[Senate Hearing 109-14]
[From the U.S. Government Publishing Office]



                                                         S. Hrg. 109-14



                 NOMINATION OF HON. R. JAMES NICHOLSON
                      TO BE SECRETARY, DEPARTMENT
                          OF VETERANS AFFAIRS

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

                                HEARING

                               BEFORE THE

                     COMMITTEE ON VETERANS' AFFAIRS

                          UNITED STATES SENATE

                       ONE HUNDRED NINTH CONGRESS

                             FIRST SESSION

                               __________

                            JANUARY 24, 2005

                               __________

       Printed for the use of the Committee on Veterans' Affairs


 Available via the World Wide Web: http://www.access.gpo.gov/congress/
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                     COMMITTEE ON VETERANS' AFFAIRS


        .........................................................


                    Larry E. Craig, Idaho, Chairman
Arlen Specter, Pennsylvania          Daniel K. Akaka, Hawaii, Ranking 
Kay Bailey Hutchison, Texas              Member
Lindsey O. Graham, South Carolina    John D. Rockefeller IV, West 
Richard Burr, North Carolina             Virginia
John Ensign, Nevada                  James M. Jeffords, (I), Vermont
John Thune, South Dakota             Patty Murray, Washington
Johnny Isakson, Georgia              Barack Obama, Illinois
                                     Ken Salazar, Colorado


                  Lupe Wissel, Majority Staff Director
               D. Noelani Kalipi, Minority Staff Director


                            C O N T E N T S

                              ----------                              

                            JANUARY 24, 2005

                                SENATORS

                                                                   Page


Craig, Hon. Larry E., U.S. Senator from Idaho....................     1
Akaka, Hon. Daniel K., U.S. Senator from Hawaii..................     3
Isakson, Hon. Johnny, U.S. Senator from Georgia..................     4
Obama, Hon. Barak, U.S. Senator from Illinois....................     5
    Articles from the Chicago Sun-Times .........................    30
Burr, Hon. Richard, U.S. Senator from North Carolina.............     6
    Prepared statement...........................................     7
Rockefeller IV, Hon. John D., U.S. Senator from West Virginia....     7
Thune, Hon. John, U.S. Senator from South Dakota.................     9
Jeffords, Hon. James M., U.S. Senator from Vermont...............    10
    Prepared statement...........................................    11
Hutchison, Hon. Kay Bailey, U.S. Senator from Texas..............    11
Allard, Hon. Wayne, U.S. Senator from Colorado...................    13
Salazar, Hon. Ken, U.S. Senator from Colorado....................    15
    Prepared statement...........................................    16

                                WITNESS

Nicholson, Hon. R. James, nominee to be Secretary, Department of 
  Veterans' Affairs..............................................    17
    Prepared statement...........................................    51
    Questionaire for Presidential nominee........................    54
    Response to written questions submitted by:
        Craig, Hon. Larry E......................................    57
        Akaka, Hon. Daniel K.....................................    64
        Hutchison, Hon. Kay Bailey...............................    66
        Specter, Hon. Arlen......................................    69
        Rockefeller IV, Hon. John D..............................    69
        Jeffords, Hon. James M...................................    72
        Salazar, Hon. Ken........................................    74
        Thune, Hon. John.........................................    78

                                APPENDIX

King, James B., Executive Director, AMVETS, prepared statement...    81
Clements, R.E., Commander, Department of Colorado Veterans' 
  Affairs, 
  letter.........................................................    82
Howard, Gerald, Executive Vice President, National Association of 
  Home Builders, letter..........................................    83
Mansell, Al, CRB, President, National Association of Realtors, 
  letter.........................................................    83
Maziarski, Frank T., President, and Carol M. Craig, President, 
  American Association of Nurse Anesthetists, letter.............    84
Molloy, John J. Jr., Chairman, National Vietnam & Gulf War 
  Veterans 
  Coalition, letter..............................................    84
Muller, Sgt. Artie, Founder/National Executive Director, Rolling 
  Thunder, Inc., National Chapter 1, letter......................    85

 
                 NOMINATION OF HON. R. JAMES NICHOLSON
                     TO BE SECRETARY, DEPARTMENT OF
                            VETERANS AFFAIRS

                              ----------                              


                        MONDAY, JANUARY 24, 2005

                      United States Senate,
                    Committee on Veterans' Affairs,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10:06 a.m., in 
Room SR-418, Russell Senate Office Building, Hon. Larry Craig 
presiding.
    Present: Senators Craig, Hutchison, Burr, Thune, Isakson, 
Akaka, Rockefeller, Jeffords, Obama, and Salazar.

            OPENING STATEMENT OF HON. LARRY CRAIG, 
                    U.S. SENATOR FROM IDAHO

    Chairman Craig. Good morning, ladies and gentlemen. The 
Committee will come to order. It is my pleasure to call this 
hearing to order, the first hearing of the Senate Committee on 
Veterans Affairs for the 109th Congress and the first hearing 
of this Committee that I have the honor of chairing.
    In a few moments, we will receive testimony from the 
President's nominee to serve as Secretary of Veterans Affairs, 
Ambassador Jim Nicholson, and I will offer him the opportunity 
to introduce the family members who have accompanied him to the 
hearing this morning. But if I may, I would like to offer a few 
introductory remarks first.
    Let me begin by thanking my Republican colleagues for 
electing me Chairman of this Committee earlier this month. I 
pledge to them--and to all of the Committee Members--that I 
will work diligently to meet the needs of America's veterans 
that we are honored to serve. I also would pledge to all of 
you, as I have to our Ranking Member, Senator Akaka, that I 
will maintain the Committee's long tradition of approaching 
veterans' issues in a constructive, problem-solving and 
bipartisan manner.
    This approach has worked very well during the 10 years that 
I have had the privilege of serving on this Committee, and that 
will continue under my stewardship. I welcome back to the 
Committee the returning Members, starting with our Committee's 
newly-appointed Ranking Member, Senator Daniel Akaka of Hawaii. 
I look forward to working with you, Senator, in putting 
together and advancing this Committee's agenda. We have already 
met to discuss a lot of issues and we will continue to meet 
together and work together for the good of our veterans. We 
share those same desires and goals.
    I also want to welcome back Members to the Committee with 
previous service: Senator Specter, who may not be with us this 
morning--I think he is in transit--Senators Hutchison, Graham 
and Ensign on the Republican side; Senator Rockefeller who is 
with us, and Senators Jeffords and Murray on the Democratic 
side.
    Finally, but most particularly, I want to welcome our new 
Senators who have been chosen to serve on this Committee: 
Senator Burr, who is with us this morning; Senator Isakson, who 
is also with us; Senator Thune, who I think will be joining us; 
and Senator Obama, who is with us. Senator Salazar is sitting 
down waiting to make introduction this morning. Again, thank 
you all for being here. I look forward to working with you.
    Now, to return to the business at hand. The President has 
nominated Ambassador Jim Nicholson to serve as Secretary of 
Veterans Affairs. Mr. Ambassador, I thank you for accepting 
this charge. As you will soon find out, running VA is one of 
the tougher jobs in Washington, one that will perhaps be made 
more difficult by two realities that you will face. You will 
succeed a man who will be a tough act to follow, and second, it 
now appears clear that the fiscal environment that you will 
inherit will be considerably less friendly than the relatively 
flush times the VA has enjoyed over the past 4 years. But I 
know, Mr. Nicholson, that you are up to the challenge.
    When you are confirmed, you will find that this Chairman, 
and I hope the Committee's Members, will be partners with you 
in making sure that America's veterans are continually served 
in the necessary and the appropriate fashion that we expect and 
that I know you anticipate.
    Before I proceed, let me offer to you a brief summary of 
Ambassador Nicholson's extraordinary background. Jim Nicholson 
was born on an Iowa farm in 1938. He left Iowa in 1957 to 
attend the United States Military Academy at West Point. After 
graduation in 1961, he served 8 years in active service in the 
Army as a Ranger and paratrooper. Most notably, he served a 
tour in Vietnam from 1965-1966, where he earned, among other 
decorations, the Bronze Star, the Combat Infantry Badge, the 
Air Medal and the Vietnamese Cross of Gallantry.
    After returning from Vietnam, then-Captain Nicholson served 
on active duty for 4 more years until 1970, followed by an 
additional 21 years as a Reserve officer. He retired from the 
Army Reserves in 1991 at the rank of colonel. Mr. Nicholson 
holds a masters degree in public policy from Columbia 
University and a J.D. from the University of Denver.
    After practicing law for a relatively brief time in Denver 
in the 1970s, he launched a successful real estate development 
career in Denver. Among other positions, he served as Chairman 
and President of Renaissance Homes of Colorado. His business 
career was also marked by extensive community involvement and 
charitable activities.
    In 1986, Mr. Nicholson became a committeeman for the 
Republican National Committee, and in 1993, he was elected 
RNC's vice-chairman, and in 1997, he was elected for a 4-year 
term as the RNC's Chairman. It was during that time that I grew 
to know Jim a great deal better than I had in the past.
    In August of 2001, President Bush appointed Mr. Nicholson 
U.S. Ambassador to the Vatican. From that post, he has 
advocated for religious reconciliation, religious freedom in 
China and Russia, and against the international exploitation 
and enslavement of defenseless persons, commonly referred to as 
human trafficking.
    If I may comment, that summarizes what I believe to be an 
extraordinary career. Veterans are fortunate, I think, that you 
have answered the President's call to service, Jim, and I hope 
that this Committee can offer quick confirmation.
    Now, if I may, let me recognize our Committee Members for 
any comments they would like to make, and let me turn, of 
course, to our Ranking Committee Member first, Senator Akaka.
    Senator.

              STATEMENT OF HON. DANIEL K. AKAKA, 
                    U.S. SENATOR FROM HAWAII

    Senator Akaka. Thank you very much, Mr. Chairman.
    I am very pleased to be here with you. I look forward to 
working with you. We have had a great beginning. We have sat 
together and chatted about the future of this Committee, and 
from that conversation I can tell you that we have some common 
ideas, and of course, the common idea is to help our veterans 
the best we can. And I am also pleased to be working with 
Senator Craig, because we have had a long history of working 
together in the House as well as here in the Senate, and we've 
talked about things that make me feel excited about this 
Committee and its future.
    I am also very pleased to welcome Ambassador James 
Nicholson to our hearing today. Mr. Ambassador, I also want to 
welcome your wife, Suzanne, and your family and thank them for 
their contributions to this process as well. And I want to 
thank you for taking time to meet with me before today's 
hearing.
    We have some new Members in the Veterans' Affairs 
Committee, and I am confident that, without question, they will 
make important contributions as we work together to fulfill our 
Nation's commitment to America's veterans.
    Mr. Ambassador, I know I do not need to impress upon you 
the importance of the leadership role you will soon assume as 
VA Secretary. As a graduate of the United States Military 
Academy, you have been provided with valuable lessons in 
leadership that can be applied to VA. We expect you to hit the 
ground running with the many challenges that you will face, and 
of course, and I want to emphasize this, we will be here to 
support you.
    On the health care side of VA, I think you will find that 
we are always open to new and cost-effective ways to care for 
our current veterans and those who are returning from Iraq and 
Afghanistan. However, it is a non-starter to cut back on 
services or cut who is eligible for VA care. I want you to know 
that we are proud of the work that this Committee and other 
Members have done in the past and in 1996 to improve 
eligibility for care.
    Health care is now very often provided in different 
settings that frequently are not hospitals. Outpatient clinics 
dot the landscape and provide for ease of access. We are seeing 
huge numbers of veterans seeking VA care for the first time. I, 
for one, believe this is a good thing. Others rationalize that 
as we are at war, we must cut back on VA care. I simply do not 
understand that logic. We are at war, and therefore, we must do 
everything we can to show our military that VA health care will 
be there for all veterans who served.
    On the benefits side, we are in crisis. VA has come under 
fire for the lack of timeliness of its claims processing. As a 
result, the Veterans Benefits Administration has turned its 
attention to decreasing the amount of time it takes to process 
a claim, to the detriment of the quality of its decision 
making. We are looking to you for innovative approaches so that 
the Veterans Benefits Administration can absorb changes in law 
and new business processes without always going into a nose 
dive. Our veterans deserve no less than quality workmanship 
done in a timely manner.
    Mr. Ambassador, because you did mention and quote from 
George Washington, I want to do so as well and say that, I 
quote: ``The willingness with which our young people are likely 
to serve in any war, no matter how justified, shall be directly 
proportional to how they perceive the veterans of earlier wars 
were treated and appreciated by their Nation.''
    Mr. Ambassador, our Nation and our veterans are depending 
on you. Our servicemembers returning from Iraq and Afghanistan 
have earned a seamless transition from the military to civilian 
life. You must assure us that the Department of Veterans 
Affairs will do its part in this endeavor.
    Thank you very much. I welcome you, Mr. Ambassador, your 
family, and thank you very much, Mr. Chairman.
    Chairman Craig. Senator Akaka, thank you very much.
    What I would like to do for those Members who have opening 
statements is turn to you in the order in which you came into 
the Committee room, and then, we will turn to our colleagues 
who are here to introduce and endorse the Ambassador. We will 
administer the oath of office--or the oath for the Committee to 
the Ambassador and allow his testimony. We will not get to that 
office yet.
    [Laughter.]
    Chairman Craig. That is anticipating a much more 
accelerated process than we are going to go through today.
    [Laughter.]
    Chairman Craig. Senator Isakson, I believe you were the 
first to enter the room. Do you have any opening statement?

               STATEMENT OF HON. JOHNNY ISAKSON, 
                   U.S. SENATOR FROM GEORGIA

    Senator Isakson. Mr. Chairman, I will submit my full 
statement for the record. I would like to make two or three 
quick comments.
    One, it is a privilege and an honor to serve on this 
Committee, and to serve with you as Chairman and Ranking Member 
Akaka; I look very much forward to doing that. I am delighted 
to be here at this hearing for Ambassador Nicholson and 
particularly delighted to be here in the best interests of the 
veterans of the United States of America. I know that the 
opening statement of the Ambassador is to follow, I have 
already read it, and I want to acknowledge at the outset my 
appreciation for his principles and commitments in terms of 
veterans, their health care, and the honor of those who make 
the ultimate sacrifice in our United States military, and I 
look forward to the hearing and the opening statement of 
Ambassador Nicholson.
    Thank you, Mr. Chairman.
    Chairman Craig. Thank you, Senator.
    Senator Obama.

            OPENING STATEMENT OF HON. BARAK OBAMA, 
                   U.S. SENATOR FROM ILLINOIS

    Senator Obama. Thank you very much, Mr. Chairman and 
Ranking Member Akaka. Thank you so much for allowing me to join 
this Committee. It is a great honor to be here.
    I want to thank, first of all, Ambassador Nicholson, for 
his service to this country. It is a great honor for you to not 
only be willing to serve now in this current position, but also 
your service as a veteran to the United States. And I am 
looking forward to working with you. We have had occasion to 
meet, and I have no doubt that you will do an outstanding job.
    As you know, I do have a set of particular concerns with 
regard to Illinois that I will be raising with you. Senator 
Akaka mentioned this quote earlier from George Washington about 
the importance of us serving our veterans so that we can 
continue to ask our Nation's young men and women to serve on 
our behalf. I think the Father of our Country understood what 
every veteran in this great country knows today: that when we 
send our troops to war, it is our solemn obligation to care for 
them upon their return and to do so in a timely manner and to 
treat them with the respect and dignity which they have earned 
and which they deserve.
    Now, a lot of my questioning is going to be focused on the 
fact that in Illinois in particular, there seems to be some 
concern that we are failing to live up to that obligation. Very 
specifically, Illinois' disability pay compensation system 
appears to be broken. There was a recent report by the Chicago 
Sun-Times that found that Illinois veterans, when compared to 
the compensation levels granted to veterans in other States, 
rank 50th out of 52 States and territories, and I think, in 
fact, we have a chart here that I just want to show very 
briefly.
    Apparently, there is as much as a $5,000 discrepancy 
between Puerto Rico and Illinois with respect to compensation 
levels for disabled veterans. Mr. Ambassador and Members of 
this Committee, that is unacceptable by President Washington's 
standard, and it should be unacceptable by our standards as 
well.
    Worse still, many of the veterans who finally receive 
benefits only get them after long, stressful battles with the 
VA. I believe we can and we must do better. Over the past 
several days, I have met with more than 500 veterans throughout 
Illinois to hear about what they believe, how they believe they 
are being treated by the VA. Though I know that the Department 
is doing some things very well, and that was acknowledged by a 
number of the veterans' groups, nearly every veteran I talked 
to was frustrated. Some have been fighting claims for decades; 
some have yet to receive compensation they deserve, and worst 
of all, some feel that the VA simply is not listening to them 
or does not care about them.
    So I recognize that some of these issues are going to have 
to do with budget concerns. It was already referred to by our 
Chairman that you are going to be inheriting a more difficult 
fiscal situation than your predecessor. At the same time, I 
also know that because we are at a time of war, this is 
precisely the time when we are going to have to do better. We 
know that the situations that contribute to post-traumatic 
stress disorder are directly proportional to the type of 
warfare fought. Urban combat in Iraq, mixed with an insurgency 
that is not always identifiable, coupled with a prolonged 
deployment create an even greater stress on today's brave 
soldiers.
    And I will just note in closing that a recent Army study 
showed that 1-in-6 soldiers in Iraq reported symptoms of major 
depression, and some think that figure could eventually reach 
1-in-3, a figure equal to those veterans who served in Vietnam. 
With hundreds of thousands of veterans from Iraq and 
Afghanistan who are going to be coming back from the war, some 
predict that the soldiers requiring mental health treatment 
could exceed 100,000.
    So I look forward very much to working with you, Mr. 
Ambassador. I look forward to the answers that you're going to 
be providing to this Committee. I am looking forward to your 
actions to address the disparities that I have already alluded 
to. Hopefully, if we learn where we failed our veterans in the 
past, we can better serve them in the future.
    I thank you for your attention.
    Chairman Craig. Senator, thank you very much.
    Senator Burr, any opening comment?
    Senator Burr. Thank you, Mr. Chairman, and I would ask 
unanimous consent that my full statement be in the record.
    Chairman Craig. Without objection.

            OPENING STATEMENT OF HON. RICHARD BURR, 
                U.S. SENATOR FROM NORTH CAROLINA

    Senator Burr. Mr. Chairman, let me thank you for your 
gracious welcome to us. Also, congratulations on your 
chairmanship and to the Ranking Member. I look forward to this 
year.
    To the Ambassador, let me say welcome back. I know Rome is 
a difficult place to leave, but it is my understanding that 
from the top of the Capitol dome, you can see the Vatican. I am 
told you can see everything from the top of the Capitol dome.
    [Laughter.]
    Senator Burr. The Veterans Administration will be a very 
difficult challenge at a very challenging time. In 1988, Ronald 
Reagan said of veterans: ``America's debt to those who would 
fight for her defense does not end the day the uniform comes 
off. For the security of our Nation, it must not end.''
    In North Carolina, Mr. Ambassador, we now have over 800,000 
military veterans. Honoring and working for those individuals 
is something that I believe is a duty of a Member of the United 
States Senate. We understand the importance of taking care of 
those who have served so bravely and willingly to protect the 
freedoms and the liberties that we have here in this country.
    But in the last 16 years since the new department was 
created, I do not think that we have perfected the operation of 
what it does. My hope, my wish and my belief is that you come 
with a level of commitment not to solve 100 percent, but to 
solve something every day. I believe that is the most we can 
ask of you. I believe that is the most we should expect, that 
after your tenure and our tenure that, in fact, our veterans 
are better off because of the contributions we have made.
    I look forward to your confirmation. I urge my colleagues 
to be as quick as the Chairman has tried to be by his 
acclamation.
     And I would yield back.
    [Laughter.]
    [The prepared statement of Senator Burr follows:]

              Prepared Statement of Senator Richard Burr, 
                    U.S. Senator from North Carolina

    Thank you, Chairman Craig, and congratulations on your new 
chairmanship and to Senator Akaka as Ranking Member. I know you will 
serve our nation's Veterans well and I look forward to working with you 
both.
    Let me welcome you, Ambassador Nicholson, back from Rome and to the 
United States Senate. I congratulate you on your selection by the 
President to serve in the crucial position of Secretary of Veterans 
Affairs and I appreciate your willingness to serve in this new 
capacity.
    My Dad, Dr. David Burr, served as a Frogman in the Navy during 
World War II, and he sends along his regards as well.
    When the legislation that created the Veterans Administration was 
signed into law in 1988, President Ronald Reagan said that ``America's 
debt to those who would fight for her defense doesn't end the day the 
uniform comes off. For the security of our nation, it must not end.''
    North Carolina has a growing population of Veterans, approaching 
800,000 in recent reports. Honoring and working for these Veterans is 
something I intend to work on as Senator from North Carolina.
    We all understand the importance of taking care of those who have 
served so bravely and willingly to protect the freedoms that America 
offers. With troops on the ground defending those freedoms as we speak, 
we are reminded to do our best for our Veterans.
    In the past four years, the budget of the Department has increased 
by just about 50%. Clearly, Congress and the Bush Administration have 
committed to improving health care benefits and access, quality of life 
programs, and pensions for Veterans.
    But in the 16 years since the new Department was created, we have 
certainly not perfected the operation. We still have inefficiencies and 
waiting lines to see physicians. We continue to evolve and upgrade, but 
work remains.
    As a member of this Committee, I will commit myself to improving 
the Department so that the care and services provided to Veterans will 
improve.
    I hope that you will join me in that commitment and I look forward 
to working together to improve the Department of Veterans Affairs.

    Chairman Craig. Thank you, Senator.
    Now, let me turn to one of the more senior Members of the 
Committee and one who I have had the privilege of working with 
over the last good number of years on veterans' issues, 
certainly an outspoken advocate for veterans. We always 
appreciate your presence and service on this Committee, Senator 
Rockefeller.

       OPENING STATEMENT OF HON. JOHN D. ROCKEFELLER IV, 
                U.S. SENATOR FROM WEST VIRGINIA

    Senator Rockefeller. Thank you, Chairman Craig, and I very 
much am pleased that you are our Chairman. As I discussed with 
the Ambassador, I think you are going to make an excellent 
Chairman.
    What this Committee, I think, needs is kind of the 
methodical work, systematically going through issues not just 
as they pop up in dramatic fashion, but on a systemic basis. I 
think that is part of your makeup and part of your discipline, 
and I have great respect for your fairness. And I equally honor 
Senator Akaka, who has been on this Committee for a long time; 
is a veteran and a splendid person.
    Ambassador, you have already brought people together. There 
are three people who I have never seen before, and they sit 
across the table from me, and I must say that I am very pleased 
to be working with you three gentlemen. The other lady, I 
already know very well and have very high respect for.
    Senator Obama, I think it is wonderful that you are on this 
Committee. I think that you will bring a wonderful vigor to it 
and intellectual analysis, and Senator Jeffords is just a piece 
of art, a special person, and he is always good.
    A couple of points: it was mentioned earlier that young 
people are more likely to go into the service if they feel that 
their Veterans Administration is going to take good care of 
them afterwards. Actually, I do not agree with that statement, 
and I think that is one of our problems. It is very hard to get 
even those who are entering the service to think about more 
than what it is they are going to be doing, which is certainly 
understandable: the training and the pressure they are going to 
be under.
    But I think there is an enormous instinct in this country 
to somehow assume that when veterans come home that they are 
going to get the care that Abraham Lincoln promised them. And I 
do not think that is the case, and yet, it is also one of the 
best health care systems in the world and the only one over 
which, in a sense, those of us who represent the American 
people have full control, which makes your position 
particularly important.
    We had a very good talk. One of the things I liked about 
you was not just your 30 years of service, your Ranger 
training, a number of other things we discussed, but I think 
you are doing this for the right reasons. You did not have to 
do this. You did not have to accept this job, because you are 
at a position and experience and et cetera where you do not 
need to. You have served your country in many ways. But you 
have chosen to do it, and I respect that. I think your soul is 
good, and I think that is an awful good place to start.
    A number of the problems have been raised. I worry, as 
Senator Obama does, particularly about what is going to happen 
with our returned veterans and the whole post-traumatic stress 
disorder syndrome. I even have not given up yet on work to be 
done on the Persian Gulf War Syndrome, and that may be, if I 
get to it, part of my questioning.
    But the work of this Committee, and I have been on it now 
for 20 years, is extraordinarily important. Because it is a B 
committee in the parlance of the Senate, it is not always given 
the weight that some of the other committees, the Finance 
Committee, the Commerce Committee, whatever, might be given.
    I think that is a terrible mistake, particularly where we 
are now in our Nation's history and where I think we are going 
to be for several generations. We have to resolve as a 
Committee, Mr. Chairman, and this is one of the reasons why I 
am so glad that you are Chairman, we are going to have to 
resolve as a Committee as well as a Veterans Administration to 
sort of put a new intensity into our work. We cannot expand our 
numbers. Your numbers are so large that only the Pentagon has 
more people, and the question is how do you bring them the top 
level, the middle level, you know, how do you close that gap 
and shape people to your will, which I think is innate to your 
character and to your experience and to what you want to do?
    So I welcome you. You flat out have my vote for a lot of 
reasons, and I think you are going to do a very good job, and I 
think it is our job to work very closely together.
    Thank you, Mr. Chairman.
    Chairman Craig. Senator Rockefeller, thank you for those 
comments.
    This may be a B committee. When we are through with it in 
the next few years, we will show the United States Senate that 
it will have the intensity of a Super A.
    All right; we thank you very much for that.
    Now, let me turn to Senator Thune.

             OPENING STATEMENT OF HON. JOHN THUNE, 
                 U.S. SENATOR FROM SOUTH DAKOTA

    Senator Thune. Thank you, Mr. Chairman and Senator Akaka.
    It is a privilege to be on the Committee and to have the 
opportunity to work with you and the other Members of this 
Committee and also on behalf of America's veterans. This is 
important business that we go about as we strive to serve the 
needs of America's veterans, men and women who have served this 
country and sacrificed for all of us when we were the ones in 
need of their service. And it is particularly important now 
because we are a country at war, and we will have men and women 
who will be returning to civilian life trying to piece their 
lives together after some of the most difficult and hazardous 
tours of duty in recent history. Many will come back disabled, 
and we owe all of these veterans our utmost care and devotion.
    I also want to note that my State of South Dakota boasts an 
exceptionally high ratio of veterans to its overall population 
compared with other States. Because it is a largely rural State 
with many remote communities, our veterans face a number of 
peculiar issues. One of the problems I will be interested in 
addressing while on this Committee is improved access to VA 
health care facilities. Often, the nearest VA hospital is 
hundreds of miles away, and to require a veteran to drive three 
or four hours to the nearest VA hospital for a simple blood 
test, especially for elderly vets, is simply not fulfilling 
this country's obligation, and I look forward to working with 
you toward finding a solution to this problem and many more. We 
owe that to our veterans.
    I also look forward to working with Ambassador Nicholson. I 
cannot think of a more qualified nominee for this position. You 
have got the character of an Iowa farm kid and have paid a lot 
of dues in the time since, and I just think it is so important, 
your commitment and dedication to serving the wellbeing of 
veterans all across this country the same way that you were to 
serving the needs of the servicemen under your command when you 
were in uniform.
    And the fact is that you have a tremendous record of 
service to this country that did not end when you took the 
uniform off, and for that, the country is already grateful, and 
we are looking very much forward to working with you as we 
again attempt to address the important challenges and problems 
that are facing veterans across this country at a time when we 
have some unique needs, the Nation being at war, and, as was 
noted earlier, the budgetary constraints that we are all under, 
but I cannot think of a priority that is higher in terms of 
what we need to be doing to honor and respect and serve the 
needs of America's veterans.
    And so, I am delighted to be a part of this Committee and 
look forward to working with you and am anxious to see you 
quickly confirmed.
    Thank you, Mr. Chairman.
    Chairman Craig. Senator Thune, thank you.
    Now, let me turn to Senator Jeffords from Vermont, where 
the snow might be just a little deeper this morning.
    [Laughter.]

         OPENING STATEMENT OF HON. JAMES M. JEFFORDS, 
                   U.S. SENATOR FROM VERMONT

    Senator Jeffords. Mr. Chairman, congratulations on assuming 
the chairmanship of this Committee.
    Chairman Craig. Thank you.
    Senator Jeffords. I am very pleased that you have 
articulated your strong support for America's veterans, and I 
look forward to working closely with you and Senator Akaka to 
see that our veterans get the care and the benefits that they 
need and deserve.
    Mr. Ambassador, you are a graduate of West Point and a 
distinguished veteran. You know the rigors of combat, and you 
have seen the valor of America's finest. You have now accepted 
one of the greatest challenges in American Government, that of 
fulfilling our promise to our veterans. As a veteran myself and 
an enrollee in my local VA, I know first hand the challenges 
this system is facing.
    Your predecessor, Secretary Principi, did a tremendous job 
in improving the VA, even in the face of insufficient budgets, 
but we can, and we must, do better. It is no longer a matter of 
choice of relative priority. Hundreds of thousands of men and 
women have gone into war, as required by their commander-in-
chief. They have suffered both visible and invisible wounds. 
They require immediate care today, and many will require 
extensive care for the rest of their lives.
    We cannot equivocate in providing that care, nor is it 
morally acceptable to provide that care at the expense of 
veterans of previous eras. We are not meeting our national 
obligation if we turn away any class of veterans. I ask you to 
join me and join this Committee in ensuring that our Nation's 
veterans receive the care and benefits that they deserve.
    Mr. Chairman, I ask that my entire statement be made a part 
of the record.
    Chairman Craig. Without objection. Thank you, Jim.
    [The prepared statement of Senator Jeffords follows:]

             Prepared Statement of Hon. James M. Jeffords, 
                       U.S. Senator from Vermont

    Thank you, Mr. Chairman.
    Let me first say that I appreciate the fact that you have moved 
swift1y to schedule this hearing on this critical nomination. I am very 
pleased that you have articulated your strong support for America's 
veterans, and I look forward to working very closely with you and 
Senator Akaka to see that our veterans get the care and benefits they 
deserve.
    Ambassador Nicholson, I appreciate your being willing to accept 
this difficult assignment. Your appointment comes at a critical time 
for our country and for the Department of Veterans Affairs. Under the 
very strong and able leadership of your predecessor, Secretary 
Principi, the VA was able to strengthen its health care system and 
improve the delivery of veterans' benefits.
    However, the entire VA system has been hampered by the 
unwillingness of this Administration to provide the VA with the 
resources that are necessary to fully meet the needs of veterans. VA 
hospitals are forced to forego needed maintenance and capital 
improvements in order to prevent a shortchanging of veterans health 
care. Benefits that could have been provided in a more timely manner 
are being delayed because sufficient resources have not been devoted to 
processing of claims. Benefits that were widely endorsed by Congress, 
such as concurrent receipt of full VA disability and military 
retirement pay, are not being paid to veterans today because adequate 
funding has not been included in the Administration's budget.
    And on top of all this comes the Iraq war and the sharp increase in 
demands on the VA system from returning servicemen and women.
    As a veteran myself, I am determined that this Nation fulfill its 
obligation to the men and women it has sent into battle. I am worried 
that we do not have sufficient resources to care for all their wounds 
and replace all their missing limbs. I am even more concerned that we 
are not fully prepared to meet the challenge of the unseen wounds, the 
psychological wounds that this war is inflicting on both the visibly 
wounded and the physically unscathed veteran. While we may have 
disagreed on the wisdom of starting this war, I don't believe there can 
be any disagreement on the importance of properly caring for those who 
are now suffering because of their military service.
    The activation of unprecedented numbers of National Guard and 
Reserve units is adding to the challenge facing the VA. Guard Members 
and Reservists come from all over America. Upon their return home, they 
do not have access to military base networks, where active duty 
military personnel find support. In many instances, the VA is their 
primary source of assistance. VA hospitals and clinics, many in remote 
areas, will be faced with new and very urgent challenges, ones they 
must meet!
    Like many of my colleagues, I have been to Walter Reed Army 
Hospital and have glimpsed the enormity of the task facing the VA. 
Because you are a decorated soldier, I am sure you share my passion to 
do right by our veterans. I hope you also share my determination to 
demand that this be a top priority of this Administration.
    Mr. Ambassador, let me just say in closing that we in Vermont are 
very lucky. Our White River Junction VA medical center and regional 
office is one of the very best in the country. Twice the recipient of 
the prestigious Robert W. Carey Achievement Award, the White River 
Junction VA was selected for the Trophy Award, the Carey Award's 
highest honor, this fall. As an occasional patient at the White River 
Junction VA, I can attest to both the quality of care and the 
efficiency of their service. This center is truly a model for other VA 
centers around the country. But even the White River Junction VA will 
not be able to maintain this quality of care if adequate funding is not 
secured in Washington. That must be our job. I am pledged to this task, 
and I ask you to join me in this commitment.
    Our men and women did not hesitate when our President ordered them 
into battle. They continue to fulfill their duties with honor and 
selflessness. It is now our turn to see that this Nation fulfills its 
obligation to them. I am fearful that we are not meeting this 
challenge. I beg you to help me reverse this course.
    Thank you.

