 1940s and 1950s, it has become less of a 
benefit for those serving in the Armed Forces today and has been little 
used by service personnel. This is probably because the amounts of 
insurance and types of coverage, including the availability of coverage 
up to $250,000 under the Service members' Group Life Insurance program, 
have expanded over the years, while the protection provided by the 
SSCRA has not changed.
    We generally support the proposed revision of the life insurance 
protections of the SSCRA contemplated by S. 792 and S. 1136, which 
would greatly enhance the insurance protection available to active duty 
personnel. We believe that many service members could benefit from the 
insurance protection provisions of the bills, particularly the proposed 
increase in the amount of life insurance that may be guaranteed and the 
expansion of the types of life insurance policies that are eligible for 
protection. We also applaud the effort to draft the bills in plain 
language. We do, however, have several concerns of a technical nature 
with regard to these bills.
    In particular, section 401(1) of the SCRA would define ``policy'' 
as an insurance policy under which the insurer may not increase the 
premium if the insured is in military service. It is VA's understanding 
that normal term insurance premium increases based upon age are not 
prohibited, and the only prohibition is that of increasing premiums 
simply because the insured is called to military service. Some 
clarification concerning whether normally scheduled premium increases 
are acceptable under this definition may be necessary. We also note 
that VA regulations implementing the SSCRA currently exclude group life 
insurance from protection under that statute. Congress may wish to 
clarify whether it intends to include group insurance within the 
coverage of the insurance protection provisions.
    Under section 402(a), the life insurance protection of the SCRA 
could be requested by the insured, the insured's designee, or the 
insured's beneficiary. Most other SCRA provisions would require the 
service member to personally request protection. While the SSCRA 
currently permits life insurance protection to be requested by the 
service member's designee or by the service member's beneficiary when 
the insured is deployed outside the continental United States, S. 792 
and S. 1136 would also permit an application by a beneficiary when the 
insured is deployed in the United States. We question whether it is 
desirable to require VA to provide premium protection based on a 
beneficiary's request about which the service member may be unaware. 
The service member may become obligated to repay any money VA expends 
to keep the policy in place. We believe the better course is to require 
that the protections afforded under Title IV of the SCRA be requested 
by the service member or the insured's designee.
    Section 407(a) (2) would require the United States, upon expiration 
of insurance protection under the SCRA, to reimburse the insurer for 
unpaid premiums in the amount of the difference between the amount of 
premiums due and the cash surrender value of the policy. The 
protections of the SCRA would be provided during a period beginning 
upon a service member's entry into military service and ending on the 
date of release from military service. As a result, VA is obligated to 
provide protection for the full military career of every active duty 
service member who is insured under a life-insurance policy that is in 
force for at least 180 days before entry into military service and at 
the time of application for SCRA protection. Given the period of 
protection provided by the SCRA and the increased coverage proposed in 
section 402(c), the Government's liability would likely increase 
exponentially. Congress should recognize that these provisions would 
result in a substantial increase in the Government's obligation to its 
service personnel.
    Under section 409, VA's decisions regarding life insurance 
protection would be subject to review by the Board of Veterans' Appeals 
(Board) and the Court of Appeals for Veterans Claims (Veterans Court). 
If the contemplated review of life insurance protections is adopted, 
conforming changes should be made to title 38 to clarify the scope of 
the Board's jurisdiction. Also, the current language of section 409 
does not appear to provide exclusive jurisdiction in the Board and the 
Veterans Court over such matters. We recommend that Congress make its 
intentions clear in this regard, and we would be glad to work with 
Committee staff to draft these clarifications.
    The budgetary impact of the expansion of insurance protection 
contemplated by these bills will depend on the number of service 
members who are called to active duty in the future, the number who 
choose to take advantage of the insurance protection provisions, and 
whether the expanded protection will apply to group life insurance 
policies. VA estimates that the benefit cost of enactment of S. 792 or 
S. 1136 would be $186,000 annually for every 10,000 personnel called to 
active duty. VA estimates that administrative costs of the insurance 
protection provisions would total $67,000 in FY 2004, $359,000 over the 
five-year period FY 2004-2008, and $788,000 over the ten-year period FY 
2004-2013.
    The only other notable impact of S. 792 and S. 1136 on VA would be 
in VA housing loan programs. The provisions of the existing SSCRA 
concerning interest rates, default judgments, termination of mortgages, 
and similar issues have a marginal impact on VA with respect to VA-
guaranteed loan holders and loans held in our portfolio. We are not 
aware that any loan holders in the VA housing-loan programs have 
encountered significant problems as a result of these important 
protections granted to persons in military service. We do not 
anticipate that the amendments contemplated by S. 792 and S. 1136 would 
have any significant additional impact on the VA housing loan programs.
    S. 806, the ``Deployed Service Members Financial Security and 
Education Act of 2003,'' would amend title 37 of the United States Code 
to authorize payment of a monthly allowance to service members involved 
in lengthy or repeated deployments. This bill would also amend the 
interest-rate-relief provisions of the SSCRA to include certain student 
loans and would preserve educational status and protect tuition 
payments of deployed service members. As S. 806 pertains to allowances 
and protections for active members of the Armed Forces, we defer to DoD 
as to its merits.

                                 S. 938

    S. 938 would amend 38 U.S.C. Sec. 1318(b)(3) to eliminate the 
September 30, 1999, date limitation on benefit eligibility for 
surviving spouses and children of former POW's who died of non-service-
connected causes and were totally disabled for a continuous period of 
one year prior to death. Under current law, VA pays DIC benefits under 
chapter 13 of title 38, United States Code, to the surviving spouse, 
dependent children, and dependent parents of service members who died 
during active duty or who died after service as a result of a service-
connected condition. In addition, VA provides benefits in the same 
manner to the surviving spouse and children of veterans who died after 
service from a non-service-connected cause if the veteran was totally 
disabled due to a service-connected cause: (1) for a continuous period 
of ten or more years immediately preceding death; (2) for a continuous 
period of at least five years after the veteran's release from service; 
or (3) in the case of a former POW who died after September 30, 1999, 
for a continuous period of at least one year immediately preceding 
death. The amendment to section 1318(b)(3) would eliminate the date 
limitation governing benefit eligibility for POWs' survivors, thereby 
authorizing such payments regardless of the date of the veteran's 
death.
    We estimate that enactment of the proposed amendment to 38 U.S.C. 
Sec. 1318(b)(3) would result in additional mandatory benefit costs of 
$7.5 million in FY 2004 and $208.7 million for the 10-year period FY 
2004 through FY 2013. Additional discretionary costs would total 
$187,000 for five years. This proposal was not in the President's 
Budget for FY 2004, so we cannot support it without an offset.

                                 S. 978

    S. 978 would authorize VA to guarantee loans to veterans to 
purchase stock or membership in a cooperative housing project.
    Under current law, veterans may purchase conventional homes, 
condominium units, or manufactured homes and manufactured home lots 
with VA guaranteed loans. In all cases except manufactured homes, the 
veteran is purchasing real property. Although a manufactured home is 
normally considered personal property, veterans nevertheless obtain 
title to the actual homes they will be occupying. In contrast, the 
buyers of co-ops do not acquire an interest in real estate or obtain 
title to their dwelling unit. Instead, the purchasers acquire a share 
of the cooperative's stock, coupled with the right to occupy a 
particular apartment in the building. Unlike other VA loans, there 
would be no lien on real property or tangible personal property.
    Predominately, cooperative housing projects are subject to blanket 
mortgages. This poses a significant risk to the buyer, the loan holder, 
and VA. The co-op owners are responsible for the monthly payment on 
their share loans as well as the assessments levied by the co-op 
project. The survival of the project may depend upon virtually all 
members of the co-op meeting their assessment obligations. Failure of a 
few members to do so could lead to foreclosure of the blanket mortgage 
on the entire building. Such foreclosure would totally wipe out the 
interests of all co-op owners, even those owners who made timely 
payments. It would also leave the holder of the VA guaranteed share 
loans without any security. This sets co-ops apart from condominiums.
    The governing documents of most co-ops contain a right of first 
refusal, a right by the co-op board to approve or reject a prospective 
buyer, or other restrictions on the resale of units. These rights of 
first refusal or most other sales restrictions are not permitted by VA 
regulations and could adversely affect the marketability of a unit. If 
veteran-borrowers are experiencing financial difficulties and cannot 
freely dispose of their units at an advantageous price, foreclosure is 
more likely. These resale restrictions could also hamper VA's efforts 
to resell properties following loan termination, thus increasing VA's 
loss. Since most co-op projects have such resale restrictions, few 
projects are likely to meet the requirements VA would set for the 
acceptability of cooperative projects. Accordingly, VA opposes 
enactment of S. 978.
    VA estimates that enactment of S. 978 would result in approximately 
30 additional guaranteed loans a year, with a first-year cost of 
$70,000 and a 10-year cost of approximately $847,000.

                                S. 1124

    S. 1124, the ``Veterans Burial Benefits Improvement Act of 2003,'' 
would increase the amount of several burial benefits for veterans. 
Section 2(a) of the bill would amend 38 U.S.C. Sec. Sec. 2302(a) and 
2303(a)(1)(A) to increase the burial and funeral allowance for non-
service-connected deaths from $300 to $1,135, and amend 38 U.S.C. 
Sec. 2307 to increase the burial and funeral allowance for service-
connected deaths from $2,000 to $3,712. Section 2(b) would amend 38 
U.S.C. Sec. 2303(b) to increase the plot allowance for veterans who are 
buried in State or private cemeteries from $300 to $670. Section 2 (c) 
would add to title 38 a new section 2309, which would require future 
annual increases in these benefits based on the percentage increases of 
the Consumer Price Index. The initial increases in the various benefits 
would apply to deaths occurring on or after the date of enactment of 
this legislation.
    We estimate that the bill could increase spending by $116 million 
during FY 2004 and $1.4 billion during the ten-year period FY 2004 
through FY 2013.
    The proposed new rates are apparently derived from a December 19, 
2000 Pricewaterhouse-Coopers study, ``An Assessment of Burial Benefits 
Administered by the Department of Veterans Affairs.'' Since that 
report, President Bush approved legislation increasing two of the three 
benefits listed in S. 1124. On December 27, 2001, President Bush signed 
Public Law 107-103, thus increasing burial and funeral allowances for 
service-connected deaths by one third and doubling the plot allowance. 
Furthermore, the adequacy of the current burial and plot allowances 
must be considered in the context of the overall burial program. The 
Government has responded to veterans' burial needs in recent years by 
establishing several new national cemeteries and by significantly 
enhancing the grant program under which state veterans cemeteries are 
established. The State Cemetery Grants Program now provides up to 100 
percent of the costs of construction associated with the establishment, 
expansion, or improvement of state veterans' cemeteries. Given the 
expanding availability of burial options within both national and state 
veterans' cemeteries, and the competing demands for scarce VA 
resources, at this time we cannot support S. 1124.

                                S. 1131

    S. 1131, the ``Veterans' Compensation Cost-of-Living Adjustment Act 
of 2003,'' would direct the Secretary of Veterans Affairs to increase 
administratively the rates of compensation for veterans with service-
connected disabilities and of DIC for the survivors of veterans whose 
deaths are service related, effective December 1, 2003. As provided in 
the President's FY 2004 budget request, the rate of increase would be 
the same as the cost-of-living adjustment (COLA) that will be provided 
under current law to Social Security recipients, which is currently 
estimated to be 2.0 percent. We believe this proposed COLA is necessary 
to protect the benefits of affected veterans and their survivors from 
the eroding effects of inflation.
    We estimate that enactment of this COLA bill would cost $355 
million during FY 2004 and $4.3 billion over the period FY 2004 through 
FY 2013. However, this cost is already assumed in the Budget baseline 
and, therefore, would not have any effect on direct spending.

                                S. 1132

    Mr. Chairman, S. 1132, the ``Veterans' Survivors Benefits 
Enhancements Act of 2003,'' contains several provisions that would 
improve benefits for survivors and certain dependents of veterans under 
the Department's various programs.
    Specifically, section 2 of this bill would increase educational 
assistance benefits under the chapter 35 VA's Survivors' and 
Dependents' Educational Assistance program by 44.8 percent, from $680 
to $985 per month for full-time course pursuit, from $511 to $740 for 
three-quarter time pursuit, and from $340 to $492 per month for half-
time pursuit, effective for months of course pursuit on or after 
October 1, 2003. It would also raise the basic monthly rate payable for 
Special Restorative Training (SRT) to $985. Similarly, the optional 
supplement to the SRT basic rate would be increased to pay the amount 
of tuition and fee charges that, on a monthly basis, would exceed $307 
for FY 2004.
    Given this benefits increase, the measure would suspend the 
statutory annual Consumer Price Index-based adjustment in chapter 35 
educational assistance rates for FY 2004.
    Chapter 35 benefit rates earlier equaled rates payable under the 
Vietnam Era GI Bill to a veteran with no dependents and, for a time, 
exceeded chapter 30 Montgomery GI Bill (MGIB) rates. In more recent 
years, however, chapter 35 benefits have lost ground. The current $680 
chapter 35 monthly rate is significantly below the MGIB rate payable to 
eligible veterans with 3 years or more of service, which will be $985 
per month in FY 2004 under legislation already enacted. Section 2 of S. 
1132 would remedy this, ensuring that chapter 35 spouses, surviving 
spouses, and children would receive educational assistance equal to 
that of veterans receiving such educational assistance under the MGIB.
    Mr. Chairman, although we appreciate your efforts to restore this 
balance, the President's FY 2004 Budget does not include this proposal.
    VA estimates the effect of the rate increase in section 2 of this 
measure could raise obligations by approximately $1.4 billion over the 
10-year period FY 2004 through FY 2013.
    Section 3 of S. 1132 would decrease the entitlement available to 
new chapter 35 recipients from the current 45 months to 36 months. This 
would apply in the case of those who first file an educational 
assistance claim under chapter 35 after the date of enactment.
    Approximately 23 percent of dependents use more than 36 months of 
benefits. Nevertheless, we believe the 44-percent increase in the 
monthly rate would compensate for the loss of 9 months of entitlement. 
VA further believes this reduction in entitlement would be necessary to 
partially offset the cost of increases in the rates of assistance 
allowance provided by section 2 of this bill.
    VA estimates the cost savings for section 3 of S. 1132 would be 
approximately $126.9 million over the ten-year period FY 2004 through 
FY 2013. The estimated ten-year net cumulative cost for sections 2 and 
3 of S. 1132 is $1.3 billion. VA supports the provision in principle, 
but because it was not in the President's Budget for FY 2004, we cannot 
support it without a corresponding offset.
    Section 4 of S. 1132 would amend 38 U.S.C. Sec. 1311 to provide an 
additional $250 in DIC for a surviving spouse with one or more children 
under the age of 18. The increase would apply only for the 5-year 
period after the veteran's death and would cease when all children 
attain age 18.
    By boosting the DIC rate payable to a surviving spouse with 
children during the 5 years following a veteran's death, this provision 
would provide dependents additional monetary support at an appropriate 
time. VA has no objection to the provision in principle, but because it 
was not in the President's Budget for FY 2004, we cannot support it 
without a corresponding offset.
    Section 5 would amend 38 U.S.C. Sec. 2402(5) to make a veteran's 
surviving spouse who marries a non-veteran after the veteran's death 
eligible for burial in a VA national cemetery based on his or her 
marriage to the veteran. This provision is similar to a VA proposal 
sent to Congress on April 25, 2003. Our full rationale and 
justification for this proposal, as well as our cost estimates, are 
contained in Secretary Principi's April 25, 2003 letter to the 
President of the Senate.
    Unlike VA's proposal, section 5 of S. 1132 would make the burial 
eligibility of remarried surviving spouses of veterans retroactive to 
deaths occurring on or after January 1, 2000. We estimate that the 
additional costs associated with this retroactivity would be 
negligible. Although it is difficult to determine how many families of 
already deceased, and presumably interred, remarried surviving spouses 
of veterans would want to disinter their loved ones and then re-inter 
them with their veteran spouses in a national cemetery, we believe the 
number of such families would not be significant.
    Section 6 would amend chapter 18 of title 38, United States Code, 
to authorize VA to provide a monetary allowance and other benefits to a 
person suffering from spina-bifida who is natural child, regardless of 
age or marital status, of a veteran who served in the active military, 
naval, or air service in or near the Korean demilitarized zone (DMZ) 
between January 1, 1967, and December 31, 1969, if the person was 
conceived after such service began and if the veteran is determined by 
VA, in consultation with the DoD, to have been exposed to a herbicide 
agent during such service. The term ``herbicide agent'' would be 
defined as a chemical in a herbicide used in support of United States 
and allied military operations in or near the Korean DMZ, as determined 
by VA in consultation with DoD during the specified period.
    VA is still formulating its views and cost estimates on this 
provision. As soon as those views and estimates are cleared for 
transmittal, we will provide them to the Committee.

                                S. 1133

    Mr. Chairman, we very much appreciate your courtesy in introducing 
S. 1133 at the Department's request. Our full rationale and 
justification for these proposals, as well as our cost estimates, are 
contained in Secretary Principi's April 25, 2003 letter to the 
President of the Senate and will not be repeated here. Several of this 
bill's provisions are also covered in other bills that are on the 
agenda for today's hearing.
    All of the provisions in VA's proposal are significant to the 
programs administered by VA and the veterans served by those programs. 
Among the important proposals in S. 1133 that have not been otherwise 
introduced in the Senate are:
    Sections 3 and 4, which would repeal the 45-day rule for effective 
dates of death pension awards and exclude lump-sum life insurance 
proceeds from determinations of annual income for pension purposes. 
These changes are necessary to eliminate unequal treatment of death 
pension applicants and to uphold one of the fundamental principles of 
the pension program--insuring that those with the greatest need receive 
the greatest benefit.
    Section 6, which would authorize VA to pay unclaimed National 
Service Life Insurance and United States Government Life Insurance 
proceeds to an alternative beneficiary. This proposal would allow VA to 
ensure that the proceeds of insurance policies are paid to an 
appropriate beneficiary and to avoid adding to the approximately 4,000 
existing policies in which payment has not been made due to the fact 
that we cannot locate the primary beneficiary, despite extensive 
efforts.
    Section 7, which would clarify VA's authority both to declare a 
claim abandoned where it is not completed within one year of VA's 
notice of what is required to complete it, and to decide claims before 
the end of the one year the claimant has to provide the evidence to 
substantiate the claim. Such early adjudications are subject to 
revision based on evidence submitted within the year, and the effective 
date of any decision so revised will be the earlier date on which the 
claim was made.
    Section 11, which would make permanent the State Cemetery Grants 
Program, an important supplement to the National Cemetery system. This 
program authorizes VA to make grants to states to assist them in 
establishing, expanding, or improving state veterans' cemeteries.
    Section 15, which would extend the date on which eligibility for 
education benefits ends for individuals ordered to full-time National 
Guard service under title 32 of the United States Code in the same 
manner the delimiting date is now extended for those who are activated 
under title 10.
    All of the proposals in S. 1133 would improve veterans programs and 
their administration, and we commend them to the Committee's careful 
consideration.

                                S. 1188

    S. 1188, the ``Veterans' Survivor Benefits Act of 2003,'' would, in 
section 2, eliminate a discrepancy regarding the limitation on the 
period for which retroactive benefits due and unpaid a claimant may be 
paid to others after the claimant's death. In the interest of fairness, 
we support enactment of this provision.
    Under 38 U.S.C. Sec. 5121, periodic monetary benefits to which an 
individual was entitled at death under existing ratings or decisions or 
based on evidence on file with VA at the date of death are paid upon 
the individual's death to specified classes of survivors according to a 
prescribed order of preference. Before a recent court decision, VA had 
construed section 5121 to limit the payment of any benefits under that 
section to the retroactive period specified in the statute, regardless 
of whether the payment was based on an existing rating or decision or 
on evidence on file at the date of death. The retroactive payment 
period, originally one year, was extended to two years by Public Law 
104-275, the ``Veterans' Benefits Improvements Act of 1996.''
    On December 10, 2002, the United States Veterans Court issued its 
decision in Bonny v. Principi, 16 Vet. App. 504 (2002). The court held 
that 38 U.S.C. Sec. 5121(a) specifies two kinds of benefits: benefits 
that have been awarded to an individual in existing ratings or 
decisions but not paid before the individual's death, and benefits that 
could have been awarded based on evidence in the file at the date of 
death. The court held that, in the case of the first type of benefits, 
the statute requires that an eligible survivor is to receive the entire 
amount of the award; only the latter type of ``accrued'' benefits is 
subject to section 5121(a)'s two-year limitation. The court based its 
interpretation of the statute primarily on section 5121(a)'s 
punctuation.
    The Veterans Court's Bonny decision has resulted in differing 
entitlements under section 5121 based on the status of the deceased's 
claim at the date of his or her death. S. 1188 would eliminate this 
discrepancy by eliminating the two-year limitation on payment of 
retroactive benefits for all classes of beneficiaries under that 
statute.
    The distinction the Bonny decision draws between the two categories 
of claimants--those whose claims had been approved and those whose 
entitlement had yet to be recognized when they died--is really one 
without a difference. In either case, a claimant's estate is deprived 
of the value of benefits to which the claimant was, in life, entitled. 
Section 2 of S. 1188 would remove this inequitable distinction, and we 
support its enactment.
    We note that section 2 of S. 1188 would also add a new class of 
claimants eligible for accrued benefits. Chapter 18 of title 38, United 
States Code, authorizes monetary benefits for Vietnam veterans' 
children with birth defects. This provision would ensure that, upon the 
death of a child entitled to benefits under chapter 18, the child's 
surviving parents would be eligible for accrued benefits.
    In addition, we note one technical change needed in section 2 of S. 
1188 should it be enacted. The comma in current section 5121(a) 
following ``existing ratings or decisions'' should be deleted to 
clarify, for purposes of 38 U.S.C. Sec. Sec. 5121(b) and (c) and 5122, 
that the term ``accrued benefits'' includes both benefits that have 
been awarded to an individual in existing ratings or decisions but not 
paid before the individual's death, as well as benefits that could be 
awarded based on evidence in the file at the date of death.
    Sections 3 and 4 of S. 1188 would add new sections 5127 and 7270 to 
title 38, United States Code. These sections would provide that, if a 
claimant for monetary veterans' benefits dies on or after the date of 
enactment of this legislation and before a decision on the claim 
becomes final, an ``eligible person'' may submit an application to VA 
or a motion to a court to be substituted as the claimant. They would 
require VA or the court to grant such an application or motion if 
timely filed.
    S. 1188 would not limit its application to claims for benefits in 
which benefits are due and unpaid under existing ratings or decisions 
or in which evidence sufficient to decide the claim has already been 
developed. Under section 5121, the findings necessary to support an 
award of accrued benefits must be made on the factual record 
established during the deceased claimant's lifetime. In contrast, 
section 5127(f) contemplates that a substitute claimant may submit 
evidence to substantiate the deceased's claim. Section 5127(d) would 
require VA to assist the substitute claimant in developing the claim 
pursuant to the Veterans Claims Assistance Act of 2000 (VCAA) in 
essentially the same manner as if the claimant had survived.
    VA opposes this legislation primarily because it would impose 
significant additional burdens by requiring evidentiary development 
after the veteran's death, when the veteran cannot provide critical 
information necessary to properly develop and adjudicate the claim. 
Inasmuch as VA would be unable to rely upon the veteran to provide 
information about events in service, treatment during and after 
service, and the nature and extent of his or her condition, as the VCAA 
contemplates, it would be unusually difficult and burdensome for VA to 
develop those claims to the extent required by the VCAA. Indeed, in 
many cases, it simply may be impossible for VA to obtain sufficient 
information to resolve the claim. Claims for disability compensation 
often cannot be resolved without examining the veteran to discern the 
nature and extent of the claimed disability and determine whether the 
disability may be related to events or injuries in service. In 
requiring VA to conduct medical examinations when necessary to a 
decision, the VCAA recognizes that, absent a medical examination of the 
veteran, the evidence will often be insufficient for VA to make a 
reasoned decision on the claim. Even if the issue of service connection 
can be resolved, there may be no basis on which to establish a degree 
of disability. Accordingly, VA's inability to contact or examine a 
deceased veteran may be an insurmountable obstacle to the proper 
development and adjudication of a claim for benefits or to an accurate 
rating of a disability.
    Moreover, the notification requirements in section 3 of S. 1188 
would impose an additional burden on VA's already overtaxed 
adjudication system. Under section 5127(c), VA would be required to 
notify ``the eligible person'' that the claim will be dismissed unless 
an application for substitution is received within one year of the 
claimant's death, within 6 months of the date of the Secretary's 
notification, or within 3 months of notification of an adverse decision 
under section 5121, whichever is latest. It appears that this provision 
would require VA to send multiple notices because there is no way of 
knowing which of several of potentially eligible persons is actually 
eligible until they submit an application for substitution. Not only 
would this provision require multiple notices, it would require a 
burdensome search of the deceased's complete file to see if it 
contained addresses of any individuals in the listed classes. In 
addition, other VA records, such as hospital records, would apparently 
have to be searched. Further, if VA records were found to contain 
addresses of potentially ``eligible persons,'' VA would have to send 
notices to all such persons, even if the information identifying them 
was many years old and VA had no way of knowing whether they were 
surviving.
    Sections 3 and 4 of S. 1188 would not afford VA or a court 
sufficient discretion in carrying out their provisions. Sections 
5127(a) and 7270(b) would require VA or a court to approve ``any'' 
timely application for substitution submitted by an eligible person.
    The substitution-of-parties portion of S. 1188 may be intended to 
provide veterans' families with benefits in the same manner as is 
currently done for survivors of Social Security claimants. The Social 
Security Act provides for adjustment of underpayments of Supplemental 
Security Income by payment to the underpaid individual's surviving 
spouse or, if the underpaid individual was a disabled or blind child, 
by payment to the child's surviving parents if the deceased individual 
had lived with such spouse or parents within the 6 months preceding 
death. 42 U.S.C. Sec. 1383(b)(1)(A). That Act also provides for 
adjustment of underpayments of Old-Age and Survivors Benefits by 
payment to survivors of the underpaid individual. 42 U.S.C. 
Sec. 404(d). Thus, the current differences between treatment of Social 
Security benefits and veterans benefits upon the death of an unpaid 
individual are the two-year limitation on certain retroactive payments 
under 38 U.S.C. Sec. 5121 and the parties to whom the unpaid benefits 
can be paid. We believe that such differences can best be addressed by 
eliminating the two-year-limitation, which is addressed by section 2 of 
S. 1188, and by expanding that provision to authorize payment to adult 
children.
    VA estimates that enactment of these provisions of S. 1188 could 
result in benefit costs of $16.1 million for FY 2004 and $62.5 million 
for the period FY 2004 through FY 2013 and administrative costs of 
$661,000 in FY 2004 and $2.6 million for the period FY 2004 through FY 
2013.

                                S. 1199

    S. 1199, the ``Veterans Outreach Improvement Act of 2003'' would 
define the term ``outreach'' for title 38 purposes and would establish 
a new subchapter IV under Chapter 5 of title 38, entitled ``OUTREACH,'' 
covering outreach funding and activities by the Department.
    ``Outreach'' would be defined as meaning the act or process of 
reaching out in a systematic manner to proactively provide information, 
services, and benefits counseling to potentially eligible beneficiaries 
to ensure they are fully informed about and receive assistance in 
applying for benefits.
    The new subchapter would require that the Secretary establish a 
separate ``outreach account,'' with sub-accounts for funding outreach 
activities for each of VA's Administrations, i.e., Health (VHA), 
Benefits (VBA), and National Cemetery (NCA), and require separate 
budgeting for each sub-account. Subchapter IV, further, would require 
VA to establish procedures for effectively coordinating outreach 
activities between and among the Administrations, the Office of Public 
Affairs, and the Office of the Secretary, with periodic review and 
modification of such procedures to better achieve outreach 
requirements. Finally, this new subchapter would require VA to assist 
states in providing outreach and assistance in locations proximate to 
eligible veteran populations and enter into cooperative agreements and 
arrangements with veterans' agencies of the various States to 
implement, coordinate, and improve such outreach. In this regard, VA 
would be authorized to award grants to State veterans agencies to 
achieve outreach purposes, including enhancing assistance in 
development and submission of claims for veterans' and veterans'-
related benefits. The State agencies, in turn, could award these grants 
to local governments or other entities in the State for such purposes.
    Mr. Chairman, we certainly appreciate this interest in outreach 
activities for veterans and their dependents. However, we already 
provide extensive and effective outreach information and assistance, 
and are implementing and planning new initiatives. Consequently, we 
believe this measure is unnecessary.
    S. 1199 would require a new infrastructure within the Department to 
coordinate all Department outreach activities and to oversee the 
proposed new outreach award grants. However, each VA Administration 
currently has Outreach Coordinators/Offices assigned to develop, 
implement, and oversee outreach activities. VA's Office of Public 
Affairs has the responsibility to coordinate the outreach activities of 
these three Administrations, in conjunction with the Secretary's 
wishes. A strategic work group has been formed by the Deputy Assistant 
Secretary for Public Affairs, which includes key executives and public 
affairs representatives from all three Administrations. This existing 
structure already affords the necessary internal and external 
coordination to achieve VA's outreach objectives.
    Recently such coordination has resulted in sharing of resources and 
staffing at the Public Service Recognition Week activities at the 
National Mall and for the upcoming AARP Conference in September 2003. 
Further, NCA is teaming up with VHA and VBA to extend its message to 
groups that more routinely come into contact with those entities. In 
this regard, a comprehensive plan is being implemented to improve 
awareness of NCA's benefits among VHA and VBA counselors and social 
workers who, because of their direct contact with the hospice industry 
and with families at the time of imminent loss, can be instrumental in 
having burial benefit information distributed to those families. All VA 
Administrations will be participating in a scheduled meeting to discuss 
and coordinate the Department's FY 2004 outreach activities.
    VA's field offices also engage in and are encouraged to sponsor 
joint outreach events. This is currently being done in ``Stand-downs'' 
where the Homeless Outreach Coordinators from the regional offices and 
medical centers work hand-in-hand in gaining sponsorship and staffing 
of these worthwhile events.
    Mr. Chairman, we view outreach as an extremely important part of 
our mission to assure that no veteran or eligible dependent is left 
behind in being made aware of the benefits VA provides and their 
ability to apply for and receive all of those benefits to which they 
may be entitled. We take this mission seriously in our efforts, for 
example, to meet the existing title 38 requirements for outreach to 
veterans and dependents, including specially targeted groups: recently 
separated veterans, active duty personnel (to include Reserves/Guard), 
elderly, homeless, women, Gulf War, those exposed to Agent Orange in 
Vietnam, minority, Native American, Former Prisoners of War, service-
disabled, Asian and Pacific Islanders, eligible dependents, and first 
time applicants for VA benefits and services. VHA has an aggressive 
outreach program directed at veterans living on the streets and in 
shelters who otherwise would not seek assistance, and at those veterans 
suffering post-traumatic stress syndrome.
    Although not covered by this bill, our outreach programs are not 
limited to veterans and dependents, but include active duty and reserve 
service members; partner organizations such as Veterans Service 
Organizations, State approving agencies, military education counselors 
and recruiters; as well as community service providers, lenders, the 
funeral industry, and other non-veteran groups.
    We certainly welcome and encourage the interest in and 
participation of veterans' agencies and other agencies of the states in 
outreach to veterans and their dependents. We will continue to 
cooperate and coordinate with those agencies. However, we believe VA's 
current outreach program meets the statutory requirements and provides 
both the quality and uniformity of benefit information and assistance 
necessary to be effective.

                                S. 1213

    S. 1213 would amend title 38, United States Code, to improve 
benefits for Filipino veterans of World War II, and their survivors, 
who lawfully reside in the United States, by expanding their 
eligibility for VA health care, compensation, DIC, and burial benefits. 
S. 1213 would also extend VA's authority to maintain a regional office 
in the Philippines through 2008. This bill reflects proposed 
legislation submitted by the Secretary of Veterans Affairs to the 
President of the Senate by letter dated May 12, 2003, and we greatly 
appreciate the Chairman's courtesy in introducing S. 1213. The full 
rationale and justification for this proposed legislation, as well as 
our cost estimates, are contained in the Secretary's May 12th letter. 
For the reasons stated in that letter, VA strongly supports this 
legislation and recommends that Congress approve S. 1213 as introduced.

       S. 1239--SPECIAL COMPENSATION FOR FORMER PRISONERS OF WAR

    Section 2 of S. 1239, the ``Former Prisoners of War Compensation 
Act of 2003,'' would add a new subchapter at the end of chapter 11 of 
title 38, United States Code, to authorize special compensation for 
former POW's. This special compensation would be in addition to any 
service-connected disability compensation or pension to which a former 
POW may be entitled and would be exempt from attachment, execution, or 
levy in the same manner as special pension paid to Medal of Honor 
recipients is exempt pursuant to 38 U.S.C. Sec. 1562. The bill would 
authorize the Secretary of Veterans Affairs to pay monthly to each 
former POW, including active duty personnel, special compensation at a 
rate of payment determined by the cumulative length of confinement as a 
POW. Thirty days would be the minimum period of confinement for which a 
former POW would be eligible to receive special compensation. The bill 
would establish three rates of special compensation based on the length 
of the period of the former POW's confinement, as follows:


------------------------------------------------------------------------
                                                   Special Compensation
       Length of Former POW's Confinement              Monthly Rate
------------------------------------------------------------------------
30-120 days....................................                  $150.00
121-540 days...................................                  $300.00
541 days or more...............................                  $450.00
------------------------------------------------------------------------

    We estimate that benefit-costs for the POW portion of the bill 
would be $134.4 million for FY 2004 and $839.5 million for FY 2004 
through FY 2013. We estimate administrative costs to be an additional 
one-time cost of $654,000 in the first year. These amounts are not 
included in the President's FY 2004 budget request, so the Department 
cannot support this provision's enactment. However, we are sensitive to 
the contributions and needs of former POW's and will consider 
additional benefits for them in formulating future budget requests. I 
would add that we have recently submitted legislation to remove the 
minimum internment periods for purposes of POW's dental care and 
presumptions of service connection, and to exempt them from the co-
payments for VA medications.

   PROHIBITION AGAINST COMPENSATION FOR SUBSTANCE-ABUSE DISABILITIES

    Section 3(a) of S. 1239 would amend 38 U.S.C. Sec. Sec. 1110 and 
1131 to clarify that the prohibition on payment of compensation for a 
disability that is a result of the veteran's own abuse of alcohol or 
drugs applies even if the abuse is secondary to a service-connected 
disability. Section 3(b) would make that amendment applicable to claims 
filed on or after the date of enactment and to claims filed prior to, 
but not finally decided as of that date. We strongly support this 
provision, which is also proposed in the President's budget.
    Sections 1110 and 1131 of title 38, United States Code, authorize 
the payment of compensation for disability resulting from injury or 
disease incurred or aggravated in line of duty in active service, 
during a period of war or during other than a period of war, 
respectively. Sections 1110 and 1131 also currently provide, ``but no 
compensation shall be paid if the disability is a result of the 
veteran's own willful misconduct or abuse of alcohol or drugs.'' Before 
their amendment in 1990, the provisions currently codified in sections 
1110 and 1131 prohibited compensation ``if the disability is the result 
of the veteran's own willful misconduct.'' In 1990, they were amended 
to also prohibit compensation if the disability is a result of the 
veteran's own alcohol or drug abuse.
    VA had long interpreted those provisions to authorize compensation 
not only for disability immediately resulting from injury or disease 
incurred or aggravated in service, but also for disability more 
remotely resulting from such injury or disease. That interpretation is 
embodied in 38 C.F.R. Sec. 3.310(a), which provides that, generally, 
disability which is proximately due to or the result of a service-
connected disease or injury shall be service connected. Thus, VA does 
pay, in specific cases, compensation for primary service-connected 
disability and for secondary service-connected disability. However, 
consistent with the plain meaning of sections 1110 and 1131, if a 
disability, whether primary or secondary, is a result of the veteran's 
own alcohol or drug abuse, VA did not pay compensation.
    This has changed. On February 2, 2001, a three-judge panel of the 
United States Court of Appeals for the Federal Circuit interpreted 
section 1110 as allowing compensation for an alcohol or drug-abuse-
related disability arising secondarily from a service-connected 
disability. Allen v. Principi, 237 F.3d 1368, 1370 (Fed. Cir. 2001). 
More specifically, the panel held that section 1110 ``does not preclude 
compensation for an alcohol or drug abuse disability secondary to a 
service-connected disability or use of an alcohol or drug abuse 
disability as evidence of the increased severity of a service-connected 
disability.'' Id. at 1381. The Government filed a petition for 
rehearing and rehearing en banc, which the panel and full court denied 
on October 16, 2001. Allen v. Principi, 268 F.3d 1340, 1341 (Fed. Cir. 
2001). However, five of the eleven judges who considered the petition 
for rehearing en banc dissented from the order denying rehearing, 
opining that the court's interpretation is wrong. 268 F.3d at 1341-42.
    We are concerned that payment of additional compensation based on 
the abuse of alcohol or drugs is contrary to congressional intent and 
is not in veterans' best interests because it provides an incentive to 
engage in debilitating and self-destructive behavior by providing 
additional compensation for the disability caused by such behavior.
    The Federal Circuit's interpretation in Allen could also greatly 
increase the amount of compensation VA pays for service-connected 
disabilities. Under the court's interpretation, any veteran with a 
service-connected disability who abuses alcohol or drugs is potentially 
eligible for an increased amount of compensation if he or she can offer 
evidence that the substance abuse is a result of a service-connected 
disability, i.e., that the substance abuse is a way of coping with the 
pain or loss the disability causes. Under this interpretation, alcohol 
or drug abuse disabilities that are secondary to either physical or 
mental disorders are compensable.
    The potential for increased costs is illustrated by mental 
disorders, which are frequently associated with alcohol and drug abuse. 
Almost 421,000 veterans are currently receiving compensation for a 
service-connected mental disability. About 324,000 of those 
disabilities are currently rated less than 100 percent and could 
potentially be rated totally disabling on the basis of secondary 
alcohol or drug abuse. Even if the service connection of disability 
from alcohol or drug abuse does not result in an increased schedular 
evaluation, temporary total evaluations could be assigned whenever a 
veteran is hospitalized for more than twenty-one days for treatment or 
observation related to the abuse. Even the 97,000 cases of a service-
connected mental disability evaluated at 100 percent disabling have 
potential for increased compensation for secondary alcohol or drug 
abuse if the statutory criteria for special monthly compensation are 
met.
    The potential increase in compensation does not end there. Under 
the Federal Circuit's interpretation, VA is required to pay 
compensation for the secondary effects of the abuse of alcohol or 
drugs. Once alcohol or drug abuse is service connected as being 
secondary to another service-connected disability, then service 
connection can be established for any disability that is a result of 
the service-connected abuse of alcohol or drugs. If alcohol or drug 
abuse results in a disease, such as cirrhosis of the liver, then that 
disease would also be service connected and provide a basis for 
compensation under the court's interpretation.
    Of course, an increase in the amount of compensation VA pays for 
service-connected disabilities will increase the benefit cost of the 
compensation program. Section 3 of S. 1239 would avoid those increased 
costs. Our estimate of savings that would result from enactment of this 
provision is based on the payment of only basic compensation for 
alcohol or drug abuse disabilities secondary to service-connected 
disabilities. We estimate that this provision would result in benefit 
savings of $127 million and administrative savings of $44 million in FY 
2004 and benefit savings of $4.6 billion and administrative savings of 
$97 million for the ten-year period FY 2004 through FY 2013. This 
amount does not include the savings that would be associated with 
payment of compensation for temporary total evaluations, special 
monthly compensation, or compensation for the secondary effects of 
alcohol or drug abuse.

                DENTAL CARE FOR FORMER PRISONERS OF WAR

    Section 4 of S. 1239 would require VA to provide outpatient dental 
services and treatment, and related dental appliances, for any non-
service-connected dental condition or disability from which a veteran 
who is a former POW is suffering. Currently, a veteran who is a former 
POW may receive dental benefits for non-service-connected dental 
conditions or disabilities only if the veteran was incarcerated for 90 
days or more. By eliminating the 90-day requirement, section 4 would 
authorize VA to treat all former POW's the same, regardless of their 
length of captivity, with respect to dental care for a non-service-
connected condition or disability. It would also make the eligibility 
rules for dental benefits for former POW's the same as for other 
health-care services for former POW's.
    This provision is identical to VA's recent proposal, and we 
strongly support its enactment.
    Costs resulting from enactment of this provision would be 
insignificant.

                                S. 1282

    S. 1282 would direct the Secretary of Veterans Affairs to establish 
national cemeteries for geographically underserved populations of 
veterans. It would direct the Secretary to identify the ten burial 
service areas in the United States, as determined by the Secretary, 
most in need of a new national cemetery to ensure that 90 percent of 
the veterans who reside in each service area live within 75 miles of a 
national cemetery. The bill would define ``burial service area'' as 
having a radius of approximately 75 miles, containing a minimum 
population of approximately 170,000 veterans, and not being served by a 
national or state veterans' cemetery. In addition, the bill would 
direct the Secretary to submit to Congress a report setting forth each 
burial service area identified by the Secretary as needing a cemetery 
and a schedule and cost estimate for the establishment of each new 
national cemetery. The first report would be due within 120 days after 
the date of enactment, and annual status reports would be required 
until the ten cemeteries were completed.
    Not all of America's veterans and their families have easy and 
convenient access to a national cemetery. In the Veterans Millennium 
Health Care and Benefits Act, Pub. L. No. 106-117 (1999), Congress 
directed VA to identify areas of the country with the greatest 
concentrations of veterans who do not have reasonable access to a 
burial option in a national or state veterans' cemetery. Substantial 
documentation demonstrates that 80 percent of burials in national 
cemeteries involve individuals who resided within 75 miles of the 
cemetery. VA has determined that a veteran population threshold of 
170,000 within a 75-mile service radius is an appropriate threshold for 
the establishment of a new national cemetery.
    In response to the Veterans Millennium Health Care and Benefits 
Act, on May 15, 2002, VA transmitted to Congress a report entitled, 
Study on Improvements to Veterans Cemeteries--Volume 1: Future Burial 
Needs. An independent contractor, Logistics Management Institute (LMI), 
prepared the report. It assesses the number of additional cemeteries 
needed to ensure that 90 percent of veterans live within 75 miles of a 
national or state veterans' cemetery between 2005 and 2020. The report 
identified 31 locations recommended by LMI as areas of greatest need. 
Six sites had over 170,000 veterans who currently were not being served 
by a burial option by a state or national cemetery within 75 miles of 
their residences. On June 4, 2003, VA transmitted revised veteran 
population estimates, based on 2000 United States Census data. From the 
two listings, eleven locations were identified as meeting VA's 
population threshold. VA plans to meet the identified unmet burial 
needs in each location by either establishing a new national cemetery 
or expanding an existing national cemetery.
    Several steps are involved in establishing a new national cemetery. 
Depending on the size of the project, the cost of these steps can range 
from $100,000 to $250,000 for environmental compliance requirements; $3 
million to $6 million for land acquisition, if required; $1 million to 
$2 million for master planning and design; and $15 million to $25 
million for construction. Even with an aggressive schedule, it 
generally takes 4\1/2\ to 5 years to open a cemetery to initial 
burials. A new national cemetery's average annual operating costs range 
between $1 million and $2 million, without consideration of headstones 
and grave liners, which are purchased through mandatory funds.
    Because the Future Burial Needs report released last year and the 
updated demographic data transmitted to Congress earlier this year 
satisfy the intent behind S. 1282, enactment of this bill is 
unnecessary. However, VA is committed to begin addressing those 
identified locations with unmet burial needs within the annual 
budgetary process.

                                S. 1360

    Section 1(a) of S. 1360 would amend 38 U.S.C. Sec. 7105(b) to 
provide, in effect, that a writing filed by a claimant, a claimant's 
legal guardian, an accredited representative, attorney, or authorized 
agent, or a legal guardian expressing disagreement with a decision of 
an agency of original jurisdiction shall be recognized as a notice of 
disagreement (NOD). The amendment made by section 1(a) would apply to 
any document filed on or after the date of enactment of S. 1360 and any 
document filed prior to the date of enactment that was not rejected as 
an NOD by VA as of that date. Section 1(b) of S. 1360 would provide 
that, if a document filed as an NOD between March 15, 2002, and the 
date of enactment of S. 1360 meets the requirements of section 1(a) for 
an NOD, but VA determined that it did not constitute an NOD pursuant to 
38 C.F.R. Sec. 20.201, VA would have to treat the document as an NOD if 
the claimant makes a request, or VA makes a motion, within one year 
after the date of enactment, to treat it as a NOD.
    S. 1360 would overturn the decision of the United States Court of 
Appeals for the Federal Circuit in Gallegos v. Principi, in which that 
court held that 38 C.F.R. Sec. 20.201, defining an NOD as a writing 
expressing a desire for appellate review, is a reasonable and 
permissible construction of 38 U.S.C. Sec. 7105, which sets forth the 
necessary steps for appellate review by the Board. Defining a writing 
as an NOD irrespective of whether it expresses a desire for appellate 
review would represent a major change in the statutory scheme of 38 
U.S.C. Sec. 7105, which refers to an NOD only in the context of 
initiating an appeal to the Board.
    It does not serve veterans to initiate appeals of their claims 
against their wishes. However, requiring VA to treat any document 
disagreeing with an initial VA determination or decision on a claim as 
an NOD, without regard to whether it expresses a desire for appellate 
review, would impose a substantial burden on the VA claims adjudication 
system and hinder us in achieving our objective of improving the 
efficiency of claim adjudications and reducing the time necessary to 
resolve claims. VA is inundated on a daily basis by myriad 
correspondence from claimants and their representatives. Under the 
proposed amendment, in any case in which such correspondence could be 
construed as expressing disagreement with an initial claim decision, VA 
would be required to initiate a time-consuming, multi-step process 
under which it is obligated to reexamine the claim and determine if 
additional review or development is warranted and, ultimately, prepare 
a statement of the case summarizing the evidence, citing applicable 
laws and explaining their affect, and providing the reasons for making 
the determination in question. This process would apparently be 
required even in cases where, although a claimant has expressed 
disagreement with a VA decision, it is quite plain from the claimant's 
submission that the claimant has no desire for appellate review of the 
decision.
    VA opposes S. 1360 and believes that the goal of the bill can 
better be achieved by amending VA's procedures to assure that VA 
ascertains the intent of a claimant who expresses disagreement with an 
initial VA claim decision.
    That concludes my statement, Mr. Chairman. I would be happy now to 
entertain any questions you or the other members of the Committee may 
have.
                                 ______
                                 
      Response to Written Questions Submitted by Hon. Jim Bunning 
                            to Daniel Cooper

    Question: VA supports legislation restoring the traditional 
prohibition on disability compensation for drug and alcohol related 
disabilities. But even if we prohibit those benefits, drug and alcohol 
abusing veterans will still receive compensation for other disabilities 
that can be used to feed their habit. Would the VA support prohibiting 
all payments to abusing veterans until they successfully complete 
substance abuse treatment?
    Answer: VA's justification for opposing compensation for 
disabilities resulting from substance abuse was primarily that 
compensating for such disabilities can provide an incentive for 
engaging in disability-producing behaviors. Compensating for other 
disabilities not related to substance-abuse does not provide an 
incentive for drinking excessively or using drugs illegally (although 
it may provide the means for obtaining them). Furthermore, it would be 
counterproductive to deny such veterans the assistance in supporting 
themselves and their families such compensation is meant to provide.

    Senator Nelson of Nebraska. I understand there may be 46 
pages to your written testimony.
    Mr. Cooper. Yes, sir.
    Senator Nelson of Nebraska. It is admitted to the record 
and it will be reviewed. We appreciate it very much, Admiral. 
Were there any other comments from anybody else here with you?
    Mr. Cooper. No, sir, I believe no.
    Senator Nelson of Nebraska. We do not have the time for 
extended questions for the witnesses or to hear oral statements 
of the veterans service organizations. I am sorry. I assume the 
witnesses, your written statements are going to be in and the 
committee members will have an opportunity to question the 
witnesses in writing, which we traditionally do and will be 
glad to do.
    [Statements of various veterans service organizations 
follow:]

     Prepared Statement of Phillip R. Wilkerson, Deputy Manager of 
   Operations and Training, Veterans Affairs and Rehabilitation, The 
                            American Legion

    Mr. Chairman and members of the Subcommittee: Thank you for this 
opportunity to present The American Legion's views on these important 
issues. We commend the Subcommittee for holding this hearing.

    S. 257--THE VETERANS BENEFITS AND PENSION PROTECTION ACT OF 2003

    This legislation amends 38 U.S.C. Sec. 5301, and prohibits any type 
of agreement assigning the payment of a veteran's compensation, 
pension, or survivor's DIC benefits to another person to include 
penalties against persons entering into such agreements with a veteran 
or other beneficiary.
    The American Legion is concerned by reports of various loan scams 
used by unscrupulous companies and individuals to take advantage of 
unsuspecting, sick and disabled veterans and their families. These 
entities 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 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. Veterans should be free to do what 
they want with their benefits; however, there is a loophole in the 
current law that should be closed to prevent veterans from being 
victimized by such predatory practices.
    This legislation also authorizes the appropriation of $3 million to 
be used over the next four 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. 
The American Legion believes this proposal will help protect veterans 
and other beneficiaries and provide substantial penalties for violators 
of the law.

   S. 517--THE FRANCIS W. AGNES PRISONER OF WAR BENEFITS ACT OF 2003

    This legislation eliminates the current requirement in 38 U.S.C. 
Sec. 1112(b), that an individual had to have been detained or interned 
for a period of not less than 30 days in order to be entitled to 
presumptive service connection. This bill also eliminates the 
requirement that an individual be detained or interned for a period of 
no less that 90 days in order to be eligible for VA outpatient dental 
treatment.
    The American Legion has long supported the elimination of these 
requirements. Studies have shown that there can be long lasting adverse 
health effects resulting from even a relatively short period of 
confinement as a prisoner of war. Access to medical and dental care is 
important factors in helping maintain these particular veterans' 
overall good health and strongly support the change in law.
    The bill also expands the list of presumptive prisoner-of-war 
diseases in 38 U.S.C. Sec. 1112, to include heart disease, stroke, 
liver disease, diabetes mellitus, and osteoporosis. It specifically 
authorizes the Secretary of Veterans Affairs to create regulations 
adding or deleting diseases enumerated in Sec. 1112(b), on the basis of 
sound medical and scientific evidence, to include recommendations from 
the VA's Advisory Committee on Former Prisoners of War.
    This legislation represents a solid step toward ensuring former 
POW's receive the compensation and medical care they are clearly 
entitled to. In addition to those diseases that would be presumed to be 
service connected, The American Legion recommends that the list also 
include the organic residuals of hypothermia, e.g. trench foot, 
immersion foot or hand, or Raynaud's Disease; arthritis, including 
osteoporosis; and chronic pulmonary disease where there is a history of 
forced labor in mines during captivity.