    Chairman Craig. Now, let me turn to Senator Kay Bailey 
Hutchison of Texas. Kay.

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

    Senator Hutchison. Thank you, Mr. Chairman.
    I do want to add to the Members who have said how pleased 
they are that you are going to be Chairman and that you want to 
make this an active and working Committee and also, your 
Ranking Member, Senator Akaka, who has a wonderful record in 
the service as well.
    I am very pleased with the nomination of Jim Nicholson, 
Ambassador Nicholson. I think that the previous Secretary of 
Veterans Affairs, Secretary Principi, did a wonderful job of 
reaching out to veterans to show how much he cared about the 
health care and the services that they are being given. I found 
him to be a straight shooter and someone on whom we could 
always rely to do what he said he would do, and I have known 
and worked with Ambassador Nicholson for many years and have 
found exactly the same type of person: a straight shooter who 
always does what he says he will do.
    I am particularly pleased that the President has appointed 
someone with such a great record in service. I think your 
credibility with the veterans' community is absolutely 
unsurpassed and essential, and I think you have done a great 
service for our country the last 4 years, I think that you are 
uniquely qualified to continue in service in this very 
important way.
    There are so many issues now facing our veterans, and I 
think many of them have already been mentioned. I would just 
add two more: one is the Gulf War Syndrome that was really 
undetected for so many years, because it was felt in many of 
the high echelons of government that the Gulf War Syndrome, 
which affected one in every seven people who returned from the 
original Gulf War was psychosomatic, that it was really stress 
and had no actual damage to any body part.
    And because of that, I think we lost a lot of time in 
finding out what the source of these symptoms were, and I have 
made it a cause of mine to assure that we get to the bottom of 
it through research and then the treatment that will come from 
the research that is being done, because now, there has been a 
causal connection between brain damage and access or being 
around chemicals, not necessarily chemical weapons, but just 
exposure to chemicals and brain damage.
    Secretary Principi made a commitment of $60 million over 4 
years, $15 million per year, to continue this research, and I 
think it is very important that we continue, and I hope to ask 
you in the question period if you will continue this 
commitment. Not only will it help treat the veterans of the 
Gulf War, but will help us determine future problems that we 
might face in battle and access and exposure to chemicals and 
the type of people who might be able to get an antidote or some 
kind of an enzyme that would keep them from being so afflicted 
as those we have seen.
    The second major thing that I think is particularly timely 
is the effect that BRAC will have on veterans' health care 
services at bases. I would hope that you would take an active 
role in looking at bases that serve veterans where there is 
little access around that base so that if that base were shut 
down, veterans' health care concerns would be elevated, whether 
you would weigh in on that to show a factor, at least; it is 
not that you would not close the base, but that it would be 
considered another one of the costs if you are going to have to 
put a veterans facility in that area to compensate for the loss 
of active duty and whether or not that is, in fact, efficient. 
It may be; it may not, but I would hope that as we go into this 
BRAC year that we look at veterans' health care services that 
is now being done routinely on active duty bases.
    You have a number of issues on the table, but I know you 
are up to the job, and I will enthusiastically support your 
nomination, and I hope that with the cooperation of the 
Chairman and the Ranking Member and all of the Committee 
Members that we can move your nomination quickly so that we 
will not have any time wasted in beginning the next phase of 
addressing issues.
    The third area that I should mention as I close is the 
CARES Commission that was put forward in the last 4 years, the 
last 2 years, and its impact on veterans' facilities, and I 
hope that you will continue to allow those communities that are 
affected by the CARES Commission's recommendations to have full 
access to you and the committees that would be making the final 
decisions on how those facilities will be used.
    So with that, I am looking forward to working with you 
through these very important years, and I know that you will do 
a wonderful job for our veterans. Thank you.
    Thank you, Mr. Chairman.
    Chairman Craig. Kay, thank you very much.
    Now, before we turn to the Ambassador for his oath and also 
his testimony, let me turn to our colleagues who are here today 
to introduce him to the Committee: the senior Senator and the 
freshman Senator from the great State of Colorado. First of 
all, Senator Wayne Allard.
    Senator.

                STATEMENT OF HON. WAYNE ALLARD, 
                   U.S. SENATOR FROM COLORADO

    Senator Allard. Thank you, Mr. Chairman.
    First of all, I would like to congratulate you on your 
leadership as the Chairman of the Veterans' Affairs Committee 
and also congratulate Senator Akaka for his position as Ranking 
Member on the Committee. I extend my best wishes to the Members 
of the Committee.
    I am also very pleased today that my colleague, newly-
elected Senator Ken Salazar is joining me at the table in 
support of Jim Nicholson to be Secretary of Veterans Affairs. 
Both of us showing up reflects the fact that we have bipartisan 
support from the State of Colorado, and we have a great deal of 
respect for what Jim Nicholson has done for the State, what he 
has done for the country, and what he will do, we think, on 
behalf of veterans.
    Before I get further on my comments, and it is a distinct 
pleasure for me to be able to introduce Jim Nicholson to the 
Veterans' Affairs Committee today, I just want to relate a 
personal experience that I am having in the State of Colorado, 
and that is that veterans are somewhat reluctant--or they are 
just simply not signing up--when they come out of service in 
Iraq and leaving the active military, getting their names on 
the rolls of the Department of Veterans Affairs. If they would 
do that now, that saves problems that many of us face in our 
offices 20 or 30 years later trying to get them through the 
paperwork, because you have already got them signed on the 
rolls of the Department.
    And in some cases, we run across situations where they do 
not have a lot of confidence in the Department of Veterans 
Affairs. I have all the confidence in the world that under the 
leadership of Jim Nicholson, Ambassador now to the Vatican, 
that he will help correct that problem, and I think that he 
will help restore confidence in the Department of Veterans 
Affairs.
    Now, I have known and worked for years with Jim in the 
State of Colorado, and I am proud that President Bush has 
nominated him to be the next Secretary of Veterans Affairs. As 
a West Point graduate, Army Ranger, highly-decorated combat 
veteran and almost 4 years of service as the ambassador to the 
Holy See, Mr. Nicholson is well-prepared and highly-qualified 
for the duties as the head of the VA. He brings forward a 
strong work ethic, and I think to be Secretary of Veterans 
Affairs, you have got to have a strong work ethic.
    Born during the Great Depression as the third child of 
seven, Jim Nicholson grew up on a tenant farm in rural Iowa. 
Both he and his older brother, Jack, earned appointments to 
West Point while struggling as a farming family in the Midwest. 
Prior to Jim's appointment, his brother returned home from 
school to the summer, and his family could not find enough 
money to send Jack back to New York for the start of his new 
term.
    In order to solve this problem, a 15-year-old Jim Nicholson 
took it upon himself to find a job building railroads through 
his home State of Iowa. By working as long as 19 hours some 
days, Jim was able to not only earn enough money to send his 
brother back to West Point, but also was eventually able to buy 
his father a used car so that he could look for work.
    These virtues that Jim displayed as a youth: work ethic, 
self sacrifice, and determination, are the qualities that will 
allow him to excel in the President's Cabinet. As a West Point 
graduate and decorated veteran, this former Army Ranger also 
has the personal experience in the armed forces that will serve 
his new constituency well. During his service in the Army, Mr. 
Nicholson fought in the Vietnam War and was a highly-decorated 
soldier. He was awarded the Bronze Star, the Combat Infantry 
Badge, the Meritorious Service Medal with oak leaf cluster, the 
Vietnamese Cross for Gallantry and two Air Medals while 
spending 8 years on active duty, 22 years in the Army Reserve 
before retiring as colonel.
    Clearly, Jim Nicholson's qualifications after his Army 
career are just as impressive, including his advanced degrees, 
starting a successful real estate business, numerous community 
volunteer efforts throughout Colorado, and finally culminating 
in his service as an ambassador to the Holy See.
    This is a man who has been asked to serve his country in a 
new capacity and who will answer that call with his own sense 
of duty and honor, and it is indeed a great pleasure for me to 
introduce Jim Nicholson to the Committee, and I also want to 
thank in a public way the willingness of his wife Susan to 
allow him to take on this job, because it means that he will 
spend time away from the family and will mean a greater burden 
on her, and I think a special thanks should be extended to her.
    Thank you, Mr. Chairman.
    Chairman Craig. Senator, thank you.
    Now, let me turn to Senator Salazar. Senator Salazar is 
also a Member of this Committee, and we welcome you to the 
Committee and look forward to your statement.
    Ken.

                STATEMENT OF HON. KEN SALAZAR, 
                   U.S. SENATOR FROM COLORADO

    Senator Salazar. Thank you, Senator and Chairman Craig and 
Senator Akaka, Ranking Member, and Members of the Committee.
    I very much look forward to serving on this Committee. Like 
all of you here, this is something that we do by choice, and I 
made the choice to sit on this Committee, requested the 
Committee assignment because of my respect for the veterans of 
our country. My father passed away several years ago, a proud 
veteran of World War II and insisted that he be buried in his 
uniform from World War II because he wanted to make a statement 
about how proud he was of this country and how proud he was of 
the freedoms that we enjoy.
    In that same vein, I have had uncles killed in World War II 
and many members of my family who have served in many wars and 
nephews who are currently in the military, and so, I very much 
look forward to contributing to the efforts of this Committee 
to make sure that we are honoring our commitments to our 
Nation's veterans and in that regard very much look forward to 
the activism that you will bring to this Committee, Mr. 
Chairman and Mr. Ranking Member.
    Let me also say, I didn't do my opening statement like the 
rest of the Committee Members, but I do have an opening 
statement, and if there is no objection, I would just submit 
that for the record.
    Chairman Craig. Without objection.
    Senator Salazar. Thank you, Mr. Chairman.
    Let me say that it is an honor for me as a fifth-generation 
Coloradan today to be able to introduce a very fine and 
distinguished member of our State, a favorite son from 
Colorado, and that is Ambassador Jim Nicholson, to this 
Committee.
    Ambassador Nicholson and I have not always been on the same 
team, if you will, on political issues in the State of Colorado 
or the Nation, but I will tell you that you get to a point, as 
we are today in our Nation, when the elections are now over, 
that we need to move forward and get about the country's 
business, and certainly the business of how we take care of our 
veterans in my State and around this Nation is one of the most 
important priorities of our country.
    And so it is with that statement that I am very proud to be 
able to introduce Ambassador Nicholson and also to urge my 
colleagues, both Republicans and Democrats, to join in voting 
for his confirmation. I look forward to working with him. We 
have already started working together on a host of issues in 
Colorado, including addressing the issue of a Veterans Affairs 
Medical Center in Denver. He has sent clear signals that 
notwithstanding the challenges that we face there that we are 
hopeful that we will be able to resolve the issues and move 
forward with the construction of a facility there that this 
Committee has been involved in making possible over the last 
several years.
    I have met with Ambassador Nicholson and talked to him 
about his life story and about his commitment to our Nation and 
to our Nation's veterans. Ambassador Nicholson has proven with 
his life story that nothing can stop him fighting for those 
things that he believes in. He was born in Iowa in a tenant 
house without plumbing. His family sometimes had to go without 
food. His mother's faith and his dedication to family taught 
him that he could succeed no matter how difficult the 
challenge.
    I know a little something about growing up on a poor farm 
with a big family and trying to get by on a little, and I am 
confident that his own life experiences have given him the 
ability to lead the second-largest department of our Nation to 
be the best that it can be.
    Ambassador Nicholson's early life experience steeled him to 
succeed as a cadet at West Point and then as an Army Ranger, 
who won the multiple decorations that have already been 
mentioned today. He took on those assignments as burdens of a 
young man who had to fight for everything he and his family 
got, and he took them on as a patriot who knew the best that 
America had to offer.
    I know that this hearing will go well and that the 
nomination process will go quickly and that our country will 
give Ambassador Nicholson another opportunity to serve our 
great Nation as the Secretary of Veterans Affairs. The new 
challenges that he will face are difficult. The basic question 
for all of us in this room and in this country is how does the 
United States honor its solemn obligations to our country's 
heroes in a time of the huge and historic deficits that we face 
today?
    I do not know that any of us know the answer to that 
question, but I do know that Ambassador Nicholson has the 
ability and the tenacity to make sure that we prioritize the 
needs of veterans around our country. And so, it is with that 
statement that I pledge my support to Ambassador Nicholson. I 
urge a positive and quick vote for his confirmation in the U.S. 
Senate.
    Thank you very much.
    [The prepared statement of Senator Salazar follows:]

                Prepared Statement of Hon. Ken Salazar, 
                       U.S. Senator from Colorado

    Good afternoon. Thank you Mr. Chairman. It is a privilege to serve 
on this Committee with you and with Senator Akaka. I very much look 
forward to working with you and all of my colleagues as we strive to 
honor our obligation to those who so honorably served this country. I 
know I will learn a great deal from all of you, as you share your 
experiences and leadership on a wide range of issues affecting the 
Nation's veterans. I am confident that my own experience as the son, 
brother, and uncle of proud Salazar family veterans will be helpful to 
this Committee.
    And thank you, Ambassador Nicholson, for your long and 
distinguished service to our country, and to the great State of 
Colorado. Your experience as an Army Ranger in Vietnam and your 22 
years of service in the Army Reserves will be very valuable, I expect, 
as you consider ways to improve the lives of your fellow veterans. And 
as I said in my introduction of you, your experience both as a soldier 
and a diplomat will be invaluable as you fight within the President's 
Cabinet for the funding our veterans have earned. It is long past time 
for us to fully fund the VA, and I pledge to help you meet that goal.
    Let me reiterate my appreciation to this committee for authorizing 
the creation of a new VA medical facility in Colorado at the old 
Fitzsimons Army Medical site. The development of this site presents a 
unique opportunity for Colorado veterans to become a part of a world-
class medical campus.
    The close proximity of the University of Colorado Hospital to the 
VA's current hospital has served both communities well. The relocation 
of these hospitals to Fitzsimons will strengthen this relationship, 
resulting in what I'm sure will be continued cost savings and, most 
importantly, excellent health care for our veterans.
    I am hopeful that after some breakdowns in communication, the 
hospital is back on track and that our veterans in Colorado will soon 
have the world-class facility they have earned.
    Colorado is blessed with values that encourage service to this 
great Nation, including in the armed forces. The VA invested more than 
$900 million in Colorado in 2003 to serve nearly 433,300 veterans who 
live in Colorado. 56,904 patients received health care and 57,706 
veterans and survivors received disability compensation or pension 
payments from VA in Colorado. More than 9,401 veterans, reservist, or 
survivors used GI Bill payments for their education, there were 68,461 
owned homes with active VA home loan guarantees, and 3,339 veterans 
were interred in Ft. Logan and Ft. Lyon national cemeteries.
    Those are impressive numbers, but the fact of the matter is that 
our veterans still have to wait too long for care, are forced to jump 
through duplicative and cost-increasing hoops to get the prescription 
drugs they need, are confronted with hospitals that are outdated, loan 
guarantees better suited for real estate markets of two decades ago, 
and in too many cases are forced to choose between the retirement they 
have worked for and the disability pay they have earned.
    One more thing that I find very disheartening, Mr. Chairman, is the 
simple fact that in any given year, 500,000 veterans face at least one 
night of homelessness. Imagine that: half a million men who laid 
everything on the line for us spend the night on the street because 
they cannot afford shelter. In Denver alone there are nearly 9,000 
homeless veterans.
    We can do better for our veterans--our national heroes. I 
anticipate we will hear a lot over the coming weeks about the impact 
the historic deficits we currently face will have on the priorities of 
our country. That is as it should be--we cannot continue to heap debt 
on our children and grandchildren at the rate we have done so for the 
last 4 years.
    I recently signed a letter, circulated by our Ranking Member, 
Senator Akaka, calling on the President to fully fund the Veterans 
Administration in his upcoming budget proposal. I also wonder, Mr. 
Chairman, if we have not come to the point where we move to guaranteed 
funding for the VA. It just is not fair to our veterans and their 
families to have to hold their breath each year to see if they will be 
able to get the care and support they were promised.
    Ambassador Nicholson, after our discussion last week I am hopeful 
that you will keep these principles in mind as you begin your 
assignment. At our meeting, I shared my priorities with you, and I 
reiterate my commitment to work with you to enact each of them. In 
particular, I look forward to working with you and my colleagues on 
this Committee to finalize the new VA facility at Fitzsimons.
    Again, thank you, Mr. Chairman and Senator Akaka. And thank you, 
Ambassador Nicholson.

    Chairman Craig. Now, we turn to the gentleman that we are 
here to take testimony from, and as we do that, Mr. Ambassador, 
if you would stand, please; let me administer the oath.
    [Witness sworn.]
    Chairman Craig. Also, at your leisure, please introduce 
anyone you would like to introduce, your family, who 
accompanied you here today. We look forward to your testimony.
    Please proceed.