 S. 1131--THE VETERANS' COMPENSATION COST-OF-LIVING ADJUSTMENT ACT OF 
                                  2003

    This legislation increases the rates of compensation and dependency 
and indemnity compensation (DIC), effective December 1, 2003. This 
adjustment is the same percentage as that authorized for Social 
Security recipients. The American Legion believes that annual cost-of-
living adjustments (COLAs) are necessary to ensure that the benefits 
provided service disabled veterans and their survivors keep pace with 
inflation.

        S. 1133--THE VETERAN'S BENEFITS IMPROVEMENT ACT OF 2003

    Section 2, increases the rates of compensation and DIC, effective 
December 1, 2003. This adjustment would be at the same percentage as 
that authorized for Social Security recipients. The American Legion 
believes that annual COLAs are necessary to ensure that the benefits 
provided service disabled veterans and their survivors keep pace with 
inflation.
    Section 3, repeals the 45-day effective date rule for the award of 
death pension. In many instances, the surviving spouse is unable to 
meet this restrictive and arbitrary filing deadline and, as a result, 
benefits for this period to which they would otherwise be entitled are 
lost.
    Section 4, amends title 38, U.S.C., Sec. 1503 to exclude lump-sum 
proceeds of any life insurance policy on a veteran for the purposes of 
determining entitlement to death pension. This includes both government 
as well as commercial life insurance policies. Under the current rule, 
the effective date of award that applies in death pension cases is the 
first day of the month in which the veteran's death occurred, only if 
the application was received within 45 days of the date of death. 
Otherwise, it will be based on the date the claim is received.
    If a surviving spouse receives the veteran's life insurance 
proceeds within 45 days of the veteran's death, but does not file a 
claim for death pension until some time after, the insurance proceeds 
are not considered as countable income for VA death pension purposes. 
If the proceeds are received and a claim for death pension are filed 
within 45 days of the veteran's death, the proceeds are then considered 
countable income, which may disqualify the surviving spouse for pension 
benefits for the entire year. The American Legion does not believe 
these surviving spouses should be put in this position.
    The American Legion also supports an increase in the surviving 
spouse's pension rate to 90 percent of that for a veteran without 
dependents as well an exclusion of the proceeds from Government life 
insurance policies from countable income.
    Section 5, prohibit the payment of compensation for a drug or 
alcohol disability, even if the abuse were secondary to a service-
connected disability.
    The American Legion is concerned with this provision. It proposes 
the amendment of title 38, U.S.C., Sec. 1110 and 1131, to specifically 
provide that disability compensation shall not be paid to any veteran, 
which would include a former prisoner of war, who is suffering from an 
alcohol or substance abuse disability even when such disability is 
determined to be secondary to a service connected disability. The 
American Legion has always held the position that veterans who succumb 
to alcohol or drug-abuse that is caused by their service-connected 
disability are entitled to a level of compensation that reflects all 
aspects of their disability. These disabled veterans are in a very 
different class from those individuals who become alcoholics or drug 
abusers because they have engaged in conscious, willful wrongdoing or 
prohibited behavior. The American Legion is opposed to any attempt to 
legislate away the rights of veterans who are suffering from 
disabilities resulting from their military service. At the April 2003 
hearing before the House of Representatives Subcommittee on Benefits, 
The American Legion testified similarly on H.R. 850, which contains the 
same bar to benefits.
    Clearly, the intent of this proposal is to overturn the 2001 
decision of the United States Court of Appeals for the Federal Circuit 
(the Federal Circuit or the Court) in Allen v. Principi, 237 F.3d 1368 
(Fed. Cir., 2001). The Court held that Congress, in enacting P.L. 96-
466, the ``Omnibus Budget Reconciliation Act of 1990'' (OBRA 90), did 
not intend to preclude compensation for an alcohol or drug-related 
disability resulting from or secondary to a non-willful misconduct 
service-connected disability. Prior to OBRA 90, VA considered 
alcoholism and drug abuse disabilities unrelated to a service connected 
psychiatric disorder as willful misconduct. The term ``willful 
misconduct'' was defined in VA regulations as a deliberate and 
intentional act involving conscious wrongdoing or known prohibited 
action, with knowledge of or wanton and reckless disregard of the 
probable consequences. However, the definition noted that the mere 
technical violation of police regulations and ordinances would not, per 
se, constitute willful misconduct unless it is the proximate cause of 
injury, disease, or death. VA's policy was that the misconduct bar to 
benefits did not apply to those veterans whose alcohol or drug 
addiction was secondary to a service connection mental or physical 
disability. OBRA 90 specifically provided in 38 U.S.C. Sec. Sec. 1110 
and 1131, that an injury or disease resulting from the abuse of alcohol 
or drugs is not considered to have been incurred in the line of duty 
and VA may not pay compensation for disabilities that are the result of 
``the veteran's own willful misconduct or alcohol or drug abuse.'' 
Under OBRA 90, VA as a matter of policy and practice, would not grant 
secondary service connection for substance abuse, but would, where 
appropriate, incorporate the symptoms of alcohol and drug abuse into 
the overall evaluation of the primary service connected disability. As 
an example, a veteran may have been rated for ``PTSD with alcoholism.'' 
In 1998, the United States Court of Appeals for Veterans Claims (CVAC), 
in Barela v. West (11 Vet. App. 280) (1998), held that, while OBRA 90 
provided for service connection of alcohol and drug-related 
disabilities as being secondary to a service connected disability, VA 
could not pay compensation for such disabilities.
    As a result of the Federal Circuit's interpretation of 38 U.S.C. 
Sec. Sec. 1110 and 1131, in the Allen decision, there are now three 
possible categories of disabilities involving alcohol and drug abuse. 
There is the category where an alcohol or drug abuse disability, 
developing during service, which results from the voluntary and willful 
abuse of alcohol or drugs and OBRA 90 still bars service connection for 
primary alcoholism or drug addiction and any associated disability. 
Then, there is the category where an alcohol or drug abuse disability 
is recognized as secondary to a service connected condition. And the 
category where there are disabilities that result from or are 
aggravated by an alcohol or substance abuse disability for which 
secondary service connection has been established
    Scientific studies over the years have highlighted the fact that 
there is a higher incidence of substance abuse problems among veterans 
who suffer from severe physical or psychiatric disabilities. A recent 
article by Dr. Andrew Meisler, entitled ``Trauma, PTSD, and Substance 
Abuse'', from the PTSD Research Quarterly notes, ``Studies of 
individuals seeking treatment for PTSD have a high prevalence of drug 
and/or alcohol abuse.'' Research has suggested ``that 60-80 percent of 
treatment seeking Vietnam combat veterans with PTSD also met the 
criteria for current alcohol and/or drug abuse.'' Also cited was a 
study of Persian Gulf War veterans that found a PTSD diagnosis was 
strongly linked to problems with depression and substance abuse which 
supports earlier research on co-morbidity. If enacted, this provision 
would severely penalize veterans whose service connected condition has 
caused them to develop an alcohol or drug-abuse disability.
    The American Legion believes Congress should not be seeking ways to 
deprive these veterans of their right to compensation benefits earned 
by virtue of their service to this nation. It is recommended that 
Section 5 of this bill be stricken, so that the merits of the other 
benefit provisions of S. 1131 can be clearly considered.
    Section 6, provides several enhancements to the VA insurance 
program and The American Legion is supportive of their enactment.
    Regarding life insurance settlements to alternate beneficiaries, 
when principal beneficiaries cannot be located, VA has some 4,000 
outstanding cases. These represent approximately $23 million in 
insurance with some 200 new cases added each year, in which life 
insurance proceeds cannot be paid under the existing rules. This 
creates a situation where the original intent of the life insurance 
contracts is negated by current law, and settlement to a contingent or 
other equitably entitled person(s) cannot be made. Further, the VA 
advises the number of such cases where a principal beneficiary does 
finally come forward at some later date to make a claim for proceeds is 
approximately one or two per year.
    The American Legion believes this proposed change would better 
serve the affected veteran's population in general, and provide a more 
fair and reasonable solution in ensuring the fulfillment of the intent 
of these insurance contracts than does existing law.
    The American Legion recommends VA consider the feasibility of 
additionally permitting a face value payment in those cases where a 
principal beneficiary does come forward, even though full payment of 
proceeds has already been rendered. This is a reasonable provision from 
the standpoint of equity and good conscience and because of the extreme 
rarity of such occurrences.
    Section 7, amends 38 U.S.C. Sec. 5102 to provide that if 
information a claimant or the claimant's representative has been 
notified of that is necessary to complete an application is not 
received by VA within one year of such notification, no benefit may be 
paid or furnished by reason of the claimant's application.
    This amendment addresses several problems with existing provisions 
of the law relating to the absence of any time limitation on the 
receipt of information needed to complete a claimant's application. 
Prior to the enactment of the VCAA, Sec. 5103 requires VA to notify the 
claimant of evidence or information needed to complete the application 
and give the claimant one year within which to respond, otherwise the 
claim will be considered abandoned. Now, in the absence of a specific 
time limit in Sec. 5102, the application technically remains pending 
indefinitely and could be the basis for a claim for retroactive 
benefits. The American Legion believes this was an oversight in the 
VCAA and supports this clarification.
    Section 8, amends 38 U.S.C. Sec. Sec. 2303 and 2307 to authorize 
the payment of the current $300 plot allowance to a state when an 
eligible veteran is interred in a state veterans' cemetery. The 
American Legion continues to support the State Cemetery Grants Program 
as an important adjunct and complement to the National Cemetery System 
in helping meet veterans' burial needs. The American Legion supports 
additional financial support for the operation of state veterans' 
cemeteries.
    Section 9, extends entitlement to a government headstone or grave 
marker regardless of whether the veteran's grave already had a non-
government marker back to November 1, 1990. P.L. 107-103, as amended, 
authorized the furnishing of a government headstone or grave marker 
where a veteran's grave was already marked by a private headstone for 
those veterans who died after September 11, 2001. The proposed change 
is consistent with this effort to assist those families who wish to 
have the veteran's service recognized and honored by having a 
government headstone or marker placed on the veterans' grave.
    Section 10, authorizes the burial of a remarried surviving spouse 
in a national cemetery. The American Legion has no formal position on 
this proposal.
    Section 11, amends 38 U.S.C. Sec. 2408, to permanently authorize VA 
to make grants to states for the establishment, expansion, and 
improvements to state veterans' cemeteries. The American Legion 
continues to support efforts to improve the State Cemetery Grants 
Program and believe the enactment of this provision will enhance VA's 
long-term planning ability for this program.
    Section 12, amends 38 U.S.C. Sec. 6105 by adding conviction for 
offenses involving biological and chemical weapons, nuclear material, 
genocide, and weapons of mass destruction to those offenses currently 
enumerated in Sec. 6105. The American Legion's historic position is 
that an individual who acts against the national interests of the 
United States and its citizens forfeits the right to any benefits based 
on prior military service in the United States Armed Forces.
    Section 13, extends the life of the Veterans' Advisory Committee on 
Education. The committee provides valuable assistance to the Department 
in developing and carrying out the various program of educational 
assistance to veterans and other eligible beneficiaries. The American 
Legion continues to support the work of the Advisory Committee and 
fully supports extending it through December 31, 2009.
    Section 14, terminates VA's authority to provide loans under 38 
U.S.C., Subchapter III of Chapter 36, and the repeal of the Educational 
Loan Program under this subchapter. The American Legion has no formal 
position on this proposal.
    Section 15, authorizes the extension of the delimiting period for 
Chapter 35 educational assistance benefits to an eligible individual 
who is a member of the National Guard and who is involuntarily called 
to full-time National Guard duty.
    Current law allows for an extension of the Chapter 35 delimiting 
period, if the individual serves on active duty. In view of the 
expanded duties and responsibilities of the National Guard in 
supporting and augmenting the active duty armed forces, The American 
Legion strongly believes it is both fair and timely to recognize their 
valuable role in the overall defense of the nation. This change to the 
Chapter 35 program ensures that entitlement to these educational 
assistance benefits is preserved during their period of active service 
in the National Guard. The American Legion fully supports this 
proposal.
    Section 16, provides for the expansion of benefits under the 
Montgomery GI Bill for certain self-employment training. It allows 
qualified veterans to utilize their GI Bill entitlement for training in 
state accredited courses that provide the knowledge and skills needed 
for successful self-employment.
    The American Legion recognizes that there are non-traditional 
employment opportunities available in today's economy and veterans 
should be allowed to utilize their earned educational benefits to 
pursue self-employment options. The Montgomery GI Bill is an important 
tool in assisting veteran's transitioning from the military to civilian 
life and the program must continue to evolve in response to veterans' 
changing educational needs.

                                S. 1188

    This legislation repeals the two-year limitation on the payment of 
accrued benefits to which a claimant would have otherwise been entitled 
to at the time of their death, as currently set forth in 38 U.S.C. 
Sec. 5121. It authorizes the continuation of a claim that was pending 
at the time of the claimant's death by the substitution of another 
eligible person. It similarly authorizes the substitution of a claimant 
in a pending appeal before a court.
    VA currently has over 279,000 pending claims and another 102,000 
cases requiring some type of action. While considerable progress has 
been made over the past year in reducing the overall backlog with 
particular attention to the older pending claims, a substantial number 
of these cases have essentially been ``in process'' for years. 
Conversely, as pending claims have been reduced pending appeals have 
increased; currently 105,000 appeals await adjudication by VA.
    The veterans filing claims and appeals are very ill and, because of 
the long processing times, may, unfortunately, die before a final 
decision is ever made on their claim. The delays they and their 
families experience can result in adverse health effects and financial 
hardship. Upon the veteran's death, the pending claim or appeal also 
dies, unless a claim for accrued benefits is filed within one year of 
the veteran's death. Regardless of how long the veteran's case had been 
pending, whether at the regional office level or the Board of Veterans 
Appeals or court, an eligible survivor can only receive a maximum of 
two years retroactive benefits, rather than the full amount the veteran 
would have been entitled to had he or she lived.
    The American Legion's longstanding position has been that any 
limitation on the payment of accrued benefits is unfair. The enactment 
of P.L. 104-275 in 1996, which extended entitlement to accrued benefits 
from one year to two years, was a step in the right direction. However, 
it fell short of providing appropriate compensation to the veteran's 
family in a claim that had been pending for more than two years prior 
to the veteran's death. Under this legislation, the full amount of 
accrued benefits could also be paid where there was an appeal pending 
before a court at the time of the claimant's death.

                                S. 1213

    This legislation improves benefits to qualified Filipino veterans 
legally residing in the United States, including medical care, 
compensation and DIC, and burial. It also authorizes VA to furnish 
hospital, nursing home care, and other medical services to former 
members of the Philippine Commonwealth Army and New Philippine Scouts 
residing in the United States as a U.S. citizen or as a permanent 
resident alien.
    In addition, extends VA's authority to maintain a regional office 
in the Philippines through December 31, 2005. The American Legion has 
long supported the continued presence of a VA Regional Office in the 
Philippines to help assist these veterans and their families. The 
American Legion continues to advocate for the earned veterans benefits 
of those Filipino Commonwealth soldiers who served and were recognized 
as members of the U.S. Armed Forces during World War II, and fully 
supports this legislation.

                                S. 1239

    This legislation establishes a special compensation program for 
former prisoners of war based on the length of their confinement. It 
authorizes payment of $150 monthly for those held up to 120 days; $300 
monthly, if held more than 120 days but less than 540 days; and $450 
monthly, if held more than 540 days. This benefit would not be affected 
by any other benefits to which the veteran may be entitled and is not 
considered income or resources for purposes of determining eligibility 
for any Federal or federally-assisted program.
    The American Legion takes no formal position on this proposal.
    Mr. Chairman, Section 3 of 1239 is the same as Section 5 of S. 
1133. The American Legion has the same concerns. The American Legion 
reiterates its position that Congress should not seek ways to deprive 
former American prisoners of war their right to compensation benefits 
earned by virtue of their service to this nation.

 S. 1281--THE VETERANS INFORMATION AND BENEFITS ENHANCEMENT ACT OF 2003

    This legislation expands presumption of service connection for 
additional diseases of former prisoners of war for compensation 
purposes and enhances the Dose Reconstruction Program of the Department 
of Defense (DoD), and other epidemiological studies.
    Section 3, mandates VA and the DoD to jointly conduct a review of 
the Defense Threat Reduction Agency's (DTRA) Dose Reconstruction 
Program and to determine whether any additional action is required to 
ensure the quality control and assurance mechanisms of the program are 
adequate. In addition, VA would determine whether any actions are 
required to ensure the communication and interaction with veterans were 
adequate, including mechanisms to permit veterans to review the 
assumptions utilized in their dose reconstructions. It also establishes 
a VA/DoD advisory board to provide review and oversight of the Dose 
Reconstruction Program.
    Since the 1980s, claims by ``atomic veterans'' exposed to ionizing 
radiation for a radiogenic disease, which is not among those listed in 
38 U.S.C. Sec. 1112(c)(2), have required an assessment to be made by 
DTRA as to nature and amount of the veteran's radiation dose(s), in 
accordance with 38 C.F.R. Sec. 3.311. Under this guideline, ``When dose 
estimates provided pursuant to paragraph (a)(2) of this section are 
reported as a range of doses to which a veteran may have been exposed, 
exposure at the highest level of the dose range will be presumed.'' 
From a practical standpoint, VA routinely denied the claims by many 
atomic veterans on the basis of dose estimates indicating minimal or 
very low-level radiation exposure.
    As a result of the case of National Association of Radiation 
Survivors (NARS) v. VA, and studies by GAO and others of the U.S.'s 
nuclear weapons test program, the accuracy and reliability of the 
assumptions underlying DTRA's dose estimate procedures came under 
public scrutiny. It has been shown that very often many of the records 
from nuclear weapons tests including individual film badges had been 
lost or are incomplete. Also noted, not all participants were issued 
dosimeter badges or had been worn at all times. Information about an 
individual's activities during these tests has often been sketchy or 
completely lacking, which raises further uncertainties about the method 
by which DTRA developed the reported dose estimates.
    On May 8, 2003, the National Research Council's Committee to Review 
the DTRA Dose Reconstruction Program released its report. It confirmed 
the often-unheeded complaints of thousands of atomic veterans that, 
historically, DTRA's dose estimates have often been based on arbitrary 
assumptions resulting in underestimating the amount of actual radiation 
exposure. Based on a sampling of past DTRA cases, it was found that 
existing documentation of the individual's dose reconstruction, in a 
large number of cases was unsatisfactory and evidence of any quality 
control was absent.
    The committee concluded their report with a number of 
recommendations that would, in their opinion, improve the dose 
reconstruction process of DTRA and VA's adjudication of claims by 
atomic veterans. These recommendations included: the establishment of 
an independent advisory board to provide ongoing external review and 
oversight of DTRA's dose reconstruction and VA claims adjudication 
process; reevaluate the method of dose reconstruction to establish more 
credible upper-bound estimates; a comprehensive manual for standard 
operating procedures for dose reconstruction; a state-of-the-art 
quality assurance and quality control; the principle of the benefit of 
the doubt be consistently applied in all dose reconstructions; 
interaction and communication with atomic veterans be improved. It 
further recommended to include allowing individual atomic veterans to 
review the scenario assumptions used in their dose reconstruction 
before this information is furnished to VA; and create more effective 
methods to communicate the meaning of the radiation risk information; 
and that information should be disseminated to the community of atomic 
veterans advising them and their survivors of changes in the method of 
dose reconstruction and the possibility of have prior assessments 
updated and a reopening of their prior VA claim.
    The American Legion was encouraged by the mandate for a study of 
the dose reconstruction program. While pleased that S. 1281 is 
responsive to the committee's recommendation, nonetheless, The American 
Legion is concerned that the dose reconstruction program may still not 
be able to provide the type of information that is needed for atomic 
veterans to receive fair and proper decisions from VA. Congress should 
not ignore the fact that, according to the National Research Council's 
report and other reports, the dose estimates furnished VA by DTRA over 
the past fifty years have been flawed and have seriously prejudiced the 
adjudication of the claims of tens of thousands of atomic veterans. It 
remains practically impossible for an atomic veteran or their survivor 
to effectively challenge a DTRA dose estimate.
    The American Legion believes that before the proposed advisory 
committee begins to consider possible changes in dose reconstruction 
procedures, they should address the fundamental question of whether the 
dose reconstruction program, as it relates to the requirements of 38 
C.F.R. Sec. 3.309, should continue. The American Legion believes this 
provision should be eliminated in the claim of a veteran with a 
recognized radiogenic disease who was exposed to ionizing radiation 
during military service.
    The American Legion supports the portion of S. 1281 pertaining to 
the Report on the Disposition of USAF ``Ranch Hand'' study. Although 
The American Legion has objected to the way the Ranch Hand study has 
been conducted, we realize that vast quantities of data have been 
accumulated during the last 20 years. Since such data could be 
potentially valuable for future research, a thorough study regarding 
the disposition of Ranch Hand study, and associated data, upon the 
conclusion of the study is warranted.

                                 S. 249

    This legislation amends 38 U.S.C. Sec. 103(d), to establish the 
remarriage of a surviving spouse of a veteran in receipt of dependency 
and indemnity compensation (DIC) after the age of fifty-five would not 
result in the termination of DIC benefits.
    Currently, the law bars the payment of benefits upon the remarriage 
of the veteran's surviving spouse at any age, unless that remarriage is 
subsequently terminated by divorce, annulment, or the death of the 
second spouse. It eliminates the disparity that exists between the DIC 
surviving spouses who lose their VA benefits if they remarry and other 
Federal annuitant who continue to receive their survivor benefits if 
they remarry after the age of 55. The American Legion is not opposed to 
this change in the DIC program.

                                 S. 938

    Amends 38 U.S.C. Sec. 1313(b)(3) deleting the effective date of 
September 30, 1999 for entitlement to dependency and indemnity 
compensation (DIC) to those survivors of former prisoners-of-war who 
were rated totally disabled for one year immediately preceding death.
    The American Legion supported the enactment of P.L. 106-419, the 
``Veterans' Millennium Benefits Act.'' which included a provision 
expanding entitlement to DIC to former prisoner-of-war rated totally 
disabled for a period of not less than one year immediately preceding 
death. However, it only applied in those cases where the veteran's 
death occurred after September 30, 1999. This legislation was felt to 
be a step in the right direction in recognizing the long-term adverse 
health effects of the prisoner-of-war experience. The American Legion 
has continued to advocate the removal of this arbitrary date of death 
restriction on the payment of this benefit and are pleased to support 
S. 938.

        S. 1132--THE VETERANS SURVIVORS BENEFITS ENHANCEMENT ACT

    This legislation increases the monthly educational assistance rates 
for veterans' survivors and dependents. Title 38 U.S.C. Sec. 3532(a), 
rates will change from $670 for full-time to $985, from $503 for three-
quarter time to $740, and from $335 for half time to $492.
    Section 3, reduces the length of Chapter 35 educational assistance 
from 45 to 36 months for individuals who first files a claim under this 
chapter after the date of the enactment of this provision. The American 
Legion has no formal position on this proposal.
    Section 4, increases the rate of DIC by $250 for a surviving spouse 
with one or more children. This would be in addition to the DIC 
dependency allowance payable. The increased rate would continue for the 
five-year period following the veteran's death. The American Legion is 
supportive of the proposed increases in educational assistance and DIC 
benefits.
    Section 5, authorizes the burial of a remarried surviving spouse in 
a national cemetery. The American Legion has no formal position on this 
proposal.
    Section 6, authorizes spina-bifida benefits for those disabled 
children of veterans who are presumed to have been exposed to Agent 
Orange while serving in Korea. This provision extends the same benefits 
and services as those disabled children of veterans who served in the 
Republic of Vietnam. DoD recently released information identifying 
units that were assigned to areas during the 1967-68 time frame that 
may have been exposed to Agent Orange. It essentially updates current 
statutes to reflect new information concerning the use of Agent Orange 
in areas of the world outside of the Republic of Vietnam and The 
American Legion believes this change is both appropriate and timely.

          S. 792 AND S. 1136--SERVICE MEMBERS CIVIL RELIEF ACT

    This legislation amends the Soldiers' and Sailors' Civil Relief Act 
of 1940 to rename the Act the Service members' Civil Relief Act and 
revises provisions with respect to certain civil protections and rights 
afforded to service members while on active duty assignment. 
Additionally, it provides certain protections of service members 
against default judgments, including a minimum 90-day stay of 
proceedings, with respect to the payment of any tax, fine, penalty, 
insurance premium, or other civil obligation or liability.
    While The American Legion does not have an official position on 
this particular bill, The American Legion has long supported fair and 
equitable provisions for Guard and Reserve service members as provided 
in the Soldiers' and Sailors' Civil Relief Act.

 S. 806--THE DEPLOYED SERVICE MEMBERS FINANCIAL SECURITY AND EDUCATION 
                              ACT OF 2003

    This legislation improves the benefits and protections provided for 
regular and Reserve members of the Armed Forces deployed or mobilized 
in the interests of the national security of the United States.
    While The American Legion does not have an official position on 
this particular bill, The American Legion has long supported fair and 
equitable provisions for Guard and Reserve service members as provided 
in the Soldiers' and Sailors' Civil Relief Act.

           S. 978--THE VETERANS HOUSING FAIRNESS ACT OF 2003

    This legislation authorizes the use of veterans' housing loan 
benefits for the purchase of residential cooperative apartment units. 
Expanding veterans housing benefits to include cooperative dwellings 
allows veterans who may otherwise be restricted from obtaining 
conventional hosing to realize the benefits of home ownership. The 
American Legion fully supports this legislation.

     S. 1124--THE VETERANS BURIAL BENEFITS IMPROVEMENTS ACT OF 2003

    This legislation increases the Burial and Funeral Allowance for a 
veteran eligible under 38 U.S.C. Sec. Sec. 2302(a) and 2303(a)(1)(A) 
from $300 to $1135. Also under this section, the burial allowance for 
veterans who die as result of a service-connected condition increases 
$2000 to $3712. This legislation increases the burial plot allowance 
for veterans eligible as described above from $300 to $600. The bill 
also ties these allowances to the Consumer Price Index, requiring the 
VA to adjust the allowance for inflation annually and eliminating the 
need for legislative action to bring the allowances in line with the 
original intent of Congress to pay 22 percent of the burial expenses of 
a veteran.
    Considering the average funeral service with casket now costs over 
$5000, exclusive of grave marking and burial plot, these increases are 
desperately needed by families of deceased veterans. The American 
Legion finds these proposals reasonable and supports them fully.

            S. 1199--THE VETERANS OUTREACH IMPROVEMENTS ACT

    This legislation would provide specific authority and requirements 
for VA's outreach activities to coordinate between its various 
divisions of benefits and compensation, education and health care. In 
addition, mandates the VA to identify within its discretionary budget 
line amounts for such activities. This legislation also authorizes VA 
to enter in cooperative agreements and arrangements in order to carry 
out, coordinate, improve, or otherwise enhance both VA's and the States 
outreach programs. Under such cooperative agreements, VA would be 
authorized to make grants to State veteran agencies for the purpose of 
outreach and providing direct assistance in claims for veterans' and 
veterans-related benefits.
    The American Legion is supportive of efforts to expand and improve 
VA's outreach to veterans and other eligible beneficiaries. The 
contracting out provision of this bill however, has the potential to 
fundamentally change the nature of the relationship between the VA and 
the State's veteran's agencies. The American Legion does not have a 
formal position on authorizing the VA to contract with the States to 
expand direct service and assistance.

                                S. 1282

    The American Legion notes that the National Cemetery Administration 
(NCA) was required by the Veterans Millennium Health Care Act of 1999 
(Pub. L. 106-117) to review the burial needs of the veteran population, 
in five year increments, through the year 2020 beginning in 2005. The 
report of a study commissioned by VA in 2001, concluded that an 
additional 31 national cemeteries will be required to meet the 2020 
objective of serving 90 percent of veterans within a 75 mile radius of 
any area in the country with a population density of approximately 10 
veterans per square mile, or roughly 170,000 veterans within the burial 
serve area.
    This legislation authorizing the establishment of ten new national 
cemeteries, together with the six new cemeteries already either 
approved or under construction will go a long way toward fulfilling 
this need. NCA has already determined, under the above criteria that 
the ten current most underserved areas are in Sarasota, FL; Salem, OR; 
Birmingham, AL; St. Louis, MO; San Antonio, TX; Chesapeake, VA; Sumter, 
FL; Jacksonville, FL; Bakersfield CA; and Philadelphia, PA. New 
Cemeteries are currently authorized or are under construction in 
Atlanta, GA; Detroit, MI; Miami, FL; Sacramento, CA; Pittsburgh, PA; 
and, Oklahoma City, OK. Fort Sill National Cemetery near Oklahoma City 
opened on November 2, 2001. Some of these projects have commenced under 
NCA's ``Fast Track'' cemetery construction program, in which within a 
very short time after the beginning of the project, interments are 
accepted by setting up minimum facilities while the major construction 
goes forward. The interment of veterans in national cemeteries has 
increased from 36,400 in 1973 to 84,800 in 2001. This rate is expected 
to continue to rise to 115,000 in 2010. The average time to complete 
construction of a national cemetery is seven years.
    This legislation will allow NCA to keep pace with demand for burial 
space if enacted and fully funded this year. The American Legion 
asserts that Congress must provide sufficient major construction 
appropriations to permit NCA to accomplish its mandate of ensuring that 
burial in a national cemetery is a realistic option for 90 percent of 
the nation's veterans. Construction funding must be continually 
adjusted to reflect the true requirements of the NCA, as must 
appropriations for operation, maintenance and renovation of existing 
national cemeteries.
    The American Legion fully supports this legislation requiring the 
establishment of additional national and state veterans' cemeteries 
wherever a need for them is apparent and petition Congress to provide 
the required operations and construction funding to meet NCA's goals.

                                S. 1360

    Currently, if a claimant is dissatisfied with a decision on their 
VA claim, the appellate process is initiated by the filing of a Notice 
of Disagreement (NOD). 38 U.S.C. Sec. 7105(b)(1) states, in part, that 
``Such notice, and appeals, must be in writing and filed with the 
activity (agency of original jurisdiction) which entered the 
determination with which disagreement is expressed.'' P.L. 87-666 added 
this provision in 1962. The regulation implementing this provision of 
the law, 38 CFR 19.118, defined the term notice of disagreement as 
``written communication expressing dissatisfaction or disagreement with 
an adjudicative determination in terms that can be reasonably construed 
as evidencing a desire for a review of that determination.'' There was 
no additional or special wording required or specified.
    However, in 1992, this regulation was revised and redesignated as 
Sec. 20.201. It now required that, in order for a NOD to be valid, it 
must not only be in writing, but it must also express a desire for 
appellate review of the determination in question. However, despite the 
restrictive language of the regulation, VA maintained its previous 
liberal interpretation of what constituted a valid NOD. Few, if any 
NOD's, were rejected as invalid due to a claimant's failure to include 
a specific request for appellate review. The fact that a claimant filed 
a NOD was generally taken at its face value as an expression of a 
desire to appeal a particular determination.
    In 2000, the United States Court of Appeals for Veterans Claims 
(CAVC), in Gallegos v. Gober, 14 Vet. App. 50, 57-58 (2000) invalidated 
38 C.F.R. Sec. 20.201. It held that the 1992 change added a 
``technical, formal requirement for a NOD beyond the requirements set 
by the statute.'' In 2001, VA appealed the CAVC's decision to the 
United States Court of Appeals for the Federal Circuit (the Federal 
Circuit). The Federal Circuit overturned the CVAC decision and held 
that it was ``reasonable and permissible for VA to require that, in 
order for a NOD to be valid, it must express a desire for appellate 
review.''
    In the opinion of The American Legion, the Federal Circuit's 
interpretation of 38 U.S.C. Sec. 7105(b)(1) imposes an unnecessary 
legal burden on veterans and other claimants who are trying to exercise 
their appellate rights. This decision has the effect of making the VA 
claims adjudication process increasingly formal, legalistic, and 
adversarial, which is contrary to the informal, ex parte system that 
Congress always intended something that The American Legion is strongly 
opposed to. The draft bill proposes to nullify the Federal Circuit's 
decision in Gallegos by amending 38 U.S.C. Sec. 7105(b)(1), to 
specifically provide that ``for the purpose of an appeal to the Board 
of Veterans Appeals,'' a valid notice of disagreement need only express 
in writing the claimant's disagreement with the adjudicative 
determination of the agency of original jurisdiction.
    Mr. Chairman, The American Legion, once again thanks you for the 
opportunity to presents its views on these various pieces of 
legislation to enhance and improve the benefits of our nation's 
veterans. The American Legion again reasserts its position that while 
the legislation we have discussed today tries to fix the many 
challenges facing the Veterans Administration and its mission to 
provide compensation and benefits, they do not fix the overall problem 
with VA.
    Until adequate funding is provided to implement the various 
programs affected by the proposed legislation, VA will continue to 
struggle to provide benefits in a fair and timely manner. The Congress 
must do all it can to ensure that proper financial support is available 
for the VA to institute the many long awaited and needed changes being 
discussed today.
    I thank you again for your commitment to veterans and look forward 
to working with you and the Committee on these important issues that 
concludes our testimony.

                               __________
               The Prepared Statement of Richard Jones, 
                 National Legislative Director, AMVETS

    Chairman Specter, Ranking Member Graham, and members of the 
Committee: On behalf of National Commander W.G. ``Bill'' Kilgore and 
the nationwide membership of AMVETS, thank you for the opportunity to 
present testimony to the Veterans' Affairs Committee on pending 
legislation regarding VA-provided benefits programs.
    Mr. Chairman, AMVETS has been a leader since 1944 in helping to 
preserve the freedoms secured by America's Armed Forces. Today, our 
organization continues its proud tradition, providing not only support 
for veterans and the active military in procuring their earned 
entitlements but also an array of community services that enhance the 
quality of life for this nation's citizens.

   S. 257--THE VETERANS BENEFITS AND PENSIONS PROTECTIONS ACT OF 2003

    Senator Nelson's legislation, S. 257, would expand the definition 
of assignments of benefits. The aim of this bill is to end the practice 
of some companies paying lump-sum cash payments in exchange for 
collection of a veteran's future pension or disability benefits. The VA 
Inspector General has termed these types of contracts a ``financial 
scam.'' We believe these practices take unfair advantage of vulnerable 
veterans receiving VA benefits. In one case, the Inspector General 
reports that a veteran received a lump sum total of $73,000 in return 
for his monthly benefit checks of $2,700 over 10 years, an annual 
interest rate of 28.5 percent. AMVETS fully supports this bill to close 
the loophole in law that prohibits the assignment of benefits.

 S. 517--THE ``FRANCIS W. AGNES PRISONER OF WAR BENEFITS ACT OF 2003''

    S. 517, introduced by Senator Murray, would amend current statute 
that requires a 30-day minimum period of capture prior to the 
designation of service connection for the purpose of payment of 
veterans' disability compensation and healthcare treatment for certain 
illnesses. It would also add to the list of diseases that are termed 
presumptive for association to the experience of being a prisoner of 
war. The list includes: heart disease, stroke, liver disease, diabetes 
(type 2), and osteoporosis. In addition, it would grant to the 
Secretary authority for making the determination of presumption for a 
non-listed disease.
    AMVETS supports this legislation for the following three reasons:
    First, the swiftness of war and communications today makes the need 
to eliminate the 30-days period to qualify for POW benefits 
appropriate. The traumatic experience of meeting an enemy face-to-face, 
not knowing what is going to happen next is sufficient stress even 
though a long period of incarceration does not follow.
    Second, research over time and in-depth study by the National 
Academy of Science and others has established the need for the addition 
of the five designated presumptives to cover these medical problems 
resulting from the POW experience.
    Third, granting authority to the Secretary regarding future 
determinations is the same standard used for delivering presumptives 
for Vietnam veterans. It is also the standard recommended by the VA POW 
Advisory Committee. If the evidence for the association is equal to or 
outweighs the evidence against the association between the occurrence 
of a disease and the POW experience should be considered positive.

  S. 1133--``VETERANS' COMPENSATION COST-OF-LIVING ADJUSTMENT ACT OF 
                                 2003''

    S. 1133, introduced by Chairman Specter, would provide a cost-of-
living adjustment for veterans' benefits programs and help protect the 
veterans' benefit against the erosion effects of inflation. The 
principle programs affected by the adjustment would be compensation 
paid to disabled veterans, dependency and indemnity compensation 
payments made to surviving spouses, minor children and to other 
dependents of service members who died in service or who died as a 
result of service-connected injuries or disabilities. AMVETS supports 
the adjustment and would encourage Congress to take one more step 
making the payment adjustment to totally disabled veterans more 
generous than the consumer-price-index as measured by the Department of 
Labor. It is time we recognize that the compensation to totally 
disabled is too low and there are a number of ways to make the 
adjustment within the current budget.

       S. 1133--THE ``VETERANS PROGRAMS IMPROVEMENT ACT OF 2003''

    S. 1133, introduced by Chairman Specter (by request), would address 
several benefit programs relating to compensation, DIC, education and 
memorial benefits. First, the bill would allow the cost-of-living 
increase in the rates of disability compensation benefits to be 
determined administratively. AMVETS appreciates the concern about 
protecting the affected benefits, however we remain confident in the 
current method of COLA adjustment accomplished by Congress in annual 
statute. Second, the bill would eliminate the 45-day rule regarding the 
filing of a death pension claim. Currently, claimants who receive 
insurance proceeds within 45-days of death and file for pension claims 
within 45-days of death can have their insurance proceeds counted as 
income for pension purposes. However, those who wait 45 days or longer 
to file pension claims do not. AMVETS supports this change. Surviving 
spouses who deserve help from VA should not have life insurance 
proceeds counted against them as income for purposes of being barred 
from the pension program. Third, the bill would prohibit payment of 
compensation for alcohol or drug-related disability. AMVETS agrees with 
this section of the bill. We do not support payment of compensation for 
a disability that is a result of the veteran's own alcohol or drug 
abuse.
    AMVETS supports provisions in this bill affecting burial benefits. 
We support the expansion of the burial plot allowance to allow payment 
of a plot allowance to States for each veteran interred in a State 
veterans' cemetery. Current law disallows such payment to the State, if 
the family seeks reimbursement of expenses for a veteran entitled to 
related service-connected burial benefits. We also support provision in 
this bill to allow VA to provide a marker for the private-cemetery 
grave of a veteran who died between November 1, 1990, and September 11, 
2001. This provision closes a gap in VA benefits by extending the honor 
of this authority to the burial site of all veterans. In addition, we 
support expansion of burial eligibility for remarried spouses, as it 
reflects the importance of the first marriage to the veteran's family. 
Also, we support making permanent the authority of VA to make grants to 
States to assist them in establishing, expanding, or improving State 
veterans' cemeteries. The VA State Cemetery Grants Program has proven 
itself as an important complement to the national cemetery program and 
making it permanent would assist planning in this benefit program.
    AMVETS also supports provisions in this bill that enhance and 
expand veterans' education programs. In particular we cite our support 
for legislation to extend educational benefits for individuals who have 
been called to full-time National Guard duty. The provision in this 
bill would extend the amount of time equal to that period of full-time 
duty plus 4 months to allow those who are qualified for chapter 35 
benefits time to reestablish their curriculum.

        S. 1188--THE ``VETERANS' SURVIVOR BENEFITS ACT OF 2003''

    S. 1188, introduced by Senator Murray, would repeal the two-year 
limitation on the payment of accrued benefits that are due to an 
unresolved benefits claim at the time of a veteran's death. AMVETS and 
the members of The Independent Budget have recommended such a change 
for a number of years. With the time period for processing claims and 
appeals often being a matter of years, the two-year limitation is 
inequitable. Long delays should not be a factor in our nation's 
compensation paid to the surviving spouse or child of a disabled 
veteran.

        S. 1213--THE ``FILIPINO VETERANS' BENEFITS ACT OF 2003''

    Mr. Chairman, AMVETS is certainly mindful of the brave and historic 
contributions made by Filipino nationals during World War II. Their 
actions as part of the allied effort are legendary. Measured in these 
terms, we believe Filipino veterans of World War II certainly deserve 
our grateful appreciation for their heroic contributions they made 
during the war effort, regardless of where they may reside. And, in a 
fiscally unconstrained environment, AMVETS would most assuredly support 
allowing these individuals access to appropriate veterans benefits.
    However, despite the efforts of the chairman and this committee, VA 
funding has been chronically deficient for far too long. With this in 
mind, AMVETS must offer its opposition to S. 1213, the Filipino 
Veterans' Benefits Act of 2003, introduced by the chairman at the 
request of Secretary Principi. By the secretary's own figures, this 
bill would cost VA an additional $16.2 million for fiscal year 2004 and 
total in excess of $130 million over the next decade. These are 
expenditures VA can little afford to make.
    AMVETS certainly values the contributions and sacrifices made by 
our Filipino comrades in arms during World War II, yet we believe the 
interests of American veterans must continue to come first. We would 
certainly prefer a fiscal climate where both the interests of similarly 
situated Filipino beneficiaries and American veterans could be 
satisfactorily accommodated. However, it is difficult to see a positive 
effect on our veterans by extending benefits to Filipino veterans, at 
this time.

   S. 1239--THE ``FORMER PRISONER OF WAR SPECIAL COMPENSATION ACT OF 
                                 2003''

    S. 1239, introduced by Senator Craig, would create a new 
compensation system establishing a three-tiered special monthly pension 
for former prisoners of war. POW's detained 30 to 120 days would 
receive $150 a month, those detained 121 to 540 days would receive $300 
a month, and those detained form 541 or more days would receive $450 a 
month. Payment would be made without regard to any other compensation 
under federal law. Current law requires a period of internment of not 
less than 90 days to qualify. AMVETS supports this bill.

  S. 1281--THE ``VETERANS INFORMATION AND BENEFITS ENHANCEMENT ACT OF 
                                 2003''

    S. 1281, introduced by Ranking Member Graham, would augment 
research in specific exposures to radiation and toxins such as Agent 
Orange and the risk of later disease. AMVETS supports the provisions 
contained in this legislation as a means to continue efforts to find 
remedies and better understand the agents used on the battlefield.

S. 249--A BILL TO PROVIDE THAT REMARRIAGE OF THE SURVIVING SPOUSE OF A 
   DECEASED VETERAN AFTER AGE 55 SHALL NOT RESULT IN TERMINATION OF 
                 DEPENDENCY AND INDEMNITY COMPENSATION

    S. 249, introduced by Senator Clinton, would allow the spouse of 
veterans who remarry after the age of 55 to continue to receive DIC 
payments. The current program that disqualifies spouses who remarry is 
the only federal annuity program that does not permit a recipient of 
dependency compensation to continue benefits after age 55. AMVETS 
supports this bill to retain benefits eligibility.

 S. 938--A BILL TO PROVIDE FOR THE PAYMENT OF DIC TO THE SURVIVORS OF 
    FORMER PRISONERS OF WAR WHO DIED ON OR BEFORE SEPTEMBER 30, 1999

    S. 938, introduced by Senator Murray, is similar to H.R. 886, 
introduced in the House by Pennsylvanian Representative Tim Holden. It 
would update and correct inequities in disability and indemnity 
compensation (DIC) for all survivors of Prisoners of War (POW's) rated 
totally disabled at time of death.
    Current law provides DIC benefits only to surviving spouses of 
eligible POW's who died after September 30, 1999. Before 1999, 
surviving spouses of POW's were eligible for DIC benefits providing the 
POW was rated 100 percent disabled for a minimum of 10 years prior to 
the POW's passing. Due to unresolved eligibility issues, many POW's 
passed away prior to being considered 100 percent disabled for ten 
years. This problem was addressed by enactment of the Veteran's 
Millennium Healthcare Act of 1999, which allowed surviving spouses to 
qualify for DIC benefits if their POW spouse was rated 100 percent 
disabled for at least one year and died after September 30, 1999.
    However, establishment of this date left many widows with 
unresolved cases penalized due to this cutoff. This legislation would 
treat all surviving spouses of POW's equally and grant them DIC 
benefits regardless of when their POW spouse passed away. We believe 
these changes honor all those who have been held captive in service to 
our nation. AMVETS also wishes to recognize the support of AMVETS 
Department of Pennsylvania for this legislation.

 S. 1132--THE ``VETERANS SURVIVORS BENEFITS ENHANCEMENTS ACT OF 2003''

    S. 1132, introduced by Chairman Specter, would enhance several 
benefits programs for spouses and children of those killed or injured 
in military service to our nation. First, it would increase the 
Survivors' and Dependents Education Assistance benefit available to 
eligible spouses and children to equal the benefit provided veterans. 
Second, the bill would increase the DIC benefit over a five-year 
period. It recognizes that the DIC basic rate of $948 monthly for a 
total of 36 months does not adequately meet the needs of surviving 
spouses with dependent children. Third, the bill extends VA authority 
to allow remarried spouses the right to burial with their previous 
spouse, already buried in a national cemetery. Fourth, the bill would 
provide benefits to spina-bifida children of veterans who served in or 
near the Korean DMZ between 1967 and 1969. This provision is crafted 
under the same rational as the benefit extended to children of Vietnam 
veterans. AMVETS supports the compassionate provision of benefits 
contained in this legislation.

            S. 792--THE ``SERVICE MEMBERS CIVIL RELIEF ACT''

    S. 792, introduced by Senator Miller, would amend and update the 
Soldiers' and Sailors' Civil Relief Act of 1940. The bill is similar to 
HR 100, legislation approved on May 7 in the House of Representatives, 
and S. 1136, legislation introduced in the Senate by Chairman Specter. 
The bill would clarify and strengthen the rights and protections 
provided to persons in military service. Under current statute coverage 
includes service members' financial obligations and liabilities, such 
as rent, mortgages, installment contracts and leases; civil (but not 
criminal) legal proceedings; life insurance; taxes; and rights in 
public lands.
    Congress enacted the Soldiers' and Sailors' Civil Relief Act in 
1940 to protect individuals called to active duty. It is intended in 
large part to promote the national defense by suspending enforcement of 
civil liabilities of service members to enable them to devote their 
entire energies to freedom's defense. For example, the act provides for 
forbearance and reduced interest on certain obligations incurred prior 
to service and restricts default judgments against service members and 
rental evictions of service members and their dependents.
    Mr. Chairman, as the scope and role of our National Guard personnel 
has changed, so must the laws that govern their service. AMVETS 
supports these changes. They are needed as recognition of the changing 
responsibilities of the modern world.

S. 806--THE ``DEPLOYED SERVICE MEMBERS FINANCIAL SECURITY AND EDUCATION 
                             ACT OF 2003''

    S. 806, introduced by Ben Nelson, would provide financial 
assistance to reserve and active troops deployed for prolonged tours of 
duty. Since the end of the Cold War, and especially since the terrorist 
attacks of September 11, National Guardsmen and Reserves have seen an 
upward spiral in the rate of deployment and mobilizations. Often these 
deployments last for long periods keeping these military personnel away 
from their jobs and their normal lives sometimes up to 2-years.
    This bill would lessen the financial burdens potentially carried by 
those called from their employment to active duty. It would amend the 
Soldiers' and Sailors' Civil Relief Act to protect the educational 
status and tuition payments and limit the interest rate on student 
loans of service for our citizen soldiers. It would allow members of 
reserve components to withdraw from new 401(k) accounts to supplement 
military income when mobilized or completing a military career. In 
whole, this bill helps recognize the stress on our brave volunteers and 
see that help is available as they fulfill their national defense and 
homeland security mission.

           S. 1136--THE ``SERVICE MEMBERS' CIVIL RELIEF ACT''

    S. 1136, introduced by Chairman Specter, would update and upgrade 
the Soldiers' and Sailors' Civil Relief Act of 1940. The bill is 
similar to legislation approved on May 7 in the House of 
Representatives and S. 792, companion legislation introduced in the 
Senate in April by Senator Zell Miller.
    S. 1136 retains the core protections in place for over 6 decades 
such as providing a stay in civil proceedings, capping interest rates 
on individual debts at 6 percent, and protecting from evictions in 
rental agreements and residential leases. However, it takes an 
additional step to upgrade the rent ceiling on evictions from the 
current level of $1,200 per month to $1,950 per month or the amount of 
a service member's basic allowance for houses whichever is higher. 
Since the basic allowance is annually adjusted, this change would avoid 
erosion of the benefit over time. The legislation also would include 
leased automobiles in the relief protections. It would allow service 
members to terminate automobile leases just they can for real property 
leases. Moreover, the bill would provide protections for small business 
owners during military service. Reservists and guardsmen deserve 
protection that postpones or suspends certain civil obligations with 
which military service could interfere. AMVETS gives its full support 
for swift consideration and passage of this measure.

   S. 1124--THE ``VETERANS BURIAL BENEFITS IMPROVEMENT ACT OF 2003''

    S. 1124, introduced by Senator Mikulski, would amend the burial 
benefits provided families of our brave and dedicated veterans. It is 
important to note that Congress, with minor, yet significant exception, 
has not increased veterans' burial benefits for several decades. A 
PricewaterhouseCoopers study, submitted to VA in December 2000, 
indicates serious erosion in the value of burial allowance benefits. 
While these benefits were never intended to cover the full costs of 
burial, they now pay for only a fraction of what they covered in 1973, 
when the Federal Government first started paying burial benefits for 
our veterans.
    While some adjustments were made in the 107th Congress to adjust 
the plot allowance from $150 to $300 and the service-connected benefit 
from $1,500 to $2,000, it's important to note that these increases 
remain significantly lower, as a percentage of original expense, than 
originally provided. For instance, in 1973 the plot allowance benefit 
covered approximately 13 percent of a veterans' funeral. Today it 
covers only 6 percent. Increasing the plot allowance from $300 to $670 
would restore the benefit to an amount proportionally equal to the 
benefit paid in 1973. Similarly the bill would raise the service-
connected benefit and the non-service-connected benefit to percentage 
levels appropriate to a more meaningful contribution to the costs of 
burial for our veterans. Finally this bill would adjust burial benefits 
for inflation annually to avoid the erosion of this important benefit 
to the families of veterans.