STATEMENT OF HON. R. JAMES NICHOLSON, NOMINEE TO BE SECRETARY, 
                 DEPARTMENT OF VETERANS AFFAIRS

    Mr. Nicholson. Thank you, Mr. Chairman, Members of the 
Committee.
    I want to thank you for the opportunity to appear before 
you so early in the new Congress and for the many other 
courtesies that you and your staffs have extended to me. Your 
words and actions underscore your commitment to the millions of 
veterans who look to the Department of Veterans Affairs for the 
benefits and services they earned, benefits and services that 
our Nation has pledged to gratefully give them.
    Let me add my congratulations to you, Senator Craig, and to 
you, Senator Akaka, on your election to Chairman and Ranking 
Member respectively of this Committee, which oversees the 
department of our government with the largest civilian work 
force and with one of our highest priorities: to deliver first 
class, timely medical care and benefits to our veterans. Your 
selections speak volumes about your colleagues' confidence in 
your commitment to America's veterans.
    I am joined here today by my wife of 37 years, Suzanne. She 
has always been at my side, through thick and thin, and I am 
very grateful to her for her support of me in accepting this 
honor and this considerable challenge from President Bush to 
lead this great Department if confirmed. I am also joined by my 
son Nick and his wife, Charlotte, who live in the Washington 
area. Our other two children could not be here.
    I am also joined by a man who has been mentioned here 
already this morning, my older brother, the pacesetter in our 
family, Brigadier General Jack Nicholson and joined by my kid 
brother, Patrick Nicholson, who is here.
    Service to our country----
    Chairman Craig. Jim, let me welcome all of your family to 
the Committee. We appreciate your being here.
    Mr. Nicholson. Service is a long tradition in my family. My 
father was an enlisted man in the Navy during World War II. My 
father-in-law served in both World War II and Korea. I have 
mentioned my brother, Jack, who served 30 years in the Army and 
was, until just very recently, the Under Secretary of the 
Department of Veterans Affairs for Memorial Affairs, where he 
did an outstanding job. One of my sons is a veteran; four of my 
nephews are colonels in the Army and Air Force.
    My 30 years of active and Reserve service in the Army, 
coupled with my 4 years at West Point, have defined my life. I 
love the armed forces of our country, their courage, their 
integrity, their sense of duty. That is why I am so honored 
that President Bush selected me to build upon his 
Administration's great record of care and compassion for our 
Nation's veterans of service in our armed forces, and if 
confirmed, it would be a privilege for me to follow the 
footsteps of Secretary Principi, a man who has provided 
outstanding leadership and tireless dedication to the welfare 
of this Nation's veterans.
    I feel humbled that America's veterans, men and women who 
served on the front lines for freedom, justice, and peace in 
democracy's name might look to me as the faithful steward of 
their trust and the leader of VA's 230,000 employees who work 
so diligently around the clock to assure our veterans that we 
are making good on the Nation's debt to her defenders.
    Mr. Chairman, as has been said, I do come from the 
heartland of this great country, Iowa, from a boyhood life that 
is so far removed from this historic and stately temple of 
liberty that we are in here today that it made Washington seem 
barely a dream. It was a hardscrabble life, to be sure, but my 
family of seven kids was filled by my mother with hope and 
confidence, and she used to continually say to us, ``if you 
will work hard, study hard,'' and she would always say, ``and 
pray hard, you can be a success in America.'' You can have 
legitimate dreams of a better life, in spite of sometimes the 
extreme poverty that we were in, and you can make those dreams 
come true, she would say.
    As a teenager, I remember watching young men going off to 
the Korean War, following in the wake of World War II, yet 
another test of freedom's will to defeat an inhumane and evil 
tyranny, yet another answered call by our countrymen to go off 
to a frozen peninsula that we had never heard of prior to that. 
They went off because their country asked them to go.
    One of the brothers of a pal of mine never returned. One of 
my best friends, who was slightly older than I, came back, but 
he left a leg over there. He was also my introduction to the 
VA, as they worked very hard to try to get his prosthesis to 
work properly. Now, again, we are at war, and again, our 
country is asking our men and women in uniform, all volunteers 
now, to go to the sound of the bugle. Those friends and 
neighbors who stood tall for freedom 50 years ago are now among 
our most distinguished veterans, and today's heroes will soon 
join them.
    I will, if this Committee so entrusts me, be proud to lead 
the Department dedicated exclusively to honoring their service 
and sacrifices, to making good on our country's promises to 
them. I have had the privilege of wearing the uniform of the 
United States Army in combat, so I have seen both the horrors 
of war and the heroes of America making the greatest sacrifices 
of military service on behalf of their comrades and our Nation.
    One cannot leave a battlefield without having profound 
respect for the courage and cool of all who have served there. 
One cannot appreciate all the blessings of our freedom without 
thanking the men and women who serve in war to bring about 
peace. Their example of unwavering commitment to their mission, 
no matter how dangerous or uncomfortable, will always 
reverberate with me and readies me for a mission of service to 
those veterans.
    I will do my utmost to see that they receive all they have 
earned and that it is delivered with the dignity that they have 
also earned. I do not underestimate the enormity of the 
responsibilities of Secretary of Veterans Affairs. This 
Committee knows well that the VA is the second-largest Cabinet 
department, operates the Nation's largest integrated health 
care system and is relied upon by millions of veterans, their 
dependents and survivors not only for health care, but for 
billions of dollars in monetary benefits, life insurance, 
education, mortgage insurance and readjustment benefits.
    The challenge of leading such an organization is daunting, 
but I am prepared to accept it. If the Senate confirms my 
nomination, I will commit without hesitation to upholding the 
following principles: veterans should have access to the best 
available health care in the most appropriate clinical 
settings, delivered in a timely manner by caring, compassionate 
clinicians, and veterans, their eligible dependents, and 
survivors are entitled to prompt, accurate, equitable and 
understandable decisions on their claims for benefits, and 
veterans should be appropriately honored in death for their 
service and sacrifices on behalf of a grateful Nation.
    Mr. Chairman, the manner in which the VA supports the 
transition of today's servicemembers into veterans, especially 
those who are injured or because they became ill as a result of 
their service in combat areas, will define the Department for 
them. If confirmed, I will ensure that the VA and DoD continue 
to work collaboratively to provide a seamless transition, so 
that returning servicemembers are timely provided the benefits 
and services that will enable them to reclaim their rightful 
places as citizens in our society.
    I am aware of recently-reported concerns of possible 
regional variations in disability compensation awards. 
Veterans' entitlements to Federal benefits is the same 
regardless of where in this country they may reside, and if 
confirmed, I will ensure that standardized training and sound 
quality controls support a uniform approach to claims 
adjudication. Further to that point, I will, if confirmed, 
order a prompt study into this whole question of equity and 
geographic differences in benefits adjudication. No one that I 
have yet met knows exactly why these differences occur exactly 
the way they do, but we need to understand this fully and then 
take remedial action as appropriate.
    Mr. Chairman, if the Senate will afford me the opportunity, 
I pledge to work with this Committee and individual Members of 
both houses for the betterment of veterans and their families. 
I will keep you informed. I will listen to your concerns, and I 
will respect your oversight responsibilities.
    I understand that the success of the Department requires a 
strong collaboration with the veterans' service organizations 
who function both as our ears to the ground on matters of 
service delivery and as our partners in devising solutions to 
problems as they arise. If confirmed, I will work closely with 
the VSOs so that I may both benefit from their counsel and draw 
upon their willingness to serve their comrades.
    I am also deeply committed to earning the respect, trust 
and following of the men and women of the VA who have made 
service to veterans their life's calling. The VA work force 
represents an enormous reservoir of dedicated, committed talent 
that must be put to its best possible use. I will hold myself 
and my leadership team accountable for ensuring and harnessing 
our employees' best efforts. It will be my job and my privilege 
to lead and harness this awesome force of talented people so 
that all of us have the same focus: our veterans.
    It is critical that we honor America's debt to those who 
have served us so faithfully. When President Bush announced my 
nomination, I did quote America's first commander-in-chief, 
President Washington, who said that it is, quote: ``our debt of 
honor.'' And today, with so many American men and women in 
uniform stationed around the globe, we give them heart when we 
keep faith with those who have served before. They do have the 
right to know that we will stand by them as well in their time 
of need. This is also integral to our Nation's ability, I 
believe, to be able to continue to attract an all-volunteer 
force ready to defend us anywhere, any time.
    The armed forces of our country are, in my opinion, the 
model for what is good and great about America. They are a 
paragon of integrity; they do not take; they give. They are 
disciplined, highly trained, with a love for their country. 
They are a unique force in the world, and we need to treat them 
uniquely well. Our VA, under Secretary Principi, has made 
terrific strides in serving our veterans. The VA provides 
health care to 860,000 more veterans now than it did in 2001. 
It has drastically reduced waiting times for health care 
appointments and opened nearly 100 new community-based 
outpatient clinics so that 87 percent of the veteran population 
now lives within 30 minutes of a VA medical facility.
    As a result of its focus on excellence in health care, the 
VA is now the proven benchmark in preventive health care 
quality and chronic disease management. Since 2001, the VA has 
also drastically reduced its inventory of pending claims for 
disability compensation, reduced average processing time for 
those claims and at the same time substantially improved the 
quality of claims decisions.
    Moreover, in 2001, the VA embarked upon the largest 
expansion of the national cemetery system since the Civil War. 
When construction of all the new cemeteries is completed, the 
VA will have expanded the national cemetery system by 85 
percent, and according to the latest American Consumer 
Satisfaction Index, the National Cemetery Association earned a 
rating of 95 out of 100, the best rating ever earned by a 
Federal agency. And I want to again here send a salute to my 
big brother, because he was the head of that Administration 
that got that wonderful affirmation from the people that have 
used or benefited from that Administration, many of them at the 
most sensitive, sad time of their life.
    I will, if confirmed, strive to move the Department to 
another level by building upon all that has been put in place 
and improving upon those areas that remain a challenge. The VA 
is a great American institution, created and founded by a 
country that appreciates that freedom is not free, and our 
veterans' lives and limbs are the price that is too often paid.
    It falls on the Secretary of the VA and the men and women 
he or she leads to keep faith with the expectations of all our 
fallen citizens in uniform, past, present, and future, 
expectations that they will be cared for as needed. This, too, 
is the mandate of the grateful people of the United States. I 
pledge to you if confirmed by you that I will do all in my 
power to see that both the veterans and the citizens of our 
great Nation are pleased by the service of their Veterans 
Administration.
    This concludes my remarks, Mr. Chairman.
    Chairman Craig. Mr. Ambassador, thank you very much.
    Let me talk to my colleagues about procedure here. We are 
certainly going to ask you to engage in all of the questions 
you want to ask of the nominee. It is important that we build a 
record. I think the nominee knows as well as we do that that 
record becomes increasingly valuable as time goes on as it 
relates to his performance and promises made, and we believe 
strongly that that is important.
    But we also have another reality in front of us. Many of 
you have already expressed your open support and willingness to 
move the Ambassador's nomination forward to the Senate floor. 
We also happen to have a quorum at this moment.
    [Laughter.]
    Chairman Craig. I am going to turn to my colleague, the 
Ranking Member, to see if he might want to comment on this 
before we address you as to what he and I might choose to do 
here.
    Senator Akaka. Mr. Chairman, I know some Members will be 
leaving soon. As such, after our Committee Members and 
Ambassador Nicholson make their statements, I would recommend 
that we immediately mark up Ambassador Nicholson's nomination.
    We have not seen the Ambassador's FBI report yet, but I 
would ask that the Committee's approval be contingent upon its 
approval of the FBI report and would therefore recommend that 
we immediately take up this nomination.
    Senator Hutchison. Mr. Chairman.
    Chairman Craig. Senator Hutchison.
    Senator Hutchison. I move that the Committee report the 
nomination of R. James Nicholson to the Senate with the 
recommendation that his nomination to serve as Secretary of 
Veterans Affairs be confirmed, subject to Mr. Nicholson's 
commitment to respond to requests to appear and testify before 
any duly constituted committee of the Senate and further 
allowing Senator Akaka and others who might wish to look at the 
FBI file the time, obviously, to do that. But I think we should 
move the confirmation forward.
    Senator Rockefeller. Mr. Chairman.
    Chairman Craig. Senator Rockefeller.
    Senator Rockefeller. I will, in every way, cooperate with 
the Chairman and Ranking Member on this, but I think it is 
important to make a point here. In the case of Secretary 
Principi and others, we have all been involved with the 
confirmation process with a number of folks over the years, and 
there is a psychological difference, and I think sort of a 
procedural difference, between asking the questions which are 
closest to us and not asking the questions that are closest to 
us before we vote. There is a particular sort of emphasis and a 
poignancy, a moral poignancy in a way, about the asking of 
those questions.
    I would just note that for the record that I hope this will 
not become a common practice. I think it is the first example 
of our Chairman having to deal with the fact that some Members 
will be leaving, and that is another matter that we all need to 
discuss to make our Committee rise to the A level that the 
Chairman and all of us want. But I certainly will not stand 
against what the Chairman is suggesting, because I strongly 
favor the nominee, but I want to just put that on the record.
    Chairman Craig. Let me dutifully note exactly what you have 
said, Senator, and I do not disagree with that. That is why I 
would assume that anyone having questions, and I have several, 
remain so that we build an important record for the Committee 
in moving with the new Secretary of the Veterans 
Administration. But I do not disagree with your overall feeling 
as to priority of action.
    Is there a second to the----
    Senator Burr. Second.
    Chairman Craig. It has been seconded that this Committee 
move forward the nomination of Jim Nicholson as Secretary of 
Veterans Affairs with the caveat so expressed in the motion as 
it relates to questions to be asked and answered. Senator Akaka 
and I will spend time with the FBI report this morning and 
background information to assure us that there are no 
difficulties with that.
    Senator Jeffords. Mr. Chairman, I do have questions that I 
do wish to ask, which may make a difference on my decision how 
to vote.
    Chairman Craig. All right.
    Senator Jeffords. That is why I raise it now, so I feel 
that we perhaps should take the regular order, but I am not 
going to object.
    Chairman Craig. All right; does the Committee wish a roll 
call vote?
    Senator Jeffords. Aye.
    Senator Rockefeller. I think it would be respectful to the 
nominee to have that.
    Chairman Craig. Then the Clerk shall call the roll.
    The Clerk. Mr. Specter.
    Mrs. Hutchison.
    Senator Hutchison. Aye.
    The Clerk. Mr. Graham.
    Mr. Burr.
    Senator Burr. Votes aye.
    The Clerk. Mr. Ensign.
    Mr. Thune.
    Senator Thune. Aye.
    The Clerk. Mr. Isakson.
    Senator Isakson. Aye.
    The Clerk. Mr. Akaka.
    Senator Akaka. Aye.
    The Clerk. Mr. Rockefeller.
    Senator Rockefeller. Aye.
    The Clerk. Mr. Jeffords.
    Senator Jeffords. Present.
    The Clerk. Mrs. Murray.
    Senator Akaka. Aye by proxy, Mr. Chairman.
    The Clerk. Mr. Obama.
    Senator Obama. Aye.
    The Clerk. Mr. Salazar.
    Senator Salazar. Aye.
    The Clerk. Mr. Chairman.
    Chairman Craig. Aye.
    The Clerk. Eleven ayes, zero nays.
    Senator Hutchison. Mr. Chairman, I would just like to make 
a parliamentary inquiry, and I would like to make a motion if 
it is necessary, to allow Senator Jeffords to change his vote 
if he wishes following his questioning so that if he decides he 
would like to move one way or the other, he be allowed to do 
that.
    Chairman Craig. I have no objection as the Chairman to 
that.
    We will proceed with that caveat, that following 
questioning, your vote can be changed as you wish.
    Senator Jeffords. Thank you, Mr. Chairman. I did so because 
I believe there are questions which are very pertinent to how I 
will vote. I firmly believe that the VA must serve the needs of 
all veterans. Because of budget shortages, your predecessor was 
forced to create a new category of veterans known as Priority 8 
veterans.
    While Secretary Principi fought hard for adequate funding 
for the VA, the Administration did not see fit to meet this 
request to provide the VA with sufficient funds to treat these 
veterans. All indications are that in order to reduce the 
budget deficit, the Administration is going to cut funding for 
the VA or at least freeze the funding at 2005 levels, which, of 
course, amounts to a cut in actual services provided.
    If that proves to be the case, are you willing to go to the 
President and request that additional funds be provided to the 
VA so services can be maintained for all veterans, or are you 
willing to accept that we may have to write off whole 
categories of veterans as now ineligible for VA services? In my 
opinion, that would be a gross mistake.
    Mr. Nicholson. Thank you, Senator. That is an important 
question, and it, I think, aptly encapsulates, you know, some 
of the tension that exists in trying to balance resources that 
are available or will be available with the needs of our 
veterans.
    I will say I have not seen the 2006 budget. They have not 
made that available, so I cannot comment on what that budget 
has in it. But I am well aware of one of the important points 
of your question as it relates to the so-called Category 8 
benefits to veterans, and I am aware that that has been 
curtailed. Those are veterans in that category who, on a means 
test basis, have the ability where they are above that de 
minimis level and thus not at this time entitled to benefits 
strictly because of the finite amount of resources available to 
serve the whole population, and the Veterans Administration has 
a delineated set of priorities by law.
    The first and foremost is to take care of those veterans 
who have been disabled because of the service that they have 
provided to our country or have incurred a chronic condition. 
Another priority is those that have fallen down on their luck 
and are indigent and are poor and then those that also have 
spinal cord injury or diabetes or kidney disease.
    And so, there is a balancing that has to go on. I will say 
to you that my commitment in taking on this job if I am given 
the privilege is to the veterans and their needs, because I 
feel it, and they deserve it. And it will be a task for you and 
your oversight responsibility for me in my leadership of the 
Department if I am there to find that balance in a world of not 
infinite, but finite resources.
    Chairman Craig. Senator Jeffords, do you----
    Senator Jeffords. Yes.
    Mr. Ambassador, the war has produced many new challenges 
for the VA. One of these challenges is meeting the increased 
need for mental health services. Initial DoD data shows that 17 
percent of the returnees from Iraq and Afghanistan suffer from 
post-traumatic stress disorder, PTSD. Studies by the VA now 
seem to indicate that as many as 25 percent of the returnees 
who seek VA care have some form of PTSD.
    In fact, this may only be the tip of the iceberg. This 
presents two challenges to the VA: first and most immediately, 
we must provide additional resources to existing VA health 
programs all across the country, so that they can meet this 
clinical demand. As a greater number of National Guard and 
Reserve soldiers serve in combat, there will be an increasing 
need for highly-skilled mental health professionals in the 
widely-scattered VA hospitals and clinics all across the 
country. We no longer have the luxury of concentrating mental 
health services in a few centers around the country thinking we 
can adequately serve all veterans.
    Secondly and no less important, the VA must provide 
additional resources to support research in the causes, 
assessment and treatment of PTSD by the National Center for 
PTSD. There is much and do not understand about the effects of 
stress and trauma on our servicemembers and the implications on 
their long-term health. I believe that significantly increased 
funding for VA mental health programs must not only be a 
priority, but must be viewed as an absolute necessity. I would 
appreciate your comments.
    Mr. Nicholson. First of all, I share your concern about 
that, Senator, and I also agree that I think that those men and 
women coming back have had a unique combat experience. I mean, 
there is, in that urban environment with suicide terrorists, 
there is no safe place. So that presents a new, I think, and 
unprecedented challenge to us in the whole realm of trauma, and 
I do not know what that number is or what that percent is or 
will end up being, but that is something that commands our 
priority attention, and we need to have early intervention and 
screening with those people and begin a counseling regime when 
we identify that it would be appropriate for that 
servicemember.
    We need to learn more about it, and I think there is some 
very good research going on. I know there is some of it right 
there in your State, as we have discussed before, at the Wind 
River Junction, and there are three other centers throughout 
the United States where this research is ongoing. And the 
Department, I have also learned, as set up these polytrauma 
centers for the treatment, not just the research, but the 
treatment of these people.
    So that really has the attention of the VA and needs it, 
and I will pledge to work with you and others on that as a 
priority.
    Senator Jeffords. I appreciate that answer. Thank you.
    Chairman Craig. Senator, thank you very much for that 
questioning.
    We will now proceed with a normal round of 5 minutes per 
Senator in the order in which you came in, and I also 
appreciate the cooperation of my colleagues to adjust the 
scheduling and facilitate the situation so that we will not 
have to return this afternoon for the actual motion and vote 
for the disposition of this nominee from this Committee.
    Does the Senator from Vermont wish to keep his vote as is 
at this time?
    Senator Jeffords. Yes, I do.
    Chairman Craig. Let us now begin with questions, and again, 
Jim, we appreciate your cooperation with the Committee, and as 
I have stressed earlier, we certainly believe that the record 
that is built here today--you have already heard some very 
important concerns expressed by many of my colleagues--is an 
important one as we work with you in the coming years to make 
sure that the Veterans Administration is responsive not only to 
current veterans' needs, but future veterans' needs.
    You have talked about a variety of your priorities. You 
have obviously, I trust, examined the record of Tony Principi, 
who leaves us with a marvelous tenure, and so, let me ask you 
this question: how do you see your first 100 days at the VA 
unfolding, and what would be your immediate priorities?
    Mr. Nicholson. I will answer the last part of your question 
first, Senator Craig, and say that my immediate priorities are 
perforce, I think, going to be on those people that are 
returning from our combat zones in Iraq and Afghanistan and 
some of the serious disabling cases that there are there to 
make sure that we are doing everything in a timely way to make 
a seamless transition from those people from their active duty 
military status to that, into the Veterans Administration 
status.
    And I will say that this is not yet perfected as I 
understand it. There is still work and emphasis needed for the 
transference of their health information and that, you know, we 
accept them into our system, our hospitals and our centers. And 
we do it without uncertainty on their part and the part of 
their families.
    I met with some wounded members yesterday and family 
members, and we talked about this, because some of these 
people--I met yesterday with a young Army major and her 
husband, and she was a Blackhawk pilot in Iraq and incurred an 
RPG rocket that blew off her legs. And her copilot was almost 
injured as seriously, but yet, she landed her helicopter and 
saved the crew's life and then went unconscious and woke up two 
weeks later at Walter Reed and now has this unbelievably 
positive attitude, but is inquisitive about, you know, what's 
next, and what's available to her. We have to take care of that 
first and foremost.
    The rest of the 100 days, I think, is to consolidate, 
address the problems that are still out there, one of which I 
know that Senator Obama is going to bring up which is a concern 
of mine and organize and build on the great progress that has 
been made in the last 4 years.
    Chairman Craig. As my last question in this round, let me 
offer you an easy one. All you have to do is say yes to this 
one. Last year, at my insistence, the Committee and the 
Congress approved legislation transferring title of a parking 
lot adjacent to the Boise VA Medical Center from the General 
Services Administration to the VA. My goal in pressing for the 
land transfer was to allow VA to collocate its regional office, 
now in rented space a substantial distance away in the downtown 
area of Boise, near the VA Medical Center so that veterans 
could secure all needed VA services at a single site.
    Do you agree that the colocation of VA facilities at a 
single site makes sense, and will you give priority attention 
to the proposed colocation of the VA Boise Regional Office at 
the Boise VA Medical Center?
    Mr. Nicholson. Yes, I agree.
    [Laughter.]
    Mr. Nicholson. I think I have to be intellectually honest. 
Yes, I believe in the proposition that co-location and 
efficiency, primarily for those people that we are serving, the 
veterans.
    Chairman Craig. Exactly.
    Mr. Nicholson. As to that specific situation, I am not 
aware of it.
    Chairman Craig. Sure.
    Mr. Nicholson. But it sounds good, and I'll be happy to 
take a look at it.
    Chairman Craig. Thank you very much.
    Let me turn to my colleague, Senator Isakson.
    Senator, questions, and we are now and will stay with the 
5-minute process.
    Senator Isakson. Thank you, Mr. Chairman.
    Ambassador Nicholson, I wanted really to ask one question 
and let you kind of expand on it. Late last year, the 48th 
National Guard Unit of the State of Georgia was activated. They 
are being trained now. In May, they will be deployed in Iraq.
    Our country is at a point in time where we have never been 
more dependent on our Guard and our reservists, and obviously, 
on volunteers. And we live in a world where we know, although 
we hope it will not happen, that there will be another time and 
another place and another occasion where we will call America's 
young men and women in our reserves to fight on our behalf.
    So, therefore, the attractiveness of that, continuing to 
meet our recruiting requirements and the quality of life when 
activated for those Guardsmen and reservists is critical. I 
would like to hear your thoughts on that topic in particular 
and if, in fact, you have looked into the future of your 
administration, what you might want to do to accomplish that in 
terms of the attractiveness of taking care of those Guardsmen 
and reservists.
    Mr. Nicholson. I tried to make that point in my opening 
statement, Senator, because I do think there is a causal effect 
between how we end up fulfilling the promise that we make and 
the attitude of people as they look at that as one of their 
options for a vocation or service to their country, however 
they see it.
    I think it is also very important the way we project it or 
market it, and I am sensitive to Senator Rockefeller's comment 
about that, because I think, and I can remember being this way 
that, you know, as a young trooper, you feel a certain 
immortality and that these things that they talk about, you 
know, VA old folks homes or even VA hospitals are vagaries that 
do not apply to me and in that way would have a diminished 
recruiting or marketing appeal which bespeaks that we need, I 
think, to really have a strong outreach about those benefits 
and that concern of our country and, you know, we are spending 
and trying very hard to provide a great service to our 
veterans, and I think that education about that is a very 
important point going forward in this all-volunteer force 
context.
    Senator Isakson. Well, I appreciate your commitment, and I 
appreciate the fact that in your 30 years, 8 were active, and 
22 were Reserve, so you've been on both sides of that service 
to the country, and I am honored to have voted for your 
confirmation. I look forward to working with you.
    Mr. Nicholson. Thank you.
    Senator Isakson. I yield back.
    Chairman Craig. Thank you.
    Freshman Chairmen are sometimes allowed a little margin of 
error, and I erred a moment ago in failing to recognize my 
colleague and Ranking Member Danny Akaka, so let me turn to him 
now for his round of questioning, and I am going to even try to 
soften that mistake a little bit by handing him the gavel for a 
moment while I step out, so now, you are in full control, 
Danny. And following your questions, would you please recognize 
Senator Obama, and I will be back in just a moment? Thank you.
    Senator Akaka. [Presiding]. Thank you very much, Mr. 
Chairman. It is great working with you.
    Mr. Ambassador, you spoke of this earlier. From your 
experience with the military, I know you understand the value 
of seamless transition. The transition from the Department of 
Defense to the Department of Veterans Affairs needs to be, I 
feel, hassle-free and as beneficial as possible for 
servicemembers. I think we have some work to do in this arena, 
and I am glad that VA is focusing some attention on it by 
opening up a new office. What is your assessment of the 
transition from active duty to veteran status and is anything 
else missing besides the transfer of medical records?
    Mr. Nicholson. Thank you for that question, Senator Akaka.
    We are at war, and we do have people coming back from war, 
and we have two different kinds of people. I mean, when they 
are at war as warriors and our soldiers defending us are the 
same. But when they return, the Guardsmen and the reservists 
get into sort of a different queue than the people who are part 
of the regular force. And we need to do better. The goal is 
there, and we will achieve it, but I cannot sit here and tell 
you that I think it is perfect or where it should be.
    For Guardsmen and Reserve, what we are finding is that some 
of them come back from their deployment, and they are not 
captured for the kinds of debriefings and briefings of what is 
available to them, and they are getting sort of scattered. They 
are obviously so anxious to get home and get back in their 
communities with their families that some of them are falling 
through the cracks, and we know that now and are taking steps 
to intervene early.
    For example, I know that the VA put some people on a troop 
transport and was able to sail with them and brief them on 
their way coming home from Iraq. On the side of the regular 
force, we need still to do better on the sharing of information 
with the Department of Defense, medical information 
particularly. I think the goal is there, that both agencies, 
both departments want to get there, but we are not there yet, 
but it is a high priority.
    Senator Akaka. Thank you.
    In your answers to my pre-hearing questions, which I 
certainly appreciated from you, you indicated that you are, and 
I am quoting: ``firmly committed to taking care of our core 
constituency,'' which you define as ``those with service-
connected disabled conditions, low incomes, and veterans with 
special health care needs.'' You went on to say that you will 
work to ensure that sufficient resources are available to care 
for these veterans who depend upon VA for care. Tell me more 
about the attention that will be paid to the millions of other 
veterans who depend upon VA care.
    Senator Isakson. The priority are those that you have 
stated for the Veterans Health Administration and Veterans 
Benefit Administration. That is not meant to say or to be at 
the exclusion of so many other veterans who do not fall into 
those categories, but that is, and I think by law, Senator, 
those priorities are a mandate of the law.
    We just have to, I think, get the best value for the 
dollars that you all authorize and appropriate to us to serve 
as large a population of veterans as we can, because there are 
a lot of needs there. They are not all the same, but my goal, 
certainly, if I am made the Secretary of this Department is to 
do our utmost and for me to do my utmost as an advocate for 
veterans and to see that the maximum number of veterans that we 
can take care of are taken care of.
    Senator Akaka. Well, thank you for that. My time has 
expired.
    Chairman Craig. Senator Obama.
    Senator Obama. Thank you very much, Senator Akaka.
    The comment that I want to make is that with respect to 
your brother. My grandfather is buried in Honolulu. He was a 
World War II veteran, and it was an outstanding service. And 
the division that your brother was operating does, in fact, do 
an excellent job, and I am grateful for that.
    Now, I am very appreciative, Ambassador, of the fact that 
you took the time to meet with me ahead of this hearing. Part 
of the reason that I agreed to gladly vote for your 
confirmation, despite not having the opportunity to ask 
questions formally in the Committee, was the fact that we had 
met earlier, and you had addressed some of my concerns in your 
opening statement.
    But I do think it is important for purposes of getting it 
in the record just to indicate the nature of the concerns that 
we have. As I stated, there has been a series of Chicago Sun-
Times articles that I would ask unanimous consent to place into 
the record that indicate that there are wide regional 
disparities with respect to disability benefits paid to our 
disabled veterans. Illinois is doing particularly poorly, 
ranking 50th, although I would note that Colorado is not 
better. It, I think, ranks 44th. And these are not modest 
discrepancies; as I indicated from the chart earlier, these are 
discrepancies that go into the thousands of dollars.
    Chairman Craig. [Presiding]. Without objection.
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    Senator Obama. I know that when we met, I stated that I 
recognize this is something that you are just now getting 
yourself familiar with, but I did want to just for purposes of 
the record find out from you, based on what you know so far, 
have you discerned any reason as to why Illinois veterans are 
virtually last in the Nation in terms of average disability 
benefits? Can you think of any reason why the disparities in 
average disability benefits is so wide nationwide?
    And finally, I would just ask whether--I know that 
Secretary Principi, acting on a request from the Illinois 
delegation, has ordered the Inspector General to look into this 
problem. I am wondering whether there are any preliminary 
findings. My staff tells me the study may take four months, and 
I am just wondering whether there is some mechanism to speed 
that up.
    Mr. Nicholson. Thank you for that question and for the time 
that we had together in your office, Senator.
    This was a problem of first impression for me in my 
learning curve, and it is beguiling. The answer to your 
question about do I have any preliminary notions about why this 
is occurring is that I do not. I have met with the Inspector 
General to discuss this to see if he had any preliminary ideas, 
and he said that he did not yet either. I have talked to 
several members of the senior leadership of the VA about this, 
and there are things that you can conjure about it. I mean, 
there seems to be some correlations between median incomes and 
even housing density, for some reason, and I do not know why, 
but that does seem to correlate somewhat. Where people are 
living in more spread out and sparse environments, those 
benefits seem higher.
    So I would only--I do not even have a good basis to 
speculate. I know the concern, I share it, and we need to find 
out why this is happening and then see what we can and should 
do about it. And I look forward to working with you on that, 
because it is a real issue.
    Senator Obama. Mr. Chairman, I think my timer started all 
over again, and I would love to have another 5 minutes, but I 
want to be fair to the other Members of the Committee.
    Chairman Craig. I am observant of the time. You do not have 
another 5 in this round, but you do have time for another 
question if you would like to ask one.
    Senator Obama. Well, I do have another question.
    Chairman Craig. Please proceed.
    Senator Obama. And I may, you know, after this question 
have one more.
    Chairman Craig. Sure.
    Senator Obama. Although I am happy to wait for a second 
round, if that is possible.
    Chairman Craig. Very fine.
    Senator Obama. But one of the speculations in the articles 
and discussions with veterans that I have had on this issue is 
that the raters in Illinois, and there seems to be some 
correlation with the Midwest having lower payments than in 
other parts of the country, that the raters in some fashion are 
either trained differently or incentivized differently in terms 
of their evaluations of claims. And I recognize you are still 
trying to figure out what causes this specific disparity.
    I would ask a broader question, and that is how 
standardized are the ratings procedures that are taking place 
in these various regional offices, and what kinds of incentives 
are we creating for raters? Are they being rewarded, which is 
the suspicion, sadly, of some of the veterans that they are 
being rewarded for turning down claims as opposed to being 
rewarded for being accurate and just and hopefully generous in 
terms of making decisions?
    Mr. Nicholson. As to the training, that is something that I 
am asking myself, is that, you know, how uniform and consistent 
is the training, the preparation of these adjudicators? And I 
think that there, also, is a fertile area for us to look at to 
ensure that it is.
    I also read the reports of your town hall meeting in 
Illinois last week, Senator, and read where there was a 
statement about incentives for people turning down claimants. I 
am not aware that that exists, but that is something I also 
will find out. This is a high priority for me, if confirmed, to 
really get our arms around this. That is, to me, a surprisingly 
big disparity in our country.
    Chairman Craig. Thank you, Senator.
    Now, let me turn to our colleague, Senator Burr.
    Senator Burr. Ambassador, once again, welcome. I think that 
every member of this institution probably has the health care 
of veterans at the top of their list of concerns. It is of 
mine, and I know it is of Senator Jeffords.
    It is disturbing to see the long lines. It is disturbing to 
see the amount, the length of the waits by individuals that are 
following the process that the VA sets up. This is not a case 
where we do not have a set of procedures that are in place. The 
fact is that we do. In Charlotte, North Carolina today, for a 
veteran to see a primary care physician, it is a two to three 
month process. That is unacceptable. It would be in any realm 
of health care, and I realize that health care is still 
evolving, and thank goodness, it is, because of the advances 
that take place.
    My question specifically to you and if you cannot answer 
it, if you would jot it down to check into as you take over is: 
are the funds following the migration of veterans? In the 
South, we have seen a growth in the veteran population. Are, in 
fact, the dollars that are devoted to veterans' health care 
following those individuals from region to region if they 
relocate? Do we have the correct amount of dollars? I am sure 
we all know the answer to that is we do not, and we will 
continue to be challenged as it relates to health care dollars.
    And how can the Department of Veterans Affairs more quickly 
and efficiently adjust the VA funding formula to get funds 
where they are most needed and where they can do the most good?
    Mr. Nicholson. Senator, let me start by answering your 
question in a general way: I think the VA has done a very 
commendable job in recent years in transitioning from a 
hospital-based medical care system to an outreach, to a 
community-based outreach clinical system. There have been 
several hundred new clinics brought on line to try to get 
closer to where veterans are.
    There is this whole comprehensive CARES process that has 
been evolved, which is, you know, the Capital Asset Review for 
Enhanced Services, and it takes into account the demographic 
shifts of our country, where when most of the hospitals were 
built, they were built where the people then lived after World 
War II, and that is the vintage of the hospitals; they average 
over 50 years old.
    That has changed, and people now are moving south, and they 
are moving west and southwest, and that CARES process took a 
look at that to see what responses ought to be needed for the 
delivery of care where the veterans are. That is ongoing. I 
think that is something that, you know, will have my obvious 
priority management attention.
    But we are still in need of more primary care clinics so 
that we can cut these waits and get out there where the 
veterans are and be convenient to veterans. We have the same 
goal, of course, for the cemetery system, so that people do 
not--so that this system is accessible.
    Is there enough money to do this? I cannot address that 
with you this morning specifically, but that certainly is a 
goal of the agency is to continue to push those community-based 
clinics out there to be available, to cut waiting times, and 
then, you know, be there if they need referrals for more 
specialized medical care into a bigger, secondary, tertiary 
facility.
    Senator Burr. Let me say publicly that Secretary Principi 
did a wonderful job during his leadership at the Veterans 
Administration. My concern is that possibly, those dollars do 
not shift as quickly as the population does, and certainly, 
within this institution, we know how hard it is to move 
dollars, but secondly that there may be a culture that accepts 
two to three months as acceptable, and I hope you will very 
quickly try to change that cultural problem if, in fact, it 
exists within the Veterans Administration.
    I thank you for your testimony today. Congratulations on 
the vote, and Mr. Chairman, I yield back.
    Chairman Craig. Senator Burr, thank you very much.
    Senator Rockefeller and Senator Hutchison, Mr. Ambassador, 
have had to leave us. They apologize through me to you. It does 
not in any way reflect their intensity or their interest in 
your tenure and in the activity of the Veterans Administration. 
We will submit their questions for you so that you can respond 
to them in writing, so they will become a part of the record. 
You will have those to deal with, I would hope, in an expedited 
fashion.
    Now, let me turn to our colleague from Colorado, Senator 
Salazar. Ken.
    Senator Salazar. Thank you, Senator Craig.
    Ambassador Nicholson, this question is a simple yes or no. 
Over the weekend, Secretary Principi actually spent all of 
Friday night getting to Denver for a very early morning meeting 
to try to move forward with what I believe is going to be a 
state-of-the-art medical facility for veterans that will help 
us take care of veterans and also research the issues around 
medical care for veterans. Will you be as supportive as 
Secretary Principi has been of that project as we move forward?
    Mr. Nicholson. Yes.
    Senator Salazar. That is all I need.
    Mr. Nicholson. Possibly more.
    Senator Salazar. Good.
    Mr. Nicholson. If that is possible.
    Senator Salazar. Secondly, in Colorado as well as across 
the country, I think one of the major problems that we all face 
is the backlog in terms of claims processing. I think 4 years 
ago, according to my information, there were approximately 
400,000 claims that were awaiting processing for disability 
compensation. Today, that number has grown to 470,000. I do not 
know the reason why that number has grown, but do you have any 
thoughts on it, and is it something you could look into for 
this Committee?
    Mr. Nicholson. Yes, sir, it is an important question. In 
looking at that as I have done, actually, got those--the number 
of those claimants to dip through a real mobilized effort, but 
what has now happened is that they have gone back up, and one 
of the reasons for that is it takes a certain amount of time to 
process and adjudicate a claim.
    What is now happening is that they are finding that a 
claimant has an average, now, of eight different parts to his 
or her claim. So the claims have gotten much more complex and 
perforce takes much more time. And that is probably a reality, 
which means that we are going to have to figure out how to 
adjust to that resourcewise, adjudicators, in ways that we will 
have to deal with so that we can once again try to cut that 
backlog way down.
    Senator Salazar. That is something that you will work on?
    Mr. Nicholson. Yes, I will. I am well aware of that 
problem. I have had a lot of discussions in the time that I 
have, you know, been working with the Department to get up to 
speed, and they share that commitment. You have my commitment 
that we will work hard on that.
    Senator Salazar. Ambassador, a question on prescription 
drugs. A veteran who now has a prescription filled out by a 
private doctor cannot use the VA prescription drug benefit 
unless, as I understand it, he goes to a VA physician and gets 
the prescription reviewed and then authorized. The Department 
of Justice, as I understand, last year, in the last several 
years issued an opinion to the Secretary of Veterans Affairs 
saying that he did have the authority to go ahead and waive 
that and to allow the prescription drug benefit to be used 
whenever you have a private physician that has already issued 
the prescription.
    Is that something that you are aware of, and is it 
something you would be willing to work on to try to implement 
with this authority that the Department of Justice now has 
found that you have as Secretary or will have as Secretary 
soon?
    Mr. Nicholson. Yes, Senator, it is. I am aware of that 
problem, that issue, and I am also aware that the Secretary has 
waived that at least once, maybe twice. Where the waiting was 
so long, he exercised that discretion that he had. And what the 
factual basis for that was, I could not comment on, but I know 
the principle, and I share the concern about it.
    I mean, there are a lot of important policy implications 
around that, because, you know, doctors who are professionals 
that we have in the VA, and I think we have some of the very 
best in the world, like to not just have somebody come, you 
know, and get the prescription, so to speak, but to have them 
in their medical portfolio, so that they know exactly what 
their condition is and can treat them comprehensively. And that 
is part of the balance against just having them, you know, just 
come to your pharmacy and get a prescription. And I plan to 
look into that carefully.
    Senator Salazar. Thank you, Ambassador.
    Mr. Chairman, I have several other questions, but for the 
sake of the Committee's time and Ambassador Nicholson's time, 
what I would like to do is to have those questions submitted to 
the record, and then, Ambassador Nicholson, if you would 
respond to us in writing on down the road soon, I would 
appreciate it.
    Mr. Nicholson. I would be happy to.
    Chairman Craig. Senator, thank you very much. There are a 
number of Senators who are going to do, and have done, just 
that, and all of the questions that you will ask of the nominee 
will be submitted to him. We will ask for a prompt return so 
that the nominee's answers can become part of the record. That 
is a valuable part of that.
    Let me turn to Senator Jeffords. Do you have any further 
questions, Jim?
    Senator Jeffords. I have about two.
    Chairman Craig. Please proceed.
    Senator Jeffords. Ambassador Nicholson, the VA has received 
significant recognition for its outcome----
    Chairman Craig. Jim, is your mike on? Thank you.
    Senator Jeffords. The VA has received wide acclamation for 
both its ability to monitor outcomes and for its performance. 
Compared to the private sector and Medicare at the same time, 
private sector and Medicare co-pays are increasing, and 
prescription drug coverage remains generally poor.
    Many veterans can choose between VA and non-VA care. This 
is particularly true in Medicare-eligible veterans. Current 
budgeting for VA health care costs is based primarily on past 
use, but is the VA considering the possibility that VA usage 
may increase from a less-likely sector, the veterans who have 
recently relied solely on Medicare? Will you give special 
attention to this factor in drawing up your budget 
recommendations in the future?
    Mr. Nicholson. Yes, Senator, we will. We must try to make 
the best projections that we can to develop our budgets and 
thus request the resources that we think are going to be 
needed. There has been a large increase in requests for VA 
Medical care, as you well know, since 2001. It has gone up by a 
huge delta. And again, I think the agency's response to that 
has been very laudatory. And as far as I know, and there is a 
lot that I need to know more about this, that we could expect 
that increase to continue, and we have to be prepared for that.
    Senator Jeffords. As you know, the VA has been experiencing 
difficulty hiring certain types of jobs, ranging from the most 
specialized physicians all the way to cleaning and housekeeping 
staff. Part of this difficulty comes from some unintended 
consequences of locality pay. Locality pay is intended to 
ensure that VA workers are paid a wage that represents roughly 
an equal standard of living in different parts of the country.
    However, locality pay has created real problems for the VA 
in certain areas. For instance, experienced nurses at the VA 
Hospital in White River Junction, Vermont are paid 20 percent 
less than nurses just 8 miles away across the river in Hanover, 
New Hampshire. Are you willing to examine the effects of the 
Federal locality pay structure in the VA and consider 
increasing VA pay where necessary to prevent shortchanging of 
employees?
    Mr. Nicholson. Yes, Senator, I am very willing to look into 
that. I have not; that has not come to my attention yet in my 
preparation for this job. I was unaware of what you just 
stated. But I certainly will look into it and see what I think 
should be done about it, because retention and recruitment are 
very big issues.
    I was reading a report yesterday, the Veterans 
Administration has 47,000 people in its professional nursing 
services, which is registered nurses and practical nurses and 
nurse assistants, and we have, as we all know, a nursing 
shortage in this country, and we need to be at our best to 
recruit and retain nurses and all other people on this team.
    Senator Jeffords. With that excellent answer, I will 
retreat.
    Chairman Craig. Senator, thank you very much.
    Now, let me turn to Senator Akaka.
    Senator Akaka. Thank you, Mr. Chairman.
    Mr. Ambassador, as a follow up to my previous question on 
seamless transition, I would like you to commit to working with 
me and any other Members who are interested towards making sure 
that our new veterans are able to receive the care and the 
services they need and are made aware of the services and 
benefits available to them.
    You mentioned in our prior chat that you will be improving 
the system by which servicemembers are made aware of services 
and benefits available to them.
    I want to make a statement prior to moving on to my next 
question. I urge you to look strongly at the makeup of the VA 
health care system. Nearly 2.5 million middle-income veterans 
are coming to VA for care. They pay co-payments, and nearly 90 
percent bring their health insurance coverage with them. The 
cost of treating these veterans is the lowest of all patients 
seen by VA, and I believe we can care for our core constituency 
and still meet the health care needs of other veterans who have 
earned VA care.
    I want to comment to Senator Salazar that you will be 
pleased to know that today, with Senator Reid, I will be 
introducing legislation to allow veterans to bring their 
outside prescriptions to VA. If you are interested, please talk 
to me later.
    Mr. Ambassador, VA's drug purchasing and negotiations have 
yielded incredible savings for the Federal Government and also 
for veterans. For example, VA uses the Federal supply schedule 
to buy Zoloft, a medication for depression, at nearly half the 
price of retail outlets, and I assume you will not be inclined 
to reduce the vitality of negotiations. Given the incredible 
success of the VA drug purchasing program, do you believe that 
the Federal Government should do more in other areas?
    Mr. Nicholson. First of all, I would say, Senator, that I 
believe in the old management theorem of, you know, if it ain't 
broke, don't fix it, and the VA's drug purchase program 
certainly is not broke. So I would just like to salute those 
who have gone before me, if I am able to follow, and what they 
have done, because it is extraordinary.
    The question of whether that could be replicated in the 
rest of the Federal Government is a good question, and I, at 
this moment, I do not feel qualified to give you a good answer. 
I would be very happy to pursue it, work with you, stay in 
touch to see what I end up thinking about that, but I do not 
think I can give you a good answer.
    Senator Akaka. Thank you. Certainly, we will be willing to 
work with you on that.
    Mr. Ambassador, VA's specialized services are one of the 
jewels of the VA health care system. Yet, for years, we have 
received complaints that VA managers are foregoing their 
responsibility to maintain a high level of specialized 
services. For example, maintaining the level of psychiatric 
care has remained a problem.
    In general, I am looking for a commitment that specialized 
services, especially mental health care, will be different 
under your administration. What assurances can you give that 
this will be so?
    Mr. Nicholson. The assurance that I can give you right now, 
Senator Akaka, is that I will take a look at that right away, 
because I am not aware of that problem that you have described. 
I know the VA is working with, I think, 107 different academic 
medical institutions to benefit from the cross-training that 
both medical students, residents, get from that, and I am 
unaware that the specialized care is suffering. I thought that 
it, in fact, was benefiting from that academic collaboration 
that is going on. But it is something that I will certainly 
look at.
    Senator Akaka. Thank you, Mr. Chairman. My time has 
expired.
    Chairman Craig. Thank you.
    Mr. Ambassador, Senator Akaka talked about two areas that 
are of concern to me. I had the privilege the week-before-last 
of going to the Veterans Hospital in Spokane, Washington, a 
facility that both Senator Murray and I share equally, and it 
services both north Idaho, parts of Montana and the State of 
Washington. And there, I saw this prescription drug process in 
action. And what I found very unique is that while people 
oftentimes arrive there to get their prescriptions filled, they 
are sent out from a center in California, and they are at the 
veteran's doorstep in 24 hours; tremendously automated; very, 
very effective and cost-saving, and I agree that that part of 
the Veterans Administration appears at this moment to be 
tremendously efficient.
    There is something about seamlessness that concerns me, 
though, and it is a new phenomenon that we are engaged in in 
this country that is something that I will address as Chairman 
and something that I think concerns a good many of us. Idaho is 
a perfect example of a lot of States today who are deploying 
their Guard and their Reserves in unprecedented numbers into 
active duty. The State of Idaho, at one point, 2 million 
people, and I think Senator Thune referenced that in his 
questioning as a percentage of total population, has about 
2,500 in service now as Guard and Reserves that have just been 
deployed to Iraq; the Army National Guard's 116th Cavalry 
Brigade Combat Team.
    Here is my concern: veterans' programs were designed for 
the most part to facilitate the transition of active duty 
troops out of service and back into civilian life and not to 
facilitate the movement of Reserves and Guard personnel into 
and out of active duty versus Reserve roles. Do you think 
veterans' programs need to be reassessed in light of an 
increasing movement of Reserves and Guard personnel into and 
out of--and sometimes back into--active duty roles? Do VA 
programs reflect the perhaps-dated view that persons are either 
in or out of service, and once they have finished with active 
duty, they are finished for good? Do we need to rethink 
programs to account for the needs of Guard and Reserve 
personnel who are asked to shift into and out of, and sometimes 
back into and then oftentimes out of, active duty?
    It is increasingly the case in the current situation we are 
now in and one that I know the Defense Department is attempting 
to address in a variety of ways, and it is something that I 
believe that we may want to review pretty thoroughly. Your 
reaction?
    Mr. Nicholson. I think it is a very important subject area, 
and I agree with you. I think that probably because of custom, 
I mean, it is quite unusual what is going on now with the 
deployment into war zones for, you know, long periods of time 
for Guard and reservists.
    Chairman Craig. This Guard unit will be expected to be 
there for at least 18 months.
    Mr. Nicholson. So, you know, we are looking at really kind 
of a de novo situation over the last several decades at least 
in our country, and we do need to adjust the systems to make 
sure that these people who have gone there and have served are 
treated exactly the same. And that is underway, I will tell 
you. I mean, there is that shared commitment both at DoD and at 
VA.
    What needs to still be perfected is the system, so that 
people do not get away from it, because many of these young 
people cannot wait to get home and get back to their jobs and 
their families, and they do not know about, or they do not 
think about VA and the screening and the education that should 
precede that, and that is underway and very important. And the 
program, the benefits, I think, are good. You know, they are 
working very hard giving the families Tri-Care while they are 
away, making sure that the families know what they are entitled 
to, and then, the VA gives any veteran returning from one of 
those calls to duty 2 years of its services.
    It is there; what is needed is to make sure that everybody 
knows it and makes use of it.
    Chairman Craig. We will follow up with you to make sure 
that we work forward on that and that that process is completed 
so that that knowledge is available, and services are 
accessible.
    Let me turn to my colleague, Senator Thune, questions of 
the ambassador.
    Senator Thune. Thank you, Mr. Chairman, and again, I 
appreciate your testimony and your dedication to this important 
mission. I know that there have been some questions asked in my 
absence about some of the issues I was concerned with, one with 
respect to the CARES Commission, and I also know that there 
really are not any of these problems that probably cannot be 
fixed with more money, and that is the challenge that we face 
up here and that you will face in the job as well is most of 
the issues, in many cases, at least, the issues that are 
brought to me by the veteran community in my State of South 
Dakota are funding issues. And that clearly is one of the 
issues that we are going to have to grapple with, but I am also 
interested in working with you on ways that we can make our 
dollars go further and ways that we can become more efficient.
    But I also have a specific interest, having said that and 
talked about some of the challenges and problems that you face 
that sometimes can only be solved by money; as I referred to 
earlier, in access in rural areas, in your testimony, and I 
believe this to be true, that with the community-based 
outpatient clinics, which have been extremely successful in 
rural areas like South Dakota, you said that 87 percent of 
veterans now have access to a VA facility that is within 30 
minutes.
    And in South Dakota, they have to be driving awfully fast, 
I think, to be able to get there in 30 minutes in a lot of 
places, but I know there are places not unlike South Dakota, 
other regions of the country that are very rural, very remote, 
and where veterans still have to drive sometimes hundreds of 
miles to get to a facility.
    And there are some things that have been proposed to 
address that. In some cases, veterans who have need for a 
simple test that could be performed in a local clinic in their 
own community, and I guess I am wondering if that is something 
that you would consider establishing, and that is improved 
access to a local clinic.
    Congressman Osborne, a former colleague of mine on the 
House side, introduced a bill that would have earmarked 5 
percent of VA funding to contract with rural civilian health 
facilities to provide services locally, and I understand that 
the VA has opposed that sort of mandatory approach, but I guess 
I am wondering if there is a less restrictive solution that you 
might support that would allow veterans to have access to some 
of these facilities, which are, in many cases, considerably 
closer and more convenient than the distances they have to 
travel in rural areas?
    Mr. Nicholson. The answer is yes, Senator Thune. I believe 
I am correct in saying that some of that is now happening, that 
there are cases where they are engaging, on a contract basis, 
local doctors to take care of veterans who are too distant from 
a VA facility or a VA clinic or who cannot adequately be 
serviced with telemedicine, which is really, now, coming into 
its own, and the VA, I think, again, is on the forefront in the 
innovations of the use of that.
    And I have been learning examples of where they monitor 
people's blood sugar and their heart rate and their temperature 
electronically remotely every day, and we have equipped people, 
we have allowed them to stay in their homes, and instead of 
institutionalizing them in a long-term care facility, they stay 
at home; there is a camera on both ends, and people talk to 
each other, and that has got great potential to mitigate part 
of that. And I will look into the use of local contractors 
more, but I think some of that is happening.
    Senator Thune. I appreciate that, and I do want to pick up 
on one thing that you mentioned, because I really believe that, 
and I have seen the examples of this in the State of South 
Dakota, where telemedicine is doing some wonderful things, and 
I hope that is something that can be further employed with the 
VA. I worked as a Member of the House on some changes in the 
Medicare program that will make it more possible for facilities 
in rural areas to be able to have access to many of the 
benefits of technology: teleradiology, a lot of diagnostic type 
things can be done from a distance now. And with the technology 
that exists and is available, we certainly want to employ that, 
and particularly if it is a way that we can achieve cost-
savings, and I would suspect that there are a number of ways 
where, if veterans had access to some of the technology that is 
available in health care today and could be served in that 
fashion, we might be able to achieve some cost-savings as well.
    So I appreciate your interest in working with us on that. 
As I said earlier, I am delighted that you are going to be in 
the position. I think you are going to be a wonderful person 
with tremendous experience and compassion for the veteran 
community, and we look forward to working with you.
    Thank you, Mr. Chairman.
    Chairman Craig. Thank you, Senator.
    Senator Obama, further questions?
    Senator Obama. Thank you, Mr. Chairman.
    Ambassador, I just want to revisit a couple of issues that 
we discussed earlier. The first, I guess, is I was not clear 
with respect to the investigation that you intend to be engaged 
in that the Inspector General has already started on this 
disabilities disparity, when, exactly, we can start getting 
some sort of report, and I was wondering if you had some date 
that when I go back to Illinois and talk to veterans, I can say 
as of this time, I think we will at least have the initial 
assessment in terms of what is going on.
    Mr. Nicholson. I wish I could give you that, Senator Obama, 
but I cannot. I asked that same question myself of the 
Inspector General.
    Senator Obama. Okay.
    Mr. Nicholson. And he said he could not, would not project 
that.
    They are working on it with intensity, and we, if I am 
confirmed and take over the VA, are going to review where his 
work is and then see what, you know, if we should be doing 
something independently of this, put a team together to look at 
this.
    I discussed this a great deal with our very able head of 
the Veterans Benefits Administration, Admiral Cooper. He shares 
the concern over this and sort of the puzzlement about why this 
is happening to that degree, but we don't know. I can just tell 
you that we will stay in close touch, and we will be working on 
it.
    Senator Obama. Let me say this: I have no doubt that you 
are concerned about it, and I think that there are going to be 
other people that are concerned about this. My concern is that 
you have got a full plate coming into this thing. I mean, the 
issues that were just raised, I thought the Chairman raised an 
excellent point about Guardsmen and Reservists and how you have 
to rethink the role there, because as I travel throughout the 
State of Illinois, we get the same thing, that the lines are 
now blurred between active duty and our citizen-soldiers. The 
point that Senator Thune raised about travel times, you know, 
believe it or not, in Illinois, we have got some folks who have 
to drive a lot, too, and are experiencing the same issues.
    So you are going to have a lot of things coming at you, and 
I guess my concern is that without some timetable, this can get 
lost. And I should note that even in the Sun-Times article, for 
example, you have got quotes from senior analysts in 
headquarters here in Washington that say things like the folks 
who do the adjudication in Chicago are pretty tough; folks 
there really look at everything with a jaundiced eye, and they 
are rather stringent in their application.
    So, I mean, there are people in your offices that have 
opinions about why this is occurring, and if the Inspector 
General cannot give us a date certain, then, I guess I would be 
interested in whether there was some team that could be put 
together, you know, so that I can provide some certainty to the 
folks back home.
    Mr. Nicholson. I understand exactly what you want and why, 
and I am sympathetic to it. I can only say that we will get on 
it, and I will make a decision about whether I think there is 
some independent group that should come together to look at it 
or wait for the IG, and as soon as I can give you some 
projection of time, I will do so, Senator.
    Senator Obama. Okay. Fair enough. Not to belabor the point, 
because I only have a minute left on this round: one issue that 
does seem to be coming up is the fact that there may be a 
shortage of personnel in these offices. You know, it appears at 
least that just to give an example, during the past 2 years, 
the number of claims filed for service connection and the 
numbers of issues per case have increased; you have already 
noted that.
    My understanding, at least, is that the Administration has 
proposed decreasing the number of employees available to 
adjudicate claims. As of December 31, 2004, there were 48 fewer 
adjudication employees in the VA regional offices than there 
were on September 30, 2004. So given what we expect to be a 
significant influx of claims being made, partly as a 
consequence of great medical care in the field, one of the 
results of that is more disabled veterans making claims. I am 
wondering whether, in fact, we are reducing or even just 
maintaining, keeping constant, the number of people evaluating 
claims and what you intend to do to make sure that these 
numbers are sufficient to meet the demand.
    Mr. Nicholson. The time that it is taking for these claims 
to be filed and adjudicated bothers me. It seems to take a long 
time, and so, I have a goal to see if we can shorten it. As to 
the number of adjudicators, I think that they did go down, but 
the agency was then able to transfer, I think, some fiscal 2004 
money into this budget cycle so that we are now hiring some 
more adjudicators, and the net result of that should be we 
should have more. And I am not speaking specifically to your 
case there, you know, in Chicago, Illinois----
    Senator Obama. No problem.
    Mr. Nicholson.----but across the system.
    Chairman Craig. Senator, thank you.
    Senator Jeffords, further questions?
    Senator Jeffords. Mr. Chairman, I ask unanimous consent 
that I may change my vote from nothing to yea.
    Chairman Craig. I appreciate that. The Committee does, and 
it will so dutifully be noted without objection.
    Thank you.
    Senator Akaka. Mr. Chairman.
    Chairman Craig. Senator Akaka, further questions?
    Senator Akaka. This is my final question, and I would ask 
that my other questions be placed in the record.
    Mr. Ambassador, each year, the Administration sends its 
budget proposal to Congress with the expectation that Congress 
will improve upon it. We have had some success in doing just 
that, but I believe we can do better for our veterans. I would 
like to start the process more rationally. What are your 
thoughts on the current budget process for VA health care? Do 
you agree there is room for improvement?
    Mr. Nicholson. I am going to respond to that based on my 
general awareness, Senator, of the budget process and say that 
yes, I think we collectively could improve on the process by 
seeing if we could get budgets done and not have to use 
continuing resolutions so that we could get more certainty into 
the Executive agencies, the departments of the Government, so 
they know where they are, and they can project their work load, 
know what their capacity is going to be. So that categorically, 
I would say yes.
    As to the specifics of the Veterans Administration and its 
budget formulation, I do not feel qualified to give you an 
answer on that at this point. I have not had that experience 
yet.
    Senator Akaka. Yes, well, another question, and it may fall 
into the same category: I was going to ask you whether you have 
had a chance to become familiar with the proposals to fully 
fund VA health care by shifting at least some of the funding to 
a mandatory account. If you have an idea about that, will you 
please express it?
    Mr. Nicholson. I have had an opportunity to have a 
discussion with people about that, and what I believe at this 
point is that given the mission of the VA and that where you 
get these exigent conditions, like we have with a war, and the 
load that comes from that and the intense and expensive care 
that comes from having to do right by those people that are 
injured and disabled, diseased as a result of that that having 
the flexibility that the VA now has in the health care area is 
a plus for them.
    It allows them to meet some of these specific demands, and 
thus, the present system which supports that seems good to me 
categorically.
    Senator Akaka. Well, I thank you, Ambassador, for your 
responses. I want to wish you well in your administration.
    Mr. Nicholson. Thank you.
    Senator Akaka. And Mr. Chairman, I submit the rest of my 
questions for the record.
    Chairman Craig. Thank you, Senator, for doing that.
    I will also submit the balance of my questions for the 
record.
    Do any of our colleagues have further questions?
    Senator Thune.
    Senator Thune. Mr. Chairman, I also would do that. I have 
some questions I would like to have answered for the record.
    Chairman Craig. All right. Without objection.
    Senator Obama.
    Senator Obama. Mr. Chairman, I do have a number of 
questions I would like to submit.
    Chairman Craig. Good.
    Senator Obama. And I will follow suit, but there are just 
three points I think that can be dispatched within 5 minutes 
that I would like to complete here in the hearing if that is 
all right.
    Chairman Craig. Please proceed.
    Senator Obama. One issue that has come up fairly 
frequently, Ambassador, is the issue of back pay for 
disabilities. I mean, it seems to be a particular problem where 
you have a veteran who goes in, gets evaluated, the initial 
evaluation says 10 percent disability. He continues to pursue 
his claim. Perhaps two or three years later, there is an 
evaluation that, in fact, he was deserving of 70 or 80 percent. 
And one of the questions I guess I have is that--and I am not 
sure whether you know the answer to this--where there is an 
adjustment of that sort? Is that veteran then entitled to back 
pay or retroactive benefits given the second opinion that was 
rendered?
    Mr. Nicholson. I am not sure I know the answer either, 
Senator. Is your question that when they looked at the veteran 
the second time, and they found him to be 70 percent that they 
also found that he should have been adjudicated 70 percent when 
it was 10?
    Senator Obama. Right; this would not be a situation where 
there would have been a deterioration of his condition, but 
rather, simply, it turns out that there was a different 
assessment that was made.
    Mr. Nicholson. I do not know the answer. That is a good 
question, and it also leads to what his appeal rights might be 
about that.
    Senator Obama. Right.
    Mr. Nicholson. I will look into that and learn from the 
answer and provide it to you.
    Senator Obama. Okay; the second question I have really has 
to do with the whole issue of mental health and post-traumatic 
stress disorder that has already been discussed. Right now, are 
there plans to expand the resources available for those 
purposes, and if so at what point, would this Committee sort of 
get a sense of how that is being structured?
    Mr. Nicholson. There are plans to expand that in 
anticipation of the needs of returnees from Operation Iraqi 
Freedom and Operation Enduring Freedom. I would think that--I 
guess the first time probably, I mean, we can always talk about 
it soon, but the 2006 budget also will encompass that.
    Senator Obama. Should reflect some of those.
    Mr. Nicholson. Yes, and should have what the agency has in 
their----
    Senator Obama. Okay; and just the final point that I would 
make, and this circles back to this broader concern that I have 
expressed about disparities, regional disparities.
    If it turns out that there does appear to be a problem with 
the raters and how they are trained and the lack of 
standardization, I guess part of what I would very much be 
interested in would be to see some sort of third-party reviewer 
to come in and assess these claims and to think about how we 
create the same system across the board. I mean, I am new to 
this Committee, but one thing that I am absolutely certain of 
and that is that if a veteran has lost a leg and lives in 
Illinois, they should get the same disability as a veteran who 
lost his leg and lives in Puerto Rico. I mean, that seems to me 
an unassailable statement.
    And so, one of the commitments that I am going to have is 
if it turns out that the raters need some sort of additional 
training, it may also be necessary that we have some sort of 
third-party reviewers or somebody from the Washington office 
that starts overseeing some of this work until it gets smoothed 
out.
    Mr. Nicholson. I think that is a very insightful question, 
Senator. I will tell you that the VA does send people around to 
do an independent review of adjudications, and I have looked 
into that with respect to Illinois, and for some reason, they 
seem to have been found to have been pretty accurate and pretty 
consistent.
    Senator Obama. I am just curious: is it consistent 
internally in the sense that they are uniformly stingy with all 
of the--I mean, I do not mean to be sarcastic, but I guess----
    Mr. Nicholson. That is not the meaning of the way I used 
it. This person had this set of conditions, and they were 
adjudicated thusly and that was being done consistently in the 
findings of--because it is sort of an ombudsman function that 
the VA does do, just to run a check on how these people are 
doing. So that has not shed any light yet, but as I said in my 
opening statement about this, there are two parts: we have got 
to get to the bottom of it and then figure out what to do about 
it. And you have my commitment on both of those.
    Senator Obama. Right. Okay. I appreciate your commitment.
    Mr. Chairman, I appreciate you devoting this time to an 
issue that is very important to my folks.
    And finally, I want to thank you, Ambassador. I know that 
before this hearing, you had made a commitment that once we had 
some answers, you would be willing to come to Illinois to 
discuss them directly with veterans. I appreciate that 
commitment, and I wish you all the best of luck in your 
service.
    Mr. Nicholson. Thank you.
    Chairman Craig. Well, Senator Obama, let me thank you, and 
obviously, this is an issue of great importance to you. It is 
an issue of great importance to this Committee. As this issue 
matures, and we are able to assess facts, it sounds like the 
ideal kind of issue that would deserve some oversight of this 
Committee, and I pledge to you we will do that in cooperation, 
also, with the Secretary to make sure that happens.
    Senator Obama. Thank you, Mr. Chairman.
    [The prepared statement of Mr. Nicholson follows:]