       S. 1199--THE ``VETERANS OUTREACH IMPROVEMENT ACT OF 2003''

    S. 1199, introduced by Senator Feingold, would establish a new 
grant program to fund State-run outreach programs conducted by State 
Departments of Veterans Affairs. AMVETS firmly believes that outreach 
programs provide important information to veterans about their earned 
benefits. Moreover the current program funded in the State of Wisconsin 
is well operated. However, we do not believe a separate funding line 
should be created. It is already well known that overall funding is 
inadequate: Over 167,000 veterans are currently denied enrollment in 
the VA health care system due to shortfalls in funding and more than 
136,000 waiting six months or more for their first appointment to see a 
VA doctor; VA benefits are running delays measured in months and in too 
many cases years; Burial benefits are under funded with maintenance of 
national cemeteries reported to be nearly $920 million in arrears. 
Though AMVETS is committed to improving the lives of our Nation's 
veterans, we do not believe the time is ripe for establishment of an 
outreach program that is more the responsibility of VA than the State 
Departments.

 S. 1282--A BILL TO REQUIRE THE SECRETARY OF VA TO ESTABLISH NATIONAL 

   cemeteries for geographically-underserved populations of veterans
    S. 1282, introduced by Ranking Member Bob Graham, would direct the 
VA secretary to ensure burial access to veterans located within a 
reasonable distance of their homes. It would authorize the construction 
of ten new cemeteries in the ten top areas of veterans population 
identified to be in greatest need. These sites would include: Sarasota, 
Fla.; Salem, Ore.; Birmingham, Ala; St. Louis, Mo.; San Antonio, Tex.; 
Chesapeake, Va.; Sumter, Fla.; Bakersfield, Cal.; Jacksonville, Fla.; 
and Philadelphia, Penn. AMVETS supports the construction of new 
cemeteries to ensure that burial needs of veterans and their family 
members will be met in the future.

S. 1360--A BILL TO AMEND SECTION 7105 OF TITLE 38, UNITED STATES CODE, 
 TO CLARIFY THE REQUIREMENTS FOR NOTICES OF DISAGREEMENT FOR APPELLATE 
          REVIEW OF DEPARTMENT OF VETERANS AFFAIRS ACTIVITIES

    S. 1360, introduced by Ranking Member Bob Graham, would clarify the 
level of formality necessary for a veteran to file notice of 
disagreement regarding a VA denial of claim for benefits. The bill 
specifies that a claimant's filing is appropriate as long as it 
complies with section 7105 of title 38, which simply requires that a 
notice of disagreement must be filed in writing within 1-year from the 
initial denial with the regional office that issued the decision in 
disagreement. Regulations issued by VA require, extra statutorily, that 
the notice also state in writing ``a desire for appellate review.'' VA 
regulations were upheld in the United States Court of Appeals for the 
Federal Circuit on appeal in Gallegos v. Gober (later Principi). AMVETS 
supports this legislation. Filing of a notice of disagreement should be 
no more convoluted than prescribed by law. Moreover, NOD's previously 
set aside by use of VA's expanded regulation should be restored.
    This concludes our testimony. Again, thank you for the opportunity 
to testify on this important legislation, and thank you, as well, for 
your continued support of America's veterans.

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

    Mr. Chairman and Members of the Committee: The agenda today 
includes a number of bills of importance to the more than 1,252,000 
members of the Disabled American Veterans (DAV). As always, we 
appreciate this Committee's efforts to improve benefits and services 
for disabled veterans, and we are grateful for the opportunity to 
provide our views on legislation affecting our members. With a few 
exceptions, the provisions of these bills are beneficial and justified.
  bills relating to veterans' disability compensation benefits--s. 257
    The Veterans' Benefits and Pensions Protection Act of 2003, S. 257, 
would clarify that the prohibition on assignment of veterans' benefits 
includes any agreement between a beneficiary and a third party under 
which the third party acquires for consideration the right to receive 
any compensation, pension, or dependency and indemnity compensation 
(DIC) of the beneficiary. The bill provides criminal penalties for 
violations, and directs the Secretary of Veterans Affairs to conduct an 
outreach program to inform veterans and other potential recipients of 
compensation, pension, or DIC of the prohibition against the assignment 
of those benefits, including information on various schemes to evade 
the prohibition and means of avoiding such schemes.
    After its May 2, 2002, hearing on several bills that included last 
year's version of S. 257, that is, S. 2003, this Committee merged S. 
2003 into S. 2237 and favorably reported it for a vote by the Senate. 
The Senate passed S. 2237 with these provisions included as section 
105. Unfortunately, section 105 was removed in conference, and the 
provisions were thus not included in the bill enacted as Public Law 
107-330.
    The DAV testified in support of S. 2003 last year, and the DAV 
fully supports S. 257. The disability benefits Congress provides to 
veterans and their dependents are intended to relieve the effects of 
impairments and other economic disadvantages. To safeguard these 
benefits against loss and to ensure they are not diverted to or 
siphoned off by third parties, Congress enacted legislation making 
veterans' benefits non-assignable. Certain commercial companies 
nonetheless entice veterans to assign their future compensation 
payments to the companies in exchange for smaller amounts advanced as 
lump sums. This practice defeats the public policy principles 
underlying the non-assignability provisions of section 5301 of title 
38, United States Code, because a portion of government payments become 
profits benefiting commercial concerns.
    Under some of these ``factoring'' arrangements, the lump sum paid 
to the veteran is only a fraction of the total amount that must be 
repaid over the term for repayment and far exceeds the amount of total 
payments of principal and reasonable interest that would be due in a 
legitimate loan. Such factoring agreements may in effect violate usury 
laws.
    The Department of Veterans Affairs (VA) Inspector General made an 
inquiry into this practice in 2001. He observed that these ``schemes 
seem to target the most financially desperate veterans who are the most 
vulnerable.'' He noted, ``for many unsuspecting veterans, these benefit 
buyouts could be financially devastating.'' Surprisingly, VA cavalierly 
testified against this legislation in last year's hearing, stating a 
belief that veterans should be free to dispose of their benefits as 
they wish. Such a position by VA is irresponsible and should be 
disregarded by this Committee, as it was last year. The DAV urges the 
Committee to favorably report S. 257.

                                 S. 517

    The Francis W. Agnes Prisoner of War Benefits Act of 2003 would 
amend certain statutory requirements for presuming service connection 
of disabilities in the case of former prisoners of war (POW's) and for 
providing VA dental care to former POW's. It would repeal the current 
30-day minimum period of internment that is a prerequisite for the 
presumption of service connection for recognized POW-related diseases. 
It would repeal the current 90-day minimum period of internment that is 
a prerequisite for eligibility for VA dental care. It would add to the 
list of diseases subject to the statutory presumption of service 
connection heart disease, stroke, liver disease, type 2 diabetes, and 
osteoporosis and would provide for the presumption of service 
connection of other diseases through administrative rules promulgated 
by the Secretary of Veterans Affairs when the Secretary determines 
there is a positive association between the experience of being a 
prisoner of war and such diseases. The short title of this bill honors 
a well-known former POW and a survivor of the Bataan Death March.
    This bill is consistent with DAV's resolution calling for expansion 
of the list of disabilities subject to presumptive service connection 
for former POW's. The DAV supports S. 517.

                                S. 1131

    The Veterans Compensation Cost-of-Living Adjustment Act of 2003, S. 
1131, provides for adjustment of disability compensation, DIC, and 
clothing allowance rates for the annual increase in the cost of living 
as will be determined by the Consumer Price Index. To avoid a decrease 
in purchasing power, these benefits for service-connected disabled 
veterans and their survivors must be adjusted annually, commensurate 
with increases in the cost of living. The DAV supports S. 1131.

                                S. 1133

    In addition to a cost-of-living adjustment for compensation, DIC, 
and the clothing allowance, this bill, which was introduced by request, 
includes a variety of other provisions, apparently sought by VA. 
Although its short title is the ``Veterans Programs Improvement Act of 
2003,'' some of the bill's provisions do not improve veterans' 
programs. Other provisions are beneficial.
    Section 3 of S. 1133 would repeal the rule that requires an 
application for death pension to be received by VA within 45 days of a 
veteran's death for the effective date for an award of death pension to 
be retroactive to the first day of month of the veteran's death. This 
change would restore the prior rule under which the effective date 
would be the first day of the month of the veteran's death provided the 
application was received within 1 year from the date of death. The DAV 
has no mandate from its membership on this provision, but we note it 
would have a beneficial effect for claimants and would be more 
practical for VA to administer as well.
    Section 4 adds lump-sum life insurance proceeds to the list of 
items that are excluded from income calculations for purposes of 
entitlement to death pension. Again, the DAV has no resolution on this 
specific issue, but we note this provision would be beneficial for 
veterans' survivors who have very limited incomes.
    Consistent with a legislative proposal in the fiscal year (FY) 2004 
budget for VA, section 5 of the bill would amend the law to prohibit 
compensation for disability from alcohol or drug abuse that was caused 
by a service-connected disability. For the reasons stated below in our 
discussion of the same provision in S. 1239, the DAV strongly opposes 
this provision.
    Section 6 would authorize the payment of the proceeds of a National 
Service Life Insurance (NSLI) or United States Government Life 
Insurance (USGLI) policy to a contingent beneficiary when the primary 
beneficiary does not claim the proceeds within 2 years of the insured's 
death. After the passage of the 2-year period, the primary beneficiary 
would be treated as if he or she had predeceased the insured.
    Further, if within four years after the death of the insured, no 
claim has been filed by a designated beneficiary, payment of the 
insurance proceeds may be made to such person as may, in the judgment 
of the Secretary, be equitably entitled to such proceeds.
    Annually, VA sends statements to policyholders regarding the status 
of their policies. Recently, VA requested that policyholders resubmit 
beneficiary designations to enable VA to electronically file the 
designations in its new imaging system. These forms also requested 
beneficiaries' social security numbers. As part of VA's annual mailing 
to policyholders, it should continue to request updated beneficiary 
information to ensure its records are current and allow it to carry out 
veterans' wishes as to recipients of life insurance policy proceeds.
    It is unclear what action VA currently takes to ensure a deceased 
veteran's beneficiary is located and receives notice that life 
insurance proceeds are available. Further, a 2-year window of 
opportunity for a primary beneficiary to file a claim appears to be a 
very short period of time, especially in light of the fact that after 
that 2-year period, the primary beneficiary is treated as if he or she 
had predeceased the insured and, therefore, is precluded from receiving 
the life insurance proceeds. Likewise, a secondary beneficiary would 
have only 2 years in which to file a claim after the primary 
beneficiary's 2-year period has elapsed.
    We are unaware of any private insurance company that has similar 
restrictions. Accordingly, the DAV is opposed to the provisions 
contained in Section 6 of this bill.
    Section 7 of the bill would amend section 5102 of title 38, United 
States Code, to impose a 1-year time limit upon a claimant's submission 
of information necessary to complete an application for benefits, other 
than Government life insurance benefits. We have no objection to this 
amendment. It would also amend section 5103 of title 38, United States 
Code, by removing the 1-year time limitation for the submission of 
information or evidence necessary to perfect a claim for benefits. We 
do not understand why VA would want to remove this time limit unless it 
desires, by the absence of any statutory time limit, the discretion to 
impose its own requirement of less than 1 year. We believe existing 
section 5103(b) should be retained, and we suggest that the time limit 
include a ``good cause'' exception. Such exception is now included in 
VA's regulation, section 3.109(b), title 38, Code of Federal 
Regulations. Section 3.109(a) (2) specifies the types of claims to 
which the time limit applies and makes an exception for evidence that a 
claimant might submit to support the credibility of a witness or to 
authenticate documentary evidence timely filed. When a disposition has 
become final under section 3.158 or sections 3.160(d), 20.1103, 20.1104 
of title 38, Code of Federal Regulations, ``evidence to enlarge the 
proofs and evidence originally submitted'' are not admissible in that 
claim. Section 3.109 implemented the provisions of section 5103 in 
effect before the amendments made by the Veterans Claims Assistance Act 
of 2000, Pub. L. No. 106-475 (VCAA). VCAA made only minor, non-
substantive changes in the language of the 1-year time limit.
    In addition, any time limitation on the submission of evidence 
should expressly indicate it is subject to other provisions that 
suspend the finality of VA decisions. For example, under section 7105 
of title 38, United States Code, an appeal initiated with a notice of 
disagreement suspends the finality of a VA decision. Thus, under VA 
regulations, evidence submitted before a decision becomes final by 
expiration of the 1-year appeal period or submitted during the pendency 
of an appeal has the same effect as if it were submitted with the 
application for benefits. See 38 C.F.R. Sec. Sec. 3.156(b), 
3.400(q)(i), 20.1304(b)(i) (2002). Thus, the 1-year rule does not 
operate when finality is suspended and a claim continues to be open and 
pending.
    Section 8 would expand eligibility for the burial plot allowance to 
make it consistent with eligibility for burial in a national cemetery 
and provide for a plot allowance to a state for burial in a state 
cemetery when a service-connected burial allowance is paid to a 
veteran's survivor. The change in eligibility for the plot allowance is 
a recommendation of The Independent Budget, of which DAV is one of the 
coauthors in the partnership of four veterans' organizations. The DAV 
supports section 8 of this bill.
    Section 9 would establish an earlier effective date for provisions 
authorizing government-furnished markers for privately marked veterans' 
graves. The DAV has no mandate from its membership on this issue, but 
the legislation is liberalizing, and we have no opposition.
    Section 10 would expand eligibility for interment in national 
cemeteries to veterans' spouses who survived the veteran and who were 
remarried at the time of their death. The DAV has no position on this 
section.
    Section 11 would remove the FY 2004 sunset from the state cemetery 
grant program. The DAV has no mandate from its membership on this 
issue, but the state cemetery grant program should continue as long as 
there is a need for state veterans' cemeteries to augment the limited 
availability of burial space in national veterans' cemeteries.
    Section 12 would add more offenses to the list of subversive 
activities that will result in forfeiture of entitlement to veterans' 
benefits. Added to the list would be (1) crimes involving development, 
possession, use, etc., of biological weapons, chemical weapons, or 
nuclear materials; (2) genocide; (3) use of weapons of mass 
destruction; and (4) terrorist acts. The DAV opposes the addition of 
crimes involving biological, chemical, or nuclear materials, without 
qualification beyond their respective broad statutory definitions, in 
sections 175, 229, and 831 of title 18, United States Code. These 
statutes include use of the prohibited materials in crimes against 
individuals--for example, poisoning or attempted poisoning of a 
person--which are not necessarily within the class of subversive 
activities, and are thus not of a magnitude to warrant forfeiture of 
all veterans' entitlements. Currently, the commission of a capital 
crime disqualifies a veteran for certain burial benefits but does not 
cause forfeiture of other entitlements. According to Black's Law 
Dictionary, 7th edition, a ``subversive activity'' is one in which 
there is a ``pattern of acts designed to overthrow a government by 
force or other illegal means.'' Therefore, section 6105 of title 38, 
United States Code, in incorporating a list of offenses that will 
result in forfeiture, should only do so with language that limits the 
applicability of these crimes to circumstances in which they were 
committed for subversive ends. Under other circumstances of crimes 
against the person, the veteran should not suffer a forfeiture of 
veterans' rights because that would constitute a dual penalty for a 
crime: the government would impose the first penalty for commission of 
the crime and the second penalty because the perpetrator was 
incidentally a veteran.
    Section 13 of S. 1133 would amend requirements for appointments to 
the Veterans' Advisory Committee on Education. Current provisions 
require the VA Secretary to appoint veterans ``representative of World 
War II, the Korean conflict era, the post-Korean conflict era, the 
Vietnam era, the post-Vietnam era, and the Persian Gulf War.'' Section 
13 would require such appointments to the extent practicable and would 
make a technical amendment to a cross-reference in section 3692 of 
title 38, United States Code. The DAV has no position on this section 
13.
    Section 14 would repeal the education loan program. The DAV has no 
position on this issue.
    Section 15 would amend provisions for extension of the period for 
using educational benefits under chapter 35 of title 38, United States 
Code. Under current law, the period of eligibility, the ``delimiting 
period,'' may be extended for the length of time an eligible person 
serves on active duty during their delimiting period. Section 15 would 
add compulsory full-time National Guard duty to types of military 
service that will warrant an extension. The DAV has no specific mandate 
from its membership on this issue, but this would be a beneficial 
change for persons eligible for educational assistance under chapter 
35, and we therefore support it.
    Section 16 would authorize payment of education benefits under the 
Montgomery GI Bill for veterans pursuing self-employment training as 
specified by the section. The DAV has no position on this issue.

                                S. 1188

    The Veterans' Survivors Benefits Act of 2003, S. 1188, would repeal 
provisions that impose a 2-year limitation on retroactive benefits 
payable to an eligible survivor by reason of death of the entitled 
beneficiary before adjudication can be finalized or payment can be 
disbursed. Section 5121 of title 38, United States Code, authorizes VA 
to pay to immediate surviving family members the benefits due a veteran 
or due an eligible dependent at the time of death, but the statute 
restricts payment to those benefits ``due and unpaid for a period not 
to exceed two years.''
    Other than an arbitrary limitation, there is no rational basis to 
pay benefits for a fixed period that is less than the period for which 
benefits are actually and rightfully due. No circumstances or factors 
inherent in the merits of the matter warrant nullification of all a 
veteran's entitlement to benefits except for the 2 years immediately 
preceding death simply because, by the chance of time and perhaps 
administrative variations, a veteran's death occurs before VA can issue 
payment of all benefits owed.
    Workload variations and differentials in efficiency between VA 
field offices can result in different outcomes and unequal treatment of 
identically situated survivors. The widow of one veteran might get the 
benefit of a full retroactive award because the VA regional office 
decided the veteran's claim and made full payment of all amounts due to 
the veteran just a day or so before the veteran's demise, while the 
unfortunate widow of another veteran may get the benefit of only a 2-
year retroactive award because her regional office took enough extra 
days to dispose of the claim that the veteran's death occurred before 
VA could pay him the benefits he was due. Although the same as the 
first widow in all respects, the second widow's accrued benefits would 
be subject to the 2-year limitation solely because of administrative 
variations.
    With the persistence of high error rates in VA's adjudication of 
claims, correct decisions only follow from appeals that take years, in 
many instances. With an aging veteran population and protracted claims 
and appeals processing times, seriously ill and aged veterans may die 
before VA can properly finalize their claims. Because effective dates 
for beginning benefit entitlement are tied to the dates veterans file 
their claims, retroactive awards spanning more than 2 years almost 
always occur because of some administrative error or delay beyond the 
veteran's control.
    Compensation and other benefits provide economic assistance for 
loss of earning power or other reasons. To the extent the veteran was 
deprived of the income from benefits due, his or her immediate family 
members are also deprived of the value of that income. A surviving 
spouse or child, who shared and suffered the effects of economic 
deprivation for an extended period while the claim was pending, should 
not be barred from receipt of a substantial portion of the relief the 
veteran would have received but for his or her death merely because the 
veteran did not live long enough to see his or her claim properly 
resolved by VA.
    To remedy this injustice, section 2 of S. 1188 strikes from section 
5121 the limiting phrase ``for a period not to exceed two years,'' 
thereby authorizing payment of all accrued benefits to eligible family 
members. This legislation addresses DAV Resolution No. 22 that calls 
for repeal of the limitation on payment of accrued benefits and a 
recommendation by The Independent Budget that Congress remove this 
unfair restriction.
    To remedy the lack of any survivor designated to receive a deceased 
child's benefits accrued under chapter 18 of title 38, United States 
Code, section 2 of the bill designates the child's surviving parents as 
eligible recipients.
    For cases in which benefits are not payable based on existing 
ratings or decisions, or not payable based on the evidence on file at 
the date of death, sections 3 and 4 of S. 1188 would authorize those 
survivors who would have been eligible to receive accrued benefits, had 
accrued benefits been payable, to continue to prosecute claims and 
appeals for the purpose of establishing, after the claimant's death, 
entitlement to the benefits sought by the deceased claimant. However, 
these substituted parties, may only prosecute claims or appeals for 
compensation, DIC, or pension, and therefore could not prosecute claims 
or appeals for the broader range of periodic monetary benefits subject 
to the accrued benefits provisions of section 5121.
    The purpose of this section is for practicality and administrative 
economy, and to remove inequities in current law. For example, if a 
veteran died while his case was before the Board of Veterans' Appeals 
or the United States Court of Appeals for Veterans' Claims, a 
substituted party could continue to prosecute the pending appeal 
without the necessity of beginning an entirely new claim as a claimant 
for accrued benefits with the knowledge that VA is unlikely to award 
the survivor accrued benefits based on the same evidence on which it 
denied the veteran's claim and with the expectation that another appeal 
from the denial of accrued benefits would inevitably be required. It 
also removes the inequity that results from circumstances in which one 
survivor would receive accrued benefits because the veteran had been 
able to submit sufficient evidence to prove his entitlement before 
death and a similarly situated and equally entitled survivor would be 
denied benefits because the veteran had been unable to submit full 
proof of entitlement before his or her death occurred. Current law does 
not permit a survivor to submit evidence necessary to prove a 
claimant's entitlement after the claimant's death. Under the provisions 
of this bill, survivors, as substituted parties, would in effect have 
all the rights the claimant had while living to submit evidence or 
appeal in an effort to establish entitlement.
    The provisions of S. 1188 address one of the DAV's legislative 
priorities and remedy serious inequities in current law. We urge the 
Committee to make this bill one of its legislative priorities this 
year.

                                S. 1213

    Section 3 of S. 1213, the Filipino Veterans' Benefits Act of 2003, 
would authorize payment of the full-dollar rate of compensation for 
service-connected disability suffered by a person who served in the 
Philippine Scouts under authority of section 14 of Public Law 79-190 
(known as ``new'' Philippine Scouts) who resides in the United States 
as an American citizen or permanent resident and would pay the full-
dollar amount of DIC to an eligible survivor of a Commonwealth Army 
veteran or new Philippine Scout if the survivor resides in the United 
States as an American Citizen or permanent resident. Section 5 would 
extend full-dollar burial benefit entitlement and national cemetery 
eligibility to a new Philippine Scout residing in the United States as 
an American citizen or permanent resident. Section 4 would extend VA's 
authority to operate a regional office in the Philippines to 2008. The 
DAV recognizes the contributions of these Filipino veterans during 
World War II, and we support S. 1213.