     Prepared Statement of R. James ``Jim'' Nicholson, Nominee for 
               Secretary, Department of Veterans Affairs

    Good morning, Mr. Chairman, and Members of the Committee.
    I want to thank you for the opportunity to appear before you so 
early in the new Congress, and for the many other courtesies you and 
your staffs have extended me. Your words and actions underscore your 
commitment to the millions of veterans who look to the Department of 
Veterans Affairs for the benefits and services they earned--benefits 
and services that our Nation is pledged to gratefully give them.
    Let me congratulate you, Senator Craig, and Senator Akaka on your, 
election to Chairman and Ranking Member, respectively, of this 
Committee, which oversees the department of our government with the 
largest civilian workforce, and with one of our highest priorities, to 
deliver first class, timely medical care and benefits for our veterans; 
Your selections speak volumes about your colleagues' confidence in your 
commitment to America's veterans.
    I am joined here today by my wife of 37 years, Suzanne. She has 
always been at my side through thick and thin and I am very grateful to 
her for her support to accept this honor and challenge from President 
Bush to lead this great Department, if confirmed. I am also joined by 
my son, Nick and his wife Charlotte who live here in the DC area. Our 
other two children could not be here.
    Service to our country is a long tradition in my family. My father 
was an enlisted man in the Navy during WWII. My father-in-law served in 
both WWII and Korea. My brother, Brigadier General Jack Nicholson, 
served 30 years in the Army and was, until now, the Under Secretary of 
the VA for Memorial Affairs, where he did an outstanding job. One of my 
sons is a veteran; four of my nephews are Colonels in the Army and Air 
Force. My 30 years of active and Reserve service in the Army, coupled 
with my four years at West Point, have defined my life. I love the 
Armed Forces of our country-their courage, their integrity, their sense 
of duty.
    That is why I am so honored that President Bush selected me to 
build upon his Administration's great record of care and compassion for 
our Nation's veterans of our Armed Forces. And, if confirmed, it would 
be a privilege for me to follow in the footsteps of Secretary Principi, 
a man who has provided outstanding leadership and tireless dedication 
to the welfare of this Nation's veterans.
    I feel humbled that America's veterans--men and women who served on 
the front lines for freedom, justice, and peace in democracy's name--
might look to me as the faithful steward of their trust, and the leader 
of VA's 230,000 employees who work so diligently, around the clock, to 
assure our veterans that we are making good on the Nation's debt to her 
defenders.
    Mr. Chairman, I come from the heartland of this great Nation--
Iowa--from a boyhood life so far removed from this historic and stately 
temple of liberty that Washington was barely a dream. It was a 
hardscrabble life, to be sure, but my family of seven kids was filled 
by my mom with hope and confidence. She used to say to us, ``if you 
will work hard, study hard and pray hard, you can be a success in 
America, you can have legitimate dreams of a better life and make them 
come true.''
    As a teenager, I remember watching young men go of to the Korean 
War, following in the wake of World War II--yet another test of 
freedom's will to defeat an inhumane and evil tyranny. Yet another 
answered call by our countrymen to go of to a frozen peninsula that we 
had never heard of, because their country asked them to go. One of the 
brothers of a pal of mine never returned. One of my best friends 
slightly older than I left his leg over there. He also was my first 
introduction to the VA as they wanted to get his prosthesis right. Now, 
again, we are at war, and again our country is asking our men and women 
in uniform, all volunteers, to go to the sound of the bugle.
    Those friends and neighbors who stood tall for freedom 50 years ago 
are now among our most distinguished veterans, and today's heroes will 
soon join them. I will, if this Committee so entrusts me, be proud to 
lead the Department dedicated exclusively to honoring their service and 
sacrifices, to making good on our country's promises to them.
    I have had the privilege of wearing the uniform of the United 
States Army in combat, so I have seen both the horrors of war and the 
heroes of America making the greatest sacrifices of military service on 
behalf of their comrades and our Nation.
    One cannot leave a battlefield without having profound respect for 
the courage and cool of all who have served there. One cannot 
appreciate all the blessings of our freedom without thanking the men 
and women who serve in war to bring about peace. Their example of 
unwavering commitment to their mission, no matter how dangerous and 
uncomfortable, will always reverberate with me and readies me for a 
mission of service to veterans. I will do my utmost to see that they 
receive all they have earned, delivered with the dignity they also 
deserve.
    I do not underestimate the enormity of the responsibilities of 
Secretary of Veterans Affairs. This Committee knows well that VA is the 
second largest Cabinet department, operates the Nation's largest 
integrated health-care system, and is relied upon by millions of 
veterans, their dependents, and survivors, not only for health care, 
but for billions of dollars in monetary benefits, life insurance, 
education, mortgage insurance and readjustment benefits. The challenge 
of leading such an organization is daunting, but I am prepared to 
accept it.
    If the Senate confirms my nomination, I will, without hesitation, 
commit to upholding the following principles:
     Veterans should have access to the best-available health 
care, in the ``most appropriate clinical settings, delivered in a 
timely manner by caring, compassionate clinicians. And,
     Veterans, their eligible dependents and survivors are 
entitled to prompt, accurate, equitable and understandable decisions on 
their claims for benefits. And,
     Veterans should be appropriately honored in death for 
their service and sacrifices on behalf of a grateful Nation.
    Mr. Chairman, the manner in which VA supports the transition of 
today's servicemembers into veterans, especially those who are injured 
or become ill as a result of their service in combat areas, will define 
the Department for them. If confirmed, I will ensure that VA and DoD 
continue to work collaboratively to provide a seamless transition so 
that returning servicemembers are timely provided the benefits and 
services that will enable them to reclaim their rightful places as 
citizens in our society.
    I am aware of recently reported concerns of possible regional 
variations in disability-compensation awards. Veterans' entitlement to 
Federal benefits is the same regardless of where in this country they 
may reside, and if confirmed, I will ensure that standardized training 
and sound quality controls support a uniform approach to claims 
adjudication. Further, to that point, I will, if confirmed, order a 
prompt study into this whole question of equity and geographic 
differences in benefits adjudication. No one that I have yet met knows 
exactly why these differences occur the way they do, and we need to 
understand this fully and then take remedial action, as appropriate.
    Mr. Chairman, if the Senate will afford me the opportunity, I 
pledge to work with this Committee and individual Members of both 
houses for the betterment of veterans and their families. I will keep 
you informed, I will listen to your concerns, and I will respect your 
oversight responsibilities.
    I understand that the success of the Department requires a strong 
collaboration with the veterans' service organizations, who function 
both as our ears to the ground on matters of service delivery and as 
our partners in devising solutions to problems as they arise. If 
confirmed, I will work closely with the VSOs so that I may both benefit 
from their counsel and draw upon their willingness to serve their 
comrades.
    I am also deeply committed to earning the respect, trust, and 
following of the men and women of VA who have made service to veterans 
their life's calling. The VA workforce represents an enormous reservoir 
of dedicated, committed talent that must be put to its best possible 
use. I will hold myself and my leadership team accountable for ensuring 
and harnessing our employees' best efforts. It will be my job and my 
privilege to lead and harness this awesome force of talented people so 
that all of us have the same focus--our veterans.
    It is critical that we honor America's debt to those who have 
served us so faithfully. When President Bush announced my nomination, I 
quoted America's first Commander in Chief, George Washington, that 
``[I]t is a debt of honor.''
    And today, with so many American men and women in uniform stationed 
around the globe, we give them heart when we keep faith with those who 
have served before them. They have the right to know we will stand by 
them as well in their time of need. This is also integral to our 
Nation's ability to be able to continue to attract an all-volunteer 
force willing to defend us anywhere, anytime.
    The armed forces of our country are, in my opinion, the model for 
what is good and great about America. They are a paragon of integrity; 
they don't take, they give; they are disciplined, highly trained with a 
love for their country. They are a unique force in the world and we 
need to treat them uniquely well.
    Our VA, under Secretary Principi, has made terrific strides in 
serving our veterans. VA provides health care to 860,000 more veterans 
than it did in 2001, has drastically reduced waiting times for health-
care appointments, and opened nearly a hundred new community-based 
outpatient clinics so that 87 percent of the veteran population now 
lives within 30 minutes of a VA medical facility. As a result of its 
focus on excellence in health care, VA is now the proven benchmark in 
preventive health-care quality and chronic disease management.
    Since 2001, VA has also dramatically reduced its inventory of 
pending claims for disability compensation, reduced average processing 
time of those claims, and, at the same time, substantially improved the 
quality of claims decisions. Moreover, in 2001, VA embarked upon the 
largest expansion of the National Cemetery system since the Civil War. 
When construction of all the new cemeteries is completed, VA will have 
expanded the National Cemetery system by 85 percent. And, according to 
the latest American Customers Satisfaction Index, the National Cemetery 
Administration earned a rating of 98 out of 100--the best rating ever 
earned by a federal agency.
    I will, if confirmed, strive to move the Department to another 
level by building on all that has been put in place and improving upon 
those areas that remain a challenge. The VA is a great American 
institution created and founded by a country that appreciates that 
freedom isn't free, and our veterans' lives and limbs are the price 
that is too often paid.
    It falls on the Secretary of the VA, and the men and women he 
leads, to keep faith with the expectations of all our fallen citizens 
in uniform--past, present and future--expectations that they will be 
cared for, as needed. This too is the mandate of the grateful people of 
the U.S. I pledge to you, if confirmed by you, that I will do all in my 
power to see that both the veterans and the citizens of our great 
Nation are pleased by the service of their VA.
    This concludes my remarks, Mr. Chairman.

                                 ______
                                 
                 Questionaire for Presidential Nominee

    1. Name: Robert James Nicholson
    2. Address: PSC 59, Box 66 APO AE 09624
    3. Position to which nominated: Secretary of Department of Veterans 
Affairs
    4. Date of nomination: 1/05/05
    5. Date of Birth: February 4, 1938
    6. Place of Birth: Struble, Iowa
    7. Marital Status: Married
    8. Full name of spouse: Suzanne Marie Nicholson
    9. Names and ages of children: Robert Jr., 35; Nicholas, 34; 
Katherine, 27
    10. Education: Institution, dates attended, degrees received, dates 
of degrees; U.S. Military Academy, 1957-61, BS 1961; Columbia 
University, 1966-69, MA 1969; University of Denver College of Law, 
1970-72, JD 1972.
    11. Honors and Awards: Imagio Dei Award, Archdiocese of Denver; 
Nostra Aetate Award, The Center for Christian-Jewish Understanding at 
Sacred Heart University; Honorary Doctorate in Civil Law, University of 
Dallas; Honorary Doctorate of Public Service, John Cabot University; 
Honorary Doctorate of Public Service, Regis University; Horatio Alger 
Award Recipient; Man of the Year, Colorado Mortgage Lenders 
Association; Investiture as Knight, Sovereign Military Order of Malta; 
Home Builder of the Year, Homebuilders Association of Metropolitan 
Denver; Distinguished Citizen of the Year, Colorado Association of 
Homebuilders; Distinguished Citizen Award, Parker, Colorado; Who's Who 
in American Politics; Pope John Paul II knighted Ambassador Nicholson 
with the Grand Cross of the Order of Pius IX for his services as the 
representative of the United States of America to the Holy See; Bronze 
Star Medal; The Combat Infantry Badge; Meritorious Service Medal with 
Oak Leaf Cluster; The Air Medal with Oak Leaf Cluster; The Vietnamese 
Cross for Gallantry; Army Commendation Medal with Oak Leaf Cluster.
    12. Memberships: 2002-Present: Member, Knights of the Constantinian 
Military Order of St. George; 2001-Present, Member. Sovereign Military 
Order of Malta; 1978-2001, Chairman of the Board and President, 
Nicholson Enterprises, Inc.; 1991-2001, Chairman of the Board and 
President, Rowley Downs Land Company; 1991-2001, Chairman of the Board 
and President, The North Woodlands Company; 1991-2001, Managing 
Partner, N-4 Associates Limited Partnership; 1991-2001, Chairman of the 
Board and President, Renaissance Homes of Douglas County, Inc.; 1995-
1999, Chairman and President, Renaissance Homes of Colorado, Inc.; 
1995-1999, Chairman and President, Renaissance Homes North, Inc.; 1995-
1999, Chairman and President, Renaissance Homes of Saddlebrook, Inc.; 
1994-2001, Managing Partner, Parker Properties Joint Venture; 1986-
2001, Director, St. Mary's Land and Exploration Company (Board of 
Directors); 1998-2001, Director, ITN Energy (Board of Directors); 1998-
2001, Director, Community Corrections Corporation (Board of Directors); 
1986-2001, Partner, Casa Del Sol Partnership; 1996-2001, Limited 
Member, Airport-Colfax, LLC; 1996-2001, Limited Member, GNMC Golf 
Office; 1988-2001, Limited Member, Tubac Investors, LLC; 1973-2003, 
Member, Colorado Bar Association; 1985-2001, Trustee, Nicholson 
Enterprises, Inc. Foundation; 1996-2001, Development Manager, Matrix 
Financial Services, Coyote Creek Development, Ft. Lupton, CO; 1989-
2001, Managing Partner, 20 Mile Associates; 1994-1999, Managing 
Partner, Meridian Land Company; 1996-1997, Managing Partner, Phillips 
Ranch Properties; 1976-1978, Partner, Calkins, Kramer, Grimishaw and 
Harring Law Firm, Denver, CO; 1980-1996, Director, National Association 
of Homebuilders for Metropolitan Denver; 1981-1985, Director, Colorado 
Association of Homebuilders; 1995-1997, Director, Blue Cross/Blue 
Shield of Colorado, Inc.; 1976-1999, Director, Lerch, Bates & 
Associates, Inc.; 1990-1995, President, NTB Real Estate; 1997-2001, 
Chairman, Republican National Committee; 1997-1998, Chairman, 
Republican Task Force on Education (U.S. Senate, House, Governors and 
RNC); 1997-2001, Vice Chairman, International Democratic Union; 1993-
1997, Vice Chairman, Republican National Committee; 1986-2001, 
Republican National Committeeman for Colorado; 1993-1997, Chairman, 
Republican National Committee Rules Committee; 1998, 1992 and 1996, 
Delegate, Republican National Convention; 2000, Chairman, Republican 
National Convention; 1996, Chairman, RNC Special Task Force on 
Presidential Primary Reform; 1986-1990, Chairman, Chairman's Circle for 
the Colorado Republican Party; 1987-1990, Director, The Center for 
Democracy; 1987-1991, Chairman, Elephant's Club for the Colorado 
Republican Party; 1996, Member, Committee on Arrangements, Republican 
National Convention; 1996, Member, Host Committee Relations, Republican 
National Convention; 1987-1992, Member, Republican National Committee 
Budget Committee; 1996, Colorado Co-Chair, Gramm for President; 1996, 
Surrogate Speaker, Dole for President; 1996, Surrogate Speaker and 
Fundraiser, Allard for U.S. Senate; 1992, Chairman, Business Leaders 
for Considine for U.S. Senate; 1988, Andrews for Governor Campaign; 
1980, Strickland for Governor Campaign; 1984, Kramer for U.S. Senate 
Campaign; 1984, Winn for Governor Campaign; 1976, Vanderhoef for 
Governor Campaign; 1999-Present, Served as fundraiser, advisor, 
campaign coordinator and grassroots organizer for scores of 
legislative, county commissioner, mayoral and city council races in 
Colorado for 25 years.
    Director, Daniels' Fund (Board of Directors); Member and Director, 
Horatio Alger Association (Board of Directors); Admitted to practice, 
U.S. Court of Appeals for the Armed Forces; Admitted to practice, U.S. 
Supreme Court; Colonel, U.S. Army Reserve (Retired); Trustee, U.S. 
Military Academy Association of Graduates; Commissioner, Defense 
Advisory Committee on Women in the Services (DACOWITS); Commissioner, 
Colorado Air Quality Control Commission; Chairman of the Board, 
Volunteers of America, Colorado; Chairman, Listen Foundation Annual 
Campaign; Trustee, Kent Denver School; Member, President's Commission 
on White House Fellows, Western Selection Panel; Trustee, Colorado 
Youth Citizenship Foundation; Member, Platte River Greenway Foundation; 
Member, Governor's Unified Housing Task Force; President, West Point 
Society of Denver; Presidential Appointee, Board of Directors, New 
Community Development Corporation (U.S. Department of Housing and Urban 
Development); Member, Denver Bar Association; Trustee, Denver Chamber 
of Commerce, Institute for Better Government; Director, Colorado 
Association for Housing and Building; Selectee, Leadership Denver; 
Director, Artreach Board of Directors; Member, Mayor's Manpower Area 
Plan Council Member; Who's Who in American Politics.
    13. Employment record: 6/1956 to 8/1956, U.S. Department of 
Agriculture, Laborer, LeMars, Iowa; 7/1956 to 2/1970, United States 
Army, Cadet and Officer, West Point, New York; Ft. Lewis, Washington; 
Ft. Benning, Georgia; Ft. Bragg, North Carolina; Republic of Vietnam; 
2/1970 to 9/1971, Lerch, Bates and Associates, Administrative 
Assistant, Denver, Colorado; 9/1971 to 12/1972, Office of the Mayor, 
Administrative Assistant, Denver, Colorado; 1973 to 1975, Calkins, 
Kramer, Grimshaw and Harring, Lawyer, Denver, Colorado; 1/1975 to 1/
1976, Colorado Association for Housing and Building, Lawyer, Denver, 
Colorado; 1/1976 to 4/1978, Calkins, Kramer, Grimshaw and Harring, 
Lawyer, Denver, Colorado; 12/1999 to 8/2001, ITN Energy, Director, 
Littleton, Colorado; 4/1991 to 8/2001, Rowley Downs Land Company, 
Chairman/President Denver, Colorado; 12/1995 to 5/1999, Renaissance 
Homes of Colorado, Chairman/President, Littleton, Colorado; 4/1970 to 
9/1999, U.S. Army Reserve, Colonel, St. Louis, Missouri; 9/1998 to 8/
2001, Community Corrections Corporation, Director, Roseland, New 
Jersey; 6/1986 to 8/2001, St. Mary Land and Exploration Company, 
Director, Denver, Colorado; 1/1997 to 1/2001, Republican National 
Committee, Chairman; 4/1978 to 8/2001, Nicholson Enterprises, Inc, 
Chairman/President, Denver, Colorado; 8/2001 to Present, U.S. 
Department of State, Ambassador to the Holy See (Vatican) Rome, Italy.
    14. Military Service: 40Sth Military Intelligence Detachment-
Strategic; 1957-1961, Cadet, U.S. Military Academy, West Point, NY; 
1961-1962, 2/Lt., Fort Benning, GA, Student Officer; 1962-1964, 1/Lt., 
4th Infantry Division, Fort Lewis, Washington (Platoon Leader Company 
Commander); 1964-1965, 1/Lt., Ft. Holabird, MD/Ft. Bragg, NC, Student 
Officer In Preparation for Vietnam Army Language School, Monterrey, CA; 
1965-1966, Cpt., Republic of Vietnam, Senior Advisor to the 402nd 
Infantry Scout Bn (ARUN); 1966, Cpt., Ft. Holabird, MD, Student 
Officer; 1966-1970, Cpt./Major, U.S. Military Academy, Staff and 
Faculty, Admissions Officer and Operations Officer; 1970-1991, Maj/Ltc/
Colonel, U.S. Army Reserves, Denver, CO (HQ at St. Louis, MI), USMA 
Liaison Officer; 1991, Retired from U.S. Army Reserves as Colonel, 
Honorable Discharge.
    15. Government record: All Listed Above.
    16. Published writings: Book: ``The United States and the Holy See-
The Long Road,'' published by Trenta Giorni Societa Cooperative, 2003; 
Article: ``Biotech Food for the Hungry,'' International Herald Tribune, 
October, 2004; Misc: Various articles and letters to the editor during 
1997-2001 as Chairman of the RNC.
    17. Political affiliations: (a) List all memberships and offices 
held In and financial contributions and services rendered to any 
political party or election committee during the last 10 years.
    Chairman, Republican National Committee; Vice Chairman, Republican 
National Committee; Republican National Committeeman, Colorado; 
Chairman, Republican National Convention; 2000, Chairman, RNC Rules 
Committee.

                              Contributions
------------------------------------------------------------------------
                                                   Value
------------------------------------------------------------------------
Republican National Committee.................      $15,000     10/25/99
Value in Electing Women PAC...................          250     10/01/97
Ronald Gene Schmidt for Governor..............          250      9/23/98
Republican National Committee.................       15,000      7/31/97
Republican National Committee.................          500     11/17/98
Republican National Committee.................          500     11/17/98
Colorado Republican Party.....................        1,000     11/19/96
Wayne Allard for Senate.......................          720     11/05/96
Colorado Republican Party.....................        1,000      3/21/96
Colorado Republican Party.....................          750      5/16/96
Colorado Republican Party.....................        1,000     11/19/96
Republican National Committee.................       15,000         1998
Tom Cole for Congress.........................          500         2004
Peter Coors for Senate........................        1,000         2004
Bush-Cheney Committee.........................        4,000         2004
------------------------------------------------------------------------

    (b) List all elective public offices for which you have been a 
candidate and the month and year of each election involved in: 
Republican Committeeman for Colorado, elected March 1986, re-elected 
June 1988, June 1992, June 1996; Republican National Committee, Vice 
Chairman, elected January, 1993; Republican National Committee 
Chairman, elected January, 1997, re-elected January 1999.
    18. Future Employment relationships: (a) State whether you will 
sever all connections with your present employer, business, firm, 
association, or organization if you are confirmed by the Senate.
    (b) State whether you have any plans after completing Government 
service to resume employment, affiliation, or practice with your 
previous employer, business firm, association, or organization. No.
    (c) What commitments, if any, have been made to you for employment 
after you leave Federal service? None.
    (d) (If appointed for a term of specified duration) Do you intend 
to serve the full term for which you have been appointed? Yes.
    (e) (If appointed for an indefinite period) do you intend to serve 
until the next Presidential election? Yes.
    19. Potential conflicts of interest: (a) Describe any financial 
arrangements, deferred compensation agreements, or other continuing 
financial, business, or professional dealings which you have with 
business associates, clients, or customers who will be affected by 
policies which you will influence in the position to which you have 
been nominated. None to my knowledge.
    (b) List any investments, obligations, liabilities, or other 
financial relationships which constitute potential conflicts of 
interest with the position to which you have been nominated. None to my 
knowledge.
    (c) Describe any business relationship, dealing, or financial 
transaction which you have had during the last 5 years, whether for 
yourself, on behalf of a client, or acting as an agent, that 
constitutes a potential conflict of interest with the position to which 
you have been nominated. None to my knowledge.
    (d) Describe any lobbying activity during the past 10 years in 
which you have engaged for the purpose of directly or indirectly 
influencing the passage defeat or modification of any Federal 
legislation or for the purpose of affecting the administration and 
execution of Federal law or policy. None, other than in a general way 
in support of the Republican Party agenda as the Chairman of the RNC.
    (e) Explain how you will resolve any potential conflict of interest 
that may be disclosed by your responses to the above items. (Please 
provide a copy of any trust or other agreements involved.)
    20. Testifying before the Congress: (a) Do you agree to appear and 
testify before any duly constituted committee of the Congress upon the 
request of such committee? Yes.
    (b) Do you agree to provide such information as is requested by 
such a committee? Yes.
                                 ______
                                 

                   Response to Post-Hearing Questions

 QUESTIONS FOR THE RECORD, SENATOR LARRY E. CRAIG, CHAIRMAN, COMMITTEE 
 ON VETERANS' AFFAIRS; NOMINATION HEARING OF R. JAMES NICHOLSON TO BE 
                     SECRETARY OF VETERANS AFFAIRS

    Question 1: I have been given a very brief overview of your 
military service. Please provide me with some details of that service, 
particularly your combat experience in Vietnam. How has that service 
equipped you to assume the post of Secretary of Veterans Affairs?
    Response: Service to our country is a long tradition in my family. 
My father was an enlisted man in the Navy during WWII. My father-in-law 
served in both WWII and Korea. My brother, Brigadier General Jack 
Nicholson, served 30 years in the Army and was, until now, the Under 
Secretary of the VA for Memorial Affairs, where he did an outstanding 
job. One of my sons is a veteran; four of my nephews are Colonels in 
the Army and Air Force. My 30 years of active and Reserve service in 
the Army, coupled with my 4 years at West Point, have defined my life. 
I love the Armed Forces of our country--their courage, their integrity, 
their sense of duty.
    I have had the privilege of wearing the uniform of the United 
States Army in combat, so I have seen both the horrors of war and the 
heroes of America making the greatest sacrifices of military service on 
behalf of their comrades and our Nation.
    One cannot leave a battlefield without having profound respect for 
the courage and cool of all who have served there. One cannot 
appreciate all the blessings of our freedom without thanking the men 
and women who serve in war to bring about peace. Their example of 
unwavering commitment to their mission, no matter how dangerous and 
uncomfortable, will always reverberate with me and readies me for a 
mission of service to veterans. I will do my utmost to see that they 
receive all they have earned, delivered with the dignity they also 
deserve.
    Question 2: Have you had an opportunity to assess Tony Principi's 
tenure as Secretary? Do you yet see how your tenure will differ from 
his in style or substance? Are there elements of his leadership you 
will seek to emulate?
    Response: I assess Secretary Principi's tenure as Secretary to have 
been one of a superb performance. I believe that my tenure should build 
upon his. To use a Navy metaphor, he began a sea change at the VA and I 
see a major part of my responsibility to see that this continues and 
that the VA is brought into the twenty-first century to serve twenty-
first century veterans. This implies that we must upgrade both physical 
stock of the VA (the average age of a VA hospital is over 50 years), 
and we must ensure that the quality of medicine given to our veterans 
is on the cutting edge and both medical care and benefits are given in 
a more timely way and that we are being consistent. So yes, there are 
many elements of Secretary Principi's leadership that I would plan to 
emulate, the principal one of which would be hands-on transparent and 
accessible management and with a continuing emphasis to serve our 
veterans with compassion, competency and dignity.
    Question 3: I hope very much that this Committee will be able to 
work cooperatively with you and the VA to solve problems that America's 
veterans face. To do that, we will need you to appear personally before 
this Committee to express the Administration's position on issues that 
concern veterans. Can we count on you to make personal appearances at 
Committee hearings when asked?
    Response: Yes, you can count on me to make personal appearances at 
committee hearings when asked.
    Question 4: Access to health care for veterans who reside in rural 
areas of Idaho is particularly difficult, and it is a problem that 
calls for creative and innovative approaches. I recently learned that 
Steele Memorial Hospital in Lemhi County, Idaho has donated space that 
can be used by veterans to secure ``telemedicine'' services from the 
Boise VA Medical Center. Such arrangements, it seems to me, improve the 
care provided to rural veterans at no cost to VA.
    A. Do you agree that VA and Congress must work together to improve 
access to VA services for veterans who reside in rural areas? If so, 
will you place a high priority on improving access to VA services for 
veterans who reside in rural areas?
    B. Will you monitor the progress--and hopefully, the success--of 
the Lemhi County program and provided periodic updates to me?
    Response: A. I agree that VA and Congress should continue to work 
together to improve access to VA services. Growing up in rural Iowa has 
given me an appreciation for veterans who reside in rural areas. I will 
put a high priority on exploring approaches to improve access to VA 
services in a cost-effective manner.
    To assist in addressing the issue of improved access to health care 
services, VA will continue to look at establishing additional Community 
Based Outpatient Clinics (CBOCs). Since CBOCs are scheduled to be 
opened in Fiscal Year (FY) 2005.
    Response B. The Boise VA Medical Center (VAMC) has worked with 
Steele Memorial Hospital in Salmon, Idaho to install two telehealth 
devices that will give VA the capability to provide both primary care 
and mental health care services to veterans in this area (a Viterion 
500, and a video phone). The Viterion 500 provides the capability of 
doing physiological monitoring remotely. The video phone will enable a 
mental health provider to interact directly with a patient. The Boise 
VAMC has already established services for two VA patients at the Steele 
Memorial site and they plan to add additional veterans. In addition, VA 
has placed monitors in the private residences of two other veterans in 
the Salmon area who are not able to easily access the Steele Memorial 
Hospital site.
    The Boise VAMC will provide periodic updates about this program to 
VA Central Office officials. In addition, they would be pleased to 
provide your office with quarterly progress reports on the 
implementation of telehealth services in the Salmon area and other 
parts of rural Idaho. These reports will highlight the locations of 
telehealth sites, the number of veterans served and the type of 
services offered.
    Question 5: Secretary Principi undertook an extensive review of VAs 
hospital infrastructure-a review that is called the Capital Asset 
Realignment for Enhanced Services, or ``CARES'', initiative. The 
Secretary proposed that three VA Medical Centers be closed (in 
Pittsburgh, Cleveland, and Gulfport, Mississippi ), that VA build 
hospitals in two cities that have no VA medical centers (Las Vegas and 
Orlando), and that decisions concerning the fates of 15 other VA 
Medical Centers be deferred pending further study.
    A. Have you yet had the opportunity to consider these decisions? Do 
you think you ought to reconsider then, and get your own assessment of 
VAs future medical infrastructure needs? Or do you think you ought to 
trust in the validity and soundness of these decisions and simply 
implement them?
    Response: A. I have been briefed regarding former Secretary 
Principi's decisions on CARES as well as the comprehensive process that 
lead up to his decisions. At this time, I intend to move forward on 
CARES implementation. I will be briefed on a regular basis regarding 
the additional studies that are currently underway and regarding 
implementation of all CARES initiatives through VHA's Strategic 
Planning Process.
    The CARES process was the most comprehensive assessment of VA 
capital infrastructure and the demand for VA health care ever achieved. 
The evaluation and review provided by the CARES commission insured that 
the process was independent and objective. Their well-reasoned report 
provides a road map for moving VA forward in planning for, investing 
in, and locating our capital facilities. I believe that the CARES 
report presents a carefully studied and strategically sound path for 
the Department, and I will use it as a blueprint for VAs future.
    B. One of the major criticisms of the CARES initiative was its 
failure to address VAs needs for long-term care facilities. Secretary 
Principi advised this Committee that a long-term care review would take 
place later. Do you intend to carry out Secretary Principi's commitment 
to assess VAs needs for long-term care facilities? Where does that 
review now stand?
    Response: B. I fully support the continuation of VA's assessment 
regarding Long Term Care (LTC). VHA has recently completed new runs on 
LTC workload projects by market and priority category. Strategic 
Planning Guidance will be going out to the VISNs and facilities in the 
next month requesting operational plans to include Strategic 
Initiatives. Each VISN will prioritize its strategic initiatives by 
year and within the year along with cost projects for inclusion in the 
VISN and National Strategic Plan. Implementation of all CARES 
initiatives, including LTC initiatives, is dependent on future funding.
    Question 6: During the past few budget cycles, the Administration 
has proposed, at various times, that so called ``low-priority'' VA 
patients pay an annual deductible (of $1,500), an annual enrollment fee 
(of $250), and that prescription drug co-payments be increased (from $7 
per prescription per month to $15). These proposals were greeted with 
some skepticism on the Hill.
    A. What is your position on proposals to increase the costs borne 
by ``low priority'' veterans seeking care at VA? Do you think some 
cost-sharing approaches make more sense than others? Do you think that 
this is a fair way of raising the level of funding available to VA?
    B. Do you believe that it makes sense for VA to impose fees on some 
classes of veterans and not on others? Does it make sense for VA to try 
to tamp down demand for care by ``low-priority'' patients so that it 
can devote more of its resources to the care of the service disabled 
and the poor?
    Response: A. Imposing cost sharing provisions, within reason, on 
veterans who have a lower priority for care should help to focus 
resources towards the care of those veterans who need us most.
    Through eligibility reform legislation, Congress requires the VA 
Secretary to decide annually whether VA has adequate resources to 
provide timely, high quality care for all enrolled veterans. Each year, 
VA reviews actuarial projections of the demand for VA health care in 
light of available budgetary resources and develops policies 
accordingly.
    Response: B. VA has proposed cost-sharing policies for Priority 7 
and 8 enrollees as a means of balancing veteran demand for VA health 
care and the finite resources available, and ensuring that VA has the 
capacity to serve those veterans who need us most--veterans with 
service-connected medical conditions, special needs, and low incomes. 
VA is committed to serving these veterans who depend upon VA for their 
health care and represent our core constituency.
    Thus, VA expects that those veterans now enrolled in priority 
groups 7 and 8 who frequently use VA health care services will likely 
pay the enrollment fee in order to continue to receive those services. 
However, many other veterans in priority groups 7 and 8 do not 
currently use the system, or use it very infrequently. Those veterans 
will likely not pay the enrollment fee, but rather will leave the VA 
system and use other health care options available to them.
    In some cases, the savings and additional collections associated 
with cost sharing proposals could help avoid more drastic enrollment 
decisions such as disenrollment of current users.
    Question 7: Do you believe that Operation Iraqi Freedom troops will 
more likely be afflicted with Post-Traumatic Stress Disorder than their 
predecessors in prior wars? Does this ``no rear echelon'' theory make 
sense to you? Does your combat experience in Vietnam give you any 
insight on this theory of extraordinary stress from Iraq combat?
    Response: War related psychiatric disorders among veterans of our 
Nation's wars for the past 60+ years have resulted in disorder rates 
from 10-20% of troops (all services) with higher rates associated with 
increased combat exposure and injury. The mental health problems of 
veterans of the Vietnam war have been studied with the latest 
psychological tools and scientific approaches and revealed that while 
30% of male Vietnam theater veterans met diagnostic criteria for PTSD 
at some point in their lives, only 15% met those criteria when they 
were assessed at a point some 10 years after the war was over. Almost 
everyone exposed to the horrors of war comes away from the experience 
with some emotional distress, but our data suggests that 70-85% of 
combatants may be expected to have no long term sequelae from the war. 
Features of combat associated with stress related disorders include: 
frequency of exposure to threat, including injuries sustained; number 
of actual combat experiences, and repeated tours of duty in the war 
zone. To the extent that these are features of the war in Iraq, one may 
expect a rate of emotional problems including, but not limited to PTSD 
(e.g. depression, substance use disorders) at least comparable to those 
in Vietnam. Given current efforts at early identification of emotional 
stress in theatre and post-deployment, by DoD and VA clinicians it may 
be possible to lower the incidence of long term problems by a 
concentrated effort at early detection and care.
    The ``no rear echelon'' theory is reasonable given the nature of 
the current war in Iraq. The insurgency is a form of guerilla warfare 
in which attacks can occur at any place and time. Established bases and 
supply convoys are subject to rocket, mortar and Improvised Explosive 
Devices (IED) attack as well as more traditional forms of combat such 
as combat patrols fighting in Fallujah. These experiences have been 
confirmed by our troops and by the military healthcare providers who 
have been in theatre and made presentations to VA staff.
    It is reasonable to compare aspects of the war in Vietnam to the 
current experience in Iraq. Urban combat, as in Fallujah, for example, 
was experienced in Vietnam in Hue and other cities during the Tet 
Offensive. Jungle warfare has similar stresses to urban warfare 
including the enemy being hidden from sight either by jungle or 
buildings. Guerilla warfare, in which one cannot tell friend from foe; 
when the enemy attacks from amidst innocent civilians; when mines and 
IEDs are used to attack without warning and with the enemy at distance 
so they cannot be counterattacked, are all extremely anxiety provoking. 
Modern body armor, and evolving combat doctrine and training of our 
troops, and the superb in theater medical support received by troops in 
combat, can strengthen our troops against these stresses.
    Question 8: Some years back, VA reorganized its health care 
bureaucracy into 22 ``Veterans Integrated Service Networks'' to 
decentralize decision-making and to encourage innovation by managers 
involved in the actual care of patients. More recently, authority for 
critical decisions--for example, VAs recent review of its medical care 
infrastructure needs--appears to be migrating back to VA headquarters.
    A. As a matter of management philosophy, do you tend to delegate 
decision-making authority? Or do you believe that--at least in 
Government--authority has to be centralized in easily-identified senior 
officials who are accountable to the President and to the oversight of 
Congress?
    Response A. There is always a tension between centralization and 
decentralization. A system that is too centralized is grossly 
ineffective and inefficient. On the other hand, a system that is too 
decentralized loses the integration and cohesiveness that defines it as 
a ``system.'' VA operates a large, integrated health care system that 
functions both efficiently and effectively. Improvements in quality, 
access, veteran satisfaction, and efficiency are measurable and have 
been widely recognized. Health care policy is established centrally in 
Washington and is expected to be executed uniformly throughout all 21 
Veterans Integrated Service Networks (VISNs). I will expect the VISNs 
to address the unique challenges of their respective environments, and 
I will hold management at all levels accountable for implementing 
national policy consistently. I intend to work with VHAs national and 
Network leadership to assure that we address the local, regional, and 
national needs of veterans effectively. I believe in performance 
measurement, and I will be very aware of performance at all levels of 
the organization.
    Question 9: As you are undoubtedly aware, the veteran population is 
aging rapidly--recent statistics show that nearly 60% of the veteran 
population is over age 55. This trend suggests to me that VA will face 
increasing demand for long-term care services. Yet VA is only required 
to provide in-patient-based long-term care--that is, nursing home 
care--to the most severely disabled of the ``service-connected'' 
veteran population.
    A. Do you think VA can meet the demand of aging baby-boomers for 
long-term nursing home care? Do you think VA ought to try to meet the 
need? Do you have any sense of how much it would cost VA to take on 
this mission?
    Response A. VA can meet the Long Term Care needs of all veterans 
for whom we are required to provide such care. VA policy is to provide 
for the institutional needs of veterans in priorities 1-3, and those 
with special needs. By reserving nursing home care for those situations 
in which a veteran can no longer safely be maintained at home, and by 
providing long-term care in the least restrictive setting that is 
compatible with a veteran's medical condition and personal 
circumstances, we can create a medical and extended care benefits 
package that is available to veterans who need them most. Non-
institutional care is a basic part of the benefits package for all 
enrolled veterans. VAs policy is to increase our capacity to provide 
non-institutional home and community-based care by 18% annually, in 
order to be able to meet the full need of enrolled veterans by 2011. A 
detailed cost estimate, however, is unavailable at this time.
    B. Do you think the current policy of mandating that long-term care 
be provided only to those with the most severe of service-connected 
disabilities strikes the proper balance of assuring that available 
resources are directed to those having the best claim to VA-provided 
care?
    Response B.: Yes. The current law assures that the most severely 
disabled service-connected veterans will be cared for if they need 
nursing home care, while preserving flexibility for VA to provide care 
for less severely disabled veterans, the indigent and those with 
special needs as resources permit.
    C. Where do outpatient-based long-term care services fit into the 
equation? Does the requirement that VA provide such services to even 
low-priority veterans divert resources away from the neediest 
veterans--those who need in-patient care--to deal with service-
connected conditions?
    Response C.: VA believes that long-term care should be provided in 
the least restrictive setting that is compatible with the veteran's 
medical condition and personal circumstances, and whenever possible in 
non-institutional home- and community-based settings. Supporting 
veterans in their local communities maintains their established ties 
with spouse, family, friends and their spiritual community. These 
contacts help provide the vital social, emotional, and spiritual 
elements that complement the physical components of care that VA 
traditionally provides in its hospitals and clinics. The availability 
of a spectrum of home- and community-based services often prevents 
unnecessary--and costly--institutionalization of veterans. It is as 
essential that these services be available to enrolled veterans, 
including lower priority veterans, as it is that acute care services be 
available to them. The cost of non-institutional home- and community-
based services is very modest in comparison to nursing home costs, and 
has relatively little impact on the availability of in-patient services 
for the neediest veterans. A far greater impediment to the most 
efficient allocation of resources is the requirement of the Millennium 
Act (Public Law 106-117) that VA maintain an average daily census of 
13,391 in its own Nursing Home Care Units. The President's budget for 
fiscal year 2006 proposes repeal of that provision.
    Question 10: One of the challenges you will confront as Secretary 
is the backlog of compensation and pension claims awaiting VA 
adjudication. When Secretary Principi appeared before this Committee 
for his confirmation hearing in 2001, he committed to reduce the 
backlog and improve the accuracy of decisions rendered.
    A. Is this mission accomplished? Is there still more work to do to 
speed claims processing and improve quality? Have you thought of a 
strategy you will employ to finish the job?
    Response A.: Improvement of benefits claims processing has been an 
important goal of the President. Obviously, much progress has been made 
both in reducing the backlog and timeliness--and especially in the 
reduction of claims that had been pending from our oldest veterans who 
had been waiting more than a year for decisions on their claims. I am 
aware that quality levels have also significantly improved.
    The changes made included making the regional offices--and the 
claims processing procedures and supporting IT applications--more 
consistent and efficient and improving the training and oversight of 
the programs. These major changes have resulted in improvements in 
production, timeliness, and quality.
    While there has been significant success, there is much to be done. 
VBA has seen large increases in incoming claims and appeals, both from 
the returning servicemembers and from older veterans who had not 
previously submitted claims. We will continue to emphasize the 
improvements necessary to give our veterans the benefits they deserve 
and which the Congress has so generously made available.
    Question 11: The budget for the current fiscal year is relatively 
tight compared to recent years and I expect the one which the 
Administration will propose for fiscal year 2006 will be tighter still. 
These realities have caused VA to prioritize eligibility for purposes 
of healthcare eligibility.
    A. Do you think VA ought to adopt similar systems of prioritizing 
the processing of claims for benefits? For example, should claims filed 
by veterans who have just returned from a combat deployment go to the 
head of the line?
    Should applications for benefits submitted by older veterans go 
first? Or, should VA simply adopt a ``first-in, first-out'' approach to 
prioritizing claims?
    Response A. I have learned that VBA is giving top priority to the 
benefit claims of all returning war veterans who are seriously injured, 
and certainly providing the best possible service to these returning 
heroes must remain our highest priority. VBA has also advised me that 
claims from terminally ill veterans, homeless veterans, veterans with 
severe financial hardship and former prisoners of war also receive 
priority attention. I believe that priority processing for these 
claimants is also most appropriate.
    Our goal must be to provide quality, timely, and compassionate 
service to all claimants. Reaching our goal will depend upon a well-
trained staff who properly develop the claims submitted and then act on 
those claims as soon as they are ready to rate. I do not believe that 
VBA should adopt a strict first-in, first-out process.
    B. Three years ago, VA established a ``Tiger Team'' to speed the 
processing of older claims submitted by World War II veterans. Should 
similar specialized teams handle other high priority claims, e.g., 
claims filed by servicemembers returning from Iraq?
    Response B. The Under Secretary for Benefits has made me aware of 
the success of some of the specialized processing initiatives that VBA 
has undertaken in recent years, including the Tiger Team, the Pension 
Maintenance Centers, and the centralized processing of in-service death 
claims. VBA is now centralizing the rating aspects of the Benefits 
Delivery at Discharge program to two regional offices, Salt Lake and 
Winston Salem. These initiatives have demonstrated that specialized 
processing can provide better and more efficient service to veterans. I 
will look for additional opportunities to improve the delivery of 
benefits and services through specialization.
    Question 12: VA spending from its compensation and pension account 
has grown by approximately 50 percent in the past 5 years.
    A. Do you have any sense of what is driving these increases?
    Response A. A number of factors have been identified to me as 
contributing to the increase in expenditures over the last 5 years. 
Those are listed below.
     There has been a 6% increase in the total number of 
beneficiaries receiving benefits from the VA from EOY1999 through 
EOY2004, an increase of 196,000 beneficiaries.
     Diabetes Mellitus and Prostate Cancer were added as 
presumptive conditions related to herbicide exposure, resulting in many 
new beneficiaries and increased ratings. Because of the nature of the 
two conditions, the disability evaluations for these conditions tend to 
increase fairly rapidly. In June 2001, just prior to adding diabetes as 
a presumptive condition, VA was paying about 38,000 veterans for this 
condition. By December 2004, VA was paying 199,000 such claims. 
Likewise, in June 2001, VA was paying approximately 18,000 prostate 
cancer claims. By December 2004, VA was paying almost 30,000 claims.
     VAs efforts to reduce the backlog of claims increased the 
number and amount of retroactive benefits paid.
     Vietnam Era veterans filed claims at rates higher than 
World War II and Korean War veterans, and veterans of the Gulf Era have 
higher application rates than Vietnam Era veterans. This may be due, 
in, part, to VA's expanded outreach programs and the Benefits Delivery 
at Discharge initiative.
    Question 13: As long as I have been a Member of the Veterans 
Affairs Committee, the problems confronting the compensation and 
pension system have been the same: the backlog of claims and appeals is 
too high; it takes too long for VA to process claims; and the accuracy 
of decisions made on applications for benefits is not as good as it 
ought to be. The Congress and VA have taken various approaches to 
solving these problems-more staff has been hired, computer systems have 
been bought, and VAs organizational structures have been repeatedly 
``re-engineered''. Yet problems persist.
    A. Do you believe it is time for Congress and the Administration to 
take a closer look at the disability claims system to see if there are 
structural flaws within the claims process that are outside VA's 
control? Why do these problems seem to be resistant to management 
reforms and money infusions?
    Response A. I would welcome working with you regarding issues that, 
while well intentioned, sometimes have adverse effects and merely clog 
the system. I would point out that the Congress has already authorized 
in the National Defense Authorization Act for 2003, a Veterans 
Disability Benefits Commission to look at the whole range of disability 
compensation benefits available to veterans from VA.
    Question 14: On February 3, I will convene a hearing to examine the 
adequacy of the benefits provided to the surviving spouses and children 
of those who die in or as a result of service. From what I have seen so 
far, survivors must navigate through a confusing maze of services 
provided by at least three different Federal agencies to secure 
benefits. Making matters even more confusing, cash benefits provided by 
some agencies are offset from those provided by others--in plain 
English, cash payments are allowed from two agencies, for example VA 
and DoD, but not simultaneously. Will you commit to work with other 
Department Secretaries to end this confusion?
    Response: I wholeheartedly agree that we should strive to make the 
benefits claims processes for surviving spouses and children of 
servicemembers and veterans as simple and straightforward as possible. 
I will be pleased to work with other Administration officials and with 
the Congress to ensure coordination of both survivors' benefits and 
survivors' benefits claims processes.
    Question 15: Do you have any conflicts of interest which you have 
not fully disclosed to the Committee? Do you know of any other matter 
which, if known to the Committee, might affect the Committee's 
recommendation to the Senate with respect to your nomination?
    Response: No, I do not have any conflicts of interest that have not 
fully been disclosed to the Committee or any matters that might affect 
the Committee's recommendation.
    Question 16: Have you fully and accurately provided financial and 
other information requested by the Committee, and do you now affirm 
that the information provided is complete, accurate, and provided in a 
form not designed to evade or deceive?
    Response: Yes.
    Question 17: Do you agree to supply the Committee such non-
privileged information, materials, and documents as may be requested by 
the Committee in its oversight and legislative capacities for so long 
as you shall serve in the position for which you now seek confirmation?
    Response: Yes.
    Question 18: An organization named the Lung Cancer Alliance has 
requested, by the attached White Paper, that I pose to you a question 
relating to a potential establishment of a pilot program for the 
screening, early detection and management of lung cancer. Would you 
please review that attached White Paper and comment?
    Response: Routine screening for lung cancer is not recommended at 
this time, as there is currently no evidence of effectiveness. The 
Federal Government has two large trials underway by the National Cancer 
Institute, so there doesn't appear to be a need for a duplicative study 
by VA and DoD. There is no evidence that the lung cancers that veterans 
get by virtue of their smoking, exposure to combustion products, or any 
other exposures would behave differently from lung cancers that non-
veterans get. Therefore, there is no compelling reason to duplicate in 
the veteran or military population the studies already underway in the 
general population.
    Given that cigarette smoking is, by far, the most important risk 
factor for lung cancer, the most effective method of preventing lung 
cancer deaths is by keeping people from smoking in the first place and 
helping those who do smoke to quit. The Veterans Health Administration 
has a large-scale, effective program in place to assist those who smoke 
and are interested in quitting. A clinical practice guideline on 
tobacco use cessation, developed jointly by the VHA and the Department 
of Defense, has recently been updated and is available at 
www.oQP.med.va.Qov/cPQITUC3/tucbase.htm.
    Lung cancer is a significant public health concern, with an 
estimated burden of 172,570 new cases in 2005 (13% of all cancer 
diagnoses). It is the leading cause of cancer-related deaths (29% of 
all cancer deaths), estimated in 163,510 fatalities for both men and 
women in 2005. Both incidence rates (new cases) and mortality rates 
(deaths) in men have been declining for more than a decade, but they 
have only recently started to decline for women. Since 1987, more women 
have died each year of lung cancer than from breast cancer. Cigarette 
smoking is by far the most important risk factor for lung cancer, 
implicated in 90% of lung cancers in men and 78% in women. Cigar and 
pipe smoking, environmental tobacco smoke exposure, and exposure to 
other environmental agents, especially asbestos and radon, are also 
risk factors for lung cancer.
    Early detection of lung cancer through screening has not been shown 
to be effective in reducing deaths from lung cancer. Screening for lung 
cancer is not presently recommended by any major medical professional 
organization. A recent review of the evidence about lung cancer 
screening done by the U.S. Preventive Services Task Force, an 
independent panel of experts in primary care and prevention that 
systematically reviews the evidence of effectiveness and develops 
recommendations for clinical preventive services, concluded that ``the 
evidence is insufficient to recommend for or against screening 
asymptomatic persons for lung cancer with either low dose computerized 
tomography, chest x-ray, sputum cytology, or a combination of these 
tests'' (Annals of Internal Medicine. 2004; 140:738-9).
    The National Cancer Institute (NCI), part of the National 
Institutes of Health, has two large studies underway to determine if 
screening for lung cancer is effective. Both are randomized controlled 
trials, the best type of study design for measuring the effectiveness 
of screening tests. The first of these, the Prostate, Lung, Colorectal, 
and Ovarian Cancer Screening Trial (PLCO), enrolled over 148,000 men 
and women participants between the ages of 55 and 74. Enrollment took 
place from 1992 to 2001 at ten centers around the country. Lung cancer 
screening was done by chest x-ray upon entry and annually for 3 years 
for smokers and for 2 years for never-smokers for those in the 
intervention group. Participants in the control group received routine 
health care from their physicians. All participants will be followed 
for up to 16 years. Results of the PLCO study are not expected for 
several years.
    The second NCI-funded screening study is the National Lung 
Screening Trial (NLST), launched in 2002. This study is comparing two 
ways of detecting lung cancer: spiral computed tomography (CT) and 
standard chest x-ray, and aims to show if one test is better at 
reducing deaths from lung cancer than the other. Over 53,000 current or 
former smokers aged 55 to 74 years have been enrolled in the trial at 
more than 30 study sites across the country. Participants have been 
randomly assigned to receive either chest x-ray or spiral CT every year 
for 3 years and all will be followed by yearly surveys until 2009. 
Results of the NLST will not be available until then.
    Both studies will provide evidence about the benefits, if any, of 
screening for lung cancer. They will also provide information about 
harms of screening. All screening tests have the potential for both 
benefits and harms. One common harm is false-positive tests results--
the finding of an abnormality that appears to be a cancer that, upon 
further testing, turns out to be benign. In lung cancer screening, 
suspicious areas on chest x-ray or spiral CT often require invasive 
tests (lung biopsies done either through the chest wall with a needle 
or through open chest surgery) to determine if they are malignant or 
benign. Some screening tests may find many areas that appear to be 
suspicious, but turn out to be benign, thus subjecting patients to the 
risks of the invasive tests for no benefit.
    Another potential harm is called ``over-diagnosis''--the finding of 
a condition that would not have become clinically significant had it 
not been detected by screening. Autopsy studies show that some people 
die with lung cancer, rather than from it. If improved screening tests 
find many small lung cancers that would not be likely to progress to 
the point of causing clinical disease and death, then the detection and 
subsequent treatment of these cancers might lead to more harm than 
good. The randomized trials underway for lung cancer screening (PLCO 
and NLST) will help to determine the extent to which these harms may 
occur, if screening were recommended and applied to large numbers of 
persons.
                               __________
        Questions for the Record from Senator Daniel K. Akaka, 
 Ranking Member, Committee on Veterans' Affairs; Nomination Hearing of 
         R. James Nicholson to be Secretary of Veterans Affairs