                                S. 1239

    As the short title of S. 1239 indicates, the Former Prisoners of 
War Special Compensation Act of 2003 would establish a special 
compensation benefit for former POW's. For service members and veterans 
who were held as prisoners of war for at least 30 days, monthly 
benefits would be paid at three different rates, based upon the length 
of time an individual was in POW status. Those held 30 to 120 days 
would receive $150 monthly; those held 121 to 540 days would receive 
$300; and those held more than 540 days would receive $450. This 
special compensation would not be considered income or resources for 
purposes of determining eligibility to any other Federal or federally 
funded program and would not be subject to attachment, execution, levy, 
tax lien, or detention under any process whatever.
    In addition to special compensation for POW's, the bill would 
remove the requirement that a POW must have been a prisoner of war for 
not less than 90-days to be eligible for VA dental care. This provision 
addresses a legislative proposal in the VA budget for FY 2004.
    Also in response to a legislative proposal in the VA budget, the 
bill would amend the law to prohibit compensation for disability from 
alcohol or drug abuse that was caused by a service-connected 
disability. Currently, the law bars compensation for disability that is 
the result of abuse of alcohol or drugs, except when alcohol or drug 
abuse is secondary to a service-connected disability. Unlike the other 
provisions of the bill, which are beneficial to POW's, this provision 
in H.R. 850 is not specifically related to POW benefits, although it 
will adversely affect some disabled POW's, as it does other disabled 
veterans.
    Veterans in no other group as a whole have borne a greater burden 
on behalf of our Nation and deserve more in return than our former 
POW's. Many suffered unimaginable horrors from torture, humiliation, 
other physical and psychological trauma and abuse, deprivation, 
isolation, and malnutrition. In addition to the effects of physical and 
mental trauma, many suffered from diseases caused by unsanitary 
conditions and inadequate diets. Many, perhaps, never fully recover 
from a life experience that is far more traumatic than most in society 
ever have to endure. The families of POW's also suffer, especially 
families of those confined for long periods of time under uncertain 
circumstances, families of those who never recover after they return to 
civilian lives, and the families of those who never return at all. To 
the extent we can provide former POW's benefits that address their 
special needs or afford some general recompense in proportion to their 
suffering and sacrifices, we should never hesitate to do so, but the 
special benefits we provide should have some equitable correlation to 
their degree of sacrifice.
    Although the DAV fully supports, in principle, special compensation 
for former POW's, we have some doubts about the appropriateness of the 
formula in S. 1239 under which special compensation would be provided. 
The three tiers of monthly benefit rates appear to be designed to 
provide higher monetary amounts for longer periods of confinement, 
i.e., $150 for 30-120 days, $300 for 121-540 days, and a maximum of 
$450 for any number of days in excess of 540. A former POW imprisoned 
for 30 days would receive the same monthly rate as a POW imprisoned 120 
days, or four times as long. A former POW imprisoned for 120 days would 
receive $150 monthly while a former POW imprisoned 1 day longer would 
receive $300, or twice as much. A former POW, who was confined 121 
days, or roughly 4 months, would receive $300, while a former POW 
imprisoned 540 days, or 18 months, would also only receive $300. A 
former POW who was detained or interned for 121 days would receive $300 
while a former POW imprisoned for any period more than 540 days would 
receive $450, only $150 more per month.
    At a monthly rate of $150, the former POW held for 30 days would 
receive $5 monthly for each day of confinement. A former POW held for 
120 days would receive $1.25 for each day of confinement, while a 
former POW held for 121 days would receive $2.47 for each day of 
confinement. A former POW held for 540 days, or 18 times as long as a 
30-day POW, would receive only $0.55 for each day of confinement, as 
compared with $5 per day for the 30-day POW. A POW held for 541 days 
would receive $0.83 for each day of confinement, with that rate per day 
of confinement dropping with each additional day after 541 days.
    According to VA statistics, there were 42,781 living former POW's 
as of January 1, 2002. Data from the VA in a report entitled ``Study of 
Former Prisoners of War'' from the Studies and Analysis Service of the 
Office of Planning and Program Evaluation, shows the estimated average 
length of internment of World War II POW's in Europe as 347 days or .95 
years; World War II POW's in the Pacific, 1,148 days or 3.15 years; and 
the Korean Conflict, 737 days or 2.02 years. This report notes that the 
82 crew members of the naval intelligence ship U.S.S. Pueblo were 
interned by North Korea for 11 months. Although the report does not 
provide average internment times for Vietnam veterans, it acknowledges 
that they were held ``longer than any other POW group--up to seven 
years.'' However, Navy pilot, Everett Alverez, was imprisoned by North 
Vietnam for more than eight-and-a-half-years. Under the formula in H.R. 
850, he would receive a few pennies a month for each day of his 
captivity. Moreover, this formula provides no special benefit for the 
families of the hundreds of heroic POW's who died in captivity, and 
thus made the ultimate sacrifice.
    Any special benefit for former POW's that differentiates between 
groups and provides different benefit rates according to the time they 
were held as POW's should have a more meaningful correlation to their 
degree of sacrifice and suffering and be money well-spent by grateful 
American taxpayers. The three classifications and benefit rates for 
POW's in S. 1239 do not equitably compensate POW's proportionate to 
their varying lengths of detainment or internment.
    The removal of the 90-day internment or detainment eligibility 
threshold for dental care is straightforward, however, and makes 
requirements for dental care consistent with requirements for other 
medical services provided to POW's.
    Generosity to POW's commensurate with their service to the Nation 
is commendable, but the provisions to bar compensation for the effects 
of secondary service-connected disabilities from alcohol abuse blemish 
this otherwise benevolent and well-intentioned bill for POW's. In 
seeking this change, VA ignores the distinction between alcohol abuse 
arising from the use of alcohol to enjoy its intoxicating effects and 
alcohol abuse that results from a service-connected disability. A 
review of the pertinent statutory and regulatory provisions is helpful 
to understanding this issue.
    Under general provisions of law, a disability incurred during 
active military, naval, or air service is deemed to have been incurred 
in the line of duty unless the disability was the result of the 
affected person's own willful misconduct. Under section 3.310(a) of 
title 38, Code of Federal Regulations, ``disability which is 
proximately due to or the result of a service-connected disease or 
injury shall be service connected,'' and when ``service connection is 
thus established for a secondary condition, the secondary condition 
shall be considered a part of the original condition.''
    In section 8052 of Public Law 101-508, the Omnibus Budget 
Reconciliation Act of 1990, Congress amended section 105 of title 38, 
United States Code, regarding line of duty and misconduct, and sections 
1110 and 1131 of that title, that govern payment of wartime and 
peacetime disability compensation, to provide that, in addition to 
disabilities resulting from willful misconduct, disabilities from abuse 
of alcohol and drugs are not in the line of duty and that compensation 
shall not be paid for disability that is a result of the veteran's 
abuse of alcohol or drugs.
    To implement these statutory changes, VA published its proposed 
rule in the Federal Register on March 1, 1994. In response, the DAV 
reminded VA, as already provided in its own instructions in a circular 
and its adjudication manual, that the changes in law did not apply to 
alcohol-related disabilities where the alcohol abuse is a manifestation 
of a service-connected disability, such as posttraumatic stress 
disorder (PTSD), or where drug abuse arises out of therapy for a 
service-connected disability. We recommended that these circular and 
manual instructions be included in the new regulations. With the 
publication of its final rule in the Federal Register on May 24, 1995, 
VA addressed our comment in the preamble:
    The same commenter noted that the Veterans Benefits Administration 
Manual M21-1 and VBA Circular 21-90-12 provide that alcohol- or drug-
related disabilities will be considered service-connected if alcohol 
abuse is a manifestation of a service-connected disability such as post 
traumatic stress disorder, or if drug abuse arose out of therapy for a 
service-connected disability.
    He stated that these are substantive rules that should be included 
in the amendment to Sec. 3.301.
    The manual and circular provisions which the commenter cited are 
examples of the application of 38 CFR 3.310(a), which provides that 
disability that is proximately due to or the result of a service-
connected disease or injury shall be service-connected and that when 
service connection is thus established for a secondary condition the 
secondary condition shall be considered a part of the original 
condition. In circumstances such as those raised by the commenter, VA 
is required by Sec. 3.310(a) to consider conditions that it has 
determined are secondary to a service-connected condition to be part of 
that service-connected condition rather than a result of the abuse of 
alcohol or drugs. Since that requirement is established elsewhere in 
VA's regulations, it is unnecessary to incorporate those provisions 
into Sec. 3.301.
    VA therefore declined to incorporate its circular and manual 
provisions in the rule because section 3.310(a) already addressed this 
matter adequately, according to VA. VA's circular and manual provisions 
initially implementing Public Law 101-508, as reinforced by its 
comments in conjunction with its final rule, indicated that it 
interpreted the changes in Public Law 101-508 as inapplicable to 
alcohol abuse secondary to a service-connected disability. In the final 
rule, VA's definition of drug abuse, codified at 38 C.F.R. 
Sec. 3.301(d), explicitly excluded addiction or the effects of drug use 
arising out of treatment of a service-connected disability but did not 
expressly exclude alcohol-related disability secondary to a service-
connected disability. As noted, VA argued that section 3.310(a) 
adequately addressed this. The definition provided:
    For the purpose of this paragraph, alcohol abuse means the use of 
alcoholic beverages over time, or such excessive use at any one time, 
sufficient to cause disability to or death of the user; drug abuse 
means the use of illegal drugs (including prescription drugs that are 
illegally or illicitly obtained), the intentional use of prescription 
or non-prescription drugs for a purpose other than the medically 
intended use, or the use of substances other than alcohol to enjoy 
their intoxicating effects.
    Without addressing or explaining why it believed its original 
interpretation was wrong, VA later took the position that Public Law 
101-508 prohibits compensation for alcohol abuse even when due to a 
service-connected disability. In an April 7, 1997, letter to the VA 
General Counsel, Congressman Lane Evans of the House Veterans' Affairs 
Committee advised VA that it was not the intent of Congress in Public 
Law 101-508 to bar compensation for alcohol-related disabilities when 
such disabilities are secondary to another service-connected 
disability. Congressman Evans said: ``Where the addiction results from 
the medical condition incurred or aggravated during military service, 
Public Law 101-508 was not intended to preclude payment of benefits.''
    In Allen v. Principi, 237 F.3d 1368 (Fed. Cir. 2001), the court 
agreed with DAV's argument that the law does not bar compensation for 
disability from alcohol abuse when caused by a service-connected 
disability, and an expanded panel of judges, finding VA's argument 
unpersuasive, rejected VA's request that the court rehear the case. 
Having had its erroneous interpretation against veterans set aside by 
the Court and having apparently determined it unlikely that further 
appeal would be successful, VA now looks to Congress to reinstate its 
incorrect view of the law. Congress should reject VA's recommendation.
    Although VA's Veterans Health Administration (VHA) is a recognized 
leading authority in research on and treatment of PTSD, and thus 
possesses extensive information and insight into the relationship 
between PTSD and alcohol abuse, VA's leadership and its Veterans 
Benefits Administration (VBA) apparently understand little about the 
subject, despite much puffing about the ``One-VA'' concept. Even before 
the American Psychiatric Association recognized PTSD as a distinct 
psychiatric disorder in 1980, those counseling Vietnam veterans 
suffering from its symptoms recognized alcohol abuse as a frequent 
component. Studies from the 1970s and later revealed that Vietnam 
combat veterans exhibited substantially higher levels of alcohol 
consumption than other veterans and non-veterans and that many combat 
veterans appeared to use alcohol as an anti-anxiety agent to induce a 
form of ``psychic numbing.'' It was observed that many combat veterans 
appeared to be ``self-medicating'' with alcohol to suppress PTSD 
symptoms.
    Numerous studies about the relationship between psychiatric 
disorders, particularly PTSD, and alcohol abuse have been conducted, 
and VA's own National Center for PTSD recognizes the relationship. From 
the Center's Internet website at www.ncptsd.org, a number of fact 
sheets, articles, and clinical newsletters about PTSD and alcohol may 
be accessed. One entitled ``Effects of Traumatic Experiences: A 
National Center for PTSD Fact Sheet,'' explains under the heading ``How 
Do Traumatic Experiences Affect People?'' that trauma survivors ``may 
turn to drugs or alcohol to make them feel better.'' Under the heading 
``What are the Common Basic Effects of Trauma?'' and subheading, ``All 
of these problems can be secondary or associated trauma symptoms,'' the 
fact sheet states:
    Alcohol and/or drug abuse: can happen when a person wants to avoid 
bad feelings that come with PTSD symptoms, or when things that happened 
at the time of the trauma lead a person to take drugs. This is a common 
way to cope with upsetting trauma symptoms, but it actually leads to 
more problems.
    Another fact sheet entitled ``PTSD and Problems with Alcohol Use'' 
observes:
    Sixty to eighty percent of Vietnam veterans seeking PTSD treatment 
have alcohol use disorders. Veterans over the age of 65 with PTSD are 
at increased risk for attempted suicide if they also experience 
problematic alcohol use or depression. War veterans diagnosed with PTSD 
and alcohol use tend to be binge drinkers. Binges may be in reaction to 
memories or reminders of trauma.
    Other articles by various authors on the subject accessible from 
the Center website include the following:
     PTSD and Substance Abuse: Clinical Assessment 
Considerations
     Dual Diagnosis: PTSD and Alcohol Abuse
     Chronic PTSD in Vietnam Combat Veterans: Course of Illness 
and Substance Abuse
     Substance abuse and post-traumatic stress disorder co-
morbidity
     Post-Traumatic Stress Disorder and Comorbidity: 
Psychological Approaches to Differential Diagnosis
    Under an article titled ``Identifying the PTSD paradox,'' in a 
recent issue (Vol. 24, No. 1) of the Vet Center Voice, published by 
VA's Readjustment Counseling Service, the author presents ``models'' 
related to PTSD and its treatment. ``Model A'' lists ``Self-medicate'' 
as the first feature of avoidance devices and symptoms. The author, a 
PTSD treatment team leader at a VA Vet Center, explains in the 
introduction how the veteran may be unable to escape the trauma of the 
past and become entrapped by PTSD symptoms and consequent alcohol 
abuse:
    Other veterans, however, continue to experience distress as they go 
through life, as if they must continue to live today under the rules 
and regulations that were imposed upon them in the past, during moments 
of trauma. Not only do some veterans continue to live in the past, but 
new learning in the present seems to have come to a standstill: today 
is just like yesterday which is just like 30 years ago; there are no 
differences--``I am my trauma; I am my PTSD.'' The self becomes 
enmeshed with the past, exposure to traumatic events, and PTSD symptoms 
in the presence of such distortions. The self is surrounded by a layer 
of trauma, followed by a layer of PTSD symptoms, followed in some cases 
by a layer of substance abuse. Reins of control are in the hands of 
PTSD. Under these conditions, a relationship in the present with others 
and life and living is difficult and distressing. Indeed, a 
relationship with the past, trauma, and PTSD is maintained to the 
exclusion of one's relationship with life today and living in the 
present.
    Under his discussion of ``Model B,'' the author explains: 
``Hyperarousal also contributes to cognitive distortions, heightened 
emotionality and maladaptive behaviors such as aggression, isolation, 
sleep disturbance, lack of concentration and self-medication.'' Under 
another model, the ``Negative SORC'' (Situation, Organism, Reaction, 
Consequences), the author shows how an individual with PTSD might react 
to a negative event with emotional symptoms, and negative reactions, 
such as to ``Start drinking.''
    The VA's 1985 edition of the Physician's Guide for Disability 
Evaluation Examinations stated that substance abuse ``may be either 
primary, or secondary to posttraumatic stress disorder.'' The 
Clinicians' Guide that replaced it states that substance abuse ``may 
occur as a result of PTSD'' and ``when a veteran's alcohol or drug 
abuse is secondary to or is caused or aggravated by a primary service-
connected disorder, the veteran may be entitled to compensation.'' 
Among other things, the Clinicians' Guide instructs examiners to 
explain why ``substance abuse had onset after PTSD and clearly is a 
means of coping with PTSD symptoms.''
    Many former POW's suffer from PTSD and other psychiatric disorders. 
These conditions are so common in POW's that anxiety, depressive, and 
psychotic disorders affecting former POW's are presumed service 
connected under section 1112 of title 38, United States Code. This 
provision in S. 1239 will prohibit them from being compensated for the 
effects of alcohol-related disabilities caused by PTSD.
    The fact sheet quoted above, ``PTSD and Problems with Alcohol 
Use,'' states: ``Women exposed to trauma show an increased risk for an 
alcohol use disorder even if they are not experiencing PTSD. Women with 
problematic alcohol use are more likely than other women to have been 
sexually abused at some point in their lives.'' With women in the Armed 
Forces being captured and held as POW's, and with the possibility that 
female POW's could be brutalized and sexually abused by undisciplined, 
unprincipled enemy forces, the possibility exists that female POW's 
might begin to abuse alcohol as a means to escape the unforgettable 
horrors of their experiences. Will they then become victims of the 
insensitivity of our own government?
    Obviously, this provision to prohibit compensation for alcohol 
abuse, included in S. 1239 at the urging of VA, does not have 
recognized medical principles and fair and equitable treatment of 
veterans as its bases. Regrettably, this recommendation reflects very 
negatively upon the agency that is charged with understanding and 
having insight into the effects of trauma and severe disabilities upon 
veterans. It evidences a narrow-minded insensitivity to the real nature 
of the effects of severe trauma and severe disability upon young men 
and women who bear these extraordinary burdens and suffer these 
extremely traumatic experiences. We oppose such an unwarranted, 
inequitable change in the strongest possible terms, and we urge that 
this Committee not report S. 1239 with this objectionable provision 
included.

                                S. 1281

    Section 2 of S. 1281, the Veterans Information and Benefits 
Enhancement Act of 2003, would add to the list of diseases subject to 
the statutory presumption of service connection based on internment or 
detainment as a POW cardiovascular disease, cerebrovascular disease, 
and chronic liver disease, including cirrhosis and primary liver 
carcinoma. Section 3 would require the Secretaries of VA and the 
Department of Defense to jointly conduct a review of the radiation Dose 
Reconstruction Program of the Department of Defense (DoD) to determine 
how well that program is working and report to Congress the findings of 
the review. In addition, section 3 would establish oversight 
requirements for the Secretaries and an advisory board to conduct 
periodic audits of dose reconstructions and perform other functions to 
ensure the integrity of the program. Section 4 would require the 
Secretary of Veterans Affairs to determine the appropriate disposition 
of the Air Force Health Study of personnel who were involved in aerial 
spraying of herbicides during the Vietnam Era. Section 5 would require 
the VA and DoD Secretaries to make funds available to the National 
Academy of Sciences for epidemiological research on members of the 
Armed Forces and veterans.
    It is self-evident that the provisions in each of these sections 
would serve to improve veterans' programs and the scientific data upon 
which entitlement decisions are made. Certainly, the accuracy of the 
Government's radiation dose reconstruction program has been doubted and 
questioned for a long time, and recent information indicates that those 
doubts were justified. Similarly, the Government's actions with regard 
to herbicide exposure and its consequences have not engendered public 
confidence. The DAV supports S. 1281. We also suggest that the better 
solution to radiation dose estimates is to remove the uncertainties 
related to dose quantification and the supposed corresponding risk of 
harmful effects from the consideration altogether, as has already been 
done for determinations of service connection under presumptive 
provisions.

         BILLS RELATING TO VETERANS' SURVIVOR BENEFITS--S. 249

    This bill would amend the law to provide continued eligibility for 
DIC when the surviving spouse remarries after age 55. Under current 
law, DIC eligibility terminates upon remarriage of the surviving 
spouse. Section 103(d)(2)(B) of title 38, United States Code, exempts 
medical care for certain veterans' spouses from the general rule that a 
surviving spouse's eligibility for veterans' benefits terminates upon 
his or her remarriage. This bill would amend (d)(2)(B) of section 103 
to include DIC in the exemption by adding a cross-reference to section 
1311 of title 38, United States Code.
    Veterans' benefits are provided to family members because they are, 
or were during the disabled veteran's lifetime, dependent upon the 
veteran for support. Entitlement to those benefits ends when the 
dependence ends by reason of age, marriage, or remarriage. Under 
section 1310 of title 38, United States Code, DIC may be paid to 
surviving spouses, children, and dependent parents of veterans. Section 
1318 of title 38, United States Code, authorizes DIC for surviving 
spouses and children of veterans whose deaths were preceded by total 
service-connected disabilities for specified periods. Under section 
101(14) of title 38, United States Code, DIC is a benefit paid to a 
``surviving spouse, child, or parent.'' Under section 101(3), 
``surviving spouse'' is defined as, among other things, a spouse who 
``has not remarried,'' and section 101(4) conditions status as a 
``child'' upon the child being ``unmarried.'' Thus, by definition, DIC, 
as it pertains to a surviving spouse or child, is a benefit for a 
survivor who is unmarried. Under section 103(d) of title 38, United 
States Code, entitlement to DIC revives upon the termination of a 
disqualifying marriage of a surviving spouse.
    The DAV has no mandate from its membership on this issue, but the 
purpose of this bill is one beneficial to surviving spouses of disabled 
veterans, and we therefore have no objection to its favorable 
consideration. However, because section 1311 is not the authority for 
DIC but rather sets the payment rates and because this amendment would 
make the existing definition of DIC under section 101 incongruent with 
the nature of the benefit insofar as it would be paid to remarried 
spouses, we question whether S. 249 would accomplish the change in the 
most appropriate manner under principles of good statutory drafting.

                                 S. 938

    Under section 1318(b)(3) of title 38, United States Code, DIC is 
authorized for certain surviving spouses and children of former POW's 
whose deaths were preceded by total service-connected disabilities. 
Before enactment of Public Law 106-117, eligibility criteria for DIC 
under section 1318 required that veterans must have been totally 
disabled by a service-connected condition for a period of 10 years or 
more immediately preceding death. Public Law 106-117 eliminated the 10-
year time requirement for survivors of POW's. Congress recognized that 
knowledge of the cause-and-effect relationships between the harsh 
conditions of confinement as a POW and many diseases had only recently 
come to light, and provisions for presumptive service connection had 
therefore not been in effect sufficiently long for POW's to have 
established service connection and a total rating for the requisite 10-
year period although many had in fact suffered total disability from 
these conditions for 10 or more years. However, Congress did not make 
these liberalizing provisions applicable retroactively. The change 
applied only to claims based on deaths after September 30, 1999, the 
effective date of Public Law 106-117.
    This bill would make the 1-year total disability requirement 
applicable to any DIC claim based on total service-connected disability 
of a former POW. The DAV supports S. 938.

                                S. 1132

    This bill, the Veterans' Survivors Benefits Enhancements Act of 
2003, would make several changes in the benefits provided to veterans' 
survivors, dependents, and disabled children. Section 2 would increase 
the monthly allowances provided under the survivors' and dependents' 
educational assistance program. Section 3 would reduce the duration of 
assistance under the survivors' and dependents' educational assistance 
program from 45 to 36 months. Section 4 would add $250 monthly to the 
DIC payment for a surviving spouse with one or more children below age 
18, with such additional payment to continue until every child has 
attained age 18 or until the end of the 5-year period beginning on the 
date of the veteran's death, whichever is earlier. As with section 10 
of S. 1133, section 5 of this bill would allow spouses who survived the 
veteran and who were remarried at the time of their death to be buried 
in national cemeteries. Section 6 would extend benefits for spina-
bifida now available to children of herbicide-exposed Vietnam veterans 
to children of veterans who were exposed to herbicide agents in Korea 
during the period beginning on January 1, 1967 and ending December 31, 
1969, with a prohibition against duplication of benefits based on 
exposure in both locations.
    The DAV supports section 2, which would provide greater assistance 
to dependents and survivors pursuing a course of education. However, 
the DAV does not support section 3, which would reduce the duration of 
that program from the current 45 months to 36 months. While 36 months 
may be adequate to obtain a 4-year degree in most circumstances, we 
question whether the availability of more time for special 
circumstances would have any significant budgetary impact. The DAV 
supports section 4 which would provide higher rates of DIC for 
surviving spouses who have a greater financial burden during the period 
in which there are minor children in the home. The DAV has no position 
on section 5, which would authorize burial of a remarried spouse in a 
national cemetery. The DAV does not have a mandate from its membership 
on section 6; however, we note, as a matter of fundamental fairness, 
benefits provided on account of exposure to herbicides should not be 
granted to one group and denied another solely because the veteran 
parents in the first group were exposed in Vietnam and the veteran 
parents in the second group were exposed in Korea.

       PROPOSED SOLDIERS AND SAILORS CIVIL RELIEF ACT AMENDMENTS 
                      S. 1136, S. 792, AND S. 806

    These three bills address current circumstances in which a need 
exists to afford certain relief and assistance to service members who 
have been called away from jobs and families for extended periods to 
serve on active duty. Although meritorious, the purposes of these bills 
are beyond the scope of the DAV's legislative mission, i.e., issues 
pertaining to rights and benefits for service-connected disabled 
veterans and their dependents and survivors. We have no position on S. 
1136, S. 792, and S. 806.

                BILLS RELATING TO OTHER MATTERS--S. 978

    The Veterans Housing Fairness Act of 2003 would make VA housing 
loans available for purchase of residential cooperative housing units. 
This expands authority for VA home loans to add this option for home 
ownership in the changing marketplace. The DAV has no mandate from its 
membership on this issue, but finds the legislation to be beneficial.

                                S. 1124

    The Veterans Burial Benefits Improvement Act of 2003 would increase 
the base burial and funeral allowance from $300 to $1,135, the burial 
allowance for service-connected deaths from $2,000 to $3,712, and the 
burial plot allowance from $300 to $670. In addition, S. 1124 would 
provide for automatic future annual adjustments indexed to increases in 
the cost of living.
    Like disability compensation, DIC, and the clothing allowance, 
burial and plot allowances should be adjusted annually. For every year 
in which these allowances remain the same despite an increase in the 
cost of living, their value erodes. Because Congress has not regularly 
enacted legislation to adjust these benefits, their value has seriously 
eroded.
    These increases are consistent with recommendations of The 
Independent Budget for FY 2004, which states:
    Congress has not substantially increased veterans burial benefits 
for the families of our wounded and disabled veterans for over a 
decade. A PricewaterhouseCoopers study, submitted to VA in December 
2000, indicates serious erosion in the value of burial allowance 
benefits. While these benefits were never intended to cover the full 
costs of burial, they now pay for only a fraction of what they covered 
in 1973.
    In the 107th Congress, the plot allowance . . . was increased for 
the first time in over 28 years to $300 from $150 . . . The IBVSO's 
recommend increasing the plot allowance from $300 to $670, an amount 
proportionately equal to the benefit paid in 1973.
    Also in the last Congress, the allowance for service-connected 
deaths was increased from $500 to $2,000. Prior to this adjustment, the 
allowance had been untouched since 1988. Clearly, it is time this 
allowance was raised to make a more meaningful contribution to the 
costs of burial for our veterans. The IBVSO's recommend increasing the 
service-connected benefit from $2,000 to $3,700, bringing it back up to 
its original proportionate level of burial costs.
    The non-service-connected benefit was last adjusted in 1978, and 
today it covers just 6 percent of funeral costs. We recommend 
increasing the non-service-connected benefit from $300 to $1,135.
    Finally, the IBVSO's recognize the need to adjust burial benefits 
for inflation annually to maintain the value of these important 
benefits.
    For these reasons, the DAV's membership has adopted a resolution 
for the DAV to support legislation increasing burial benefits and 
providing for automatic annual adjustments based on the Consumer Price 
Index. We therefore urge favorable action by the Committee on S. 1124.