    Question 1: As you well know, Congress gave the Secretary the 
responsibility for deciding which veterans can enroll for VA health 
care. Using that authority, a decision was made in January of 2003 to 
refuse enrollment to so-called ``middle-income veterans. Given that 
waiting times for care have decreased--thanks to the incredible work of 
your dedicated health staff--many of us here in Congress believe that 
the ban on Priority 8 veterans should be rescinded. Because an 
enrollment decision is typically made early in the year, I am curious 
as to what your position will be on this year's enrollment decision.
    Response: In addition to the incredible work of VA staff, the 
suspension of Priority 8 enrollment contributed to the reduction in 
waiting times. I will consult with VA staff to determine the need for 
continuing this suspension and/or the need to exercise another 
enrollment policy to balance demand with available resources for FY 
2005. Equally important is the need to consider the out-year impact of 
enrollment decisions in terms of expected resource availability, 
expected demand for VA health care services and the potential for 
growing waiting lists and waiting times.
    Question 2: In the past, VA has come under fire for the lack of 
timeliness of its claims processing. While VBA has made progress in 
improving timeliness and accuracy of disability claims processing, 
further improvement is needed. Notably, VBA has turned its attention to 
decreasing the amount of time it takes to process a claim and taken its 
focus off of appeals.
    A. How can a more balanced approach be reached?
    Response A.: I am aware of the need for a balanced approach to 
managing our claims workload. A balanced approach must be taken in the 
allocation of our personnel resources to ensure we are effectively 
managing the full spectrum of our claims and appellate processing 
responsibilities.
    VBA has recently increased its emphasis on addressing appeals, 
necessitated by an increase in the rate and number of appeals filed. 
The increase is attributable to several factors, including the dramatic 
increase in the output of claims decisions in the last few years.
    VBA and the Board recently signed an agreement regarding additional 
training that would be provided to field stations to ensure appeals are 
ready to be certified to the Board of Veterans' Appeals. We need to 
continue to track and analyze appellate cases to determine how we can 
reduce the number of cases appealed to VBA as well as those remanded by 
the Board for further development.
    B. I am concerned that VBA does not have enough employees to 
process claims timely and accurately. You noted in your pre-hearing 
questions that additional hiring is anticipated this year. Will this be 
reflected in the President's Budget? If not, where will the funding for 
these employees come from?
    Response B.: As a result of the Consolidated Appropriations Act, 
2005 (Public Law 108-447), an additional $125 million will be made 
available to VBA (through a transfer of funds from medical care) for 
compensation claims processing. Of this total, $75 million will be used 
in 2005 to fund additional staffing to address the increased volume of 
disability claims. The remaining $50 million will be used in 2006.
    C. VA officials have acknowledged that VBAs compensation and 
pension claims processing needs to be more productive, that is, to 
decide more claims without significant increases in staffing. How do 
you plan to improve claims processing productivity without significant 
staffing increases?
    Response C.: Increased productivity does not depend solely on 
increases in staffing. Better training, new technologies, and more 
efficient organizational processes and structures can also contribute 
significantly to higher levels of productivity. I believe we need to 
continue to focus on all of these areas.
    VA's recent decision to consolidate the rating aspects of the 
Benefits Delivery at Discharge Program to two regional offices is an 
example of the type of process and structural change that I believe 
will allow VBA to be more productive. I will look for additional 
opportunities to apply technology and make changes that will enhance 
the delivery of benefits and services to veterans and their families.
    Training is also key to improving productivity. I will focus our 
efforts on improving VBAs training systems, both for new employees and 
to raise the skill levels of the more experienced staff. Improvements 
will be achieved through providing employees with more and better 
training and with up-to date tools and IT systems to support their 
decisions. As employees develop their skills, they will work faster and 
with fewer errors.
    Question 3: VA has become increasingly reliant on contractors. Do 
you support contracting out VA functions? If yes, do you have any 
concerns that it will erode VAs ability to meet its mission? And what 
functions would you be comfortable contracting out services for?
    Response: VAs primary goal is to provide the best possible service 
to veterans within the current budget environment. As such, I will 
continually challenge the Department to examine ways to more 
effectively and efficiently use resources to better meet veterans' 
needs. Contracting out certain functions may provide one avenue for 
meeting this goal. However, the provision of services such as direct 
medical care are a core capability for the Department, and contracting 
out of these functions should only be pursued on an exception basis 
where in-house resources are not available. In addition, a clear 
business case must be made that justifies the rationale and provides 
assurance that contracting will not erode VAs ability to meet its 
mission. 38 U.S.C. 7409 affords the Department the flexibility to 
contract out for ``scarce medical specialist services at Department 
facilities'' in this case. However, VAs experience indicates that 
contracting out for such positions generally is much more expensive 
than direct hiring.
    In addition, under 38 U.S.C. 8153, ``to secure healthcare resources 
which otherwise might not be feasibly available, or to effectively 
utilize certain other health-care resources, the Secretary may, when 
the Secretary determines it in the best interest of the prevailing 
standards of the Department's medical care program, make arrangements, 
by contract or other form of agreement for the mutual use, or exchange 
of use, of health-care resources between Department health-care 
facilities and any health-care provider, or other entity or 
individual.'' Contract services in this regard must also be supported 
by a clear business case that ensures the quality of service provided 
by another source is as good as or better than the existing service at 
reduced costs.
    There are other situations where contracting for non-core VA 
functions may be appropriate. Our analysis of these opportunities 
across the Veterans' Benefits Administration (VBA) and National 
Cemetery Administration (NCA) indicate that contracting opportunities 
are generally limited due to the nature of the functions performed, the 
relatively small numbers of personnel involved, and the fact that they 
tend to be highly geographically dispersed. Within VHA, we believe 
there may be some opportunities to enhance the effectiveness and 
efficiency of certain non-core, commercial, competitive functions, 
e.g., grounds maintenance, through the President's Management Agenda 
(PMA) competitive sourcing initiative. However, 38 U.S.C. 8110(a) (5) 
prohibits VA from conducting certain cost comparisons with the private 
sector unless funds are specifically appropriated for that purpose. 
Since funds have not been specifically appropriated for the purpose of 
conducting cost comparisons, VA's previously, OMB-approved competitive 
sourcing program has been on-hold until such time as legislative relief 
is obtained.
    Question 4: GAO added VA's disability programs, along with other 
federal disability programs, to its high risk list in 2003. VBA's 
vocational rehabilitation and employment program has been criticized 
for insufficient emphasis on helping disabled veterans return to work. 
In what ways will you ensure that VBA strengthens its emphasis on 
helping disabled veterans reintegrate into the workforce?
    Response: Secretary Principi established the Task Force on the 
Vocational Rehabilitation and Employment Program to conduct an 
independent assessment of the program. The Task Force's report, 
submitted in March 2004, contained many recommendations to produce a 
more proactive, employment-driven program.
    VA is now in the process of implementing the recommendations. The 
most important of the recommendations is the Five-Track Employment 
Model, which calls for VA to focus its efforts on:
     Reemployment of veterans with their previous employers.
     Access to rapid employment services with new employers.
     Self-employment for veterans whose disabilities preclude 
more conventional channels of access to employment.
     Long-term vocational rehabilitation services for veterans 
who need such services to obtain suitable employment.
     Independent living services, with the possibility of 
employment when appropriate, for veterans whose disabilities are so 
severe at present as to preclude them from working.
    Along with developing this model, VA is testing a new field 
position, Employment Coordinator. The Employment Coordinators will 
perform duties recommended by the Task Force. It is anticipates that 
they will enhance the delivery of quality and timely employment 
services and increase the number of veterans obtaining suitable 
employment.
    I will ensure that the actions taken by VA to implement the Task 
Force recommendations will give our disabled veterans the assistance 
they need to successfully reenter the workforce.
    Question 5: ``While you were at the RNC did you have dealings with 
the VSOs and if so, what were the nature of those discussions?"
    Response: Yes, I recall during my 4 years as Chairman of the 
Republican National Committee, that I had occasional meetings with the 
directors of several of the VSOs. I can specifically recall having one 
meeting around a table in my office at the RNC, but I do not recall 
what the substantive nature of the discussions addressed.
                               __________
Questions for the Record from Senator Kay Bailey Hutchinson, Committee 
 on Veterans' Affairs; Nomination Hearing of R. James Nicholson to be 
                     Secretary of Veterans Affairs

    Question 1: Currently, military retirees in many parts of the 
country are not allowed to register with permanent military health care 
providers due to the shortage of military physicians. Do you believe 
that this situation can be corrected? How would you go about it?
    Response: VA has an effective primary care system in place. When 
veterans are enrolled into the system, they are assigned a primary care 
physician. I would defer the questions on military health care to DoD.
    Question 2: Many veterans are anxiously waiting the Base 
Realignment and Closure (BRAC) results which should be released in May 
of this year. A loss of a base or a post in a specific region of the 
country could mean that a deserving veteran may have to travel many 
additional miles to seek a treatment. Are you approaching the BRAC 
process with similar concerns?
    Response: VA plans to cooperate fully with DoD throughout Base 
Realignment and Closure.
    Question 3: Recently, the Walter Reed Amputee center here in 
Washington, DC has seen an influx of wounded and amputated veterans to 
its facility due to ongoing operations in Iraq and Afghanistan. What is 
the process to allow these future veterans to transition from Walter 
Reed back to their home of record or to their permanent duty station? 
Are you confident of the VAs ability to serve these veterans?
    Response: VA shares your concern that our Nation's newest veterans 
get the healthcare and benefits they deserve, particularly those who 
are ill or injured as a result of their service in Iraq or Afghanistan. 
VA has worked hard over the past 18 months to implement numerous 
programs to ensure these veterans receive timely and high quality 
services and that their transition from DoD to VA is seamless and 
efficient. For the first time, VA employees are stationed at many of 
the major military treatment facilities (MTFs) receiving casualties 
from Iraq and Afghanistan. VA staff brief servicemembers about VA 
benefits, including healthcare, disability compensation, vocational 
rehabilitation, and employment. VA enrolls these veterans into the VA 
system and begins to complete the necessary paperwork for their 
compensation claims prior to discharge from military service which 
eliminates any gap in services or compensation. VA social workers 
facilitate the transfer of veterans from Walter Reed and the other 
major MTFs to the VA Medical Center closest to their home of record or 
most appropriate for the specialized services their medical condition 
requires. In addition, each VA Medical Center and Veterans' Benefit 
Administration Regional Office has identified a point of contact to 
ensure the seamless transition of these veterans into the VA system. 
Vet Centers located throughout the country are providing mental health 
services and counseling to returning veterans and their families, as 
well as bereavement counseling to those who have lost a family member 
in Iraq or Afghanistan. The Department has increased the number of 
transitional assistance briefings given to active duty, Reserve and 
National Guard servicemembers who are discharging from military 
service. The purpose of the briefing is to educate servicemembers on 
the VA benefits available to them. In total, the Department held nearly 
12,000 briefings reaching nearly 500,000 servicemembers, including 
those aboard some Navy ships returning to the U.S.
    VA has made great strides in ensuring our veterans experience a 
smooth transition between military and civilian life. VAs next 
challenge is to ensure that those veterans and their families receive a 
high level of customer service. VA is working to strengthen its support 
system for the family to include Fisher Houses, hotels and meals. VAs 
goal is to honor each new veteran and their family with compassion, 
dignity, and coordination of every service and support that can help to 
restore function.
    Question 4: A November report found unsanitary conditions at the 
Dallas Veterans Affairs Medical Center. I am concerned there is 
currently not a framework for improving a facility so critical to the 
veterans of North Texas. What will you do to remedy this shortcoming 
and prevent similar issues at other facilities?
    Response: The Department of Veterans Affairs Office of the 
Inspector General (OIG) report that you referred to cited the status of 
the VA North Texas Health Care System (VANTHCS), Dallas during its May 
2004 OIG Combined Assessment Program (CAP) review. Subsequent to this 
review, the OIG published report number 04-01878-34, on November 26, 
2004 and tasked VISN 17 to draft a response to the findings that was 
due on January 19, 2005: VISN 17 submitted its response to the findings 
by the suspense date.
    The CAP review focused on 14 areas. In two of the areas the 
reviewers did not identify concerns. In the remaining 12 areas, the 
reviewers noted a need for additional management attention.
    VISN 17 and the VANTHCS began to immediately initiate action on the 
recommendations as early as the period following the OIG team exit 
briefing. An action plan along with a spreadsheet was developed by VISN 
17 to monitor the VANTHCS progress in addressing the concerns noted by 
the OIG reviewers. Specific milestones were established to monitor the 
levels of improvement. The leadership of VISN 17 has been highly 
involved in this process. Periodic meetings have been held to track 
progress being made, and adjustments were made to ensure that 
milestones were met. As a result of these improvement efforts, the 
majority of the problems noted in the OIG CAP review were corrected by 
early January 2005. The VISN Director has noted that the only reason 
that the VANTHCC is not currently within 100% compliance is that some 
needed construction work has not been completed.
    Key leadership positions in the Dallas facility will be filled by 
individuals tasked to facilitate the changes required to bring the 
Dallas facility to a higher level of performance. The Acting Under 
Secretary for Health has appointed a 5-member General Medical Review 
Team, and tasked the VA Office of the Medical Inspector (OMI) to review 
operations at the Dallas facility. The scope of the review includes 
interviews of key staff at the facility, and the review of five key 
operational areas. The results of the findings of the two teams will be 
used to enhance the operations of the Dallas facility in particular, 
and serve as a model to prevent similar situations in the future in 
other VA facilities. These lessons learned will augment other programs 
already in place that provide continuous monitoring of operations, and 
quality improvement.
    An example of programs already in place is the VHA System-wide 
Ongoing Assessment Review Strategy (SOARS) program. During 2004, the 
Veterans Health Administration (VHA) initiated the SOARS program. To 
date, this initiative has visited 32 VA medical facilities. The purpose 
of this initiative is to identify problems and areas for improvement in 
50+ key areas within medical facilities that includes cleanliness, 
infection control, safety, privacy, and security concerns. SOARS 
utilizes multi-disciplinary employees from throughout the system as 
Internal Consultants to identify issues as ``external observers''. This 
also allows the sharing of strong practices and problem solutions from 
other environments and the ability to take ``lessons learned'' back to 
other VA facilities. After a successful pilot phase, this program is 
now able to complete 4 facility site visits a month on a continuous 
basis with more planned for the future. SOARS will allow for the 
monitoring of past problems as well as the early identification and 
correction of problematic areas in the future.
    Question 5: On November 12, 2004, Secretary Principi announced that 
VA would dedicate up to $60 million (up to $15 million annually over 
the next 4 years) for research into Gulf War Illness. Secretary 
Principi has been on the forefront of this issue, securing $14.6 
million in federal funding over the past 5 years for research into Gulf 
War related illness--much of it carried out at the University of Texas 
(UT) Southwestern by Dr. Robert Haley.
    Ambassador Nicholson, can we have your assurance that you will keep 
this promise to Gulf War veterans?
    Response: As Secretary Principi stated on November 12, 2004, VA 
will commit up to $15 million in additional federal funding in FY 2005 
to support continued research into the cause of and potential 
treatments for Gulf War illnesses. This represents VA's single largest 
set-aside of research funding for a specific area of investigation and 
almost 20 percent of all new research grant awards for FY 2005.
    In response to a reporter's question about commitments beyond FY 
2005, Secretary Principi said, ``I'm not making any out-year 
commitments. . . And we have taken an unprecedented step by earmarking 
funds for this type of research. We certainly will look at it in 2006, 
2007, 2008.''
    While it essential to find answers to what is causing Gulf War 
illness and to identify appropriate treatments, the specific financial 
commitment will need to be reviewed each year.
    To implement the commitment for FY 2005 funding, VA is in the 
process of issuing a new request for proposals. The proposed studies 
will undergo the same intensive evaluation and review for scientific 
rigor as all projects sponsored by VA research.
    Also, VA plans to establish a center dedicated to the investigation 
of potentially effective treatments for veterans with Gulf War 
illnesses. This center will use observational and epidemiologic methods 
to identify promising therapies and will conduct pilot studies that may 
serve as prelude for more definitive clinical trials. To ensure that 
this center is designed successfully to meet the methodological 
challenges of research in this difficult area of investigation, VA is 
working closely with the Research Advisory Committee in forming a 
committee of expert advisors to assist in the planning and design of 
the center. The Committee will be meeting in early March.
    VA has funded 111 projects on Gulf War veterans' illnesses since 
1991. The direct research costs of these studies as of October 2004 
total $56.4 million. Indirect costs associated with this research are 
estimated at $16.9 million (historical data suggest indirect costs 
equal 30% of direct costs).
    In FY 2004, VA approved 18 new Gulf War projects. Total funding 
over the life of these projects will exceed $9.5 million. VA is 
currently funding 48 ongoing Gulf War studies in FY 2005. Areas of 
focus include: brain and nervous system; depleted uranium; interaction 
of multiple exposures; treatments; and epidemiology. Direct research 
costs for these studies total $6 million.
    Recent VA findings with impacts or potential for impacts in Gulf 
War veterans' illnesses include:
     Identification of a superior mode of treatment for 
veterans suffering from undiagnosed Gulf War symptoms.
     Finding that a statistically significant higher prevalence 
of ALS in Gulf War veterans (led to presumptive service connection for 
compensation).
     Confirmation of higher rates of PTSD and other 
psychological disorders among Gulf War veterans.
     Substantiation that adverse reproductive outcomes have not 
been more common among veterans deployed to the Gulf War than among 
those who were not deployed.
    Examples of ongoing VA studies include:
    Neuroimaging: A team at the San Francisco VAMC has initiated the 
largest effort to date to conduct research to detect any brain changes 
associated with Gulf War veterans' illnesses and to determine possible 
relationships with ALS. The team, under Dr. Michael Weiner, will use a 
4-Tesla magnetic resonance imaging-magnetic resonance spectroscopy 
system that the VAMC acquired through grants from the Department of 
Defense (DoD) and the National Institutes of Health (NIH).
    Epidemiology. Studies conducted to date have not shown an excess of 
cancer-related deaths among Gulf War veterans. However, because many 
cancers are not rapidly fatal, VA recently funded a cancer prevalence 
study among Gulf War veterans.
    Amyotrophic Lateral Sclerosis (ALS): VA has initiated a national 
registry for veterans with ALS and an accompanying genetic tissue bank 
(ALS-DNA) to build upon its earlier prevalence study. The goals of the 
registry are to identify as completely as possible all veterans with 
ALS, not just Gulf War era veterans, and to provide a mechanism for VA 
to inform veterans with ALS about clinical drug trials and other 
studies for which they may be eligible. The ALS-DNA bank will involve 
collection of DNA and plasma from blood samples from consenting ALS 
registry participants. It is the intent that these materials be made 
available for future genetic research on ALS. The Veterans' ALS 
Registry has generated great enthusiasm and praise among the national 
community of ALS researchers.
    While not specific to Gulf War veterans, VA investigators are also 
conducting a clinical trial to determine the safety and efficacy of 
sodium phenyl butyrate (NaPS) in subjects with ALS. While there is no 
know treatment for ALS, NaPS is a pharmacological treatment that has 
been shown to extend survival in mice with ALS. This study will also 
seek to identify optimal doses for NaPS and riluzole (currently, the 
only approved drug for ALS) and examine their combined effects in ALS 
mice.
    Depleted Uranium: VA continues to fund a clinical health 
surveillance of Gulf War veterans who were exposed to depleted uranium 
(DU) oxides as a result of friendly fire incidents. Some of these 
veterans have retained DU fragments that cannot be removed due to 
medical considerations, and the 39 surveillance participants, nine of 
whom remain on active duty, had significantly higher exposures than 
other servicemembers who served in the Kuwaiti Theater of Operations. 
Testing to date has found no differences in the frequency of 
musculoskeletal, cardiovascular, psychiatric, nervous system, or other 
disorders. Although the kidney is the putative critical organ for 
uranium toxicity under acute and chronic exposure conditions, no 
evidence of renal dysfunction has been found. Of note, none of the 
participants' offspring have had birth defects. This is far less than 
would have been expected. Despite these favorable outcomes, VA will 
continue to fund this surveillance to monitor for any potential DU-
related long-term health problems.
    Question 6: Will you look carefully at the CARES Commission report 
and where closure of a veterans' facility has been recommended, give 
time and weight to the appointed community task forces so local leaders 
may have a chance to maximize the efficiency and productivity of each 
of these facilities?
    Response: The Implementation Process for CARES includes the 
requirement for stakeholder involvement by local VA facilities. For the 
additional study sites listed in former Secretary Principi's Decision 
Document, a formal process has been put in place to include leaders 
from the community to provided advice to the Contractor completing the 
studies. VISNs will be required to report on the progress of all CARES 
initiatives to the CIS which I chair.
                               __________
   Question for the Record from Senator Arlen Specter, Committee on 
   Veterans' Affairs; Nomination Hearing of R. James Nicholson to be 
                     Secretary of Veterans Affairs