                                S. 1199

    To improve the dissemination of information on programs for 
veterans, the Veterans Outreach Improvement Act of 2003 would first 
define outreach according to its methods and goals to guide VA actions. 
It would establish by law separate funding line items for outreach 
activities within the budgets of VA and its three administrations, VHA, 
VBA, and the National Cemetery Administration (NCA). Separate funding 
would serve to assure that the resources provided by Congress are used 
to meet the goals of this legislation. The bill would require the VA 
Secretary to establish and maintain procedures to coordinate outreach 
activities between the Office of the Secretary, the Office of Public 
Affairs, VBA, VHA, and NCA to gain economies of scale and avoid 
duplication and inconsistency. It would authorize VA collaboration with 
state governments to take advantage of and supplement their resources 
with grants for the purpose of providing outreach. The DAV supports S. 
1199.

                                S. 1282

    This bill would require the VA Secretary to determine from current 
population data the 10 areas in the United States where the need for 
new national cemeteries is most urgent, toward the goal of ensuring 
that 90 percent of the veterans within a 75-mile radius of a population 
center have access to a national cemetery. The Secretary would be 
required to carry out advanced planning for the establishment of 
cemeteries in these 10 ``burial service areas,'' report to Congress his 
findings, and establish a national cemetery in each such area.
    The provisions of this bill are consistent with the DAV's 
resolution calling for an adequate number of national cemeteries and 
recommendations by The Independent Budget. The DAV supports S. 1282.

                                S. 1360

    By reference to existing statutory provisions regarding the form of 
a ``notice of disagreement,'' this bill would provide that a document 
conforming to the existing requirements will be accepted by VA as a 
notice of disagreement. Under section 7105 of title 38, United States 
Code, a veteran may initiate an appeal by notifying VA in writing of 
his or her disagreement with a VA decision. The statute requires 
nothing more to trigger the appellate process within VA. This bill 
would override a decision by the United States Court of Appeals for the 
Federal Circuit that upheld VA's regulation, which has requirements 
beyond those set forth in section 7105. The change would apply to any 
notice of disagreement filed on or after the date of enactment of S. 
1360 and any existing notice of disagreement that had not been rejected 
by VA at the time of enactment. For any document rejected as a notice 
of disagreement by VA as not conforming to its regulatory requirements, 
the bill provides that VA must accept the document as a notice of 
disagreement if affirmatively requested to do so by the veteran or 
other claimant within the time prescribed for such request. Also, the 
Secretary may, on his own motion, accept the previously rejected 
document as notice of disagreement.
    The process Congress established for veterans' claims and appeals 
is designed to be simple, informal, and pro-veteran. Because the 
process is non-adversarial and because VA has the obligation of 
assisting the veteran in prosecuting claims and appeals, adverse 
actions based purely on formalities are inappropriate. In the case 
leading to the decision by the Federal Circuit, the veteran had 
notified VA of his disagreement in accordance with the requirements of 
the statute but had not expressly stated that he desired appellate 
review, as required by VA's regulation. This seems somewhat absurd 
inasmuch as the purpose of a notice of disagreement is to formally 
lodge an appeal. It inherently communicates a desire for appellate 
review. To require the veteran to also expressly state he or she 
desires appellate review is a redundant and unnecessary formality. 
Regrettably, this represents the mindset of today's VA in which VA will 
resort to an extremely strict literal reading of somewhat imprecise 
regulatory text to justify a result against a veteran. The pertinent 
general words on which VA relied to reject the veteran's notice of 
disagreement in the case decided by the Federal Circuit were: ``the 
Notice of Disagreement must be in terms which can reasonably be 
construed as disagreement with [the] determination and a desire for 
appellate review.''
    It is regrettable that it becomes necessary for Congress to 
intervene to prevent such behavior by VA, but it has nonetheless become 
necessary in this instance. We urge the Committee to act favorably and 
promptly to restore reason to VA's appellate process.
    These many beneficial provisions included in these several bills 
demonstrate the sincere efforts of members and staff of this Committee, 
as well as other Senators who introduced and co-sponsored some of these 
bills, to improve veterans' programs. We appreciate this strong support 
for our Nation's disabled veterans.

                               __________
   Prepared Statement of Carl Blake, Associate Legislative Director, 
                     Paralyzed Veterans of America

    Chairman Specter, Ranking Member Graham, Members of the Committee, 
PVA would like to thank you for the opportunity to testify today 
concerning the proposed veterans benefits legislation. PVA is pleased 
to present our views on the important issues that you have addressed 
with these measures.

 S. 257--THE ``VETERANS BENEFITS AND PENSIONS PROTECTION ACT OF 2003''

    PVA supports S. 257, the ``Veterans Benefits and Pensions 
Protection Act of 2003.'' This measure would provide protection to some 
of our most vulnerable veterans. S. 257 would close a current loophole 
by prohibiting assignment contracts transferring certain veterans' 
benefits for cash ``buy-outs'' to non-veteran entities for specified 
periods. The Department of Veterans Affairs (VA) Inspector General has 
stated in previous testimony 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.''

 S. 517--THE ``FRANCIS W. AGNES PRISONER OF WAR BENEFITS ACT OF 2003''

    S. 517 would repeal the current requirement that a former prisoner 
of war be interned for at least 30 days in order for the VA to 
recognize a presumption of service-connection for certain listed 
diseases directly associated with that internment, for purposes of the 
payment of veterans' disability compensation. It would also repeal the 
90-day minimum period of internment in order for the veteran to be 
eligible for dental care furnished by the VA. The proposed legislation 
adds heart disease, stroke, liver disease, Type 2 Diabetes, and 
osteoporosis to the list of diseases presumed to be service-connected 
for former prisoners of war. PVA recognizes that prisoners of war have 
suffered extreme hardships in defense of this country. We also 
recognize that veterans who were held as prisoners of war for less than 
30 or 90 days did not necessarily suffer any less than those veterans 
who were held longer. PVA supports this legislation.

S. 1131--THE ``VETERANS' COMPENSATION COST-OF-LIVING ADJUSTMENT ACT OF 
                                 2003''

    PVA supports S. 1131, 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.

       S. 1133--THE ``VETERANS PROGRAMS IMPROVEMENT ACT OF 2003''

    As stated previously, PVA supports Section 2 of S. 1133 which would 
increase the rates of compensation for veterans with service-connected 
disabilities and the rates of dependency and indemnity compensation. 
However, we oppose the provision requiring the rounding down to the 
nearest whole dollar amount compensation increases.
    Section 3 of the proposed legislation would repeal the 45-day rule 
for the effective date of award of death pension. The award of death 
pension would be placed in the same section as death compensation and 
DIC. This means that death pension benefits can be paid as long as an 
application for these benefits is made within one year, not 45 days. 
The elimination of the 45-day rule is yet another issue of fairness for 
claimants who are coping with the losses of loved ones. PVA supports 
this section. Likewise, PVA supports Section 4 which would exclude the 
proceeds of life insurance from consideration as income for purposes of 
determining veterans' pension benefits.
    PVA is deeply troubled by, and sees no need for, Section 5 of this 
legislation as written. The narrowness of the Federal Circuit Court of 
Appeals' holding in Allen v. Principi, 237 F.3d 1368 (U.S.C.A. Fed. 
Cir. 2001), a narrowness repeatedly referenced by the Court, would 
enable compensation only when there is ``clear medical evidence 
establishing that the alcohol or drug-abuse disability is indeed caused 
by a veteran's primary service-connected disability, and where the 
alcohol or drug-abuse disability is not due to willful wrongdoing.'' We 
are also concerned that this section would erase the important 
distinction between willful and involuntary acts, a concern also 
expressed by the Court.
    Section 6 of the S. 1133 would ensure that insurance payments are 
made to a primary beneficiary or a designated alternate beneficiary. 
National Service Life Insurance (NSLI) and United States Government 
Life Insurance (USGLI) are important benefits available to veterans and 
their families. It is essential that these benefits be paid to the 
proper beneficiary in the event that a veteran dies. Likewise, it is 
important that an alternate beneficiary be designated by the veteran 
who carries USGLI or NSLI so that an insurance payment may be made to 
an appropriate beneficiary. The VA must play an active part in ensuring 
that benefits intended for a veteran's surviving spouse or alternate 
beneficiary are paid in full. PVA does have concerns about allowing the 
Secretary of Veterans Affairs to determine who will receive the 
benefits in the event that no claim has been filed within four years. 
We do not understand how the Secretary has the knowledge and authority 
to make such a decision.
    Section 7 of the legislation allows the VA to not pay benefits to a 
claimant if the claimant does not provide information requested by the 
VA within one year of that request. PVA opposes this section. Veterans 
should not be subject to a time limitation for anything related to the 
completion of a claim for disability. The VA has a responsibility to 
ensure that a veteran is given the benefit of the doubt when filing his 
or her claim. That veteran should not be under pressure to meet a time 
deadline because the VA does not want to take more time to ensure a 
veteran is properly taken care of.
    PVA supports the provisions of Section 8 of S. 1133. This provision 
would allow the VA to pay states a plot allowance for burying veterans 
in state cemeteries. Currently, states do not receive this allowance if 
a veteran's surviving spouse files for reimbursement of funeral 
expenses. Our position is consistent with the recommendations of The 
Independent Budget. PVA also supports Section 9 of the bill. This 
provision would allow the VA to furnish a government marker to the 
family of veteran whose grave already has a private marker. Currently, 
this is allowed for veterans who died after September 11, 2001. This 
provision would extend that time period to include veterans that died 
after November 1, 1990.
    PVA has no position on Section 10 of this legislation. This section 
would permit the surviving spouse of a veteran who remarries to be 
eligible for burial in a national cemetery. Current eligibility allows 
for a surviving spouse who is remarried to a non-veteran to be buried 
in a national cemetery. The spouse is eligible if the remarriage is 
terminated by divorce or the non-veteran spouse dies. The proposal 
seems to be consistent with current law. PVA understands this proposal, 
as it is written, allows a remarried spouse to be buried together with 
the deceased veteran whether or not he or she is divorced from the new 
spouse or the new spouse is deceased. PVA is concerned that this 
section may be unnecessary.
    Section 11 of S. 1133 would remove the end date for providing state 
cemetery grants and make the program permanent. This program is 
currently scheduled to end at the end of FY 2004. PVA has no objection 
to this provision. Section 12 of the legislation adds to the list of 
offenses that a veteran could be convicted of that would result in a 
forfeiture of ``gratuitous'' VA benefits. Section 6105 provides that an 
individual convicted after September 1, 1959, of any of several 
specified offenses involving subversive activities shall have no right 
to gratuitous benefits, including national cemetery burial, under laws 
administered by the Secretary of Veterans Affairs and that no other 
person shall be entitled to such benefits on account of such 
individual. Congress' primary concern in enacting this provision was to 
prevent VA benefits from being provided based on military service of 
persons found guilty of offenses involving national security.
    This section adds six classes of ``subversive'' activities. The 
following offenses from title 18, United States Code, would be added: 
sections 175 (Prohibitions with respect to biological weapons); 229 
(Prohibited activities with respect to chemical weapons); 831 
(Prohibited transactions involving nuclear materials); 1091 (Genocide); 
2332a (Use of certain weapons of mass destruction); and 2332b (Acts of 
terrorism transcending national boundaries). These activities are 
recognized as threats to national security. PVA has no position on this 
section.
    PVA has no objection to the provisions of Section 13 or 14. PVA 
supports Section 15 which provides for an extension in the period of 
eligibility for survivors' and dependents' education benefits for 
members of the National Guard who are involuntarily ordered to active 
duty. The legislation would extend the delimiting date for use of 
Chapter 35 education benefits. The amount of time available for this 
benefit would be extended the length of the active duty service time 
plus four additional months.
    PVA fully supports the provisions of Section 16 of S. 1133. This 
section would allow for a veteran who is eligible for Montgomery GI 
Bill benefits to use those benefits to pay for self-employment 
training. This provision would meet the intent of P.L. 106-50, which 
PVA worked to get enacted, which fosters veteran-owned small business 
entrepreneurship. A veteran would not be able to use these benefits 
unless the program or entity providing the self-employment or on-the-
job training was certified by a state approving agency.

                                S. 1188

    Under current law, if a veteran dies while a claim is being 
processed by the Department of Veterans Affairs (VA), but before his or 
her claim becomes final, the surviving spouse is entitled to no more 
than two years of accrued benefits when the claim is decided in the 
veteran's favor. S. 1188 repeals this two-year limitation allowing the 
veteran's surviving spouse to receive the full amount of the award and 
not be penalized by VA's failure to resolve a claim in a timely manner. 
The Independent Budget clearly states that ``with the time period for 
processing claims and appeals often being a matter of years, this 
limitation is inequitable.'' A veteran's surviving spouse should not be 
forced to suffer the consequences of the VA's inefficiency. PVA fully 
supports Section 2 of S. 1188.
    We do, however, have concerns regarding provisions of S. 1188 that 
allow for substitutions before the Court of Appeals for Veterans 
Claims. As the Court noted in Vda de Landicho v. Brown, ``the issues 
involved in the Board's [of Veterans Appeals'] adjudication of the 
deceased veterans' underlying claims are not identical to those needing 
resolution in an accrued-benefits claim.'' 7 Vet. App. 42, 48 (1994).
    In addition, these provisions conceivably could change the nature 
of the Court, as well as implicate the ``case or controversy'' 
requirement. The Court is not generally considered to be an initial 
trier of facts. As the Court stated in de Landicho, if it ``were to 
permit a putative accrued-benefits claimant to continue the appeal, 
there would be no guarantee that that individual would be entitled to 
accrued benefits [.] Further, there is no innate guarantee, in the case 
of the death of any veteran, that any accrued-benefits claimant exists; 
a veteran may die without leaving a qualified spouse, child, parent, or 
final-sickness-caregiver. Absent a BVA decision that a survivor is 
qualified under section 5121, any decision the Court would render on 
the deceased veterans' service-connection or increased-rating claims 
could well be purely hypothetical.'' de Landicho at 49 [emphasis in 
original].

        S. 1213--THE ``FILIPINO VETERANS' BENEFITS ACT OF 2003''

    PVA strongly supports S. 1213, the ``Filipino Veterans' Benefits 
Act of 2003.'' This legislation would extend health care benefits to 
certain Filipino veterans residing legally in the United States. It 
would also eliminate statutory payment rates that allow Filipino 
veterans and their survivors who live in the United States to be paid 
less than other veterans and their survivors who live in the United 
States. PVA supports the provision of health care and nursing home care 
outlined in Section 2 of this bill.
    Section 3 of the draft bill addresses a basic issue of fairness and 
equality for payments of compensation and dependency and indemnity 
compensation (DIC). Currently, Filipino veterans receive compensation 
payments at the rate of $0.50 for every dollar that other veterans 
receive. PVA supports Section 3. PVA also supports the extension of the 
operation of a regional office in the Philippines provided for in 
Section 4 and the offering of national cemetery burial to New 
Philippine Scouts provided for in Section 5.

  S. 1239--THE ``FORMER PRISONERS OF WAR SPECIAL COMPENSATION ACT OF 
                                 2003''

    S. 1239 would allow the VA to pay a monthly special compensation to 
veterans who were prisoners of war. The amount of this compensation 
would be based on the length of time that the veteran was actually held 
as a prisoner. The bill would also allow the VA to provide dental care 
to all former prisoners of war, not just those who were held captive 
for more than 90 days. PVA supports the provisions of Section 2 and 4 
of the proposed legislation; however, we have concerns about whether or 
not the formula used to determine the amount of compensation is fair 
and equitable. We would urge the Committee to consider other 
alternatives for the payment of compensation.
    As we stated in our testimony regarding S. 1133: PVA is troubled by 
Section 3 and sees no need for this legislation as written. The 
narrowness of the Federal Circuit Court of Appeals' holding in Allen v. 
Principi 237 F.3d 1368 (U.S.C.A. Fed. Cir. 2001), a narrowness 
repeatedly referenced by the Court, would enable compensation only when 
there is ``clear medical evidence establishing that the alcohol or 
drug-abuse disability is indeed caused by a veteran's primary service-
connected disability, and where the alcohol or drug-abuse disability is 
not due to willful wrongdoing.'' We are also concerned that this 
section would erase the important distinction between willful and 
involuntary acts, a concern also expressed by the Court.

  S. 1281--THE ``VETERANS INFORMATION AND BENEFITS ENHANCEMENT ACT OF 
                                 2003''

    PVA supports Section 2 of S. 1281 which would add three diseases to 
the list of conditions presumed to be service-connected for former 
prisoners of war. These diseases include cardiovascular disease, 
cerebrovascular disease, and chronic liver disease. PVA also supports 
the intentions of the provisions of Section 3 and Section 4 which would 
require the Secretary to conduct a review of the Department of Defense 
Dose Reconstruction Program and the Air Force Health Study. Finally, 
PVA supports the Section 5 which would require both the VA and DoD to 
provide funding for the Medical Follow-up Agency, a scientific body 
charged with tracking the health of veterans and military service 
members. This provision is consistent with the original law, P.L. 102-
585, which required the two agencies to fund this program.

                                 S. 249

    The proposed bill, S. 249, allows for the surviving spouse of a 
deceased veteran to continue to receive Dependency and Indemnity 
Compensation (DIC) if he or she remarries after the age of 55. This 
bill would prevent the VA from stopping payment of these benefits to 
the surviving spouse. PVA does not have a resolution addressing this 
issue. This is an issue that staff members in our Veterans Benefits 
department continue to monitor and evaluate. At this time, PVA does not 
oppose this proposed legislation.

                                 S. 938

    S. 938 provides for the payment of DIC to survivors of veterans who 
were former prisoners of war who died on or before September 30, 1999. 
Under this proposed legislation, the same eligibility conditions that 
apply to payment of DIC to the survivors of former prisoners of war who 
die after that date will apply to this new group of survivors. It is 
important that the surviving spouses and dependents of veterans who 
were held as prisoners of war receive just compensation. This is an 
issue of fairness and equity for all surviving spouses of former 
prisoners of war. PVA fully supports S. 938.

 S. 1132--THE ``VETERANS' SURVIVORS BENEFITS ENHANCEMENTS ACT OF 2003''

    PVA supports Section 2 of the ``Veterans' Survivors Benefits 
Enhancement Act.'' This section would increase the monthly Survivors' 
and Dependents' Education Assistance, DEA, benefits from $680 to $985. 
The surviving spouse or dependent child of a veteran who is killed 
while in the service or fatally injured is entitled to these education 
benefits. However, the small amount is not enough to provide for the 
costs of tuition, fees, and room and board. PVA recognizes this as a 
basic issue of fairness. Surviving spouses and dependent children are 
still left with a heavy burden when paying for an expanded education. 
This increased benefit would provide the resources they need to pay for 
the costs of tuition, as well as other fees and room and board. 
However, PVA has concerns with Section 3 of the proposed legislation. 
As we understand it, this legislation would reduce the time frame for 
use of the benefits from 45 to 36 months for any surviving spouse who 
claims the benefits after the enactment of this bill. PVA opposes any 
reduction in the amount of time that the veteran's family has to use 
these benefits.
    Section 4 of the bill would increase the rate of DIC by $250 per 
month, from the current rate of $948, from the month immediately 
following the death of a veteran. This increased rate would be in 
effect for five years after the veteran's death and effect surviving 
spouses who have dependent children. This rate will cease the first 
month after all dependent children reach the age of 18. PVA supports 
this section. This provision would reinforce the commitment of the VA 
to both a veteran and his or her family.
    PVA also supports Section 6 which would expand benefits available 
to dependent children of veterans who suffer from spina-bifida. The 
veteran whose children are eligible must have served in or near the 
Korean demilitarized zone between January 1, 1967 and December 31, 1969 
during which time the defoliant Agent Orange was utilized.

      S. 792 AND S. 1136--THE ``SERVICE MEMBERS CIVIL RELIEF ACT''

    We welcome both S. 792 and S. 1136 and thank Senators Nelson and 
Specter for introducing them. Times are very different from when the 
Soldiers and Sailors Civil Relief Act was introduced in 1940. In many 
ways, the Act has not kept up with the times.
    Though these bills are similar and we support both bills, we would 
prefer to see the more beneficial provisions of S. 1136. These include 
the higher monthly rent provision of Sec. 301, the inclusion of motor 
vehicle leases in Sec. 305 and the provisions of Sec. 706 providing 
protections of business obligations and 707 providing the opportunity 
to return to educational classes with no extra costs.
    Service members often live in high rent areas and implementing the 
$1,950 rent level specified in Sec. 301 will benefit a large number of 
service members. The addition of a provision using the monthly basic 
allowance for housing as a guide will also protect the service member 
against the wide disparities in lease costs that can occur nationwide.
    Sec. 305 adds motor vehicles to the provisions that cover real 
property leases. It makes no sense to permit a service member to 
terminate a lease for housing while requiring them to maintain a lease 
on a vehicle they have no opportunity to use. This is clearly different 
from payments on a motor vehicle that is owned. A lease is payment for 
the use of the vehicle. The inability of the service member to use the 
vehicle should preclude their requirement to pay for it.
    PVA applauds the inclusion of Sec. 706. Many service members are 
engaged in small businesses or have professional obligations. This is 
particularly true for Reservists and National Guardsman. The provisions 
to protect the personal assets of a service member that are not part of 
the business are needed to insure service to this nation does not 
destroy the life, livelihood or family of the service member. We also 
feel that Sec. 706(b) provides sufficient safeguards to obligators in 
allowing for the courts to modify the relief.
    Sec. 707 simply makes good sense. Our service members should not be 
punished with extra costs or lost educational benefits because of their 
military service.

S. 806--THE ``DEPLOYED SERVICE MEMBERS FINANCIAL SECURITY AND EDUCATION 
                             ACT OF 2003''

    We thank Senator Nelson for his introduction of S. 806, the 
Deployed Service Members Financial Security and Education Act of 2003. 
Today's service members face significant challenges with longer and 
more frequent deployments. The impact on family members is significant, 
especially on children. Another impact is the financial effect of 
deployment. The added costs of phone calls, shipping costs for packages 
and additional comfort items provided to their deployed family members 
can be significant. In addition, soldiers often maintain part-time jobs 
to supplement their lower pay. The $1,000 allowance would help defer 
many of these extra expenses. PVA also supports the educational 
provisions of the bill. As many service members try to continue their 
educations while a member of the military, they should not be penalized 
when called to defend the nation.

         S. 978--THE ``VETERANS HOUSING FAIRNESS ACT OF 2003''

    PVA supports the provisions of S. 978. This legislation would 
authorize a veteran to use veterans' housing loan benefits to purchase 
stock or membership in a development, project, or structure of a 
cooperative housing corporation. In order to do so, the structure that 
the veteran purchases must be in compliance with criteria set forth by 
the Secretary of Veterans Affairs, and it must be a single-family 
residential unit.

   S. 1124--THE ``VETERANS BURIAL BENEFITS IMPROVEMENT ACT OF 2003''

    PVA fully supports this proposed legislation. The provisions are 
consistent with the recommendations of The Independent Budget with 
regards to burial benefits. The Independent Budget states:
    Congress has not substantially increased veterans burial benefits 
for the families of our wounded and disabled veterans in over a 
decade[.] While these benefits were never intended to cover the full 
costs of burial, they now pay for only a fraction of what they covered 
in 1973, when the federal government first started paying burial 
benefits for our veterans.
    S. 1124 would increase the plot allowance from $300 to $670. It 
would also increase the service-connected benefit from $2,000 to $3,712 
and the non-service-connected benefit from $300 to $1,135. PVA also 
appreciates the provision allowing for an annual inflation adjustment 
in the burial benefits.

       S. 1199--THE ``VETERANS OUTREACH IMPROVEMENT ACT OF 2003''

    The ``Veterans Outreach Improvement Act'' is intended to improve 
outreach activities performed by the VA. It does so by creating a new 
budget line item for funding the outreach activities of the Veterans 
Health Administration (VHA), the Veterans Benefits Administration 
(VBA), and the National Cemetery Administration (NCA). This money is 
currently drawn from the budget line item for general operating 
expenses.
    The bill also would create a structure within the VA to require the 
Office of the Secretary, the Office of Public Affairs, the VBA, the 
VHA, and the NCA to coordinate outreach activities. Coordinated 
activities could improve the efficiency of each office and make them 
more effective at providing for the needs of current veterans and new 
veterans who will be returning home from new conflicts. The legislation 
would also allow the VA to enter into cooperative agreements with State 
Departments of Veterans Affairs regarding outreach activities and would 
give the VA the authority to provide grants to these state departments. 
PVA supports the provisions of S. 1199.

                                S. 1282

    PVA fully supports the provisions of S. 1282. This bill would 
require the VA to establish new national cemeteries in the 10 most 
underserved geographic areas in the country. These areas are defined as 
having 170,000 or more veterans living in the area who are more than 75 
miles away from the nearest national cemetery. With the rate that 
veterans are dying today, particularly World War II veterans, it is 
imperative that the VA be able to provide a suitable burial location 
for these men and women. It is also important that the families of 
these deceased veterans have relatively easy access to these locations. 
PVA cannot stress enough the need for adequate funding for the 
construction of these new cemeteries as well.

                                S. 1360

    S. 1360, is a measure that would amend 38 U.S.C. Sec. 7105, to 
clarify the requirements for notices of disagreement for appellate 
review of VA activities. This measure is in response to a U.S. Court of 
Appeals for the Federal Circuit's ruling that upheld the VA's 
regulation that is beyond the scope of statutory requirements. PVA 
strongly supports S. 1360.
    PVA appreciates the opportunity to testify before the Committee 
today on this important legislation. As new veterans return from the 
front lines of combat in Iraq, we must continue to work to expand the 
benefits available. We look forward to working with this Committee in 
the future to continue to provide for our nation's veterans.