    Question 1: The Veterans' Park Conservancy (VPC), a group of 
concerned and civic-minded veterans and residents in Los Angeles, is 
eager to create a 16-acre National Veterans' Park on the undeveloped 
portion of land at the West Los Angeles VA facility. Over the past 15 
years, this group has worked to preserve, protect and enhance the 
historic West Los Angeles VA property, including the National Cemetery 
and have made over $3 million of improvements in this property. Many 
donors have made this work possible. The VPC intends to raise 
substantial private funding for development of the Park and is looking 
to have some assurance of permanence. Please review the January 21, 
2005, letter addressed to me from Veterans' Park Conservancy regarding 
this matter and respond to their concern for the record. Ambassador 
Nicholson, will you work with Veterans' Park Conservancy toward a 
mutually beneficial agreement regarding the creation of a National 
Veterans' Park?
    Response: The concerns addressed in this letter have been responded 
to by Secretary Principi in a letter dated October 8, 2004 (attached 
for the record). I will continue to work with Veterans' Park 
Conservancy within the framework identified in the Secretary's 
response. The Memorandum of Understanding signed in July of 2001 is our 
commitment regarding the creation of a National Veterans' Park and 
identifies the parameters of the partnership. The process described in 
the Memorandum of Understanding was successful in a similar project VPC 
performed for improvements to the West Los Angeles National Cemetery. 
Although it is VAs intent to have this area remain as parkland and open 
space, VA cannot consider preserving this designated area in perpetuity 
in view of the ongoing Capital Asset Realignment for Enhanced Services 
planning process. Included in that process will be a new Master Plan 
for the VA West Los Angeles campus that will guide the future use of 
the property.
                               __________
Questions for the Record from Senator John D. Rockefeller IV, Committee 
 on Veterans' Affairs; Nomination Hearing of R. James Nicholson to be 
                     Secretary of Veterans Affairs

    Question 1: Mr. Ambassador, as most people know, health care is my 
passion, and I push for quality health care at every opportunity, 
especially for our veterans who earned their benefits through 
distinguished service. Your predecessor, Tony Principi, was a good 
friend to me and to veterans. His candor and his voice about the true 
needs for VA health were crucial. I urge you to be as candid and as 
clear about the true need our veterans within the VA health system as 
we all struggle under the pressures of our budget deficits.
    Response: The Fiscal Year 2006 Budget will enable VA to continue 
its mission of providing high-quality, timely, and compassionate health 
care to all enrolled veterans who seek care. This budget enables VA to 
place its greatest emphasis on our core population of veterans--those 
with service connected disabilities including returning OIF/OEF 
veterans; those with low income; and those who have specialized needs--
while asking veterans in Priority Groups 7 and 8 to make limited 
contributions toward the cost of their care. We believe that these 
contributions are modest in light of the comprehensive, high-value, and 
high-quality care the Department provides. In addition, this budget 
includes $700 million in construction to continue the Department's 
commitment to the CARES initiative, $100 million for the Mental Health 
Initiative, and $100 million for Prosthetics. In future years, I assure 
you that I will be a firm advocate for budgets that allow the 
Department to meet the needs of all enrolled veterans who choose to 
come to VA for their health care.
    Question 2: During the first Persian Gulf War, this committee asked 
many questions about Persian Gulf War illnesses. I was pleased that 
Secretary Principi did an advisory task force on the issue, and he 
pledged $60 million in research to continue studies on the Persian Gulf 
War illnesses. I think VA should aggressively pursue additional 
research because we must have the facts, and I want to know if you are 
committed to follow through on this issue.
    Response: As Secretary Principi stated on November 12, 2004, VA 
will commit up to $15 million in additional federal funding in FY 2005 
to support continued research into the cause of and potential 
treatments for Gulf War illnesses. This represents VA's single largest 
set-aside of research funding for a specific area of investigation and 
almost 20 percent of all new research grant awards for FY 2005.
    In response to a reporter's question about commitments beyond FY 
2005, Secretary Principi said, ``I'm not making any out-year 
commitments . . . And we have taken an unprecedented step by earmarking 
funds for this type of research. We certainly will look at it in 2006, 
2007, 2008.''
    While it essential to find answers to what is causing Gulf War 
illness and to identify appropriate treatments, the specific financial 
commitment will need to be reviewed each year.
    To implement the commitment for FY 2005 funding, VA is in the 
process of issuing a new request for proposals. The proposed studies 
will undergo the same intensive evaluation and review for scientific 
rigor as all projects sponsored by VA research.
    Also, VA plans to establish a center dedicated to the investigation 
of potentially effective treatments for veterans with Gulf War 
illnesses. This center will use observational and epidemiologic methods 
to identify promising therapies and will conduct pilot studies that may 
serve as prelude for more definitive clinical trials. To ensure that 
this center is designed successfully to meet the methodological 
challenges of research in this difficult area of investigation, VA is 
working closely with the Research Advisory Committee in forming a 
committee of expert advisors to assist in the planning and design of 
the center. The Committee will be meeting in early March.
    VA has funded 111 projects on Gulf War veterans' illnesses since 
1991. The direct research costs of these studies as of October 2004 
total $56.4 million. Indirect costs associated with this research are 
estimated at $16.9 million (historical data suggest indirect costs 
equal 30% of direct costs).
    In FY 2004, VA approved 18 new Gulf War projects. Total funding 
over the life of these projects will exceed $9.5 million. VA is 
currently funding 48 ongoing Gulf War studies in FY 2005. Areas of 
focus include: brain and nervous system; depleted uranium; interaction 
of multiple exposures; treatments; and epidemiology. Direct research 
costs for these studies total $6 million.
    Recent VA findings with impacts or potential for impacts in Gulf 
War veterans' illnesses include:
     Identification of a superior mode of treatment for 
veterans suffering from undiagnosed Gulf War symptoms.
     Finding that a statistically significant higher prevalence 
of ALS in Gulf War veterans (led to presumptive service connection for 
compensation).
     Confirmation of higher rates of PTSD and other 
psychological disorders among Gulf War veterans.
     Substantiation that adverse reproductive outcomes have not 
been more common among veterans deployed to the Gulf War than among 
those who were not deployed.
    Examples of ongoing VA studies include:
    Neuroimaging: A team at the San Francisco VAMC has initiated the 
largest effort to date to conduct research to detect any brain changes 
associated with Gulf War veterans' illnesses and to determine possible 
relationships with ALS. The team, under Dr. Michael Weiner, will use a 
4-Tesla magnetic resonance imaging--magnetic resonance spectroscopy 
system that the VAMC acquired through grants from the Department of 
Defense (DoD) and the National Institutes of Health (NIH).
    Epidemiology. Studies conducted to date have not shown an excess of 
cancer-related deaths among Gulf War veterans. However, because many 
cancers are not rapidly fatal, VA recently funded a cancer prevalence 
study among Gulf War veterans.
    Amyotrophic Lateral Sclerosis (ALS): VA has initiated a national 
registry for veterans with ALS and an accompanying genetic tissue bank 
(ALS-DNA) to build upon its earlier prevalence study. The goals of the 
registry are to identify as completely as possible all veterans with 
ALS, not just Gulf War era veterans, and to provide a mechanism for VA 
to inform veterans with ALS about clinical drug trials and other 
studies for which they may be eligible. The ALS-DNA bank will involve 
collection of DNA and plasma from blood samples from consenting ALS 
registry participants. It is the intent that these materials be made 
available for future genetic research on ALS. The Veterans' ALS 
Registry has generated great enthusiasm and praise among the national 
community of ALS researchers.
    While not specific to Gulf War veterans, VA investigators are also 
conducting a clinical trial to determine the safety and efficacy of 
sodium phenyl butyrate (NaPS) in subjects with ALS. While there is no 
know treatment for ALS, NaPS is a pharmacological treatment that has 
been shown to extend survival in mice with ALS. This study will also 
seek to identify optimal doses for NaPS and riluzole (currently, the 
only approved drug for ALS) and examine their combined effects in ALS 
mice.
    Depleted Uranium: VA continues to fund a clinical health 
surveillance of Gulf War veterans who were exposed to depleted uranium 
(DU) oxides as a result of friendly fire incidents. Some of these 
veterans have retained DU fragments that cannot be removed due to 
medical considerations, and the 39 surveillance participants, nine of 
whom remain on active duty, had significantly higher exposures than 
other servicemembers who served in the Kuwaiti Theater of Operations. 
Testing to date has found no differences in the frequency of 
musculoskeletal, cardiovascular, psychiatric, nervous system, or other 
disorders. Although the kidney is the putative critical organ for 
uranium toxicity under acute and chronic exposure conditions, no 
evidence of renal dysfunction has been found. Of note, none of the 
participants' offspring have had birth defects. This is far less than 
would have been expected. Despite these favorable outcomes, VA will 
continue to fund this surveillance to monitor for any potential DU-
related long-term health problems.
    Question 3: In September 2004, the GAO issued a report noting that 
VA needs better data to plan and prepare to serve veterans with Post-
Traumatic Stress Disorder (PTSD). GAO specifically calls on VA to do a 
full assessment of current veterans receiving PTSD care. Then VA should 
work with DoD to help identify how many servicemembers may need PTSD 
care and where they will be located. Given that medical experts predict 
that about 15% of military personnel serving in Iraq and Afghanistan 
will develop PTSD, the need for planning and care is real.
    What is VA doing to follow up on this GAO report, specifically, 
what priority will VA make PTSD and care to our newest veterans, those 
returning from Iraq and Afghanistan?
    Response: In follow up to the GAO report of September 2004, VAs 
Office of Environmental Epidemiology is identifying and tracking the 
numbers and locations of Operation Enduring Freedom (OEF) and Operation 
Iraqi Freedom (OIF) veterans being served by VA Medical Centers, 
outpatient clinics and Readjustment Counseling Service (Vet) Centers. 
To identify servicemembers who may need VA care, VA is working closely 
with DoD to maintain accurate data on numbers of OEF/OIF returnees and 
their use of VA services. For those veterans already in the system the 
Northeast Program Evaluation Center publishes an annual national 
analysis of all PTSD treatment programs. This provides Networks and 
Facilities with demographic analysis of the veterans seen in their 
programs.
    Meeting the needs of our returning veterans and their families is 
among VAs highest priorities. VAs approach toward the returning troops 
and their families is guided by an emphasis on health promotion and 
preventive care principles. It focuses on patient and family education 
about good health care practices and behaviors to avoid. It avoids 
``over pathologizing'' the veteran. For those who do have mental 
disorders, the orientation involves the concepts of rehabilitation that 
address a patient's strengths as well as deficits. It embodies a belief 
in recovery of function to the greatest degree possible for each 
patient. This approach is designed to identify and resolve problems in 
readjustment to civilian life, before they progress to problems 
requiring more intensive clinical interaction. Readjustment Counseling 
Service takes the lead in providing this level of care through the 207 
community-based Readjustment Counseling Centers (RCS) throughout the 
United States. 50 additional Global War on Terrorism counselors have 
been added to these centers to meet this need. In addition the 
Secretary has expanded authority to RCS to deliver bereavement 
counseling to those in need.
    For those that require clinical interaction, VA provides state-of-
the-art psychotherapy and psychopharmacology treatments. The joint VA/
DoD Clinical Practice Guidelines direct evidence-based care for PTSD 
and other disorders that may be associated with PTSD and the stress of 
war such as Major Depression and Substance Use Disorders. VA provides 
this care through 144 specialized PTSD programs in all States. These 
consist of specialized in-patient PTSD units, Residential Treatment 
units, and Outpatient PTSD clinical teams. All patients are currently 
screened annually for PTSD. In addition an OIF/OEF clinical reminder 
tool in the computerized medical record was developed for clinicians 
which reminds them that they are seeing a veteran who has recently been 
exposed in the War effort and needs to be screened for PTSD, 
Depression, and Substance abuse.
    Innovative clinical approaches are being pursued through the use of 
Public Law 180-170 funding which authorizes $5 million for the 
development of special outreach, health promotion, consultation, and 
liaison programs for returning veterans in collaboration with Veterans' 
Benefits Administration, DoD, and community resources. P.L. 108-170 
also authorizes an additional $5 million each for the expansion of 
existing PTSD and substance use disorder treatment programs. In 
addition the National Center for PTSD coordinates state-of-the-art 
research for the VA and provides training and guidance to our 
clinicians. The National Center for PTSD produced an Iraqi clinician 
guide that provides a tutorial for practitioners on what they might 
look for in returning soldiers/veterans who have served in Iraq.
    Question 4: The CARES Commission was intended to be a strategic 
plan for VA health care, but it did not truly consider long-term care 
issues and mental health issues. I believe each should be a priority of 
VA given the needs of the veteran population. How are you going to deal 
with long-term care and mental health?
    Response: I fully support the continuation of VAs assessment of LTC 
and Mental Health (MH). VHA has recently completed new runs on LTC and 
MH workload projects by market and by priority category for LTC. 
Strategic Planning Guidance will be going out to the VISNs and 
facilities in the next month requesting operational plans to include 
Strategic Initiatives. Each VISN will prioritize its strategic 
initiatives by year and within the year along with cost projections for 
inclusion in the VISN and National Strategic Plan. LTC and MH 
initiatives are included in this process. Implementation of all CARES 
initiatives, including LTC and MH initiatives, is dependent on future 
funding.
                               __________
 Questions for the Record from Senator James M. Jeffords, Committee on 
   Veterans' Affairs; Nomination Hearing of R. James Nicholson to be 
                     Secretary of Veterans Affairs

    Question: VA Physician Assistants--Mr. Ambassador, the Congress has 
been pushing the VA for many years to provide an advisory position 
within the VA for Physician Assistants. The VA currently employs over 
1,500 physician assistants (PAs), who are a very important part of the 
VA healthcare structure. However, they do not fall neatly into either 
the doctor or nurse category. In 2000, Congress passed legislation 
directing the VA to implement a PA advisor to the Under Secretary for 
Health. The following year, a part time position was established, but 
it was located outside of Washington and given very little travel 
money. Congress has since reiterated that this position should be a 
full time position and be either located in the Washington DC area, or 
provided with a sufficient travel budget to fulfill the advisory 
duties. As of yet, however, this has not happened.
    The current PA Advisor's lack of access to the department's policy 
deliberations hampers the department's ability to fully and 
appropriately utilize this important resource. Have you examined the 
issue of representation of the PAs in policy discussions, or the 
position of the PA Advisor? I understand that you may not have had time 
to reach this level of detail, but I would appreciate your attention to 
this question at your earliest convenience and a response as to your 
plans for the PA Advisor position.
    Thank you.
    Response: Prior to the enactment of P.L. 106-419, the Veterans' 
Health Administration (VHA) had utilized a physician assistant (PA) in 
a Lead PA function for advice, policy input, and guidance since October 
1997. Since 2000, VA has established and filled the position of PA 
Advisor on a permanent or acting basis. This position was and continues 
to be filled by a field-based PA who advises the Under Secretary for 
Health (USH) while also performing clinical duties.
    In 2001, the Secretary explained to Senator Jeffords and two fellow 
Senators the reasons that VHA believes that the responsibilities of the 
position would be best fulfilled by a field-based PA position.
    The PA Advisor and the PA Field Advisory Group are fully engaged in 
policy deliberations and are consulted concerning a range of issues. 
See attached Fact Sheet.
                                 ______
                                 
Response to Senator Jeffords Concerning The Physician Assistant Advisor 
                         to the Under Secretary

    The PA Advisor position has been filled with a field-based PA, with 
financial support from headquarters for travel, training, and 
miscellaneous expenses.
    Until recently, the position was 50 percent for headquarters 
duties; based on special projects, the amount of time has been 
increased to 75 percent for the past several months.
    The Veterans' Health Administration (VHA) has a long-standing 
practice of obtaining clinical program leadership using field-based 
clinicians. As VHA explained in its May 2001 response to a prior 
Congressional inquiry concerning the PA Advisor position, this approach 
is not unique to PAs. VHA's Office of Patient Care Services has a 
number of clinical program managers working at VA medical facilities 
across the country. These include VHA's Chief Consultant for Spinal 
Cord Injury, located in Seattle, Washington; the Director, Podiatry 
Service, located in Cleveland, Ohio; the Director, Radiology Service, 
located in San Francisco, California; the Director, Optometry Service, 
located in Baltimore, Maryland; and the Director, Infectious Diseases 
Program Office, located in Cincinnati, Ohio, to name only a few. All of 
these clinicians devote half-time to national duties and half-time to 
local clinical responsibilities.
    VHA believes that utilizing ``hands-on'' clinical providers as 
national program leaders where possible and allowing them to stay in 
the field provides several distinct advantages. First, clinical leaders 
maintain active practice, thus maintaining their clinical skills and 
current awareness of technology, patient, and treatment needs, demands, 
and developments. Second, they are able to approach national policy 
issues from the perspective of someone on the ``front lines'' taking 
care of patients. And third, when recruiting, VHA increases the pool of 
available candidates since many well-qualified candidates may not wish 
to give up clinical work or move to Washington for exclusively 
administrative assignments. We believe that these same advantages 
accrue to a field-based PA Advisor with an active clinical practice.
    Public Law 106-419, which added the Advisor on Physician Assistants 
to the Under Secretary for Health's cadre of national clinical leaders, 
did not specify a duty station or how much time the position would be 
required to spend on PA Advisor duties. The legislative history of 
Public Law 106-419 would appear to indicate that the intent of Congress 
was to allow the position to be based in the field.
    PL 106-419 amended 38 U.S.C Sec. 7306 to require that the Office of 
the Under Secretary for Health include, among other specified 
positions, ``[t]he Advisor on Physician Assistants, who shall be a 
physician assistant with appropriate experience and who shall advise 
the Under Secretary for Health on all matters relating to the 
utilization and employment of physician assistants in the 
Administration.'' This language is silent as to where the PA Assistant 
should be stationed and whether his or her advisory duties may be 
collateral to other assignments. However, there is specific legislative 
history indicating that Congress intended that the PA Advisor would be 
primarily assigned to a field facility and would simply travel to 
Washington to advise the U.S.H on an as-needed basis.
    Prior versions of the bill (set forth in HR 4759 and HR 5109) 
provided that the Advisor on Physician Assistants ``may have a 
permanent duty station at a Department medical care facility in 
reasonable proximity to Washington, DC.'' The legislative history shows 
that the version of the language enacted in PL 106-419 was approved as 
a compromise between HR 5109 and a Senate Veterans' Affairs Committee 
(SVAC) bill, S. 1810, which made no specific reference to the PA 
Advisor's duty station. While the compromise language omitted the House 
bill's reference to a permanent duty station other than VACO, Senator 
Rockefeller--then the Ranking Member of the SVAC--discussed the PA 
Advisor's duty station when he introduced the final bill on the Senate 
floor. Sen. Rockefeller's comments (found at 416 Congo Rec. S 10500, 
S10515) make it clear that the PA Advisor position was intended to be 
filled by a field-based provider:
    Another important provision in this legislation that I am very 
proud of is the creation of a physician assistant advisory position 
within the Veterans' Health Administration (VHA).
    The VA Under Secretary for Health will designate a VHA physician 
assistant to fill this position and charge that person with advising on 
all matters regarding the employment and use of physician assistants 
within the Veterans' Health Administration. The advisor may be assigned 
out in the field with periodical visits as necessary to VHA 
headquarters for reports, so that they are able to keep in touch both 
with physician assistants working all over the country and the VA Under 
Secretary for Health in VA Headquarters.
    In the past several months, VHA has increased the percentage of 
time that the PA Advisor spends on advisor duties to 75% in order to 
meet the need to revise two critical VHA policy documents, one a VHA 
Directive on the utilization of PAs and the other VAs PA qualification 
standard. The Department will reconsider the PA Advisor position again 
in the 3rd quarter of FY 2005, with a focus on the justifiable need for 
the amount of time allotted to national issues and with due 
consideration for reduced personnel ceilings, budgetary constraints and 
other national priority issues.
    VHA issued a national policy on the utilization of PAs, known as 
VHA Directive 2004-029: Utilization of PAs, in July 2004. This policy 
was developed with input from the PA Advisor, the PA-FAC, other PAs, 
Primary Care physicians and nurses, policy decisionmakers in VA Central 
Office, and other field staff.
    VHA has undertaken a comprehensive revision of the qualification 
standards for VA PAs, a process that again has involved input into the 
utilization of PAs from the PA Advisor, the PA-FAC, and other 
stakeholders throughout the VA system.
    In addition, VHA has established a PA-Field Advisory Committee (PA-
FAC), which had its first face-to-face meeting in Washington, DC, on 
May 17, 2004. Prior to that meeting, VHA's National Director for 
Primary Care met with officials of the VA Physician Assistant 
Association, and the PA-FAC held monthly conference calls during which 
various PA issues were discussed at length to obtain input. A member of 
the PA-FAC also serves on VHA's Primary Care-Field Advisory Committee 
to represent PAs' interests, and VHA is currently developing PA 
training which would assist in PAs in their re-certification process.
    Regarding the question of funding support for the PA Advisor's 
official travel, the level of funding has been equal to or greater than 
that provided to other individuals for the performance of their 
official duties. The level of support has consistently increased over 
time to support PA professional activities.
                               __________
    Questions for the Record from Senator Ken Salazar, Committee on 
   Veterans' Affairs; Nomination Hearing of R. James Nicholson to be 
                     Secretary of Veterans Affairs