                               __________
     Prepared Statement of Dennis M. Cullinan, Director, National 
             Legislative Service, Veterans of Foreign Wars

    Mr. Chairman and Members of the Committee: On behalf of the 2.6 
million members of the Veterans of Foreign Wars of the United States 
(VFW) and our Ladies Auxiliary, I would like to thank you for the 
opportunity to offer our views on the following legislation under 
discussion.
    The VFW supports S. 257, the Veterans Benefits and Pensions 
Protection Act of 2003, introduced by Senator Nelson. This bill will 
prohibit unscrupulous companies from taking advantage of veterans by 
cheating 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, however, have found a loophole that 
they unjustly use to defraud unsuspecting 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 nation's veterans.
    We also applaud the 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.
    The VFW lends its support to S. 517, the Francis W. Agnes Prisoner 
of War Benefits Act of 2003, introduced by Senator Murray.
    We especially applaud Section 2(a), which would repeal of the 30-
day minimum period of internment prior to presumption of service 
connection for certain listed diseases for purposes of payment of 
veterans' disability compensation, Section 2(b) repeal of requirement 
for minimum period of internment for presumption of service connection 
for dental care and Section 2 (c) which adds additional diseases 
presumed to be service connected to Sec.1112 of title 38, United States 
Code.
    The VFW is pleased to offer our support for S. 1131, introduced by 
Chairman Specter, legislation that would provide an annual cost-of-
living adjustment to compensation, clothing allowance, and dependency 
and indemnity compensation (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.
    The VFW supports all sections of S. 1133, introduced by Chairman 
Specter, the Veterans Programs Improvement Act of 2003 with the 
exception of Section 5, which would amend the clarification of payment 
of compensation for alcohol or drug, related disability to preclude 
service connection on a secondary basis. Physicians often consider 
alcohol and drug related disabilities to be secondary conditions of 
Post Traumatic Stress Disorder resulting from such situations as 
internment as a POW or from severe combat war wounds such as an 
amputation.
    This, coupled with their primary condition, impairs their ability 
to manage day-to-day activities, like holding a job. Accordingly, their 
earning potential is limited. Disability compensation was intended to 
compensate the veteran for that limited earning potential due to 
injuries suffered while defending this nation. Further, restricting 
veterans from receiving these benefits, which were granted in relation 
to a primary service connected condition, directly opposes the 
principles behind service connected disability compensation.
    We strongly support S. 1188, introduced by Senator Murray, and 
would like to thank the members of the committee for addressing this 
legislation that would repeal the inequitable two-year limitation on 
accrued benefits.
    Last summer, the voting delegates to the VFW National Convention in 
Nashville, Tennessee, approved Resolution 628, which calls for the 
removal of the limitation on payment of accrued benefits. Under current 
law, if a veteran dies while a claim for VA benefits is being 
processed, the surviving spouse is entitled to no more than two years 
of accrued benefits. With the time period for processing claims and 
appeals often taking over two years, this law unjustly penalizes the 
survivor. The surviving spouse or children should not be made to suffer 
economically if a veteran dies while a claim for VA benefits is being 
processed.
    S. 1188 would ensure that the veterans' survivor would receive the 
full amount of accrued benefits. Further we support the section that 
would allow an eligible person to take up the veteran's claim if the 
original beneficiary dies while the claim is still pending.
    The VFW has long supported legislation that seeks to restore 
benefits to certain military forces of the Philippine Commonwealth Army 
and the Philippine Scouts and is pleased to support S. 1213, introduced 
by Chairman Specter by request. This legislation will provide a number 
of benefits that our Filipino veterans have earned through their 
service fighting side by side with American soldiers in WWII.
    It is our belief that since such forces were in active service of 
the U.S. Armed Forces they should be entitled to equal benefits under 
the programs administered by The Department of Veterans' Affairs. As 
many Filipino veterans of WWII are departing life every day, now is the 
right time to fulfill our obligation as a grateful nation and restore 
their full-earned benefits.
    Next, the VFW will discuss S. 1239, the Former Prisoners of War 
Special Compensation Act of 2003, introduced by Senator Craig. We 
support Section 2, which would establish a three-tiered special monthly 
compensation to former Prisoners of War to be based upon length of 
captivity as follows:
     Those detained 30-120 days would receive $150 per month
     Those detained 121-540 days would receive $300 per month
     Those detained 540 or more days would receive $450 per 
month
    We believe, however, that all POW's should be included in this 
special monthly compensation. Furthermore, we acknowledge Senator 
Murray's legislation mentioned earlier which would repeal the 30-day 
minimum period of internment prior to presumption of service connection 
for certain listed diseases for purposes of payment of veterans' 
disability compensation. By eliminating the 30-day starting period in 
the first tier, so that eligibility starts from the moment of capture 
those POW's who have been held for shorter intervals but have certainly 
suffered most of the same physical and psychological trauma as other 
POW's will be included.
    The VFW objects to Section 3, which would amend the clarification 
of payment of compensation for alcohol- or drug-related disability to 
preclude service connection on a secondary basis. We stand by our 
statement in S. 1133 which contains the same language in Section 5.
    The VFW is pleased to support Section 4 which would extend 
outpatient dental care to all former POW's regardless of their length 
of captivity.
    The VFW is supportive of S. 1281, introduced by Ranking Member 
Graham. This legislation would amend Title 38, United States Code, to 
presume additional diseases of former prisoners of war to be service-
connected for compensation purposes, to enhance the Dose Reconstruction 
Program of the Department of Defense, and to enhance and fund certain 
epidemiological studies. The VFW believes that Section 3, Dose 
Reconstruction Program of Department of Defense may be premature at 
this time. Recently the Government Accounting Office published a study 
on the Defense Departments' Reconstruction Program. We believe that the 
Department of Veterans' Affairs should be given the opportunity to 
review and respond to the findings in that report.
    The VFW supports S. 249 legislation introduced by Senator Clinton, 
which would amend Title 38, United States Code to provide that 
remarriage of the surviving spouse of a deceased veteran after age 55 
shall not result in termination of DIC.
    No other federally-funded survivorship program including Civil 
Service, Social Security and Congress's own program makes a distinction 
between unmarried and remarried surviving spouses. DIC was created to 
replace family income loss due to the service member or veteran's death 
and to serve as reparation for his death. Our nation has made a promise 
to our veterans that their families will be taken care of should they 
die for our country. It is our duty to ensure that that promise is kept 
and S. 249 is a good step towards that goal.
    The VFW also supports S. 938, introduced by Senator Murray, 
legislation to provide for the payment of DIC to the survivors of 
former prisoners of war who died on or before September 30, 1999, under 
the same eligibility conditions as apply to payment of DIC to the 
survivors of former prisoners of war who die after that date.
    The VFW will next address S. 1132, legislation introduced by 
Chairman Specter by request. We will comment on each section in order:

      SECTION 2. INCREASE IN RATES OF SURVIVORS' AND DEPENDENTS' 
                         EDUCATIONAL ASSISTANCE

    The VFW supports this section, as it would make the monthly benefit 
amount under the Dependents' Educational Assistance Program (DEA) equal 
to what veterans receive under the Montgomery GI Bill (MGIB).

     SECTION 3. MODIFICATION OF DURATION OF EDUCATIONAL ASSISTANCE

    VFW has no objection to this section that would allow eligible 
dependents 36 months of educational benefit upon enactment of the 
Veterans' Survivors Benefits Enhancements Act.

      SECTION 4. ADDITIONAL DEPENDENCY AND INDEMNITY COMPENSATION

    The VFW supports this section, which would provide the surviving 
spouse with dependent children under the age of eighteen additional DIC 
compensation.

 SECTION 5. ELIGIBILITY OF SURVIVING SPOUSES WHO REMARRY FOR BURIAL IN 
                          NATIONAL CEMETERIES

    The VFW supports this section that would permit remarried surviving 
spouses of veterans to be eligible for burial in a national cemetery. 
Current law does not allow the surviving spouse to be buried in a 
national cemetery if the surviving spouse's remarriage remained in 
effect at the time of death.
    In 1994, Public Law 103-446 revised the eligibility criteria by 
allowing a surviving spouse of an eligible veteran, whose subsequent 
marriage to a non-veteran had been terminated by death or divorce, to 
be buried in a national cemetery. This legislation would be consistent 
with that amendment and further acknowledges the importance of the 
veteran's first marriage.

   SECTION 6. BENEFIT FOR CHILDREN WITH SPINA-BIFIDA OF VETERANS OF 
                        CERTAIN SERVICE IN KOREA

    The VFW supports this section that would now equitably include the 
eligible child of any veteran, as stipulated in Chapter 18 of Title 38, 
United States Code (U.S.C.), who was exposed to herbicides used in 
certain other locations during the veteran's active military service on 
the same basis as veterans who are eligible under Chapter 11 of Title 
38, U.S.C. That authority, however, does not extend to those claimants 
under Chapter 18, Title 38, U.S.C., because their entitlement was not 
established until after P.L. 102-4 was enacted. It is our understanding 
that VA is in the process of issuing regulations under the authority of 
the Agent Orange Act of 1991 (P.L. 102-4) that would extend a 
presumption of exposure to veterans who served in other locations where 
herbicides, primarily Agent Orange, were used. Such locations included 
Panama, Johnson Island and the Demilitarized Zone between North and 
South Korea. These regulations have not been issued at this time.
    The VFW strongly supports both S. 1136, introduced by Chairman 
Specter and S. 792, introduced by Senator Miller. The Service members 
Civil Relief Act as titled both provide much needed enhancements to the 
original Soldiers' and Sailors' Civil Relief Act of 1940. We applaud 
those sections that will modernize, reinforce, and expand judicial and 
administrative protection for our service members. Both also offer 
increased protection for future financial transactions, legal 
representation, protection against default judgments, professional 
liability, and health and life insurance protections and guarantee 
residency for military members. Equally important is that it will 
shield professionals and small business owners called to active duty by 
protecting their assets from personal trade and business debts.
    The VFW supports S. 806, the Deployed Service Members Financial 
Security & Education Act of 2003, introduced by Senator Nelson. This 
legislation much like the Service members Civil Relief Act would 
improve the benefits and protections provided for regular and reserve 
members of the Armed Forces deployed or mobilized in the interests of 
the national security of the United States.
    We would like to specifically comment on Section 3 which would 
provide our military personnel a leave of absence from educational 
commitments and financial relief on student loans, tuition and fees 
paid for the period covering their active duty. Since September 11, 
many of our nations Air Force, Army, Coast Guard, Marine Corps, Navy 
and Reserve Components have put their postsecondary education on hold 
in order to serve their nation without hesitation. The VFW believes 
that offering them this waiver gives those called and their families' 
peace of mind and is the right thing to do.
    The VFW supports S. 978, introduced by Senator Schumer, which would 
amend Title 38, United States Code, to provide housing loan benefits 
for the purchase of residential cooperative apartment units. We believe 
that this legislation would offer those veterans living in large urban 
areas a more affordable option for using their VA housing loan.
    The VFW strongly supports S. 1124, introduced by Senator Mikulski, 
the Veterans Burial Benefits Improvement Act of 2003. This legislation 
provides a long overdue increase in veterans' burial benefits. When 
first enacted in 1973, the amount of the benefit for a service-
connected veteran covered 72 percent of the average burial expense, 
today, the current benefit of $2,000 covers just 39 percent of those 
costs. The non-service-connected veteran received 22 percent or $300, 
which is 6 percent of today's funeral expenses. This bill will provide 
service connected veterans an increase to $3,713 and non-service-
connected veterans an increase to $1,135, which returns the cost of 
burial benefits back to the same percentages offered in 1973 when the 
program was initiated.
    It will also allow for annual adjustment to cover inflation which 
we believe will help continue to address the burial needs of those who 
have and continue to make the ultimate sacrifice.
    The VFW supports S. 1199, introduced by Senator Feingold. This bill 
would improve the outreach activities of the Department of Veterans 
Affairs. We especially applaud Sec. 563, which would offer grants to 
States to help them in their efforts to improve, carry out, and 
coordinate outreach and assist veterans when applying for any veterans-
related health or benefit programs.
    The VFW strongly supports S. 1282, introduced by Ranking Member 
Graham, legislation to require the Secretary of Veterans Affairs to 
establish national cemeteries for geographically underserved 
populations of veterans.
    The mortality rate of our World War II and Korean veterans is 
increasing rapidly. VA estimates that approximately 665,000 veterans 
will die during this fiscal year--that is more than 1,800 per day and a 
figure much higher than previously projected.
    This legislation is a step in the right direction. It identifies 
areas that are currently underserved while mandating NCA to construct 
and open these cemeteries in a reasonable time frame. We would also 
encourage Congress to meet the present and future requirements of the 
National Cemetery Administration by providing adequate funding to 
ensure that existing cemeteries are properly maintained and new 
cemeteries are constructed to provide access to burial options for 
veterans and their eligible family members.
    The VFW is also pleased to support S. 1360, introduced by Ranking 
Member Graham, legislation that would amend section 7105 of Title 38, 
United States Code, to clarify the requirements for notices of 
disagreement for appellate review of the Department of Veterans 
Affairs. We believe this legislation strengthens Congress' original 
intent as to what constitutes a notice of disagreement.
    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 answer any questions you 
may have. Thank you.

    Senator Nelson of Nebraska. If there is no objection, and 
since I am the only one here and I am not going to the object--
--
    [Laughter.]
    Senator Nelson of Nebraska. ----then it will be the order 
of the chair that the business, having been accomplished, I 
order this hearing adjourned. Thank you very much.
    [Whereupon, at 3:46 p.m., the hearing was adjourned.]

                            A P P E N D I X

           The Prepared Statement of Hon. Daniel K. Inouye, 
                        U.S. Senator from Hawaii

    Mr. Chairman and Members of the Committee: At the outset, I wish to 
commend you for holding this hearing on veterans' benefits measures 
that are pending before the Committee. I appreciate the opportunity to 
comment on S. 1213, the Filipino Veterans' Benefits Act of 2003, which 
would provide both health care and certain compensation benefits to 
Filipino veterans residing legally in the United States.
    Many of you are aware of my continued support and advocacy on 
behalf of the Filipino World War II veterans, and the importance of 
addressing their plight. As an American, I believe the treatment of 
Filipino World War II veterans is bleak and shameful. Throughout the 
years, I have sponsored several measures to rectify the wrong committed 
against these World War II veterans. I am grateful to the Committee for 
the assistance and considerations given to my past initiatives 
involving the Filipino veterans. While some strides have been made, I 
believe more needs to be done to assist these veterans who are in their 
twilight years. Of the 120,000 that served in the Commonwealth Army 
during World War II, there are approximately 59,899 Filipino veterans 
currently residing in the United States and the Philippines. According 
to the Department of Veterans Affairs, the Filipino veteran population 
is expected to decrease to approximately 20,000, or roughly one third 
of the current population, by 2010.
    I support the intent of S. 1213, to provide health, disability 
compensation, and burial benefits to Filipino veterans legally residing 
in the United States. However, I remain concerned that the benefits in 
S. 1213 are restricted to only those veterans residing in the United 
States. In my view, a distinction should not be made between those 
veterans residing in the United States and those residing in the 
Philippines.
    As a result of a citizenship statute enacted by the Congress in 
1990, some Filipino veterans who were able to travel came to the United 
States to become United States citizens. At the same time, many other 
Filipino World War II veterans were unable to travel to the United 
States and take advantage of the naturalization benefit because of 
their advanced age. The law was subsequently amended under the Fiscal 
Year 1993 Departments of State, Justice, Commerce and the Judiciary 
Appropriations Act (Public Law 102-395), to allow the naturalization 
process for these veterans to occur in the Philippines. Since then, a 
distinction has been made to provide benefits to only those Filipino 
veterans residing in the United States. I believe it is unfair to make 
a distinction between those residing in the United States versus those 
residing in the Philippines. The Commonwealth Army of the Philippines 
was called to serve with the United States Armed Forces in the Far East 
during World War II under President Roosevelt's July 26, 1941, military 
order. Together, these gallant men and women stood in harm's way with 
our American soldiers to fight our common enemies during World War II.
    Because all Filipino veterans stood in equal jeopardy during World 
War II, I do not believe we should draw a distinction based on their 
current residency in the U.S. or in the Philippines. All of them were 
at equal risk, and so all should receive equal benefits. Accordingly, I 
introduced S. 68, the Filipino Veterans' Benefits Improvements Act of 
2003, which has health and disability compensation benefits similar to 
those provided in S. 1213, but without limitations based on the 
residency of the veterans. S. 68 includes an outpatient health care 
component at the Manila Veterans Affairs Outpatient Clinic for veterans 
residing in the Philippines. I strongly urge the Committee to 
incorporate provisions of S. 68 into S. 1213, and not make a 
distinction between those veterans residing in the United States and 
those veterans residing in the Philippines.
    Heroes should never be forgotten or ignored, so let us not turn our 
backs on those who sacrificed so much. Many of the Filipinos who fought 
so hard for our nation have been honored with American citizenship, but 
let us now work to repay all of these brave men and women for their 
sacrifices by providing them the veterans' benefits they deserve.

                               __________
              The Prepared Statement of Hon. Jim Bunning, 
                       U.S. Senator from Kentucky

    Thank you, Mr. Chairman. I am glad to be here today to begin the 
legislative process on improving benefits for our veterans. We have 
many good ideas on the agenda today, but unfortunately we don't have 
much money to spend under this year's Budget Resolution.
    First and foremost, we need to make sure our veterans receive a 
cost-of-living increase in the benefits they rely on. The Budget 
Resolution provides us with funding to ensure our veterans' benefits 
are increased by the same amount as Social Security benefits, and we 
have a bill on today's agenda to do just that. I am a co-sponsor of the 
Chairman's bill, S. 1131, which will ensure our veterans' benefits 
maintain their value and buying power. I fully support that bill, and 
hope that we can quickly hold a markup and get it to the Senate floor.
    Another important bill before us today is S. 1132, the Veterans' 
Survivors Benefits Enhancements Act. I am also a co-sponsor of this 
bill, which increases educational benefits for widows and children of 
our service members killed in action. Spouses and children of deceased 
service members would be eligible for the same level of educational 
benefits as the service member, and a new payment would be made for 
spouses with a minor child. Finally, remarried widows would be allowed 
to be buried in VA cemeteries with their first spouse. I realize this 
bill needs PAYGO offsets, and I hope we can find some so we can have 
this bill signed into law.
    Finally, I want to mention my support for S. 1136, another bill 
introduced by the Chairman that I am a co-sponsor of. That bill makes 
many important changes to the current Soldiers' and Sailors' Civil 
Relief Act of 1940, which protects our military men and women when we 
send them away from their homes. We have not updated this law 
substantially since the first Gulf War, and we need to modernize it to 
ensure our men and women who are increasingly deployed to fight 
terrorism around the globe can be sure they have legal protections in 
the courts and against creditors while they are fighting to protect our 
country.
    Again, thank you Mr. Chairman. I look forward to hearing from the 
witnesses.

                               __________
        The Prepared Statement of Hon. Hillary Rodham Clinton, 
                       U.S. Senator from New York

    Let me begin by thanking the chairman of this committee, Senator 
Specter, and the Ranking Member, Senator Graham, for allowing me the 
opportunity to submit this statement for the record in support of S. 
249. I would also like to acknowledge my partner in this effort, 
Senator Kay Bailey Hutchison. She is an original co-sponsor of this 
legislation and has been its steadfast advocate. I also want to thank 
The Gold Star Wives of America, who brought this issue to the attention 
of Senator Hutchison and myself. They have worked tirelessly for its 
passage.
    Mr. Chairman, at this time when our nation's armed forces are once 
again in harm's way defending the fundamental values of our nation, it 
is a fitting moment to remedy a long-standing penalty in the benefit 
system for the widows and widowers of United States veterans who served 
their country and paid the ultimate price.
    As you know, Dependency and Indemnity Compensation (DIC) is the 
benefit provided to surviving dependents of members of the Armed Forces 
who died in active duty or of a service-connected cause. However, it is 
the only federal annuity program that does not allow a surviving spouse 
who receives compensation to remarry after the age of 55 and retain 
these benefits. Social Security and the Railroad Retirement allow 
remarriage after 60 without the loss of benefits, while Civil Service 
Survivor Benefits and the Federal Employees Compensation Act allow 
remarriage after 55. This inherently unfair policy essentially demands 
that the surviving spouses of these heroes who find a mate later in 
life make an extraordinarily difficult and unjust choice.
    I firmly believe these courageous men and women should not have to 
choose between the person they love and financial security. By 
eliminating this marriage penalty, S. 249 will enable these widows and 
widowers, who have limited earning power, to continue to receive the 
assistance they need to make ends meet. Additionally, it will provide a 
small measure of comfort to those individuals who have been forced to 
make profound sacrifices in the name of their country.
    I urge my colleagues on the committee to join us in supporting this 
important and meaningful legislation. It is time for these inequities 
to be corrected. Thank you.

                               __________
              The Prepared Statement of Hon. Bob Filner, 
                    U.S. Congressman from California

    I would like to thank Chairman Specter and Ranking Member Graham 
for the opportunity to speak about providing Filipino World War II 
veterans, widows and dependent children living in the United States 
with increased benefits, including VA health care for Filipino veterans 
in the same manner as other U.S. veterans. I would also like to thank 
Chairman Specter for holding this hearing on this important issue.
    As many of you know, I have been working to restore these benefits 
for many years. By passing legislation for Filipino World War II 
veterans, we are providing a giant step forward in our quest to restore 
the benefits for Filipino soldiers that were rescinded by the 1946 
Congress, shortly after World War II ended.
    You also may know that over 50 years ago, Filipino soldiers were 
drafted into service by President Franklin D. Roosevelt. They fought 
side-by-side with soldiers from the United States mainland, exhibiting 
great courage at the epic battles of Bataan and Corrigidor. Their 
participation was critical to the successful outcome of the war in the 
Far East. It was quite a shock when Congress deprived many of these 
veterans of the benefits that they were expecting.
    Because these veterans are in their 70s and 80s, their most urgent 
need is for health care. So I sincerely appreciate the actions of the 
Chairman and of VA Secretary Anthony Principi to restore health care 
benefits to them.
    Regarding the increase in compensation in S. 1213 and in my own 
bill in the House of Representatives, H.R. 664, quoting Secretary 
Principi: ``Filipino beneficiaries residing in the United States face 
living expenses comparable to United States veterans and limiting the 
payment of these subsistence benefits to these individuals based on 
policy considerations applicable to Philippine residents is not only 
inequitable, but may result in undue hardships.'' Our actions today 
will benefit in a substantial way a number of these brave veterans and 
their survivors.
    But, at a deeper level, these bills are also about restoring 
dignity and honor to these proud veterans. Over fifty years of 
injustice burns in the hearts of the Filipino World War II veterans and 
in the hearts of their sons and daughters. This bill says that we will 
remedy this historical injustice. We will make good on the promise of 
America.
    Recently, the House of Representatives Veterans' Affairs Committee 
passed the provisions of my bill, H.R. 664 and they now move for action 
on the Floor of the House. I commend the Chair and the Ranking Member 
on their fine work in bringing S. 1213 to the Senate Veterans' Affairs 
Committee for consideration.

                               __________
Prepared Statement of Robert D. Evans, Director of Govermental Affairs, 
                        American Bar Association

    Dear Mr. Chairman: I am writing you in connection with the hearings 
your committee held July 10, 2003, on S. 792 and S. 1136, legislation 
to restate, clarify and revise the Soldiers and Sailors Civil Relief 
Act of 1940 (SSCRA). We ask that the ABA voice be heard and this letter 
be made a part of the record of the hearings. The ABA strongly supports 
enactment of this important legislation to modernize the SSCRA, which 
has had only a few changes since it was passed in 1940.
    We strongly recommend that the escalator provisions based on the 
Basic Allowance for Housing (BAH) found in Section 301 of S. 1136 be 
included in the final version of the legislation reported from 
Committee. We believe the BAH escalator is a much more realistic 
escalator than other escalators since it reflects rental costs where 
service members are assigned rather than escalators based on a national 
average like the CPI. Due to rising and widely varying housing costs, a 
realistic escalator provision or index is vitally needed.
    We also support the provisions in S. 1136 and in Section 3 of S. 
806, the ``Deployed Service Members Financial Security and Education 
Act of 2003,'' that would extend the six percent interest cap to 
federally insured student loans held by deployed service members. 
Coverage of these loans is now prohibited by the Higher Education Act 
of 1965.
    Following the terrorist attacks of September 11th, our nation has 
increased its focus on enhancing homeland security. Since the military 
action against Iraq was initiated, the number of service members and 
reservists on active duty has increased. Because our homeland security 
is at stake, it is imperative that these brave men and women devote 
their full and undivided attention to their military duties. As a 
result, we must provide security at home for those who risk their lives 
everyday, in order to protect our nation. S. 792 and S. 1136 take 
several important steps toward that end.
    Congress has an important opportunity to modernize and clarify the 
SSCRA, which has become outdated as a result of the passage of 63 years 
and advancements in case law. The revision of the SSCRA is an urgent 
issue that should be addressed as soon as possible. Legislative action 
will show our service members that we value their sacrifices and that 
we fully support them and their families.
    Thank you for considering the views of the ABA on this important 
legislation.
  

                                  
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