    Question 1: Will you commit to use your best efforts to make the 
new VA medical center at Fitzsimons a reality?
    Response: VA continues to work on acquiring a site, preferably on 
the Fitzsimons site, in close proximity to University of Colorado 
Hospital and the affiliate to maintain the positive working 
relationship that has been so successful for all.
    Question 2: How will you advocate for sufficient health care 
funding to meet increasing demand given the historic deficits we face?
    Response: The Fiscal Year 2006 Budget will enable VA to continue 
its mission of providing high-quality, timely, and compassionate health 
care to all enrolled veterans who seek care. This budget enables VA to 
place its greatest emphasis on our core population of veterans--those 
with service connected disabilities including returning OIF/OEF 
veterans; those with low income; and those who have specialized needs--
while asking veterans in Priority Groups 7 and 8 to make limited 
contributions toward the cost of their care. We believe that these 
contributions are modest in light of the comprehensive, high-value, and 
high-quality care the Department provides. In addition, this budget 
includes $700 million in construction to continue the Department's 
commitment to the CARES initiative, $100 million for the Mental Health 
Initiative, and $100 million for Prosthetics. In future years, I assure 
you that I will be a firm advocate for budgets that allow the 
Department to meet the needs of all enrolled veterans who choose to 
come to VA for their health care.
    Question 3: Will you work to lift the outdated and unfair income 
cap for care of priority 8 veterans?
    Response: I will consult with VA staff to determine the need for 
continuing this suspension and/or the need to exercise another 
enrollment policy to balance demand with available resources for FY 
2005. Equally important is the need to consider the out-year impact of 
enrollment decisions in terms of expected resource availability, 
expected demand for VA health care services and the potential for 
growing waiting lists and waiting times.
    Question 4: Do you agree to exercise your authority to end co-pays 
and duplicative physicals to permit access to prescription drugs?
    Response: Historically, VA medical care has been defined by the 
provision of comprehensive services for veterans, encompassing care 
provided across the continuum of time and care setting. VAs 
prescription benefit has been designed as an extension of the care 
continuum, rather than an ``add-on'', non-integrated service. As 
medications have become more costly and/or more difficult for patients 
to obtain in the private sector, it is understandable that interest in 
VA providing a prescription-only benefit has increased. I am hopeful 
that the implementation of Medicare Part D next year will provide an 
additional option for patients' medication needs and will improve 
access to prescription drugs.
    Providing prescriptions to veterans in the absence of comprehensive 
medical care is problematic for two primary reasons. First, and most 
importantly, I believe that coordination of care by one provider is the 
cornerstone of high-quality health care. Without up-to-date information 
such as a detailed medical history, a complete medication use summary, 
and other pertinent clinical information as can only be provided by a 
single Primary Care provider, there is risk that a course of treatment 
for an individual patient which is based on incomplete or inaccurate 
information could lead to significant negative outcomes. Specifically 
from a quality of care perspective, providing medication therapy in a 
fragmented, nonintegrated manner, as is the norm in much of the U.S. 
health care system, is conducive to greater medication misadventures. 
VA has considerable experience to demonstrate that providing 
pharmaceuticals as an integrated portion of VAs health care benefit is 
effective and efficient from both a qualitative and quantitative 
perspective.
    Second, from an economic perspective, dispensing prescriptions 
prescribed by non-VA doctors would dramatically increase VAs per capita 
expenditures for pharmaceuticals and has the potential to divert 
resources from other medical care programs. VA has maintained 
unprecedented control over its per prescription unit costs by using 
sophisticated formulary management techniques and by assuring that 
prescriptions written by VA staff are consistent with the goals of the 
VA formulary management process. VAs per capita pharmaceutical 
expenditures are well below those of most, if not all, managed care 
organizations in the United States. This fact is most impressive 
considering that VA cares for patients that are typically among the 
oldest and sickest. Part of the reason for VAs success is the 
infrastructure in place to develop and promulgate evidence-based drug 
treatment guidelines and an effective National Formulary process. We 
strongly believe that the quality of care provided by a comprehensive 
Primary Care delivery approach, integrated with a well-managed National 
Formulary process is vastly superior to the fragmented, medication 
therapy model that many Americans access today.
    I support VA's long-standing commitment to provide high quality, 
cost-effective and safe healthcare to our Nation's veterans who choose 
VA as their healthcare provider. However, based on the reasoning 
described above, at this time I do not support providing prescriptions 
to veterans outside of VA's comprehensive medical care program.
    Question 5: How, specifically will you help reduce claims 
processing backlog for disability and compensation claims? There are 
currently 8,247 claims pending at the Denver Regional Office.
    Response: Improvement of benefits claims processing has been an 
important goal of the President. I am aware that much progress has been 
made both in reducing the backlog and timeliness--and especially in the 
reduction of claims that had been pending from our oldest veterans who 
had been waiting more than a year for decisions on their claims. 
Quality levels have also significantly improved.
    The changes made included making the regional offices--and the 
claims processing procedures and supporting IT applications--more 
consistent and efficient and improving the training and oversight of 
the programs. These major changes have resulted in improvements in 
production, timeliness, and quality.
    While there has been significant success, much remains to be done. 
VBA has seen large increases in incoming claims and appeals, both from 
the returning servicemembers and from older veterans who had not 
previously submitted claims. We will continue to emphasize the 
improvements necessary to timely provide our veterans with the benefits 
they deserve and which the Congress has so generously made available.
    I have been advised that the Denver Regional Office is working hard 
to reduce its pending inventory and is making good progress. To assist 
the office, over 1,000 cases were transferred to other regional offices 
for processing during the first quarter of this fiscal year. The Denver 
office also hired eight additional employees in 2004, which was the 
largest single recruitment in the Veterans' Benefits Administration's 
Western Area.
    Question 6: Will you advocate to end concurrent receipt 
regulations, the ``disabled veterans tax?''
    Response: Under current statutory authority, concurrent receipt of 
military retirement pay and veterans' disability compensation is being 
phased in over a 10-year period for retirees disabled to a degree of 
50-percent or more, at 10-percent increments each year through 2013. In 
October, legislation was enacted by Congress and signed by the 
President eliminating as of January 1, 2005, the phase-in period for 
concurrent receipt for retirees receiving veterans' disability 
compensation for a disability rated 100-percent disabling. It is my 
understanding that the additional payments veterans receive as a result 
of concurrent receipt are generally received in the form of increased 
military retirement pay, which veterans had previously waived in order 
to receive VA disability compensation. Amounts veterans receive from VA 
as disability compensation are generally unaffected. Therefore, I would 
defer to the views of the Department of Defense on this issue.
    Question 7: Funeral costs routinely cost many thousands of dollars. 
Those veterans who die from illness or injury directly related to their 
service receive only $2,000 and the plot allowance for disabled or 
indigent veterans is only $300. Will you agree to advocate to increase 
burial benefits to $3,700 and $1,100 respectively?
    Response: I understand that VA provides a full range of burial 
benefits and services beyond the monetary benefits you mention. All of 
these are designed to help defray the cost of burial. Included in these 
benefits is burial in a national or State veterans' cemetery at no cost 
to the veteran. Additionally, grave liners, headstones and markers, and 
in some cases transportation fees to the nearest national cemetery are 
available.
    I also understand that in addition to these benefits many veterans 
are entitled to burial assistance through other federal, State, and 
local governments, their employers, or fraternal organizations as well 
as through money they themselves have set aside for this purpose either 
through pre-paid burial trusts or in insurance policies. I have learned 
that 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 improvements associated with 
the establishment, expansion, or improvement of a State veterans' 
cemetery, as well as the cost of equipment necessary to operate a new 
cemetery.
    While VA benefits may not cover every expense associated with a 
burial, I believe they do represent a comprehensive list of benefits 
and services available to honor America's veterans at the time of 
death.
    Question 8: Will you advocate to readjust mortgage assistance 
levels to keep pace with real estate process and inflation?
    Response: The amount of guaranty that VA provides on a loan 
determines the amount of the loan that a lender will make to a veteran. 
Lenders will generally make a no-down payment VA loan for up to four 
times the amount of the VA guaranty. However, as your question rightly 
recognizes, the guaranty amount has sometimes become insufficient to 
permit all veterans to buy the homes of their choice with their VA home 
loan benefit.
    I am pleased that both the Administration and the Congress have 
recognized the problem and recommended and passed legislation that will 
go a long way toward alleviating it. As the result of the Veterans' 
Benefits Improvement Act of 2004, the guaranty amount is indexed at 25% 
of the ``conventional conforming loan limit,'' which is the limit on 
loans that can be purchased by Fannie Mae and Freddie Mac. The 
conforming loan limit is set annually by Freddie Mac to adjust for 
inflation and market conditions. When this limit increases, the VA 
guaranty will also increase to 25% of the new limit. In practical terms 
this means that lenders will now make a VA no-down payment loan for up 
to the conventional conforming limit, which is currently $359,650.
    Question 9: Members of the National Guard and Reserve become 
eligible for 2 years of health care through the VA after being deployed 
for more than 180 consecutive days. Given the increased reliance on 
Guard and Reserve in Iraq (where Guard and Reserve make up 40% of the 
troops) and the global war on terrorism, thousands of soldiers are 
becoming eligible for VA benefits--at the same time the President is 
contemplating freezing funding for VA health care at last year's level. 
What will you do to support this newest generation of VA clients, to 
ensure a seamless transition from serving overseas to receiving care 
through the VA, and to guarantee that these heroes will not return home 
to waiting lists or doctor shortages?
    Response: VA has recognized the importance of seamless transition 
by opening a new VHA office dedicated to coordinating this critical 
issue. VA has been and will continue to work with DoD to ensure that we 
collect and share information on veterans serving in Operations 
Enduring Freedom and Iraqi Freedom. VA is also working with its health 
care actuary to assess the impact of these veterans on our health care 
system and ensuring that we plan for and are prepared to deliver the 
health care needed by this newest cohort of veterans. VHA is committed 
to ensuring its core constituency receives the services they need and 
is also closely monitoring access to health care in terms of waiting 
lists.
    Question 10: The New England Journal of Medicine recently found 
that as many as 1-in-6 servicemembers returning from Iraq may suffer 
from Post Traumatic Stress Syndrome, but that many servicemembers do 
not receive mental health care. What can the VA do to improve mental 
health care for veterans?
    Response: The New England Journal of Medicine article by Dr. 
Charles Hoge found that the percentage of study subjects whose 
responses met the screening criteria for major depression, generalized 
anxiety, or PTSD was 15.6-17.1% after duty in Iraq. Of those who 
screened positive for a mental disorder only 23-40% sought mental 
health care. The good news from this study is that 83% of the returning 
troops did not meet the screening criteria for mental disorders. The 
great majority of them will not suffer long-term consequences of their 
war zone experience, although many will have some short-term reactions 
to the horrors of war. Of those who do develop mental/emotional 
problems, PTSD will not be the only problem to be addressed. Major 
depression and substance abuse are two problems that can be recognized 
with screening and successfully treated. VAs approach toward the 
returning troops and their families is guided by an emphasis on health 
promotion and preventive care principles. It focuses on patient and 
family education about good health care practices, and behaviors to 
avoid. It also avoids ``over pathologizing'' the veteran. For those who 
do have mental disorders, the orientation involves the concepts of 
rehabilitation that address a patient's strengths as well as deficits. 
It embodies a belief in recovery of function to the greatest degree 
possible for each patient. This approach is designed to identify and 
resolve problems in readjustment to civilian life, before they progress 
to problems requiring more intensive clinical interaction.
    Program staff are contacting returned troops including members of 
the National Guard & Reserves, and families in forums such as 
preventive health/educational briefings that allow for informal sharing 
of information about stress related disorders and coping mechanisms, 
and availability of the range of VA psychosocial support services. 
Other activities such as participation in Public Service Announcements, 
presentations at community sites such as schools, faith-based and 
professional organizations, liaison with (Veterans Service 
Organizations, State Veterans' Affairs Departments, and Military Unit 
Organizations), and other innovative approaches relevant to the local 
community may also be employed. Collaboration with Readjustment 
Counseling Service is a key element of these successful interventions.
    VA provides comprehensive care for veterans with mental disorders 
through a continuum of services designed to meet patients' changing 
needs. The intensity of care ranges from acute in-patient settings, to 
residential services for those who require structured support prior to 
returning to the community, to a variety of outpatient services. 
Outpatient care includes mental health clinics, ``partial 
hospitalization'' programs such as day hospitals and day treatment 
centers that offer care 3-5 days a week to avert the need for acute or 
extended in-patient care, and intensive case management in the 
community. Long term in-patient or nursing home care is available if 
needed. VAs mental health programs include programs designed to meet 
the needs of special populations of patients including those with 
schizophrenia, major depression, PTSD, and addictive disorders.
    VA mental health care is based on two core elements: state-of-the-
art psychopharmacology and evidence-based psychotherapy and 
psychosocial rehabilitation. Evidence-based practices are outlined in 
Clinical Practice Guidelines (CPGs), created jointly with DoD, 
including CPGs on major depression, serious mental disorders, substance 
use disorder, and PTSD.
    Research in future practices is performed by Clinical research and 
services delivery entities such as QUERI (Quality Enhancement Research 
Initiative), ten Mental Illness Research, Educational and Clinical 
Centers (MIRECCs), and VA's National Center for PTSD.
    VA is known as a world leader in PTSD treatment and research, and 
will continue to deliver state-of-the-art care to veterans with PTSD.
    Question 11: According to the National Coalition on Homeless 
Veterans, as many as 500,000 veterans spend at least one night a year 
homeless. They also have circulated that 1-in-4 homeless people in this 
country is a veteran. What can the VA do to improve the lot faced by 
homeless veterans, who according to some estimates may number as high 
as 500,000?
    Response: VAs efforts to improve the, circumstances faced by 
homeless veterans are aimed at enhancing the continuum of services for 
homeless veterans. This includes: 1) outreach; 2) assistance in 
securing access to medical and mental health treatment, including 
substance abuse treatment; 3) case management; 4) transitional housing; 
5) assistance in improving income support; and 6) assistance with 
permanent housing.
    To this end, VA intends to offer funding through capital grants to 
increase the number of faith-based and community-based transitional 
housing beds that will be available for homeless veterans across the 
country. VAs goal is to provide support through per diem payments for 
approximately 10,000 community-based beds by 2009.
    VA will continue the 29 Special Needs Grants to allow existing 
community-based grant and per diem recipients and their VA medical 
center partners to enhance services for special segments of the 
homeless population to include: (1) chronically mentally ill, (2) frail 
elderly, (3) women, including women with children, and (4) terminally 
ill homeless veterans. VA is committing approximately $30 million 
across a 3-year period to support these partnership projects.
    VA also intends to expand and augment the Domiciliary Residential 
Rehabilitation and Treatment Program for Homeless Veterans by 
activating 7 new programs and adding staffing to 10 existing programs 
in FY 2005. With these program activations, VA will have more than 
2,100 domiciliary residential rehabilitation beds dedicated to homeless 
veterans.
    VA will continue to work with the Departments of Housing and Urban 
Development (HUD), Health and Human Services (HHS), and Labor (DOL) in 
supporting collaborative initiatives that address the needs of 
chronically homeless people, including homeless veterans, by providing 
permanent housing, primary and mental health care and support services. 
VA's contribution to these collaborative projects includes the 
provision of case management services for homeless veterans who are 
enrolled in these programs. In addition, VA's Northeast Program 
Evaluation Center (NEPEC) is monitoring the programs and conducting a 
long-term evaluation to determine the effectiveness of this innovative 
approach.
    VA is increasing its efforts of outreach to incarcerated veterans 
who are at risk of becoming homeless upon release from jails and 
prisons. These outreach efforts are aimed at providing veterans with 
detailed information about VA services and benefits that are available 
to them upon release and providing them with contact information for VA 
staff, staff in other Federal, State, and local government agencies, 
and staff in community-based programs so they can access services more 
easily.
    VA will continue to work toward implementation of at least 3 
projects to develop long term transitional housing for homeless 
veterans under the Loan Guarantee for Multifamily Transitional Housing 
for Homeless Veterans Program. Conditional commitment letters issued to 
date would guarantee loans totaling $9.57 million and would support 
approximately 367 transitional housing beds for homeless veterans.
    Finally, VA is incorporating performance measures into VA Network 
Director's Performance Plans that focus on homeless veterans' access to 
primary care and mental health treatment. By identifying benchmarks and 
setting goals for improvement, VA expects to improve homeless veterans' 
access to health care services.
                               __________
  Questions for the Record From Senator John Thune, Senate Veterans' 
   Affairs Committee; Nomination Hearing of R. James Nicholson to be 
                     Secretary of Veterans Affairs

    Question: I understand the VA is considering a proposal to 
standardize testing equipment made available to veterans suffering with 
diabetes.
     What data do you have to indicate that quality of care 
will not be compromised by switching veterans to different test 
equipment?
     What will the direct and indirect costs be to transition 
to a national program? How will these costs be measured?
     What are the VAs plans for obtaining public input into 
this program? Has the VA considered an advisory committee to monitor 
key aspects of the program including quality of care, access to testing 
equipment, and overall implementation?
    Last year Congress extended the authorization of long term care 
(e.g. nursing home, geriatric day care, and home health care, etc.) to 
veterans with service connected disabilities rated 70% or higher. This 
is a 1-year extension of the 5 year authority originally provided for 
in the Veterans' Millennium Health Care Act of 1999. Terminating this 
program could have a negative impact on World War II and Korean 
Veterans and chronically ill Vietnam Veterans. Will you seek a 
permanent authorization for long-term health care?
    Response: VA has two primary goals connected with standardization 
of Self Monitoring Blood Glucose (SMBG) equipment. First, we must 
ensure that veterans with diabetes receive the best care possible, 
including using reliable, state-of-the-art SMBG equipment with which 
they are comfortable; and second, we must pursue every opportunity to 
leverage our volume purchasing power to achieve savings to support more 
care for veterans.
    Our initial efforts to implement standardization will be focused on 
providing new devices to veterans newly diagnosed with diabetes, to 
those whose existing equipment fails, as well as those patients who 
choose to change equipment on their own accord. Local VA providers will 
work with veterans who use the current standard SMBG equipment to offer 
transition to the new device. As is true with all VHA standardization 
efforts, individuals for whom the new device is not appropriate will be 
offered alternate SMBG devices. No one will be forced to change 
devices, and VA has made a commitment to various stakeholders to allow 
patients to continue to use their existing devices after a national 
award is made. Moreover, we would never prescribe a device that is not 
clinically appropriate for the individual patient.
    VAs experience with standardization of pharmaceuticals and other 
medical supplies has shown that we can achieve significant savings to 
support expanded care to veterans, while simultaneously maintaining and 
in some cases, improving outcomes. The annual volume of SMBG strips has 
increased 70% from 91 million strips in FY 1999 to 155 million strips 
for FY 2004; however, the discounts offered by the vendors using this 
contract strategy have not significantly changed. The cost per strip 
has dropped by only a penny in the last 3 years even though utilization 
has increased. Currently VA spends approximately $53 million dollars 
annually on blood glucose strips dispensed in the outpatient setting. 
Based on past standardization efforts however, a conservative estimate 
of SMBG devices cost avoidance would be in the range of 15-25% off of 
the current price. This would represent an $8M to $13M gross reduction 
in VAs annual cost for SMBG device strips. If VA were to make an award 
for 2 years, with 4 renewal options, the total gross reduction could 
approach $64M to $104M.
    In September 2003, VA convened a multidisciplinary advisory group 
consisting of physicians, nurses, diabetic educators, medical 
technologists, and pharmacists and charged the group to review the SMBG 
medical literature and develop options for further SMBG 
standardization. This advisory group is conducting market research and 
clinical evaluations in this area, to include identifying direct and 
indirect transitional costs, and measurement of the same. Once the 
advisory group completes its evaluation and VA has had an opportunity 
to reviews its findings and analyses, VA officials will be pleased to 
brief the Committee on the results.
    The Veterans' Health Care, Capital Asset, and Business Improvement 
Act of 2003, Public Law 108-170, extended the long-term care provisions 
of the Veterans' Millennium Health Care and Benefits Act of 1999 (the 
``Millennium Act'', Public Law 106-117) for a 5-year period ending on 
December 31, 2008. We believe that periodic review and reauthorization 
of this authority by Congress is appropriate.
    Section 1710B of title 38, United States Code, directs that the 
Secretary operate and maintain a program to provide extended care 
services to the extent and in the amount provided in advance in 
appropriations acts for such purposes. The law specifies that such 
services shall include geriatric evaluation, nursing home care, 
domiciliary services, adult day health care, respite care, and such 
other non-institutional alternatives to nursing home care as the 
Secretary may furnish as medical services under section 1701 (10) of 
title 38, United States Code.
    Section 1710A of title 38, United States Code directs that the 
Secretary shall provide nursing home care (1) to any veteran who is in 
need of such care because of a service-connected disability, and (2) to 
any veteran who is in need of such care and who has a service-connected 
disability rated at 70% or more.
    These categories of veterans are commonly termed ``mandatory 
veterans'' under the provisions of the Millennium Act.

    Chairman Craig. To all of my colleagues, again, let me 
thank you for your cooperation and for allowing us to expedite 
this process, as we have effectively done this morning. I will 
leave the vote open for one full day. There are absent Members 
who might wish to cast their vote on this most important topic, 
and without objection of the Committee we will do so.
    We will also ask the Ambassador--a variety of our 
colleagues are submitting questions, and the timeliness of his 
responses to those questions will be very, very important for 
completing a full record.
    Lastly and finally, Mr. Ambassador, let me again 
congratulate you on being nominated by the President. We will 
move as expeditiously as we have and can to get you in place. 
It is obvious to me and to you, I think, that there are a good 
many concerns to be addressed and that we have our colleagues 
here who are certainly going to be active participants with you 
in making sure they are effectively addressed and that you, the 
Administration, and the Senate and the House combined can work 
cooperatively together in a bipartisan way to make that 
happens.
    With that, the hearing will stand----
    Senator Jeffords.
    Senator Jeffords. How do I stand on the vote?
    Chairman Craig. You have been recorded as having voted aye.
    The vote remains open, and we have several of our 
colleagues who were absent. We will seek them out to see if 
they want to vote before it is closed.
    With that, the hearing will stand adjourned.
    [Whereupon, at 12:41 p.m., the hearing adjourned]

                            A P P E N D I X

                              ----------                              

                 Prepared Statement of James B. King, 
                       Executive Director, AMVETS

    Chairman Craig, Ranking Member Akaka and Members of the Committee, 
it is a pleasure to submit AMVETS testimony on President George W. 
Bush's nomination of Ambassador R. James ``Jim'' Nicholson to be the 
Secretary of the Department of Veterans Affairs. Thank you for this 
opportunity and thank you, also, for scheduling this confirmation 
hearing as early as you have in the new Congress.
    As National Executive Director for AMVETS (American Veterans), I 
would like to congratulate you, Senator Craig and Senator Akaka, on 
being voted by your colleagues, respectively, as Chairman of the Senate 
Veterans' Affairs Committee and Ranking Member. Your prior service on 
the Committee has been superb. You have helped charter a course for 
this Committee that has enabled the Nation to express its gratitude to 
the brave men and women who have served in our military forces and 
sacrificed so much to preserve our freedoms. I look forward to working 
with you in the days ahead.
    I would also like to briefly comment on the service of outgoing 
Secretary Tony Principi, who has been an outstanding advocate for 
veterans' issues, and successfully lead the VA with passion, commitment 
and dedication.
    Secretary Principi has been a true friend to America's veterans, 
and we sincerely appreciate everything he has done on their behalf. He 
set out to make a positive difference 4 years ago when he accepted the 
position, and he has done exactly that. Secretary Principi has served 
the veterans community with distinction, and we will miss him. We wish 
him well in his future endeavors.
    Mr. Chairman, we are certainly mindful of the importance of this 
high national office. The Department of Veterans Affairs is the federal 
government's second largest department, responsible for a nationwide 
system of health-care services, benefits programs and national 
cemeteries supporting more than twenty-four million veterans. Its role 
is central to ensuring that our veterans receive critical medical care, 
benefits to which they are legally entitled, and lasting remembrance 
for their selfless sacrifices, patriotism, and unswerving dedication to 
this Nation whenever America called.
    Over the course of the last several years, AMVETS has witnessed VA 
health care shift from an in-patient hospital base to a more 
comprehensive outpatient care system. Frankly, change in VA health care 
has been enormously successful and presented veterans with a day and 
night difference in quality of care. In fact, when the prestigious New 
England Journal of Medicine published a 2003 study on the quality of 
care, the VA system received the highest rated measures and proved to 
be ``significantly better'' than non-VA care.
    Uncertainty about the future direction of VA health care, however, 
is causing concern to rise. We are hopeful that the next Secretary can 
improve overall delivery of veterans' health care. Despite growth in 
the VA budget, we watch certain veterans being shut out of the system 
designed for their care; we see curtailment of services at clinics and 
care units across the Nation due to stringent resources; and we hear 
some continue to propose budgetary restraint, new fees and higher 
pharmaceutical co-payments to access the care veterans earned through 
their military service.
    The new nominee will immediately face these matters and many other 
challenges, including health care funding shortfalls, access to care, 
and timely care for veterans currently enrolled in the system. During 
President Bush's first term, the number of veterans enrolled in VA's 
health care network grew from 4 million to 7 million.
    Conflicts in Iraq and Afghanistan have produced the highest number 
of U.S. casualties in two generations and many American soldiers will 
face a lifetime of injury from their military service. Given these 
facts, it is critical that the new nominee show a willingness to work 
with the members of this Committee, others in the Congress and in the 
veterans community to ensure that resources keep pace with a system 
struggling to care for sick and disabled veterans.
    The members of AMVETS staunchly believe the Department of Veterans 
Affairs should be led by an individual who understands that freedom is 
not free; that the price is too frequently measured in terms of lives 
lost and citizen soldiers either physically or psychologically injured 
for life--men and women whose service to our Nation left them hurt and 
too often unable to fully recover from the wounds of their military 
service. This leader must be a veterans' advocate for he and the 
department he leads must continue to advance the Nation's commitment to 
provide effective, prompt attention to the well-being of our veterans.
    In these terms, AMVETS will work hand-in-hand with President George 
W. Bush's nominee to ensure VA's mission is met and the promises made 
to America's veterans are kept. We are heartened by the fact Mr. 
Nicholson is an outstanding veteran who has displayed a lifelong 
commitment to and respect for our men and women in uniform. His prior 
service as an Army Ranger, decorated Vietnam veteran, businessman, and 
most recently, as Ambassador to the Vatican, has demonstrated a life of 
service to his Nation and importantly to the community in which he 
lives.
    As a successful Colorado businessman, Army Ranger, and ambassador 
who will now work, following confirmation, to coordinate policymaking 
and administration of the second largest federal department, Jim 
Nicholson will need to call on all his skills in the coming weeks when 
the President's new budget hits the table.
    Clearly in order to meet his pledge to halve the budget deficit, 
the President will be looking to freeze some spending and cut 
burgeoning federal programs. We anticipate a tight budget, but we 
expect the administration and Congress to work together and recognize 
the need for a strong defense at home and abroad and a strong 
commitment to America's brave veterans who when called didn't tell 
their country they had other priorities and simply couldn't answer the 
call.
    In summary, Mr. Chairman, AMVETS supports Jim Nicholson's 
nomination as Secretary of the Department of Veterans Affairs. We 
believe he is a committed individual who will do his very best to serve 
America's veterans and lead a department of more than 230,000 
employees. We urge you and your Committee to forward his nomination 
favorably to the full Senate for confirmation.
    Chairman Craig, thank you again for providing AMVETS the 
opportunity to submit testimony concerning the nomination of Jim 
Nicholson as Secretary of Veterans Affairs.
    We look forward to working with you, Ambassador Nicholson, and 
others in Congress to resolve the issues facing VA today. As we find 
ourselves in times that threaten our very freedom, our Nation must 
never forget those who ensure that our freedom endures.
                               __________
           Department of Colorado Veterans of Foreign Wars 
                                      of the United States.
                                      Arvada, CO, January 23, 2005.
Hon. Larry E. Craig, Chairman,
Committee on Veterans' Affairs, U.S. Senate.
    Re: Jim Nicholson, Secretary of Veterans Affairs.
    Dear Chairman Craig, This letter written on behalf of the nearly 
30,000 members of the Department of Colorado Veterans of Foreign Wars 
of the United States, and its' Ladles' Auxiliary, and the nearly 
465,000 veterans in our State is in support of the confirmation of Jim 
Nicholson to be the next Secretary of Veterans Affairs.
    It is not only a great honor for Jim to be nominated by the 
President, but by this nomination he has placed his faith in Jim for 
this most important position.
    We in Colorado know of Jim's long term interest and commitment for 
veterans and their families. He will be an outstanding advocate for 
this Nation's veterans, their families, and the armed forces of this 
great country.
    We fully support his nomination, and ask for your Committee's vote 
in favor of his confirmation.
            Very truly yours,
                                Department of Colorado, VFW
                                             R.E. ``Bob'' Clements,
                                                         Commander.
    cc: U.S. Senator Wayne Allard, U.S. Senator Ken Salazar, John J. 
Senk, Jr., Adjutant General, Veterans of Foreign Wars of the United 
States, Robert Wallace, Executive Director, Washington Office, Veterans 
of Foreign Wars of the United States.
                               __________
                     National Association of Home Builders,
                                                  January 24, 2005.
Hon. Larry E. Craig, Chairman,
Senate Veterans' Affairs Committee.
    Dear Chairman Craig: On behalf of the 220,000 members of the 
National Association of Home Builders (NAHB), I would like to express 
our enthusiastic support for Ambassador Jim Nicholson as the next 
Secretary of the Department of Veterans Affairs. Ambassador Nicholson's 
strong background and proven leadership capabilities make him an 
outstanding choice for this cabinet position.
    Ambassador Nicholson's commitment to his country, defined by his 
service in our Nation's military, will give him the practical 
experience needed to address the full range of concerns facing our 
Nation's veteran community. Moreover, his leadership for the past 3 
years in his role as the United States Ambassador to the Vatican will 
serve him well while overseeing a department of more the 230,000 
employees at the Department of Veterans Affairs.
    From a housing perspective, as a former developer, I believe his 
experience will guide him as we work together to ensure those who have 
served our country have access to affordable housing.
    We urge you to confirm Ambassador Nicholson's nomination as 
Secretary of Veterans Affairs.
            Sincerely,
                                             Gerald Howard,
                                          Executive Vice President 
                                        and Chief Executive Officer
                               __________
        National Association of Realtors, Al Mansell, CRB, 
                                                 President,
                                                  January 24, 2005.
Hon. Larry E. Craig, Chairman,
Committee on Veterans' Affairs, United States Senate.
    Dear Mr. Chairman: On behalf of the more than one million members 
of the National Association of Realtors, let me first congratulate you 
upon your election as Chairman of the Senate Veterans' Affairs 
Committee. The National Association of Realtors looks forward to 
working with you on a range of housing issues affecting veterans under 
the VA Home Loan Guaranty Program.
    With this letter the National Association of Realtors is pleased to 
support the nomination of Jim Nicholson as Secretary of the U.S. 
Department of Veterans Affairs. For the past 3 years Mr. Nicholson has 
served as the U.S. Ambassador to the Vatican. Prior to this he served 
as Chairman of the Republican National Committee. Mr. Nicholson has a 
distinguished career in the military, having served as an Army Ranger 
in Vietnam and graduating from the U.S. Military Academy. He was a 
practicing attorney and has an extensive background in residential real 
estate development. His experience in real estate will serve him well 
as the overseer of the VA Home Loan Guaranty Program which is an 
important program to our membership.
    The National Association of Realtors represents a wide variety of 
housing industry professionals committed to the development and 
preservation of the Nation's housing stock and making it available to 
the widest range of potential homebuyers. The Association has a long 
tradition of support for the VA Home Loan Guaranty Program and has 
worked diligently with the Department of Veterans Affairs to fashion 
housing policies that ensure the VA programs meet their mission 
responsibly and efficiently.
    The VA Home Loan Guaranty Program has made mortgage credit 
available to many veterans whose loans otherwise would not have been 
made. The program has helped many deserving veterans realize the 
American dream of owning a home and the program has had a profound 
impact on our Nation's economy and our mortgage markets. We stand ready 
to work with Secretary-Nominee Nicholson to address veterans housing 
issues encompassing his ideas, visions and innovations.
    The National Association of Realtors welcomes the selection of Jim 
Nicholson as Secretary of the Department of Veterans Affairs, and we 
appreciate your grateful consideration of our endorsement.
            Sincerely,
                                                Al Mansell,
                                                         President.
                               __________
                American Association of Nurse Anesthetists,
                                                  January 26, 2005.
Senator Larry E. Craig,
Washington, DC 20510.
Senator Daniel K. Akaka,
Washington, DC 20510.
    Dear Mr. Chairman and Ranking Member: On behalf of the more than 
33,000 Certified Registered Nurse Anesthetists (CRNAs) including the 
530 full time CRNAs employed in the VA health system, we encourage 
Members of the Senate to confirm the President's nominee for Secretary 
of Veterans Affairs (VA), Jim Nicholson.
    With an Army career that includes 8 years of active duty as an Army 
Ranger, medals of distinction for combat in Vietnam, and 22 years in 
the Reserves, Mr. Nicholson has been chosen by President Bush to lead 
this Nation's Veterans' health system. The profession of nurse 
anesthesia was begun treating America's soldiers in the battlefields of 
the 19th Century, a tradition of care continually improved and extended 
through the 21st Century as a substantial proportion of AANA members 
have worked to ensure safe anesthesia care to our U.S. Armed Forces and 
Veterans past and present. We look forward to working with Mr. 
Nicholson to promote anesthesia patient safety within our VA 
facilities, support educational funding for the VA-DoD nurse anesthesia 
school in Ft. Sam Houston, Texas, and ensure quality healthcare to all 
Veterans. The Administration has been more than gracious in extending 
us the open door to address issues of concern to ensuring safe and 
effective anesthesia care, so that we might together improve healthcare 
for those men and women who have served this country honorably in the 
military. I am sure that Mr. Nicholson will continue such a 
relationship.
    If we can ever be of service during this process, please feel to 
contact Frank Purcell, Director of Federal Government Affairs in our 
Washington, DC office at (202) 484-8400.
            Sincerely,
                             Frank T. Maziarski, President,
                                                CRNA, MS, LTC, ANC,
                 American Association of Nurse Anesthetists (AANA).
                                 Carol M. Craig, President,
                            CRNA, Association of Veterans' Affairs,
                                        Nurse Anesthetists (AVANA).
                               __________
             National Vietnam & Gulf War Veterans Coalition
Hon. Larry E. Craig, Chairman,
Senate Committee on Veterans' Affairs,
Re: Hon. Jim Nicholson Secretary-designate, Department of Veterans 
        Affairs.
    Dear Mr. Chairman: The National Vietnam & Gulf War Veterans' 
Coalition is a federation of 98 veterans groups. One of our ten (10) 
goals is to have qualified Vietnam and Gulf War veterans appointed to 
high visibility government positions.
    Colonel Jim Nicholson (USA-ret.) is a Vietnam Veteran, a graduate 
of the United States Military Academy, and a former U.S. Army Ranger 
who received the Combat Infantry Badge and the Bronze Star for service 
to his country. He knows and understands veterans and the military. It 
is with this in mind that we are pleased to strongly endorse and 
support Jim Nicholson for the position of Secretary of Veterans 
Affairs.
    My organization and I have previously worked with Jim when he 
served as Chairman of the National Republican Committee. We were 
impressed with his availability to listen to our concerns, his fairness 
with regard to all matters, and his interest in improving the 
conditions of the men and women who have served in the Armed Forces of 
the United States. Jim Nicholson is a man of integrity in whom we have 
instilled our confidence and whom we feel will be an effective advocate 
for both the Bush Administration and this country's veterans. We urge 
you, the Senate Committee on Veterans' Affairs, and the United States 
Senate to support Colonel Nicholson.
            Respectfully,
                                       John J. Molloy, Jr.,
                                                          Chairman.
                               __________
                  Rolling Thunder, Inc., National Chapter 1
                                              Neshanic Station, NJ,
                                                  January 18, 2005.
Hon. Larry E. Craig, Chairman,
Senate Committee on Veterans' Affairs.
    Dear Mr. Chairman: Rolling Thunder, Inc. National, a group of 
veterans and citizens concerned with all veterans, current and future, 
wholeheartedly endorse the Honorable Jim Nicholson for the position of 
Secretary of Veterans Affairs.
    Our organization feels that Colonel Jim Nicholson, a retired 
Vietnam Veteran, truly knows and understands veterans and the military. 
We feel he will listen to our concerns and will be fair in all matters 
to improve the conditions of the men and women who have served and are 
serving in the Armed Forces of the United States. We strongly urge you, 
the Senate Committee on Veterans' Affairs, and the United States Senate 
to support Colonel Nicholson as the next Secretary of Veterans Affairs.
            Sincerely,
                                         Sgt. Artie Muller,
                                                  Founder/National 
                                                Executive Director.

  

                                  
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